Tomorrow’s world

By 2020 stockbrokers will be replaced by robots and offices will only exist in virtual worlds. Or at least that’s what the experts think. BM reports on how you could be doing business by the year 2020.

“My vision for 2020 is that there will be no office space at all. It will all be virtual”
-Nipan Maniar

PICTURE yourself at work in the year 2020 and what do you see? Office staff replaced by robots; deals done in 3D virtual worlds or journeys to the office in cars that drive themselves. While all this may have sounded like the stuff of science fiction novels a decade ago, the sophistication of today's computer technology and the speed at which working life has changed in the past ten years means just about anything is possible.

In this feature we ask a panel of technology and management experts for their vision of working life in 2020.

The virtual office:

One of the biggest clues to how working life will have changed by 2020 is the emergence today of a mobile workforce that be based anywhere provided they have a laptop, a mobile phone and an internet connection. By 2020 experts predict that organisations will depend on "plug and play" virtual offices that employees can link into from wherever they are, to such an extent that the corporate HQs could become extinct. A study by the US firm OfficeTeam, entitled Office of the Future 2020, predicts that the whole concept of going to work will be redefined as employees use portable, wireless tools to communicate from any location. Physically commuting to work will be replaced by "telecommuting" - a trend which 87 percent of the executives polled by OfficeTeam believe will increase in the coming decade.  The actual geographic location of employees will not matter, allowing businesses to shift human and material resources around the world - virtually- in response to changing market conditions. These trends will be driven by businesses that will realise huge benefits from savings on overheads and travel costs as well as cutting the organisation's carbon footprints. Already the trend is taking on. Microsoft for instance, has added 400 staff to one of its existing campuses in the UK, simply be introducing flexi-time and mobile working on laptops and mobile phones.

University of Portsmouth academic Nipan Maniar, specialises in creating computer games and virtual environments for educational and training purposes. He describes his vision for the 2020 virtual office: "My vision for 2020 is that there will be no office spaces at all. It will all be virtual. For example, you will be at home, you will log into your office online and it will be a 3D office environment where there will be, for instance, bookshelves containing books you click to open then read online.  Companies will straightway see the advantages of having virtual offices. In fact they would save so much money that they should offer employees' financial incentives to work from home." Robotics expert Kevin Warwick of the University of Reading, agrees with the concept that offices will become 3D virtual environments that workers can enter online: "I'm noticing big trends already with people working more from home - the power of the internet and the IT network is incredible in that respect. But by 2020 it won't just be about message passing. It will be a visual environment with the user's home network linked in."

The emergence of the virtual office naturally leads to increased virtual meetings, which are already growing in popularity as companies strive to cut travel costs and carbon footprints. Work Wise UK, a non profit organisation which aims to boost the British economy, claims that if British businesses alone aimed for ten additional virtual meetings a year they could save €14 billion collectively. Research by BT Business claims that a single virtual meetings saves companies, on average 298, 247 miles of travel and three hours of travel time. Indeed by 2020 meeting virtually will have overtaken face to face interaction completely according to Rachel Pickering of European eco-consultancy Enviros: "One of the key ways that companies are looking to cut costs during the recession is to cut meetings. They are so expensive and can so easily be done by video conferencing. Before, if you weren't there face to face at a meeting this was seen as a sign that you didn't take it seriously enough. By 2020 this attitude will have turned on its head completely and people will ask why people have travelled to a meeting at all."

Today's technology allows companies to hold virtual meetings using video conferencing and even to create 3D virtual worlds, Maniar, however believes that by 2020 business will be done in environments similar to the online virtual community Second Life with participants represented by avatars: "As far as proper meetings I don't see why this shouldn't happen because it will only save time and money. You can incorporate PowerPoint presentations, video calls and conferencing calls into the meeting and all the usual facilities for meetings."

While the technology for virtual offices and meetings may be readily available however, widespread adoption of it will depend on the shifting of pre-conceived ideas by less forward thinking companies according to Mike Emmott of the UK's Chartered Institute of Personnel: "The one inhibition is attitudes. In some parts of Europe and in some sectors you get some unreformed attitudes. Surprisingly it's often the workforce that finds flexibility implausible." The concept of virtual working, while demonstrating clear financial and logistical advantages needs a fundamental attitude shift on the part of companies to become widespread. However as the recession cuts into travel budgets, and overhead costs and technology makes the transition from physical to virtual an increasingly seamless one practical considerations are overtaking companies' increasingly outdated reservations.

Organisational structures:

Technology is an enabler of dramatic changes in working practices as demonstrated by the move towards the mobile workforce. But how will it shape the organisational structure of the future? It is one of a number of forces that will shape the corporate landscape in 2020 - one of the strongest being the credit crunch and ensuing financial meltdown which has shaken the European business world to the core and forced a complete re-assessment of corporate practices - from governance and ethics to management structures.

In 2007 a team of experts from PricewaterouseCoopers embarked on a year long project to explore the future of people management. The result was the Managing Tomorrow's People report, which identifies three potential scenarios for working life in 2020: The Blue World, the Orange World and the Green World. One of the lead researchers on the team was Sandy Pepper, a member of the Employment Relations and Organisational Behaviour Group at the London School of Economics.   He explains the thinking behind creating three possible scenarios: "If you look back over the last 15 to 20 years, and you think about the things that have happened to profoundly change the world economy, such as 9/11 or the financial crisis, it's almost impossible to predict what will happen by 2020. The scenario approach involves thinking about a number of possible paths to the future and building up narratives around those paths.
The closest 2020 scenario to today's world, and the one that assumes the least impact from the financial crisis, is the Blue World.  "The Blue World is the world in which there is a continuing growth of big companies and capitalism and a continuing focus on individualism and consumerism," says Pepper. "This is, in a sense a development of the world we've got now."

In the Blue World the corporate is king - big company capitalism rules and consumers take precedence over social responsibility. This is a world, says Pepper, in which global companies will assume the role of mini states, with many making profits equivalent to the GDP of a small country. Factors that could drive this, according to PwC include the merging of the world's biggest technology and search engine companies in 2012, the climax of a decade of M&A consolidation across industry sectors in 2014 and the emergence of the Indian economy as a leader in several industry sectors by 2011. Describing the impact of the Blue World on working life, Pepper says: "The implication of the Blue World to employment is that people would become linked to companies in the way they are currently linked to the state. You might imagine, for instance, a world where corporate health schemes become more important than national health services. The relationship between companies and individuals would become ever more important."

Such a scenario assumes however that there will be no backlash from the financial crisis against the types of corporations that helped to make it happen. The opposite scenario would be the Green World, in which as Pepper explains: "There's a reaction against the focus on individual preferences and consumerism." The Green World would still involve a focus on large companies, but with a focus on "patient capitalism" - where social responsibility dominates the corporate agenda and "green" concerns, such a climate change and sustainability, are the key drivers for the business.  In this scenario, virtual meeting technology comes into its own; face-to-face meetings are replaced with virtual solutions and air travel is only permitted in exceptional circumstances. Companies would also provide employees with corporate transportation options between work and home. There would, says Pepper, would a stronger focus on the work/life balance with companies taking a "holistic view" of employment: "Companies would engage with staff around a psychological construct that's much more focussed on work-life balance and sustainability. There would be a much more rounded view of people's careers and they would be encouraged to go on train and to go on secondment to social enterprises for a period of time in order to develop them."

A more pragmatic scenario - and one driven by today's technology trends is the Orange World. This takes the virtual office concept to the extreme by suggesting a world where companies become increasingly fragmented and specialised. Each organisation has a core staff, which is supported by a network of mobile workers that are called upon whenever their skills or services are needed. As well as technology facilitating the mobile workforce, the following events could result in the emergence of an Orange World: A record number of corporate de-mergers and spin-offs by 2012; a steep decline in the popularity of supermarkets and a move towards local farmers markets by 71 percent of the European population; skills shortages in China that push up wages and drive the balance of power to the individual and away from the collective. In the Orange World organisations would be built around an "inverted doughnut" structure in which, says Pepper: "The idea is you have a core of people working for an organisation and then an outer ring of people associated with it. Companies would manage this network of people so that they've got resources when they need them." This would provide the opportunity for people to have "portfolio careers" in which they work on individual projects for companies of their choice - a very different scenario from PwC's Blue World.

Although The Orange World has the least similarities to today's business environment, Pepper says he believes the financial crisis could be the catalyst that will drive a move from corporate giants to the fragmentation and specialisation of companies: "Because of what's happened in the past 12 months I think one might well expect there to be a reaction against the traditional big company capitalism that has dominated the last 50 to 100 years. What's happened in the financial world has caused a huge number of people to re-think their careers fundamentally and to take much more interest in smaller organisations that have a particular niche."

Mike Emmott of the Chartered Institute of Personnel agrees that the current financial crisis will drive changes in organisational structure and management practices. He points to the fact that organisations are under increased pressure to improve their reputations and manage staff in an ethical way, indicating support for PwC's Green World scenario.: "There is a definite re-bound from the behaviours that are seen to have produced financial disaster. Management will want to display greater responsibility in the sense that they can defend their actions and behaviours at the bar of public opinion. There's far more interest now in issues about reputation and brand." He goes on to say that he expects in 2020, managers to veer from the accepted model of corporate behaviour and take a more maverick individualised approach to running their organisations: "Managers will be more willing to rely on their own judgement and less impressed by establishment or 'top-down' thinking. It will be a bit less hierarchical and less dependent on formal authority and more aware of individuals' ability to assert their right to be listened to."

The financial crisis coupled with sophisticated technology allowing remote working could spell the end of the corporate giant. But with corporate mergers shrinking the size of the financial world and emerging economies gathering power in the industrialised world the Blue World could continue to be a force to be reckoned with in 2020 and beyond.

Artificial intelligence

PwC's three scenarios focus on the ways in which employees will be managed in 2020 and assume human beings will still be required to carry out the work they do today - albeit in a different context. However some experts believe that by 2020 the human element will be taken out of the equation completely in some workplaces - instead the work will be carried out by computers with artificial intelligence or, in extreme cases, by robots.

 One of the biggest proponents of this theory is Kevin Warwick, a professor of Cybernetics at the University of Reading. He is currently leading a project to study the use of artificial intelligence and in 1998 became the first person to have an RIFD transmitter implanted under his skin.  In a later experiment his nervous system was connected to the internet from which he was able to control a robot arm. He firmly believes that artificial intelligence is reaching such a level of sophistication that it won't be long before machines make decisions in the workplace  - particularly where humans are prone to error such as in the financial sector: "The human response is slow and can be error prone and too emotionally driven, which on a business front is now always a good thing," says Warwick. "In the future a lot of decisions will be taken not by humans by technology, particularly regarding financial transactions where humans make a bit of a hash of it sometimes."|
He goes on to say that in the financial sector today, transactions are already taken by machines, but these machines do not yet have the intelligence to make decision. The development of this intelligence will allow machines to decide whether to buy or sell stocks and products based on up to the minute data. This, says Warwick, could lead to stockbrokers being replaced completely by machines: "I think they should be drawing their pensions now because in 2020 machines will be doing the stock broking," he says.

Warwick also outlines a situation where this sort of artificial intelligence - will enable companies to gather information about customers far quicker than a human marketing officer ever could and to tailor their marketing accordingly. He outlines how this could work, for example, for retailers: "In supermarkets 95 percent of what people buy is regular purchased consumer products like milk and bread. The AI systems can therefore predict what customers are going to buy and look for links to other products. Then it can send marketing messages about those products that are specifically tailored to the individual consumer. For instance if somebody has a cell phone and they usually buy a certain cheese, the AI machine could send them a text offering them a free trial of a bottle of wine. This would be a specific message tailored to the customer not a general spam."

The big advantage of artificial intelligence in this context - like in a banking environment -  is that machines will have the ability to make decisions based on up to the second financial calculations and a rapid analysis of variables, far quicker than the human mind. This raises the question of whether humans will in fact become subservient to machines with superior artificial intelligence in the workplace - a scenario which Warwick says is inevitable: "From an economical point of view you can see how the machine will be able to make better decisions and do the job in a much better way.  Because of this the human will become much subservient to the machine. But then we end up with a situation where human beings are drones, keeping the machines going. The roles will be reversed. It's like a Terminator scenario."
One area where moves are already being made to completely replace humans with machines is the military, where technology is being developed, particularly in US, for autonomous vehicles and weapons: "The military is already heading towards technological warfare. I don't know how long there will be soldiers," says Warwick. "Already there are pilot-less fighter planes and drones for flying so it's already gone a long way. Autonomous vehicles on land and sea is the direction it's moving in."
This technology could, by 2020, also filter down to transform the way we travel to work, according to Warwick, who claims GPS technology combined with artificial intelligence could lead to cars being able to drive themselves: "Satellite navigation systems already know what road you should take to get to your destination and what the road signs you will pass. So as long as cars can stop you hitting other drivers then there is no need to drive."

Hearing Warwick's theories it is easy to imagine a world in 2020 where offices are full of humanoid robots and given the sophistication of robots such as Honda's Asimo, this does not seem so far fetched. Artificial intelligence has developed to such an extent today that machines are now able to carry out conversations with humans as Warwick testifies: "There are tests that are done now where people have to decide whether they are having a conversation with a human or a machine. The best machines are able to fool some very eminent people. So even today we have machines that can communicate with humans so well that experts don't know the difference." The growing sophistication of humanoid robots could see them become a fixture in people's homes, says Warwick: "I think there is the possibility of people having humanoid robots around the house to that it can talk and interact with you and carry out housework."

The most extreme research his team at Reading University is currently carrying out involves implanting rats' brain cells in robots which then assume the creatures' characteristics. The next step, would involve doing the same with human brain cells. An experiment, which could mean "the workplace in 2020 would change dramatically", says Warwick: "In the future you may well be able to take part of your brain and send that to work. Your robot self could go off to work and do the boring stuff and you could stay at home."

It's certainly an attractive prospect but it relies on a certain business model where rigid working practices and decisions made according to set financial criteria stifle creativity and individualism. Whether this will happen comes down to PwC's three scenarios. There would be little place for robots in an The Orange or Green World. But in The Blue World, artificial intelligence and taking humans out of the equation may be seen as the only way for companies to avoid the sorts of mistakes that led to today's financial collapse.

Going offshore

The outsourcing of back office functions by European companies to offshore firms is already widespread. And according to the European Outsourcing Association the types of areas that companies choose to contract out will have increased to include ones as sophisticated as business strategy.

Chairman of the EOA, Martyn Hart, says: "I think what will happen is that by 2020 more and more things will be outsourced that aren't as the moment such as business strategy. There will be a maturing of outsourcing in that sense. I also think that outsourcing will be called something else and will be more widely accepted."

He goes on to say that outsourcing services will become more specialised allowing companies to fragment the portfolio of services they contract out, choosing smaller specialised companies to deliver specific skills.
Traditionally Asia and Eastern Europe have dominated as the most popular outsourcing destinations. However, Hart says he believes that by 2020 many more companies will have gotten in on the act: "More countries will be involved depending on their commercial advantage. Services such as call centres will move back closer to home because of cultural affinity."

The green agenda

Green issues are already high on the agenda of European companies, but the pressure on them to produce sustainable products and to run their businesses in a way that will have minimal impact on the environment will have greatly increased by 2020, according to Rachel Pickering, Development Director of Enviros. This, she says, will have a particularly big impact on smaller companies which today are under less pressure to comply with environmental guidelines. She says: "Smaller companies tend to be under the radar today from an environmental regulations perspective. But by 2020 they will be impacted more directly particularly as environmental issues move from being voluntary guidelines to legal requirements. Government targets set a few years ago that don't seem challenging now are likely to be revamped and to become more stringent. Climate change will mean companies will have to look much more closely at how much energy is used within a product or a process and at minimising the amount of material that is used in it."

She goes on to say that proving their environmental credentials will become a way for companies to raise their competitiveness: ""Legal requirements can take a long time to move from being an idea into legislation whereas sustainability issues affecting the reputation of an organisation require a faster response. Companies need to pre-empt these reputational issues because it will
give them the competitive edge."