The internet era is about to enter a new phase, in which everything communicates with everything and starts functioning autonomously – without human interference. Smart technology will usher in fundamental innovations that break down old structures and impact every sector of the economy. These are the conclusions of ABN AMRO’s latest report "SMART future ” which is to be officially presented at the Dutch Design Week in Eindhoven, the Netherlands.
“Smart” is shaking up the whole economy
At the moment, we are still in a transitional phase: “creative destruction”. A process of technological changes in which the latest discoveries develop further as new ones continue to appear on the horizon . Like other technological breakthroughs in history – from the steam engine to the microchip – these discoveries will spawn fundamental innovations that will change forever the very structure of our economy. Smart technology is pivotal in this process: everything is becoming a computer and connecting to everything else. ABN AMRO believes these developments will impact every sector of our economy. Health care, for instance, where robots will take over bedside care, or construction, where domotics will give home-owners full interactive control over their homes. With a remote control at first, but later perhaps by speech or using smart glasses. In industry, too, there are many changes in store. Smart factories will address any disruptions to the production process and restart production all by themselves. In every single sector, we will see structures and processes being shaken up and reinvented.
From Smart Farming to Smart Money
In its report, ABN AMRO presents scenarios for five economic sectors. The Dutch agricultural sector, for instance, is a front runner in Smart Farming. This latest step in agri-automation allows producers to take better decisions based on detailed measurement and control solutions.In de logistieke sector werken pioniers aan het Cross Chain Control Center (4C): een regiecentrum waar zij met behulp van slimme IT-toepassingen en datasharing goederenstromen bundelen. Zo zorgen ze voor een hogere beladingsgraad, minder kosten en een lagere CO2-uitstoot.
The construction industry is seeing a growing demand for Smart Homes, where innovative building solutions enable people to continue living in their own homes as they grow older and more physically challenged. ABN AMRO believes that domotics will make enormous strides in the years ahead: from fridges ordering groceries to sensors that alert the home care providers if they fail to detect any movement in the home.
In the textile industry, Smart Textiles are projected to see growth of over 400 per cent in the next 8 years, with sales projected to reach USD 1.5 billion in 2020. Currently wearable tech is no more than a market niche, with gadgets like Google Glass and smart watches. But it has loads of potential, notably in medical applications, protective clothing, sports and fashion.
Paying for products is fast becoming an “experience”. The fact that nearly everyone has a smartphone is creating new needs, like contactless payment. Payment 3.0 is not just 100 per cent digital, but above all smart: personal and more contextual.
Employment effects less dramatic than feared
In ABN AMRO’s opinion, it’s not surprising that these innovations are still viewed with some suspicion, especially when it comes to the labour market effects. After all, new, fundamental innovations are creating a mismatch with the labour market, which is still geared to the current economic structure. Moreover, breakthroughs like smart technology are specifically aimed at making existing processes more efficient.
“In previous cycles, the dire predictions of soaring unemployment never materialised. Innovations like smart technology also create new jobs and raise the standard of living. In other words, they drive economic growth. So the downward pressure on employment is likely to be a temporary phenomenon,” says Mathijs Deguelle, ABN AMRO Sector Economist. “We’re heading for a future in which smart technology touches every aspect of our lives. At work, outdoors, in the car and especially at home. Enabling objects to communicate independently will make processes more efficient, more flexible and more effective. Luckily, such innovations take time to gain influence, and it will be a while before they really change the economic structure. So we still have plenty of time to adjust our own behaviour.”