The next US administration must reassure China, not just deter itÂ
During a recent Oxford debate organized by Asia Society Switzerland, experts sparred over how the next US administration should frame policy on China....
Technology
Leadership
Navigating the singular reality: Our lives and identities are changingÂ
The boundary between the physical and digital worlds is dissolving, says Joseph Bradley, CEO of TONOMUS. Harnessing data's power while managing risks is crucial for an integrated future....
The boundary between the physical and digital worlds is dissolving, says Joseph Bradley, CEO of TONOMUS, a world-leading technology enterprise powering the world’s first ecosystem of cognitive technologies at NEOM in Saudi Arabia. Harnessing the power of data, while addressing the risks, will be key to an enhanced integrated future.
The best way to glimpse the future is through the eyes of the young. To my eight-year-old nephew, there is no distinction between the physical and digital worlds. Whether he’s kicking a ball on the grass or moving players on a screen, he’s playing football. He’s just living. Welcome to the Singular Reality. 
Consider Fortnite and Roblox, video gaming platforms where the physical and digital worlds converge through interactive virtual events, user-generated content, and social interactions that mirror real-world experiences. Both Fortnite and Roblox total 500+ million users to date, and they support robust virtual economies. Roblox’s revenue for the first three quarters of 2023 was $2.04bn.
In-game events are becoming cultural phenomena. In April 2020, the musician Travis Scott put on a concert in Fortnite that attracted 12.3 million viewers. The concept of choosing between digital and physical is becoming obsolete. Dissolving the border between the limitless potential of the digital world and the inherent limitations of the physical world, we access unprecedented opportunities and expanded possibilities. 
The inevitability of a singular reality urges a re-evaluation of every part of our business. It involves integrating advanced digital technologies such as AI-driven simulations, immersive virtual environments, and sophisticated analytics into our corporate fabric and everyday business practices, transforming traditional meetings into dynamic, engaging experiences.
A shift in human experience
Our cities will transform – we’re not just talking about smart cities and enterprises, but cognitive ones. The difference lies in data utilization. Smart cities/enterprises use about 5% of the available information. Cognitive cities/enterprises use around 90% to enhance human experiences. Technology will anticipate and evolve, leveraging the power of AI to transform data into actionable insights for predictive, proactive decision-making. Data is already the world’s most valuable asset. The Ocean Tomo Study of Intangible Asset Market Value states that “Between 1995 and 2015, the share of intangible asset market value increased from 68% to 84%. As of 2020, COVID-19 had accelerated the trend of increasing IAMV share, with intangible assets now commanding 90% of the S&P500 market value.” As leaders, think about which data sets you need to have relationships with. Build an ecosystem of partners to allow for the use of unique data points to create insights. Employing cutting-edge technologies like AI and machine learning can help you uncover patterns, predict trends, and make data-driven decisions that propel your business forward. When it comes to data, there is a golden rule. No trust = no data = no value. You need to be clear about what you’re going to use people’s data for. Without trust, stakeholders are reluctant to share their data, leading to gaps in your insights and ultimately diminishing the value you can derive from your data assets. Cognitive technology is already being realized in real-world applications, ushering in an era where data becomes the cornerstone of foresight and empowerment. Again, we are seeing examples of this. In China, there is a city that uses AI to count raindrops, monitor potential flood areas, and dispatch teams to repair roads without ever talking to a human. Elsewhere, technology monitors elderly people’s household water intake and automatically dispatches a social worker to check on them if the intake drops. Using GenAI embedded in a common data architecture, personalized services will improve urban life, community engagement, and social equity. This is a cumulative equation creating an environment where every individual can achieve their fullest potential.People tend to focus on the output, on the answers that ChatGPT is giving, but the real value lies in knowing which question to ask. This is where humanity and creativity live.
People tend to focus on the output, on the answers that ChatGPT is giving, but the real value lies in knowing which question to ask. This is where humanity and creativity live. The challenge does not lie in its execution but in knowing what to execute. It’s important to note that algorithms optimize for efficiency, but leaders solve for happiness. By doing so, we will end up with frictionless living experiences. To give just one example, in the Netherlands, one supermarket introduced a slow checkout lane after realizing that self-serve checkouts don’t always increase customer satisfaction. Some customers came to the store for the human touch. Now they can engage and connect.
It’s important to note that “services” no longer just means final services, such as architecture or medical services. It means intermediate services – all of the back-office services that go into those final services. If you’re running a business, you already buy many services from other businesses – and it’s these B2B services – HR, accounting, bookkeeping – that are the future of trade.  Â
Now consider the demand and supply. The demand for these intermediate services is huge in rich nations. 30% of all gross spending in wealthy nations is on intermediate services. Why? Because you need intermediate services to run every single business. You need it in mining, manufacturing and agriculture, but especially in services, which account for two thirds or three quarters of the whole economy. Â
What’s notable is that the supply of workers is huge in emerging markets, and they are already doing back office and accounting services for their own companies. North-north trade dominates intermediate services still, but non-OECD exports are growing twice as fast since 1995. Â
So, the good news is that the emerging market miracle will continue and spread but be based on services rather than industry and commodities. Countries all around the world that have talented low wage workers will now participate in exporting services and this will be extraordinary. Just think about how this could transform cities like Nairobi, Bogota and Buenos Aires. Â
“The purpose of AI is to make you the best you possible. To make you happy. Do not assume that it’s just to improve efficiency measures.”
Now let’s turn to privacy concerns. The ability to recognize privacy is directly proportional to the value received.
Your digital identities will become sapient, with AI enabling decisions that are aligned with yours. From basic chatbots to complex LLMs, digital identities are evolving to become extensions of our cognitive processes.
Customers and employees will not just be human, but a singular reality of human-machine cognition. If your customers and employees are multi-modal, so must your services and products. You will sell to digital identities trained on LLMs that embody users but might not have their human intervening in their decision-making and choices.
As with any huge shift, the path to cognitive transformation won’t be straightforward. Significant risks need to be addressed, including:
1. Disparities in access: AI technologies can significantly boost productivity and economic growth, but if access to these technologies is limited to affluent individuals or organizations, it can widen the digital divide.
2. Perpetuating biases: If marginalized communities are underrepresented in the data that the LLM is training on, it will not perform well for these groups. This would lead to unfair and biased outcomes in various applications, from hiring processes to criminal justice. Make sure you know who in your organization is going to be responsible for the ethical use of AI because AI can’t go to jail. You can.
3. Concentration of power and control: Decision-making based on the limited perspectives of a small group of decision-makers can lead to opaque processes, which in turn lead to unfair outcomes and reinforce existing inequalities.
4. Ownership of Digital Identity: Digital identities are prime targets for hackers. If the security measures protecting these identities are compromised, this can lead to financial and reputational damage for individuals and organizations alike. Our digital identities need to be legal, safe, and secure.
5. Truth: The majority of information we consume will be false. You must learn to be an active agent of listening and not simply absorb what others want you to hear.
If the singular reality is unfolding around us right now, why are we not embracing it? Uncertainty. When I was diagnosed with colon cancer stage III out of the blue 14 months ago, someone said to me: “When you’re dealing with uncertainty, don’t worry about what you don’t know. Instead, every day, challenge what you believe to be true.” That is what’s required of CEOs today. Be a change-maker.
The singular reality brings unprecedented opportunities. It also presents new challenges that we must navigate with wisdom and foresight. We must address the risks head-on to ensure the benefits are accessible to all, fostering an inclusive and equitable society. Then we can build a future where technology enhances the human experience without compromising our values or freedoms.
Tips for leaders
- Decide on what is important and set the direction. Many leaders today will tell you: customers, employees, financials. You’ve got to do it all. At TONOMUS we look after our employees, who look after our customers, who look after our financials.Â
- Be vulnerable. People need to understand that it’s okay for them to make a mistake. Every week I record a two-minute message to my team, and I typically talk to them about a mistake I’ve made, something I could have done better. And before you know it you have people who, in being open and transparent, are solving problems.Â
- Diversity is not enough. Diversity has the potential to create value. Inclusion is the realization of value by driving participation. Push towards inclusion and use technology to support you to do that. You need every bit of value and thought process that you have in your organization to make it work. Make sure you hire inclusive leaders and ask them who they include in decision-making.Â
- Foster transparency. Typically, non-inclusive organizations are such because they’re worried about making a mistake. Have old-fashioned one-to-ones. Â
- Have people show you their work. This shows them you care, and they get a genuine sense that what they’re doing matters to the organization. Â
- Forget about work-life balance. You have a life. Tomorrow is not promised. Make sure that you’re spending the time with your loved ones, and that you’re present. Â
This article is inspired by a keynote session at IMD’s signature Orchestrating Winning Performance program, which brings together executives from diverse sectors and geographies for a week of intense learning and sharing with IMD faculty and business experts.
All views expressed herein are those of the author and have been specifically developed and published in accordance with the principles of academic freedom. As such, such views are not necessarily held or endorsed by TONOMUS or its affiliates.
Authors
Related
Why multinationals are betting on IndiaÂ
As the world’s largest democracy prepares to overtake China in terms of economic growth, it offers a huge investment opportunity, explains IMD’s Richard Baldwin....
Why supply chain reorganization now tops the CEO’s agenda
Amid mounting geopolitical tensions, CEOs must take direct control of supply chain resilience, says IMD’s Carlos Cordon...
Where business and policy meet: Managing geopolitical tensionsÂ
Business leaders need to respond more proactively to geopolitical tensions, while policymakers need to rethink their approach, argues IMD’s Simon Evenett....
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Â
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Â
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.
Â