My re­flec­tions from Boao

Global Times – Metro Beijing - - ENTERPRISE - By Ram Kr­ish­nan The au­thor of this ar­ti­cle is the pres­i­dent and CEO of Pep­siCo’s Greater China Re­gion.

You’ve heard of Davos, where the global in­tel­li­gentsia gath­ers each Jan­uary, but how about Boao? Each spring, this charm­ing town on the south­ern Chi­nese is­land of Hainan hosts the Boao Fo­rum for Asia (BFA), which brings to­gether at­ten­dees from in­ter­na­tional po­lit­i­cal, busi­ness and aca­demic cir­cles.

I had the plea­sure of par­tic­i­pat­ing in my first BFA re­cently, and I en­joyed the chance to step back from the hum of daily life and re­flect on some of the big ideas shap­ing our world. The econ­omy was a cen­tral topic at the con­fer­ence, and there was no short­age of talk about trade pol­icy, the Belt and Road ini­tia­tive, and the im­pact of emerg­ing tech­nolo­gies.

One of the more in­ter­est­ing themes fo­cused not on tech but on peo­ple and their role in the new econ­omy. Con­fer­ence speak­ers par­tic­u­larly high­lighted the im­por­tance of valu­ing peo­ple, in­clud­ing peo­ple and serv­ing peo­ple on a per­sonal level.

Di­a­logue about the com­ing fourth In­dus­trial Rev­o­lu­tion can some­times over­whelm with talk of au­to­ma­tion and un­em­ploy­ment. How­ever, I left the con­fer­ence more cer­tain than ever that hu­man cre­ativ­ity and in­no­va­tion will be as im­por­tant in the next cen­tury as they have been in the past 100 years. Here are three con­fer­ence in­sights that il­lus­trate why.

Re­dis­cov­er­ing the value of hu­man wis­dom

The 2017 G20 Sum­mit put the dig­i­tal econ­omy on the top of its agenda as one of the fun­da­men­tal so­lu­tions and direc­tions of the world econ­omy. This term refers to the eco­nomic ac­tiv­ity that re­sults from the bil­lions of on­line con­nec­tions among peo­ple, busi­nesses, de­vices and data. The scale of the dig­i­tal econ­omy is ex­pand­ing, and its pro­por­tion of na­tional GDPs is ris­ing. In the US, the dig­i­tal econ­omy ac­counts for 58 per­cent of the GDP. In China, it ac­counts for 40 per­cent – a num­ber that is grow­ing.

Fu­tur­ist and the founder of Wired magazine Kevin Kelly told the fo­rum that the dig­i­tal econ­omy will be driven by ro­bots, vir­tual re­al­ity, ar­ti­fi­cial in­tel­li­gence, the In­ter­net of Things (IoT), blockchain and other new tech­nolo­gies. How­ever, one of Kelly’s most pro­found in­sights was also in­cred­i­bly low-tech – the dig­i­tal econ­omy is noth­ing with­out peo­ple. It is sim­ply a new eco­nomic sys­tem that em­bod­ies age-old hu­man in­tel­li­gence and be­hav­ior. For ex­am­ple, AI and cloud com­put­ing are ex­ten­sions of in­tel­li­gence needed for solv­ing the prob­lem of what-we-should-do. The IoT re­al­izes com­mu­ni­ca­tions be­tween hu­mans and the world and set­tles the prob­lem of how-todo, and the ro­bot is an ex­ten­sion of spe­cific hu­man be­hav­iors.

Kelly re­minded con­fer­ence­go­ers that amid rapid in­no­va­tion, hu­mans re­main su­pe­rior at ask­ing why. We con­tinue to out­per­form ma­chines when it comes to ex­plor­ing, cu­rat­ing, in­vent­ing, in­no­vat­ing, and ex­pe­ri­enc­ing new things.

As we con­tem­plate the fourth In­dus­trial Rev­o­lu­tion, smart lead­ers will re­mem­ber that peo­ple, not ma­chines lie at the heart of the dig­i­tal econ­omy. For or­ga­ni­za­tions, this re­in­forces the need to pur­sue a strat­egy of peo­ple-first in­no­va­tion. Even amid rapid au­to­ma­tion, lead­ers must pri­or­i­tize ef­forts to at­tract and re­tain the best peo­ple. In­creas­ingly, this will in­clude hir­ing those with the soft skills nec­es­sary to imag­ine a ma­chineaided so­ci­ety, such as cu­rios­ity, em­pa­thy, and cre­ativ­ity, and for­mal­iz­ing ways to train and in­cen­tivize lead­ers at all lev­els to value hu­man col­lab­o­ra­tion as much as tech­no­log­i­cal pro­fi­ciency.

A man­date for ‘rad­i­cal in­clu­sion’

The con­fer­ence theme was An Open and In­no­va­tive Asia, and the re­lated idea of in­clu­siv­ity sur­faced in many ses­sions.

Sev­eral speak­ers re­minded con­fer­ence-go­ers that the ap­pli­ca­tion of new tech­nol­ogy is un­bal­anced around the world and, in many cases, causes po­lar­iza­tion and marginal­iza­tion. This in­spired me to think deeply about our col­lec­tive re­spon­si­bil­ity to make sure the dig­i­tal di­vide doesn’t leave large seg­ments of the pop­u­la­tion be­hind.

Is­raeli en­trepreneur Yossi Vardi ad­vo­cated for the need to change the idea that only gov­ern­ment is re­spon­si­ble for solv­ing th­ese prob­lems. He stressed that in­clu­sive mea­sures should be taken to al­low all classes to join in and help marginal­ized groups gain ac­cess to re­sources as much as pos­si­ble. The pro­ceed­ings were pep­pered with spe­cific ex­am­ples, like Al­time­ter Cap­i­tal part­ner Ram Parameswaran’s sug­ges­tion that pro­vid­ing in­ter­net ac­cess for the 5 bil­lion peo­ple cur­rently with­out it is the next blue ocean for in­ter­net providers.

This in­sight about in­clu­siv­ity high­lights the op­por­tu­nity for com­pa­nies to add the lens of “tech eq­uity” to cur­rent sus­tain­abil­ity ef­forts. Do­ing this would bring or­ga­ni­za­tional fo­cus to the ways tech in­no­va­tion will change busi­ness and in­vite ac­tion. For ex­am­ple, emerg­ing tech­nol­ogy will un­doubt­edly burst open the al­ready wide in­come gap be­tween skilled and un­skilled work­ers while leav­ing many with­out vi­able em­ploy­ment op­tions. This sug­gests a clear man­date to pri­or­i­tize ini­tia­tives aimed at reskilling and up-skilling our work­force. It also beck­ons com­pa­nies to look fur­ther afield to sup­port ef­forts that en­sure the next gen­er­a­tion has the skills to thrive in the au­to­mated work­place of the fu­ture.

Serv­ing peo­ple at a per­sonal level

The term “new re­tail” was an­other one of­ten cir­cu­lat­ing through­out the con­fer­ence. For those less fa­mil­iar, an­a­lysts use this la­bel to re­fer to the use of tech­nol­ogy, up­graded man­u­fac­tur­ing, fi­nan­cial tools and data-backed lo­gis­tics to re-imag­ine the in­ter­play be­tween con­sumers, mer­chan­dise and the re­tail space.

While tech­nol­ogy pow­ers the new re­tail econ­omy, pre­sen­ters em­pha­sized the fact that it is knowl­edge of peo­ple or cus­tomers that will en­sure suc­cess. In the new re­tail world, prod­ucts will be de­signed based on the anal­y­sis of cus­tomer be­hav­ior and cre­ated be­fore peo­ple even re­al­ize they have a need. Hans-Paul Burkner from BCG noted that the key to this fu­ture re­tail land­scape is to re­ally know your cus­tomers and cre­ate an ex­pe­ri­ence be­yond just pur­chas­ing, which re­quires con­stant ex­per­i­men­ta­tion via data min­ing and anal­y­sis.

As I con­tem­plate the “new re­tail” world, I am par­tic­u­larly in­ter­ested in the abil­ity to use data for mass per­son­al­iza­tion. How quickly can we move from lead­ing com­pa­nies that make prod­ucts for the masses to lead­ing com­pa­nies that cre­ate a personalized of­fer for to­mor­row based on what some­one con­sumed yes­ter­day? This crit­i­cal path to suc­cess will em­anate from a peo­ple-first ap­proach.

I greatly en­joyed the op­por­tu­nity to meet, learn from and ex­change views with so many in­spir­ing thinkers from around the globe. Among many other things, I learned three things. One is that peo­ple, not ma­chines, will lie at the heart of the dig­i­tal econ­omy. We should shape our or­ga­ni­za­tions to value the hu­man in a high-tech world. Two, as we ap­proach the fourth In­dus­trial Rev­o­lu­tion, com­pa­nies can use the lens of “tech eq­uity” to fo­cus their sus­tain­able busi­ness ef­forts. The third thing is that tech in­no­va­tion pow­ers “new re­tail,” but suc­cess will go to the busi­nesses that un­der­stand their cus­tomers at a per­sonal level and tai­lor their of­fer­ings ac­cord­ingly. Th­ese BFA im­pli­ca­tions en­er­gized me, and I hope you will be too.

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