Digital Disruption: a view from Silicon ValleyPRESENTATION TO THE BCAS – INTERNATIONAL ECONOMIC STUDY CIRCLEMUMBAI, INDIA : DEC 23, 2015

Discussion◦ Theme of Digital Disruption◦ Media◦ Transportation / Delivery◦ Healthcare◦ Education◦ Banking / Financial Services◦ IT◦ CA Profession◦ Will the robots and machines take away all our jobs?

Theme Disruption of established intermediaries

That used to capture most of the value in the value chain By

Automated Platforms That drive benefits for participants

At both ends of the value chain

Media

Media◦ Music Artists Record Labels CD Stores

◦ Writers Publishers Bookstores

◦ Videos Producers TV

Artists at the mercy of the talent hunters. Famous examples: Beatles

◦ Music Artists Youtube / Soundcloud Online Music Stores

◦ Writers Blogosphere e-books

◦ Videos Youtube Netflix / Amazon

Youtube celebrities now earn millions of dollars a year.

Transportation / Delivery◦ Autonomous cars + Delivery drones◦ Tesla already has semi-autonomous mode enabled on its cars, which allows its cars

to drive on major freeways without any intervention from the driver.◦ Miners have deployed self-driving trucks.

◦ A typical cars ends up being used 1-2 hours/day on average, sits idle otherwise.◦ Save on huge parking space requirements, running and maintenance costs.◦ In the future, no one will “own” cars!◦ Our kids may never learn how to drive (driving will become a hobby, like sewing).◦ Self-driving will have a huge tax / insurance requirement.

Healthcare◦ Telemedicine / remote appointments are already in place.

◦ AI Doctors which have up-to-date access and understanding of the entire medical science; as well as immediate feed of new epidemics / treatments

◦ Coupled with ultra low cost sensors◦ Alert you proactively with diagnostic information even before symptoms arise◦ Massively reduce costs by reducing the needs for GP doctors◦ Most services can be rendered by nurses in smaller medical clinics◦ Many will shift completely to being delivered in home

Education◦ Traditional education was driven by one to many monologues by teachers who may

not necessarily be the experts in their respective fields◦ Pure online, remote universities have also had limited success in completion rates◦ Hybrid solution is the answer

◦ Offline, self-paced watching of lecture videos from the experts in the field◦ This combined with onsite, group projects and answering of specific questions by the

teachers◦ A completely customized study plan based on computerized assessments

Financial Services◦ Payments: Stripe, Square, etc.◦ Digital Currency: Bitcoin, etc.◦ Wealth Management: Betterment, Wealthfront, etc.◦ Lending: Lending Club, Prosper, etc.◦ P2P Insurance: Upcoming

IT IndustryTraditional IT players Online Marketplaces

Recruit Everyone free to list

Train Online training / Certifications

Locate Projects Discovery / Bidding on Projects

Deploy Resources Dynamic allocation

Huge ODC’s / Infra requirements

Strain on the IT centers Work from home / nearby shared workspaces

Requires relocation / adjustments Work on their own schedule

Deployments decided by management Work on what they want

Disruption in the CA professionTAX / LAW

◦ AI with complete understanding of all tax laws and treaties

◦ For any given problem / situation / requirement, it will recommend the best option / “loophole” possible

AUDIT

◦ AI with an understanding of the business processes, statistical patterns of distribution

◦ Comprehensive data analysis to detect patterns, duplicates, frauds

Worry less about these competitors,

Worry more about them!

Will the robots take away our jobs?Let us take a look at the past “revolutions”:

◦ Agricultural revolution – fear that agricultural machines would make farmers jobless◦ Industrial revolution – fear of industrial machines rendering factory workers jobless◦ Service revolution – fear of moving from “real” manufacturing economy to intangible

services◦ IT revolution – fear of IT machines taking away all white collar jobs

Every time, there were fears, partly valid, that the revolutions would destroy jobs.

Instead they overall ended up improving the quality of life for everyone…

Impact of the revolutions

Technology

Services

Industrial

Agricultural Provided food and clothes to the masses; led to the Industrial revolution

Access to cheaper material goods; moved workers from farms to factories

With manufacturing getting automated / offshored, moved workers from factories to offices

With routine work getting automated, will allow people to work on arts, music, sports, science, philosophy, spirituality and altruism

Note the similarity to Maslow’s Hierarchy as we move from Physiological needs to Self-actualization

Case for optimism◦ As long as there is enough help provided to those impacted by these transitions,

everyone will benefit in the longer run.◦ Since human wants are unlimited, and since happiness eludes even the wealthy,

there will continue to be enough opportunities for everyone. They just might be different from what we know of, or can think of today. For example:◦ The film industry is just 100 years old◦ Sports being a lucrative career option is also a recent phenomenon◦ Newer career options like bloggers, vloggers, online gamers, etc. have recently come up ◦ Despite Walmart and McDonalds, smaller niche retailers, restaurants, etc. are still successful

Thank you!

Nikunj Sanghvi Twitter: @nikunjsanghvi

Linkedin: www.linkedin.com/in/nikunjsanghvi

Sources / further reading◦ Stratechery◦ CBInsights.com◦ Mary Meeker’s Internet Trends report