Tackling global uncertainty with agility and technology
The technological and economic transformations of the past decade have been some of the most dramatic in history—and they help explain much of the uncertainty business leaders are now confronting.
To succeed in the decade ahead, leaders must be prepared to act and adapt in new, yet sometimes daunting, ways. Technology will both drive this change and help address it. The biggest opportunities lie in AI and data to put a seamless focus on a business’s big picture and its details.
Yet the greatest investments will be in people. It will take a new kind of workforce to truly harness these technologies, a new kind of leadership to capitalize on it and a renewed focus on global issues to satisfy key constituencies.
As we kick off a new decade, here are six trends driving business in 2020 and beyond. These will have an impact on how businesses are run day-to-day, how things need to adapt ahead of these changes and what smart leaders need to do to prepare.
Uncertainty demands agility
The global economy is in a period of historic transformation, with moments of uncertainty likely to persist for some time. Industrial demand is evolving as consumers expect full experiences, not just physical products. Global trade tensions heighten the differences between capitalistic and state-sponsored enterprises. Shifts in workforce demographics reveal skill gaps and fuel the race for talent.
Business leaders need to understand that the economic transformation is impacting their organizations as well as workers and consumers. They should respond by becoming more agile and adaptable to the disruption, and they should continue to identify sources of competitive advantage to deliver to customers and clients the value that they’re looking for.
Tech’s impact goes beyond its application
It’s easy to be concerned about this transition, but what’s happening today fits a recognizable pattern of technology’s historic impacts. Looking back to the First Industrial Revolution starting in the 18th Century, machine-made production boosted productivity in textile manufacturing, agricultural harvesting and food processing. From a socio-economic perspective, technology led to population redistribution from rural areas to factory towns, and the rise of the working class.
Today we’re on the cusp of the Fourth Industrial Revolution. Information technology has bolstered productivity across business processes and brought trade to the fingertips of every consumer. New technologies like AI, IoT, 5G and Blockchain will further accelerate a data explosion. Business leaders need to invest in human capital and intellectual property alongside technology to facilitate the new business processes, new products, new services, and new business models success will require.
AI changes how work gets done
AI is well suited to perform certain tasks that draw on experiential learning, like scheduling equipment maintenance and defect detection. Human workers bring softer skills to the equation, like using intuition, applying creativity and creating innovative designs. IBM’s research at the MIT-IBM Watson AI Lab shows that AI adoption is gaining momentum by performing a small portion of AI-suitable tasks across many occupations.
This is creating a new and growing set of requirements for workers – not less work but different work. Occupations and tasks are being reorganized. This means organizations must reskill workers to work with AI and look for additional opportunities to improve productivity. We are still in the very early days, but the pace is quickening.
Data is a raw material—it must be refined
We often say data is the newest natural resource. Just as oil is only useful in its applications—for heat, energy, plastic products, etc.—the same goes for data. It’s all in how you use it. The challenge for business leaders is to organize their data and all its disparate sources, whether it’s IoT, financial, customer or HR data. Companies must display the data in a timely, clear manner, and not only understand performance but also how to improve performance.
AI is one solution. It provides the benefit of anticipating future needs, whether for consumers, workers or decision makers. And AI is different because of its ability to draw on vast pools of unstructured data, solve nonlinear optimization problems, and use fast, inexpensive computing power.
Sustainability beyond the consumer
In a number of markets, we have consumers expressing a desire for more sustainable practices and products—particularly younger consumers. Workers have begun demanding it, too. Increasingly, we’re seeing investors becoming concerned with sustainability. Some want to minimize corporate liability, but they also want more social responsibility.
Traditional tools remain insufficient to tackling such globe-spanning issues, which are bigger than any one organization. That’s where technology like blockchain and AI can break down barriers to tackle serious issues, like product transparency or carbon credits. Solutions are out there, and they’re being driven by innovations and conversations.
Agile leaders make resilient companies and communities
The Business Roundtable made its recent announcement that “companies should benefit all stakeholders.” It’s becoming the norm. The kind of long-term value that shareholders require is going to take a commitment to a broader set of constituents, including customers, employees, suppliers and especially the communities we live and work in.
It’s going to require a reallocation of capital to talent, research, sustainability and social responsibility. Agile leaders are the ones who help companies and communities navigate the transformation ahead. It’s not just in business but the nature of work, education, public policy—everything. Companies are driving this transformation.
Dr. Martin Fleming, IBM’s chief economist, joined the company in 1999 and has held his current position since 2009.