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Future Cities: Jobs And Social Capital

Brian Lee-Archer

If work isn’t the cornerstone of our society, then why is there so much focus on the jobs of the future and the impact of the digital economy?

Labor mobility is a characteristic of a modern thriving economy. Jobs might attract people to a community, but livability makes them stay. Bill Clinton’s famous slogan from the 1992 U.S. presidential election, “It’s the economy, stupid,” is a poignant reminder that sustainability within our communities is contingent on a level of economic activity.

Jobs and livability go hand-in-hand. Economic activity within a community underpins investment in social capital-related initiatives. Strong social capital is a stabilizer to the negative effects of economic cycles. Improving livability and economic activity can trigger a virtuous circle effect leading to sustainable communities.

On the other side of the coin, if economic activity slows and jobs disappear, investment in livability may decline and put community sustainability at risk. Communities often have limited capacity to influence the macroeconomic issues that determine labor markets and attract jobs.

However, they have a level of control over livability factors such as open space, public safety, and recreational activities.

In periods of economic slowdown, the focus on social capital-related initiatives contributes to resilience, thereby increasing capacity to influence economic activity.

The new economy is putting a spotlight on the concept of tradable and non-tradable jobs, as Enrico Moretti explains in his book, The New Geography of Jobs. A tradable job creates goods or services that can be exported to other regions—for example, knowledge or manufacturing jobs.

Non-tradable jobs are usually local jobs that support people in tradable jobs—for example, retail, health services, and education. According to Moretti, “A healthy traded sector benefits the local economy directly, as it generates well-paid jobs, and indirectly, as it creates additional jobs in the non-traded sector.”

At the macro level, attracting traditional tradable industries such as manufacturing is beyond the reach of many communities. While communities may offer incentives to attract investment, it comes with risk.

However, the new economy provides opportunities to attract or upskill to a new class of tradable jobs at a lower investment risk – the knowledge workers. Knowledge workers have higher average incomes, are mobile and well-educated, and have a life perspective beyond the community they live in. Knowledge workers create the potential to leverage existing social capital assets of the community to enable innovation, leading to new jobs with higher levels of job satisfaction.

Increasing the pool of knowledge workers within a community lifts demand for local services in the non-tradeable sector – the multiplier effect.

By virtue of their mobility, knowledge workers have the opportunity to exercise choice in where they live. Communities can leverage livability factors to retain newly upskilled workers and attract new knowledge workers.

A three-year study (2010-12) conducted by Gallup and the Knight Foundation of 26 communities across the United States, The Knight Soul of the Community, examined the factors that bond residents to their communities and the role of community attachment in an area’s economic growth and well-being.

This study revealed three dominant factors: aesthetics, openness, and social offerings.

Kick-starting a virtuous circle of growth in employment and livability is contingent upon a rich source of data and the capability to turn data into information for business insight.

Information informs community leaders in making targeted investment decisions addressing social capital factors proven to have a positive impact on tradable job prospects.

Community leaders face a unique challenge: The levers they have most control over are not necessarily the most direct in terms of creating jobs. However, the livability levers they do control can have a significant impact on creating the environmental conditions for innovation among knowledge workers.

The economic value created will empower communities to invest further in social capital initiatives.

For more on how technology drives social capital, see Smart Investments Create Smart Cities.

This article was originally published on InnovationAus.com.

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Brian Lee-Archer

About Brian Lee-Archer

Brian Lee-Archer is director of the SAP Institute for Digital Government Global (SIDG). Launched in 2015, SIDG is a global think tank that aims to create value for government by leveraging digital capability to meet the needs of citizens and consumers of government services. In collaboration with government agencies, universities and partner organizations, SIDG facilitates innovation through digital technology for deeper policy insight and improved service delivery.

Why Youth Will Determine ASEAN’s Success In The Digital Revolution

Michael Zipf

Don’t let the European Union and all of its troubles fool you. At least one regional integration has a lot to celebrate: The Association of Southeast Asian Nations (ASEAN) turns 50 this year.

Indonesia, Malaysia, Philippines, Thailand, and Singapore founded the association in 1967 to facilitate economic and political collaboration among its members and to accelerate economic growth and social progress. Five more countries joined ASEAN in the 1980s and 1990s, helping to make it an economic powerhouse with a combined GDP of US$2.5 trillion. (If it were a single country, ASEAN would be the seventh-largest economy in the world.)

But ASEAN is in the middle of the same digital revolution as the rest of the world. Technologies such as artificial intelligence, robotics, machine learning, 3D printing, autonomous vehicles, and nanotechnology, along with accelerating progress in genetics, automation, and materials science, are shaking up the planet’s economies.

ASEAN taking over as the world’s factory

We are at “an inflection point in the history of our economies and societies because of digitization,” according to economists Erik Brynjolfsson and Andrew McAfee in their latest book, The Second Machine Age. “It’s an inflection point in the right direction – bounty instead of scarcity, freedom instead of constraint – but one that will bring with it some difficult challenges and choices … The choices we make from now on will determine what kind of world that is.”

Brynjolfsson and McAfee are optimistic about the future, but they argue that technology may “leave a lot of people, organizations, and institutions behind.” They point out that especially workers with only “ordinary skills and abilities to offer” will suffer since “computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.”

The low cost of labor in Indonesia, Laos, Myanmar, and Vietnam is a competitive advantage for multinational firms – and for ASEAN. Experts from ANZ Bank believe “Southeast Asia will take up China’s mantle of the world’s factory over the next 10 to 15 years.”

Preparing the next generation

Much of what lies ahead for ASEAN will depend on how the younger generations will handle digitalization – and the challenges described in the 17 United Nations Sustainable Development Goals. Almost half of the region’s population will be younger than 30 by 2020. It will be a young, diverse, and digitally savvy population – so ASEAN could be in a good position to benefit from the digital transformation.

But getting into that good position will not be easy. Youths need to be prepared for the digital economy and be sensitized for what’s needed to ensure prosperity in a sustainable way. The challenges ahead are so fundamental that ASEAN will need help from all its stakeholders: public and private sectors, academia, and civil society.

Global partnership for sustainable development

The ASEAN Foundation is rolling out three initiatives in 2017 to address ASEAN’s economic, environmental, and societal issues. The projects are based on three focus areas:

  • Education: The data analytics competition “ASEAN Data Science Explorers“ (ADSE) is already underway. University students across all 10 ASEAN member states from any discipline are invited to deliver data-driven insights for ASEAN across six U.N. Sustainable Development Goals cloud-based analytics.
  • Volunteerism: In collaboration with the United Nations Volunteers (UNV) program and the German Federal Ministry for Economic Cooperation and Development, ASEAN Secretariat, ASEAN Foundation, SAP, and other partners have launched the Youth Volunteering Innovation Challenge (YVIC) in ASEAN. Under the theme “Impact ASEAN,” the initiative supports young volunteers throughout the ASEAN countries in their journey to catalyze youth-led innovation for social impact and sustainable development.
  • Entrepreneurship: Through social sabbatical programs, employees from companies such as SAP are supporting social impact intermediaries through mentoring and pro-bono consulting. The program, in association with several partners, will impact close to 20 social enterprises across Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand, and Vietnam in 2017.

These and other collaborative efforts will help many of ASEAN’s young people excel alongside Brynjolfsson and McAfee’s “computers, robots, and other digital technologies.” Beyond justifying the two economists’ optimism, these efforts will help equip youth in the 10 ASEAN countries with the skills they need to meet the United Nations Sustainable Development Goals – and to thrive in the digital economy.

Applying artificial intelligence (AI) to complex decisions has clear benefits. But it also increasingly means automating ethical choices that can alter human lives. Learn more about how scientists are Teaching Machines Right from Wrong.

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Big Ideas For Banking That Helps More Than The Privileged Few

Susan Galer

People using the latest technologies are often well-off, younger, urban, and tech-savvy – or none of the above. This was the disruptive reality that 20 students from the London School of Economics imagined during a recent design thinking workshop. The three-hour session, conducted as part of the school’s relationship with SAP, challenged the non-techie undergrad and grad students to brainstorm how innovations in banking could help people with disabilities – physical, social, and psychological – realize their business dreams. It was their first-ever experience using design thinking, and a revelatory exercise that broadened their minds.

“We wanted to shake them up and bring them out of their comfort zone,” said Martin Gollogly, director of SAP Next-Gen Innovation Community for SAP Leonardo. “One of the first ‘aha moments’ came during the warm-up when we asked them to design a chair. They realized everyone had similar ideas narrowly related to physical disabilities and banking environments. We challenged them to have the broadest possible definitions of both being disabled and banking.”

Twenty students from the London School of Economics envisioned how the internet of good things could bring banking to non-traditional customers.

Twenty students from the London School of Economics envisioned how the Internet of good things could bring banking to non-traditional customers.

Applying Internet of good things

Working in small groups, the students created several personas of non-traditional banking customers. The challenge was to apply an “Internet of good things” approach to meet each person’s unique requirements.

Persona 1: A high-powered businessman-turned-monk, disappointed with his previous life, seeks a more spiritual existence. Now living in Tibet, he aims to build a non-profit temple supporting the local economy. He uses cashless transactions-in-kind and barter from his remote location. Drones could fly in small-denomination cash and smaller barter goods. RFID chips could track livestock and materials for farmers and people making small crafts, turning the temple into a source of security when animals go astray or materials are lost or stolen. A digital voice assistant could automatically translate words and enable basic transactions between two people who speak different languages. The temple could house a local 3D printer station creating objects to help maintain local goods.

Persona 2: A flight attendant dreams of opening a café on a boat that would travel the world, allowing him to pursue his hobbies, playing the guitar and sailing. People with disabilities would be able to book ideal locations, travel times, and rates using banking services powered by Big Data and analytics. A currency conversion selector would allow customers to set and receive the best ticket prices based on purchase dates, trip timeframes, and destinations. Travelers could also request and buy specific supplies sourced from local businesses at various ports along the journey.

Persona 3: A retired, divorced soldier with PTSD is living on a lake in Africa, forced to travel over an hour to pick up his monthly pension from a bank that is often closed. With cybersecurity fears, he checks email only once every couple of months in a remote Internet café. He also needs to purchase equipment to build his sailboat. Using biometric input plus virtual reality headsets, the local Internet café could become this ex-soldier’s bank. Virtual reality headsets can create the impression that he’s in a bank branch, while avatars based on facial reproduction technology allow him to transact business at his convenience while talking to a “face.”

Creative disruption

Even for these top students who will likely go on to assume senior roles in banking and economics, it was a stretch to consider the less-obvious, which is critical to disruption.

“Some of these ideas might seem unusual or far-fetched, but they are actually viable, said Gollogly. “SAP University Alliances has 3,000 members, and if we get one viable idea from one design thinking session out of ten, that’s 300 disruptive ideas. We’re helping students expand their education for creative disruption to do good in the world.”

Gollogly added that SAP is launching a Next-Gen Community powered by the SAP Leonardo Center with the University of Portsmouth in the United Kingdom this month.

This blog was originally posted on the SAP Business Trends Community.

Follow me on Twitter, SAP Business Trends, or Facebook. Read all of my Forbes articles here.

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Running Future Cities on Blockchain

Dan Wellers , Raimund Gross and Ulrich Scholl

Building on the Blockchain Framework

Some experts say these seemingly far-future speculations about the possibilities of combining technologies using blockchain are actually both inevitable and imminent:


Democratizing design and manufacturing by enabling individuals and small businesses to buy, sell, share, and digitally remix products affordably while protecting intellectual property rights.
Decentralizing warehousing and logistics by combining autonomous vehicles, 3D printers, and smart contracts to optimize delivery of products and materials, and even to create them on site as needed.
Distributing commerce by mixing virtual reality, 3D scanning and printing, self-driving vehicles, and artificial intelligence into immersive, personalized, on-demand shopping experiences that still protect buyers’ personal and proprietary data.

The City of the Future

Imagine that every agency, building, office, residence, and piece of infrastructure has an entry on a blockchain used as a city’s digital ledger. This “digital twin” could transform the delivery of city services.

For example:

  • Property owners could easily monetize assets by renting rooms, selling solar power back to the grid, and more.
  • Utilities could use customer data and AIs to make energy-saving recommendations, and smart contracts to automatically adjust power usage for greater efficiency.
  • Embedded sensors could sense problems (like a water main break) and alert an AI to send a technician with the right parts, tools, and training.
  • Autonomous vehicles could route themselves to open parking spaces or charging stations, and pay for services safely and automatically.
  • Cities could improve traffic monitoring and routing, saving commuters’ time and fuel while increasing productivity.

Every interaction would be transparent and verifiable, providing more data to analyze for future improvements.


Welcome to the Next Industrial Revolution

When exponential technologies intersect and combine, transformation happens on a massive scale. It’s time to start thinking through outcomes in a disciplined, proactive way to prepare for a future we’re only just beginning to imagine.

Download the executive brief Running Future Cities on Blockchain.


Read the full article Pulling Cities Into The Future With Blockchain

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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.

Raimund Gross

About Raimund Gross

Raimund Gross is a solution architect and futurist at SAP Innovation Center Network, where he evaluates emerging technologies and trends to address the challenges of businesses arising from digitization. He is currently evaluating the impact of blockchain for SAP and our enterprise customers.

Ulrich Scholl

About Ulrich Scholl

Ulrich Scholl is Vice President of Industry Cloud and Custom Development at SAP. In this role, Ulrich discovers and implements best practices to help further the understanding and adoption of the SAP portfolio of industry cloud innovations.

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4 Traits Set Digital Leaders Apart From 97% Of The Competition

Vivek Bapat

Like the classic parable of the blind man and the elephant, it seems everyone has a unique take on digital transformation. Some equate digital transformation with emerging technologies, placing their bets on as the Internet of Things, machine learning, and artificial intelligence. Others see it as a way to increase efficiencies and change business processes to accelerate product to market. Some others think of it is a means of strategic differentiation, innovating new business models for serving and engaging their customers. Despite the range of viewpoints, many businesses are still challenged with pragmatically evolving digital in ways that are meaningful, industry-disruptive, and market-leading.

According to a recent study of more than 3,000 senior executives across 17 countries and regions, only a paltry three percent of businesses worldwide have successfully completed enterprise-wide digital transformation initiatives, even though 84% of C-level executives ranks such efforts as “critically important” to the fundamental sustenance of their business.

The most comprehensive global study of its kind, the SAP Center for Business Insight report “SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart,” in collaboration with Oxford Economics, identified the challenges, opportunities, value, and key technologies driving digital transformation. The findings specifically analyzed the performance of “digital leaders” – those who are connecting people, things, and businesses more intelligently, more effectively, and creating punctuated change faster than their less advanced rivals.

After analyzing the data, it was eye-opening to see that only three percent of companies (top 100) are successfully realizing their full potential through digital transformation. However, even more remarkable was that these leaders have four fundamental traits in common, regardless of their region of operation, their size, their organizational structure, or their industry.

We distilled these traits in the hope that others in the early stages of transformation or that are still struggling to find their bearings can embrace these principles in order to succeed. Ultimately I see these leaders as true ambidextrous organizations, managing evolutionary and revolutionary change simultaneously, willing to embrace innovation – not just on the edges of their business, but firmly into their core.

Here are the four traits that set these leaders apart from the rest:

Trait #1: They see digital transformation as truly transformational

An overwhelming majority (96%) of digital leaders view digital transformation as a core business goal that requires a unified digital mindset across the entire enterprise. But instead of allowing individual functions to change at their own pace, digital leaders prefer to evolve the organization to help ensure the success of their digital strategies.

The study found that 56% of these businesses regularly shift their organizational structure, which includes processes, partners, suppliers, and customers, compared to 10% of remaining companies. Plus, 70% actively bring lines of business together through cross-functional processes and technologies.

By creating a firm foundation for transformation, digital leaders are further widening the gap between themselves and their less advanced competitors as they innovate business models that can mitigate emerging risks and seize new opportunities quickly.

Trait #2: They focus on transforming customer-facing functions first

Although most companies believe technology, the pace of change, and growing global competition are the key global trends that will affect everything for years to come, digital leaders are expanding their frame of mind to consider the influence of customer empowerment. Executives who build a momentum of breakthrough innovation and industry transformation are the ones that are moving beyond the high stakes of the market to the activation of complete, end-to-end customer experiences.

In fact, 92% of digital leaders have established sophisticated digital transformation strategies and processes to drive transformational change in customer satisfaction and engagement, compared to 22% of their less mature counterparts. As a result, 70% have realized significant or transformational value from these efforts.

Trait #3: They create a virtuous cycle of digital talent

There’s little doubt that the competition for qualified talent is fierce. But for nearly three-quarters of companies that demonstrate digital-transformation leadership, it is easier to attract and retain talent because they are five times more likely to leverage digitization to change their talent management efforts.

The impact of their efforts goes beyond empowering recruiters to identify best-fit candidates, highlight risk factors and hiring errors, and predict long-term talent needs. Nearly half (48%) of digital leaders understand that they must invest heavily in the development of digital skills and technology to drive revenue, retain productive employees, and create new roles to keep up with their digital maturity over the next two years, compared to 30% of all surveyed executives.

Trait #4: They invest in next-generation technology using a bimodal architecture

A couple years ago, Peter Sondergaard, senior vice president at Gartner and global head of research, observed that “CIOs can’t transform their old IT organization into a digital startup, but they can turn it into a bi-modal IT organization. Forty-five percent of CIOs state they currently have a fast mode of operation, and we predict that 75% of IT organizations will be bimodal in some way by 2017.”

Based on the results of the SAP Center for Business Insight study, Sondergaard’s prediction was spot on. As digital leaders dive into advanced technologies, 72% are using a digital twin of the conventional IT organization to operate efficiently without disruption while refining innovative scenarios to resolve business challenges and integrate them to stay ahead of the competition. Unfortunately, only 30% of less advanced businesses embrace this view.

Working within this bimodal architecture is emboldening digital leaders to take on incredibly progressive technology. For example, the study found that 50% of these firms are using artificial intelligence and machine learning, compared to seven percent of all respondents. They are also leading the adoption curve of Big Data solutions and analytics (94% vs. 60%) and the Internet of Things (76% vs. 52%).

Digital leadership is a practice of balance, not pure digitization

Most executives understand that digital transformation is a critical driver of revenue growth, profitability, and business expansion. However, as digital leaders are proving, digital strategies must deliver a balance of organizational flexibility, forward-looking technology adoption, and bold change. And clearly, this approach is paying dividends for them. They are growing market share, increasing customer satisfaction, improving employee engagement, and, perhaps more important, achieving more profitability than ever before.

For any company looking to catch up to digital leaders, the conversation around digital transformation needs to change immediately to combat three deadly sins: Stop investing in one-off, isolated projects hidden in a single organization. Stop viewing IT as an enabler instead of a strategic partner. Stop walling off the rest of the business from siloed digital successes.

As our study shows, companies that treat their digital transformation as an all-encompassing, all-sharing, and all-knowing business imperative will be the ones that disrupt the competitive landscape and stay ahead of a constantly evolving economy.

Follow me on twitter @vivek_bapat 

For more insight on digital leaders, check out the SAP Center for Business Insight report, conducted in collaboration with Oxford Economics,SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart.”

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Vivek Bapat

About Vivek Bapat

Vivek Bapat is the Senior Vice President, Global Head of Marketing Strategy and Thought Leadership, at SAP. He leads SAP's Global Marketing Strategy, Messaging, Positioning and related Thought Leadership initiatives.