The following article stems from Jeremy White’s keynote presentation at Womble Bond Dickinson’s Innovation Week 2021. The annual event brings together the entire transatlantic firm to discuss, consider and learn about innovation, both in the legal profession and society at large. Innovation Week 2021 is presented by the firm’s Innovation Board and took place March 22-26.
In the 1980s, telecom executives predicted cell phones would remain a niche technology, rather than become an essential communications tool for billions of people. In 2010, a cable industry official laughed off Netflix as a potential competitor. Today, Netflix has more than 200 million subscribers, and industry titans ranging from Apple to Disney to NBCUniversal have made SVOD (subscription video on demand) the cornerstones of their business models.
The point, according to Wired Magazine Executive Editor Jeremy White, is that innovation comes fast—and it comes big. Today’s successful companies won’t be upended by peer competitors—but they can be replaced by upstarts who figure out better, more efficient ways to achieve the same goal.
The last 30 years have seen a massive increase in the global middle class, White said, with hundreds of millions of people moving from poverty to prosperity worldwide. Not coincidentally, he also noted a corresponding increase in computing capacity. Such capacity was mostly found in the U.S. in the late 1990s, but now, China has more computing capacity than the U.S. and Europe combined.
“Most people are online,” White said. “The money isn’t—but it will be.”
He said the COVID-19 pandemic accelerated an online spending trend that already was growing. “You’ve got three to five years’ growth (in online spending) in just two quarters. This is a phenomenal change in how we view e-commerce,” he said.
The Rise of Shopify and What It Says about Innovation
Shopify’s rapid growth is an example of how innovation is impacting consumer shopping trends and upending notions about the marketplace.
Shopify describes itself as “a subscription-based software that allows anyone to set up an online store and sell their products.” During 2020, Shopify saw sales on its platform double from 2019—to $120 billion. The key is that it allows brands and stores to directly sell to consumers, without going through third-party sellers that take a substantial cut.
“It shows how naïve people are when they say ‘Nothing can compete with Amazon.’” White said. That doesn’t mean Shopify is hurting Amazon—in fact, the online giant recorded record revenues in 2020. But White said it does prove that innovators can succeed by finding new approaches to old problems (in this case, how to connect merchant to buyer).
And while Shopify may be disrupting the marketplace now, White said don’t assume that will be the case a few years down the road, as the wheel of innovation continues to turn.
“Now, there are companies trying to be easier (to use) versions of Shopify,” he said.
Smart Technology as a Constant Companion, at Work & Home
Few companies seem as stalwart and dependable as McDonald’s. It’s the place grandparents take their grandchildren and reminisce fondly about their own youthful experiences under the Golden Arches.
But even an institution like McDonald’s still has room improve the way it serves customers. The company recently spent $300 million to purchase a group of artificial intelligence (AI) start-ups. These tech companies are developing technology that can alter restaurant menus and display boards in real time based on weather, traffic patterns, the time of day, etc.
“It’s an example of an established corporation investing in AI to dramatically change what it does,” White said.
Such examples can be found in virtually every sector, including the legal services industry, as companies look to AI and related technology to find new, better ways to do business.
White says the western world soon may adopt a trend seen in Asia, where “super apps” like China’s WeChat and Japan’s Line enjoy massive popularity used by hundreds of millions of users.
Both are messaging apps, but have evolved into many additional functions. In addition to sending text messages, customers use WeChat and Line to pay bills, do their banking, listen to music, play online games and much more. They essentially have become one-stop shops for online services.
“People go into the app at the start of the day and never get out of it,” White said.
And as AI technology becomes more sophisticated, it will be used for even more tasks. For example, a Hong Kong hedge fund called Aidyia is using AI to predict price movements in financial markets.
Tech Trends to Watch: Voice Recognition & Full Fiber
White also believes voice recognition AI, which already is widely used, “will be the dominant user interface.” Instead of typing into a keyboard, users will simply speak a command and an AI-powered device will execute it. Many users already employ voice-activated virtual assistants to turn off lights, find TV programs and set reminders. White says many other tasks similarly could be entrusted to voice recognition AI.
“Houses will have it built into the walls instead of (residents) buying speakers,” he said.
Such technology does present security concerns. White noted a recent case in which fraudsters used voice recognition AI to access an energy company’s account and steal £200,000. He said such attacks will become more frequent as hackers become more sophisticated in using voice recognition AI.
All of these technological innovations depend on fast, reliable broadband. White said the push for full-fiber broadband will pay huge dividends for future innovation.
Full-fiber broadband uses fiber optic cables, rather than copper cable, throughout the entire broadband infrastructure. Full-fiber connections are much faster, but currently, only 14 percent of UK customers have full-fiber broadband. By comparison, Spain has extended full-fiber to 80 percent of customers, and France has connected more than 40 percent. Japan and South Korea are the world’s leaders in full-fiber connectivity, having connected approximately 99 percent of users. The UK announced in September 2019 that it would invest £5 billion to expand full-fiber access.
As the saying goes, “The only constant is change.” This certainly applies in the world of innovation, and today’s technological innovations will have real-world consequences on tomorrow’s business. Successful companies, including law firms, are the ones that have their collective finger on the pulse of innovation, White said.
“The more that you are aware of these things puts you ahead of the competition,” he said.