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In the latest installment of the Salzburg Questions for Corporate Governance series, Stacy Baird, consulting director at TRPC Pte, reflects on the need for corporations to prepare for the fourth Industrial Revolution
This article is part of the series, the Salzburg Questions for Corporate Governance by the Salzburg Global Corporate Governance Forum
Businesses in recent years have begun to realize the opportunities for growth in the fourth Industrial Revolution (IR). The fourth IR is being driven by the high rate of innovation in broadband, 5G telecommunications, cloud computing, big data analytics, machine learning, robotics, nanotechnology, genetics, biotechnology, artificial intelligence, the Internet of Things (e.g., connected devices) and additive manufacturing (e.g., 3-D printing). These technologies will eventually transform all sectors, impact every business and every worker.
Already we are seeing how innovation is addressing the immediate crisis. For example, new online resources are enabling business and education to continue uninterrupted. This innovation was unimaginable even 15 years ago – the iPhone only being introduced in 2007. Additive manufacturing (e.g., 3D printing) is already in use to manufacture critical personal protective equipment and ventilators. Notably, this illustrates how the use of 3D printing transforms manufacturing and supply chains, putting production closer to the end-user.
With innovation comes demands for new skills. There is a challenge to taking maximal advantage of innovation to propel business and economic growth: a sufficiently prepared workforce. Given the scale and scope of the industrial transformation underway before the outbreak of COVID-19, it was already apparent that to continue to compete and grow, companies needed to lead the transformation of the workforce; to facilitate the skills capacity building and inform policymaking to keep pace with the technological advances.
Businesses needed to prepare their workforce for the jobs of even the near future through re-skilling and vocational training. Now, with the economy in crisis, there is an opportunity to reboot, to undertake a more radical reconstruction of the global economy by aggressively meeting the need for skills previously less in demand such as complex problem solving, creativity, cognitive flexibility, emotional intelligence, and critical thinking.
Three features of the global pandemic economy converge to create an opportunity to accelerate this re-skilling process. First, with the widespread and growing unemployment, as well as a significant number of non-working paid employees, there are lots of people with both time on their hands to study, and ultimately, a need to find a new job.
Second, one of the most revealing characteristics during the economic shut-down is the rapidity of adoption across economies of the ‘work-at-home’ and ‘school-at-home’ paradigms. The experiences drawn from transforming the workplace to use virtual spaces and schools to online learning can serve as a foundation for expansive company-supported continuing and vocational education to enhance and significantly update workforce skills.
Third, there is a need for a radical response by industry to restart the economy and set objectives to grow the economy in the face of lingering challenges. With the right opportunities, workers will be able to prepare for the anticipated changes within a company, and more broadly, in the job market and across the economy.
Boards and management should be reviewing their business models and processes – and the competitive landscape – to consider how they will take the greatest advantage of fourth IR innovation in their businesses. The role of innovation to improve efficiency and develop new products, services, and business models has never been so essential.
Some applications may even address the residual challenges of COVID-19, such as weak consumption, the reluctance of individuals to socialize, congregate, or travel. For example, new technology, such as wearables, is making contact tracing and social distancing measures more efficient and widespread. Continued use of remote collaboration tools, which will increase in sophistication through the use of AI, 3D technology, 5G, and other innovations, will enable businesses to operate increasingly without physical interaction. Greater use of robotics, including autonomous vehicles, will enable critical services without human interaction. With these tools more widely available, there will be greater ability and confidence for people to re-engage; to gather in group settings such as offices or shopping malls, while protecting the most vulnerable populations.
By investing in the skills of workers, foundational to addressing today’s economic challenges, a company may also situate itself to come back stronger, more innovative, and more competitive. As companies look at how new technologies will impact their business, they should also look at the skills they will need across their workforce, in management, and on the board. Even before the COVID-19 crisis, Amazon and AT&T committed enormous resources to re-skilling their workforces.
In July 2019, Amazon announced it would spend $700 Million to retrain one-third of its US workforce by 2025 to do more high-tech tasks to enable continued market leadership. Intending to maintain global competitiveness, in 2018, AT&T began a $1 billion effort, called Future Ready, to re-skill its global workforce using online resources. This training included online access to university-level courses, an online portal to access job opportunities, and a career guidance center, among other resources.
By taking advantage of some of the same tools used for “work-at-home” and “school-at-home,” companies can create and extend the reach of online up-skilling opportunities relevant to their business. Companies can work across sectors to provide quality cross-industry re-skilling and vocational training. Working with academic institutions and governments, companies can support initiatives that meet both their own business needs as well as broader economic development and workforce skilling needs. A willingness by industry to support training now for the unemployed (whether former employees or a larger public) would expand the pool of available workforce for the future.
In light of the current efforts to ‘reopen’ economies, some may say that it is too late for such programs. However, this may be short-sighted, as it is unlikely that employment returns to normal quickly. Furthermore, if more dire predictions come to fruition, we may have a more widespread economic problem to recover from, and recovery will take much longer than currently envisioned. The concurrent issues of recovering from the coronavirus’ impact while growing a business into the fourth IR present significant challenges to the global economy. Wise investing in the workforce now should set the stage for greater competitiveness for businesses as well as economic growth for national economies well into the future.
Workforce transformation will improve access to new job opportunities and, by increasing skills, raise overall income levels, thereby improving the chance for consumer participation in the economy. Starting in-house, would it not be smart for a company to join the chorus of businesses and industries transforming the workforce - preparing themselves for the future and restarting the engine of commerce?
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Stacy Baird is a consulting director at the Singapore-based consulting firm TRPC. His expertise lies in law and advising businesses and governments on information technology, privacy, data protection, cloud computing, and intellectual property (IP) public policy matters. Stacy also serves as executive director of the U.S.-China Clean Energy Forum Intellectual Property Program, where he helps address bilateral technology transfer and IP issues in the context of clean energy research and commercialization. Previously, Stacy served as Senior Policy Advisor to U.S. Senator Maria Cantwell, including work on the U.S. Patriot Act, and advisor to U.S. Congressman Howard Berman on issues of first impression related to the then-nascent internet and the mapping of the human genome. Prior to law, Stacy worked as music recording engineer with clients including Madonna, Stevie Nicks, Elvis Costello, Brian Eno, and Francis Coppola. He held appointments as Visiting Scholar at the University of Southern California College of Letters, Arts and Sciences and Visiting Fellow at the University of Hong Kong Faculty of Law. Stacy has a J.D. from Pace University and a B.A. in radio and television communications from San Francisco State University. Stacy is a Fellow of Salzburg Global Seminar.
The Salzburg Questions for Corporate Governance is an online discussion series introduced and led by Fellows of the Salzburg Global Corporate Governance Forum. The articles and comments represent opinions of the authors and commenters, and do not necessarily represent the views of their corporations or institutions, nor of Salzburg Global Seminar. Readers are welcome to address any questions about this series to Forum Director, Charles E. Ehrlich: cehrlich@salzburgglobal.org To receive a notification of when the next article is published, follow Salzburg Global Seminar on LinkedIn or sign up for email notifications here: www.salzburgglobal.org/go/corpgov/newsletter