Ed Daniels

Ladies and gentlemen,

I am delighted to be here – at the world’s foremost technology summit. An event that stretches thinking, provokes discussion and sets out to shape the future. In that spirit, I would like to share one of Shell’s secrets with you.

But before we get started, we certainly advise people not to make investment decisions in Shell based on what I am about to share with you. 

This is a secret that might surprise you. It is… time travel. Or at least the ability to view the different futures the world could face. We call them scenarios and, at Shell, we have been working on them for 50 years. That is 50 years of studying the future, and using it to make crucial choices today. And today, we all need to take action.

Digitalisation and energy are two of the most significant forces shaping the world – and the world is changing rapidly. 

Shell Scenarios

So how does the scenarios team work? They are thinkers and strategists. They do not predict the future but describe a set of plausible and challenging future landscapes. This then informs Shell strategy.

As Winston Churchill is thought to have said: “I never make predictions. Particularly about the future.”

Scenarios are based on possible assumptions and quantification. They are designed to stretch the thinking of our executives. Get them to consider events that may only be remote possibilities. Scenarios are not about what will or should happen… but about what could happen. Who needs a time machine when you can travel so smartly to alternate futures?

Digitalisation of society

Most recently, the team has been looking at the world’s possible digital futures. And all the material is available at shell.com/scenarios.

The team worked with international specialists… in advanced computation, artificial intelligence and transactional technology… and they have sketched out three ways the digital future could unfold.

These futures are shaped by three primary forces. Three points on a triangle with digital technology at its centre. The first point on the triangle is legislative force, such as governments. The second, is market drivers such as businesses. The third, of course, is society at large – and not just here, today, in Lisbon. It is the wider public. Social forces. People power. These are the drivers that shape the three distinct scenarios.

So, allow me to take you forwards in time.

Digital islands

We call the first scenario “Digital Islands”. In it, the global order fragments. The key forces at work here, are people power and government power. It is a future in which individualism and autonomy develop as prime social values. So how does this future come about? 

It starts with more and more security breaches… greater misinformation… and the growing use of personal data for profit by corporations. People begin to resist giving up information they consider private. This growing focus on privacy and individualism mirrors national trends against globalisation. Greater importance is placed on local identity, family values, nationalism and ethnicity – and as a result, populist politics continue to grow more powerful.

By 2030, governments step in to address individual privacy. They constrain technology companies and force them to make their data available for official use. Some countries set up firewalls to close their digital borders. Cooperation is rare. This a world once again made up of a kaleidoscope of states – some successful, some not. This future is the least economically prosperous of our three scenarios… but there are benefits. Particularly in terms of localised social cohesion.

By 2040, the world is a place where technological advances have slowed and there is a return to traditional values, face-to-face interaction and decisions made by humans… rather than algorithms.

So… what do you think it means for you? These islands challenge the modern digital order. This scenario is about people seeking to take back control. Which, I can tell you, is a theme that is very familiar in the UK right now.

To avoid a fragmented digital world, technology companies would need to look at ways of empowering individuals through digital means. Giving back their data. In this “Islands” scenario, global energy companies face challenges – and I look forward to discussing this with Neanda in a few minutes.

Open platforms

The second scenario, is that of a more open world. We call it “Open Platforms”. This is a future of even greater global digital connectivity and internationalism. It is the one most shaped by market forces and people power.

In the early 2020s, digitalisation grows further thanks to the ever greater convenience it offers. People benefit from the increased personalisation of goods and services. They delegate more and more of their day-to-day lives
to algorithms.

Technology companies innovate, expand and move further into sectors such as banking, health and even… energy. There is an economic boom, but this increases the gap between the digital “haves” and “have-nots” and leads to growing unrest. The international digital architecture continues to strengthen but as social interaction becomes more digital and virtual, traditional social structures weaken. Increasingly, the public sees the big technology companies as too powerful and becoming too close to politicians.

By 2030, the public backlash reaches critical mass and this makes governments finally step in with greater regulation. Technology companies begin to restructure and over time adopt more open business models. As access to information grows broader, the established digital architecture leads to the renewal of open, internationalist values.

This scenario represents a bumpy route to a more prosperous future. The challenge here is finding ways to ensure that no one is left behind by the digital advance. How do we all do this?

Comply and prosper

We call the final scenario “Comply and Prosper”. Here, the prime forces are legal and market-led. Governments and business. In this world, societies place value on stability, social cohesion and convenience above everything else.

In the early 2020s, technological and digital advances continue to boost economic growth. There are, however, increasing concerns about cyber-attacks. These are matched with unease about the role of news platforms, social media and chat groups in polarising society, provoking unrest and fuelling populist politics. Even in free-market economies, people come to expect government intervention in the digital world. Over time, all important systems and infrastructure are intelligently optimised and controlled by governments. They use public and private data to do this.

By 2030, governments begin to work closely with technology companies and gradually seek to control innovation. At the same time, increased surveillance reduces low-level crime. And, the use of personal data means social support structures such as healthcare are personalised and improved. People are both rewarded and sanctioned for the way they live their lives. It is a world where people are a little richer and safer but generally, less free than today.

So, what steps does this mean right now for the technology industry? Should you reorganise and restructure radically today to avoid this kind of intervention in the future? What is certain, is that digitalisation has the potential to fundamentally reshape our entire society… It will accelerate or slow down the world’s progress… And it is a vital consideration in what companies do today.

And this is just a glimpse of the three scenarios. As I said before, there is more material at shell.com/scenarios. And I hope it encourages you. Because we all have a new and challenging world before us.

And whether you are a large technology group… a small team of coders… or a growing new energy company… This new world, is one that you can shape. Especially with a little help from time travel.

Thank you.

Ed Daniels, Head of Strategy, Shell

Ed Daniels was appointed Executive Vice President of Strategy and Portfolio on 1st January 2019. He is responsible for charting the road ahead for the company – including the role Shell can and should play in the energy transition.

Ed’s career spans roles in Shell’s Upstream, IG, Downstream and Projects & Technology businesses, bringing 30 years of industry knowledge, expertise and executive leadership experience with the company.

Ed served as the Technical Vice President for the Institution of Chemical Engineers (IChemE). He is a Fellow at both the IChemE and the UK Royal Academy of Engineering and has an honorary doctorate from Imperial College.


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