Chunka Mui is a futurist, innovation advisor, and author. His book, Unleashing the Killer App: Digital Strategies for Market Dominance, is a New York Times bestseller. Public Power Daily interviewed Chunka in advance of his presentation Tuesday, June 19 on Unleashing Six Megatrends of the Next Decade to public power leaders at the National Conference in New Orleans.
What qualifies a technology as a megatrend, as opposed to a technology that just gets widely adopted?
A megatrend is something that creates a large gap in capability. When technology improves to the point that it creates a whole enormous amount of capability that is very different from the capabilities utilized today. Essentially, you have a large gap that separates what people are doing now from what’s possible.
Because there’s a large gap, the market players will step in to take advantage of those capabilities. And if those market players are new from the incumbent, then that forces a disruption in industry structure.
A megatrend is an inexorable force that is going to create opportunities and changes. Megatrends are horizontal disruptors that cut across all industries, and utilities certainly are one of those industries.
The technology in the megatrends you cite (cameras, cloud computing, internet of things, big data, artificial intelligence, social media) have already become a big part of our culture, why pay attention to them now?
When you are thinking about the future, you have to realize the future is already here.
One of the main criteria is that they are no longer emerging technologies – I think of them as mature technologies that have reached widespread adoption. When you think about interconnected devices, sensors, the internet of things, cloud; all these are things that we no longer look at as coming, they are here and they are widely adopted in other industries. And you can easily see the adoption curve growing to the point where all industries will have to deal with them.
The difference between a megatrend and emerging technology is that the megatrend is here. If you look at an emerging technology like blockchain, there are still a lot of issues that have to be resolved and we don’t know quite how it’s going to scale. That’s not a megatrend because we have to still deal with those issues.
Megatrends are things that we know are moving. It is not up to utilities decide whether or not they are going to be widespread, it is up to utilities to figure out how they will deal with the widespread adoption curve.
Is there an example of an industry that has adapted to change well?
If you think about the automotive industry, it actually hasn’t changed much in 100 years. It is the same conglomeration of players across the globe.
We think of it as slow moving, but there are massive disruptions because of technologies like artificial intelligence, the internet of things, and cloud computing. In the last 10 years or so, there has been a global arms race in using these new technologies for autonomous vehicles.
There are ripple effects of this change. If you change the core product, you essentially change the whole value chain. How suppliers interact with manufacturers, dealers, and industries such as energy and utilities. Once you make a core change in the car, that affects how the monies and competitive advantages throughout the value chain will change.
If disruption can happen to something as old and staid as automotive, you can imagine it is going to happen to utilities as well. Disruptions in the automotive industry will impact utilities, because a change there will drive a shift in the demand for electricity.
What should utilities watch for in megatrends?
It is hard to imagine an industry that touches as much of the population as electricity. If we have needs for different types of power, different types of distribution – electric utilities have to respond. If we have changes in expectations for customer service, utilities have to respond. The need will definitely be there. If we have a more interconnected society, and those devices are somehow connected to the grid, that is a cybersecurity issue utilities have to deal with.
An opportunity and at the same time, a challenge, is that for particular technologies, such as autonomous vehicles, the adoption is going to be uneven. It is a technology that is going to be very localized. In some cases, there may be an opportunity for public power utilities to help accelerate adoption, which creates both economic opportunity for the utility and also advantages for the region in which they operate.
For example, if we have a faster than expected adoption of EVs due to autonomous cars, that will depend on the infrastructure of the region to be ready for it. There is a role that electric utilities can play in shaping the environment to be more accepting of that technology and to facilitate the adoption of that technology.
What makes for an innovative company?
Companies that successfully innovate think big, start small, and learn fast. The losers tend to think incrementally instead of thinking big. And after thinking incrementally, they tend to start big and they don’t leave themselves time to learn.
The real message for all companies, especially those on the verge of disruption, is that they have to have a systematic process for innovation. Start by thinking big and then break that down into a systematic process for experimentation to understand how these large possibilities and particular elements fit into your environment. And then set up mechanisms for learning from those experiments. In the end, that’s the only way to innovate.
Does innovation look different for non-profit entities? Do nonprofits have any competitive advantages?
The market doesn’t care if you are for-profit or not-for-profit. In the automotive industry, profit-seeking companies will change the adoption curves for electric vehicles, which then has a ripple effect in terms of where charging stations and the level of consumption will be. That’s going to affect utilities whether they are for-profit or not-for profit.
One of the major differences between the two business models is the ability to do long-term planning. The particular pressures of each business structure enables or makes planning harder. One of the things we’re facing over the next ten years is a large-scale change over different industries. And some have the capacity to do long-term planning better than others because of economic pressures. So in some cases, nonprofits might be in a better position than others, but in some cases they may be at a disadvantage. It depends on the circumstances of the industry and the market.
