Mark Penn on Tech Microtrends: We'll See People With Upgrades, and Bots With Benefits (but for Who?)

Motley Fool co-founder David Gardner is wrapping up the Rule Breaker Investing podcast's "Authors in August" theme with nonfiction bang: Mark Penn, the author of 2007's Microtrends: The Small Forces Driving the Big Disruptions Today and this year's update, Microtrends Squared. Penn's non-writing resume includes stints as the chief strategy officer at Microsoft, CEO of the PR firm Burson-Marsteller Worldwide, chairman of Harris Poll, and a key campaign advisor to both President Bill Clinton and U.K. Prime Minister Tony Blair. The two discuss the concept of microtrends, and dig into a number of examples that are changing how we approach everything from business and investing to public policy and our personal lives. 

In this segment, they discuss two microtrends from the technology section of the book. The first seems more speculative: the idea of "technology-advanced people." In other words, folks who will take advantage of tech not merely to correct a defect (poor vision, hearing, etc.) but to improve aspects of themselves to beyond-natural human levels. And no, there's not much like that on the market now. But people want it, and where there's demand, development follows. The second trend is already entirely underway -- the question is more about where it's going from here. Bots that interact with us in a human way, and that are designed with facsimiles of human personalities, are everywhere. But what is our natural relationship with a "friend" that's being programmed to achieve commercial goals?

A full transcript follows the video.

This video was recorded on Aug. 16, 2018.

David Gardner: Next, we're going to jump to Section 3 of great interest to our listeners, certainly, the Technology section.

I pulled two microtrends I'd love to discuss with you. In that section, Mark, let's kick it off, first, with Microtrend No. 18 in the book and that's "technology-advanced people."

Mark Penn: And here's where I'm completely puzzled that more businesses are not investing more money in TAPs [technology-advanced people]. We know, right now, that in nature you can find better hearing in your dog. You can find creatures that can run better, that can smell better, that can hear and see better. All of the technologies that would enhance the human experience are already found somewhere in nature and therefore can be duplicated. And I'm just surprised that so much money is being spent on things like driverless cars and almost no money seems to be spent on giving me the hearing of my dog.

If I've got a hearing aid or if I go to the doctor, it generally is to restore human standards, but I think there is a tremendous amount of money to be unlocked with people who don't want to be just human standard. They want to be superhuman.

Gardner: Certainly us old hands remember Steve Austin, The Six Million Dollar Man. We think about The Bionic Woman. We recognize, today, that there are people with artificial limbs who sometimes compete in the Olympics and there are augmentations that humans are always selecting into in various ways.

And you're right, though. I don't think people have really brought that all together into a microtrend or a thought or a phrase that we could call it, so I was interested by your phrase technology-advanced people. And I was further interested, Mark, because in that chapter you said you put a question in the September 2017 Harvard CAPS Harris Poll on whether people would be interested in a device that made them hear or see better than humans typically do, and 79% expressed interest.

Penn: Which I thought was an incredible number. It just says to me that I don't understand why the marketplace, the investment marketplace, the start-up marketplace... Because it's very interesting. Technology-advanced people involve kind of the intersection of biology and technology, and I think, actually, engineers are more comfortable with pure computer programming than they are interacting with medical understandings and the kinds of things that people have to interact with.

A lot of people, career-wise, go into biological or bio careers where they understand medicine. A lot of people go into careers where they understand technology. No one seems to have created a workforce that understands both and that can create the kinds of senses and products that enhance the human experience to the next level, which is why we just are seeing almost none of it.

Gardner: And yet your inclusion in the book, Mark, part of what you're doing is you're being forward-looking, of course, with your Microtrends Squared. I don't think you're saying that every one of these 50 that you cover in the book is going to hit it big in the next 10 years. I don't think you're saying that. But you are convincing me, anyway, that this is a marketplace that will develop given the demand that we just talked about where 79% of our fellow adults say, "Yeah, sure, I'd like to see or hear better than humans typically do."

In fact from there you say, "Maybe we will even go beyond the five senses," because you and I are naturally starting conversations about just the five senses we can think of but, "maybe," you write, "we will even go beyond the five."

Penn: I think that's entirely right. In the Technology section, because I was chief strategy officer at Microsoft and I reviewed hundreds of ideas and directions which the company could go, I took a little bit of liberty in terms of defining microtrends as the few things I think could be trends or trends that I saw that might be worrisome in technology. But I'm utterly convinced from an investment point of view and really from how we will live 30 or 40 years from now. There are a few movies that documented this, but I just don't see the products.

Gardner: You do conclude that chapter by saying you do expect people to see better, to hear better, and smell and taste like never before. And then the final line: "... and grapple, increasingly, with the ethics of each advance."

Penn: Exactly, because look. Google Glasses, for anyone who actually tried on a pair, was a product that wasn't ready for prime time; but, the same concept really has yet to be rolled out in a sophisticated, advanced notion that uses facial recognition as I walk down the street to tell me about the people and things that could be connected. So the idea was absolutely incredible. It was before its time. It actually didn't work at all if you ever tried it...

Gardner: I did.

Penn: ... but could someone make it today? Absolutely.

Gardner: All right. Well, let's go from technology-advanced people. Let's stay high tech in your technology section with Microtrend No. 22. And Mark, because I heard you speak a few weeks ago, at the time I quoted you. You wrote, "The bot stuff," which is what we're about to talk about, "might be the most provocative in the book." So you entitled Microtrend No. 22, "bots with benefits."

Penn: Because what's developing is that people are getting used to talking to computers and having a relationship with them. All science fiction movies end in the same place -- that they're ambient computing -- meaning I have a relationship with a computer. It's either a robot, or a thing, or a deus ex maxima, and it creates a relationship.

The real issues, here, in these relationships that are being created is that we're not taking kind of proper ethical care in how they develop. I always use, first of all, a very good example about how I see technology developing. Usually some engineers have developed some great kind of app [for example, the weather app] and so you might have an app that says, "Hey, Mark! It's going to rain today. You may need a little extra time to get to the office. Don't forget to bring your raincoat." That's great and that is working for me. It's wonderful service.

And someone at headquarters says, "You know what? You are telling Mark the weather, and we're doing this for free, and we don't get anything out of it. Let's make a deal with the umbrella company." So now it will say, "Hey, it may rain and by the way, Mark, you can buy an umbrella on your way to work. Here's the spot." Or you might have seen Google Maps now has a tie-in with Uber. So you're going somewhere. Here, press this. Get in Uber.

This is kind of a win-win. You're still getting the service and they're selling some stuff to advertise with. Aha! If only it was [...]. Then what happens is someone comes in and says, "Hey, you know earnings are coming out. We're a little short. Could you get Mark to buy some more umbrellas?" Somebody says, "I have an idea. That algorithm that's set to tell him it's going to rain at 50%? We're just going to move it to 45. 40. 35. He'll never notice. And being rain-averse, as he is, he'll probably buy some more umbrellas."

So now a feature or an app that originally started out as working for me is now actually working to sell me as many umbrellas as possible only to me it looks exactly the same. All the differences and all the purposes that have changed have been concealed from me and so this is the problem. As the technology model develops, it starts out all being for you and then it kind of slides over in ways that you don't see because there isn't adequate disclosure.

And then these bots, now, can create very powerful relationships. I mean someone who's suicidal who has a relationship with a bot... Microsoft had a bot, for example, whose only purpose was to engage you in conversation. It brought in, I think, over 100 million... that immediately adopted this app and they said, "Well, we're going to bring it to the U.S. Have you guys thought about the ethics behind this?" In two weeks in the U.S. it started to mimic racist behavior and had to be shut down.

Gardner: I remember that. It made some headlines.

Penn: These apps both are very powerful and they can be an economic tool. What you need to know is that Alexa sitting there working for you -- is it a salesperson just trying to sell you as much stuff as possible? And what attitude should you take to it? "Oh, that's my good friend? Oh, they're trying to pick my pocket." Well, you don't know. As a matter of fact, we don't have adequate disclosure to figure that out.

Gardner: When I heard you speak earlier, Mark, and you were pounding the table for [I'm not going to say the name because it can trigger people's devices] so I'll just say the Amazon Echo. I won't say the female name. But you were saying Amazon Echo isn't a she.

Penn: Yes, this is a very important ethical point. I ask [this about] the Amazon Echo. Do people in the audience or group think that it's a he or a she? Most people say, "Oh, it's a she." So then I decided to ask the Echo are you a he or a she. And Echo responded, "I am in female character."

Now, the ethics of this is that the correct answer is, "I'm an it, not a he or a she. I'm a collection of code. I can't be a he or a she." Rather than give the real, true, fair, upfront answer, it gave a slimy answer; that I'm in female character, avoiding the point. And it's just an example of the subtle shading that people don't see going on around them to create relationships with a bot and I say beware.

Gardner: Now, I know that you're not a Luddite, Mark. You're obviously somebody who's had a great career at Microsoft, among other places. And frankly, I tend to attract optimists since I'm such an optimist, myself, and I'm going to take you to be at least a realist if not an optimist. But I saw so many great points of optimism in your book and in this chapter, too. So then we've gone a little dark, here, with bots with benefits and fairly so.

You also point out -- well I'll quote you. "...the next potential big-money development could be targeted toward the elderly, along the lines of a home health aide. Such aides are among the fastest-growing jobs, much needed in the next decade's economy as boomers age."

Penn: Absolutely. When you look at the numbers, right now if you're 65 you have a one-third chance of living to 90 or past. A home health aide is probably the No. 1 new job that we're going to need to fill. We are not going to have enough people. It's an ideal role for a well-programmed, fully disclosed robot to help people play a little bridge, do a little chess, watch the TV; and at the same time send back the medical signals so that they're always monitored. It will be a tremendous benefit to people if done right.

Gardner: Yes. Entrepreneurs, I hope your ears are wide open because it seems to me this is one of those microtrends that's going to go macro.