Measures to contain the Covid-19 pandemic have compelled many countries in the world both developed and developing to access digital technologies, as much as one could, at an accelerated pace, to overcome the massive disruptions caused by these measures in the worldwide value and supply chains.
The OECD's Digital Economy Outlook 2020 launched on November 27 has listed the following five pertinent key messages in this framework:
*The Covid-19 pandemic has amplified all aspects of the digital transformation, and digital tools have enabled many economies to avoid a complete standstill during shutdowns.
*Governments are increasingly putting the digital transformation front and centre of national policy agendas.
*Connectivity continues to improve in OECD countries, but important digital divides remain - across and within countries, industries and demographics.
*Covid-19 has raised the bar for what is considered "acceptable" connectivity, and the crisis may open new divides - now is the time to step up and do more.
*Big data create new opportunities for businesses and consumers, and new challenges for security and privacy.
Thirty-four OECD countries have a national digital strategy to enhance policy co-ordination at the highest levels of government, most commonly the prime minister or chancellery, or a dedicated ministry or body. This strategic approach is especially apparent in the context of emerging technologies: by mid-2020, 24 OECD countries had a national AI strategy, with strong emphases on adoption and skills.
The use of data - whether sold to third parties or used by firms to advertise or tailor their own products - has become integral to business models. Data-intensive technologies such as AI and the Internet of Things (IoT) offer greater consumer choice and personalization. Already in 2019, over 80% of OECD countries reported AI and big data analytics as the biggest challenges to privacy and personal data protection, followed closely by the IoT and biometrics.
Since the Industrial Revolution, the world has developed complex supply chains, from designers to manufacturers, from distributors to importers, wholesalers and retailers, it's what allowed billions of products to be made, shipped, bought and enjoyed in all corners of the world.
In recent times the power of the Internet, especially the mobile phone, has unleashed a movement that's rapidly destroying these layers and moving power to new places.
As Tom Goodwin said in his article (The Battle For The Customer Interface-Newsletter from World Economic Forum) the world's largest taxi company, owns no vehicles. Facebook, the world's most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world's largest accommodation provider, owns no real estate.
"Something interesting is happening".
The new breed of companies is the fastest-growing in history. Uber, Instacart, Alibaba, Airbnb, Seamless, Twitter, WhatsApp, Facebook, Google: These companies are indescribably thin layers that sit on top of vast supply systems ( where the costs are) and interface with a huge number of people (where the money is). There is no better business to be in.
The interface layer is where all the value and profit is. The Internet age means building things is nothing other than code. We're going to see a non-stop battle to leap ahead of each other. And also get more wide, Twitter may have started out as a microblogging platform, but it's now aiming to be a way to exploit its audience to distribute TV content. Facebook's attempts with news content now make it a news channel and thanks to Autoplay video, soon a way to watch TV content.
And to top it all, according to a US Department of Labor report, 65 percent of today's school children will eventually be employed in jobs that have yet to be invented. This not only has significant implications on how these children have to be educated and trained. It also implies that the current workforce may have to question the longevity of their existing employment and how they can ensure they are earning a living in the mid-term, given the changing nature of the labor market and the jobs available.
There is widespread recognition that the role of digital technology has shifted from being a driver of marginal efficiency to being an enabler of fundamental innovation and disruption.
Take the healthcare industry (What are the digital industries of tomorrow? By Bruce Weinelt, Head of Partner Development, North America and Europe, World Economic Forum-Sept 10, 2015), for example, which historically has been one of the few sectors that is not particularly consumer-centric. When sick, one often has to settle for appointments that are neither imminent nor convenient and deal with long waiting times at the doctor's office while surrounded by other ill patients. The introduction of digital healthcare services, which place the patient firmly at the heart of their activities, will be the biggest single factor in transforming healthcare over the next decade. In fact, few industries have the potential to be changed so profoundly by digital technology.
The two big shifts in this space include point of care (for instance, moving care closer to home) and disruptions to the level of care (such as the move from high-cost, specialized labor to self-care). The home will become an important location of care and virtual care will broaden access to healthcare in rural areas, especially in emerging economies. This will result in healthcare systems that will focus less on building beds and more on developing services to provide improved access to care at a lower cost.
With around $7.5 trillion spent globally each year on health, the rewards are likely to be substantial for the healthcare industry as it successfully creates transformational digital services on a wider scale.
Health start-ups like Castlight, Healthsparq and Stridehealth, for example, have been able to develop cloud and analytics-based solutions to drive greater price realization, enable greater patient health insights and help patients take better control of their healthcare. HealthTap, the Uber or Airbnb of the healthcare industry, uses an interactive app to deliver real-time remote care by providing virtual care solutions on a patient's smartphone. Via its virtual platform, HealthTap connects over 64,000 doctors with patients globally to offer on-demand patient treatment services through its app, 24 hours a day, seven days a week.
In emerging markets, access to affordable transportation is one of the most important factors in lifting citizens out of poverty. Integrated multi-modal transportation networks will provide lower travel costs while greatly expanding transportation options. This has the potential to make inclusive access to affordable transportation a reality, while also positively impacting the environment.
Digitalization will also require new skills and capabilities in the workforce. As such, organizations will need to understand how to identify, capture and retain these skills.
Take 58 Daojia (Why the platform economy can unlock prosperity for billions of workers, by Zishu Chen, Content Curator, New Champions, World Economic Forum Beijing, 16 Nov 2020, The WEF COVID Action Platform), a digital platform that connects people for housekeeping and babysitting services, which is part of the World Economic Forum's New Champions Community. Its digital solution is twofold: on the supply side, a mobile app helps workers complete the human resource process online, from recruitment to contract-signing, training, performance evaluation and pay roll; on the product side, big-data analysis helps improve accuracy in terms of the time and location of the services provided. Insurance provided instantly through the platform helps protect both workers' health and users' property, while facial recognition technology ensures the worker selected online is the same as the one delivering the service.
The IT industry is undergoing a technology and data revolution. Technology is accelerating the pace of change, creating new pathways for managing the customer experience and delivering services-and generating new business models.
To anticipate these disruptions and stay ahead of the curve, companies are investing in data analytics, digital, and security technologies. The cloud has become a critical part of this transformation. Companies get a big bang for their buck in the cloud. For a typical retailer, the cloud drives dramatically lower spending on a like-for-like basis.
Healthcare providers are grappling with a continuously changing regulatory environment and a growing need to make electronic health records available throughout the hospital and across practitioner devices while ensuring patient confidentiality.
According to Teresa Carlson, Vice-President, Worldwide Public Sector, Amazon Web Services (Demand for cloud-skilled talent is increasing in the digital economy, published in WEF newsletter dated 20 Jan. 2020) the cloud (both public and private) can make us work smarter, faster, and cheaper, but many companies aren't getting all they should from their investment-because the cloud has an Achilles' heel. It can only perform as well as its weakest link. For most businesses, that's the network, and a poorly optimized, static network can actually destroy value.
Copyright Business Recorder, 2020