Transformation in a Rapidly Changing World: States, Companies, People
KEY CONCLUSIONS
Access to technologies is a key factor for competitiveness
“Countries compete for technological leadership. Technologies have become the main geopolitical weapon. States do not threat each other with nuclear bombs anymore, they say: ‘We will disconnect you from technologies.’ Today this is like to take off a drop bottle from a sick person; we all depend on these technologies, and that is why they gain so much importance,” Herman Gref, Chief Executive Officer, Chairman of the Executive Board, Sberbank.
“According to a survey among global companies, over 70% of respondents believe that artificial intelligence as a particular technology will have even more large-scale consequences than Internet,” Bob Moritz, Global Chairman, PwC.
“IT is a technology that makes it possible for business to work; it is a core technology,” Guo Ping, Deputy Chairman of the Board, Rotating Chief Executive Officer, Huawei.
New technological setup enhances the role of human capital
“We are in need of new young managers. The state should act in the way that shows that they are really needed. <…> Leadership cannot be learnt from textbooks. You can only be infected with leadership; it is a kind of fervor. It is transmitted from one person to another, there is no other way. <…> Many people start thinking that now everything is becoming automated, artificial intelligence is being introduced, and soon people will not be needed. I strongly disagree; in my opinion, it is nonsense. People’s decisions, leadership are valued; people will always be the most important thing. <…> Almost each manager says: ‘Give me a dozen, at least, a dozen, or even two dozen smart leaders, and I will find solution to any unsolvable problem’,” Sergey Kirienko, First Deputy Chief of Staff of the Presidential Executive Office of the Russian Federation.
Digitalization significantly enhanced efficiency of business and public administration
“Urban intellectual transport system that is based on artificial intelligence, big data, information flows. A really expensive thing: billions have been spent on its development and functioning, but it provides 15% improvement of city traffic. Imagine that if the same task would be solved by expanding physical infrastructure, for example, by constructing roads and junctions, it would require around 300 billion roubles and digging up the whole city. Intellectual transport system implies largest investments and unprecedented efficiency,” Sergei Sobyanin, Mayor of Moscow.
PROBLEMS
Fast technological development creates instability risks
“In total, there are approximately 3.4 billion jobs for 7.8 billion people. According to the McKinsey Global Institute, half of them, or around 1.6 billion, might be automated or rightsized by 2030,” Herman Gref, Chief Executive Officer, Chairman of the Executive Board, Sberbank.
“Technologies created a huge uncertainty. This uncertainty bewilders people; they ask themselves: how the company future will look like? Will this technology ruin my business before I am able to evolve? Will my competitors outpace me; will I fall into oblivion as a company? For countries: how can I attract investments to become this country or this city of the future? What if I will not survive this competition in the future? And the same at the level of individual person. My future employment is uncertain. My job might be gone, and I might be replaced with some technological solution,” Bob Moritz, Global Chairman, PwC.
Inequal access to technologies increases the gap between leaders and those who hang behind
“New economy has the undisputed champion – United States, but the second leader who is catching up is China. The two countries account for around 95% of world’s digital capitalization. The situation is the same on non-public companies market,” Herman Gref, Chief Executive Officer, Chairman of the Executive Board, Sberbank.
“We live in an open world, and a degrading city, first of all, loses people, investment, intelligence, its future. Catching up becomes extremely difficult. Degradation of cities is followed by degradation of states,” Sergei Sobyanin, Mayor of Moscow.
SOLUTIONS
Use of public possibilities for development of digital technologies
“Public online services have become a predominant trend in public administration. Over the last two years, the share of public online services worldwide grew from 18 to 47 per cent. We intentionally chose this period, because before the dynamics was very slow. It took us ten years to reach 18 per cent, and then over the course of two years we more than doubled the amount of online services,” Herman Gref, Chief Executive Officer, Chairman of the Executive Board, Sberbank.
“If we have a 100% electronic record, we have exactly 150,000 spots that can be given for these mothers. Today, not 280,000, but rather 450,000 children go to kindergartens. Among them only 50,000 have been physically built in addition,” Sergei Sobyanin, Mayor of Moscow.
Expansion of investments in R&D
“The next generation will live in intellectual society that will have three important features: everything will be connected to the Internet; everything will have sensors, and everything will be a smart device. <…> To achieve that, we need to massively invest in R&D, as well as design and experimental work. For example, last year Huawei’s investment reached 15 billion dollars. We believe that each year we need to invest 10% of our revenue into R&D,” Guo Ping, Deputy Chairman of the Board, Rotating Chief Executive Officer, Huawei.
“Many people are involved in data science and academic medical research. We have largest number of medical patents. We are on the second place with AI patents. We invest a great share of proceedings into R&D,” Frans van Houten, Chief Executive Officer, Chairman of the Board of Management and the Executive Committee, Royal Philips.
Development of business culture
“It takes time for willingness for team work to emerge; that is the culture. Entrepreneurship and business are always based on competition, it is inevitable, and everything begins with an attempt to do things by yourself. But at the next stage there comes an understanding that together we can do more, work faster and more efficiently. This is time, culture and leadership, because leadership is also about setting an example of cooperation,” Sergey Kirienko, First Deputy Chief of Staff of the Presidential Executive Office of the Russian Federation.
“We need to nourish the culture, the culture of innovation, the culture of entrepreneurship, the culture where people would defend their point of view,” Frans van Houten, Chief Executive Officer, Chairman of the Board of Management and the Executive Committee, Royal Philips.
“Corporation is responsible for creating new jobs. A global company must have a balanced team all over the world,” Frans van Houten, Chief Executive Officer, Chairman of the Board of Management and the Executive Committee, Royal Philips.
Support for domestic producer
“We need to support domestic producers, but not to cross the line. To avoid the situation, when people buy from them only because they are domestic. As soon as we lose competition, the quality will drop, and we will be defeated,” Sergey Kirienko, First Deputy Chief of Staff of the Presidential Executive Office of the Russian Federation.
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