The events of  2020  will have a far-reaching impact and will shape the future of technology, society, and geopolitics in the coming years. Its impact is likely going to be felt for decades and possibly generations. Here are some of my predictions of major developments in this decade and how they present as opportunities for entrepreneurs and investors.

01

Virtual And Decentralized Business Ecosystems Eventually Leading To Digital Jurisdictions

The pandemic has accelerated the digital transformation of society that was already in motion. From virtual schools and colleges to telehealth to remote offices, the virtual Wall Street and Silicon Valley on the Cloud are now real possibilities.  We are already seeing an exodus of companies from the San Francisco Bay area to Austin and from New York to South Florida. Tesla and Oracle from the Bay Area have relocated to Austin and Goldman Sachs asset management group is contemplating moving to South FL. The social media-savvy mayor of Miami, Francis Suarez, is openly urging Wall Street businesses to move to friendlier cities such as his. The economic prowess and attractiveness of the metropolitan areas will likely diminish as people seek to move out of big cities.

Is this the beginning of the great decentralization of population and business hubs? I believe so. Not only will value-chains and business ecosystems be virtual but they will be decentralized. Hubs like Silicon Valley and Wall Street or, for that matter, capital cities could be distributed physically. The business ecosystems will be tied together virtually as network graphs with cross-border governance. This will create unique policy and governance challenges that will lead to broad reform on taxation, jurisdiction, and regulations. Will this ultimately lead to digital jurisdictions and digital governments in this decade (like Estonia’s eResidency program but broader)?  Remote work, a virtual workplace, and decentralized business ecosystems on the blockchain will create the perfect storm for this to happen. Don’t shred your State ID or passport just yet though.

02

Decentralized Finance (Defi) with Stablecoins and Crypto-currencies will make Money Programmable Significantly Changing the Roles of Financial Services Institutions and Central Banks as we know it

There were several favorable regulatory actions announced in the last year making it easier for banks to participate in INVN (Independent node verification networks), including blockchain networks, and use stablecoins for payments.  Digital currencies (CBDC or Stablecoins), digital commodities (like Bitcoin), or digital securities (like security tokens) will transform the financial services landscape in this decade. The efficiency gains, increased transparency, and participation from these changes are however not what will have the most transformative impact on society.  With digital currencies like Stablecoins, money becomes programmable, having a profound impact on how the central banks and governments affect monetary and fiscal policies. For example, stimulus payments for the travel industry after a pandemic can be programmed, implemented, and enforced at orders relatively easily through programmed money or small businesses can have access to capital more easily (I wrote about how the SBA can help small businesses impacted by the pandemic with capital infusion last year here).  The programmability of money and securities will lead to new financial products in cash management, securities, alternative models of risk and collateral management and will create huge opportunities for fintech startups and incumbents to innovate. Core banking vendors, payment platform providers, and even aggregators in fintech have the opportunity to enable banks as nodes in INVN and enabling payments with stable coins.

The infographic below shows the Defi landscape today and I anticipate both infrastructure and applications to grow in the coming years.

First published in iValley’s Bitcoin is not Blockchain article in 2020.

03

Decentralized Digital Identity Coupled with AI will Lead to Hyper-personalized Super-apps or Lifestyle Applications for Consumers and Small Businesses

Consumers and small businesses will be the custodians of their digital identities (in their digital wallets) and not internet firms or banks that store credentials today. Consumers will provision apps in their digital wallets based on their needs leading to a consumer-oriented super-app - a hyper-personalized app (almost an Appstore) that is AI-enabled that seamlessly integrates with lifestyle and business functions for individuals and small businesses. The super-app will become the portal for consumers and small businesses in the future - like a personalized Siri or Alexa with Tesla’s autonomous driver with capabilities provisioned and personalized by the user and not controlled by Apple or Amazon.

04

AI will take Leaps Towards Human-like Intelligence and Self-awareness when the AI Architecture Encodes Multi-sensory Inputs Simultaneously

The human brain learns concepts by encoding two or more senses, for example, auditory and visual input together. While our understanding of the human brain is limited, auditory waveforms and visual waveforms linked and stored is like storing reality (in the quantum realm) rather than a transcribed version of it with tokens. For example, the sound of a rose with the image of a rose when processed by a human brain, all 5 senses like the photons processed through the eyes and visual cortex, the sound waveform processed by the auditory cortex, are encoded. This is quite different from the current day AI (like GPT3) which is quite advanced but is based on lexical tokens. Multi-sensory AI architecture will metamorphose AI applications as we know it, whether for good of humanity time will tell.

05

All Enterprise Will Be A Digital Platform Enterprise Participating In Decentralized Web As Nodes That Are Orchestrated By A Enterprise Platform Hub Internally

As business ecosystems become decentralized, value chains will too. Platform enterprise will orchestrate the flow of value from the decentralized web much like what Amazon or Uber do today in the centralized web. Successful platform enterprises will be the ones that flow value from decentralized networks somewhat akin to the API-based value flow in platform enterprise. These companies will be the next Amazons, Ubers, and Grabs, and traditional enterprises that evolve their business model will also be successful. This calls for innovation in the traditional  ERP/CRM companies to evolve their offerings to support the decentralized web.

06

Internet Search and Social-media will Become Like Energy Utilities - Internet Utility Businesses That will be Regulated

Recently, I read an anecdote on social media about a poignant moment where an old lady in rural America was helped into her porch on a wheelchair to watch broadband internet cables being laid out into her home and neighborhood. As a young girl, she had sat on the same porch and watched the electric wiring being brought into her house. Technology and innovation of one era are utilities today. While internet search, social media, and even eCommerce are applications of the internet, gradually they will soon turn into regulated utilities due to political, societal pressures, and equities considerations. Blockchain’s immutability may play a role in creating reliable information custody on the web.

07

E-commerce Giants will Face Political And Sustainability Scrutiny Leading to Localization of E-commerce

The convenience of eCommerce especially during a pandemic is unquestionable. The impact on small businesses and also on local retail and thereby local employment will eventually lead to political scrutiny of the business model. Virtual storefront to support local businesses and retail will mitigate some of these challenges.  Imagine being able to purchase from the local store with the same convenience as Amazon or Walmart.com and being able to track how your purchases are helping the community. 

08

Analog to Digital to Quantum - The Entanglement Principle in Quantum Computing will have Practical Applications in Cybersecurity, Immutable Blockchains, and Predictability of Outcome

Quantum entanglement is the phenomenon in physics where two or more objects are interconnected in such a way that the state of one’s state can predict accurately the state of another. We are seeing applications of this in use cases in cybersecurity like detecting snooping of the key exchange. These are other applications of Quantum computing that will become mainstream.  Then there is the ability to map or model physical reality or real-life situations into the quantum realm that can explode the usage potential of quantum computers even at their infancy with all the engineering constraints. Quantum sensors might be the next big IoT opportunity.

09

The Cost of Healthcare in the U.S will Decrease with Better Capacity Utilization with Telehealth and Uber Business Models of Medical Professionals

The uberization of healthcare, especially for chronic disease management is already occurring. The capacity utilization from telehealth will reduce the overall costs of healthcare (at around 17% of GDP in the U.S). Digital therapeutics models may actually improve healthcare outcomes while decreasing cost, something the industry has been wanting to achieve. This could lead to alternative business models in health insurance especially for chronic disease management, opening up the potential for innovations.

10

Space Economy with LEO Satellite-Based Internet, Space Tourism and Harvesting Resources for Terrestrial Use will be the Next Technology Frontier for Mankind

Oumuamua, (Hawaiian for a messenger from afar) is the first known interstellar object detected passing through our Solar System and is regarded by some astronomers as alien technology doing reconnaissance of our solar system. While we will not know for sure, as it is on its way out of the solar system, somewhere between the orbits of Saturn and Neptune currently, it has inspired several conversations of space travel and space technology. While humans don’t have the technology to build rockets for interstellar travel (outside our solar system), there are a lot of opportunities in near space. The space economy will see the rapid development of LEO satellite-based internet, space tourism, and harvesting resources from asteroids for terrestrial use.

A little over 50 years after the creation of the first internet (Arpanet) to share documents, the internet has evolved and transformed our society and how we live like no other invention in history. Access to information throughout the globe has helped improve awareness but wealth creation from technology has been for few. I believe the next era of technology will see more equitable opportunities. The great decentralization including that of the web, and advances in artificial intelligence, quantum computing, and space technology will shape our lives, society, money, and even how we govern ourselves in the coming decade. 

Paddy Ramanathan is the Founder and Managing Director of the iValley Innovation Center in the East San Francisco bay area. iValley Innovation Center is a corporate venture studio and host of FINTECHTALK™. iValley's mission is to incubate and catalyze the development of big ideas and innovation and promote inclusive innovation.