Name: FAST FORWARD: How the Pandemic is Shifting Digital Transformation into High Gear
Uploaded: 2020-12-03
Duration: 10 min 33 s
Description: Experts talk about the accelerating rise to a new era of industrial digitization

FAST FORWARD: How the Pandemic is Shifting Digital Transformation into High Gear

Tech

The rise to a new era of industrial digitization

The Pandemic is Shifting Digital Transformation

Experts talk about the accelerating rise to a new era of industrial digitization

One of the things that really surprised me about the many conversations during the Fortune Global Forum is that we heard so many, uh, CEO is a big fortune 500 companies talking about digital transformation. And Michael, I wonder if we could start with with you. Um, you've just done a very deep dive. Study, uh, into how the pandemic is affecting digital transformation, Uh, five different sectors around the global economy. But I wonder if you could just start with this question of definitions and what what really is a digital transformation and and what's new about the way people are thinking about clay? As you mentioned, we've We've looked at five sectors in particular healthcare, media, education, transport in government to look at how innovation processes are changing at the sector level. And we think of digital transformation as falling into two distinct buckets. One is new uses of technology. How do we how can we use new technology? And the technology is currently at our disposal to help us get through the pandemic, whether it's through new products or services, new ways of working the second way is a longer term bucket looking at new processes for innovation. How is this experience this moment changing the way we think about innovation, that their values suitability, Uh, and the implementation, uh, in in our organization. But then we're looking at this, you know, the the the scope of the broader economy. And it's a really important discussion half because we are going through an unprecedented disruption. Francois, I wonder if I could come to you next. I mean, you have this fascinating dual role at BCG where you are a senior partner, right in the middle of the digital practice that is engaging with clients on all these issues and advising uh companies around the world on them. But then you also have this kind of more cerebral function as the managing director of the Henderson, uh, institute that tries to take a step back and see all of this in a broader context and also in a kind of a policy contact, which is which is quite fascinating. What are you seeing right now in terms of, uh, the way companies are thinking about this idea of digital transformation? So I I think that it's, uh it's something very important. And I will echo what Michael say. But what I've seen over the last 23 years, I would say, is a real change in terms of mindset regarding digital transformation. And I would add a I as well, because today I kind of think about the digital transformation without a I. And of course, you have a massive new adoption. For instance, Now you have. We just released a report that we did with Mitt, where we're seeing that 59% now of companies have an AI strategy with 20% points more than it was three years ago. But what I see even more is the need to have a change in terms of mindset instead of trying to ask yourself. Okay, how could a I or digital transformation help me optimize my process? The real question is, how should I revisit my process to put a I ended all the digital transformation at the core of my process because this is only when you have this type of behavior that you will have significant financial impact. Paul, How does it look from your perspective? You're an Australian working in this giant telecommunications company that is at the center of so much of what's going on digitally? Uh, not only in China, but elsewhere around the world. Um, what Tell us your kind of perspective of what the what the Chinese model of digital transformation feels like If we want to look at some fundamental fundamentals about transformation, digital transformation, you know, real time analysis of data transforms that industries transforms anything so you can't do it without data, and you can't do it without, of course, processes and security and privacy. They're absolutely important. But I would say in the U. S. Perhaps there's a lot of innovation, the Silicon Valley methodology, but in China and New Huawei, we've got a backyard that's got billions of people. So and we have so many industry is prepared to trial things. The second one is collaboration. None of these transformative things, as you mentioned, can happen without collaboration between different industry partners. It's not a telecom company transforms. It's not a media interview that transforms. It's not about saving a billion lives by somebody inventing a voice. Its collaboration. Who would have thought China, Brazil, UK working together on a on a vaccine or competitors in different drug companies competing now collaborating to make a vaccine. You wouldn't have really heard about this 12 months ago as being the new norm. So now it's about I believe there's a couple of things I 100% agree with the topic. Covid has moved everybody into top gear in this thing called experimentation. How to do things differently. But I also believe we still are missing on core ingredient, and that is what the target, you know, we've known you want to save a billion lives. Ai based on connectivity with Iot in five, you will achieve that in 10 years. You want to make a trillion dollars this same thing in manufacturing and industry. You want to save a billion tons of carbon dioxide. We have these technologies that can do these things, and I think that's really what it called 2020. A Sputnik moment. You've got a question here from someone who says, How do we address the huge impact on the global workforce with the big shift towards automation of knowledge workers jobs? And I think it's probably not just knowledge work. It's factory workers. It's anybody in the distribution and supply chain. Um, this potentially has a, uh, an enormous uh disruptive. Uh, impact. Uh, Michael, did you look at that at all in your study of the kind of job impact and and the social disruption of these technologies as companies adopt them? Yeah, well, I have to say, that's one of the things that worries me most is the impact of inequality. And not just over the next five years. When we think about the Children and the youth that are in school Now there's all right. We're seeing a huge gap opened up in in education between the haves and have nots in every country. You look at this at Henderson Institute, I presume? Yes. So, basically, I I think there are different elements. Um uh, fusions back after China has just issued, let's say the the ambition to be leading ai in 2030. I had the exact same conversation with high level official Chinese official, and he told me, Yes, but you know, this is what will happen and therefore, let's create let's say, well first, and then we will see how to redistribute it. So I think that there is question because we are entering into a revolution that should take a young, creative destruction moment. But it doesn't mean that because you the jobs are destroyed somewhere there will be some others will be created in the same place. And to a certain extent I am. I have the feeling that Europe, at this moment a little bit like China in the middle of the 19th century, with the second industrial revolution missing. Let's say the wind of innovation and therefore may be living is true. So I think it's important to do it until they say to think about it at the creek. It's a country or uh huh regional level. But I agree with you. It will have impact. But okay, it's a president dilemma. So I agree with Michael that it's a lot of called education. It's a lot about as well the role of companies versus governments, because with these new technologies, the time when you have government, that's a developing education. You were regulating people. They had a stamp and then doing the center for 40 years disorder, which means that let's say companies will need to become their own universities. But how does it work now with between governments, governments, companies and so on? So so I think there is a question about the workforce, but this embrace, uh, this technology and this evolution, trying to create value and then to make sure that we redistribute to the people. And we try to limit inequality that I would try to associate both. There's no doubt that if you just take the 200 years when we had all of these things, it displaced certain types of jobs. But it created new types of jobs and certainly everything that's moving online. As you mentioned Michael, a great logistics sector logistics sector which has become still become very robust. And demonstrator. That was one of the things that I think China understood earlier. Whether it understood it happened by accident, I'm not sure, but Digital based commerce economist has existed a long time in China. But we demonstrated that even in Kenya some 10 years ago, 11 or 12 years ago, even it's not that it's a new concept that's been here, but it's adopted in different ways, and perhaps the best way I can describe it is does the government and the government represents the people of a culture, Um, see the value in these things. So in Kenya it was quite clear it had no significant banking and it could see that this was an opportunity to enable the population and and economy to grow and industries to develop by using by adopting these digital based technologies. And I guess China generally understood that better than everybody else compared with more traditional businesses and business opportunities. But I tend to agree with where we've come from, which is that the world now knows that this is normal. Okay, it's absolutely normal to do that.