May 24, 2019

Artificial Intelligence Will Transform Companies into the Businesses of Tomorrow

Sponsored by Globality, The Economist Intelligence Unit published a whitepaper that asserts: "Truly disruptive new technologies have historically reshaped organizations, and on occasion the mechanisms of global trade, substantially. Experts expect this will undoubtedly be the case with artificial intelligence (AI). But the extent and nature of its impact will ultimately depend on the willingness of firms to embrace its potential, to co-operate in its adoption and, of course, the role of regulators in overseeing its use."

The AI-enabled organization of the future explores the likely impact of AI on future organizations in several areas:
  • The central foundation of successful AI adoption—namely, data— in boosting insight and prediction, and the ramifications for how companies work with each other;
  • Potential of AI to level the playing field in terms of company size;
  • Impact of AI on workforce dynamics; and
  • Regulatory challenges and potential solutions posed by AI.

Data will truly be a resource

"AI will fundamentally affect how companies work with each other, notably in procuring services and goods, refocusing their value chains and how they share knowledge," the report suggests. "AI will empower procurement to speed up the sourcing of professional services for legal, marketing, IT, consulting, HR and other key functions of the company, tapping into resources and providers that were outside of their network in the past."

The report further says that "in order to benefit from better insight and prediction, the kind and quality of data available, and the creativity with which it is used, will be sources of competitive advantage. Successful companies will therefore need to create and execute strategies that harness their own internal data, both for the company's use and to barter with other sources where needed."

Company size and AI

I have observed over the past few years how AI enables small businesses to better compete with their larger competitors. The report importantly notes: "To date, bigger companies have proportionally shown more commitment to AI in terms of investment at scale and creation of formal AI strategies. Looking ahead, however, smaller firms are taking the plunge. Already, a survey by Emergent Research found two-thirds of US small businesses are using some form of automation. Meanwhile, 54% see AI as an opportunity; only 5% perceive it as a threat."

Moreover, "The real question is not who will use AI—eventually everyone will—but whether in the long term it will drive corporate integration or be a technological leveller." And with respect to the cost of AI infrastructure, "The rapid spread of cloud-based AI off-the-shelf offerings and development services are making this aspect of the technology affordable.

"Nonetheless, the key for small companies will be to design operations to obtain sufficient data, both internal and external, to use in ways that provide competitive advantage."

Successful leaders will use data creatively

Labor economists say the global economy has the potential to produce greater economic output and, therefore, greater wealth, if companies were more productive. In its final chapter, the report explains: "Clearly, if firms are to truly exploit AI, then they will need to implement it effectively across their workforces. In this regard, arguably the lowest hanging fruit in terms of boosting company productivity is the suite of AI tools being rolled out to take on the more repetitive and administrative tasks of employees—a potentially enormous time saver (according to an Accenture survey published in the Harvard Business Review, managers spend over half their day on administrative chores)."

The report adds:
Empowered by the loosening of the administrative burden, the workplace can then transition to becoming a place of constant learning. Curiosity and experimentation will be key to workplace success—employees will need to constantly consider how to use AI tools creatively. This will inevitably require teams comprising varying areas of expertise and collaboration. ... Notably, managers will need to focus on connecting their people with those in other parts of the organization to form teams that improve results in the manager's areas of responsibility as well as elsewhere. In the wake of this improved transparency—the democratization of knowledge, as [Ching-Fong Ong, senior partner and managing director of Boston Consulting Group (BCG) Malaysia] refers to it—the reliance on managers' 'gut instinct' will wane, with potentially positive ramifications for overall workforce cohesiveness.
Whether it is in the companies I have co-founded in recent years or clients my colleagues and I advise, I appreciate the role AI serves in helping managers make informed decisions. Therefore, I welcome the report's conclusion that:
Artificial intelligence will transform companies into the businesses of tomorrow. It seems clear that AI, if properly used, could prove a powerful tool to both boost business performance and strengthen partnerships. Admittedly, corporates are in the early stages of this transition, and the final contours of the future company remain unclear, but four areas are set to be central in AI's organizational reshaping:
  • Data strategy will be a core part of corporate strategy and companies will organize to maximize their ability to harness information.
  • AI may not end up favoring one size of firm, but it will reshape small companies in particular as they seek the best way to benefit from the technology. Small firms will rely increasingly on outsourcing and partnerships to achieve non-core activities.
  • The leaders of tomorrow will need to win the hearts and minds of a workforce that has access to almost as much data and analysis as senior management.
  • A host of new legal and regulatory questions will make the ethics of AI deployment a key boardroom issue. Companies have a limited time in which to address these challenges and the other AI-induced changes that are yet to fully emerge.
How is AI transforming your business?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

May 19, 2019

GSMA Report Says Mobile Technology Will Enable Access to Life-Enhancing Services in the Pacific Islands

post that I published in this forum in 2008 focuses on a project my colleagues and I developed in utilizing information and communications technology (ICT) to implement social and economic development initiatives in the Federated States of Micronesia (FSM). One significant outcome of our proposal was to create a digital strategy to be incorporated into the FSM's national development strategy. Eleven years later, I read with great interest a report, The Mobile Economy Pacific Islands 2019, that says "[m]obile technology can play a pivotal role in the digital transformation of the Pacific Islands, enabling access to life-enhancing services in areas such as health and education, while proving a catalyst for innovation and economic growth, with the promise of new jobs and increased tax revenues."

Authored by GSMA Intelligence, the research arm of the UK-based GSMA, below are the report's findings:
  • Mobile helping to boost financial inclusion: The Pacific Financial Inclusion Programme (PFIP) was launched in 2008 and has funded 44 projects with financial service providers helping more than 2 million Pacific Islanders access formal financial services;
  • The ongoing shift to mobile broadband and digital transformation: at the end of 2018 mobile internet penetration in the region was the lowest of any region in the world at 18 per cent. However, 4G connections in the Pacific Islands are set to account for more than half of total connections by 2023, doubling the figure from the end of 2018 and increasing access to services;
  • Infrastructure challenges: Many countries in the Pacific Islands region face issues around insufficient infrastructure. Several countries are yet to complete the digital switchover process, including Papua New Guinea, Tonga and Solomon Islands; and
  • Unlocking the full potential of mobile: The upcoming World Radiocommunication Conference will be one of the best opportunities for governments and industry to identify a significant amount of harmonized millimeter wave spectrum, which will result in massive economies of scale for 5G in the future.
Infographic: GSMA
The report encouragingly explains: "Mobile phones are bringing internet access to previously unconnected populations across the world, particularly in developing regions such as the Pacific Islands where there is a lack of alternative access technologies."

However, "Countries across the Pacific Islands still face significant challenges around funding infrastructure to provide mobile and internet access to their populations, which in turn reduces the ability of governments and policy-makers to address social and economic challenges. Providing mobile coverage is a particular challenge in a region often described as 'sea locked,' with large segments of the population living in remote and often inaccessible areas."

Further on the topic of the challenges of mobile connectivity in the Pacific Islands, the report notes:
The GSMA Mobile Connectivity Index measures digital inclusion in 163 countries across the world, including six countries in the Pacific Islands. The index is built around four key enablers of mobile internet connectivity, critical to creating the right conditions of supply and demand for mobile internet connectivity to flourish:
  • infrastructure: the availability of high-performance mobile internet network coverage
  • affordability: the availability of mobile services and devices at price points that reflect the level of income across a national population
  • consumer readiness: citizens with the awareness and skills needed to value and use the internet and a cultural environment that promotes gender equality
  • content: the availability of online content and services that are accessible and relevant to the local population.
There are many aspects of our 2008 proposal remain relevant in 2019 of using mobile technology as a pivotal role in the digital transformation of the FSM and throughout the Pacific Islands. Specifically, with the expansion of mobile technology, Pacific Islanders will be able to access digital health (mHealth), education, and financial technology (fintech) services. This presents a great opportunity for technology developers and investors to collaborate and support local small businesses.

In addition, with an early roll out of 5G services in 2020 and a projected 19,000 5G connections in 2025 (see left chart), frontier technologies such as artificial intelligence, blockchain, IoT and advanced data analytics will become available. "The Pacific Islands region might not be one of the first to roll out 5G services but it can benefit from a mature ecosystem and global economies of scale to see 5G develop in the same way as LTE has done in the region. New submarine cables with improved capacity and other technical advancements are setting the stage for advanced broadband services, including 5G."

What online content and services are you developing that are accessible and relevant to Pacific Islanders?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

May 17, 2019

The Mobile Industry Plays an Increasingly Important Role in Accelerating Social Progress in West Africa

West Africa's mobile ecosystem generated more than $50 billion in economic value last year – equivalent to 8.7 percent of the region's GDP, according to a GSMA study. Authored by GSMA Intelligence, the research arm of the GSMA, The Mobile Economy, West Africa 2019 further finds that rising mobile phone ownership and the ongoing migration to mobile broadband networks and services across the region will see the mobile ecosystem's economic contribution continue to increase over the coming years, forecast to reach almost $70 billion (9.5 percent of GDP) by 2023.

Available in both English and Fran├žais, the report reveals that:
  • The number of unique mobile subscribers across West Africa reached 185 million at the end of 2018, equivalent to 48 percent of the region's population. This number is forecast to rise to 248 million by 2025, 54 percent of the population;
  • Future subscriber growth will largely be driven by young consumers owning a mobile phone for the first time; more than 40 percent of the region's population are under 18 years old, according to the report;
  • 3G will overtake 2G to become the leading mobile technology in West Africa this year, supporting about half of the region's mobile connections. 4G momentum is also building: ten new 4G networks have recently launched in West Africa, including the first ever 4G networks in Burkina Faso, Sierra Leone and Togo;
  • Local mobile operators are increasing investment in their networks and are expected to spend $8.5 billion (capex) on network infrastructure and services over the next two years (2019/2020);
  • West Africa's mobile ecosystem directly employs around 200,000 people, supports 800,000 jobs in the informal employment sector, and a further 600,000 jobs across the wider economy; and
  • Mobile is the primary platform for accessing the internet in West Africa; at the end of 2018, there were around 100 million mobile internet users in the region, up almost 20 million year-on-year.
On the topic of mobile contribution to social progress, the report says "[t]he mobile industry plays an increasingly important role in accelerating social progress in West Africa. With a sizeable proportion of the sub-region's population excluded from many services, mobile-enabled digital platforms provide a vital opportunity to deliver solutions that can improve the livelihood of the most vulnerable people in the society and foster greater socioeconomic inclusion. Across West Africa, the activities of mobile operators and other ecosystem players are enhancing digital and financial inclusion, driving innovation and supporting efforts to achieve the United Nations Sustainable Development Goals (SDGs)."

Eleven years remain until the 2030 deadline to achieve the SGDs. The report notes: "Countries in the sub-region face an uphill task to attain these goals, mainly due to acute resource and infrastructure gaps. The mobile industry is, however, well positioned to support governments, the development community and other stakeholders in efforts to accelerate progress on key SDG targets. This is achieved in three main ways:
  • Deployment of infrastructure and networks: The mobile industry drives impact through the provision of – and investment in – high-performing mobile networks, which provide the foundations for the digital economy and act as a catalyst for a diverse and innovative range of services.
  • Access and connectivity: Mobile operators are continuing to connect the unconnected, with 30 million new mobile subscribers and 50 million new mobile internet subscribers across West Africa since 2015.
  • Enabling services and relevant content: Mobile connectivity continues to transform the lives of millions of people across West Africa, by enabling the delivery of life-enhancing services, including education, health and financial inclusion. This is especially significant given the challenge of providing the services by conventional means amid considerable infrastructure and funding gaps."
The report encouragingly explains that "[t]he tech start-up ecosystem in West Africa is growing rapidly, with the emergence of a new generation of tech entrepreneurs and increasing funding from private investors. Tech innovators increasingly use mobile platforms, such as connectivity, mobile money and cellular IoT, to create and distribute innovative solutions that address a wide range of local challenges. This is helping bridge the digital content gap through the development of homegrown content and services with direct relevance to local consumers."

Infographic: GSMA Intelligence
What localized content or services do you think will provide value to West Africa's mobile ecosystem?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

May 16, 2019

AI Will Affect the Ways in Which Businesses and Governments Engage with Consumers and Citizens Alike

"Artificial intelligence (AI) will profoundly affect the ways in which businesses and governments engage with consumers and citizens alike," says a report developed by The Economist Intelligence Unit (The EIU) and sponsored by Microsoft. "From advances in genetic diagnostics to industrial automation, these widespread changes will have significant economic, social and civic implications."

AI "is moving from the realm of science fiction to real-world adoption among private- and public-sector organizations globally," notes the report. "Today AI is used by financial services companies to serve customers better and detect fraud; by healthcare providers to more accurately diagnose illness and identify more effective treatments; by manufacturers to keep machines up and running on the plant floor and to streamline supply chains; and by city authorities to track and mitigate urban challenges such as traffic, pollution and crime."

Intelligent Economies: AI's transformation of industries and society "draws on a survey of more than 400 senior executives working in various industries, including financial services, healthcare and life sciences, manufacturing, retail and the public sector. Survey respondents operate in eight markets: France, Germany, Mexico, Poland, South Africa, Thailand, the UK and the US. Additionally, we conducted in-depth interviews with business leaders and experts in AI."

Listed below are the report's key findings:

1. Respondents are optimistic about the economic benefits that AI will bring. Over the next five years, survey respondents expect AI to have a positive impact on growth (90%), productivity (86%), innovation (84%) and job creation (69%) in their country and industry.

2. Both private- and public-sector organizations consider AI essential to business strategy. More than nine out of ten respondents (94%) describe AI as important to solving their organizations' strategic challenges, with 57% saying that it is "somewhat" important and a further 37% characterizing it as "very" important.

3. The race to adopt and implement AI in business processes has already begun. More than one in four respondents (27%) say their organizations have already incorporated the technology into key processes and services, while another 46% have one or more AI pilot projects under way.

4. Despite their optimism, businesses recognize several major obstacles to leveraging AI successfully. When asked what major risks they see when adopting or increasing the use of AI, cost or financial risk tops the list, cited by 42% of respondents. Next is execution risk, with 36% saying their organisation may not have the necessary resources, in terms of people or tools, to effectively implement AI. Following closely behind are the workforce challenges involved in persuading employees to adopt new technology or learn new skills (35%) and security (32%)."

The EIU report also reaches the following conclusion:
As AI emerges from research labs and IT back offices and into the mainstream, and humans and machines begin to collaborate more closely, the transformational possibilities of AI for both businesses and societies are enormous.
Some industries, markets and individual companies are further down that road than others, but few will be left untouched. For now, it's still early days, and there are many opportunities for all. Intelligent economies, after all, will be made up of smarter businesses, and regardless of size or geographic location, every organisation has the opportunity to leapfrog the competition. Those that are successful will probably prioritize the following approaches:
Experimentation: an approach based on identifying small early wins will lay the groundwork in terms of innovation and risk mitigation strategies for more ambitious deployments in future. Organizations will look to AI to help them better understand the needs of customers and citizens and then develop new products, services and business models that are more resilient to future economic uncertainty and competitive disruption.
Skilling up: a workforce that clearly understands the benefits that AI brings to their jobs and is equipped with the skills to use this technology to best effect will be well positioned to identify fresh opportunities, not just for increased productivity but also for personal career development. Smart employers will gear training and development accordingly.
Governance: organizations in both the private and public sector will build in appropriate governance and control mechanisms that evaluate the societal impacts of AI. They will pay particular attention to building trust in their AI solutions and ensure that the logic underpinning their algorithms is sound, unbiased and can be easily explained to customers, employees and regulators.
In these ways, business leaders can make their own contribution to building tomorrow's intelligent economies, not just for their own benefit, but for that of their workforce and society at large.
How do you think AI will affect the ways in which businesses and governments engage with consumers and citizens alike?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

May 3, 2019

EIU Report Says Trade Must Be a Central Part of the Solution if the World Is to Restrict Global Warming to 1.5°C

"If the world is to restrict global warming to 1.5°C, trade must be a central part of the solution," concludes a report published by The Economist Intelligence Unit (The EIU). Commissioned by the International Chamber of Commerce (ICC), as part of the ICC World Trade Agenda, an initiative in partnership with Qatar Chamber of Commerce and Industry, the report, Climate change and trade agreements: Friends or foes? further says that "it will be impossible for countries to meet their ambitious Paris Agreement targets without strong and coherent trade and environmental policies."

It is widely know that the world needs transformative solutions to reduce greenhouse gases (GHG). The report explains, however, that "[i]n climate policy discussions, relatively little attention is paid to the global trade architecture. Bilateral, regional or World Trade Organisation (WTO) trade agreements could help to meet climate goals—for example, by removing tariffs and harmonizing standards on environmental goods and services, and eliminating distortionary and poorly designed subsidies on fossil fuels and agriculture."

Moreover, "Despite the potential for trade–climate synergies, the weight of historical evidence is heavy in the other direction. Universal tariff reduction has increased trade in carbon-intensive and environmentally destructive products, such as fossil fuels and timber, more than it has for environmental goods. In some cases FTAs can also shrink the 'policy space' available to countries to pursue environmental goals, for example if they prohibit, or are perceived to prohibit, a country's ability to distinguish between products according to emissions released during their production."

The report importantly "assesses the degree to which the WTO and four contemporary free trade agreements (FTAs)—CPTPP, EU–Singapore, EU–Canada and Korea–Australia—support seven opportunities for boosting climate-friendly trade flows (see graphic below)."

The report finds "that the four contemporary trade agreements are more supportive of these climate goals than their traditional counterparts. The EIU also finds "that the WTO’s efforts to pursue climate and environmental goals have largely stalled and its cooperation with international climate policy actors is limited. Post-Paris there is a real concern that ambitious climate policies will fall foul of WTO rules if they are perceived to arbitrarily or unjustifiably discriminate against third countries."

The report provides recommendations for domestic and global policymakers including "transmitting and strengthening best practices from recent trade agreements and increasing WTO–UNFCCC (United Nations Framework Convention on Climate Change) cooperation." Furthermore, "To truly align the global climate and trade architecture," The EIU recommends "discussing the introduction of a 'climate waiver' that would permit countries to impose trade-restrictive climate policy response measures that are in line with Paris Agreement obligations."

Do you agree that trade must be a central part of the solution if the world is to restrict global warming to 1.5°C?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

May 1, 2019

Pursuing Uganda's Mobile-Enabled Digital Transformation

"As Uganda advances its efforts focused on the Sustainable Development Goals (SDGs) and the Uganda Vision 2040, harnessing the power of mobile technology will be critical to influencing progress across all development goals," explains a report published by the UK-based GSMA. The report, Uganda: Driving inclusive socio-economic progress through mobile-enabled digital transformation, further says, "Mobile is the first among all information and communication technologies to reach across geographies, income levels and cultures, enabling access to basic services where traditional means have often failed, including financial services, access to health information, education and clean energy. Mobile technology also enables the most widespread means of accessing the internet – the foundation for Uganda's digital future."

The report is correct to note that a "[d]igital transformation is underway in Uganda, as shown by the growing number of people accessing digital content and services. This is having a profound impact on the country's socio-economic development, with digital platforms beginning to provide access to life-enhancing services while improving productivity and efficiency across key sectors of the economy."

"In 2015," the report explains, "Uganda launched the second five-year National Development Plan (NDP II) 2015/16 – 2019/20. Its five priority areas – agriculture, human capital development, infrastructure, tourism, and minerals, oil and gas – prioritize action as part of a broader goal to transform the country from a low-income economy to a competitive and market-driven, lower middle-income economy by 2020, in line with the long-term vision of reaching upper middle-income status by 2040."

Moreover, "The government of Uganda also pledged to achieve the SDGs and other international commitments. Although government and its development partners have committed resources to the NDP II priority areas and other development goals, economic progress has been sluggish, constrained by productivity challenges, slow private-sector growth and funding deficits for key sectors."

Based on my visits to the country, the first of which occurred in 2004, I support the following assertion: "With more people using mobile services today in Uganda than ever before, the technology is having a direct impact on social and economic activities and, by extension, supporting progress with the national and global development goals."

The report highlights five broad areas where the use of mobile technology is having a notable impact in Uganda:
  • Productivity and efficiency – mobile connectivity lowers the cost of accessing and disseminating vital information, allowing private businesses and public institutions to be more productive;
  • Service delivery – mobile platforms enable innovative solutions that leapfrog infrastructure and funding challenges across key sectors of the economy, notably health, education and utilities;
  • Good governance and social justice – mobile-enabled digitization of government tax receipts and social security disbursements has increased transparency and accountability in those processes;
  • Climate change and the environment – mobile technology helps with disaster preparedness and response by raising public awareness and reaching out to vulnerable populations on disaster risks; and
  • Digital entrepreneurship and emerging technologies – Around 4 in 5 tech start-ups use one or more mobile platforms in their solution, while mobile connectivity is enabling the development of blockchain and other emerging technologies in Uganda.
"We are at a key point in Uganda's history," the report concludes. "Mobile is powering the most widespread and inclusive means of accessing the internet and digital technologies, which are vital to the growth of the Ugandan economy in an increasingly digital world. Stakeholders need to act collaboratively now to ensure that Uganda's digital future is an inclusive one that leaves no one behind."

What role are you playing in supporting Uganda's digital future?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.