Top Industry Insights

Look to adjacent industries to see disruption on the horizon

To anticipate industry disruption, look at adjacent industry shifts and trends. For example, digital transformation and the advent of the autonomous car could have severe impacts to the revenue of oil and gas companies, not only through reductions in demand of petrol but also, and more importantly, through elimination of trips to retail stations where margins are made in non-petroleum sales. For consumer companies, it may be widely recognized that self-driving trucks and drones will reduce operating costs and improve efficiency, but there is also great concern that these efficiencies will eliminate a significant percentage of the workforce.  

Focus on Fourth Industrial Revolution jobs and skills

The Information and Communications Technology (ICT), Media Entertainment and Information (MEI), and Electronics communities called for building alliances for skilling youth and reskilling mid-career professionals, and developing agility in skilling/training for life-long learning. While Professional Services firms have analysed job creation opportunities in the Fourth Industrial Revolution, the community recommended aggregating these analyses and start creating a collective positive narrative supported by the statistics available. The Travel and Tourism industry noted that while automation of some tasks will be inevitable, companies should focus on moving some of their employees to roles which have more value-added and have a stronger customer and problem-solving focus. The Aerospace community identified a need to not only motivate more young people to go into STEM education so that there will be enough engineers in the future, but also look at new methods of helping people shift jobs from one industry to another and continue to adapt their skills to the changing technologies which they will need to master.

Data is the “new oil"

Data has the potential to drastically improve consumer experience, as organizations have more data at their disposal than ever before. Yet, deriving quality insights that convert knowledge into action is increasingly difficult. Many organizations approach the data itself as a winner-takes-all commodity, rather than recognizing that it is the analytics that make the data valuable, thus creating artificial barriers that further limit its value. What is the right framework, or data protocol, to enable data use to positively impact behaviour and improve human lives? One idea is to create a data cooperative for companies, such as asking ride-sharing companies to donate their data to the city in which they operate so as to contribute to more effective public transportation infrastructure. Such data philanthropy could be tax-deductible, recognizing the market value of data.

Cybersecurity is a C-suite issue

Cybersecurity has quickly moved from the realm of the chief technology officer to a chief executive officer and board level issue. This has coincided with clients’ growing concerns about the cyber resilience of their financial institutions and intermediaries, as well as the Internet of Things (IoT) consumer ecosystem. While this more senior attention is commensurate to the seriousness of the threat, new risks may emerge from boards that lack the appropriate competencies to productively address the issue. Agile governance is required both on a private enterprise level as it is on the public macro environment.

Embrace the value of public-private partnerships

The public sector has increasingly been seen as an enabler of a healthy business ecosystem and several examples of true public-private partnerships were cited to inspire more opportunities for growth. The value of public sector involvement goes beyond public funding and regulation. An agile governance approach to designing incentives create a balanced ecosystem, such as in the case of the Forum’s Battery Alliance initiative that provides a framework in the pre-competitive space for the battery industry where multistakeholder thinking and co-designing of solutions across the value chain encourages disposing of waste at the end of a product’s lifecycle. Another example comes from the digital communications community involving how IoT industry players can help support the attainment of the Sustainable Development Goals (SDG). This is a vital opportunity to show where governments, especially local governments and municipalities, can engage with the private sector to reap significant benefits to public services and overall economic development.

Navigate political and regulatory uncertainty through cooperation

The private sector needs to collaborate to re-establish confidence in the viability of the global business community. Brexit and the US cancelation of the Trans-Pacific Partnership (TPP) fuel diminishing confidence in the ability of these economies to keep their past commitments and serve the global market. These geostrategic shifts in the political and regulatory environments have also had significant implications for financial institutions, driving fragmentation and regionalization of the regulatory environment with significant implications for firms with global operations. In addition, policy-maker positions on climate change and its implications carry significant weight in decision-making processes at the corporate level, creating a new challenge to close the gap between C-suite and board priorities on environmental sustainability issues.

Company Culture is Key

In the digital age, companies no longer have the choice to be closed and controlled ecosystems, but must embrace an open network and recognize that their company culture lives and breathes into every aspect of their brand, supply chains and strategic decisions to enter new market segments. It is not enough to recognize technologies or business models that will disrupt a company; shifting company culture to embrace disruption is critical to the business strategy. Authenticity and transparency are also critical components of company culture to maintain a strong brand. In a post-fact world, companies have recognized that “fake news” affects all brands in all sectors, not just media companies, and that a culture of transparency and responsive leadership is the only way to build resiliency into one’s brand to combat misinformation.   

A human-centered future

The fundamental issues of the Fourth Industrial Revolution transformation are finally in the corporate boardrooms. Strategy officers validated that inclusivity is the critical topic now, requiring the same level of commitment and momentum that the environmental sustainability movement has benefited from in the recent past. The conversation should also be positive and constructive, with as much focus on developing the new areas of work created by the Fourth Industrial Revolution, as there is recognition that the nature of work will shift from today’s employment landscape.   

Learn more about the Forum’s Center for the Fourth Industrial Revolution

The Industry Strategy Meeting was hosted by the Forum’s Center for the Fourth Industrial Revolution located in San Francisco’s iconic Presidio park overlooking the Golden Gate Bridge.  The Center invites and catalyses global cooperation dedicated to developing policy principles and frameworks that accelerate the application of science and technology in the global public interest.  To learn more, please click here.