Full transcription: may contain unintentionally confusing, inaccurate and/or amusing transcription errors

Intro (01:24)

Nuno: In today’s episode, episode 11 we will start talking about the 2020s, the decade that we have ahead of us. We will drive this into different episodes and we will choose a framework that’s a little bit different than those normally followed by people that we normally listen to. We will choose a scenario planning framework.

The difference between a scenario planning framework and simply a forecast framework is in forecasting. We’re trying to extrapolate the future from where we start today. In a scenario planning exercise, we really doing a little bit of time traveling to start with. We’re moving ourselves into the future and to 2025, 2029 and we’re trying to figure out, from there, what things would need to happen to give rise to those scenarios. In some cases, we will share very strong views, which we hope you’re okay with, but in others we will really structure two or three potential scenarios for some of the elements that we will discuss. The objective is to start the discussion going and to the best of our knowledge, really frame what’s ahead of us in the next five to 10 years.

Section 1 – When did the 2020s started? (02:41)

Bertrand:  We will start with, where does it start? When did the 2020s started? And I guess everyone will agree that right now under shelter in place we have a pretty momentous event with us. We’re in the middle of COVID-19 emergency, we are in a new world, a brave new world, I guess, and that’s how the 2020s started. Obviously it will be more difficult to guess exactly when this decade will be over, beyond, the digits, but more based on inflection points.

Nuno: So we start with crisis.

Bertrand: We start with crisis. Hopefully we don’t end with crisis 

Nuno: It seems like every decade has been defined by crisis. So the likelihood of that we shall see.  

Bertrand: Indeed

Section 2 – Macro, World Governance, Geopolitics, Non-Governmental (03:24)

Nuno: We are gonna talk about scenarios for what the world will look like in 2029, 2030, from what I call the outlandish, to the predictable. And we’re going to start with the macro space, world governance, geopolitical, and non-governmental elements.

2.1 Covid-19 impact

So we’ll start with coronavirus, which is obviously in our minds today, and we’ve already dedicated episode 9A and 9B to the discussion around coronavirus. So today we will not repeat what we discussed in that episode. So go back to episode 9A and 9B to really see our views on what’s happening with coronavirus.

Rather, we’re going to focus a little bit further out on what we see  from that impact.

2.2 Government interventions / regulations

Bertrand: Yes, I think it makes totally sense. So let’s move to government interventions, government regulations, where do we see the world ending in that decade.

Personally,  I am definitely expecting more and more regulations, at least in tech. I’m not saying we should wish that because actually, you could argue that some of these regulations at least played a role in where we are today, which is not a great situation regarding COVID-19. We had maybe too much regulations. We have seen that some regulations have been actually removed in the emergency. Now you can do in the US medicine across state lines, you can do remote medicine for instance. So maybe there is some positive regulation actually going on, meaning less of it. 

But on the other end, it’s very clear we should end up with more in many ways. If we think about fake news, if we think about elections, it’s highly probable that we will end this decade with a lot more, and what we know today as social platforms might have a very very different face as a result, because they’re often the target of regulations.

Privacy is another one. There has been a lot of changes in the past decade with GDPR, with now some new California regulations. How far will it go? It’s highly probable there will be more of it. What is very highly probable is that it will be everywhere. What you have in US and Europe will be there for the rest of the world. That would be at least my expectation. 

Another question because we see that a lot, is around breaking down some big tech companies. I don’t know if we will see that, but it’s definitely a possibility that more in that direction. What’s your take 

Nuno: Nuno?  

So I would do the time traveling, the time-traveling piece and talk about government roles to start with. I think all the topics you mentioned are very much top of mind. But if we look maybe 5 to 10 years ahead, what will be the role of government. And for me, scenario one is, as this scenario where we will have democratic governments elected that are not exceptionally competent, but they’re whatever the people choose, that are most of the time ill prepared for crisis, but otherwise do a decent job and we’re all happy with that. 

I think the second scenario to go a little bit more extreme, is what I would call mummy governments, and we end up in governments that basically we expect that everything will be taken care of for us. So we expect government takes care of our infrastructure, they care of our wellbeing, of our health. And in that scenario, even countries like the US will migrate more and more to a sustainable system where people do have access to healthcare, where people do have access to justice, and do have access to all the infrastructure they need to have, which today they can’t take for granted.

So it’s sort of the mummy logic. The government will take care of us. They need to take care of us because we’ve had a pandemic, maybe we’ll have another one who knows, but we need to have a government and institutions that really take care of what we need to do. 

The other extreme, on the other hand, is sort of governments die in some ways. Governments are there just to manage the upper layers, and the basic infrastructure of the country. But in some ways, the private sector once and for all just fully takes over. And that scenario would be a scenario under which our belief in the government is no longer there. We believe that the companies around us, are really much better equipped to serve our needs, to serve our privacy or lack thereof if we’re willing to accept it.

And in that scenario. You know, our view on the governments is just,  for the basic things and basic regulation. 

So if we look at three scenarios as potential scenarios, I would say, you probably have the most regulation in scenario one and two. 

And in the other scenario that I just talked about, which is the mummy government that takes care of us and that mommy government, as you said, all the key issues are around, undue power of the private sector, issues around privacy, issues around access to healthcare, issues around any regulatory intervention that allows things to be fair and non discriminatory. 

Whereas you move to a scenario where we just stop trusting our governments, we’re going to be in a world that really is more and more in the hands of some of the giants around the world. The energy giants, the financial service giants, and obviously the tech giants. 

Bertrand: I think it is not just a question of trusting, not trusting our governments, or system of government. My take for instance is that it’s clear that at least in the West, the response to this COVID crisis has been pretty poor, while in some other countries like Asia it has been pretty great, much less infection rate, much less death. And the way I’m looking at it is, maybe we end up with a similar system of government, but what is changing is who is in charge. Do we move to a place where instead of the lawyers being in charge in many governments, do we move to a world where we have more experts, more scientists?

Interestingly enough, there are a few countries that are actually led, by scientists or former scientists that did actually pretty well during this crisis. So do we move to a place where it’s a new type of politicians that are taking over because we have been proven that we cannot trust, the current type of politicians but the system can sustain a different approach, a new type of politicians that might be less populist, more focused really on the good the people.

And, I think what we went through is also showing us some level of incompetence at so many level that it’s really scary. So will it push some change. I think it can only come from the bottom up, from the citizens, for this change. I’m hopeful. I think in the worst case situation, we’d have similar politicians, but this crisis has been so bad that everyone is going to be better prepared for a similar health crisis. Obviously you won’t ever be prepared for a different type of crisis. But at the very least, I hope we will have politicians that will have learnt the lessons.

They are also questions around, what is going to happen with some of these world organizations? WHO, UN? The US has announced they plan to leave the WHO. Is the UN next? And I still remember personally how shocked I was, like how long will it take WHO to finally declare we are in a pandemic. If these guys are supposed to help and that’s their mission to help against pandemics, you better recognize them when they are there, not months or weeks too late.  So that will be an interesting development. 

And what is the trust in this supranational governments because there’s always questions about citizens trusting their own governments, but what about these supranational governments? In some ways you could argue some have benefited from more trust, I would say, but following what’s happening, I’m not sure, if you can say that.

Another example is the EU. What will happen with the EU? We have seen a pretty big lack of friendship among countries in the EU. Everyone was fighting for resources, for medical support, separately and sometimes against each other. The frontiers have been blocked, across member states, which is totally against, how Europe is supposed to work. And this has not happened in the United States obviously. So that’s also raising question. Is the EU only there when it’s easy, but not really there when it’s hard, which would be probably worrisome in some ways.

Nuno: And I fully agree with that. But I would also allege that in the US, the federal government is at odds with many States, including the state where we live in, in California. 

Bertrand:  Fair enough

Nuno: That also creates its own dynamics of power. Back to the point that you were making, because I want actually double click on that.

You’re almost saying maybe there will be an emergence of technocracy again. And we’ve seen that in Europe before. We’ve had technocrat leaders, certainly in my country in Portugal, we had  a technocratic leader for 10 years as a prime minister for a significant period of time that really moved the country forward in terms of infrastructure.

And maybe that’s one possible route. The route where we stay in the current system that we’re in. In Diaz’s system, but we have more competent technocratic, process-driven people to lead us there. But the failure that you just alluded to, and it is a failure of what’s happening today with the EU, I would allege also there’s significant failures today happening in the US with federal government versus the States might lead to something more dramatic. It might lead to a more extreme scenario where either we get polarized to scenario two or we get polarized to scenario three. We get polarized to mummy, or we get polarize to private sector is full on in control. We don’t trust government anymore. So how would you see that?

Bertrand: That’s a very fair point. The US is absolutely not rosy, but it might go further. Could it be the beginning of the end? Could it be the start of a long decline of the US? Because ultimately, it’s not able to work efficiently at all in this type of situation. And some states have proven pretty clearly they have a very different approach to  some issues. And how long can it stay that way? That’s really a fair question. The US as we know them, they have been there for, not so long actually by most of world history. 

2.3 China

Nuno:  I think that’s a great segue for us to go into actually the world powers and the geopolitics of the world and talk about exactly whether the US is going to be a super power or not in five to 10 years. And the other side of the coin obviously is China. And will China be that second superpower?

Will China be the single power, which is another scenario, a world in 5 to 10 years where China is the single super power, where the US because of its own factions and complexities and organization that has federal country with States might not b, as powerful certainly from a foreign policy perspective.

Or will we see the emergence of a third super power, for example, like India or other powers that will come to it. What are your thoughts on that, Bertrand?

Bertrand: There is definitely rise of China, and it’s not new, it has been happening for the past 40 years.  It was fast growth, but it was coming from a very small base from an economic standpoint, a technological standpoint.

But now China is really big, keeps growing and has shown is better able than the US to deal with at least some type of crisis in protecting their citizen in the situation of a health crisis. So that’s definitely something that is very strongly in favor of China. What’s less in favor of China, is since this crisis, China has not always acted in the best way for the rest of the world.

And for a lot of politicians, it’s also very clear that China is a perfect scapegoat to their own shortcomings, and that’s what all politicians do: you try to deflect the fire, somewhere else. So in term of softpower, I’m pretty worried for the next 10 years from China, at least, from a developed economy perspective.

We can see that just today, the UK announced, potentially granting citizenship to all citizens in Hong Kong. The UK also talks about removing Huawei, like the US has been working on for some time. 

So my point is that I can see a change already in politics in the past few weeks. And I don’t see really reason that this is going to change. 

China will keep growing , and even if there are new regulations, even if there is a decoupling in some ways of the economy and the technology, which I think will happen, that will not stop the rise of China. And with 1.3 billion people and a very efficient economy, you are going to be very successful, and I think become a world power again, I would say. 

And for the US I don’t think they will disappear in any way, but, I see more of a going back to the old days of USSR and US. But now, it will be more China versus the US is my expectation in 10 years from now. And you could argue, it might already be the case today, but we refuse to acknowledge it.

Nuno: I think for me, the biggest two or three questions in my mind. First, can the U S get its act together? Certainly from a political standpoint and emerge from a foreign policy perspective, again, as a superpower, which it has almost effectively withdrawn itself from being a super power, certainly during the COVID crisis. If the US can reemerge as a foreign policy player, I think it will be the second superpower. Then there are questions where there will be a third or not, but in all likelihood, if I had to make an educated guess, we will have two super powers, China and the US which is always the assumption we’ve had over the last five years or so.

But there is also a chance where the US will even more withdraw itself from foreign policy, even more focused itself on his own issues and its own problems. And will leave the route for China to continue to expand with its infrastructure. 

Now, there’s always been this question, and certainly now that we’re in the midst of the COVID pandemic  and all the discussions around it, that supply chains will start migrating out of China to other countries. But there’s very limited talent also in many other countries that you would migrate to. 

There’s another discussion which would say we as countries then need to have our own ability to produce, manufacture our own supply chains and need to control them. But the complexity of that, the cost of that is also very significant.

It’s almost a reindustrialization of many countries that have sort of become service / tertiary countries. So if I had to make an educated guess, I would say China will likely emerge as the significant superpower of the next decade. You know for me, the joker is actually the US: the joker is can the US be that second superpower or not , but it would still really depend on whether it can get its act together and come back to the foreign policy table.

Bertrand: I think with the US, I would not forget the role of the US dollar, I would not forget the role of English as a language of international communications, I would not forget the US at the core of a lot of international institutions.

But also maybe more importantly the US has it’s defense industry and defense policy. There are US troops all over the world, US defense systems all over the world, US command system all over the world . So I don’t see that changing that fast. They might withdraw from some international organizations that I see that, but they don’t think they will withdraw that much otherwise. They have too much to gain, and too much to lose if they were to leave.

Another point, I agree with you, I think there will be way more regionalization. Can it become really self-sustaining,I don’t think so. But I have seen that US, Europe have discovered that they depend on China, or some other countries very far away, very much for some basic needs. Health basic equipment, medicine, so I think some are realizing that it’s not just, the military side or the deep tech side, but also some very basic stuff that might not be a such a good idea to let a third party work on. So I would say what is considered primary nation state interest, might expand in term of scope and might be regionalized in the sense that we will have the Americas or North America versus Europe versus Asia. But there will be some change here. I would expect some roll back of the globalization we have seen the past 30 years.

Nuno: So to summarize I would say you stand on the scenario under which we will have two superpowers. Yes, no.

Bertrand: Yes.

Nuno: I stand on, the most likelihood is we will have one superpower, China, potentially lower likelihood, we will have two superpowers. We both don’t believe in three. I think both aligned on the fact that China is going to be still the manufacturer of the world, but with less control than it has today on supply chains.

Is that where we stand? 

Bertrand: Yes, less. China’s still important, but I think China losing some part of what is considered core state interest, at least for developed economies, will change, but for China I don’t think it will be that big an issue because ultimately their internal market will keep growing, and they will have developing nations that will be much less difficult with some of these questions.

2.4 Non-Government

Nuno: So now let’s talk about non-governmental and where we see the macro trends going. Clearly, digital   transformation is a given at this stage. And digital transformation, has been painful and hard for low tech industries, but we’re seeing a huge, huge shift right now from digital, it’s something where: we have a chief digital officer and we’re going to have a path to get there, to you actually need to do it tomorrow or you sink if you don’t have a digital strategy, if you don’t have digital channels, if you don’t have a way of addressing your customers in a digital manner, you don’t have the right to exist. So we’ve gone in just a few months from digital transformation school to digital transformation is the difference between survival or death.

At the same time, we have all these generational shifts. We had a full episode on gen Z, which you can check out, but certainly gen Z is emerging and leading us into this new world is going to basically create a paradigm shift on how you address end-users and consumers, which is also fascinating. So in that world, what scenarios do you see merging, Bertrand?

Bertrand: I think the generational shift is obvious, that’s the one thing we can bet pretty easily, people grow old and die.  So this one, at least probably for the coming 10 years, we will see if it changes at some point, thanks to healthcare revolution. 

But I think for me digital transformation has always been in some ways, I don’t want to say a joke, but I’ve seen this as the sort of stuff you talk and talk about and do step by step and don’t rush because it looks good to talk about this, makes your shareholder feeling good. But my take has always been that the true technological companies, who are digital native didn’t need to go through digital transformation.

So in a way, digital transformation were for all these other industries, obviously they have a right to exist. But what am I super excited is that it’s being forced on them, they were in such easy situation not having to move too fast, spend 10, 20, 30 years to really change, that was pretty sad. Of course there were some exceptions, some companies that were truly moving very fast to the future, Disney for instance moving in that direction.

But for some others, I think it’s time they move to the 21st century. And why am I talking like that? It’s because I’m a consumer, and it’s so frustrating when you have to deal with all these corporations who require for you to sign some papers, to receive some mail from the post, to talk to someone over the phone, when there is absolutely no good reason to have to go through that, instead of just doing a few clicks and being done with it. So that gets me excited to think that maybe we’re going to get some more efficient governments, more efficient banks, more efficient insurance and all of this.

And it’s of course not great when it’s being pushed on you super hard, and it’s not great for the people who are suffering as a result, but I think we will be out of this a more efficient world and in a way you could argue, interestingly enough, that some of these efficiencies I’m talking about were already there in some countries, take Estonia, for instance, in Europe, very famous for being very optimized, take Singapore, take some part of China that are very optimized.

So my point is that you can already see the future in some countries.

Nuno: So for me here, there are only two potential scenarios and both assume you are in the digital world. 

The first scenario is a hybrid scenario under which the digitally native companies co-exist in some industries with existing incumbents, companies that were not originally digitally first, but that have developed digital capabilities and have actually transformed themselves and have ways of addressing their customers and their end users in additional manner. I call that my hybrid model, right? And if you look at industries, for example, financial services, or at least big bracket financial services, logistics, some of the key elements of logistics, some of the elements around,  the agricultural space, it is easy to understand that there might be this coexistence that there might be a scenario, or that’s the scenario that we’re going forward to, is the scenario under which these two models co-exist. So digitally native companies coexisting with digitally transformed companies, so to speak.

The second scenario is that digitally native wins, that digitally native wins and that you have every single industry and sub-industry being disrupted by digitally native players. That you have new entrance in the financial services space, that potentially first unbundle the financial service offerings and then over time rebundle it and they basically beat the big bracket banks at their own game and offer much better offerings to end consumers. You might be in a case where logistics totally gets redefined.

That, agriculture goes into full on AgTech. And so that’s the second scenario for me, a world in which there is only disruption that the forcing mechanism of digital transformation that comes from example, from COVID right now doesn’t really manifest itself at the end of the day. And that, that is not enough, that digital native always wins.

So those for me are the two scenarios. If I had to make a bet, I would say over the next decade, we’re talking again about 2020 to 2029 more or less, or 2020 to the next crisis. I would say that the bet is going to be more a hybrid model. There’s going to be some industries that are very, very difficult to totally disintermediate, and even if you’re subpar on some of your offerings, you’re going to have to compete.

Certainly there will be a lot of digitally native disintermediation, but there will be a hybrid world going forward. What’s your bet, Bertrand?

Bertrand: I don’t see only these digital native win, I might be wrong, but I don’t think so. So I would agree with you. And if I take Asia, for instance, there have been a lot of new players, much more than in the West and even more than in Europe, but at the same time, you still have some of these older companies, non digital native companies that were very successful still.

So my take is that what we are living right now is an acceleration, acceleration of five, 10 years of the transformation to digital, and also a separation between the losers and the winners, that is happening much faster. So basically you always have in business at some point, the weak gets weaker, the strong gets stronger.

What we see is that we are going to see that accelerating, and I’m expecting a lot of traditional companies and we start seeing that in the past few weeks, big companies take Hertz, for instance, that just went bankrupt a few days ago. It’s an acceleration without COVID-19 it would have taken maybe three more years, I do not know, but my point is that this was bound to happen. So now we just see an acceleration of that. And I can see that in retail, in the transportation industry, and other industries, we will see an acceleration.

And I think ultimately it would be better for everyone to have stronger, more efficient businesses. And it will give better opportunities to people because the worst is to keep going in the wrong direction. Sooner in your career, you can make a change to the right direction, that’s probably better for everyone.

Section 3 – User paradigms (28:08)

Nuno: And going from the more macro to the more micro, we want to talk a little bit about user paradigms and user flows both Bertrand and myself we were product people and we always like to think through use cases, user flows, how are people behaving. And there are three core user paradigms that we will discuss today.

Work, home and mobility. 

3.1 – Work

Starting with work and framing work around, again, a couple of scenarios. In this case, three scenarios, we’re probably going to end up in the next decade in one of these three. 

First scenario, we go back to pre-COVID and somehow magically we all go back to offices, remote work and distributed work is still the exception, obviously offices will change, that is a given from the current conditions, but that’s, one plausible scenario. We go back to where we were, we changed the way we set up our offices but still being in person, interacting in person is pretty important, there’s still a lot of business travel, and a few other elements to that scenario. 

Scenario number two, we go full remote. We go into what I call the liquid world where there are liquid teams. Everyone works from their home or from wherever they want to work from, be it the beach or somewhere else, and somehow the complexity changes to how do you manage teams that are highly distributed where there’s little little hubification. How do you manage the water cooler moments? How do you manage, you know, the creation of credibility and trust? How do you manage the measurement of productivity and the measurement of action. 

And then there’s a third scenario under which we go probably to more a hybrid model where going into the office is still part of the equation, you still need to go to the office once in a while where there’s still a bit of business traveling, but at the end of the day, where most people are allowed to be remote most of the time. So what I would call the 50% plus remote play, and that’s a model that we’ve been seeing edified by some of the recent announcement by, for example, Facebook and Mark Zuckerberg who was saying over the next five to 10 years, a significant part of our workforce will be distributed and will be able to work remote, but still the offices will have a role.

And maybe the scenario two that I was alluding to the more we’re all full remote is edified best by players like Jack Dorsey with Square and Twitter saying everyone can from now on work remotely if you want, Coinbase doing the same thing, et cetera. 

So these are the three scenarios I see emerging. 

I have to be honest, I don’t think we’ll go back to scenario number one. I don’t think we’ll go back to offices are the center of the universe and everyone needs to go back to the office. So for me, the question is really fundamentally between scenario two and three. I’m still a believer that we’ll end up in something hybrid, that fully liquid world, fully remote world where we are all nomadic won’t fully happen. The generation of credibility, that generation of trust is something that’s really complex to do at a distance. Even if we have great tools and great collaboration tools emerging, it will be difficult to get to that world. So I’m not a huge believer in world 2. But again, I was always a big believer in hubification of companies and distribution of companies, and maybe less of a believer in fully liquid teams.

So I’m a little bit suspect to have a view on this. So my view on this is we’ll end up in an hybrid world. We’ll end up in, let’s call it Mark Zuckerberg’s world, where you know, these two things will be together.

Bertrand: Yes, I feel for me there is a parallel with what happened in the cloud industry. If you take 15 years ago, you were probably seen as complete crazy to think that the cloud take over, there was not a single person serious talking about the cloud. I was probably one of the rare believer in that model  at that time, but no one in the big companies would talk about this.

There was always these security issues, these dependency issues, these expertise issues. There was always good excuses from all the big guys, up to the moment where there was no excuse anymore: if you are not on the cloud, you were just a laggard. 

So my take here is that I’ve been a big believer in a new approach to work in the past two years, looking into more how this is working, how you can best optimized.

I believe now, the next level of sustaining advantage is truly the work from anywhere you want, so be it home, be it from the beach, be it from a WeWork or WeWork type of environment where you share offices. Obviously now is not the time to be sharing offices with a lot of people, but in a few years, I think it might go back to being an interesting option. 

And the other piece is that, I think what we will see and we already see some very successful companies that have been remote first companies for the past few years, take an Automattic, take a Gitlab, take an InVision. So these companies have been remote work from day one, have been extremely successful. 

So my take is that, this is obviously different, this is forced on many companies, so there will be quite a few stories of companies that don’t manage to do it, it’s not working for them, but it’s more because they didn’t get it, it’s not because it was not possible. 

So I would expect by the end of the next decade, we will have a mix, but I think the best companies, the ones that are exploding, that are considered best in class companies, will be the remote first companies, not the remote last, not the remote in the middle, not the hybrid Facebook model, but more the Shopify of the world who announced that they were going full remote.

Nuno: So clearly we disagree on that, which is great. And let’s talk a lot about some of the elements of work and how they’re going to change because there’s a lot of interesting and practical elements of this. We’ve been talking about remote working and distribution of teams as the first element to this. 

There’s also a very core element. One thing that I do think is going to change dramatically is business travel. Business travel will dramatically reduce. The bar for business travel will go higher on both ends. It’s a cost dimension, a significant cost, I mentioned to the company, but it’s also significant dimension to the individual, to their own family. You know, why do you need to do a hundred flights a year? You know, isn’t that unsafe, et cetera. So one thing that I strongly believe in, is that business travel will have to dramatic reduce under any scenario going forward. 

I believe there’s a strong, strong element around productivity of teams and in productivity of teams, today we take for granted that we can measure people in what they’re doing cause we see them doing things. So if you’re in the office and I’ll see you work for eight hours, maybe you’re Googling for eight hours, or you’re on Facebook for eight hours, but hopefully you’re doing something for eight hours.

Whereas if you’re at home, I can’t see what you’re doing. I just came off a call today with a very senior VP a very large player, and he was telling me the story of one of his colleagues saying, you know, I have a couple of thousand people and I don’t know if I should have a couple thousand people or if I should have a couple of hundred people doing that work for me.

Now, with remote work, that’s almost even more difficult because the tools for measurement, the tools for understanding deliverables are even more complex. Even if the person delivers what the person is supposed to deliver, let’s say I have a very deliverable, strong approach to the measurement of productivity, which by the way, I think is the right way.

I don’t know if the person is doing it in two days or in three days or in five days. Is he doing it in one day? Is this person so efficient that actually they’re doing the job of two people, but they’re actually working half because they don’t need to do, more than that. And the interesting thing and the interesting element that, I think comes out of this, is in a world where certainly there’s more and more remote working, where I think there you and I agree, there will be more and more remote working, in that world, the way that people engage with companies might change. It might be that gig economy actually expands beyond, what I would call blue collar, semi white collared type activities, and it goes full on senior white collar activities.

It might be also going beyond that, that people are so efficient or so productive, that actually we stop having five days a week of work. Today we have five days a week of work. We do take it for granted. We’ve discussed it in one of our past episodes. Korea, I believe it wasn’t until 2005, at six days was their working week, you know, so going down to five, we’ve just seen an announcement from New Zealand at least temporarily, they’ll go to four days a week of work of the working week. You know, maybe we’ll go down to three or four days in the working week, and the other days are up to you. You decide what you want to do, and if you have extra time, maybe you work, and you work more because you want to work more, and you make more money because you can make more money, or you take more time with your family or take more time on vacation. 

So the interesting thing for me, and I call this the element of podification of work, would there be an extreme scenario under which certain very high talented people, because of their expertise at a certain point in time, start aggregating talent around them and they themselves become micro companies that work for three or four different companies at the same time.

And we’ve seen that already in the past in a bunch of areas. And I’m sure Bertrand and you have a lot of examples with consulting CFOs, and a few other areas. But can that be the future? Can that be the case that if I’m an exceptional person at strategy and business development, at a certain point in time, I have three or four people that work with me and I actually work across three or four companies, and this is not consulting.

This is not because everyone at this point, it’s like, Oh, that sounds a lot like consulting or like small teams that do this. It’s actually not necessarily that, it is that I am working for three or four organizations. I’m representing those three or four organizations longterm, but it’s just that I actually am bringing my own people to the table.

I’m bringing my own structure to the table and I’m delivering on that. It’s an extreme scenario. I know a lot of people probably disagree that that’s the future, but maybe that is a scenario that is possible.

Bertrand: I’m definitely sure that the gig economy will get bigger, but I think, and by talking about gig economy, I’m talking about work that can easily be done by nearly anyone without any specific knowledge beyond for instance, a driver’s license, but I also believe that work marketplaces for what you would call white collar are going explode.

And it’s already in that direction, but I think it will accelerate, in the past there was a lot of: “you have to work from our office even if you are a freelance, we want you at the office, blah, blah, blah”. I think the fact that everyone has to work remote is going to help accelerate that.

Because suddenly you don’t have that location issue. And I’ve seen a lot of startup companies that are doing some fantastic work market places for all type of work. Be it UX, be it translation, be it product management, be it IT consulting, be it software engineering itself.

So I think that will be huge. I think that overall freelance, combining this work marketplace, gig economy approach,  will be bigger and bigger. I mean, there are estimates that it could be 50% of the workforce by end of this decade. I would definitely believe that. I think it’s a true possibility. The only thing that might go against that might be some temporary government regulations.

And I’m saying temporarily, because I don’t think it can withstand the test of time and what’s possible now with technology, and also what people want. I think a lot of people would welcome that because without this  you cannot go to what you described, which is to work part time on this topic, on this project for this company to do multiple things, to be really in control of your agenda.

So I think we will see that happening and that will help companies also become more flexible, way more flexible in term of how they are organized. And to be clear, I still believe there is a strong case to have your own employees who are there for the long run. I’m not saying it should disappear, but I think some functions definitely are going to change pretty dramatically.

Nuno: And it’s an interesting aspect that you mentioned, which is, the COVID effect, for example, on the rules of work, there needs to be certainly coming out of this and with economic development that we foresee over the next one to two years and the needed recovery that we’re going to have all over the world.

Certainly a relaxation around some of the labor laws and labor rules in some of these elements, and that actually might give rise precisely to what you’re saying, which is at certain point in time, a lot of these rules that were established, like the ones that were established in California. And in other parts of the US regarding people actually being the employees of their companies because they needed to have benefits and a bunch of stuff.

I mean, at some point, these need to be relaxed just to make the economy sort of renew itself. 

Bertrand: Of course, of course. 

Nuno: So it’s again, an element of COVID that was totally unforeseen, that’s relaxing even regulations in healthcare, which we’ve talked about in the past, regulations around work in many other dimensions. 

3.2 Home

Talking about another element of COVID and how COVID is changing our lives.

Let’s talk about home. Home is probably one of the things that’s going to be the most changed because of COVID. And again, there I see a few scenarios emerging. We were in a world where there were more and more debates do people actually need to own their own homes, or can they just Airbnb their way around the world?

Live in a nomadic lifestyle, either short term, medium term, or long term. Does the home actually play a role? Do I need to control my environment or will I just want to move from home to home? That’s clearly one scenario that’s still possible. Obviously, COVID seems to have put a little bit of a dent on that scenario for the time being, but it’s still possible that that would remerge over time with extreme remote working nomadic behaviors, et cetera.

The second piece and the second scenario, is a scenario under which the home is a utility, it’s a place where I just spend time. I have to have really good sleep in that place, and potentially a place where I can cook or do some utility activities. The scenario I would call the utilitarian scenario of the home.

It’s more of an urban scenario. It’s a scenario that assumes very dense urban population where people then have everything else that they want from outdoor parks to bars and restaurants, et cetera around them. Again, the current world we are in seems to elude to something that certainly is not foreseeable in the next maybe few years. But again, we’re talking about the next decade. Maybe that’s a path that we’re going to. 

And then maybe there’s a third scenario, which is one that I start to believe more and more on , which is a scenario that really is your home is your castle and your entertainment center and your gaming center and everything under the sun.

So where home becomes the center of your universe and your office. Because we’re going to do more remote working. We both agree on that. So  where do we end up? I would say this scenario three that I’m mentioning where home is everything, is probably the most likely one. Then there’s some interesting discussions we can have about that.

But what do you think? Do you think there’s a way back from this.

Bertrand: I think that’s one of the core questions, because that will have huge impact on where is the economy going forward? What change will we see? I think you cannot disconnect that from a move from cities to suburbs, to potentially to the countryside, because that part around let’s have our home, as our entertainment center, our castle, our everything, that’s great, when you have a four bedroom home with garden, but if you are in a 200 square foot apartment, good luck with that, it’s not going to be fun. 

But the good news is that if you stop thinking, you have to be close to a big city for a job, that you can do it from the suburbs, or you can do it from the countryside. That’s becoming a bit different. 

Suddenly, what you described might be possible for a lot more people than it is today. Because today, you just cannot afford that, that’s as simple as that. So I think it’s connected to, will we see a trend: a move from people who live in the cities they moved to suburbs, people will live in suburbs are they moving to the countryside,  and we see a progressive move and it would have been weird to think so much about that before, but with COVID it’s clear the cities are losing their value. You are not there to hang out with people, you’re not there to hang out at restaurants, at bars.

So you are losing some of that value. So why stay in a small place where you cannot do much? And I think the worry is that, it’s not just COVID-19 with the coming one or two years, can a COVID-20 happen or something else, a new type of flu. And I think people would be much more sensitive to, you know, what that kind of stuff , that might actually happen in the next decade, and the more I learn about this type of disease and risk of pandemics beyond COVID the more I’m worried that indeed it’s totally possible it’s going to happen again. It’s very reasonable actually, in a way we got lucky, but if you look at the experience of some Asian countries  that had to impose some extreme control in the past, not just for COVID, but for months at a time because of SARS, because of MERS, because of different diseases, I’m worried we are on track to have more of them.

And it’s clearly based on that we have billions of people on the planet. People have been going, not just where they used to be, but to many new places, displacing animals and the like, and as a result, the probability has been just higher and higher for this to happen. So there is strictly nothing we are going to do in the next 10 years, that’s going to decrease the probability of that happening again.

The only thing we can decrease, I believe, and we are going to work on, is on the medical side. I would expect, and we can talk later about this, that there would be way more investment, because we are going to realize that except closing some wet markets, which I hope we would do, but then it will be another question of enforcement obviously.

I’m not sure there is much we can do to change the level of risk. And that risk has been growing over the past 20 years very clearly by nearly every metric.

Nuno: We will revisit doomsday scenarios, we promise. We will also revisit the healthcare discussion. 

Going back to the home strong agreement is what I’m sensing around the fact that the home will become more and more important that it will serve as an entertainment center. That it will serve as a place where you’re safe, where you’re going to spend more time, that it will serve, therefore, potentially as the beginning of this Renaissance of what the home means, because it will need to be a more flexible space, it currently is not a very flexible space, but it will need to be, if it’s your remote office and it’s the place where you consume entertainment and it’s the place where you have kids running around. It will also lead the Renaissance into the smart home, which we’ve been offered many times.

And so probably unless you disagree, we would say home is actually going to be where your heart is, but also where your money is going to be spent going forward. 

3.3 Mobility

Interesting point you made around the move to the countryside and the move to the suburbs outside of cities and the emptying, so to speak of urban areas or the emptying of the value proposition of urban areas.

Because if that’s the case, we’re going back to, in some ways, the story of the US where people do like to have space, where they want to be outside the cities, either in the suburbs or in the countryside, and that model will need to somehow work at scale going forward, which is probably a good segue into the discussion around mobility and how are we going to move going forward.

Because if we’re not all in a place where we can move, you know, and walk, or we have personal mobility devices like scooters and electric bicycles and all the great things that we have today, we’re gonna have to move by car or car like vehicles.

Bertrand: Or we don’t have to move. I’m only half joking, but the past few weeks have shown us that you can just stay home, get everything, delivered, food, products, physically or digitally if we are talking about entertainment or communication. So the car, yes, you might need it once in a while, you might definitely need it for an emergency.

But that might be a different approach  to how much do you truly need to travel  in the first place anyway. If you can solve all your needs through e-commerce, digital entertainment and all of this stuff. To be clear, I still believe that people will want to still meet each other physically to still have dinner, restaurants, to go to a bar. 

But I think there will be big generational differences. If you are single is not the same that if you have a family with kids, and you could argue, this was already the case. People were moving out of the city of San Francisco when they’ve got kids for instance, it’s a very clear trend. Very few people stayed in SF if they had kids for instance. 

And to combine that, it’s a perfect storm in term of timing.

If I take Silicon Valley or New York or some other capital of the world the prices have gone truly insane in some downtown. So suddenly you have even more tension about a disconnect between the cost of living, the value you get from there, and suddenly companies giving you opportunities to not live there anymore.

Nuno: And that’s one scenario. There is a scenario under which, let’s call it the, at the extreme, the hermit scenario where people go outside the urban areas, into suburbs or even into the countryside. They will move less. They will only move for very special occasions. They will stay at home. The home becomes totally the center of the universe. Not only a great place to be in, but just a center of their universe. I am a big believer that’s probably not the likely world. People like to move and they still like travel. And so mobility will not go away. 

It will be a different type of mobility that we will need to have and in that type of mobility you know, one of the key questions is, are we going to have self driving vehicles to take us around? Are we going to have, ways to fly around that are certainly more hygienic than the ways we have today where we’re all inside a can. We certainly, probably gonna travel less, but you know, are we going to have better ways of traveling, even if it’s for long distances?

My core belief is that we will have, we will come back to the topic of technologies later on, but we will have self driving vehicles probably by the end of the decade in some way or another, even with some limitations, potentially not full level five in self-driving, but maybe somewhere close already to that, that world would likely be still a hybrid world with other vehicles that are driven by actual people.

We probably won’t get rid of all of those going forward. And then there’s clearly an element of whether it matters whether the self driving vehicles belongs to someone else. Pre COVID, I would have said, well, it doesn’t. Post-COVID, I’m not sure, because I want to make sure that my little area of containment while I’m being transported somewhere else is actually clean and I’m not going to get someone else’s viruses.

So, I think guys were doing self driving vehicles, I would say that’s a core feature right now. How do you figure out, you know, the hygiene of a vehicle if you want to do sharing. Because I think the world we would like to move in, is a world where there’s certainly a lot more sharing of these vehicles.

Because you know, mine have been in my garage for weeks now under this pandemic, so sharing is a good thing, but we do need to have very hygienic as a core feature at the center of self driving vehicles.

Bertrand: I think that’s one of the big issue of the whole sharing economy in the context of COVID-19 and potentially a new virus coming up. I think it’s going to hurt quite significantly. But in some cases you might have no choice, it’s just the most economically efficient approach, the same way that public transportation is usually very efficient economically speaking, so you might not have the choice. 

But I think the sharing economy, will lose many years and certainly don’t grow as fast as we would have expected in the first place, before COVID-19 happened. So I must say I’m probably more gloomy on, overall the sharing economy. 

On the side of self-driving, it’s tough to say at this stage , if you ask me, where will we be in 10 years from now? I’m not sure we will been level five autonomy, meaning the vehicle can do absolutely everything by itself in absolutely every circumstance , and you can really turn your back form the road, and there is not even a driving wheel anymore for you to touch. I would like to think it’s going to be there in 10 years, but I think the space have been full of broken promise, and I think we don’t have yet a clear roadmap on how to get there. And of course, Elon Musk and Tesla will disagree, but so far they keep delaying by two years, every two years when it’s supposed to happen.

So, my bet would not be on level five in every situation by end of the decade, that we are very strong level three, level four, that you drive only 10% of the time in most situation, and you have time to prepare to take over,  that I can fully imagine, I have no problem to imagine that, but that full taxi service that you don’t control, don’t own, there is, no one in the vehicle, that I have more and more trouble to think it’s there in 10 years from now, but I wish it would be there.

Nuno: I think on this one, we’re in full alignment. Not level five potential level three, level four. Sharing will be complex, will be elements of sharing that we didn’t predict pre-COVID that will make sharing complex. So ownership might matter more in some way. And so full alignment on that. 

Conclusion (53:49)

And that’s a great way in which to end our episode.

Bertrand: I hope you enjoy this approach in term of thinking on the long run. what might happen in the next 10 years? What could be the different scenarios that could happen? 

In the next episode we will touch, with the same approach of scenario planning, many different verticals, in term of what they will look like in the coming 10 years or so?

So I want to thank you for listening to this first episode about the coming 2020s, the coming decade. And please look out for the next episodes.