5 questions for BCG’s François Candelon

With help from Derek Robertson

Happy Friday and welcome back to the Future in Five Questions! Today, we have François Candelon — managing director and senior partner at Boston Consulting Group. Candelon is a leader of BCG GAMMA’s [email protected] effort and the global director of the Henderson Institute, BCG’s strategy think tank. His work has been published in the Harvard Business Review and the MIT Sloan Management Review.

Read on to hear his thoughts on synthetic biology and the metaverse, the government as a corporate cooperation catalyst and how technology is altering global power dynamics.

Responses have been edited for length and clarity. (PS: to get a better feel for the interview, please read all the answers in a soothing French accent.)

What’s one underrated big idea?

Synthetic biology — it is a bit today what cheap design was in the last century. I made a study where I quantified that by 2030, a third of the global GDP will be impacted by synthetic biology, either through product substitution or by redefining processes.

But to unleash the power of this technology, we require collaboration between startups, scale-ups and traditional companies. Because syn-bio products and processes are analog by nature. Start-ups cannot do everything — they cannot bring syn-bio products and processes to scale on their own.

Bringing analog technology to scale is very different from digital technology. The key tension here is that because it is biological work, it can take years before something that is brewed at the lab level to be scaled to mass production. Traditional companies have engineering knowledge, regulation know-how and experience dealing with go-to markets. It’s very difficult for a startup to deal with that. Start-ups and traditional companies need to work together.

And especially in Europe, nations and companies still have a lot to learn about synthetic biology. They need to make sure this cooperation is encouraged. This is something I have seen in China a lot.

And you also need to find a balance between a friendly regulatory environment and the social license. For instance, in Europe, when you talk about synthetic biology, people have the feeling that it is something that is terrible — something that will put their health at stake. So a critical element will be to turn the narrative around on synthetic biology to emphasize its capacity to be helpful.

In Europe, I am extremely frustrated by the lack of understanding of all of the opportunities that we can have with synthetic biology. Because with this technology, people are looking much more at, let’s say, synthetic food, while the spectrum is absolutely amazing — in mining, in chemicals and in paper processes where you can remove water so it’s extremely environmentally friendly.

What’s a technology you think is overhyped?

A technology that is not overhyped but misrated is the metaverse. It was clearly overhyped last year — because it was actually a product push. The Google search interest for metaverse last year was three times lower than Second Life in 2006, when Anshe Chung became a real-life millionaire. I think that the metaverse was more a push for companies saying, okay, we have this issue with China so I need to find a new place to sell stuff. And I need to understand Gen Z and Gen Alpha so I will go to the metaverse. But it was not really driven by consumers at the time.

And this is why I think that today it’s a bit underhyped — because it’s still interesting in the B2B space. BMW is using, for instance, the Nvidia Omniverse to launch its virtual production plant Debrecen two years before the actual production, just to make sure that everything is fine.

The metaverse is not digital — it’s both digital and hardware. There is a quote from Neil Stephenson that I like a lot: “The hype cycle moves fast, but engineering doesn’t. Engineering takes time.” So I think that we should not bury the metaverse and we should not overhype it. It will come when it is time, which will probably be in the next decade or so.

What book most shaped your conception of the future?

So, I must admit that I don’t try to look at the future because it’s very difficult to predict. But I like books that give you ideas on the framework.

I would like to mention two books. The first one is still very relevant, called “Competing in the Age of the AI” published in early 2020 by Marco Young and my friend Karim Lakhani. The book shows that AI is not just technology — it’s a new way of doing business. It’s a real shift. You need to rethink your organization, to put AI at the center of your processes and not just a tool. The book is about how AI and human expertise can work together and create a new culture of learning and experimentation — new opportunities for innovation.

And the second one, if you want to really understand the world as it goes today — one of my most favorite books — is called “The Problem of China.” It was written in 1922 by Bertrand Russell and really shows the way the West works to prevent the development of potential rivals. One century later, it’s extremely, extremely specific and relevant. It shows the way we need to think about our values.

I don’t know if our values are universal, but I think that what is universal at the moment is our industrialism, our militarism and all of our progress. Very often, living in China, living in India, there are different ways, there are different values. And I cannot tell that ours are better than theirs. And so I think that definitely we should not regard ourselves as missionaries of a superior civilization. We might be a lighthouse, say this is how we behave, what we believe in. But reading this book is a very good opening to try to understand the world as it is today.

What could government be doing regarding tech that it isn’t?

One quote from Michael Porter — a strategy professor at Harvard — that is a very important and critical to my mind is that “a nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” I wrote an article, a very academic one, on the strategy differences between the U.S., Europe and China. In the U.S., traditional companies don’t really upgrade, but are replaced by a new generation of companies. But in Europe, given our social model, we cannot just do that. And therefore, the upgrade of the traditional companies is very important. And this is something the Chinese do very well.

China is a great catalyst for helping their traditional companies embrace new technologies. Beyond government’s traditional role of being a regulator, educator and making sure you produce enough engineers, one of the critical roles that they need to play now is to be a trusted third party or a real catalyst. This is what I believe, maybe not in DC, but in other regions, needs to be done.

We did a survey of hundreds of companies in the world and saw that the difficulty in making these traditional companies cooperate with startups is largely driven by data. They don’t trust each other about data. So these notions of data leakage, of fostering the emergence of data labeling players to ensure data quality and an industry-wide framework for data standardization — all of that is something that is really seen as critical both by the incumbents and the startups, so that together they can collaborate, cooperate and improve the competitiveness of a country.

What has surprised you most this year?

That technology is now at the core of everyone’s conversation — even the man on the street. Of course, it’s largely due to ChatGPT right now, but last year you had the metaverse. You have as well the geopolitics around the shortage of semiconductors and the decoupling with China. We can see the power of it and this is just the beginning.

With second order effects, technology is altering power dynamics. On October 7, 2022, when the US imposed severe export controls on chips to China — that was an act of technology war. In the Ukraine war, thanks to, let’s say Musk and Starlinks, a mid-sized country was able to fight against Russia in a more effective way.

Technology is also rebalancing power within a company. As AI increasingly augments decision-making quality and decentralization, as a contributor, you need less guidance from your manager. At the same time, generative AI gives a good first draft, so what is the value of the contributor?

So what really is surprising to me is that now, technology is becoming a topic for everybody in the street. That’s very important, especially if we want to make sure that people embrace and adopt these technologies.

nation-states in the metaverse

A new report on government experiments with the metaverse has some recommendations for how states can deal with a rapidly-changing digital landscape.

The write-up from consulting firm Consulum Government Advisory looks at experiments in Barbados, South Korea, and Saudi Arabia, which include everything from an ornamental “metaverse embassy” to Seoul’s attempt to run actual city administration in a virtual world.

Author Isabella Williamson sees three main areas right now where governments can take advantage of VR: Public services, the digital administration of which can be “more accessible and human-centered” than on the 2D web; culture and tourism (think Egypt’s digital model of an ancient city); and boosting the economy, in theory by positioning one’s country as ambitious and tech-minded.

That doesn’t happen overnight, however: “...Specialised talent is crucial,” Williamson writes. “Few government agencies will have all the skills they need in-house and may consider Web3 recruitment programs as well as upskilling employees.” — Derek Robertson

cracking down on crypto crime

The Treasury Department’s efforts to stop crypto-abetted crime continue, and yesterday the department recommended changes to anti-money laundering and terrorist financing rules in order to stop the use of crypto platforms to hide transactions.

As POLITICO’s Sam Sutton reported for Pro subscribers, the Treasury’s first ever DeFi-focused risk assessment “identified gaping holes” in the current crypto infrastructure that criminals might exploit, and called on legislators to update existing legal definitions of financial institutions to include DeFi platforms. It also encouraged the private sector to do its part, saying “Many so-called DeFi networks have failed to set up adequate safeguards to prevent their services from being used to launder money or finance illicit activity, creating havens for North Korean cybercriminals and other scammers.”

And naturally, given the nature of the international criminal activity targeted, the full report recommends “stepping up engagements with foreign partners to push for stronger implementation” of various security standards, and to push the crypto industry to do more of its own work as such. — Derek Robertson

tweet of the day

the future in 5 links

  • What can AI and DNA teach us together about the global supply chain?
  • Read up on where the comparison between AI and the Manhattan Project breaks down.
  • A group of medical experts sounds off on the tech that will change the future of health.
  • Robots: They’re already all around us.
  • Chinese tech giant Alibaba is gearing up to unveil its ChatGPT competitor.

Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Mohar Chatterjee ([email protected]); Steve Heuser ([email protected]); and Benton Ives ([email protected]). Follow us @DigitalFuture on Twitter.

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