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In Alec Ross’s new book, The Industries of the Future, he takes a deep dive into the specific fields he believes will shape our economic future, including robotics and the codification of just about everything. The book is based in part on his four years serving as senior advisor for Innovation to then-Secretary of State Hillary Clinton, as well as on his travels, which took him the equivalent of “25 circumferences of the globe.”
Recently Knowledge@Wharton interviewed Ross about his book while he was on campus as an Authors@Wharton guest.
An edited transcript of the conversation follows.
Knowledge@Wharton: When you were coming up with the industries to highlight in the book, was it immediately obvious what would make sense to put in there? What was your process of deciding which ones to include or how to categorize what you were seeing into clear industry sectors?
Alec Ross: It was a long process, actually. My assistant totaled up my travel, and apparently over the last handful of years, I’ve traveled the equivalent of two roundtrips to the moon with a side trip to New Zealand. The process of identifying the eight to 10 specific industries that I profile in The Industries of the Future is a byproduct of that travel — 25 circumferences of the globe. Some of the ideas that I had going in didn’t stick. Then there were things like the commercialization of genomics, which I would not have necessarily intuited would be a trillion-dollar industry in the future, but by virtue of my research, it emerged.
Knowledge@Wharton: One of the things I thought was really fascinating about the book is you see two different things at work here. You see emerging economies where they are developing industries from the ground up that are cutting-edge. You also see more developed economies where their economies were basically shaped on the innovations of the past, and they are having to retool. What were the lessons you took from each of those? Is it easier for one versus the other?
Ross: The process of imagination that becomes innovation, which becomes commercialization, is fairly similar country to country. But the problem is that [some] countries have the wherewithal — the access to capital, the employee base — to take something from imagination to reality, and others don’t.
“Over the last handful of years, I’ve traveled the equivalent of two roundtrips to the moon with a side trip to New Zealand.”
In the most highly developed countries, you do have baked in a set of advantages that don’t exist in frontier markets or in developing economies. More often than not, it’s in the developed economies. It’s in places like Silicon Valley where they’re going to create entirely new platforms that billions of people will eventually use. Whereas in developing economies — at least to this point and it could change — it’s been the case that what I see is building a tool, building an application, developing that solves a very specific problem as opposed to building platforms that serves hundreds of millions of people.
Knowledge@Wharton: So for those economies it’s more about whether they can take the tool and really develop an industry around that or an industry around that type of innovation?
Ross: That’s exactly right. I think about mobile payments and how mobile payments emerged in Kenya. The reason why mobile payments emerged in Kenya was in part because there weren’t mainstream banks on Main Street in Nairobi. It was innovation born out of scarcity. But the interesting thing there is because it’s so good and because it appeals to consumers around the world, it’s something that can scale from developing economies into developed economies. So there are examples of that.
Knowledge@Wharton: When you look at developed economies, for example, you talk a little bit in the book about your background growing up in West Virginia and about what happened to the community when coal became not a dominant industry anymore, when it moved overseas to other places. I lived in a place very similar to that in Indiana, which had been an industrial economy, and one of the things that I found interesting is that the government tried to pivot to something new, to what was coming next. But you have this pushback from the population that they want the jobs back that were there before. They want it to be the way it was before because that was very sustainable, it made a good life for generations of people. With developed economies, how did you see governments or people trying to get beyond that?
Ross: One of the lessons of the past 40 years of globalization is that you can’t click your heels together, and say, “There’s no time like 1965.” It just doesn’t work…. That kind of regressive worldview when it becomes a regressive set of policies tends to lead to nowhere. One of the reasons why I wrote The Industries of the Future, was as a response to how poorly the state of West Virginia did respond to globalization and technology-driven innovation. [They] clung on to coal even as coal became automated.
This is where leadership is necessary. People cannot curl into the fetal position and wish for the prosperity of yesterday. It’s not the strongest of the species that survives or the most intelligent, but those most adaptable to change. That’s as true in most highly developed Western economies as it is anywhere.
Knowledge@Wharton: In the book, you talk a little bit about how the people ask you, for example, “How does my community become Silicon Valley?” Your answer is they can’t — that you can’t be Silicon Valley because Silicon Valley had a special set of things that made it that way.
What you can do is take the deep knowledge in your own community and leverage that. You have a community like Detroit where their deep knowledge is in automobiles, and in some sense, that’s become antiquated…. How do you pivot an industry like that that’s very much based on the innovations of yesterday and focus them on some of these industries that you talk about in the book? Do you see economies that are doing that well?
“The process of imagination that becomes innovation, which becomes commercialization, is fairly similar country to country.”
Ross: First, let’s go right back to Detroit…. In my opinion, the next generation of automobiles will be increasingly internet-connected, which will be driverless. [Detroit] ought to assert their own domain expertise in automotive so that they can be a part of that economy tomorrow.
Secondly, again sticking to Detroit, there are going to be emerging fields like drones. Marc Andreessen from the venture capital firm Andreesen Horowitz suggested that Detroit become Drone Valley. If you take the industry out of it — the car industry — but think about what the skills were that made Detroit what it was for as long as it was, that can lend itself to a set of future-oriented industries. When I think about the Rust Belt more broadly, I think about deep domain expertise in manufacturing. Supply chains are growing more sophisticated. Advanced manufacturing is growing more sophisticated. There is the emergence of 3D printing. That domain expertise in manufacturing in the Rust Belt could be turned to its advantage so long as it’s oriented towards the industries of the future.
Knowledge@Wharton: Do you see that type of deep thinking going on in some of these economies like in the United States and Europe? Are there people out there that thinking about this that way? Is there enough thought being put into that.
Ross: I actually think there is. Most people who write books about the future are either wildly utopian or wildly dystopian. It’s either, “Oh, we’re going to live 150 years, happy, healthy, wealthy, wise and lack for nothing. Or it’s written with sort of fists clenched and eyes closed, very angry. Life is much more up the middle.
When I think about your question here about our communities preparing themselves to pivot and leverage their domain expertise, I actually think, yes. Where I live now in Baltimore, there’s a very strong focus on the commercialization of genomics, the life sciences based on the tremendous research institutions that are there. It’s close to the NSA and the CIA and the Defense Department. So there’s a big focus on cyber security. I do think that communities have grown smarter and smarter about mapping their assets and figuring out how to build industries around those assets.
“If you take the industry out of it — the car industry — but think about what the skills were that made Detroit what it was for as long as it was, that can lend itself to a set of future-oriented industries.”
Knowledge@Wharton: As robots and codification and all of these other industries that you identify in the book become more prominent, how do you feel that’s going to change the world balance of power? How does that change the global economy and who has power and who doesn’t?
Ross: That’s a tremendous question. First of all, I’d put it into a certain kind of binary. The first is within the architecture of the 196 sovereign nation states, and the second is within those nation states, what kinds of individuals do well and what kinds of individuals do poorly.
You can live in a country that is prospering, but you can be doing very well or you could be doing very poorly. Or you could be living in a country that’s floundering, and you might be able to be doing pretty well. The principle political and economic binary of the 20th century was right versus left. In the 21st century, I think it’s open versus closed, defining open as upward economic mobility not confined to elites; social and cultural and religious norms not set from a central authority and broadly rights respecting for women, minorities of all type and what have you.
I believe that the centers of innovation and the wealth creation and job creation that come from that will be in the more open societies for the industries of the future. People conglomerating around what will probably be ten to 15 major centers over the next fifteen years. We already see this in development now. The more open societies will be those that compete and succeed most effectively.
“The more open societies will be those that compete and succeed most effectively.”
Looking at this on an individual level, it’s going to be a terrible time to be mediocre at your job if you’re in a high-cost labor market. It’s an absolutely brutal truth. When people in Baltimore are competing against people in Bangalore, not just based on cost of labor but also quality of labor, which is now increasingly going to be the case, being more middle class or working class in the United States or Western Europe isn’t going to mean you’re starting life on second base to the degree that it did in the past.
You’ve got to be a committed lifelong learner. You’ve got to be adaptable. Otherwise you’re going to be left behind even if your country is producing substantial growth.
Knowledge@Wharton: In the last chapter of the book, you share advice for parents. Even if they are decades away from college or a few years away, what do you suggest? How do you guide them? How can they adjust to this new type of economy? You have some interesting advice and part of it’s with languages. The other interesting part was just the idea that it’s more important than ever to have stamps on your passport, which is something I never experienced as a kid and something that definitely got me thinking, “Well, this is something I need to make a point of making sure my daughter does.”
Ross: There was a World Economic Forum study that said that for children entering preschool today, 65% of the job types that will exist when they graduate from college don’t exist today. What that means is that we aren’t preparing our kids for specific jobs. Rather what we have to do is develop a set of skills they can then map into job types that we don’t even know what they are right now.
“The 21st century is a terrible time to be a control freak.”
The last chapter of The Industries of the Future [is] called “The Most Important Job You’ll Ever Have.” The most important job you’ll ever have [is] being a parent. Without pretending to be a parenting guru myself … I interviewed the scores of people who have been very successful in business, and said, “What are the skills and attributes that today’s kids need? I’m all in favor of language learning — for tomorrow’s economy?”
There are a handful lessons in there from foreign language-learning to interdisciplinary learning to making sure that kids are as multiculturally fluent as possible because they are going to be working in a world where the frontier economies are becoming developing economies and the developing economies are becoming developed economies. So it’s going to be a little bit of a tricky world for kids my [children’s] age — they’re 13, 11 and nine — when they enter the workforce. It’s never too early to begin to prepare them for that.
Knowledge@Wharton: When you talk about languages, you also talked a lot about preparing them for technological language – code, including .html, Python — in addition to a foreign language….
I’m all in favor of language learning — foreign languages and computer languages. Even if the computer languages that kids are learning are not necessarily those that’ll be used in 15 years, it still teaches you a way of thinking. It teaches you a way of problem-solving and an above-average coder has got a couple of decades’ worth of employment in front of him.
Knowledge@Wharton: If you are early- to mid-career or somebody who has built a career on one of the old innovations of the past, how do you prepare for the future? How can you take this book and really use it? What would your advice be to older folks?
Ross: I think that anybody from middle schoolers to people toward the end of their professional careers, hopefully can draw something from The Industries of the Future. One of the things that I would simply say is I’m such an evangelist for lifelong learning. The idea that [learning] somehow stops in your 40s or your 50s, I simply don’t buy or buy into…. I say the 21st century is a terrible time to be a control freak. One of the key things is to give up on the kind of control that you’re most comfortable with and begin to understand that a lot of the ground shifting under your feet is going to shift whether you like it or not and to understand and accept that we’re going to be living in a world of ever-faster‒paced change.