Are we undergoing an industrial revolution or a phase change?
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Bill Davidow, one of Silicon Valley’s pioneers, stopped by the Fortune offices in New York last week. He spent a career at HP and Intel and then founded Mohr Davidow venture capital. At 84, he deserves some down time. But instead, he’s got a new book out—The Autonomous Revolution—coauthored with long-time tech journalist Michael Malone. I read it this weekend; it’s worth your attention.
Davidow’s main argument is that the “Fourth Industrial Revolution” rubric, popularized by the World Economic Forum’s Klaus Schwab, understates what is really going on today. He sees something much bigger. Borrowing a term from the physical sciences, he calls it “phase change”—similar to water changing to ice or to steam. The agricultural revolution was the first great historical phase change; the industrial revolution was the second; and the autonomous revolution will be the third, but hit much faster. “If we believe that we are experiencing the next phase of the Industrial Revolution,” Davidow argues, “we will fail to address new challenges at their roots and we will miss out on great opportunities. Worse still, we will apply obsolete solutions to our most pressing problems.”
What happens in a “phase change”? It is not just economic but also profound social change. “Our institutions will assume new forms and operate using different tools and according to new rules; our sense of time, space, and self will be irrevocably altered. Our memories of what came before the new epoch will be skewed and the few revenants from the past that do survive it will have limited applicability in the future.”
The book is a short read: 200 pages. Davidow and Malone don’t try to make detailed predictions about the future; they simply say why they think the change will be more fundamental than most acknowledge. They raise the prospect of considerable social upheaval ahead. But they end optimistically, saying America’s “sacred values, such as democracy, equality, and liberty and freedom for all, will enable our leaders to bring us together in pursuit of common goals.”
Unfortunately, there was little evidence of that in the weekend’s political news, with one party embracing the tactics of authoritarianism while the other lurched toward (democratic) socialism.
More news below.
The unrelenting spread of the Covid-19 coronavirus is hammering markets today. In Asia, the Hang Seng was down 1.8%, the Nikkei 225 0.4% and the Kospi 3.9% (South Korea is experiencing a worsening outbreak). The sea of red is deepening in Europe, where the Stoxx 600 is down 3.7%. A significant outbreak is happening in northern Italy, where some municipalities are on lockdown, but to what avail? European contagion now looks increasingly likely. The tourism sector is getting particularly beaten up today. Guardian
Intuit and Credit Karma
TurboTax-maker Intuit is reportedly nearing a deal to buy Credit Karma for around $7 billion. The purchase of the personal-finance portal would be Intuit's largest yet, and the first sizeable transaction under the stewardship of newish CEO Sasan Goodarzi. Wall Street Journal
Whoever HSBC's new CEO will be, it won't be UniCredit's Jean Pierre Mustier, who just pulled out of the race to stick with the bank he already fronts. So HSBC's seven-month search continues, leaving open the question of who will actually implement its huge restructuring plan, which involve the shedding of 35,000 jobs. Bloomberg
Meanwhile, Barclays is also looking for a new CEO, with current chief Jes Staley (the one being investigated over links to Jeffrey Epstein) being on his way out. The process is expected to take up to a year: six months for the hunt and six for potential gardening-leave requirements. Financial Times
AROUND THE WATER COOLER
A whopping 94% of the Fortune 1000 is seeing supply-chain disruptions as a result of the coronavirus outbreak. And while most will be aware of the statuses of their Tier 1 suppliers, many have little interaction with their suppliers' suppliers. Fortune
Boeing is to give more support to its 737 MAX suppliers, both as preparation for a resumption in production and as a disincentive to looking for more Airbus business. Around 600 Boeing suppliers have been in limbo since the U.S. planemaker suspended MAX production last month. WSJ
James Packer's Crown Resorts, an Australian gambling giant, is being investigated over suspected links to organized crime, including alleged money-laundering. The public inquiry, being conducted by the New South Wales gaming authority, follows allegations in the media last week. BBC
Warren Buffett, soon to be 90, is staying on as Berkshire Hathaway CEO and chairman. But, as laid out in his latest annual missive to shareholders, he does have a succession plan for his fortune—namely, that the executors of his will and trustees to his estate may not sell any Berkshire shares. Fortune
This edition of CEO Daily was edited by David Meyer.