The past 18 months have transformed society – and sped up the digital transformation of our world.
On the plus side, digital technologies allowed business and society to continue to function even during lockdowns – helping companies survive, vulnerable people access healthcare and children continue to learn. When the worst of the pandemic is, someday, behind us, we’ll be able to take many of these lessons – and technological advancements – with us to enable greater access to healthcare (especially mental healthcare), education, job training and finance.
And it provided a much-needed boost to the pandemic economy. The UN’s Sustainable Development Report 2021 highlighted the role of technology manufacturing as a key driver of the economic recovery, citing the rise in demand for computer electronics due to the global shift toward working from home, remote-learning and e-commerce.
However, with 3 billion people worldwide still offline, the pandemic also exposed and exacerbated digital inequality and the gaps that still exist in digital access, according to a report from the World Economic Forum and BCG.
And while many countries and industries were able to quickly access and seamlessly adapt to new forms of human interaction and remote work, the speed of the transition has led to vulnerabilities and risk. In 2020, we saw a 358% increase in malware and 435% increase in ransomware attacks. This further exacerbates digital inequality, with attacks on large and strategic systems carrying cascading physical consequences across societies, and prevention entailing higher costs. Intangible risks—such as disinformation, fraud and lack of digital safety—will also impact public trust in digital systems.
A recent report by McKinsey emphasizes that while the digital era is still very much a new frontier, a digital transformation demands fundamental change across every part of the organization and this change must come from the top. “Successful transformations start with the CEO and top leadership reimagining their business in a digital age. These are bold visions to generate transformative value – think new business models, entry into new markets and monetization of data-based assets.”
So, what, exactly, should CEOs and boards do? How do we achieve this change in an equitable, sustainable way? What mindsets must leaders adopt, and what concrete approaches should they implement across their organizations, supply chains and communities?
Ahead of the virtual Davos Agenda (17-21 January 2022), we asked 10 business leaders at the forefront of the digital transformation of business and society to tell us their strategies for ensuring an equitable digital transformation. Here’s what they said.
‘Structure and tested governance models’
Michael C. Bodson, President and CEO, DTCC
Given the rapid pace of digitalization, increasing investment in digitized products and the transition to a more decentralized financial system, a key area of focus in the coming years must be establishing structure and tested governance models to support the highest level of investor protection and promote market growth.
The original view of DeFi – peer-to-peer interaction without trusted intermediaries – creates the potential for increasing the very risks that regulation is intended to mitigate. Market infrastructures will play an even more critical role in shifting from legacy markets to digitized ones. They will also be responsible for establishing consistent governance and resolving disputes, setting performance and resilience standards and maintaining market stability.
That also means further embracing automation produced by distributed ledger technology, artificial intelligence, machine learning and other digital technologies that are fundamentally changing market structure ecosystems. As more asset classes are digitized, market infrastructures will evolve from traditional roles as cash-versus-securities clearing and settlement organizations to “asset transfer facilitators”, transacting everything from registered securities and cash to private market securities, digital tokens, dividends paid in cryptocurrency and central bank digital currency. While market transformation is guaranteed in the years ahead, trusted intermediaries will remain essential participants in protecting the stability and integrity of the financial system.
‘Capacity, governance and culture’
Özgür Burak Akkol, Chairman of the Board, Centre for the Fourth Industrial Revolution (C4IR) Turkey and Chairman of the Board at Turkish Employers Association of Metal Industries (MESS)
We have seen companies accelerate their digitalization and automation efforts to adjust to the pandemic. Industry has been reshaped by digitalization and 4IR technologies – both to improve efficiency but also as a prerequisite to achieving the Sustainable Development Goals. We need to equip organisations and employees for this transformation through capacity, governance and culture.
MESS, Turkey’s largest employers’ association, established a technology centre (MEXT) for members with 100+ use-cases and scenarios, training and multi-dimensional experience areas – the services required for the digital transformation of an industrial company. We will train 250,000 people in five years and prepare our workforce for the digital future with Digital Literacy and Artificial Intelligence Academy programs. To ensure this capacity building is supported by a functional digital ecosystem, we are working with the Centre for the Fourth Industrial Revolution in Turkey to shape governance. Through the Working Culture Transformation Movement, we are preparing workers for a digital working culture.
It is important to establish a digital production infrastructure and a complementary working life that will support socio-economic development and include employees at every level of every organization. The end goal is to reach the entire industry and inspire, especially in neighboring countries.
‘Aggregate and connect data’
Arindom Datta, Executive Director and Head, Rural & Development Banking/Advisory, Rabobank
Emerging economies are exploring the potential of AI, IoT, blockchain and drone-based solutions to address pressing agricultural challenges. These technologies hold significant potential to transform agricultural sustainability and productivity, especially for small-holder farmers.
Public-private partnerships that foster multistakeholder collaboration can be an effective model for scaling these technologies. For example, partnerships can support the growing “last-mile delivery” start-up ecosystem in agriculture and deliver innovative finance mechanisms to small-holder farmers through data-based credit risk assessment. Further improvements to farmers’ income, environmental sustainability and inclusivity can be achieved through tailored insurance packages that leverage field and weather data, supply chains analysis and market-based platforms.
However, the biggest challenge for unlocking agricultural innovation through 4IR technologies is the limited availability, quality and usability of agriculture data. To overcome this barrier, the Agriculture Data Exchange aims to aggregate and connect data from different data providers and users to reduce data asymmetry across complex agricultural stakeholder ecosystems. Further development of a streamlined, scalable and sustainable digital agricultural ecosystem is required to provide value to farmers at scale.
Apply ‘digital technology in cross-sector collaboration’ to meet climate goals
Börje Ekholm, President and CEO, Ericsson
The science is clear: we need to limit global warming to 1.5 degrees. This means we need to cut global greenhouse gas emissions by 50 percent by 2030.
The information and communications technology (ICT) sector has the potential to meet the 2030 milestone sooner and enable other industrial sectors to move towards the low-carbon economy that will be central to mitigate climate change.
ICT produces 1.4% of global greenhouse gases today, yet research shows ICT solutions can enable a 15% reduction of emissions in other sectors.
5G has the potential for even greater reductions in net carbon emissions. As an open innovation platform, 5G will have a direct impact on a range of industries – from smart manufacturing and public transport systems, to smart power grids supporting electric vehicles and more renewable energy coming onstream, not to mention more efficient logistics.
With other technologies like AI and IoT, we can do more and faster.
Climate action must be based on science – and applying digital technology in cross-sector collaboration will be a key enabler to meeting this challenge.
‘Drive tech as a force for good’
Pat Gelsinger, CEO, Intel
We stand at the precipice of a digital renaissance.
Humans create technology to define what’s possible. We ask “IF” something can be done, we understand “WHY,” then we ask “HOW.” How do we ensure innovation is ethical and available to all?
COVID-19 obliterated timelines and plans and made technology
The speed at which the pandemic connected the digital and physical through data drastically accelerated the impact and possibilities of the superpowers at our disposal – ubiquitous compute, cloud-to-edge infrastructure, pervasive connectivity and AI – which allow us to push forward with discovery and growth.
AsKlaus Schwab noted, “New technologies and novel ways of perceiving the world trigger a profound change in economic and social structures.” Today, every business is a technology business. We may consider technology a binary system of 1s and 0s, but innovation is not a zero-sum game.
Semiconductors beat at the heart of it all. We can choose – as an industry and global society – to drive tech as a force for good and improve the life of every person on the planet. We can, and should, innovate on shared industry standards and open platforms, with a focus on ethical outcomes. And we must create a resilient and geographically balanced supply chain to ensure developments are widely accessible.
‘Facilitate collaboration between people and technology’
Vijay Guntur, Corporate Vice President & Head, Engineering and R&D Services, HCL Technologies
The pandemic has accelerated digital adoption across all aspects of the business value chain. Global spending on the digital transformation of business practices, products and organizations is forecast to reach $2.8 trillion in 2025 at a compound annual growth rate of 16.4% – more than double the amount allocated in 2020.
Digital underpins not only how businesses and enterprises procure and create products but also how consumers interact with and consume them. Digital engineering is enabling this transformation of creation, discovery, consumption and sustained interaction between products and consumers. AR/VR/XR is bridging the gap between the real and digital equivalents, with the ongoing interaction creating a wealth of data that is leveraged to improve experiences and products and, in most cases, create new products. Businesses are creating mash-up enterprises that collaborate with each other to create new and bigger value for consumers beyond what has ever been realized.
Of course, building digital transformation platforms of the future comes with challenges such as ensuring alignment to the business, change management, technology capabilities and the sales transformation of the organization. The most successful digital platforms facilitate collaboration between people and technology and a continuous “change” culture that delivers better customer and employee engagement and tangible financial returns.
‘Embed specific and measurable global-impact goals into the fabric of your business’
Raghu Raghuram, CEO, VMware
Every leader is redefining how their organization operates, with a heavy focus on using applications to engage customers in new ways, and to empower a distributed workforce.
Compared to a few short years ago, there’s now an understanding that “getting the transformation right” goes beyond important business metrics like revenue growth and profitability.
Core to almost every transformation initiative is an awareness that businesses can – and must – seize this moment to help address the most critical challenge of our time: creating a more equitable, sustainable and resilient future. There’s a sense of urgency now, and a recognition that both customers and employees are demanding concrete action.
It’s no longer enough to have good intentions. The key is to embed specific and measurable global-impact goals into the fabric of your business – with transparency and leadership accountability for the results.
From digital equality and resiliency to carbon reduction, the global challenges we face are complex. Every business has a role to play, and it starts with placing environmental and social impact at the centre of everything we do.
‘Include cyber risks in the company development strategy’
The business world benefits from digital transformation with the opportunities it offers for development and growth. But these opportunities also broaden cyberattack vectors. The resilience of a growing digital infrastructure has many requirements, so cybersecurity has already become an issue to be discussed at the board level. Still, some companies disregard security matters. To avoid irreversible damage and ensure a successful business transformation, it is important to take certain steps.
First, include cyber risks into the company development strategy, because these risks are now business risks. A single cyberattack can disrupt operations for days and months, same as floods or fires. Addressing cyber risks is a complex and multifaceted task that involves the work of different departments, but including such risks in the development strategy may help to avoid considerable financial and reputational losses in the future.
To ensure this is addressed, and everything is being done to keep a company cyber resilient, you need to appoint a board member who will be personally responsible for that.
Key decisions need to be taken at the board level concerning investments in security, addressing cyber risks and measures to protect the infrastructure, and that individual should be responsible for this.
Close partnership between schools, governments, non-profits and private organizations’
Chuck Whitten, Co-Chief Operating Officer, Dell Technologies
The pandemic accelerated a massive global digital transformation that touched every part of our lives. It also widened the gap between people who have access to digital technologies and those who don’t, fostering stark inequities across education, healthcare and job opportunities. In fact, it’s estimated that about two-thirds of school-age children around the world are offline.
But, the era of digital disruption is still in its infancy. If we get it right, it presents a generational opportunity to close the divide and help level the playing field. This requires close partnership between schools, governments, non-profits and private organizations to create a technology ecosystem with equitable access to opportunities for underserved communities around the world. A great example is the World Economic Forum’s EDISON Alliance.
Access to technology is no longer an option; it’s a critical piece to improving the lives of millions around the world.
‘Employees play a critical role’
Olivera Zatezalo, GM-Cybersecurity & Privacy, Suncor Energy
Digital transformation has the potential to change every aspect of business. New technologies and processes will increase efficiencies, profits and streamline workflows.
While bringing substantial opportunities and benefits, these new technologies face significant challenges in security and privacy protection. Therefore, the healthy development of digital transformation should rely on the proper governance of cybersecurity and privacy. We should ensure that security and privacy requirements are integrated throughout the entire development process, from design to implementation.
Also, it is important to understand that the services we are building are highly dependent on third-party technologies, and that rapid and effective digital transformation can only be promoted through clarifying and sharing the responsibilities with relevant stakeholders. Finally, security and privacy must be top priorities throughout the organization and embedded into the culture. Employees play a critical role in detecting and preventing suspicious emails and abnormal activities. Therefore, providing employees training and awareness on cybersecurity and privacy can be crucial to ensuring they have the knowledge and instinct to prevent attacks and breaches.
Courtesy- https://www.weforum.org/agenda/2022/01/equitable-digital-transformation-business-leaders-davos-agenda-2022-digitization/