January 30, 2019

by Matt Mouritsen, professor and MBA Director, Weber State University

“I have but one regret, I wish I had your future.” Neil Armstrong made this statement at the Weber State College 1988 Commencement. I was in attendance, having just earned an Accounting degree. His insightful words formed a powerful statement that I have not forgotten, particularly because I had admired Mr. Armstrong most of my life. On my birthday, July 20, 1969, I watched him step onto the moon. The images projected on my Uncle’s black & white TV have stayed in my mind. This led to my interest in astronomy and so I attended numerous workshops at the old Hansen Planetarium in Salt Lake City. Naturally I had my own telescope and I vividly recall my mom helping me see the rings of Saturn through it. Perhaps the lunar landing made me interested in planets and stars, at least for a time, until I realized that accounting and business management, and later teaching, could be a fulfilling career, relegating astronomy to hobby status.

I have pondered Mr. Armstrong’s statement many times. How could a man who had accomplished so much wish he had the future that lay before my graduating class? Perhaps he could see what was ahead of us better than we could, for very few have had the view of Earth that he had in 1969.

From Neil Armstrong’s statement in 1988, fast forward to the 2004 Weber State University Commencement. Dr. Clayton Christensen, from Harvard Business School, was the speaker. Among other things, he spoke about ethics and that it is easier to keep our ethical standards 100% of the time than it is to keep them only 98% of the time. His remarks led me to study his work on disruptive innovation, which I quickly incorporated as a topic of discussion in an MBA IT management class I teach.

From 1969 to 1988 to 2004 to 2019, much innovation has occurred. The past 50 years have brought with them many inventions that are too numerous to count and beyond the scope of this post. Instead of recounting inventions, I’d like to discuss the disruption that is occurring all around us in 2019 due to technology advancements and our degree of trust in it.

Disruption is all around us – some of it is good and some of it isn’t.

DEEP FAKE TECHNOLOGY 

Recently I’ve noticed friends in my social media feeds participating in the “10-year challenge.” I’ve probably “liked” several of their posts. Before long, some users began to speculate that Facebook was using artificial intelligence (AI) to teach machines to learn about aging from these posts.  Facebook denies its involvement. But why would Facebook need access to two photos spread across 10 years when they already have access to all of the photos posted on their platform?

Then there are those photos that when posted, users find themselves saying – “that’s been photo-shopped!” “It’s a fake!” And even then they don’t think twice before sharing it with their friends. But what about the seemingly countless videos posted online? They can’t be photo-shopped so they must be authentic. Or are they?  With the emergence of deep fake technologies, even videos are being altered in a way that is unnoticeable to most viewers. Fake photos, fake videos, and fake news! What can be trusted on social media?

The takeaway: We must learn to be more discerning, even skeptical of what we trust and share online.

What are your strategies to avoid online fakes?

Regarding videos that were produced using deep fake technology, one way to detect a fake is to watch the eyes of the person in the video. If blinking doesn’t occur, it is likely a fake. That may work now, but with the advances in technology, even blinking will be integrated into fake videos. When this technology advances, disruption will follow. Hopefully systems for detecting it will also be created. For now, and into the future, let’s be skeptical of what we see and be careful what we share online.

NOT EVERYONE ONLINE IS WHO THEY SAY THEY ARE

Much like the fake photos, videos, and news we see on social networks, there are also plenty of fake users and followers. After reading the 2018 NY Times article entitled “The Follower Factory” I became acutely aware at how widespread the problem of fake users really is. It’s more than getting a friend request from someone claiming to be your friend but with whom you are already friends.  Often these fake accounts are based on the stolen social media identity of innocent users. Having a large number of friends and followers in our online spaces can be lucrative. An online presence with millions of followers looks credible, even influential. So, because growing the number of followers organically occurs over a long period, businesses emerged that sell followers, thousands of fake followers, for very little money, to those seeking to appear to be more influential than they really are.  There are estimates of fake accounts (sometimes called cloned accounts) in the tens of millions on the most popular social media platforms.  These fake accounts can lead to disruption in the messages posted and shared and can lead to the proliferation of fake news.

Takeaways: We need to assess our level of trust with those we follow online. Is it their message we find credible, which may or may not be fake, or is it their number of followers?

How do you protect yourself from being faked out by fake users? 

To keep your own accounts from being cloned, it is important to change your social media settings, such as your friends or followers list, to private rather than public.  If someone you know has sent you a friend request, it’s so easy to accept it. However, before accepting it, especially when you believe you are already connected, check your friends or followers list to see if they are already a friend. If they are, then their account has been cloned and is being used by a scammer. Let them know and instruct them that they should notify the social networking site AND their friends (to not accept requests from them).

BLOCKCHAIN TECHNOLOGY 

Blockchain doesn’t get enough attention, mainly because Bitcoin took center stage last year. Blockchain isn’t Bitcoin, or any of the other thousands of crypto-currencies. Blockchain has the potential to disrupt daily life and how business is conducted. Let me share a few emerging examples.

• Auditing and the Blockchain

Blockchain is basically a distributed ledger system on the Internet. Each node on the ledger is securely controlled independently and without a central authority. As transactions enter the blockchain ledger, multiple (dozens) independent nodes verify the transactions. From an accounting perspective, blockchain transactions go beyond the usual double-entry accounting system and add a third entry. With these third, yet identical, entries already verified, auditors will need to change their scope dramatically. Instead of sampling transactions on a company ledger, auditors can examine all transactions and will need to determine if they are valid and in accordance with accounting standards and that they lead to financial statements being fairly presented.

• The supply chain, smart contracts, and the blockchain

There was some speculation that logistics carriers throughout the supply-chain would be disrupted by an Uber-like system for transporting goods. Instead, blockchain technology and smart contracts may prove even more disruptive. With contractual requirements “coded” into the blockchain and with sensors providing validation at pickup, transport in process, and delivery, transactions can be agreed to, trusted, and completed without the usual human interaction (aside from drivers, for now).

Takeaways: Though blockchain isn’t widespread, yet, it is coming our way. We need to be aware of how it will disrupt our current way of doing business. Blockchains create a system in which trust between two or more partners can quickly be created and without a central authority.

What about the blockchain gives you ideas for its use or gives you concern?

It’s important to first understand what blockchain is and where it is being utilized. Regarding its use, it is commonly utilized in the financial sector though other industries such as transportation (smart contracts), utilities, retail, insurance, health care, manufacturing, and government are beginning to deploy it. That said, there may be simpler, less complex solutions available that don’t require the use of a blockchain (See Forbes’ article called “10 Questions To Ask Before You Use Blockchain” for more information).

When new technological solutions emerge, it is common to feel threatened by them because of the disruption that may occur to key functions and processes and their potential to displace people who run them. Understanding where and when blockchain works best will help identify possible uses of it but can also highlight where it won’t work. 

THE INTERNET OF THINGS AND THE ANALYTICS OF THINGS

I own a garage door opener that is smart. It’s connected to a secure wifi network at my home. I can open and close my garage door from my phone. It alerts me every time the door opens and closes. It also sends information to the manufacturer who can send updates back to my opener. My neighbors have similar smart devices in the form of sprinkler systems and doorbells with video cameras on their doorsteps. This is good disruption, in my opinion, that has reached the consumer market. There are plenty of other examples (fridges, phones, home entertainment systems, cars, etc). With Internet connectivity also comes the need to secure them with strong passwords. These devices, these things, that use the Internet, are part of the billions of nodes we classify in a category called the Internet of Things (IoT).  These devices, all over the world, are creating data, data that need to be analyzed and used productively. In one form, the data create what is called a digital twin of the actual physical device. It doesn’t have the same physical attributes because it is only in digital form, but the diagnostic and predictive analytics performed on the twin can yield benefits. Perhaps it could anticipate when maintenance is needed or a breakdown is looming. It can send a signal to its physical device with a software update to self-repair.

Takeaway: The business opportunities and the benefits to consumers are numerous for those who can not only deploy IoT devices but can analyze the ever-growing volumes of data that these devices are producing.

What Internet-of-Things devices offer the most benefit to you? From a business perspective, how are you planning to deploy “Things” and how will you utilize the data produced by these devices?

Though the benefits of these IoT devices are numerous, it’s very important to remember to secure these devices with strong passwords and secure networks. As of 2018, there were more than 23 billion IoT devices, which is likely to more than double in the next five years.  Before purchasing an IoT device as a consumer, or utilizing the technology in business to improve the customer experience or enhance the efficiency of employees and processes, it is important to determine what specific limitations these devices (and their data) will help overcome.

AUTONOMOUS VEHICLES

In March of 2018 I was attending a conference on business analytics in Tempe, Arizona. The evening before the meetings began I walked about a mile to eat at a restaurant. While walking, I observed three self-driving Uber cars moving along the streets near Arizona State. The next day the keynote speaker at the conference, Todd Walter, announced that the evening before that one of these vehicles, while operating in autonomous mode, hit and killed a pedestrian in Tempe. The Uber tests were halted shortly after. Mr. Walter presented a scenario in which autonomous, on-demand vehicles have the potential to disrupt numerous auto-related businesses such as manufacturing, lending, marketing, paid drivers, legal, medical, infrastructure/roads, auto maintenance, and repair. These autonomous vehicles produce multiple terabytes of data per hour while operating, data that must be analyzed, data that the car itself will use to make decisions while operating, decisions that are based on programmers’ code. Assume that a self-driving vehicle is within seconds of impact with another vehicle carrying three passengers. The car is programed to evaluate alternative outcomes in order to minimize injury and damage to itself and the other vehicle and its passengers. Within milliseconds, it calculates that it can avoid the other car but to do so it will maneuver away from it and into a motorcycle with only one rider. That decision, to avoid injuring three people while injuring or killing one, was coded by a human and it reveals the ethical issues that exist in deploying this technology.

Takeaway: Though more testing and more innovations are needed before we fully trust autonomous vehicles and on-demand cars, they will eventually disrupt our daily lives.  Business models will emerge and others, that fail to adapt, will fade away. 

What are your key concerns with sharing the road with autonomous vehicles? Do you foresee yourself forgoing the purchase of your own vehicle but instead opting for renting on-demand self-driving cars?

It is justifiable to be concerned about safety issues or the disruption that may impact business in the future, however, the evolution of autonomous vehicles is more gradual than we may realize. There are vehicles on the market now that deliver varying levels of automation that likely align with our degree of trust with the technology. According to a CNET article called “Self-driving cars: A level-by-level explainer of autonomous vehicles,” there are 6 levels of autonomous vehicles ranging from no automation (level 0) to full automation (level 5). Many of the vehicles on the market now offer features considered level 2 – partial automation (adaptive cruise control, lane-assist, auto-braking). The driver must remain actively engaged in the driving of a level 2 vehicle. The jump to level 3 – conditional automation - is significant and will still require active involvement by the driver to maintain safety. There are no cars on the market at this time that are level 3 or higher, though several companies are developing and testing them.

DISRUPTION IS ALL AROUND US – HOW WILL WE REACT?

It was July 21, 1969. Apollo 11 began making its return journey by launching from the Sea of Tranquility. Elsewhere on the moon an un-manned Russian probe, the Luna 15, landed in the Sea of Crises. Communication was lost and the probe’s mission ended.  Perhaps these two missions, one successful, the other a failure, provide an appropriate analogy regarding disruption and technology.

Our reaction to technological disruption may well be defined by our willingness and ability to adapt and adopt emerging technologies.  Our success, their success, may also depend on how well they can be trusted. It seems clear to me that the road ahead may not always lead through the Sea of Tranquility toward immediate, let alone historic, triumph, but may at times look like a dead-end in the Sea of Crises.

---

ABOUT THE AUTHOR

 

BACK TO BLOG