Spotlight Series
The world faces major changes in 2024. What’s going to happen? How might this impact your plans? And how might your brain be tricking you?
This article analyses what predictions on AI, US Elections, and Climate Change tell us about how we might navigate our fears, uncertainties and hopes, and plan for the year ahead.
Introduction
At the start of every year, our inboxes and social media feeds are full of predictions. Some are good, some less so.
I confess, as former Research Director of STL I was sometimes guilty of being one of those propagating such predictions. To be fair, that is part of the job – helping clients look ahead and make decisions to shape their futures.
This year I thought I would try something different. I identified a handful of major themes that will impact our lives and businesses, and asked other people to make predictions on related measurable outcomes which would happen in 2024. I called this the “Festive Forecast 2024”, and while your festive feelings may be long forgotten, the questions and answers are still highly relevant.
Here is a quick preview of three of the questions and how an initial tranche of thirty-two people has answered them so far*. You can still add your own views by taking part here. It is anonymous, and I will share the results with you.
The questions cover AI, Climate, US elections, Interest Rates, Consumer Confidence and MWC. This article gives a preview of early results on the first three – and what I think they might mean.
The Biggest Uncertainty: Biden vs Trump
The outcome of the US election will be influential for all manner of decisions and industry conditions. US foreign, economic, and industrial policy, internal market conditions, etc. will all impact the global market for telecoms and connected technologies in different ways.
This question shows the biggest spread of opinions so far. The split predicting Republican vs Democrat is 50/50, and there is still high uncertainty about who will be the candidate for each party.
Source: Connective Insight Survey (early preview)
I’d say that the spread reflects a realistically high level of uncertainty. A lot can happen in the months leading to the vote – and who knows what afterwards, based on the last US election.
So what? If you are planning, you should look at different scenarios on the US election, particularly for late 2024 and into 2025 and onwards.
You might think you know who will win – but you don’t. You might have a strong hope or fear or what seems like a gut feeling, and it might even turn out to be right. But this is your mind playing a trick on you – it’s your innate human preference to feel certain that’s cornering you into an irrational delusion that you know what will happen (I will explain how this works later in this article).
Polls may change – and who knows what else will happen – so it’s worth having a plan A and a plan B on any related issues and decisions.
The Biggest Fear: Climate Change
For the survey, I chose an ongoing measure of the average surface temperature of the world’s oceans. It’s measured daily by satellites, and you can follow it here.
From the chart below (showing the current position and the options I gave), the trend looks like it is getting worse. Temperatures may be rising even faster than anyone thought – look at the black (2024) and orange (2023) lines in the chart below: they are significantly outside the bounds of the last forty years.
Source: https://climatereanalyzer.org/clim/sst_daily/
The respondents to the survey so far seem to agree, as only a minority chose one of the blue options where things would improve on the climate front.
Source: Connective Insight Survey (early preview)
Could the idea that the climate situation is getting worse be an irrational delusion? Of course it could, but I think the situation is different to the US election.
First, there is a long-term pattern of physical measurements over forty or so years (rather than poll trends registering non-binding viewpoints, for example). These recent measurements are significantly and consistently outside of this long-term pattern, and Reuters reports that the last 12 months has already seen global warming exceed 1.5 degrees Celsius.
Second, in the US election, it is feasible to imagine all kinds of dynamics that could sway the outcome. There are court cases and primaries to contest, decisions, and speeches to make, and doubtless new stories to break. In the climate cycle, the only foreseeable mechanism that could temporarily boost sea surface temperatures is that of El Nino (a cyclical warming of part of the ocean that happens every 2-7 years that is currently underway). This is possible, yet El Ninos have happened over the last 40 years, and none has taken global averages so far outside band of averages.
So what? Managing resources better is a priority for everyone, but when it comes to sustainability it can be challenging, because there are things many of us would rather do (e.g. build infrastructure and economies, eat meat, go on holiday flights, etc.) that we probably now need to do either less or in a different way to reduce our footprint.
Most people now believe that climate change is a reality, and that some changes in how we live must happen (think of the shifts to green energy, electric cars, etc.).
However given the pace and scale of change we can see today, we also need to act even faster to mitigate the challenges created by those known changes as best we can. It is unlikely that climate change will reverse soon, so we need to plan for a “base case” world where weather is even more volatile, sea-levels may rise faster, and agriculture and wellbeing are even more threatened by the climate.
There’s a strong argument to factor in even more volatile and violent weather in 2024, as the current warming including El Nino takes place – maybe think of this as “base case +”.
Beyond that, I recommend that planners should consider a “worst case” climate scenario on the basis that there might be an unexpected non-linearity – a “tipping point” where something in the world’s climate systems changes (or has changed) faster than anyone hoped.
In this case, pressures on world populations and resources will increase even faster than the current trend and strategic responses will be needed to deal with that.
Please note – I am not a climate scientist! I am just looking at a line on a chart that looks like it is behaving differently than it has in the past. Given that this relates to the surface temperature of the oceans – a major driver of climate, it seems quite significant. While I don’t fully understand its causes and consequences, it’s enough to worry me – and hence my efforts to draw attention to it.
The Biggest Hope: AI
Despite fears of the all-powerful general “terminator AI”, AI has significant near-term potential for achieving beneficial outcomes too. In telecoms, the most targeted areas are network automation and customer care. As a judge of the AI section of the GLOMOS this year, I was lucky enough to see a broad range of CSP applications put forward touching these and other areas, some of which are already operating at scale.
For the survey, I chose the value of a fund comprising selected AI investments as a measurable indicator of the fortunes of AI, and asked people to predict it’s value in a years’ time.
Source: https://www.google.com/finance/quote/AIQ:NASDAQ
Most people in the survey thought the value of such AI assets would continue to rise during 2024 but there was also a clear core of doubters (the dark blue block on the bar chart below) who think there is a bubble which will burst soon.
Source: Connective Insight Survey (early preview)
So what? I don’t see AI as a technology bubble that will suddenly ‘burst’, although hopefully the hype will calm down a little. Some of its applications will prove less valuable than others, but it is fundamentally a data-based technology that works through self-improvement. The initial data may itself need improvement – but if the potential value of that improvement is tangible then it is likely that someone will want to make it happen.
AI can also be used in applications ranging from purely analytical (e.g. “tell me something about this dataset”) through to highly automated situations (e.g. “based on all the data we can see, optimise this outcome”).
AI is not an approach that requires the majority of a given system or organisation to use it to be successful (like, say cloud-native). You may get significant advantages from very specific, point-based applications.
Think of the medical application of AI spotting cancers in X-Ray or MRI scans. It is only necessary for the process that analyses scans to use AI for there to be a benefit. The rest of the hospital can work by passing hand-written notes if necessary – although it would of course be better if it didn’t!
For AI, the ‘so what?’ is straightforward – you should be trying to work out in what practical ways you can apply or engage with AI in your role today. Don’t just bury your head in the sand to avoid the uncertainty! While the hype may calm down (and indeed, there could be a drop in AI stock valuations, of course), AI is not going to go away.
Can you tell the future?
We like to think we can predict the future, and in some ways we can.
You can be fairly sure that when you walk into the park, you’ll walk out the other side at a predictable time. What time you’ll get to work each day after you leave the park is a bit less certain. But whether you will still be at the same job in a years’ time is even less certain.
We all like to think we know what’s going to happen. It makes us feel more comfortable and able to concentrate on putting one foot in front of the other, rather than dwelling in existential dread or doubt. Nonetheless, this desire for certainty causes us some hidden problems.
Do you want to feel comfortable or make better decisions?
Studies of MRI scans have shown that the feeling of uncertainty (and other ‘social pains’) triggers neural responses in areas of your brain close to those that process physical pain.
Source: Your Brain at Work, David Rock https://davidrock.net/books/
This is a useful insight – uncertainty creates a feeling akin to “pain”. You may have experienced this in certain situations – e.g. waiting to discover the outcome of something important to you, such as getting test results, a new job offer, or closing an important deal.
I find this helpful because it shows that it is reasonable to think we will dodge uncertainty if we can in the same way we wouldn’t put our hands in a flame – we don’t like that feeling!
But the reality is that we cannot know everything. This leads to the underlying paradox that certainty is a comfortable illusion and uncertainty is an uncomfortable reality. It means we have an innate bias to try to find certainties when none exist, and this can lead us to make some irrational and unhelpful decisions.
So, what can you do? Thinking in terms of scenarios is a helpful way of dealing with this tension. Scenarios allow us to imagine different realities while maintaining an element of doubt as to what will transpire, and trying to imagine plans that allow us to cope in any eventuality.
What’s next?
The survey asks three other questions about interest rates (will they go down, and if so, how much?), Consumer Confidence (will it recover to pre-conflict levels?), and MWC attendance – the nearest term predictable variable, and for me a useful barometer of industry sentiment.
You can of course still contribute to the survey here, and I hope to update you on the findings a couple of times in the year, and certainly in December 2024.
Good luck, and don’t be afraid to take a position! It’s often necessary, can be helpful, and it’s also OK to be wrong (let’s face it: it’s unavoidable!).
Just try to look out for your brain trying to trick you into irrational certainties.
*A note on the survey
The survey has only got thirty-two respondents so far, so it is not a huge study at this point. You might ask what you can learn from small groups, and I think the answer is “it depends”.
In this case, I am seeking to explore the spread of opinions on a range of topics to which no one can know the answer at this moment. I am not seeking to say “because of these results this is what will happen” or claim that these results are representative of the views of a wider group.
They are, however, the thoughts of a mix of well-informed professionals, most of whom I know. You might look at this group as being something like a mix of people who might be your colleagues.
The object of the exercise was to try to gauge sentiment – and to see who would be brave enough to take a view. Do have a go if you can – it takes about three minutes and it’s anonymous.
Try out your own predictions here
Andrew Collinson, MD, Connective Insight. Andrew helps clients bring it all together – helping to deliver big picture strategy and thought leadership, develop high value research, and take stakeholders with them. Previously he built and led the research business at STL Partners, and worked in variety of strategic, marketing and operational roles in telecoms and connected technologies. He’s chaired or facilitated over 50 events and curated the production of 700+ industry research reports.
Andrew: https://www.linkedin.com/in/andrewcollinson/
Connective Insight: https://www.connectiveinsight.com/