How can CEOs and their top teams even begin to make sense of the swirl of technological breakthroughs affecting business today? How do they gauge the impact of artificial intelligence on their companies’ future compared with, say, the Internet of Things or virtual reality?
Given the sheer pace and acceleration of technological advances in recent years, business leaders can be forgiven for feeling dazed and perhaps a little frustrated. When we talked to CEOs as part of our annual Global CEO Survey, 61% of them told us they were concerned about the speed of technological change in their industries. Sure, more and more C-suite executives are genuinely tech-savvy - increasingly effective champions for their companies’ IT vision - and more and more of them know that digital disruption can be friend as well as enemy. But it’s fair to say that most struggle to find the time and energy necessary to keep up with the technologies driving transformation across every industry and in every part of the world.
History is littered with companies that have waited out the Next New Thing in the belief that it’s a technology trend that won’t amount to much, or that won’t affect their industries for decades. Yet disruption happens. It’s safe to say that the history of humankind is a history of disruption - a stream of innovations that have tipped the balance in favour of the innovators. In that sense, technological breakthroughs are the original megatrend. What’s unique in the 21st century, though, is the ubiquity of technology, together with its accessibility, reach, depth, and impact.
Business leaders worldwide acknowledge these changes, and have a clear sense of their significance. CEOs don’t single out any particular catalyst that leads them to that conclusion. But we maintain that technological advancements are appearing, rapidly and simultaneously, in fields as disparate as healthcare and industrial manufacturing, because of the following concurrent factors:
Collectively, those driving factors are forcing big questions to the surface - questions that C-suite executives themselves are asking. To help provide answers, we tracked more than 150 discrete technologies, and have developed a methodology to identify the most pertinent of those technologies; the aperture being granular enough to scale from a business unit to a company, an industry, or even the global enterprise landscape as a whole. The multifactor criteria screens for business impact and commercial viability of these technological breakthroughs over the next five to seven years (and as little as three to five years in developed economies).
The specific technologies most impactful to a company can - and likely will - vary, of course, but when we analysed for technologies with the most cross-industry and global impact over the coming years, eight technologies emerged. They are at varying degrees of maturity; some have been around for years but are finally hitting their stride, while others are maturing rapidly. None will be surprising to CEOs; they are regular subjects of often breathless coverage in popular newspaper coverage.
1. Artificial intelligence (AI): Software algorithms that are capable of performing tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and language translation. AI is an “umbrella” concept that is made up of numerous subfields such as machine learning, which focuses on the development of programs that can teach themselves to learn, understand, reason, plan, and act (i.e., become more “intelligent”) when exposed to new data in the right quantities.
2. Augmented reality (AR): Addition of information or visuals to the physical world, via a graphics and/or audio overlay, to improve the user experience for a task or a product. This “augmentation” of the real world is achieved via supplemental devices that render and display said information. AR is distinct from Virtual Reality (VR); the latter being designed and used to re-create reality within a confined experience.
3. Blockchain: Distributed electronic ledger that uses software algorithms to record and confirm transactions with reliability and anonymity. The record of events is shared between many parties and information once entered cannot be altered, as the downstream chain reinforces upstream transactions.
4. Drones: Air or water-based devices and vehicles, for example Unmanned Aerial Vehicles (UAV), that fly or move without an on-board human pilot. Drones can operate autonomously (via on-board computers) on a predefined flight plan or be controlled remotely. (Note: This category is distinct from autonomous land-based vehicles.)
5. Internet of Things (IoT): Network of objects — devices, vehicles, etc. — embedded with sensors, software, network connectivity, and compute capability, that can collect and exchange data over the Internet. IoT enables devices to be connected and remotely monitored or controlled. The term IoT has come to represent any device that is now “connected” and accessible via a network connection. The Industrial IoT (IIoT) is a subset of IoT and refers to its use in manufacturing and industrial sectors.
6. Robots: Electro-mechanical machines or virtual agents that automate, augment or assist human activities, autonomously or according to set instructions — often a computer program. (Note: Drones are also robots, but we list them as a separate technology.)
7. Virtual reality (VR): Computer-generated simulation of a three-dimensional image or a complete environment, within a defined and contained space (unlike AR), that viewers can interact with in realistic ways. VR is intended to be an immersive experience and typically requires equipment, most commonly a helmet/headset.
8. 3D printing: Additive manufacturing techniques used to create three-dimensional objects based on digital models by layering or “printing” successive layers of materials. 3D printing relies on innovative “inks” including plastic, metal, and more recently, glass and wood.
We believe that these technologies will shake things up across all five aspects of your business model - some in very beneficial ways, and some in quite challenging ways, as seen in the following snapshots.
So what should CEOs and their leadership teams do with such brief glimpses of the business impact of these influential technologies? For starters, it is best not to treat the technologies as a kind of checklist to delegate to the CIO or the CTO. Instead, CEOs must take very seriously their own obligations to turn these technologies to strategic advantage - and to protect their organisations against others using the technologies for advantage. If that sounds something like an arms race, that’s because it is: technology must be viewed as a competitive weapon, one that merits regular discussion and decision-making in the C-suite.
Tracking, evaluating, and developing the action plan for emerging technologies should be an integral component of the overall corporate strategy. To do so, there are three questions you must find effective answers to:
Answers to these fundamental questions will give you the meta-actions - moves that enable the executive team as a whole to properly and effectively harness the best new technologies.
No argument: it is not easy to stay ahead of emerging technologies. But you really don’t have a choice; your organisation must adapt. By winnowing down the welter of possible technologies to a starting list of the Essential Eight, we hope we have helped provide some focus and clarity. More than that, we hope that we can begin to re-energise the C-suite’s discussion of how best to leverage the right technologies in the right ways at the right time - for the right business reasons.
So, develop an innovation strategy and start making the exploration and quantification of emerging technologies (and planning for them) a core part of your corporate strategy.