Common wisdom says you don't make projections beyond five years. With the rapid change we've all become accustomed to, some would even say five years is too long. Yet, as financial advisors, we make assumptions about the status of clients' assets, income, health and other plan-impacting variables over periods exceeding 30 years in some cases. The point of this exercise, I used to tell my own clients, isn't to predict the future but to determine what small adjustments may be needed along the way to keep them on a sound financial course. Applying this same philosophy to technology...if you have a sense of where it's headed, you can better stay on track as a business owner.
Will the technology we use as financial advisors 30 years from now be merely an extrapolation of the systems we now have? Yes and no. Creativity happens in different ways. In some cases, a brilliant idea improves on an existing idea; in other cases, creative solutions develop to look like nothing that has come before. Advisor technology in the future will be a combination of the two.
So we will first ask -- to give this issue some perspective -- what technologies have represented the greatest change and innovation over the last 30 years? The easy answer is that most new technology has been merely an offshoot of two things: 1) The production of a commercially viable personal computer, and 2) the Internet. With the computer, we have the ability to create, store and retrieve data essential to running a business; with the Internet, we have the ability to share that data. If you think about it, virtually every technological innovation important to your business stems from these two sources.
Let's next ask, "What technologies are likely to prevail 30 years from now that we can't see coming?" Well, your guess is as good as mine (unless you don't give much thought to technology). Just look at the equipment you use today and it's obvious that much of what science fiction authors were writing about prior to 1980 has emerged to take on a real, commercially viable presence in our lives.
A somewhat easier question to answer is... "What important new technology that's in its early developmental stages now will be perfected and taken for granted in 30 years?" With the help of my business partner and MorningstarAdvisor.com's Technology Editor, Joel Bruckenstein, we can find unmistakable trends towards improved ways of interacting with our computers and the Internet. First, the hardware that combines to make up today's physical computer system -- the box, or CPU; the mouse and keyboard, or input devices; and the monitor, or output device -- are evolving way beyond the paradigm we now take for granted.
Points out Bruckenstein, for example: "The technology that amazed us all in the Tom Cruise movie Minority Report -- 'Gesture Technology' -- is already starting to show up in Apple hardware like the iPhone and the MacBook Air" (Apple's recently released ultra-skinny, light-as-a-feather new laptop computer than runs on a flash drive rather than a traditional hard drive; mechanical hard drives will certainly have achieved dinosaur status 30 years from now). Movie-goers will remember scenes from Minority Report where Cruise puts on a pair of reflective gloves and gestures wildly in front of a wall of glass; meanwhile, a camera tracks his hand movements, making images and data dance across the glass surface until they interact in never-before-seen combinations to reveal to crime-fighter Cruise new information about his suspects.
Within a few years of the 2002 movie, Raytheon was reputedly developing very similar technology. But, aside from the militaristic or law enforcement connotations suggested by the movie and Raytheon's involvement, other uses are already in play. Owners of Apple's iPhone know that one interacts with the device using its touch-screen gesture-based interface. And Apple's new MacBook Air laptop uses an oversized trackpad that permits more than straight-line cursor movement: You can pinch it, swipe it or rotate your finger across it to zoom in on an image or text, to advance through a series of images (as on the iPhone) or to adjust the image on your screen.
Of course, Wii (pronounced WEE) technology is an even more expansive use of gesture technology, since one gestures with one's entire body. A Nintendo invention, Wii users' movements are picked up by motion-sensing controllers, enabling the user to swing a sword, throw a punch or drive a car -- depending upon the artificial environment created by each Nintendo game -- and actually see the results of his movements on a large screen. (I think perhaps our space program innovations now benefit the gaming world before they get to the business world).
"Virtual paper" is another technology with seeds in today's world. We can see it in the Amazon Kindle ebook reader, and even more so in the Readius, by Polymer Vision -- a flexible e-reader with a five-inch monochrome display to be released in mid-2008 that rolls up into a package the size of a cell phone. These devices communicate with the Internet, downloading fresh content onto their readable surfaces in seconds. Hence, the name "virtual paper."
If virtual paper represents a new form of computer output, and gesture technology employs both new input and output features, then what improvements will we see in our CPUs (known today simply as "processors")? The use of Intel's "Core 2 Duo" processor in many new computers gives you the answer. Analogous to implanting an extra brain in a human being, a dual-processor computer can literally do two things at once rather than devoting some attention to one task before shifting its singular attention to a second task, and then back again. The effect on computer performance has been dramatic. Comparison tests between Intel's older Pentium D processor and newer Core 2 Duo processor conducted by the hardware-testing site BCCHardware.com showed the Core 2 Duo processor to be anywhere from 50 percent faster to twice as fast, depending upon the test.
But that's just the beginning of the trend towards higher processor speeds. Computer manufacturers are just now marketing systems using Intel's quad-core chip, and CNET just reported that Intel's six-core chip -- code-named "Dunnington" (Intel code-names all its chips) -- will be made available to computer manufacturers in the second half of 2008. The history of PCs is also a history of faster and faster chips; it doesn't appear this trend will change anytime soon.
Another explosive technology is that which allows us to move fluidly among different forms of communication. We can handwrite a note on a tablet PC and translate it into either a text file or even an audio file (computerized, yet very realistic voices, speak the words we've handwritten or typed); or we can speak into a device that will produce a textual transcript, a podcast, or an instruction carried out by an intelligent hardware device.
Still tied to your desk because that's where your computer is with all your software applications? That's already changing for many advisors, as companies like Google and ThinkFree make available for free, online, the same Microsoft Office applications we've heretofore only installed and used on our desktop/laptop computers or servers. The trend here isn't necessarily towards competition and expense-lowering, although those are important offshoots of the exodus from offices to more desirable -- if more remote -- work environments; the trend is towards doing more and more online with less and less hardware. The greatest achievement of the Internet may not be technological at all but, rather, its ability to free us up to live our lives.
The picture that emerges from these developments is one in which the previously hard line between discrete devices (computers, smartphones, media players) blurs, and communication options among increasingly faster gadgets multiply geometrically. Not convinced? We used to manage data on our computers, watch videos on our televisions, and make phone calls on our cell phones; now we can manage data on our iPods (which are, after all, just cleverly programmed hard drives), watch videos on our smartphones, and make phone calls from our computers. Any manner of devices, like lightweight and very portable book readers -- to name just one -- will connect to the Internet which, eventually, will be available just about everywhere, like other utilities we take for granted (water, electricity, etc.).
One can't help but wonder if, 30 years from now, the typical advisory firm owner's day will have none of the trappings of a typical workday in 2008. With the technology we have today, not to mention the improvements we'll see over the next 30 years, we already have little need for physical offices or airplane travel. Very little in the way of client service and relationship-building cannot be accomplished over the Internet. So imagine a future where each of us is less bound to time and space, because that's what all these technological events lead up to: total freedom from the usual restrictions of a physical existence.
David J. Drucker, CFP, is president of Drucker Knowledge Systems; see www.DavidDrucker.com.