Is this working? Bring it closer. You can all hear me, right? I'll give it a couple of minutes — I think some people are still straggling in and then we'll start off with our Kahoot. Let's get everyone to register at least on the Kahoot.
Frank, you moved. You were sitting over there last time, right? Do you guys come and have breakfast here as well? Is the breakfast good? Average? Enough to give you energy for the day. Wind is back — you got your stuff sorted out? Everything okay? I know Sujin is away today. Hi, Pawn, how are you doing? Make sure you're checked into the Kahoot.
I see the number keeps going up and then down again. Please make sure you're checked in and then we'll get started in about 30 seconds. Looks like we're up to about the right number here. Someone's got kicked out. Make sure. All right. Ready to go. Question number one.
So here's the question: In which city was Rolex originally founded? Everyone knows this. It was founded in about 1904 or 1914, I can't remember, by Hans Wilsdorf and his brother-in-law, Mr. Davis. So it was called Wilsdorf and Davis. It only moved to Switzerland about 20 years later, which is quite a very interesting story, Rolex. These days you can't really find out much information about it at all because it's a private trust. Marcus, you're Swiss, right? Do you know much about the Rolex foundation and the money it gives out? No? Because in Geneva, apparently if you need money — like suddenly you can't pay your rent — you can ask Rolex and they will give you some money. Apparently they give out a lot of money to make sure that Geneva is a very good and livable city. It's very interesting.
Let's see who — oh, where am I? Oh yes, I can do this. Sorry, I don't know what happened there. Far, where's Far? Ah, there you are. Let's see if you can keep your lead. Question number two.
What is the largest family-owned business in the world? This should be easy, right? CP Group, Walmart, UnitedHealth, or Mars? In terms of revenue. No, and market cap. Definitely. So Walmart biggest — I mean, Tata is very big as well, though. And the other issue with Tata is they've actually given out quite a bit of their ownership to employee groups and foundations and so on. So maybe they don't own as much as a family to consider it a full family business.
So Walmart, Mars. What does Mars produce? Chocolate, dog food. So of the $12 billion brands that Mars owns, half of them are in the confectionary and sweet side and half of them on the pet food side. And each of those brands is worth a billion dollars or more. It's a very impressive company. In fact, about 20 years ago, they bought Wrigley, which was another family-owned company. And now they own that as well. The way they work is quite interesting because they are family-owned but not family-run, which means they have professionalized their whole management structure. So if you're a Mars kid and you want to get into the company, you go in like everyone else and you go through the ranks like everyone else. The ownership and the work is kept quite separate.
Many of you are in family business, right? How many of you are in a professionalized family business where the family is not directly involved in the management? Anyone? No. So if you're a family business, you have to run it yourself, right? And you've got to think about what that means. Do you keep ownership within the family or do you open it out and make sure that you have new ideas and new things coming in? Because if a family business stays purely within the family, what happens is you get quite rigid and stuck. And at some point when you're large enough, you may need to professionalize. Central Group has been doing that over the last 20 years now. And I think a lot of their leadership, even though the top level is still family, a large chunk of their leadership is now professional, which is quite interesting.
Let's see — oh, you dropped that. Good. And Sue up there. So the most common reason startups fail is — oh, sorry. What is that? You guys should know this because you're quite experienced business people, right?
Very good. The MBAs did not get this — they were not sure, it was quite all over the place. You run out of cash. You can't run a business, right? You need constant cashflow. If you look at — how many of you know the story of Lazada in Thailand? I know a few people that were part of the setup team when they brought it in here. It's a company that was set up by Rocket Internet. Has anyone heard of Rocket Internet? Rocket Internet is a group of three or four German brothers whose whole business model is copy and paste — if they find a nice business model, a nice company working in one region, they will allocate some funds and try and open it somewhere else. So Lazada was the Amazon copy for Southeast Asia.
And before they were bought by Alibaba for about $2 billion, they were three months away from running out of money. If they hadn't been bought, they would have basically closed down and disappeared. And it's also very interesting if you look at Lazada versus Shopee and how Shopee has come in and basically taken the market from Lazada, who was there several years before. It's a very interesting approach that they've taken. In fact, we'll talk about Shopee maybe a little bit at another time.
So running out of cash — who got that? Sue. From second place to first place. Nice. And our jug is the highest climb.
What is the biggest industry in the world by revenue? Gas, semiconductors, commercial banking, life and health insurance. Interesting, right? We all hear about oil and gas, but insurance — there is so much money in insurance. It is the biggest industry by revenue, the amount of money that comes in, because the money is coming in every month. Once you've got that contract, it just keeps coming in. So if you want to make lots of money, go into insurance. Although I know a couple of insurance companies that failed because of COVID, and in fact several insurance companies in Thailand failed in 2011 because of the floods. So you've got to be aware of the dangers and risks.
So the winner is — let's see, third place Far. Nice. Second place Sue. Oh, someone beat you. And the winner is — very nice. You get a very cute, chubby little capybara. There you go.
So we have a lot to cover today because we only have basically six lectures to work with. I'm going to go through a couple of things — oh, but before I start, thanks. Sorry. Before I start, I know you guys are working on your interviews with people for the Sasin group assignment and so on. I just wanted to try and simplify what you needed to do. I realized my guidelines were very complicated. So this was the assignment: summarize, understand where Sasin is right now. What are its strengths and its weaknesses in context compared to other business schools and so on and so forth. And think about who are you comparing us to — are you just comparing us to business schools in Southeast Asia? Then who's our competition? Is it just the Singaporeans? Is it China? Or is it a global market that we're trying to get? And based on that, what are our strengths and weaknesses? And then what are the opportunities and threats and what is your plan for us for the future?
I know that the MBAs have got, I think, most of the management team coming in on Monday at about 4:30 to talk to them. I think you guys have also arranged some talks with Ajahn Pichat and so on. How did it go? Useful? Excellent. Good.
So understanding Sasin in context means not just looking at — and this is the thing some groups haven't really done in the past. I've only done this for a year or so because we've been in the process of change. But some people don't look at Sasin as a whole business. They focus on the academic side and the academic side is the biggest, but there's also Sasin Management Consulting, there's Sasin Executive Education. There used to be — we used to have a revenue-generating sustainability and entrepreneurship center, which doesn't exist anymore. So think about the businesses as a whole, and also its relationship with the university and if there's any issues with that as well. So that's all I wanted to say.
Now we're going to look at the system within which a business exists. This was a quote by a physicist about chaos theory. I'm sure you've heard this before: a butterfly flaps its wings in Brazil, it sets off a tornado in New York or Hong Kong or wherever. What do you think? Do you think this is an accurate reflection of how the world works?
Student: Sort of.
Professor: What do you mean by that?
Student: Because sometimes a small event can have ripple effects across the world. So it works. The world works like that. In some cases, I think everything is a system — everything in the world is connected in some way. And it may be a small thing and you don't notice because there are multiple different consequences that happen and a chain of events, but it is possible.
So this is why we need to look at what is happening in the external environment, because businesses tend to start failing when they are internally focused. When they think, oh, we have this great product, we can sell it — rather than what do customers want and what can we create for them? Or what does the world want? And if you remember when we talked about purpose, what does the world need is a key part of what it means to run a business.
We'll look a little bit at foresight and trying to understand the future because if you're trying to create strategy, you're trying to create strategy for the future. And you need to understand — at least, nobody can predict the future, but you need to think about what do you think the future is going to be? Because your decisions will be based on how you see the future. What do you think is going to happen? Do you think it's going to be wonderful, a utopia, or do you think the world is going to blow up and we're all wandering around in the ruins?
Focus in on the industries that you are in, because while there are broad factors that affect everybody in all industries, there are certain factors that are stronger and weaker in different industries. And we need to understand how our industry works specifically and how we might respond to that as a player in that industry and in that market.
So we look at the external environment. This is from the textbook. What we're doing now is analyzing the company's external environment. We then look at the internal environment, which we'll probably do next week. And then that's where we come with our vision and our strategic options and so on.
So the components of the external environment — I'm sure many of you know all of this. We look at the macro environment, which is the broad external environment. And then we'll look at the industry factors, Porter's Five Forces. So there are two models and frameworks that we'll look at: the macro environment, the industry and competitive environment.
Now, why do we need to do this? Why do we need to look at the external environment? There are two types of things that happen. Firstly, the stuff that we can usually calculate that it'll probably happen — predetermined things that we know are going to happen. So for example, we know that Thailand has an aging population. So we can predict that within 20 years, this is what the Thai population pyramid will look like. We generally base our forecasting on these trends because they are happening over time and we can plan for that.
But there are also critical uncertainties, which are the things that happen by surprise, basically. What's the most recent thing that happened by surprise? COVID, right? It affected everyone, affected all businesses. We didn't expect it to happen. But now we need to start building that into our plan. After COVID, the research is showing that it used to be that pandemics would occur once every 20 years. Now they're expecting pandemics or various different diseases to occur every five to ten years. So how do you prepare for that?
When we don't even know what's going to happen — if you think about it, we know that the ice caps are melting in the North Pole and in the South Pole. Polar bears don't have anywhere to rest and they're struggling. But what it also means is that as ice that hasn't melted in 10,000 years or a hundred thousand years is melting now, it will release bacteria, small viruses, whatever, that we have no experience of, that we have no idea what's going to happen to us because we've never encountered them before and we haven't built immunity. So it may be that things are going to get much worse in some ways.
So we need to look at predetermined elements and critical uncertainties. And we'll talk about foresight a little bit for that as well.
So, short video about the things that are happening. I'd just like you to watch this and think about — is there anything interesting that comes out of this for you? This is just a short video about what's happening in the world today.
[Video plays]
So what comes to mind when you watch this video? What does it make you think of?
Student: My job may not exist in 10 years.
Professor: Your job — what is your job right now?
Student: Accountant.
Professor: Accountant, right? So your job may not exist in 10 years. It may not exist in about a year, right, if you think about how quickly ChatGPT and all the other AI is developing. But it also means that — look, if you look at how AI has been developing, I have been finding that actually it's been getting worse in some areas, because it's based on what it collects and it's collected everything that it can. And now basically it's feeding off itself. If you think about where is AI getting its data from — when it first was collecting data, it was collecting human-created data. Now humans are using AI to create that data and AI is gathering that as well. And it becomes this cycle and it may drive it into the toilet. I don't know. I don't know what will happen.
Anything else?
Student: I would say the world is more civilized.
Professor: Do you think this is civilization? Interesting. More connected, definitely. But for me — and maybe I'm a little bit of a cynic and a pessimist — I see so many opportunities, but there are also so many dangers. If you think about it — do any of you have tech-enabled homes where you can set your lighting and stuff? You do right now. Do you know if it's possible that your house can get hacked? So many people will put up cameras in their homes to check the lights and everything and don't even realize how many of — you know? The question I wanted to ask you about: how many millions of hacks, right? Even in Thailand, and we ran a course on cybersecurity, the number of businesses, including big banks, that have been attacked every year — hundreds. And most of them are prevented, but some of them are not. And they don't tell you about this stuff. They don't tell you about ransomware — you get blocked. And what do you do? Suddenly they can delete all your data. Do you pay them the money? Do you say no? And sometimes you tell them you're not paying, but in the background you pay them something and then they release your information because you don't want to lose everything that you have. Do any of you know if you've been hacked? Your email has been hacked or anything, or your passwords.
Have any of you heard of the website — this is quite a useful website that I discovered a few years ago. Put your email address in there, it'll tell you when your passwords were hacked and for which websites. So LinkedIn was hacked in 2022 and your password was taken — 15 million passwords were taken — or Facebook was hacked and they got your password. I don't know if any of you try this. It's scary. So this is happening all the time. How do we protect ourselves from that? And with quantum computing, how do we even prevent them from hacking back and destroying the financial system? So these are the questions.
Another question that I was quite — oh, sorry, go ahead. What did you want to say?
Student: For me, when I watched the video, I want to focus on the one that says we will have children that will be born into the age of digital and AI and what's going to happen. And it's already happening now — people stop learning how to interact with each other. They have chatbot as their best friend. And it's leading to issues with mental health. People are anxious in society because they literally don't know how to interact with real people. That's what I see.
Professor: That's a big issue, right? Social change. But along with that, we say that children are born into this digital and AI age, but the reality is the children born into this age do not know how to create the tools. Because now it's vibe coding, right? I can say, oh, AI create an app for me. They have no idea how to write code. So what are they going to do when the people who do know — which is this generation and the generation before — are gone? Because they won't know how to make any of the changes that they need to make, which is a scary thing.
The other thing that I find really interesting — I mean, Tesla's and not just Tesla, Boston Dynamics as well — this obsession with human-looking robots. We've had robots for generations in automotive factories, in everywhere. Even your Roomba vacuum is a robot. Why do we need human-looking robots? Any idea? Does anyone think that we need human robots? Because the human body is not necessarily made in the best way to do any of the technical stuff that we need to do. So it's a vanity project, in my view. But anyway.
So I just wanted to show you this because what it shows us is that the world is changing really, really fast and we need to keep an eye on what is happening so we understand how we can respond. How many of you — I assume most of you read the news regularly, right? How many of you read beyond the news and your technical knowledge, textbooks, and articles? How many of you read fiction regularly? Novels? Few of you. I'm finding that fewer and fewer people are actually reading these days. And so your knowledge becomes narrower and narrower and you don't see the signals coming in from around us.
And I think that's what I want to focus on at least the first half of this lecture: how do we start focusing on what's happening around us that we can understand as either opportunities or threats and respond to before they become a problem? If COVID was caught in the fresh market in China, then it wouldn't have spread globally and it wouldn't have been a problem. How do we know when these things are going to happen? How can we predict when these things are going to happen?
So before we go into that, let's look at the broader external environment. I'm sure you're all familiar with — so why are we doing this? We need to understand and anticipate what's going to happen. And we need to time — if you think about the Hambrick Strategy Diamond, we need to know how we are going to stage and time all the things that we're going to do. And we do that based on: do we know that a new regulation is coming in? Do we know if the weather patterns and the climate is changing, so we need to do something different?
If you think about the fisheries industry and seafood — the way climate has been changing, especially in the North Atlantic, the stuff that they used to catch at quite low latitudes along Canada and Alaska, now because temperatures are rising, those things are no longer available there. They've got to go even higher and into more dangerous territories to do what they need to do. So it's something that allows you to start thinking about what's happening in the world.
So these are the six aspects. Now, please remember — are you all familiar with PESTLE, right? It's not a complicated model. It just categorizes the types of things that are happening in the external environment. Things can be categorized in multiple different ways. All this does is it helps you try and broaden your thinking into different areas and not just think about legal or about politics or about — try and think more broadly. For example, tariffs — tariffs may be legal, but they may also be political. So there are multiple ways you can categorize things. The way you categorize them is not as important as the fact that you can spot them and you can see what you might be able to do about them.
So we've got politics, economy, society, social, legal, environmental, and technological. And the reason it's important is because it affects everything that we do and we don't always spot these things until it's too late.
The example I wanted to share with you is a technology one — happens to be about technology. Have you heard about the quartz revolution, which happened in the late sixties, early seventies? You have, right? Because Japan was a big part of it. Very interesting because in the rest of the world, including Japan, they called it the quartz revolution. Switzerland called it the quartz crisis.
Why? Because in the late sixties, it was discovered that if you pass an electrical current through a piece of quartz, it will always vibrate at 32,768 Hertz. Now, that's a technological discovery. It's very interesting. Why is it something that could change the world? It renders mechanical watches obsolete. Not only because they were much cheaper to produce, but because they were far more accurate — no mechanical watch can be as accurate as a quartz watch. No matter what you say, no matter how many movements you have.
So we moved from this to this. And in the sixties, Switzerland accounted for 85% of global watch revenue. They made 85% of the money from watches. It was known as the place where you go to get watches. By the late seventies and early eighties, it had gone down — within a period of 15 years, the Swiss watch industry had collapsed from 85% of the global market to 15%, from one discovery and what it meant.
So what do you think they did? What did the Swiss watch industry do? Premiumize, go luxury. Now, that happened later. They were already expensive, and Casio, Citizen, Seiko — their watches were less than 10% the price of Swiss watches. And more importantly, they could produce them in bulk in factories. They did not have to be handmade.
So what happened was the Swiss watch industry tried to consolidate. They tried to respond. If you were a Swiss watch man — what would you have done? Would you have tried to start making quartz watches? So the Swatch Group was the industry's attempt at consolidating. A whole bunch of companies got together and formed a consortium and produced Swatches. Anyone know what Swatch stands for? Second watch. Yes. Second watch. You can have a third watch. It's cheap, it's fun, it's nice, whatever. And it did quite well, but it didn't come close to making up for the revenue that they lost.
So when something like this happens that revolutionizes your industry, your business, your product — what do you do? Do you go with the flow and try and make more quartz watches and be happy with your lot? Or do you premiumize, go luxury? Saying that the Swiss watch industry went luxury is, I think, diminishing the amount of work that went into it, because it's not an easy thing — oh, we're going to be special and more expensive. People are not going to be interested. So you've got to think about how do you do that?
One company which basically went bankrupt, closed down, was Blancpain. I don't know if any of you know this watch brand — you probably do, well-known exclusive watch brand. Jean-Claude Biver, who wasn't even a watch person, in 1983 bought the company for $16,000. Ten years later, he sold it for $73 million. That's a good return on investment. And what was his response to the quartz crisis? "Since 1735, there has never been a quartz Blancpain watch and there never will be." We are not going to go with the herd. We are going to stay in what we know and we can do really well. And we will try and do that even better. Now, the market obviously reduced, which means you have to increase your prices or something like that to ensure that you can still bring in the right sort of revenue.
But something like — not even 90% — of the watch industry, the companies within the watch industry, which were not purely the watch brands but also the people that made movements, the people that put things together, made cases, all of that stuff — because there was a huge supply chain for the Swiss watch industry — most of them went out of business. Most of them either consolidated or went out of business. So you've got to think: how would you respond when something like that happens to your industry?
Rolex was quite interesting because — did Rolex do quartz or not? One quartz watch they made, and they did a lot of research on it. They tried the quartz watch and they realized this is not their area of expertise. And they went back. But because they don't have to report to anyone — they don't have any shareholders that they have to report quarterly losses or revenue to — they could wait and build and focus on what they wanted to do. So they were in a very strong position, which is why they did really well out of this.
And if you think about the luxury watch industry, Rolex is not really at the top. Because the top-level watch companies in Switzerland make, at the most, maybe 50,000 watches. That's it. Rolex makes 1.2 million a year. So it's not — and pricing-wise, it's also not at the top. It costs less than half what some of these other watches would. So they have managed to maintain their position as a premium brand, but not a luxury brand. And that's partly conscious and partly by accident. So it's really interesting to see what different companies in an industry will do when something like this happens.
So think about what might be a crisis in your industry. What might happen in your industry that might cause you to really go and have to review and completely reinvent yourself? If you think about AI now — if you are a copywriter for an ad agency, your job's already gone. Because ChatGPT can make it sound really beautiful. You don't need to do anything. And these days you can even code your own website. So why do you need web developers when you can do it yourself? WordPress has introduced AI into their website process, which means that you don't need a professional web designer to come and do it for you — you can go in and use their AI and they'll produce one for you.
So it's one thing to know what the things are that are happening. It's another thing to figure out what the impact will be. So it's important not just to identify it, but to note whether it'll be a net positive or a net negative — or potentially both.
An example here is — well, you know, if we look at Thailand — we had a coalition government. Is that good? Probably not. Because there's going to be infighting and so on. So it's negative — it's a political aspect that's negative for business. Hosting the ASEAN conference, which we did a couple of years ago, that's positive. Policy instability — well, that should be on the negative side. Tourism recovery after COVID would have been positive. Household debt would have been bad. In fact, do you know how much household debt Thailand has? What percentage of GDP is household debt? 86, 87%. One of the highest in the region, definitely. And if not in the world.
So as you can see, if something happens — if you think something is happening currently or in the near future — you've got to say: what is the impact? Is it positive or negative impact? Is it a big or small impact for your business? The impact is related to what it means for your business. It's not just in general. So ESG awareness may be positive for you if you're a company making renewable energy, but for an oil company, maybe it's negative. So you've got to think about how it relates to your business.
And once you've identified it, you prioritize based on impact and likelihood. You identify the impacts, you assess, and then you have mitigation strategies — from the bottom up to the top. You can't just think, oh, all of this stuff is happening, I'm not going to do anything about it — because by the time you do something about it, it may be too late for you.
So what I'd like you to do — we've got a whole bunch of flip charts here. I would like you to take two minutes by yourself to just list all the major trends that you think are happening that might affect the economy and your business. Think about it. Is there a certain regulation that's come in or that's coming in that might affect your business? It doesn't matter what business you're in — think about yourself and what you know that is happening in the world. Once you have done that, I'll put some letters on each of these, and then I want you to go around and place them in which dimension you think it is. So while you're doing this, first of all, just write down what you think is important that is happening in the world today. Just two minutes.
I'm just going to put six up and what I'm trying to find out is where the preponderance of change is that you think is going to happen. Does anyone have more than five things? No, almost. So you have five for now. You got rid of one. Thinking about it. Take a few, take a minute. Just think about what have you experienced in the world over the last couple of months that you think — oh, this is something that's interesting that might affect me or my business.
And remember, whatever ChatGPT or Claude give you for this, everybody else knows as well. So I'd like you to think what is important for you.
What you have is enough. Now I've got politics, economy, social, technological, environmental, legal. All I want you to do now is go in, write down in as short as possible a sentence what your trend is. And let's see how many we get on each of those. Get up, walk around. There are markers everywhere and write something down. I'll give you five minutes to do that.
And as you're doing it, what I want you to do at the end of your notes — rather, I'm not going to get you to do a whole impact map — I want you to write down how much impact it'll have by noting plus three for the most positive, so from plus one to plus three for positive, and minus one to minus three for negative impact. That's it, in brackets at the end or in a circle at the end of what you write down.
[Students complete the exercise]
This side of the room: politics, economy, social. That side of the room: technological, environmental, legal. So this is about crowdsourcing ideas. Long queue in front of political — actually in front of all of them. Very nice. Good. If you run out of space, you're welcome to turn the flip chart over and start a new page. If you see someone has written something that you've also written, you can put a star next to it or something so you don't have to rewrite it. Once you're done, you can sit down and we'll have a look. Try and be as specific as possible — don't just say AI, say, well, some of AI is going to affect — is it a potential opportunity or a potential threat? Jessica, you finished. Just economics.
The line is so long for economics, right? Well, this is a business course, so that makes sense. If you've got the same, just put a star next to it so it's a repeat.
[Discussion of flip chart items]
We're getting — put my mic on. We've got an aging society, plus three and minus three. And that's quite an interesting one, especially in Thailand, but I think it's happening in several Asian countries — in Japan it's happening, and in Thailand — not so much in places like Indonesia. But single-person household — what does that mean for us as a society and for us as businesses? So all of these things will have an impact in one way or another on some business. That's why you're thinking about it. But what's important is how do you think about it for your own business? Right now, it only gives you the trends that you currently see.
What I want to do in the next half hour that we have before the break is to take this one step further and look at — so these are all trends that you see happening now. I want us to start thinking further ahead. If you remember when we started this course, I said strategy is about the long term, right? We have companies that are 1,400 years old. How do they survive? How do they plan? How do they think about the future? And so how do we think about the future and how has that changed — that is something that is really useful for us.
I'll show you a picture in a moment, but let me ask you a question for yourselves. What do you think? You will be 24 years older. What will the world look like? You'll probably be my age by then, right? What will the world look like? Think about it. You don't have to think about it in these terms, but you will probably think in terms of some of these things. What will the environment look like? What sort of government will we have? Will we no longer have nation-states — will corporations rule the world? What is the world going to look like? Take a moment and think about it in your head. You can write it down if you want. I'm curious. I'll ask some of you to share some of your thoughts. What will the world look like 24 years from now?
Okay. Anyone want to share any thoughts that they have? Yes, Ty — mic on please. Thank you.
Ty: In 24 years, I believe that 80 or 90% of cars will be EV. And similar to horses, the car will be just a very expensive hobby.
Professor: Okay. Interesting. All right. Great.
Student: There's going to be a lot of unemployment. And if a universal basic income is not implemented, there could be lots of instability around the world. And the gap between the haves and the have-nots will widen — those who own the technology and the means of production will earn more, and those who do not have those means will fall behind.
Professor: Okay. So the gap between rich and poor will expand and people will be out of work. So how do they survive without a universal basic income? And I think the next step beyond that is — well, if you don't have any job, any income, who's going to buy all this stuff that the elites are producing?
Student: I think we would have less leaders in the future because the young generation relies on AI and they don't know how to lead. So I think there will be less leaders in the future.
Professor: So they heavily rely on AI. Will AI become our leader, do you think?
Student: No. I just say there will be a leader, but...
Professor: So what do you mean by that? Do you mean not so many countries will have leaders, or do you mean businesses will not have leaders, or fewer people to choose from for leadership positions?
Student: Yeah. That's a big issue for service firms like law firms and consulting firms. Usually you learn the trade by being a junior associate, but now if AI is doing everything, where are they going to find the junior associates to become consultants or lawyers or whatever? If there's no opportunity for these people to be a junior associate, there's no opportunity for these people to learn.
Professor: So that's a prediction, right? And the question is, what does that mean for you and your business and your life? So these are the things we need to think about. Terry, you had your hand up.
Terry: I think there are some human concerns from long time ago about aging and how we are living in longevity. In the age of AI, it will accelerate this dream coming true. So I think in the future it will be positive in our aging.
Professor: How long do you think people will live in 24 years' time? How old do you think people will get?
Terry: I don't think the age number is the important part — it's more like aging reversal. So if you are like 60 but you look young, it will be very great for human aging.
Professor: Nice. So everyone will look 27, right? Now, what does that mean? What does that mean for the healthcare industry? What does that mean for retirement homes? If that's what you think is going to happen, you have to think: well, what does that mean? It's always — yes, this is an interesting idea, but what does it mean for me?
In fact, I don't know if I mentioned this to this class or the MBAs — a researcher at Harvard called Aubrey de Grey. When I was living in Boston in 2007, I was following his work and he was doing work on longevity and aging. He had managed to increase the lifespan of rats by double, by doing some genetic manipulation. But he said, even then in 2007, the first person who will live indefinitely has already been born. What does that mean? That means someone in the world right now may never die. Because right now we have technology that will get people to live healthier, to older — to about 100, 120. But by the time this person gets to that age, there will be technology that takes them even further, and so on and so forth.
Anyone else? Some of you have quite positive views. Yes?
Student: I think for me, I'm more specific — I'm in interior design. So I think in terms of design, it takes both positive and negative. I think we will have less originality because AI is now a new collage rather than new creations. I'm a part-time professor at a school, so now when I go lecture on thesis, it's all AI-created and it will be somewhat exactly what we saw 20, 30 years ago — collage in a new way. But I see less originality in the students. So it takes a negative. But in a positive way, if you use it in a good way, in a certain way that helps you generate your idea in a more three-dimensional way, it makes other people understand it much easier. As an interior designer, before you had to draw it by hand. If you don't have good skill, then it's hard to translate to your client to see what the interior looks like. But now with these AI tools, if you use them in a way, you can translate your idea more like real three-dimensional to the client. So I think it takes both negative and positive on that.
Professor: Okay, great. So less creativity, but easier creative communication.
And so what are you hearing as we hear this stuff? Because what I'm hearing is that we are thinking about the future from the context of the present, which is all we can do. We cannot even imagine a completely different future. When the internet was created in the seventies — Tim Berners-Lee and all that sort of stuff — who would have imagined that what we end up with is TikTok and Fortnite? Nobody thought of that.
So what I want to highlight to you is that the way we think about the future is restricted by what we know exists now. These are some postcards — some images that were made from 1899 to 1910, 120 to 130 years ago — about what the future in the year 2000 would look like, a hundred years from where they were. And what do you see in these pictures? What you see is that they are imagining them doing the same things that they are doing currently, in a hundred years, with a little bit better technology. We can fly when we hunt. We can go underwater, but we need animals to do that — there's no submarine technology. Think about this one: put books in and it goes in through a wire. What's missing there? Wireless technology, computers — all of that stuff. People could not even imagine it at the time.
In 1913, the former president of the American Meatpackers Association predicted that within 50 years, most humans' diet would consist mostly of vegetables because meat would be so rare and so expensive.
Here's something about fashion, from 1920: "We should be having a hair-raising time. Yet another designer goes so far as to believe that skirts will disappear entirely. Shoes will have cantilever heels and an electric belt will adapt the body to climatic changes. The lightly clad woman of tomorrow will move in an atmosphere that's scientifically kept at the right temperature — a dress of aluminum with a sash to change it for afternoon or evening, and an electric headlight to help her to find an honest man. As for him, if he matters at all, he'll be fitted with a telephone, a radio, and containers for coins, keys, and candy for cuties." Now, who would have thought that all of that stuff that he has on his head and his belt and everywhere is now in our pocket?
In 1952, they were talking about solar-powered cars. Are there any commercially available solar-powered cars? No. House of the future, Monsanto, 1957.
This one is quite interesting. In 1959, the idea was that the fastest way to communicate was by rocket — you write a letter or type a letter, you put it where the warhead goes into a rocket, and then you shoot it 5,000 miles. And they did this, from a ship towards the Johnson Space Center. It took maybe 20 minutes to get a thousand kilometers or something like that. And this was a huge idea at the time — wow, we can send mail fast around the world using rockets. What do we use instead of mail by rocket now? Email, the internet. They could not imagine that. And that was 50 years ago. In fact, the internet started about 10 years after this — they started thinking about it.
In 1964, the RAND Corporation said that by the 1990s, we would have chimpanzee chauffeurs and gorilla butlers. We would be using animals as our servants. There was no idea that we would destroy their environment so much that they barely exist anymore.
I think I asked you guys when the last time people landed on the moon — 1972, a very long time ago. Flying cars — we have been promised flying cars for a hundred years. Hasn't happened. Hoverboards — I mean, have you seen the way we have hoverboards now? They've got wheels. They're not hover.
In 2005, it was said that by the 2020s, there will be nanobots capable of entering the bloodstream to feed cells and extract waste, which will render the mode of food consumption as we know it obsolete. We never have to eat — the nanobots will do everything for us in our bodies.
In 2000, The Simpsons predicted the Trump presidency, and that happened about 16 years after.
And even on a business and technology approach, people who are experts in their field could not predict certain things. Western Union, who used to do the telegraph: "This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." Thomas Watson, Senior Chairman and CEO of IBM: "I think there is a world market for maybe five computers." DEC, a very big tech company in the sixties and seventies: "There is no reason for any individual to have a computer in their home." Steve Ballmer, co-founder of Microsoft: "There is no chance that the iPhone is going to get any significant market share." No chance. In 2007, when the first iPhone came out. And what happened to the Microsoft Windows phone?
So you can see that it's very difficult for us to predict what's going to happen, but we do have to start thinking about it.
Current views of the future: mass chip implantation. Do you think everybody will get a chip so that we can scan and pay and identify ourselves? Quang, you think it's going to happen?
Quang: Yeah. It's already happened. Certain documentaries show some people already implant chips in the body just to enter the house and the office. They don't have to do anything — they just walk by.
Professor: So it's already happening. Crazy, right? Multi-sensorial messaging — so you can send messages that have smell and touch as well. I don't know how that's going to happen. Exoskeletons, prosthetics that allow you to move and carry more, which will help people.
Has anyone heard of Neom? You have. Oh yeah, you're in the hospitality industry. Do you guys have any investment in there? No, thank God.
So Neom was a planned linear city — let's not say "was" yet. Neom, launched in 2017, was meant to be completed by 2045. The total planned area is 26,500 square kilometers. And one of the main products of the city's plan is to create a new city, a new life. "Humanity has existed within dysfunctional and polluted cities that ignore nature. Now a revolution in civilization is taking place. Imagine a traditional city and consolidating its footprint, designing to protect and enhance nature. The Line will be home to 9 million residents and will be built with a footprint of just 34 square kilometers." The Line's infrastructure makes it possible to travel end to end in 20 minutes with no need for cars, resulting in zero carbon emissions. The Line is 500 meters tall, 200 meters wide, 170 kilometers long, and housed within an elegant mirror glass facade. Energy and water supplies are 100% renewable. With 40% of the world accessible within six hours at the heart of the globe's key trade routes.
My first issue with that advert is it says, oh, for too long we've been fighting against nature, but now we're going to put a tropical city in the desert. How is that not fighting against nature? Anyway.
So Neom's current reality: because of a drop in Saudi Aramco profits, they reduced their investment timeline. Now it'll take a hundred years to produce even just The Line, not even the whole thing. Scale reductions — 2030 is supposed to be the completion of a 2.4 kilometer section containing fewer than 300,000 residents, down from an expected 1.5 million. And by July 2022, only two buildings had been completed. In 2024, one part of the project was three years behind schedule and at three times its initial cost. So no matter what you think you can create in the future, it's not as easy as people think, no matter how much money they have.
Now, if you were a cynic like me, you may think that actually Saudi Arabia has already achieved what it wanted to achieve by announcing all of this and putting a little money in, because it's created a certain different perspective of what Saudi Arabia is — high-tech, futuristic. So even if it doesn't complete, it's done part of its job.
How about — I don't know if anyone has ever read this — one of my favorite books, it's called "The Windup Girl." It is a science fiction novel which has won both the Hugo and the Nebula awards, the two top awards for science fiction. And it's the only science fiction book that I've read that's set in Thailand. It's interesting because it talks about a post-oil world. The energy doesn't come from oil anymore — it comes from kinetic energy. You have to wind things up if you want to get anything done. And there's genetically modified elephants and so on and so forth. But one of the biggest issues that the book covers is the idea of GM crops, which are owned by specific companies. And because they cannot be controlled except by GM-produced viruses, they spread around the world and cause problems for everyone anyway. Interesting view of the future, right?
So why do we need to think about all of this? Because if you're a leader, if you're not thinking about the future, you are not doing your job. If you are just fighting fires, then you are not doing your job. Your job is to think about what is going to happen and how do you get ready to respond to it. You should have people that work for you that are dealing with what's happening now.
Look at Kodak. Look at Blockbuster — Blockbuster declined to buy Netflix for $50 million in the year 2000. Nokia, in five years, went from 40% global market share to 3%. Think about how the taxi industry ignored the problems inherent in that industry until ride sharing came along and basically wiped them out.
So if you have competitive advantage, if you can use foresight, you can think about what might happen and how you might prepare for it. Think about Amazon. Amazon first created an online bookstore. But in order to sell its books, it needed to create infrastructure. It then thought, well, we've got this infrastructure, why don't we sell other things? And then they thought, well, we've got all of this infrastructure for selling things, why don't we sell or lease out that infrastructure? Which is why now Amazon Web Services is a significant chunk of Amazon's revenue. Because it saw it coming.
Apple saw the shift from just selling computers to selling a lifestyle ecosystem. Netflix we'll talk about — from DVD by mail to streaming to content creation. So you've got to think about what's going to happen.
So we know that certain things may happen, but we're not always sure how they will affect us. There are three types of unpredictability. Path uncertainty: we know that AI will transform work, but we don't know which workflows will happen first. Everybody says, oh, people with low-level skills will lose their jobs. But perhaps it is the CEOs and the senior executives that will lose their jobs, or should be losing their jobs, to AI because AI can think for them. You still need people to deliver — why do you need a CEO to tell you what to do when AI can give you that prediction in a more accurate way, if you've got the right algorithm? Destination uncertainty: will AI primarily augment professionals or replace entire roles? Do we think that AI will help us do our work better or take our work away?
Student: I have a question. Where do we draw the line between being visionary and being delusional?
Professor: Well, you know, you cannot tell in hindsight, right? Only in hindsight. This is the thing — you can't tell. But you have to put something there so you have something to work towards. But you have to be able to adjust quickly if it doesn't work. Adaptability becomes essential.
Student: Yes. How do you know if you're delusional? Well, you don't. But if you're not thinking about the future, you're not going to exist in that future.
So let's take a break now. I want us to go through this idea of predictability and unpredictability and just share with you this idea of weak signals. These are the things that you need to look out for.
So as you can see, weak signals are when things are happening — trends are happening in the world — but they are so slight that most people are not seeing them. Once they hit this zone where more and more people know that something's happening, it's already too late for you to take advantage, because everybody will be doing the same thing. If you can jump onto a trend that you believe is going to make a difference, and it does, and you can take advantage of it before everyone else — that's when you're taking advantage of weak signals. A sign which is slight and present, but huge in terms of its virtual consequences.
When you're thinking about weak signals, you are looking at how important is something if it happens and how many people agree that it's going to happen or not. So the weak signals are the ones that are not important for everybody, and there's a lot of disagreement about whether this is going to happen or not. But you choose a certain direction based on what you're seeing more than everyone else. If everyone sees it, then it doesn't matter — it's built into your thinking and built into your actions. So you've got to be looking for stuff that may affect you that not everybody is seeing.
So just a quick example before we take a break. Look at Netflix. How did Netflix gain an advantage? What happened? Netflix has been ahead of the curve at least three times in shifting its business model. It really is a great example of foresight.
The first one was: why did Netflix feel it had a business model that worked? What was it competing against? What was it a substitute for? Video stores. What did it do that video stores didn't do, that made people choose them? No late fee. It wasn't just the delivery — it was the fact that everybody knows that you hire something, eventually you're going to forget to return it and you're going to have to pay a late fee. And a significant portion of Blockbuster's income was late fees. These guys said: no late fees, you just pay us a monthly subscription. You can keep the DVD as long as you want. You can only get a new one when you return that, but that's fine — we don't care. Keep it, as long as you're paying us. So that was the first shift. They realized that people didn't like late fees and would take advantage of no late fees for a small subscription premium.
Then what did they do next? They moved from DVDs to streaming. Why did they do that? What made them do that? What was different from Blockbuster and Disney and any other company?
Student: I think they saw the trend in broadband internet.
Professor: That's exactly right. And that's also speed. The biggest issue that they saw coming along was that broadband was too weak at the time to stream video, but they could see the rapid rate of change — very soon you'd be able to send video through broadband. And that's where they invested their money. They built the infrastructure to take advantage of growing broadband uptake as well as bandwidth.
Then, once they had created all of that and they had licensed movies from Paramount, from Disney, from everyone, and they were doing really well — what happened? Suddenly all of these other companies said, why are we giving our stuff to Netflix? We should be setting up our own streaming. We should be getting that money. So then you had HBO, Hulu, Netflix, Disney, all of these different players coming in and doing their own streaming.
So what did Netflix do? They had to create their own content. And one of the things that they did really well, which companies that already had their own content were less willing to invest in because they had content they could use, was that they sourced content from places where these big players, which are mostly US-based, were not sourcing from. Which is why some of the biggest hits on Netflix are from where? Korea. Globally. You know what Thailand is famous for on Netflix, right? Girls' Love, Boys' Love. Huge. Thai shows are known globally in the LGBT community. So they have managed to allow very small filmmakers to create global impact. Because they went original.
Student: I'm not sure about the weak signals that Netflix created their own content. That's going to be from — was it really weak signals that created their own competitive advantage to compete with other competitors?
Professor: Sure. Yes. But originally — so it meant a shift of business model because their original business model with streaming was to license content. But they could start sensing — when Hulu came out, Hulu was a consolidation of 16 different companies that started streaming on the Hulu platform. And that was competition to Netflix. But when they noticed that several of these companies were pulling out of Hulu and starting to prepare — that's when they started thinking that their own content was necessary. So they saw the signal that content owners were starting to want to stream their own content. So they may have seen it at the same time as everybody else, but they were in a position to take advantage of it. So it may not have been as weak a signal as I'm implying here, but it was something that other companies that could have invested in original content from around the world didn't do.
Because for them — and I think this is the differentiator — most of these traditional companies, Disney, Paramount, all of those historically, they had benefited from a global desire for American content. And they had not looked outside of America for creating new content. And that's something that Netflix took advantage of. The globalization of taste, and the creation of diversity in taste.
So anyway, shall we take a break now? 30 minutes back here and we will do a quick little exercise on how you see the future. Any questions before we break? I'll be around, so if you want to ask questions, you can.
[Break]
Okay, guys, let's get going. Got a lot to cover. Everyone back from their group stuff. So we were talking about noticing and leveraging weak signals.
What do you know about — turned out to be TikTok. So it was owned by ByteDance. This was the first attempt that they had. And what they managed to see was: mobile-native content was becoming more popular, rather than watching on a computer, which previously people wouldn't watch because it's such a small screen, it's only a secondary device — but this became mobile-native. The potential of short-form videos — Vine was about 30-second videos — so they saw that getting traction. And social graphing. Previously it was all like Instagram and Facebook — you see what your friends are looking at and that gets posted to your site. But the social graphing prioritized what the broader demographic was looking at. And so you could have a very small video and not have many friends or connections on TikTok, but because a few people in different parts of the world were looking at it, you could suddenly become quite viral without a lot of connections. So that was the big shift. These three things they put together, and TikTok was born. And now has what — 1.6 billion, probably 2 billion users.
In fact, how many of you still use Facebook? This is definitely not Gen Z. How many of you use TikTok? Wow. A couple, not many. Instagram? Instagram is the middle ground.
The power of AI — the way AI works today in terms of parallel processing — originates from a single research paper that was written by some Google scientists. And it's called "Attention Is All You Need." It was written in 2017. It's available publicly — you can read it. But that article was what drove the dramatic and exponential increase of AI computing power and broadened out the amount of data that LLMs could process at the time. And then as these models grew bigger and bigger, a lot of other capabilities began to emerge. And eventually you ended up with ChatGPT.
But interestingly enough, this idea of scaling — having a huge amount of computing power — that is not necessary to have good AI. And you can see that from the Chinese models like DeepSeek — they use far less resources than the American models. The reason the American models are so resource-intensive is because they are trying to beat each other in terms of where they get to. And they can only do that by brute force, because that's what gives them the speed to expand. Whereas the Chinese companies are looking at what's available in the resources that they have and creating some really, really powerful models with about a third of the computing resources. So they have found a different way to do this.
So how do you notice when you see key patterns? Look beyond the current markets. Look beyond the current market that you are serving to think about what else you can provide. I mentioned Amazon Web Services. Look at Netflix — broadband growth, viewing habits, technology costs. They saw that technology costs were coming down, they saw that broadband growth was happening, and they saw that viewing habits were changing.
What viewing habit came into being because of Netflix? Binging. Binge watching. You watch a whole series in one weekend. Before streaming, where you had a choice — because Netflix could also have done exactly what the cable companies and the TV companies were doing, which is let's release one episode per week. Everybody was used to that — one episode per week. But they realized that people wanted to watch a lot of stuff of the same thing all in one go. Before Netflix, all you could do was buy the DVD box set and watch it yourself. But now you could watch it all on Netflix all at once. So they saw that. They saw these trends and they connected these things together. They didn't have to be connected, but they connected them together.
Acting while signals are still weak. Think about Tesla and its charging stations. They had no idea how big the market would be, but they were able to predict with their own level of confidence that if they invested in EV infrastructure, that would benefit them in the long run. Because they would then have a network for their cars. These days, nobody even thinks about it — I think just about every condo in Bangkok has power charging in their parking. But before that, who was investing in these things? It had to be a company that thought they could benefit from it in the long term, because it's a huge upfront investment to put this stuff in place.
So Apple said: why should a phone and a music player be separate? Before the iPhone, what did Apple produce? iPod for music. And the internet — you had to have a computer. Or you could do very little on your BlackBerry to get online. But they put all of that together and they said, why can't we put it all in one device? Why do you have to carry ten devices around?
So I would like us to do this quickly, because I think it's quite useful for you to see how you manage your own future — how you see the future. This is a game we usually play by standing up. I'm going to ask you to stand up because I want you to have a bit of a discussion.
This was created by a Polish sociologist and futurist called Fred Polak. It's called the Polak Game. And what it does is it gets you to start thinking about how you see the future. So what I'd like you to do is physically stand up and move to the side of the room: positive — the future is likely to be good, things are improving, things are looking good. Optimistic this side, pessimistic this side — things are broadly getting worse or headed in a bad direction. Let's see what you guys think. Up and move. Choose a side: positive, optimistic, or pessimistic.
Wow. A lot more optimists in this class than the MBAs. Such a bunch of optimists.
Stay where you feel most comfortable, one side or another. I don't mind — there's no right or wrong. This is how we see the future. Let me ask anyone on this side: what makes you feel optimistic about the future?
Student: You hope for better things.
Professor: But are you seeing anything that makes you have hope?
Student: You see opportunities.
Professor: Any particular sort of opportunities that you see?
Student: Opportunities for work and personal life.
Professor: Okay. There's no such thing as too optimistic. I think it's fine. Anyone else? What makes you optimistic? Jack, I hear you've got a mic there.
Jack: I feel like in the future, the robots will be working for all the humans. Then we just do whatever we like. And everyone has a basic life — support from — because now we need to earn for our living, right? In the future, we will have basics that you don't have to work — have food and shelter and so on. But some people like to have a better life, maybe they will do something a little bit more, similar to work. But if you just want to relax, then you can, because you already have enough food from the robots.
Professor: Well, that's a very optimistic view. I think that's lovely. In fact, if you are really interested in that particular type of future, there's a great book written by a British philosopher called Aaron Bastani. The book is called "Fully Automated Luxury Communism." It's a very interesting book about the future. I like it very much. You should check it out. One more person on this side.
Student: Things will keep moving upwards.
Professor: So you're seeing humanity — the history of humanity — as a progression for the better. And you think it'll keep going, right?
So how about you guys on the pessimistic side? What puts you on this side? What are you seeing that makes you think the future is not that bright?
Student: The GDP growth estimate for Thailand for this year is quite low — like 1.7-ish percent. So that's short-term pessimism. And in the long term, as I've indicated earlier, AI and automation will replace a lot of jobs. And if a UBI is not implemented, a lot of people will have a problem surviving in the future without work.
Professor: So listen — notice, right? Jack spoke about AI and robots. This student spoke about AI and robots. But they're sitting on different sides because their perspective of what might happen is quite different. Jack thinks, oh yeah, everything's going to be fine, people will get food and shelter. This student thinks it may not happen — you're not that confident that it'll happen.
Student: I choose to be on this side just because I think being a little bit pessimistic drives you to think of a contingency plan. And I think with the fast-paced changing world, there is a very intensive need of high adaptability needed in our human survival. The faster you can adapt, the faster you can foresee what could be a threat to you — maybe it leads you to survive with a higher chance.
Professor: So you are pessimistic because you think you need to be pessimistic in order to drive to success. So actually you see good things — you see the good thing in pessimism. So you are optimistic about pessimism.
So can you see that despite us all seeing the same trends, we have a different perspective of what the future might hold?
Now I need you to make one more move. The next move is: how much influence do you feel you have over the future? When I say high agency — the people who believe that what they do individually or collectively genuinely makes a difference, move to the back of the room. Those of you that feel, oh, you know what, it doesn't matter what I do — whether I think the world is going to be good or bad in the future, nothing I can do about it, it's just going to happen. So this is about level of agency. High level of agency at the back, low level of agency here. Stay on your side, move up or down.
So we have four groups. Pessimistic and passive. Interesting. So you think you can do something.
Wow. This is so interesting. Are you guys not sure? Think about it. Do you think that what you do makes a difference? That's all you need to do. If you think what you do makes a difference, go to the back. If you think what you do makes very little difference, come to the front.
Based on your belief of how much impact you have on the future — and not just your own life, but the lives of your community. It doesn't have to be the whole world, but it can be your community — bigger than yourself. You can make a difference bigger than yourself is what I'm asking. Wow.
So Sue, you're alone over there. Tell me why you put yourself there. So you're not really pessimistic about the world — you just think it's a good intellectual exercise to think that bad things will happen. But actually you're not in the right place then — do you think the world will be good or bad in the future? What do you think?
Sue: [inaudible]
Professor: So you do think it's getting worse, but you think you can make a difference. What makes you feel that you can make a difference? The impact of the things that you do. Wonderful.
So we have two groups over here that both think — some of you think the world is bad, some of you think the world is going to be good — but all of you seem to think, well, nothing much I can do. What do you think? How do you think that affects your decision-making? First of all, why do you think that there's nothing much you can do? What do you think is stopping you from taking action to change the world?
Anyone on this side? The world is getting bad, right? And you're basically what you're saying by standing here is: the world is going to hell and I can't do anything about it. So I'm just going to sit here and take the ride. Does that sound about right? Why do you think you cannot change anything?
Student: I do believe in human nature in a bad way. Humans have the potential to adapt, right? Not a good thing, but it's also a bad thing as well. They have the potential to find cracks in the system. AI, as everyone mentioned, is going really fast. I mean, even now, just recently, OpenAI just released the new model that had to stop midway because it was too smart. Something like that. I think the AI is growing faster than the government or regulation to really put a broader regulation on them. That's how I feel. It's not like we are not trying to do anything, but there's a bigger scale that we really cannot stop.
Professor: So you feel your actions are too small to make an impact at the grand scale. Great.
Anyone else in here? Any thoughts?
Student: We just sit here and wait. Switching gears in terms of politics — I'm not the president or the majority in the parliament. So we can't really do much to change the government. Like, my mom is a Senator and she's in the minority. She can't...
[Transcript ends]