43 Facts On Purpose And Sustainability In The Digital Economy

Peter Johnson

Part 5 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 simplify your ability to find facts for specific topics, I have grouped the facts into six subsets, and below is the fifth of these:

Earth

With the coming and going of ice ages over the last 400,000+ years, CO2 in the earth’s atmosphere fluctuated between 180 ppm and 300 ppm. However, CO2 levels have skyrocketed and now exceed 400 ppm for the first time in recorded history.

Source: “The Relentless Rise of Carbon Dioxide,” NASA Global Climate Change: Vital Signs of the Planet.

New digital technologies can enable a 20% reduction in global carbon emissions by 2030. This is equivalent to eliminating 100% of China’s CO2 emissions, plus another 1.5 billion tons.

Source: “SMARTer2030: Australian Opportunity for ICT Enabled Emission Reductions,” Telstra Corporation.

In the last two decades, 9.6% of the earth’s total wilderness areas has been lost, an estimated 3.3 million square kilometers.

Source: “Catastrophic Declines in Wilderness Areas Undermine Global Environment Targets,” Current Biology.

Many Latin American governments are turning to artificial intelligence to aid in their forest conservation efforts.

Source: “10 Innovations That Are Changing Conservation,” Cool Green Science.

Air pollution continues to rise at an alarming rate, and now 92% of the world population is exposed to air pollution above WHO air quality guidelines.

Source: “Ambient Air Pollution: A Global Assessment of Exposure and Burden of Disease,” World Health Organization.

Every year, nearly 600,000 children under the age of five die from diseases caused or exacerbated by the effects of air pollution.

Source: “Clear the Air for Children,” United Nations Children’s Fund (UNICEF).

Inequity

GDP per capita has increased roughly 1,000% since the 1970s.

Source: “GDP Per Capita,” The World Bank.

CEO pay has risen 1,000% over the past 40-plus years.

Source: “World Economic Forum Annual Meeting 2017: Responsive and Responsible Leadership,” World Economic Forum.

But average worker pay has increased just 11% since the 1970s, essentially stagnating over the past 40-plus years.

Source: “The Productivity–Pay Gap,” Economic Policy Institute.

If ordinary citizens don’t have incomes to buy products made by corporations, how can those corporations prosper? The IMF found countries with less inequality perform better.

Source: “Nobel Economist: One-Percenters, Pay Your Taxes,” CNN.

Although GDP growth is an indicator of progress, it has concealed growing inequality. Economies need a balanced scorecard that also assesses and prioritizes quality of life across the population.

Source: “An Economy for the 99%,” Oxfam International.

By broadly addressing gender equity at work and in society, the world could add $12 trillion to annual gross domestic product in 2025.

Source: “Realizing Gender Equality’s $12 Trillion Economic Opportunity,” McKinsey Global Institute.

The 43 public companies in the DiversityInc Top 50 were 24% more profitable than the S&P 500 average.

Source: “Cultural Diversity in the Workplace: How Diversity at Work Makes More Money for You,” The Balance.

Migrants make up just 3.4% of the world’s population, but they contribute nearly 10% of global GDP. Today, immigrants earn 20% to 30% less than native workers, but if countries narrow this wage gap by just five to 10%, they could generate an additional $1 trillion in global economic output.

Source: “Global Migration’s Impact and Opportunity,” McKinsey Global Institute.

Improving lives

In initial tests, a machine-learning algorithm created at Carnegie Mellon was able to predict heart attacks four hours in advance, with 80% accuracy.

Source: “Of Prediction and Policy,” The Economist.

Artificial intelligence can predict where epidemics will happen. AIME developed a platform with 87% accuracy in predicting dengue fever outbreaks three months in advance. Now they hope to similarly target other diseases, such as Ebola and Zika.

Source: “Artificial Intelligence Innovation Report,” Deloitte.

An estimated 45.8 million people are trapped in some form of slavery in 167 countries.

Source: “Global Findings,” Walk Free Foundation: The Global Slavery Index.

Advanced analytics and Big Data are enabling coordinated efforts to combat human trafficking networks and rapid responses when victims are located.

Source: “Tracing a Web of Destruction: Can Big Data Fight Human Trafficking?” HBS Digital Initiative.

Two billion individuals and 200 million small businesses in emerging economies lack access to basic financial services and credit. Broad adoption of mobile banking in developing nations could create 95 million new jobs and increase GDP by $3.7 trillion by 2025.

Source: “How Digital Finance Could Boost Growth in Emerging Economies,” McKinsey Global Institute.

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.

Resource management

On the edge of the Sahara, Morocco is building what will be the world’s largest solar power plant, capable of providing energy even after the sun sets.

Source: “Morocco Unveils A Massive Solar Power Plant in the Sahara,” NPR.

Morocco plans to generate 14% of its energy from solar by 2020, and hopes to eventually export solar energy to Europe.

Source: “The Colossal African Solar Farm That Could Power Europe,” BBC.

An extremely large city can lose as much as 500 billion liters of drinking water each year through leakage.

Source: “Water and Cities – Facts and Figures,” United Nations.

More than 300,000 billion liters of water could be saved globally by using new information and communications technologies to increase resource management efficiencies.

Source: “Quantifying the Opportunity,” Global e-Sustainability Initiative (GeSI).

Barcelona uses the IoT to optimize urban systems and enhance citizen services. To date, it has saved $95 million annually from reduced water and electricity consumption, increased parking revenues by $50 million a year, and generated 47,000 new jobs.

Source: “How Smart City Barcelona Brought the Internet of Things to Life,” Data-Smart City Solutions, Ash Center for Democratic Governance and Innovation at Harvard Kennedy School.

By 2019, 40% of local and regional governments will use the IoT to turn infrastructure such as roads, streetlights, and traffic signals into assets instead of liabilities.

Source: “IDC FutureScape: Worldwide Internet of Things (IoT) 2017 Predictions,” IDC Research Inc.

Global urban populations will add 2.5 billion people by 2050. This massive urban expansion will require as much as $70 trillion in infrastructure spending.

Source: “In a Fast-Changing World, Can Cities Be Built with Long-Term Perspective?” EY.

Global debt has more than doubled since the turn of the century to $152 trillion and now represents a record high 225% of global GDP. This creates a vicious feedback loop in which the debt overhang exacerbates the economic slowdown and lower economic growth hampers deleveraging.

Source: “The IMF Is Worried About the World’s $152 Trillion Debt Pile,” Bloomberg.

Trust and corruption

93% of CEOs believe it’s important to engender trust that their company “will do the right thing.”

Source: “Connecting the Dots: How Purpose Can Join Up Your Business,” PwC.

72% of people feel that companies have become more dishonest.

Source: “The State of the Debate on Purpose in Business,” EY Beacon Institute.

There is a growing level of distrust: only 15% of people believe that society’s institutional pillars (government, businesses, media) are working for the common person.

Source: “2017 Edelman Trust Barometer,” Edelman.

Leading up to the U.S. election, the top fake news stories on Facebook generated 20% more engagement than factual stories.

Source: “This Analysis Shows How Fake Election News Stories Outperformed Real News on Facebook,” BuzzFeed News.

Bribery reduces global GDP by $1.5 trillion to $2 trillion each year, as it drives suboptimal business decision making, corrupting economic performance.

Source: “Corruption: Costs and Mitigating Strategies,” International Monetary Fund.

To combat corruption and tax evasion in its cash economy (only 2.6% of its citizens pay taxes), the Indian government devalued 80% of its currency in three hours.

Source: “Demonetization | This Is a New Indian Sunrise,” DNA India.

India could eliminate the need for credit cards, debit cards, and ATMs in three years by switching to biometric payments, as nearly 1.1 billion citizens have already registered their biometric data.

Source: “First Cash, Now India Could Ditch Card Payments by 2020,” CNN.

Purpose

In a study of 100 variables, seeing purpose and value in work was the single most important factor that motivated employees. Yes, more than compensation.

Source: “Purpose Trumps Cash + Other New Research Findings,” LinkedIn.

75% of millennials would take a pay cut to work for a socially and environmentally responsible company.

Source: “2016 Cone Communications Millennial Employee Engagement Study,” Cone Communications.

Only 13% of employees worldwide are engaged, meaning that the other 87% are not involved in, enthusiastic about, and committed to their work and company.

Source: “The Worldwide Employee Engagement Crisis,” Gallup.

Companies with engaged employees outperform their peers by up to 202%.

Source: “The Importance of Employee Engagement,” Dale Carnegie Training.

How millennials want to work and live is a problem leaders need to take seriously. Just 40% of millennials feel strongly connected to their company’s mission.

Source: “Millennials Not Connecting With Their Company’s Mission,” Gallup.

During the next year, one in four millennials plans to leave his or her current employer, and by 2020, two in three millennials expect to have found a new employer.

Source: “The 2016 Deloitte Millennial Survey – Winning over the next generation of leaders,” Deloitte.

Organizations in which employees perceive meaning at work are 21% more profitable.

Source: “Meaning@Work, Leadership in times of digitization,” Future of Leadership Initiative.

87% of millennials say that they base their purchasing decisions on whether or not a company makes positive social efforts.

Source: “Why Millennials Care About Purpose-Driven Business,” D!gitalist Magazine.

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, and we will cover the 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.

AI, Blockchain, And Cloud Fuel Banking’s Evolution

John Bertrand

Artificial intelligence (AI), blockchain, and cloud technologies are increasingly appearing on the horizon. This could be exactly what the banker ordered, given the legal mandates for open banking and General Data Protection Regulation for 2018. These three key technologies can fuel the financial services industry’s evolution into the digital age.

Artificial intelligence

AI is a collection of machine learning, natural language processing, and cognitive computing designed for scale. It is this scalability that is exciting, as it can create exponential growth and deliver today’s required personalized communications. For example, in July 2017 UK payments processed 21 million payments per business day. If 0.5% of the daily volume needed additional review, 105,000 items would need to be checked, often manually and with rules-based, tick-the-box solutions. AI would significantly increase productivity by matching payment behavior and pattern recognition, and simply asking the question, “does this look right?” AI-powered chatbots could help business users and consumers answer inquiries and enhance the customer experience.

Blockchain

Blockchain is also a mix of technologies that enables us to trust someone we do not know and protects us from cybercriminals. The block contains vital information about a party, and the chain is the sequence of third-party, verified events that have taken place over the history of the transaction. Blockchain is fully encrypted and can be permissioned for private and public groups. Given the manual, paper-based state of the supply chain, it is not surprising that we’re seeing many new proofs of concepts and pilots using blockchain.

Cloud

Cloud computing gives improved security, scale, and agility to respond to market demands and can decrease banks’ cost bases. The advances in cloud technologies permit software applications to move seamlessly between legacy, private cloud, and public cloud solutions. One such technology, containers, allows the applications to flow safely across the end-to-end processes regardless of the underlying technologies, much like how shipping containers transformed the inefficient, non-scalable 20th century transportation industry to the one today.

Finance’s digital evolution

These technologies are could be the savior of financial services industry. Financial services are rapidly becoming a technology-driven sector, evidenced by the increasing amount of money being spent in this area.

  • Financial services is now one of the largest buyers of software
  • IDC expects this figure to grow more than five percent over 2016’s spending
  • The forecast of $2.7 trillion in worldwide IT spending by 2020 is led by the financial services industry

Legacy banks and financial services firms can either build the technology themselves or work with fintechs to do so; either way it has to be done. Eminent evolutionary biologist Charles Darwin could have been discussing this new banking environment when he noted:

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. 

Potential impacts of financial services’ digital evolution include:

  • Low-cost centers using AI to increase straight-through processing (STP) to 100%, thus removing cost, increasing customer satisfaction, and reducing liabilities from errors
  • Administration of trade finance through blockchain to reduce costs and increase certainty of ownership at any point in time
  • Spare computer capacity created by using the cloud, enabling banks to meet peak-day requirements and increase cybersecurity

Security is now a bottom-line concern. See The Future of Cybersecurity: Trust as Competitive Advantage.

This article was originally published on Finextra.

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Robots Are Moving Into Our Human Resources Functions

Agnes Desplechin

“When we react it will be too late,” said Elon Musk, CEO of Tesla Motors (a pioneer in the connected car market), in July at the U.S. National Governors Association Summer Meeting. The businessman expressed his concern about the development of artificial intelligence and the delay in terms of regulation that would represent “a fundamental risk to the existence of human civilization.”

Today, the thought that humans can (in some activities) be substituted by robots no longer belongs solely to fictional works such as Frankenstein (1818) or current television shows Black Mirror and Westworld.

Concerns about potential failures caused by robots are very real and present today. Even before the most advanced prototypes of robots and the possibilities offered by artificial intelligence were considered, economist John Maynard Keynes prophesied the substitution of man by machines. In “Economic Possibilities for Our Grandchildren,” published in 1930, he questioned the effects of automation on jobs, well-being, and happiness, seeking to find solutions to the issue of “technological unemployment.”

A century later, the replacement of human workers by robots is anticipated across the job spectrum. According to Laurent Alexandre, technocrat, urological surgeon, and artificial intelligence (AI) advocate, all professions will, in the near future, be threatened by AI, which will soon be everywhere. Indeed, AI it is already in your pocket; Siri and Google Assistant are early chatbots, conversational robots that will replace salesmen, attorneys, journalists, and eventually, human resource assistants.

To better understand the stakes, we must understand what AI is. Consider a machine without AI, which makes decisions based on manually defined rules. When a machine facing a large data flow learns to analyze and make decisions, intelligence is born; this is machine learning. If you’re still confused about machine learning based on this description, let’s take the example of email that you define manually as “spam” within your mailbox. Once it learns the form, structure, sender, and other details that led you to mark a message as spam (i.e., the rules you defined, even subconsciously), the machine can make the decision that a message is spam. Unlike human intelligence, the machine can be caught off guard when there are exceptions.

How AI develops is of great interest in the context of HR functions. Some examples include using automated and intelligent filters for recruitment, using robots for interviews, or having chatbots act as human resource assistants in order to answer recurring questions from employees.

AI’s contribution is often measured in terms of time and cost savings, but it can also lead to more impartiality and efficiency. Even so, the human aspects and ethics must remain the core part of the HR role. As Elon Musk suggests, we must now ensure AI retains our standards, and, crucially for the HR profession, keeps the “human” in human resources.

Will intelligent machines and HR one day walk hand in hand? AI offers prospects that are very promising and prompt many questions that will shape the evolution of our profession.

AI’s ability to end bias hinges on teaching it to play fair and constantly questioning the results.
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Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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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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Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!

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