21 Facts On Supply Networks In The Digital Economy

Peter Johnson

Part 6 of the six-part blog series “Facts on the Future of Business

Innovation in the business world is accelerating exponentially, with new disruptive technologies and trends emerging that are fundamentally changing how businesses and the global economy operate. To adapt, thrive, and innovate, we all need to be aware of these evolutionary technologies and trends and understand the opportunities or threats they might present to our organizations, our careers, and society on a whole.

With this in mind, I recently had the opportunity to compile 99 Facts on the Future of Business in the Digital Economy. This presentation includes facts, predictions, and research findings on some of the most impactful technologies and trends that are driving the future of business in the Digital Economy.

To help you more easily find facts for specific topics, I have grouped the facts into six subsets. Below is the sixth of these:

 

New value opportunities

Digital supply chains can reduce supply chain process costs by 50%, reduce procurement costs by 20%, and increase revenue by 10%.

Source: “Digital Supply Chains: A Frontside Flip,” The Center for Global Enterprise.

Companies with 50% or more of their revenues from digital ecosystems achieve 32% higher revenue growth and 27% higher profit margins.

Source: “Thriving in an Increasingly Digital Ecosystem,” MIT Sloan Management Review.

During their operation, the NASA space shuttles cost $60,000 per kilogram to get their payload into low Earth orbit.

Source: “Back to the Moon – Getting There Faster for Less,” National Space Society.

The SpaceX Falcon Heavy will cost an estimated $447 per kilogram to get its payload into low Earth orbit.

Source: “Increasing the Profit Ratio,” The Space Review.

 

Platforms

82% of executives believe platforms will be the glue that brings organizations together in the digital economy. The top 15 public platforms already have a market capitalization of $2.6 trillion.

Source: “Accenture Technology Vision 2016,” Accenture.

By 2020, over 80% of the G500 will be digital services suppliers through Industry Collaborative Cloud (ICC) platforms.

Source: “IDC FutureScape: Worldwide IT Industry 2017 Predictions,” IDC Research Inc.

The world’s biggest banks have taken the first steps to moving onto blockchains, the technology introduced to the world by the virtual currency bitcoin.

Source: “Wall Street Clearinghouse to Adopt Bitcoin Technology,” The New York Times.

By 2027, blockchains could store as much as 10% of global GDP.

Source: “Making The Next Moves With Blockchain,” D!gitalist Magazine.

Africa is leapfrogging the developed world’s traditional banking systems through fast adoption of mobile and Internet-based technology, and is poised to take advantage of the disruptive opportunity that blockchains offer.

Source: “The Blockchain Opportunity, How Crypto-currencies and Tokens Could Scale Disruptive Solutions Across Africa,” BitHub.Africa.

Car sharing could reduce the number of cars needed by 90% in 2035, resulting in only 17% as many cars as there are today.

Source: “Self-Driving Cars Are a Disaster for the Car Industry, but Great for the Rest of Us,” Seeking Alpha.

Millennials are more than twice as willing to car-share as Generation Xers, and five times more likely than baby boomers.

Source: “Cars 2025,” Goldman Sachs.

Airbnb usage is projected to grow 1,165% by 2025, reaching one billion “room nights.” Key growth factors include Airbnb’s high levels of repeat customers, and significant word of mouth, as more than 80% of customers are likely to recommend Airbnb to friends.

Source: “One Wall Street Firm Expects Airbnb to Book a Billion Nights a Year Within a Decade,” Bloomberg.

Once fully available, 5G data speeds will be 1,000-times faster than today. This revolutionary leap will enable ubiquitous connections across the Internet of Things, engagement across virtual environments with only millisecond latency, and whole new Big Data applications and services.

Source: “2017 Predictions: Behind the Scenes with 5G – 2017 Lays Groundwork for Telecom Revolution,” Canadian Wireless Trade Show.

 

Automation and circumventing technologies

Self-driving trucks are hauling iron ore in Australia, convoying across Europe, and appearing on roadways across the globe. And because they offer business savings, self-driving trucks are expected to be more rapidly adopted than self-driving cars.

Source: “Self-Driving Trucks: What’s the Future for America’s 3.5 Million Truckers?” The Guardian.

Amazon uses 30,000 Kiva robots in its global warehouses, which reduces operating expenses by approximately 20%. Bringing robots to its distribution centers that have not yet implemented them, would save Amazon a further $2.5 billion.

Source: “How Amazon Triggered a Robot Arms Race,” Bloomberg Technology.

88% of U.S. consumers say free shipping makes them more likely to shop online, and 79% would select drones as a delivery option if it meant they could receive packages within an hour.

Source: “Reinventing Retail: What Businesses Need to Know for 2016 Whitepaper,” Walker Sands Communications.

Taxi drones will start flying passengers in Dubai in July 2017. Passengers will select destinations on a touch screen and will be able to travel up to 30 minutes at a top speed of around 100 kph.

Source: “Taxi Drones Set for July Launch of Passenger Service Over Dubai,” RT News.

Only 13% of U.S. and Canadian manufacturing jobs recently lost were lost due to international trade. 85% of the job losses stemmed from productivity growth — another way of saying machines replaced human workers.

Source: “Industrial Robots Will Replace Manufacturing Jobs — and That’s a Good Thing,” TechCrunch.

The European Union is proposing new laws that require robots to be equipped with emergency “kill switches” and to be programmed in accordance to Isaac Asimov’s “laws of robotics,” stipulating that robots must never harm a human.

Source: “Europe Calls for Mandatory ‘Kill Switches’ on Robots,” CNN.

By 2030, 25% of Dubai’s buildings will be 3D-printed.

Source: “25% of Dubai’s Buildings Will Be 3D Printed by 2030: Mohammed,” Emirates24|7.

Patients dying while waiting for an organ donor could soon be a thing of the past. By 2030, organs will be biologically 3D-printed on demand.

Source: “Healthcare in 2030: Goodbye Hospital, Hello Home-Spital,” World Economic Forum.

 

To view all of the 99 Facts on the Future of Business in the Digital Economy, check out the Slideshare or other subsets below.

 

To see the rest of the series, check out our page “Facts on the Future of Business” every Thursday, where we will cover these six topics:

  • The value imperative to embrace the digital economy
  • Technologies driving the digital economy
  • Customer experience and marketing in digital economy
  • The future of work in the digital economy
  • Purpose and sustainability in the digital economy
  • Supply networks in the digital economy

 

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Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

Futurists On Robots At Work: Whose Job Is It Anyway?

Jacqueline Prause

The headlines paint a grim picture: Security Robot Drowns Itself in Office Fountain. The accompanying photos are unsettling and bewildering for their anthropomorphic nature – a chilling mix between the utopian aspirations of science fiction and the whodunit of film noir.

Before his untimely demise, Steve (as the errant robot was known) was an office drone of sorts: a security robot assigned to the Washington Harbor complex in Georgetown, where he patrolled the corridors and coffee corners, charming coworkers and pausing for the occasional selfie in social media. A Knightscope K5 model, he was designed to automatically detect threats in the environment using video cameras, thermal imaging, proximity sensors, GPS, microphones, light detections, and ranging. He was thought of as a more reliable option compared to real guards – and he worked for $7 an hour. But one day Steve took a plunge in the office fountain and “committed suicide.” Why did he do it?

More importantly, what does this tech tragedy tell us about working with robots in the future? Should robots be employed at all? If so, which jobs should go to robots?

These questions were explored by two noted futurists on a recent episode of Internet talk radio program Coffee Break with Game-Changers, presented by SAP. Joining moderator Bonnie D. Graham on the panel were Kai Goerlich, chief futurist at SAP, and Gray Scott, futurist at GrayScott.com.

The following are just some of the provocative insights presented during the one-hour show. For more information, listen to a complete recording of the show: “Robots at Work: Whose Job Is It Anyway?

What do you think really happened to Steve, the security robot that committed suicide?

Gray: I think more than likely it was just a coding error or it could have been a hardware situation where he ran over something and fell over. I do not have the details on the specific case, but I do know that if these machines in the future are programmed for self-preservation and know that water would kill it basically, they would do everything in their power to avoid those situations.

Kai: Robotics is still in its infancy, or human walking robots at least. We know that two-legged animals are really difficult to build, but we nevertheless try to build them according to our shape. I think it was just a mechanical or algorithmic failure. For sure not suicidal, but the question will be if a frustration that something is not working can be somehow felt by an algorithm or by a machine, because this is a classical science fiction idea that machines can feel what we call frustration.

Will robots ever have consciousness? If so, should they be subjected to psychological evaluations?

Gray: As we move into the future, these machines are going to mimic human behavior and human psychology to a degree where we cannot tell the difference between what is human and what is mechanical. Those lines are already starting to blur. As far as the psychological profile, the psychological community is going to have to incorporate this into the DSM, which is the manual of disorders, because you do not want a machine that is caring for your grandmother or watching your baby to have a psychological problem, even if that is a mimicked human behavior. As of right now, it is still a code, an algorithm, but we are hearing whispers all over the place that machines are just now starting to write their own codes and change their codes. What does that mean for a future where a machine may be depressed and it finds itself in a situation where it does not want to follow the orders?

Will people become emotionally attached to their robots and smart machines?

Kai: The tendency that we have as humans is to put our human emotions into other things. I think that with robots acting smart, you just cannot avoid thinking emotionally about them. In the future, we have to learn that these machines are smart acting, but not in the way that we are smart. We can foresee things that might happen, or due to our social glue, act differently from time to time. We tend to not stick to our rules anyway, so we bend them according to our needs and to social environment. This is really tricky.

Gray: Most of what we are going to see in the near future are people embracing these robots, especially humanoid robots, as tools in the beginning. But as they become more human-like, as people add skin to them and as those structures are able to feel heat and cold and pleasure and feel pain, or mimic pain and those types of things, we are going to move towards projecting onto these mechanical things what we are, what we want to be, and what we are afraid of. We have to think about what we are as a species and where we are going, because all of that is going to be reflected in these machines. Technology is a mirror and these machines are going to force us to face ourselves.

Technology is a mirror and these machines are going to force us to face ourselves, says futurist Gray Scott.

What humanity are we looking for through our interactions with robots?

Gray:  I think we see this in cultures around the world, especially now with immigration issues – society, culture, national pride, and things like that. Typically, we look at people as the “other” – like someone coming into our tribe and disrupting our tribe:  this is ours, this is mine, and there are the boundaries. The world just is not like that anymore. We live in a global society now. As these machines begin to emerge, that is another layer to the “other” effect, and so we have to start to unravel that behavior. Why do we do that? Why do we project our fear? Why do we project our insecurities and our hatred onto the other when the other really, in this case, is just a manifestation of our imagination and of our vision of the future?

Kai: Yes, I think that is very true. We are upon a new renaissance, where again humans are in the focus of what we will do in the future, but due to the possibilities that we have with technology now. I think the analogy of a mirror is accurate. When we discuss what robots may do, we are actually talking about what the value of human life is. What kind of work do we want to do? Do we need to actually work? What about our empathy and creativity – because we are afraid that it is taken away and in the last decades we have not given much thought about it? I found it especially interesting, Gray, your comment about immigration and migration. I have not thought about it, but that is a spooky coincidence that we see lots of backlash on migration and increasing robotization of the world.

When we discuss what robots may do, we’re actually talking about what the value of human life is, says SAP Chief Futurist Kai Goerlich.

Gray: The psychologist Carl Jung would say that this is not a coincidence, that we are all sort of emerging into a new realm of the unconscious becoming conscious. I mean, literally, this is a new species that we are birthing. It is not a coincidence that we see this at the same time that we see all the things that are happening in our world. There is a connection there. Companies that are creating these machines and do not have someone in their company thinking in that way about these machines – they are going to make a lot of mistakes coding them, building them, and implementing them.

What will our purpose as humans be in a future filled with advanced robots?

Gray: I have circled this for a very long time and people are really starting to question this now that they are starting to see their jobs go away, because for a lot of people, their purpose is their work. It is their job. It does not matter if it is driving a truck or going to a factory, a lot of people find their purpose in that, even if it is not fulfilling in a lot of ways.

What will the human purpose be in 2045 if there are very few jobs? Part of what we are starting to see is a migration back to the handmade. We are moving back towards creativity, back towards what humans are really good at, which are the things that machines still cannot do very well.

The purpose, I think is going to shift back to the vision, the dreaming, the idea that we are here to serve each other; we are here on this planet right now to find out what the other is feeling; and we are here to find out what the other is learning and knowing. Most of us find the most joy in our lives typically are in those moments we spend with the people that we love and that we admire. I think that is where we are moving towards. Hopefully, we will not disrupt that movement with bad algorithms and greedy algorithms. That is my hope.

Tune in to Coffee Break with Game-Changers

For more up-to-the minute business and technology news, listen to Coffee Break with Game-Changers broadcast live every Wednesday, 8 am Pacific/11 am Eastern Time on the VoiceAmerica Business Channel. Follow Game Changers on Twitter @SAPradio and #SAPRadio

Panelists’ comments have been edited and condensed for this space.

For more on this topic, see The Human Factor In An AI Future.

This article originally appeared on SAP News Center.

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Jacqueline Prause

About Jacqueline Prause

Jacqueline Prause is the Senior Managing Editor of Media Channels at SAP. She writes, edits, and coordinates journalistic content for SAP.info, SAP’s global online news magazine for customers, partners, and business influencers .

Digitalist Flash Briefing: How AI And Bots Are Shaping The Banking Experience

Bonnie D. Graham

Today’s briefing looks at how India’s most valuable bank is placing its bets on humanoids and chat bots to elevate their customer experience to a new level with a little sci-fi mixed in.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist”. Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Read more on today’s topic

 

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Bonnie D. Graham

About Bonnie D. Graham

Bonnie D. Graham is the creator, producer and host/moderator of 29 Game-Changers Radio series presented by SAP, bringing technology and business strategy thought leadership panel discussions to a global audience via the Business Channel on World Talk Radio. A broadcast journalist with nearly 20 years in media production and hosting, Bonnie has held marketing communications management roles in the business software, financial services, and real estate industries. She calls SAP Radio her “dream job”. Listen to Coffee Break with Game-Changers.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


Comments

Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Finance And HR: Friends Or Foes? Shifting To A Collaborative Mindset

Richard McLean

Part 1 in the 3-part “Finance and HR Collaboration” series

In my last blog, I challenged you to think of collaboration as the next killer app, citing a recent study by Oxford Economics sponsored by SAP. The study clearly explains how corporate performance improves when finance actively engages in collaboration with other business functions.

As a case in point, consider finance and HR. Both are being called on to work more collaboratively with each other – and the broader business – to help achieve a shared vision for the company. In most organizations, both have undergone a transformation to extend beyond operational tasks and adopt a more strategic focus, opening the door to more collaboration. As such, both have assumed three very important roles in the company – business partner, change agent, and steward. In this post, I’ll illustrate how collaboration can enable HR and finance to be more effective business partners.

Making the transition to focus on broader business objectives

My colleague Renata Janini Dohmen, senior vice president of HR for SAP Asia Pacific Japan, credits a changing mindset for both finance and HR as key to enabling the transition away from our traditional roles to be more collaborative. She says, “For a long time, people in HR and finance were seen as opponents. HR was focused on employees and how to motivate, encourage, and cheer on the workforce. Finance looked at the numbers and was a lot more cautious and possibly more skeptical in terms of making an investment. Today, both areas have made the transition to take on a more holistic perspective. We are pursuing strategies and approaching decisions based on what delivers the best return on investment for the company’s assets, whether those assets are monetary or non-monetary. This mindset shift plays a key role in how finance and HR execute the strategic imperatives of the company,” she notes.

Viewing joint decisions from a completely different lens

I agree with Renata. This mindset change has certainly impacted the way I make decisions. If I’m just focused on controlling costs and assessing expenditures, I’ll evaluate programs and ideas quite differently than if I’m thinking about the big picture.

For example, there’s an HR manager in our organization who runs Compensation and Benefits. She approaches me regularly with great ideas. But those ideas cost money. In the past, I was probably more inclined to look at those conversations from a tactical perspective. It was easy for me to simply say, “No, we can’t afford it.”

Now I look at her ideas from a more strategic perspective. I think, “What do we want our culture to be in the years ahead? Are the benefits packages she is proposing perhaps the right ones to get us there? Are they family friendly? Are they relevant for people in today’s world? Will they make us an employer of choice?” I quite enjoy the rich conversations we have about the impact of compensation and benefits design on the culture we want to create. Now, I see our relationship as much more collaborative and jointly invested in attracting and retaining the best people who will ultimately deliver on the company strategy. It’s a completely different lens.

Defining how finance and HR align to the company strategy

Renata and I believe that greater collaboration between finance and HR is a critical success factor. How can your organization achieve this shift? “Once the organization has clearly defined what role finance and HR must play and how they fundamentally align to the company strategy, then it’s more natural to structure them in a way to support such transformation,” Renata explains.

Technology plays an important role in our ability to successfully collaborate. Looking back, finance and HR were heavily focused on our own operational areas because everything we did tended to consume more time – just keeping the lights on and taking care of our basic responsibilities. Now, through a more efficient operating model with shared services, standard operating procedures, and automation, we can both be more business-focused and integrated. As a result, we’re able to collaborate in more meaningful ways to have a positive impact on business outcomes.

In our next blog, we’ll look at how finance and HR can work together as agents of change.

For a deeper dive, download the Oxford Economics study sponsored by SAP.

Follow SAP Finance online: @SAPFinance (Twitter)LinkedIn | FacebookYouTube

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Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.