The Leader Magazine

MAR 2017

Issue link:

Contents of this Issue


Page 33 of 63

34 MARCH 2017 F E A T U R E A R T I C L E Four mega-challenges must be addressed 1) Convergence, the business eco-system, and the networked organization The complexity of opportunities and challenges facing business and institutions requires that enterprises and disciplinary professionals cross traditional boundaries and work together in new ways. Business ecosystems and networked organizations bring together fi rms with different and complementary skills and competencies to frame opportunities, defi ne value propositions, align processes, and leverage technologies so they can approach markets with integrated and enhanced products and services. SAP, for example, is using its Co-Innovation Lab (COIL) network center to build co-inventing relationships around supply chain processes of mutual interest across fi rms that previously have not worked together but that, together, enhance each other's product and service lines. 2) The emerging geography of value creation Shifts in the geographic locations where enterprise value is created are being shaped by the globalization of supply chains; technology that fosters the fast, easy, and inexpensive exchange of information and communication; networks of globally distributed companies; tax policies and regulations; trade agreements among states; the growing dominance of some cities; and the rise of economies and markets previously underappreciated as "developing countries." These include Africa and Latin America and the 21st-century growth of countries along the Silk Road through China and Central Asia. The 2016 political debates about regional trade agreements in the Pacifi c, challenges to the solidarity of the European Union, and attempts to reset power arrangements among East Asian nations all raise questions about potential business locations, questions that will not be resolved for some time. The shift in geography is played out at both the micro and macro scales. The general movement of corporate headquarters and R&D functions back to cities throughout much of the world has been playing out over the past decade, with a more recent focus on sub-districts that cluster activities across an industry's value chain and/or create an ecosystem of established and start-up fi rms, along with universities that promote entrepreneurship and innovation. The United States, Western Europe and economically strong countries of Asia lead this phenomenon, but it is coming into focus throughout the world. 3) Blending of the physical and virtual domains The impact the Internet and related communication and control technologies have on business has already been transformative, but that transformation has just begun and will be accelerated by the introduction of artifi cial intelligence into almost all aspects of work. To date, related technology has infl uenced our sense of place and relationships, expanded patterns of social and business communication, and created new systems to control the environment. The result is the movement toward a completely blended environment in which people act in and experience both physical and virtual places seamlessly. Where now movement from one domain to the other requires conscious action, soon there will only be one domain where the physical and the virtual are one domain into which people move into and out of unintentionally. This will shatter business models that focus either on physical or virtual spaces. Even now, companies like Amazon that have here-to-for focused on one domain now work in two, with technology intermingling transactions made in each place. Apple, known for its products, derives upwards of $6 billion from its cut of its App Store. Artifi cial Intelligence is the newcomer into active engagement with places but its impact will be dramatic. Now it is primarily deployed in the design of buildings and the control of their systems. But its functionality will go much further as algorithms and machines displace manpower. Increasingly, these will drive the interface between people and building functions. The confi guration of public space will shift from places of passive personal relaxation or socialization, to places for work or gaming in the physical or virtual environment. The speed of change in products, services and the "environment" will be rapid and the adaptation cycle will shorten. This sounds like science fi ction today, but so did the idea of "Googling" 18 years ago, "tweeting" before 2006, or the fi rst legal drone delivery of 24 medical packages from an airfi eld to a nearby medical clinic in 2016. 4) Social justice and the politics of distribution The term social justice relates to promotion of a "just" society by championing equality and diversity and the equitable allocation of community resources. It is a term most often discussed in terms of government policy, philanthropic goals and political campaigns. But it also needs to be of concern to corporations in a way that is broader than the concept of corporate social responsibility (CSR). CSR references a wide variety of business tactics, such as giving a portion of a company's proceeds to charity, implementing "greener" business operations, and promoting workforce diversity, a safe and healthy workplace, and a fair wage. Broader issues about "social justice" came to the forefront in the period of 2014-2016 with the social turbulence and dissatisfaction revealed in the demise of the visions of the "Arab Spring," the BREXIT movement, the American political campaign of 2016, and social unrest in a number of Western European countries. How these issues will play out in the U.S. and the rest of the world is unclear. Certain, however, is that public discussion and debate about the vast disparity in the distribution of wealth in a range of societies, and the broad societal impact of choices made by government and corporations, will not disappear; the politics of the distribution within society of the value created by the technologies like those noted above will be a major concern of public discourse. One mega issue of enormous consequence that remains largely in the shadows of corporate and even societal concern is whether or not to deploy technology and new business processes that create a class of new products (or even markets) that result in greater effi ciencies and higher profi t, but that destroy jobs and further an inequitable distribution of wealth. Is it in society's interest, for example, to eliminate tens of thousands of delivery and logistics jobs by deploying drones for quick delivery of nonessential items? Or to deploy robots to care for the bedridden elderly when that would displace jobs for unskilled workers with few other job opportunities? The choices about these issues are not those of corporations alone. They also rest with the consuming public. Here, too, a few questions illustrate the point. Are consumers prepared to spend more for their personal electronic communication devices (or even clothing) and keep them for longer periods of time, with fewer upgrades, if it means fewer jobs will be outsourced? Are local and state governments willing to put a greater proportion of their economic development funds, social energy and political capital into the promotion of fi rms and projects that have "One mega issue of enormous consequence that remains largely in the shadows of corporate and even societal concern is whether or not to deploy technology and new business processes that create a class of new products (or even markets) that result in greater effi ciencies and higher profi t, but that destroy jobs and further an inequitable distribution of wealth."

Articles in this issue

Archives of this issue

view archives of The Leader Magazine - MAR 2017