Open Innovation 2030

Future-proofing a decade of change Open Innovation 2030

From covid-19 to climate change, economic recessions to technological disruption, 2020 has served as a reality check that global crises are only going to become more common in today’s increasingly-complex and connected world. ‘Open Innovation 2030: Future-proofing a decade of change’, a thought leadership program commissioned by HCL in partnership with The Economist Intelligence Unit, explores how companies can seize opportunity in complexity to not only survive, but thrive, now and in the coming decade. To rise to the occasion, business leaders must align on an enduring vision to build a better future; one underpinned by equality, sustainability and global cooperation. Enterprise risk management typically focuses on ‘known risks,’ amplifying them to model the maximum impact so that the worst case scenario can be planned for. At the other end of the scale, ‘unknown risks’ are considered outlying cases, like the asteroids that sometimes fly by Earth—we know they exist and have plans that can be attempted as a possible first response, but they largely remain on the edges of our planning blueprints.

ven with a canvas that wide, structures. Infrastructural and cultural nearly all of us were caught changes are needed because the most tal- off-guard when covid-19 ented people increasingly seek a new style struck earlier this year. Few of working, one infused with detailed had imagined the scale of change this pan- awareness of global impact, dedicated to Edemic has brought into our professional sustainability, engaged in life-long educa- and personal lives. And yet when we look tion, dripping with technology and con- back at the past six months, admiration stantly adapting. has overtaken our initial dismay; admira- Open to sustainable consumption. Dis- tion at the way individuals, communities, ruptive technology provides new opportu- companies and countries have risen to nities to benefit society and increase prof- this challenge and admiration at the way itability. Growing scrutiny of the impact human innovation, ingenuity and resil- of companies on the environment means ience has prevailed. pabilities and offerings or upskilling staff. executives must become leaders in tack- The takeaway across the board, there- Transformations in three sectors—health- ling challenges such as climate change fore, has been unilateral—although we care, real estate and retail—foreshadow and sustainability. In an increasingly in- cannot fully anticipate and control all the changes in the future of work that will af- terconnected world, firms must consider challenges that may strike, the way we re- fect millions of people. the needs of all stakeholders—employees, spond may define us forever. Open to disruption. Companies must suppliers, consumers, inhabitants of the Looking at this through the lens of anticipate disruptive change and seize planet—as well as shareholders. the technology sector, the response of or- the opportunities it creates. Those with a The challenges are daunting, but this ganizations to the pandemic has had an head start in leveraging key technologies book, published jointly by HCL Technolo- immense short-term impact and will pro- are reaping the rewards. New technologies gies and The Economist Intelligence Unit, foundly shape the future. Most business such as quantum computing, edge, digital, offers new ways to think about these chal- leaders have embraced technology, accel- big data and artificial intelligence, among lenges and help you map out your bets for erating their transformation journeys as others, must be understood in the context the future. It includes perspectives from they adjust to the new normal. of each business. leading business thinkers, chief experi- The best among them are those that are Open to secure collaboration from any- ence officers, other senior executives and open to change. We call this ‘open inno- where. Companies must constantly col- HCL leaders. It offers articles gleaned from vation.’ Open means many things, as this laborate through ‘open innovation,’ which The Economist magazine and designed to book explains, but mostly it means be- in practice means partnerships within an pique your thinking on related topics. The ing open to rapid change and evolution, ecosystem of businesses in other indus- content is intended to help us all, compa- crossing boundaries and ignoring norms tries and geographies—or even with ri- nies and individuals alike, to be more ef- to assemble the best possible ecosystem to vals. Inside the organization, all perspec- fective, more successful, more humane, collaborate and create the best strategies. tives must be included, rejecting ethnic, more socially responsible and more able I see five key manifestations of open- gender-related or cultural barriers to cre- to safely navigate the covid-19 pandemic ness: ate value. Cybersecurity must be inherent to a brighter future. Open to re-invention. The dust has not in this collaboration, especially in work- yet settled on covid-19, but it is already from-home environments. clear that businesses in countries that Open to adaptation. Collaboration and are further ahead have been permanently technology disruption requires companies altered in ways that may prove advan- and their employees to become masters of tageous—whether it be implementing change management. Agile organizational distributed work arrangements, making models break out of the straightjackets we C. Vijayakumar, long-overdue investments in digital ca- often put on by blind acceptance of rigid President & CEO, HCL Technologies

1 hcltech.com Contents

04 06 07 09

Open to Re-imagining How to feed The sum re-invention healthcare in a the planet of all lives 1 Transforming post-covid-19 The global food The way people live the world world supply chain their lives can be beyond covid-19 is passing a mined, too severe test

12 14 15 17

Open to Democratising How executives To have and disruption financial data use AI to hold 2 A lesson in digital through open Welcome to the Supplying clean transformation banking machine power is easier from fintech than storing it

20 22 23 25

Open to Securing the new Cybersecurity Digitisation collaboration perimeter: your A connected world Digitisation is 3 Building a synergistic living room will be a playground helping to deliver multi-stakeholder for hackers goods faster ecosystem in the digital era

29 31 32 34

Open to Workforce A different Human-machine adaptation adaptability as the dystopia: July 2030 interface 4 Navigating the new foundation for What if robots don’t Data-labelling world (dis)order by resilience take all the jobs? startups want to embracing change help improve corporate AI

37 39 40 42

Open to The opportunity Saving water What are sustainable to shape a better companies for? consumption The best way to 5 world solve the world’s Big business is The global imperative to weather the curve water woes is to use beginning to accept beyond covid-19 less of it broader social responsibilities OPEN TO RE-INVENTION

Transforming the world beyond covid-19

Commissioned by HCL 3 October 2020 hcltech.com Transforming the world beyond covid-19

rises have a way of altering those who struggle to attend clinics provided “just-in-time” instruction, societies, often for the bet- either due to living in rural and remote reportedly training over 15,000 health ter. The four big economic areas or because they have mobility workers in the NHS and 14,000 in the “levellers” to reduce ine- difficulties. It will also allow health US. This could radically improve Cquality, for instance, have not been systems to allocate resources far more healthcare workforce planning in the election manifestos, books and efficiently and effectively. long run by allowing more staff to be debates in legislatures but war, revo- Out of the administrative confu- equipped with a richer repertoire of lution, state collapse and plague. sion of the last four months, experts skills. The dust has not yet settled on are tabling more innovative and flex- There are also encouraging shifts covid-19. It is already clear, though, ible ways of managing public health for the commercial health sector that that businesses in countries that are resources such as “braiding and blend- could outlast covid-19. For one, it has further ahead in the arc have been ing” government funds, creating inter- been a boon for the wellness industry. permanently altered in ways that may mediary bodies to encourage inter- Some analysts even believe life expec- prove to the better — whether it be agency collaboration and introducing tancy may increase as people take implementing distributed work waivers to reduce red tape in future more active measures to address arrangements that had stalled, mak- emergencies. Health systems “should health conditions like obesity, with ing long-overdue investments in their not go back to bureaucratic normal demand for health trackers, smoking digital capabilities and offerings or after the pandemic is over”, says one cessation aids and vitamins all report- upskilling their staff. article in JAMA, a leading medical edly increasing. The fact that cov- This article explores how the post- journal. id-19’s impact is so much worse for covid-19 world is taking shape in three Upskilling staff to cope with covid- people with conditions like obesity sectors that have been heavily 19 has fundamentally challenged and diabetes — which are amenable affected by the crisis and are employ- methods of in-person training. Armies to self-monitoring and self-manage- ment sources for millions of people of volunteers, students and retired ment digital aids--has put companies worldwide: healthcare, real estate and medical workers have joined the in this sector, ranging from consumer retail. workforce. In the state of New York, app start-ups to Apple, on firm foot- 40,000 people, including retirees and ing for the future. Healthcare finally gets digital students, volunteered. In the UK, the Pharmaceutical companies and aca- figure is half a million, and over 10,000 The end of the office? demic research institutes dominate retired medical staffers were brought Real estate, especially for enterprises, the healthcare headlines as the search back into the National Health Service is a second sector that will look quite for a vaccine and treatments heats (NHS), along with final-year medical different in a post-covid-19 context. up. The tiniest crumbs of positive and nursing students. Companies have been forced into clinical data are enough to send global Many have little to no experience remote work by social distancing stock markets soaring. of the technologies or processes regulations and, in some cases, the But there is a deeper healthcare involved in acute respiratory disease, change may be permanent. Face- story than the quest for a cure. The though. “The majority of healthcare book’s CEO Mark Zuckerberg recently entire sector, both public agencies and staff wouldn’t know how to put on said 75% of his employees have companies, is adapting in ways that aerosolising head masks,” says Alex expressed some degree of interest in will be long lasting — and to the good. Young, NHS surgeon and founder of leaving the Bay Area, where costs of Telemedicine consultations are Virti, an extended reality training com- living have spiralled. Twitter has becoming possible at scale as govern- pany. Similarly, staff might be placed announced that any workers who ments pass necessary legislation to in an intensive care unit with no expe- wish to work from home permanently reimburse it in countries including the rience of using a ventilator. will be able to. Jeff Staley, group chief US and Australia. This could greatly Virti, which uses virtual and aug- executive of Barclays, said, “The improve access to healthcare for mented reality combined with AI, has notion of puttingputting 7,0007,000 peoplepeople inin a a

PB PB hcltech.com 4 hcltech.com hcltech.com building may be a thing of the past.” companies — one specialising in vir- online transactions as a result of Real estate platforms are reporting tual sensors to track the use of office covid-19, and these behavioural shifts spikes in home searches in smaller space, the other a worker call-out look set to be permanent. This tran- cities. Transformingsystem — to enable companies the to worldsition will support innovators in the While it is too soon to know automatically notify a cleaner to dis- retail space and punish any laggards. whether companies will shift enmasse infect a desk when a worker has left. “With many people trying online shop- to distributed work — many peoplebeyond Another JLL portfolio covid-19 company, which ping for the first time, it is unlikely are beginning to appreciate the cama- has developed a ventilation technol- they will revert back to in-store for raderie and social bonds of office life- ogy, is also well positioned as com- some time, if at all,” says Mr Monk. -experts see the pandemic accelerat- panies improve air filtration turnover “Many retailers have invested in and ing the shiftrises towards have a waymore of alteringflexible thoseto maintain who strugglehygienic tooffice attend conditions. clinics expandedprovided their“just-in-time” online operations instruction, to work. “I believesocieties, the [flexible often for office] the bet will- either due to living in rural and remote reportedlyhelp meet trainingthis demand. over 15,000 While health this come back ter.as partThe offour the big trade-off economic of areasRetailers: or because Final curtain they have or the mobility next ongoingworkers intransformation the NHS and 14,000 may inmean the working from“levellers” home,” to says reduce Christian ine- difficulties.act? It will also allow health US.fewer This stores could in the radically future, diversificaimprove- CUlbrich,quality, forCEO instance, of Jones haveLang notLaSalle, been a Forsystems retailers, to allocate the resourcespandemic far looked more tionhealthcare of the workforceretail experience planning will in rise.”the electionreal estate manifestos, services company.books and“If efficientlydire on the surface.and effectively. They have seen long run by allowing more staff to be employeesdebates in wantlegislatures to do that,but war, they revo will- theirOut profits of the steadily administrative erode in confurecent- equippedThe retail with sector a richer is also repertoire undergoing of needlution, to state accept collapse that the and company plague. only yearssion of as the consumers last four flockmonths, to expertsthe con- anskills. overhaul of supply chains. Simone providesThe dust a flexible has not desk.” yet settled on arevenience tabling and more speed innovative of home andpurchas flex- Cipriani,There founderare also ofencouraging the Ethical shiftsFash- covid-19.Flexible It leasing is already arrangements clear, though, are ibleing. waysLook ofdeeper, managing though, public and health the forion theInitiative commercial of thehealth International sector that alsothat morebusinesses in favour in countries as decision-mak that are- resourcespandemic suchmight as “braidingreward the and innova blend- Tradecould outlastCentre, covid-19. a joint agencyFor one, of it hasthe ersfurther fear long-termahead in thecommitments arc have been with tors.ing” government funds, creating inter- UNbeen and a boon the forWTO, the wellnessthinks that industry. one permanentlyso much uncertainty. altered in “Companies ways that may are mediaryWalmart’s bodies recent to dealencourage with Shopify inter- Somelong-term analysts shift even could believe be life greater expec- forcedprove toto thesign betterup for a— certain whether amount it be agencyhas opened collaboration the marketplace and introducing of the tancyregionalisation may increase in the as fashion people sector. take ofimplementing space for ten distributedyears even if workthey formerwaivers toto Shopify’sreduce red roughly tape in1m future busi- Thismore could active enable measures parts ofto Africa address and arrangementsdon’t have a cluethat hadwhat stalled, they need,”mak- emergencies.nesses. More Healthbroadly, systems the industry “should is thehealth Mediterranean conditions liketo meetobesity, demand with ingsays long-overdue Mr Ulbrich. investments “This is the in theironly finallynot go investingback to bureaucraticin its digital normalcapabili- indemand European for healthmarkets. trackers, smoking industrydigital capabilities where you and force offerings people to or afterties. the pandemic is over”, says one cessationBut this aids change, and vitamins while alleconomi report- upskillingmake such their long-term staff. decisions. We article“Retailers in JAMA, have adapteda leading to themedical pan- edlycally welcome,increasing. requires The fact companies that cov to- willThis see article the importance explores how of flexibilitythe post- demicjournal. at incredible speed,” says Kyle takeid-19’s a impactlonger-term is so muchview givenworse thefor covid-19accelerate.” world is taking shape in three Monk,Upskilling head of staff retail to insights cope withand covid-ana- peoplepotential with difficulties conditions inlike setting obesity up sectorsThe realthat estate have industry been itselfheavily has 19lytics has at thefundamentally British Retail Consortiumchallenged andthese diabetes new outposts. — which “Asia are has amenable become affectedsuffered throughby the crisis the crisisand areas transacemploy- (BRC).methods The of switchin-person to digitaltraining. has Armies been ato manufacturing self-monitoring centre and —self-manage in fashion- tionsment dwindle.sources forYet millionspast investments of people ofunprecedented volunteers, studentswith non-food and retiredonline —ment not justdigital because aids--has of the put productivity companies inworldwide: technology healthcare, and data real have estate allowed and medicalpurchases workers up 60% havein May, joined according the ofin thislabour sector, but alsoranging the fromproductivity consumer or theretail. more progressive among them to toworkforce. the BRC. In “They the statehave ofmade New consid York,- efficiencyapp start-ups of to the Apple, overall on firmsystems foot- — find new ways of adding value to their 40,000erable people,investments including in e-commerce,retirees and inglogistics, for the banking future. and the rest, says clients.Healthcare Companies finally have, gets for digital instance, onlinestudents, deliveries volunteered. and click-and-collect In the UK, the Mr Cipriani. “These new regions may Pharmaceuticalshifted to offering companies virtual viewings and aca of- figureoperations, is half whicha million, have and allowed over 10,000 the Thenot beend so of efficient the office? in areas like ship- propertiesdemic research and digital institutes mortgage dominate appli- retiredpublic medicalto continue staffers accessing were brought the Realping, estate,customs, especially financial for servicesenterprises, and cations.the healthcare “Proptech” headlines start-ups as the searchwere goodsback into they the need.” National Health Service governance.is a second sector There that may will also look be quite chal- alreadyfor a vaccine a thriving and segment.treatments In heats2018 (NHS),S&P alongGlobal with Market final-year Intelligence medical differentlenges around in a labourpost-covid-19 practices.” context. up.alone The nearly tiniest US$20bn crumbs was of investedpositive andreckons nursing the pandemicstudents. will be a cata- CompaniesMr Cipriani have encourages been forced the fashion into clinicalinto companies data are enough offering to send everything global lystMany for millionshave little of todollars no experience of invest- remotesector to work make bya long-termsocial distancing commit- fromstock marketsblockchain-based soaring. investment ofment the by technologiesretailers in automation or processes and regulationsment to improving and, in bothsome environmen cases, the- platformsBut there to workspaceis a deeper optimisation. healthcare involvedrobotics toin acutestreamline respiratory aspects disease, such changetal and labourmay standardsbe permanent. in the indusFace- Now,story thantheir theservices quest arefor aparticularly cure. The asthough. order-picking, “The majority inventory-tracking of healthcare try.book’s Investment CEO Mark Zuckerbergopportunities recently in entireuseful. sector, both public agencies and andstaff delivery wouldn’t while know also how giving to compaput on- productivitysaid 75% of as hisnew employees geographies have are companies,JLL is reaping is adapting the benefits in ways ofthat its aerosolisingnies more control head masks,”over supply says chainAlex expressedbrought into some the degree sector’s of interest lucrative in ownwill be venture long lasting investing — and arm, to JLLthe Spark,good. Young,bottlenecks. NHS surgeon and founder of supplyleaving chainsthe Bay now Area, offer where the costspotential of Telemedicinesays Mr Ulbrich. consultationsIt has, for instance, are Virti,Even an extendedthe most realitytechnology training averse com- forliving positive, have long-lastingspiralled. Twitterchange. 7has becomingbrought together possible two at scaleof its as portfolio govern- consumerspany. Similarly, have staff had might to embracebe placed announced that any workers who ments pass necessary legislation to in an intensive care unit with no expe- wish to work from home permanently reimburse it in countries including the rience of using a ventilator. will be able to. Jeff Staley, group chief US and Australia. This could greatly Virti, which uses virtual and aug- executive of Barclays, said, “The improve access to healthcare for mented reality combined with AI, has notion of putting 7,000 people in a

5 hcltech.com October 2020

Re-imagining healthcare in a post-covid-19 world

gained and behaviors adopted during established by healthcare and phar- these times will reshape healthcare maceutical companies are leveraging in the long run. The future portends data analytics extensively to ensure an accelerated and innovative adop- availability and equitable distribution tion of digital technologies by health- of scarce lifesaving medical supplies care enterprises. and drugs. Equipped with artificial The top three areas of focus for intelligence / machine learning and healthcare enterprises to reorient advanced visualisations, advanced themselves and be future ready are: analytics offers viable solutions for • Patient and physician experi- pre-emptive and predictive manage- ence: The convenience of telehealth ment of global health. consultations, enabled by legislations • IT modernisation: IT workloads and amendments, will be very hard created by the surge of covid-19 to undo. This experience alone is patients and remote working enable- increasingly pushing healthcare ment for employees are tackled by enterprises towards consumer- deploying stop gap solutions. Digital Shrikanth Shetty, driven, decentralised care delivery healthcare of the future needs a mod- Executive Vice President and North models. Digital front doors and virtual ern IT foundation that is scalable, America Head - Life Sciences and care corridors are fast becoming cor- resilient and secure; enterprises need Healthcare, HCL Technologies nerstones of this transformation by to modernise their legacy IT systems leveraging app-based diagnostics, to support a broader spectrum of artificial-intelligence, and machine- scenarios. The case for large scale learning-driven point-of-care solu- adoption of cloud and related tech- ovid- 19 has played the tions. Enterprises that embrace this nologies in healthcare, and with unlikely role of a chief transformation with speed and agility speed, just became stronger. transformation officer for will flourish, and those that don’t will the healthcare industry. meet the fate of brick and mortar An Inevitable Future CHealthcare enterprises that have shops who didn’t establish web pres- The world stands at crossroads once typically lagged in digital adoption ence in time. Improved care access again. The covid-19 pandemic has are, in the blink of an eye, transform- to underserved communities and cost ravaged societies, halted most eco- ing. To those of us working at the efficiencies are two major added ben- nomic activity and exposed a number confluence of technology and health- efits of this digital care delivery. of vulnerabilities. But it has also pre- care, the most visible changes are • Unlocking health data: The sented us with an opportunity to with adoption of telehealth, remote publicly visible use of real time data reshape the world for the better. With patient monitoring, remote clinical analytics to monitor and predict the digital innovation, we know that the trials and data-led pandemic man- progress of covid-19 is unprece- future is not far when billions of peo- agement. While in the short term dented. The power of data and ple can easily access a higher quality these radical changes are a business insights that can be eked out of it of healthcare at far more affordable necessity, there are emphatic signs are more evident in healthcare now costs. This is a future worth investing that the lessons learned, benefits than ever before. Command centres in, and the time to do so is now. 7

6 hcltech.com May 9th 2020

How to feed the planet The global food supply chain is passing a severe test

Keeping the world fed

f you live in the rich world and want that, during and after the pandemic, gov- Union’s farm tariffs are four times those Ian example of trade and global co-op- ernments do not lurch into a misguided on its non-farm imports. A dozen or so big eration, look no further than your dinner campaign for self-reliance. exporters, including America, India, Rus- plate. As the lockdowns began in the West The supply chains behind an iPhone, sia and Vietnam, dominate staples such as two months ago, many feared that bread, or a car component that criss-crosses the wheat and rice. Half a dozen trading firms, butter and beans would run short, caus- Rio Grande, are wonders of co-ordination. such as Cargill from Minnesota and cofco ing a wave of stocking-up. Today, thanks But the unsung star of 21st-century logis- from Beijing, shift food around the world. to fleets of delivery lorries filling super- tics is the global food system. From field Concentration and government inter- market shelves, you can binge-eat as you to fork, it accounts for 10% of world gdp vention, along with the vagaries of the cli- binge-watch. and employs perhaps 1.5bn people. The mate and commodity markets, mean that This capitalist miracle reflects not a global supply of food has nearly tripled the system is finely tuned and can misfire, monolithic plan, but an $8trn global sup- since 1970, as the population has doubled with devastating consequences. In 2007- ply chain adapting to a new reality, with to 7.7bn. At the same time, the number of 08 bad harvests and higher energy costs millions of firms making spontaneous de- people who have too little to eat has fallen pushed up food prices. This led govern- cisions, from switching rice suppliers in from 36% of the population to 11%, and a ments to panic about shortages and ban Asia to refitting freezers. The system is far bushel of maize or cut of beef costs less exports, causing more anxiety and even from perfect: as incomes collapse, more today than 50 years ago in real terms. Food loftier prices. The result was a wave of ri- people are going hungry. There are risks, exports have grown sixfold over the past ots and distress in the emerging world. It from labour shortages to bad harvests. 30 years; four-fifths of people live in part was the worst food crisis since the 1970s, And there is an irony in seeing the in- on calories produced in another country. when high fertiliser prices and bad weath- dustry grapple with a crisis that probably This happens in spite of governments, er in America, Canada and Russia caused began with the sale of pangolin meat in a not because of them. Although their role food production to drop. market in Wuhan. But the food network has declined, they still sometimes fix pric- Despite the severity of today’s shock, is so far passing a severe test. It is crucial es and control distribution. The European each layer of the system has adapted. The

7 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com May 9th 2020

supply of cereals has been maintained, the world’s population to 3.4%, the un year, food had become part of a trade war. helped by recent harvests and very high reckons, including in some rich coun- America has sought to manage its soya- stocks. Shipping firms and ports continue tries. This reflects a shortage of money, bean exports and put tariffs on cheese. to move around food in bulk. The shift not food, but if people go hungry govern- President Donald Trump has designated from eating out has had dramatic conse- ments will, understandably, take extraor- abattoirs part of America’s critical infra- quences for some companies. McDonald’s dinary measures. The ever-present risk is structure. President Emmanuel Macron sales have dropped by about 70% in Eu- that rising poverty or production glitches has called for Europe to build up its “stra- rope. The big retailers have cut their ranges will lead panicky politicians to stockpile tegic autonomy” in agriculture. Yet food and rewired their distribution. Amazon’s food and limit exports. As in 2007-08, autarky is a delusion. Interdependence grocery e-commerce capacity has risen by this could cause a tit-for-tat response that and diversity make you more secure. 60%; Walmart has hired 150,000 people. makes things worse. Crucially, most governments have learned Governments need to hold their nerve Cooking up a new recipe the lesson of 2007-08 and avoided protec- and keep the world’s food system open The work of the food-supply system is not tionism. In terms of calories, only 5% of for business. That means letting produce yet done. In the next 30 years supply needs food exports face restrictions, as against cross borders, offering visas and health to rise by about 50% to meet the needs of a 19% back then. So far this year prices have checks to migrant workers, and helping wealthier, growing population, even as the dropped. the poor by giving them cash, not stockpil- system’s carbon footprint needs at least But the test is not over yet. As the ing. It also means guarding against further to halve. A new productivity revolution industry has globalised, it has grown industry concentration which could grow, is required, involving everything from more concentrated, creating bottlenecks. if weaker food firms go bust or are bought high-tech greenhouses near cities to fruit- Covid-19 outbreaks at several American by bigger ones. And it means making the picking robots. That is going to require all slaughterhouses have cut pork supplies by system more transparent, traceable and the agility and ingenuity that markets can a quarter—and boosted wild-turkey hunt- accountable—with, for example, certifica- muster, and huge sums of private capi- ing licences in Indiana by 28%. America tion and quality standards—so that dis- tal. This evening, when you pick up your and Europe will need over 1m migrant eases are less likely to jump undetected chopsticks or your knife and fork, remem- workers from Mexico, north Africa and from animal to human. ber both those who are hungry and also eastern Europe to bring in the harvest. And To understand food as a national-secu- the system feeding the world. It should be as the economy shrinks and incomes col- rity issue is wise; to bend that understand- left free to work its magic not just during lapse, the number of people facing acute ing to self-sufficiency drives and blunt the pandemic, but after it, too. 7 food shortages could rise—from 1.7% of intervention is not. Already, before this-

8 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Mar 12th 2020

The sum of all lives The way people live their lives can be mined, too

But there will be setbacks and privacy problems along the way

hreadworms are trending, according the norm in other areas. By failing to make a human being,” says Eric Topol, head of Tto the app on Johannes Schildt’s the most of their potential, these coun- the Scripps Research Translational Insti- phone. The app was created by Kry, the tries are wasting $600bn a year—roughly tute in La Jolla, California. Swedish digital health-care firm Mr Schil- the gdp of Sweden. Adding real-world data to genome- dt runs. It offers information on the sick- This underutilised resource has at- based profiles would undoubtedly be use- nesses for which people are currently tracted the attention of a panoply of pri- ful. Michael Joyner of the Mayo Clinic in booking doctor’s appointments, as well as vate companies, from minnows like Kry to Rochester, Minnesota, and Nigel Paneth at on things specifically important to its giants like Amazon, Apple, Facebook and Michigan State University argue that char- user—it keeps Mr Schildt, who suffers Google. Governments, hospitals and in- acteristics such as family history, neigh- from hay fever, up to date with the pollen surers, they think, will pay for what they bourhood, socioeconomic circumstances, count. It lets him book an appointment glean from it. So will individuals—who height and girth still outperform genetic with a family doctor or a specialist, and will often pay for the privilege of supply- profiling as predictors for all sorts of indeed to have such an appointment by ing yet more data off their own bat. Mobile health outcomes. This does not mean ge- phone. None of this sounds particularly phones log their users’ physical activity, netic information is without value; it stretching. But in health care, it counts as creating records used by many of the bil- means it needs context. radical. lions of health-related smartphone apps Various new frontiers in diagnosis are According to the Organisation for Eco- downloaded globally every year (1.7bn in being explored. Firms across the world are nomic Co-operation and Development 2013, 3.7bn in 2017). Make sense of all this competing to develop “liquid biopsies” (OECD), a club of richer nations, the world data for them, the argument goes, and you that can detect and characterise cancers creates 2.5 exabytes of data a day—thou- can make money helping people stay by means of fragments of DNA in the sands of times what even the grandest healthy and warning them of disease. blood; other molecular markers could re- sequencing centre can produce in a As with the genome twenty years ago, veal other diseases. But so could the digi- month. Of those which get stored, 30% some scepticism is warranted. But in time tal footprints people leave when they de- pertain to health. The trove contains in- a picture of a life built up from the ge- cide whether to leave the house, what to sights into the health of populations and nome’s underlying recipe, from medical buy, what to search for or what to stream. of individuals, the efficacy of drugs and histories and tests that profile specific the efficiency of health-care systems, the bodily functions, and from the monitor- Not-yet-dead men walking failings of doctors and the financial health ing of every step and heartbeat, will allow Sometimes the footprints may be just of insurers. But OECD countries typically personalised, preventive medicine to be that. Dan Vahdat, who runs Medopad, a spend less than 5% of their health budgets rolled out across entire populations. “All health-technology firm in London, says managing these data, much less than is these layers define the medical essence of conditions as varied as Parkinson’s dis-

9 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Mar 12th 2020

ease, depression and breast as health-care professionals, it cancer can all have a distinc- found that most had methodo- tive effect on a patient’s gait. logical flaws. The world creates He speculates that with One particular worry with enough data covering differ- machine learning in general is ent behaviours it will be pos- that bias in the “training sets” 2.5 exabytes of data sible to identify “digital bio- from which the computers markers” capable of predicting learn their stuff can mean that the risk of Alzheimer’s or a the algorithms do not work a day — thousands heart attack. Work by Dr Topol equally well for all members of has already shown that spikes the population. Medical re- in resting heart rate—more search has a poor historical of times what common when people have an record on such matters, for ex- infection—allow someone ample when it does not match with access to lots of fitbits to clinical-trial populations to even the grandest see when flu is breaking out in the population at large, or ex- the population. cludes women of child-bear- The recognition of such ing age from trials. Machine sequencing centre patterns is clearly a job for the learning could bake in such machine-learning techniques biases, and make them invisi- driving the current expansion ble. can produce in a of ai. These techniques are al- Excessive optimism that ready being used to interpret edges into barefaced hype is diagnostic tests, sometimes just one cause for concern month. with real success. An ai system about datomics. Privacy is, as for prostate cancer diagnosis always, an issue. The amount developed by the Karolinska of data that parts of the nhs what researchers or compa- drome, a hormonal problem, Institute in Stockholm has have shared with Google has nies might do with personal was recommending that an held its own against a panel of worried some Britons. Con- data, there are reasonable con- improbably large number of 23 international experts; a versely, some researchers feel cerns over how safe they can its users see their doctors. nine-country trial is now as- hampered by constraints such keep it. A cyberattack on Prem- Trustable intermediaries— sessing how much it can re- as those of Europe’s General era Blue Cross, an American such as government health- duce the workload of doctors. Data Protection Regulation, insurer, may have exposed the care systems, regulators and But recent research published says Claire Gayrel of the eu’s medical data of 11m customers reputable insurers—will help in The Lancet Digital Health, a data protection authority. in 2015. consumers to know what journal, suggests some cau- They see it as an obstacle to in- There is also the challenge works best. They should also tion is advisable. Looking at novation. Ms Gayrel treats that of cost. Whatever claims are be able to help each other. Not around 20,000 studies of with equanimity: “I don’t made early on and whatever everyone is motivated to im- medical ai systems that think it is a bad thing to think benefits they may demon- prove their health, and even claimed to show that they slower, especially in health.” strate, new technologies have avid consumers of health data could diagnose things as well As well as worries over a marked, persistent tendency will rarely have the same sense to drive up spending on health of common cause as people in rich countries. There is no with congenital diseases and obvious reason to think that, their families. But health con- just because sequencing, data cerns bring people together, processing and some forms of and through supporting each Mapping behaviour machine learning are getting other they may develop new cheaper, their ever greater ap- mechanisms for change. Fitbit, number of active users and devices sold, m plication to health care will Because health systems 30 drive down costs. look to the needs of the many, One reason is that, al- personalised medicine will hit Users 25 though knowledge may be its stride only when it can power, it may also be a need- show that its approaches work less worry. A DNA test that in the round. But as people get 20 seems to tell you some of your more used to customising Devices future, or a watch that can pick their lives through online ser- 15 up atrial fibrillation, may seem vices that know what they great to users; they are less en- want, health care will get 10 ticing to health systems that pulled along. There will be have to deal with diagnoses many false correlations, pri- 5 which are not, in themselves, vacy violations, and errors clinically relevant. Last year along the way. But in the end, 0 the New York Times reported people of all sorts will benefit that a period-tracking app from being understood as 2012 13 14 15 16 17 18 19 which also evaluated women’s unique 7 Source: Fitbit risk of polycystic-ovary syn-

10 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com OPEN TO DISRUPTION

A lesson in digital transformation from fintech

Commissioned by HCL 11 October 2020 hcltech.com A lesson in digital transformation from fintech

igital technologies are bleed across sectors. Innovations that increased income in many areas. At disrupting the landscape enhance capabilities in one field can the same time, many start-ups have of even the most tradi- quickly do the same elsewhere, rev- easily adjusted to working arrange- tional sectors. The finan- olutionising existing industries and ments imposed by health require- Dcial services sector is a case in point. creating new ones along the way. ments. “Start-ups and scale-ups tend The power of disintermediation — Recall how better data storage and to be more agile so suddenly working cutting out the middleman — and the faster transfer speeds for computing remotely is not much of a fundamen- decentralisation of power aided by quickly upended traditional music tal shift,” Mr Kassai explains, “but for these new tools is allowing start-ups and video distribution years ago. This large corporations suddenly working to reshape every aspect of how we scenario will be repeated frequently from home is not always easy.” receive, save and spend money. in the form of many different Underlying this changing land- advances right across the economy. The nature of the new competitive scape are technologies that are opti- environment mising or automating processes, Financial services in the eye of the Ongoing barriers to market entry yielding unprecedented efficiencies in storm make it difficult to start up as a full- performing complex operations. The financial services industry is a service bank or investment house. Smartphones and other mobile prime example of a sector that is Accordingly, existing players do not devices, meanwhile, have changed experiencing the early stages of rev- face big disruptors. Instead, they con- how services can be consumed, ena- olutionary disruption. This tradition- front an army of smaller threats: bling instant and convenient transac- ally staid market has witnessed the would-be unbundlers attacking prof- tions. Accordingly, the need to arrival of numerous so-called fintechs, itable pieces of the financial services enhance the user experience is a which McKinsey & Co defines as value chain. These new players are force driving further developments. “start-ups and other companies that carving out distinct niches in areas Husayn Kassai, CEO and co-founder use technology to conduct the fun- as diverse as payments, e-invoicing, of Onfido, a digital identity verifica- damental functions provided by peer-to-peer lending, automation, tion and authentication provider, financial services, impacting how con- asset management, risk assessment, notes that, especially for digital gen- sumers store, save, borrow, invest, fraud detection, security and business erations, “services and user interface move, pay and protect money”. These financing. have to be fast, intuitive and con- new entrants, staffed by digital For incumbents, though, it is not venient. User convenience is the new natives ready to innovate, have simply a matter of fending off chal- norm and is expected. Traditional and appeared across the whole landscape lengers; the new environment also legacy services, such as going in- of financial services, including invest- includes potential allies. Mr Kassai branch, or showing paper-based util- ment management, lending, pay- explains that many major banks use ity bills are alien to them.” ments, insurance and capital markets. his firm to reduce the expense of While current technology already Finally, the covid-19 pandemic has compliance with know-your-cus- provides substantial­ room to improve dispelled the conventional wisdom tomer and anti-money-laundering user experience, advances in areas that long-term prosperity in the finan- legislation. Yet this same lowering of like global connectivity, autonomous cial services industry depends on size cost also means that new players, artificial intelligence­ (AI) and comput- or historical pedigree. Expertise in which once could not have afforded ing power combined with the prolif- disruptive innovation is now more to meet such compliance require- eration of digital networks and the critical. Mr Kassai notes that in major ments, can now become competitors multiple uses of blockchain mean that developed countries neobanks, pay- to existing financial services firms. continuous disruption will be the ment facilitators, insurers and other Fintech, then, is not simply allow- norm in the lead-up to 2030. fintechs have handled the lockdown ing new companies to enter financial Such technology-driven change well. Their capacity for digital interac- services. It is reshaping the entire will be wide and deep. It will also tion with clients has allowed competitive landscape, making new

PB PB hcltech.com 12 hcltech.com hcltech.com strategies both possible and essential. expect global solutions, such as maintains that financial services insti- “global investment platforms, enabling tutions should adopt technology in a New business models users to invest overseas, communi- strategic manner that leverages their PayPal, for instance, was founded as cate and collaborate across coun- customer data and relationships, ana- a way for consumers to pay for small tries”. lytical tools and computing power. online purchases in the early days of With the ongoing diversification “We can grow in a symbiotic manner e-shopping. Through expansion and and unbundling of services, some with technology companies; it will be acquisition, the company is reaching analysts suggest that financial ser- a win-win for the financial services a level of consumer acceptance that vices will increasingly be provided as sector, the technology companies no organisation receiving retail pay- part of ecosystems. China’s Ant Finan- and the customer.” ments can afford to ignore. cial is an example. Originally a pay- Indeed, many established firms In terms of business models, Pay- ments platform, it now offers a grow- have started to catch up by improv- Pal is well along the way to the cov- ing range of fintech-based services ing their digital offerings. As early as eted status of a platform. “There is to about 1bn users. Mr Assia describes 2014, Citi CEO Michael Corbat a network effect going on,” said Pay- a trend of “re-bundling” as fintech claimed that “we see ourselves as a Pal CEO Dan Schulman to analysts players look to aggregate services for technology company with a banking in October 2019. “We have almost the user in order to provide a better licence”. Established firms in the 300m active accounts now. Mer- experience. Saurabh Narain, presi- industry need to continue paying chants understand the scale we have. dent and CEO of NCIF believes that attention to areas where customer They want to be a part of that. We in the future there will be “a market- dissatisfaction may prevail. A study do start to see right now the begin- place for basic services”. In his view, by PwC suggests that insurance nings of our capabilities of selling as “banks as we know them today will (small and medium-sized enterprise, a platform provider and not just a not exist, but banking as a service personal and commercial) is a sector product.” will”. that may be ready for disruption, not- The intersection of social media Finally, technology will break down ing increased customer dissatisfac- and asset management suggests barriers between industries. Mr Kas- tion. Companies should also take another business model. For example, sai notes that about three-quarters advantage of progress in AI, machine eToro, founded in 2007, has created of his company’s clients are financial learning and computing overall, a social trading and investment plat- services firms. Other sectors, how- which can help in cost optimisation form, according to CEO Yoni Assia. ever, also face strong regulatory in saturated markets with low margins. Among other innovations, it has intro- requirements to be able to identify The current pandemic may have duced “copy trading” which allows customers. Much of Onfido’s client provided the push needed to acceler- users to follow the investment strat- base outside financial services, for ate the transformation of older finan- egies of top-rated investors. example, consists of online health- cial services firms into enterprises fit Unlike in the past, Mr Assia care providers--a growing sector that for the new environment. Mr Kassai explains, “gradually, with widespread must be certain of patients’ identities. reports that many major businesses acceptance of social networks, it has Ultimately, he adds, many companies have accelerated their digitisation become clear that you can discuss engaged in ecommerce will be inter- programmes during the lockdown. and share your investments online. ested in more robust ways to reduce Decreasing footfall in bank branches It’s called social investing. People fraudulent transactions and provide and greater use of digital channels increasingly want to invest in com- a convenient user experience through combined with the need for more panies that they believe in — brands better identity verification. Onfido employees to work from home has that they know and love. When they will not be the only company looking left them with little choice. invest in companies they believe in, for wider opportunities, taking fin- Looking ahead, the rate of change they are proud to show others what tech’s disruption further afield. Ama- is unlikely to diminish. For Mr Assia of they are investing in”. zon Pay, for example, has issued more eToro, the key to navigating disruption Regardless of the business model, than US$3bn in cash advances to is non-stop innovation. He explains success requires a compelling user merchants in recent years. how eToro constantly adapts its offer- experience. Mr Assia draws attention ings based on customer feedback. to the “consumerisation” or “produc- How do companies prepare for According to Mr Assia, “fintech is still tisation” of the industry where new disruption? relatively nascent; the next ten years products consist of user experiences. Traditional firms will need to become are going to be ten times bigger”.7 He further notes that consumers will more agile and adaptable. Mr Narain

PB PB hcltech.com 13 hcltech.com hcltech.com October 2020

Democratising financial data through open banking

he covid-19 pandemic has riences must, therefore, widen to accelerated data-driven facilitate the full range of services. forces that were already Such expansion brings challenges. causing sweeping changes The door stands open to aggregators Tin the financial industry. At the same like Amazon. They are skilled at build- time it has compelled banks to ing customer loyalty and own the become both more open and more customer at a deeper level than banks secure. do. With more activity online, security, Open Banking, or Payment Ser- compliance and data protection must vices Directive 2.0, has been in force be improved and made more usable. in the EU for some time, placing the The ease of transactions in combina- power of data in the hands of banks. tion with the assurance of complete There is so great a divergence in the security will become important points abilities of different banks to make of differentiation. use of this data, however, that ana- What will the banks of the future Rahul Singh, lysts suggest that 80% of today’s look like? Tomorrow’s prospective President and Global Head financial firms will not survive in the homeowner will expect a bank to Financial Services, face of competition from new data- provide everything from the ability HCL Technologies driven, omnichannel financial players to examine properties online to com- over the next 12 years. pleting legal paperwork, paying for The victors will be a new breed of the property, renting furniture and banks that use data to improve cus- applying for loans and insurance. The tomer experience. Before covid-19, focus will be on end-to-end solutions, the mandate for change was to cre- backed by expanded intelligent auto- ate multi-channel offerings that ena- mation, that make banking itself bled banks to become agile while invisible. The key will be open bank- preserving their traditional branch ing that fashions dormant customer networks. data into compelling commerce. The The pandemic shifted the balance winners will be those who provide of that vision. The share of financial the best synthesis of remote services services served solely through online within a demonstrably secure user experiences will certainly be much experience. 7 larger. The scope of online user expe-

14 hcltech.com Mar 28th 2019

How executives use AI Welcome to the machine

High-growth companies are big believers in artificial intelligence

ll workers must have days when they Clearly, their experience so far has not products like cars. Others use “HR bots” to Awonder whether their managers pos- discouraged them. Almost all the high- help employees who have questions about sess any intelligence at all. But next time growth companies (93%) intend to invest their work. you are puzzled by a boss’s decision, con- in AI in the next 1-3 years, and more than More detailed questions reveal that sider this possibility: the manager relied half of them expect to use AI to improve “motivating and inspiring employees” is on artificial intelligence (AI) when consid- their decision-making over the coming the area that managers think might be the ering their options. A survey by Microsoft year. single most useful way to invest in AI. So of 800 business leaders drawn equally So what are the ways in which manag- next time your boss pays you a compli- from eight countries (France, Germany, It- ers hope to benefit from AI? Microsoft’s ment, remember: an algorithm may have aly, the Netherlands, Russia, Switzerland, David Carmona points to four areas. The made them do it. 7 the UK and the US) found they are increas- first is based around customers; identi- ingly keen on the idea of AI. fying for example, which customers are The survey found that 41% of high- likely to “churn”, allowing the company growth companies were already imple- to find ways to keep them on board. A menting AI, as against only 19% of those second approach is to use AI to optimise defined as low growth. There is no proof business processes. Third, AI can be used of causation, of course; the high-growth to make hiring decisions. Fourth, manag- companies have not necessarily prospered ers can use AI to identify new products because they have used AI. The explana- or areas of expansion. Companies have tion could simply be that high-growth been using AI already for issues such as companies have more money to spend on quality assurance, predictive maintenance technology and AI is the latest fashion. and adding digital assistants to consumer

15 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Mar 28th 2019

The explanation could simply be that high-growth companies have more money to spend on technology and AI is the latest fashion.

16 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Nov 28th 2019

To have and to hold Supplying clean power is easier than storing it

Cutting emissions relies on energy-storage technology coming of age

t sounds simple: lift heavy blocks with blocking the sun. That means that solar type of hydropower is not the answer to Ia crane, then capture the power gener- and wind cannot, on their own, replace providing lots more storage. Building a ated from dropping them. This is not an coal and gas plants, which produce con- new reservoir requires unusual topog- experiment designed by a ten-year-old, tinual power reliably. raphy and it can wreak environmental but the premise of Energy Vault, which One answer is to store power in bat- havoc. has raised $110m from SoftBank, a big teries, which promise to gather clean Batteries offer an alternative and avail- Japanese tech investor. The idea has electricity when the sun and wind pro- ability should improve as electric cars competition. A cluster of billionaires duce more than is required and dispatch become ever more popular. “The whole including Bill Gates, Jack Ma, Ray Dalio it later, as it is needed. In 2018 some 3.5 production supply chain for lithium-ion and SoftBank’s Masayoshi Son are back- gigawatts of storage was installed, about batteries for electric vehicles is gearing ing other schemes to capture power. A twice the amount in 2017, according to up,” says Andrés Gluski of AES, an elec- firm incubated at Alphabet, Google’s par- BloombergNEF, an energy data firm. To- tricity company, “so we’re going to pig- ent company, wants to store electricity tal investment in storage this year may gyback on that.” As greater demand led in molten salt. Such plans hint at one reach $5.3bn, it estimates. As this grows to greater manufacturing scale, the cost of the power business’s hardest tasks. it could drive an extraordinary expan- of batteries dropped by 85% from 2010 to Generating clean power is now relatively sion (see chart). However at present only 2018, according to BloombergNEF. That straightforward. Storing it is far trickier. about 1% of renewable energy is com- makes batteries cheap enough not only Solar and wind last year produced plemented by storage, reckons Morgan to propel mass-market electric cars but 7% of the world’s electricity. By 2040, Stanley, a bank. There are still plenty of for use in the power system, too. that share could grow by over five times, hurdles to clear. And as electric cars become more according to the International Energy The most common method of storage widespread their batteries could serve as Agency, an intergovernmental forecaster. so far has been to pump water into an a source of mobile storage, feeding pow- The trouble is, a lull in the wind leaves elevated reservoir at times of plenty and er back into the grid, if required, when a turbine listless. Clouds have a habit of release it when electricity is needed. This the vehicles are parked and plugged in.

17 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Nov 28th 2019

With the right infrastructure combines solar with storage in place, fleets of electric cars to meet peaks in demand. The “The whole production could substitute for new dedi- Rocky Mountain Institute, a cated storage capacity. clean-energy research group, Batteries do a variety of warns that solar and bat- supply chain for lithium- things. A firm called Sun- tery projects, combined with run sells residential solar measures such as smarter ap- ion batteries for electric panels paired with batter- pliances to control demand, ies, a particularly appealing may turn gas-powered plants proposition for Californian into stranded assets. vehicles is gearing up, homeowners desperate for Nevertheless, the battery an alternative to fire-induced industry faces several barri- so we’re going to blackouts. Within the broader ers to broader deployment. To grid, batteries can act as a start with, if a battery over- shock absorber to deal with heats it can catch fire, produc- piggyback on that,” says variations in supply from ing gases that might explode. one minute to the next. Other In the past year installations Andrés Gluski of AES, uses include shifting electric- in South Korea have caught ity supply from the day, when fire. A fire and explosion in solar panels often produce a April damaged a storage site an electricity company. surfeit of power, to the even- in Arizona run by Fluence, ing, when demand rises. a joint venture between AES The growth of storage is and Siemens, a German engi- becoming a headache for neering giant. The causes are its domestic battery-makers, in tanks of chemical solution, old-fashioned power genera- still under investigation. As which are among the world’s as well as mechanical means tors that rely on gas or coal. the industry matures, safety leaders. Some states in Amer- such as Energy Vault’s falling NextEra Energy Resources, measures are likely to become ica, such as New York and blocks. Hydrogen can also be which builds clean-power more rigorous. New Jersey, have mandated made using clean power and installations, is increasingly In the meantime, the in- storage to help reduce emis- turned back into electricity pairing large solar farms with dustry will have to cope with sions. In others, America’s in gas-fired power plants or batteries. AES, which has a patchwork of other rules and federal electricity regulator fuel cells. In the future liq- battery-storage facilities in regulations. South Korea has is trying to open markets to uefied gases might provide a 21 countries and territories, offered incentives for storage, storage, but the details of how solution. Unlike solar panels, runs a scheme in Hawaii that in part to create a market for that will work in practice are which have become standard- unclear. In Britain, batteries ised, different batteries are are deemed “generation as- likely to serve different pur- sets”, which exposes storage poses on a grid. “All batter- Clearing the air developers to extra fees and ies are like humans, equally costs, says Michael Folsom of flawed in some specific way,” Worldwide cumulative energy-storage installations, terawatts* 1.0 Watson Farley & Williams, a says Mateo Jaramillo, who led China law firm. storage development at Tesla, 0.8 United States Even if electricity regu- an electric carmaker. India 0.6 Germany lations were smoothed, Mr Jaramillo now leads Rest of world 0.4 lithium-ion batteries would Form Energy, a firm that is eventually reach their lim- developing an electrochemi- 0.2 its. Breakthrough Energy cal alternative to lithium-ion 0 Ventures (BEV) is a fund backed batteries. Investors include 2017 20 25 30 35 40 by Messrs Gates, Ma, Dalio and BEV and Eni, a large Italian other billionaires to invest in oil and gas firm. Mr Jaramillo Worldwide electricity generation by fuel, % Technology cost reductions 50 Benchmark, = transformational technolo- declines to predict when his 100 gies. The cost of lithium-ion work will be commercialised. 40 Onshore wind turbine Coal 80 batteries is falling quickly, But the goal is clear. “If you 30 60 but to store power for days can develop a long-term stor- Natural gas let alone weeks “lithium-ion age solution,” he says, “that’s 20 Lithium-ion 40 Hydroelectric battery pack is never going to get cheap how you retire coal and that’s Solar photovoltaic Nuclear 10 20 Renewables enough”, says Eric Toone, how you retire natural gas.”7 Oil Other 0 0 BEV’s head of science. 2000 05 10 15 18 2010 11 12 13 14 15 16 17 18 19† Alternatives include flow Sources: BloombergNEF; BP *Forecast from  †To June or forecast batteries, that use electrolytes

18 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com OPEN TO COLLABORATION

Building a synergistic multi-stakeholder ecosystem in the digital era

Commissioned by HCL 19 October 2020 hcltech.com Building a synergistic multi-stakeholder ecosystem in the digital era

ver the next decade, tion models to understand consumer Collaboration in practice companies will operate needs, leverage knowledge within Collaboration typically includes in an increasingly com- their networks and improve their agil- transactions, but it runs far deeper plex world. An ageing, ity. than a typical buyer-seller relation- Ourbanising and growing global popu- • Open innovation is already an ship. In the era of the platform lation will drive shifts in centres of established practice across indus- economy, collaboration requires economic power. Responding to the tries, utilised by companies such as much upfront work to set standards more demanding tastes of a growing Procter & Gamble, Samsung and for integration and infrastructure. middle class, technologies — ranging Unilever. This approach allows ideas For instance, Mastercard is part- from machine learning to 3D printing to flow easily into and out of an nering with retailers and consumer — will revolutionise services and man- organisation in a decentralised way, brands to digitise the payroll of ufacturing. Global challenges like bringing together companies, start- developing-country garment workers climate change and cybersecurity will ups, academia and government in as part of a broader effort to develop require urgent action. Unexpected different permutations and for dif- an “on ramp” to the digital economy. events, meanwhile, will increase com- ferent purposes. Says Mr Haythornthwaite explains: plexity in unpredictable ways. For • Collective intelligence involves “You can’t just say, ‘I’m going to work example, how many businesses can stakeholders co-operating to tackle with you, Marks & Spencer’, because say that they were prepared for the complex issues, often assisted by in fact you’re working with an entire dislocation caused by the covid-19 powerful digital networks that can group of stakeholders — Marks & pandemic. be further boosted with artificial Spencer, its supply chain, govern- Román Arjona, chief economist at intelligence (AI). Citi has used this ments — to bring interoperability the EU’s Directorate-General for approach for strategy formulation, standards within the payments and Research and Innovation, argues that and MIT’s Centre for Collective Intel- banking systems. You can’t do this in if companies are to survive in a com- ligence creates platforms to examine a unilateral way. Putting the stand- plex world, rapid innovation cycles global issues like climate change. ards in place requires an extremely and adaptability will be paramount. • Design thinking seeks to devise broad partnership.” This will require increased collabora- solutions that improve the experi- And collaboration leads to busi- tion and openness. “Innovations are ence of users (including not only ness opportunities. For Antonio Pie- increasingly open in nature,” he customers but also employees, tri, CEO of Aspen Technology, “in explains. “They are no longer based investors, regulators and suppliers). today’s technology landscape part- on linear or bilateral transactions and It encourages multidisciplinary col- nership and collaboration are essen- co-operation. They are built on laboration among creatives, tech- tial to sustain and maintain com- dynamic, networked and multi-col- nologists and managers, with GE a petitive advantage”. The company laborative innovation ecosystems. leading adopter of this way of work- has a rich history of collaboration, They emerge at the interaction ing. Mastercard offers a design- going back to its origins in MIT between the physical, digital and bio- thinking service to its customers. Its research for a project funded by the logical worlds and at the crossroads chair, Rick Haythornthwaite, says US Department of Energy. of various technologies and scientific this approach “builds tremendous Collaborating with start-ups offers disciplines.” closeness with customers and puts an additional advantage. “It gives us us at the heart of their innovation the opportunity to work with com- The landscape of collaboration agenda, not just ours. We can’t think panies that we think are most aligned Globally, companies large and small in silos anymore. We have to col- to our future,” says Mr Haythornth- are embracing collaborative innova- laborate and co-create”. waite. “In a world where we see eve-

PB PB hcltech.com 20 hcltech.com hcltech.com rything through the digital lens, we purpose-built Patient Monitoring Sys- then getting out of the way. In the can influence how those technologies tem. Health system and government present project, the three initial col- come together and the shape of the public health officials can then use laborators brought distinct assets ecosystem itself. That’s invaluable in the aggregated data, presented on a and expertise: Wake Forest in sci- meeting the needs of our customers.” secure, web-based system dashboard, ence and data collection, Javara in At Aspen Technology, collabora- to inform decision-making. The anti- research best practice and strategies tion has also been essential internally. body tests are collected and analysed for researcher-patient interaction, In order to innovate and develop a by researchers at Wake Forest and, and Oracle in information technol- new generation of products, the com- in some cases, a third party testing ogy. Each “had a defined contribu- pany has enabled collaboration company. Since the project’s initial tion”, Ms Byrne explains. “We did not between two areas of expertise: the launch in April, other health systems try to get into each other’s swim core capabilities in chemical engi- in North Carolina have also joined. lanes. We are not competing to be neering, and a newer area—working Within two and a half weeks of all things to each other.” in technologies like AI, the Internet the original partners discussing the • Collaboration happens in an of Things, and cloud and high-per- idea in late March, the project went ecosystem. Those involved in a joint formance computing. The purpose is live, recounts Jennifer Byrne, Javara’s endeavour need to bear in mind to “improve accuracy of modelling, to CEO. By mid-June some 18,000 par- constraints on all the partners and automate knowledge and use cogni- ticipants from Wake Forest’s health the requirements of other potential tive abilities in products”. system were answering the daily stakeholders. For example, medical questions, as well as thousands of research of any kind is highly regu- Collaboration in a time of pan- participants, Ms Byrne estimates, lated, yet outside the present project demic from other systems state-wide. each collaborator might have a dif- Addressing the challenges of covid-19 Already, the US Department of ferent experience of how these rules rapidly requires extensive collabora- Health and Human Services is using affect their own activities. Therefore, tion between organisations and the data to track trends in prevalence, Ms Byrne explains, “we were not act- across sectors. One crucial tool in and Oracle intends to roll the model ing from a scientific standpoint in fighting the disease is the collection out across the whole country. “I don’t isolation and hoping it would work of accurate public health information know of another clinical research with regulators.” A multidisciplinary on its extent, spread and retreat. Col- project of this scale that has been legal team, as one example, with laboration is just as fundamental to launched as quickly,” Ms Byrne says. members from all three collabora- success here as it is in drug discovery. This collaboration provides a prac- tors was thus involved from the start. One example is the recent joint tical illustration of several of the Similarly, there is little point in gath- endeavours of Javara, a specialist points raised in this article: ering data that interests no one. clinical research company, Wake For- • Collaboration depends on a Accordingly, those involved in the est Baptist Health, a North Carolina relationship rather than being project consulted with the Depart- healthcare provider, and Oracle, a purely transactional. Ms Byrne ment of Health and Human Services global technology firm. The three says: “Trust is extraordinarily impor- on what patient information would organisations have launched a large, tant. The pandemic required an be most useful to health officials. community-based research project to immediate response and we did not Openness to collaboration allows provide near-real-time data on the have time to vet each other.” Organ- long-term progress towards address- state of symptomology and sero- isations that seek the benefits of ing complex challenges where no prevalence of covid-19 in North collaborative innovation should single actor can do enough on their Carolina. Initially, individuals are invest in developing trusted relation- own. Ms Byrne notes that the present invited to participate in the study via ships, she adds. “In a collaboration, partnership, which initially included Wake Forest’s electronic health you are representing each other’s a single health provider, has now record patient portal. Invitees are reputation and brand identity.” become a state-wide coalition of sys- sent daily, standardised questions • Collaboration requires letting tems that will grow across the coun- about symptoms. Wake Forest also each actor do what they do best try. “Beyond the pandemic, there will provides a cohort of participants with rather than doing everything be so much more room for us to home antibody-testing kits. jointly. Ms Byrne notes that success work together.”7 The responses to the texted ques- has been built on understanding tions are collated using Oracle’s what each partner has to offer, and

PB PB hcltech.com 21 hcltech.com hcltech.com October 2020

Securing the new perimeter: your living room

s covid-19 forced C Suite.” They need to “understand millions of workers the business risk to get those home, the front line of investments in place,” he explains. the cybersecurity A top priority for the near term A battle went with them. Organisa- is widespread, effective training to tions were forced to secure a fully enable business staff to manage remote landscape — a reality for aspects of cybersecurity through which few had prepared. What had self-service. Cross-departmental been a long-term consideration collaboration and individual respon- became an immediate need for sibility for security extends and tactical responses that could also hardens an organisation’s defences, underpin a resilient long-term addressing the shortage of cyberse- strategy. curity staff with practices, policies Internal security challenges, and new technologies that increase barely managed within controlled the efficiency and effectiveness of Maninder Singh, on-premises workflows, became security efforts. Corporate Vice President and major vulnerabilities when the In the longer term, there is a Global Head, CyberSecurity workforce was dispersed. As need for more cybersecurity & GRC Business, reported in The Economist: “millions professionals and expanded col- HCL Technologies of professionals are at home and laboration across industries. Organi- online, adjusting to new routines sations and security experts must and anxious about their jobs. That also learn from one another to makes them perfect marks.” strengthen infrastructure while How did we become so vulner- making it possible to provide secure able? As companies have under- remote access and combat shifting gone digital transformation, the cybersecurity threats. Companies highest priorities have naturally must fully report on breaches, been profitability, user experience study them and share best prac- and efficiency. Security, if not tices. secondary, has been left in the By raising the visibility of cyber- trusted hands of a very limited security, the pandemic has created number of IT professionals. an opportunity to increase invest- According to CISA director Chris ment and encourage working in a Krebs, the solution to this problem collaborative, convergent manner. In starts with focusing on “the people this way, our collective defence can who make the decisions that grow stronger and our prepared- enable the actions of the IT ness can increase. 7 security community: and that’s the

22 hcltech.com Sep 12th 2019

Cybersecurity A connected world will be a playground for hackers

Few companies making connected gadgets have much experience with cyber security

s ways to break into casinos go, a fish er’s equipment.” His firm also discovered spread into objects that can interact with Atank is an unusual route. Yet that is an attack on fingerprint readers that con- the physical world, it will enable attacks what was used in an unnamed American trolled access to a luxury-goods factory, that endanger life and property. gambling house in 2017. It had invested in and malware which spread through a hos- In 2015 a pair of security researchers a fancy internet-connected tank in which pital department after infecting a connect- from Twitter, a social network, and IOac- the temperature and salinity of the water ed fax machine. tive, a cyber-security firm, staged a dem- were remotely controlled. Its owners were Other incidents have been spectacular onstration for Wired, a technology maga- not naive: when they installed it, they iso- enough to make the news. In 2016 millions zine, in which they remotely took control lated its controls on their own specific part of people in America found themselves of a car while it was being driven. They of their company network, away from all struggling to reach many websites, includ- were able to turn on the stereo and the their sensitive systems. ing those of Twitter, Amazon, Netflix and windscreen wipers, cut the engine, apply It made no difference. According to Reddit. The culprit was a piece of IoT-fo- the brakes and even, in some circumstanc- Darktrace, a computer-security firm, at- cused malware called Mirai. By exploiting es, control the steering wheel. As a result tackers from Finland managed to break a list of default usernames and passwords, Fiat Chrysler, the car’s manufacturer, an- into the tank’s systems, then used it as a which most users never change, Mirai had nounced it would recall 1.4m vehicles. Se- stepping stone for the rest of the casino’s infected hundreds of thousands of con- curity researchers have demonstrated an networks. They made off with around nected devices, from smart energy meters ability to hack into medical devices, in- 10GB of data. to home CCTV cameras and connected cluding pacemakers and insulin pumps. Computer security is already hard. Eve- baby monitors. Hacking an insulin pump would be a ryone from the central bank of Bangladesh Each infected gadget became part of a convoluted way to kill someone. But less to America’s National Security Agency has “botnet”, a group of computers in thrall to drastic sorts of crime will be possible, too. suffered hacks or data breaches. The IoT the malware. The botnet then performed a Ransomware, which prevents use of a will make things worse. A world in which “distributed denial-of-service attack” computer until cash is paid, is a natural fit more objects are computers is a world against Dyn, a company that helps main- for a world where everything is connected. with more targets for miscreants. tain the routing information that allows Ransomware for cars or home-lighting David Palmer, Darktrace’s director of browsers to reach websites. By deluging systems is a popular near-future predic- technology, reels off a list of examples. Dyn’s servers with junk messages gener- tion at computer-security conferences. “We’ve seen corporate espionage between ated by the subverted devices, the botnet Some accidental infections have already suppliers inside a power station,” he says. prevented them from responding to legiti- happened. In 2018, 55 speed cameras in “One supplier was using [their] access mate requests. Victoria, Australia, were infected by a within the network to look at the perfor- But the IoT will do more than simply piece of ransomware that was designed to mance characteristics of another suppli- give hackers new targets. As computers attack desktop computers. In June Avast

23 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Sep 12th 2019

Software, a Czech cyber-secu- almost any computerised problem to those better suited for more than five years. That rity firm, demonstrated how to gadget will be riddled with to dealing with it. Arm has for- sort of institutional neophilia install ransomware on a net- bugs. tified its chip designs with is not going to work with prod- worked coffee machine, mak- Another problem is that built-in security features, as ucts like cars or factory robots, ing it gush boiling water and few of the companies making has Intel, the world’s biggest which can have much longer constantly spin its grinder un- connected gadgets have much chipmaker. lifespans, says Mr Palmer. Em- til the victim pays up. experience with cyber security Big computing firms are ploying the programmers nec- – or the incentives to take it trying to turn security into a essary to provide support for Dangers of connection seriously. Good security costs selling point. Microsoft sees dozens of models for decades, Companies are aware of the money, and the better it is, the the IoT as an important market he says, will be an expensive danger. A survey of managers less its benefits are visible to for its cloud-computing busi- proposition. by Bain & Company, a consult- the end-user. Attacks like Mi- ness. Under the Azure Sphere ing firm, found that worries rai, in which the costs fall not brand it has developed a secu- Code and the law about security were the single on the gadget-makers or their rity-focused, low-power mi- Looming over everything, says biggest barrier for companies owners but on unrelated third crocontroller designed to be Angela Walch, an American thinking of adopting IoT tech- parties, muddy things even the brains of a wide range of lawyer who specialises in tech, nologies. Consumers are wor- more. The upshot is that basic IoT devices (these are smaller, is the question of legal liabili- ried, too. A survey of 2,500 of precautions are routinely ig- cheaper and less capable than ty. The software industry uses them by Ernst & Young, a man- nored. A paper published in a microprocessor). Those mi- licensing agreements to try to agement consultancy, found June by Stanford University cro-controllers run a security- exempt itself from the sort of that 71% were concerned about analysed telemetry from 83m focused version of the Linux liability that attaches to firms hackers getting access to smart connected devices and found operating system and commu- that ship shoddy goods. Such gadgets. that millions used old, inse- nicate through Azure’s cloud an exemption, she says, Patching up the holes will cure communication proto- servers, which have extra secu- amounts to an enormous de not be easy. One reason is that cols or weak passwords. rity features of their own. facto subsidy. computers, and computer soft- One option is to learn from Mark Russinovich, Azure’s So far courts (at least in ware, are complicated. Ford’s others. In February the Indus- chief technology officer, says America) have been broadly best-selling F150 pickup truck, trial Internet Consortium, a many of the security features happy to enforce such dis- for instance, is reckoned to trade body focused on indus- were inspired by lessons from claimers. Ms Walch says any have around 150m lines of trial deployments of the IoT, the firm’s Xbox video-gaming attempt to change that would code. A general rule is that published a guide to security division, which has plenty of be fought by the software in- good programmers working written by experts from veter- experience designing hack-re- dustry, which has long argued under careful supervision av- an firms such as Fujitsu, sistant computers. Starbucks, a that holding it liable for mis- erage about one bug per 2,000 Kaspersky Labs and Microsoft. coffee chain whose connected haps would stifle innovation. lines of code. That means that Another is to outsource the coffee machines can download But that line will become hard- new recipes, is one early cus- er to defend as software tomer. spreads into the sorts of physi- Governments are getting cal goods that, historically, involved, too. In 2017 Ameri- have not been granted such ca’s Food and Drug Adminis- legal exemptions. “What are The IoT will make tration issued its first cyber- we saying?” she asks. “That if security-related product recall, buggy software or compro- having found that some wire- mised software kills someone, less pacemakers were vulner- you won’t be able to claim?” things worse. able to hacking. The following Bruce Schneier, an Ameri- year California became the can security expert, thinks first American state to man- that, in the long run, the con- A world in which date minimum security stand- sequences of poor security ards for IoT products, includ- could mean that businesses ing a ban on the use of default and consumers reach “peak passwords. Britain’s govern- connectivity” and begin to more objects ment is mooting similar laws question the wisdom of con- to require manufacturers to necting everyday objects. He provide contact details for draws an analogy with nuclear are computers is bug-hunters and to spell out energy, which enthusiasts how long products can expect once saw powering everything to receive security updates. from cars to catflaps. These a world with But whereas widget-makers days “we still have nuclear can learn much from the com- power,” he writes, “but there’s puting giants, some lessons more consideration about will have to flow in the other when to build nuclear plants more targets for direction, too. The computing and when to go with some al- industry moves at high speed. ternative form of energy. One Smartphones, for instance, day, computerisation is going miscreants. rarely receive security updates to be like that, too.” 7

24 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Jul 11th 2019

Digitisation Digitisation is helping to deliver goods faster

Machines are replacing humans in prediction and planning

igitisation will have the impact on “Dsupply chains that steam and elec- tricity had on manufacturing,” declares Joe Terino of Bain. His claim seems hy- perbolic, but it may yet prove prescient. Nearly 30 years after the internet first emerged as a tool for business, the man- agement of supply chains at most multi- national corporations (MNCs), which do not operate in the rarefied air of Amazon and Alibaba, remains a surprisingly back- ward-looking, sluggish affair. The good news is that companies in many industries are experimenting with a variety of new technologies and meth- ods that promise to improve how they plan, source, make and deliver. These innovations are making supply chains smarter by increasing their predictabil- ity, transparency and speed of delivery. First, to predictability. Firms have long used historical sales data to come up with demand forecasts, then manu-

25 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Jul 11th 2019

factured and distributed ac- shelves by 30% and cut its in- application of AI to supply- launched a “track and trace” cording to the plan. This anti- ventory needs by several days chain management and man- service in partnership with quated approach cannot keep by replacing manual stock ufacturing could create $2trn Sigfox, an IoT service provid- pace with today’s on-demand planning with JDA’s AI system of value. er. Initially it will track only economy. So firms are ex- for demand forecasting and containers travelling from perimenting with AI to assess replenishment. Out for delivery suppliers to factories run by everything from social-media ORSAY, a German fashion As for transparency, Adam Groupe PSA, a big French car trends and shifts in demand retailer, last year used JDA’s Mussomeli of Deloitte, a con- manufacturer, but the service to inventory turnover and self-learning algorithm to sultancy, says that an age-old is to expand across Europe vendor behaviour. Their goal make 112,000 autonomous question still bedevils supply- this year. is to fine-tune supply chains pricing decisions. This ena- chain managers: “Where’s my Digital innovations from in real time. bled the firm to reduce the stuff?” This may seem surpris- the top down and bottom up An annual survey by volume of stock that need- ing in an age of personal con- are making shipping smarter KPMG, a consultancy, and ed discounts of over 30% nectivity, smartphones and too. Singapore is building a JDA, a supply-chain software to sell. GPS, but it is still true. massive new port that will firm, released in May, asked Intel, a big manufacturer Pawan Joshi of E2Open, a expand its use of automated executives which technolo- of computer chips, estimates supply-chain-software firm, cranes and driverless vehi- gies had the highest poten- that it has already saved $58m explains why. Because of wide- cles. It has also launched an tial impact on supply chains through better forecast mod- spread outsourcing, typical international effort to digitise and were most likely to be elling. The firm uses so many MNCs do not make products trade. Tan Chong Meng, head adopted. Cognitive ana- bots (software that runs auto- (contract manufacturers do); of Singapore’s PSA, a giant lytics and AI came out on mated tasks) that it has cre- they do not ship them (third- port operator, explains that top, shooting up from their ated new bots to manage the party logistics providers do); “like the swift codes used in rankings the previous year. worker-bots. One executive they do not store them (ware- banking, we need common Blockchain and drones were says that lawyers have been housing firms do) and they do digital standards.” down year-on-year. called in to decide whether not sell them (resellers and IBM and Maersk are us- JDA uses deep-learning al- management is liable for bad retailers do). So, he says, “the ing blockchain to try to make gorithms developed by Blue decisions made by boss-bots. data needed to make real-time shipping paperless and trans- Yonder, a German startup it McKinsey estimates that decisions are not inside the parent. Their TradeLens ini- acquired that originally cre- 40% of all procurement tasks ecosystem of the manufactur- tiative got a big boost in May ated the software for particle- (vendor management, order er.” Data inside firms are also when CMA CGM and MSC, physics experiments at the placement and invoice pro- compartmentalised into spe- two big European shipping CERN laboratory in Geneva. cessing) can be automated to- cialised software used by dif- firms, joined. The consor- Morrisons, a British grocery day, and 80% soon; this could ferent divisions. E2Open con- tium accounts for almost half chain, reduced the incidence produce annual cost savings nects and makes sense of all the world’s cargo-container of out-of-stock items on its of 3-10%. All told, it reckons these data. shipments. Every participant In November 2017 a strike in the process, from shipper by German cargo-handlers to customs agent to auditor, stranded a shipment of IBM will be able to track ship- mainframe computers at ments from start to finish by Frankfurt airport. Unable to inspecting the relevant parts Digitisation will track its precise location, the of the blockchain rather than firm assumed the pricey car- ploughing through lots of pa- go was safe inside an airport perwork. warehouse. In fact, it sat on an Standing at Flex’s Pulse have the impact icy tarmac for nearly a month, command centre near Silicon exposed to blizzards. When it Valley, Tom Linton looks every was eventually located, the inch a commander-in-chief. on supply chains kit – portedly sitting in four The system gives him access inches of water – was a total to 92 variables from his sup- write-off. ply chain in real time. Rather that steam and The rise of the internet of than hoard this intelligence, things (IoT) will help. Sensors he shares it with employees, are coming onto the market suppliers and clients on com- that track not only the loca- puters and mobile phones. electricity had on tion of goods, but also the His “data democracy” has orientation of crates and fac- decentralised a lot of deci- tors such as temperature and sion-making and speeded up manufacturing. humidity. In February IBM the flow of parts. In the first

26 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Jul 11th 2019

two years of using Pulse, Flex reduced in- Fast Radius, a Chicago-based uni- Rivals send containers across the Pa- ventory by 11 days and released $580m of corn, has an advanced manufacturing cific to America that are only 65% full. cash. “The theory of everything is speed, facility located at a big shipping hub in Because his firm digitises packing lists and you need visibility to get velocity,” Kentucky run by UPS, one of its inves- using ML and can run real-time analyt- says Mr Linton. tors. Its secret weapon is a collection of ics, it is often able to fill the empty third To deliver that speed, product design 3D printers from top manufacturers. An of the container quickly with smaller is undergoing a transformation. Spencer aerospace firm urgently needed a tool to loads also waiting to ship. To match sup- Fung is chief executive of Li & Fung, an restart production. Making and shipping ply and demand in smaller and varied Asian supply-chain firm that has helped it using normal manufacturing methods shipments, says Mr Petersen, “brains, Western MNCs with sourcing for over a would have taken 45 days. Lou Rassey, spreadsheets and phone calls aren’t century. Getting a new fashion item from Fast Radius’s boss, says his firm got the enough. You need technology and data paper sketch to the high street used to digital file, printed the tool and delivered to make decisions right.” take 40 weeks, he recalls. Now it can take it via UPS, all within two days. Dave Clark, a senior operations ex- half that. At a busy warehouse in Yantian, a port ecutive at Amazon, agrees. Supply-chain Ford’s Hau Thai-Tang says the use of district in the southern Chinese city of management has gone from a negotiation 3D prototyping and digital design short- Shenzhen, Flexport, a Californian firm, and procurement job to a technology and ened the development of the new Mus- is digitising the freight-forwarding busi- science function, he says. Two decades at tang GT500, a sports car, by 18 months. ness. As lorries arrive at the loading bay, the trailblazing firm have convinced him Carbon, a Californian 3D-printing uni- cargoes are measured digitally, with no that managers introduce huge variability corn rumoured to be considering a public manual entries or paper forms, to capture by relying on gut instincts. Rather than flotation, is now printing parts used on dimensions straight to handheld devices machines eliminating human labour production lines that produce hundreds and the cloud. Every pallet is barcoded downstream in the warehouse, as techno- of thousands of Ford vehicles and Adidas and weighed on a digital scale. Computer pessimists fear, he sees a future in which running shoes a year. vision turns analogue forms into digitally ML replaces human judgment upstream Logistics innovators are harnessing searchable ones, and machine learning in prediction and planning. He sums up platform technologies like those pio- (ML) optimises loading. Flexport reached Amazon’s thinking neatly: “We are a sup- neered by Uber and Airbnb. Warehouse a valuation of $3.2bn after a $1bn invest- ply-chain technology company.” 7 Exchange, a startup, matches owners ment by Japan’s SoftBank in February. offering slivers of warehouses on short- Ryan Petersen, its boss, argues that the term contracts to firms with uncertain or old model of shipping 40ft-container- highly fluctuating storage needs. UPS, a loads of a single product from China to big American courier, last year launched a handful of big distribution centres in Ware2Go, a platform that connects firms America or Europe cannot meet today’s with warehouse space, inventory man- demands for endless variety and speedy agement and other logistics services. delivery.

27 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com OPEN TO ADAPTATION

Navigating the new world (dis)order by embracing change

Commissioned by HCL 28 October 2020 hcltech.com Navigating the new world (dis)order by embracing change

t the turn of this year, 20th and early 21st centuries were encouraging, according to Nadjia the business landscape laminar. The flows sped up occasion- Yousif, managing director and partner was already characterised ally but did not become turbulent.” at Boston Consulting Group. Some by complexity. The bound- According to Mr Brown, the white- have turned to help companies dig- Aaries between sectors were blurring water epoch of today requires rapid itise their payments systems, for as technology companies challenged improvisation and an increased abil- instance. As conduits for government legacy businesses in everything from ity to withstand uncertainty, which aid and furloughs, they have also manufacturing to financial services. demands entirely new mindsets and fixed many cumbersome internal pro- Regulators were imposing new attitudes. This white-water theory, cesses for measuring risk, allowing frameworks to grapple with the dig- developed by Mr Brown in partner- them to use their own capital to ital era in areas like data privacy and ship with Ann Pendleton-Jullian, an extend loans to viable businesses. “I cybersecurity, and this was motivat- architect and fellow at Stanford Uni- have been impressed by the ability ing companies to overhaul many versity’s Centre for Advanced Study of banks and financial players to pivot aspects of their business. Social in the Behavioral Sciences, aims to products and services quickly,” says media judged companies that fell equip businesses for a world that is Ms Yousif. short of expectations in terms of continually changing. “Any time a kay- The food and beverage sector, workplace culture, diversity and sus- aker faces a new rapid, they need to another industry that is not famed tainability. comprehend what the ripples really for being innovative, has also adapted In light of how the covid-19 pan- are and what is beneath the surface,” swiftly to the challenges brought by demic has upended the global econ- he says. Adapting to this reality the lockdown. “Nestlé introduced omy and healthcare systems, such requires a shift from top-down con- visualisation tools to provide techni- challenges now pale in comparison trol to a culture that embraces agility, cal support to factories from off-site with those the world currently faces. adaptation and dig­ital transformation. locations to avoid travel, both improv- With this in mind, however, the very Successful businesses will be quick ing efficiency and cutting emissions,” principles and attitudes that corpo- to seize the opportunities presented says Béatrice Guillaume-Grabisch, rate leaders adopted to navigate dis- by change. the company’s executive vice-presi- ruption and complexity before the dent and global head of human virus struck – agility, flexibility, dis- Innovating through a crisis resources and business services. Not- tributed decision-making and digital Few events are as radically contingent ing the huge increase in home cook- transformation — have put them in as a global pandemic that has seen ing during the pandemic, Nestlé has a good position not only to survive many safe and steady businesses, also used its digital channels to pro- but to thrive in the wake of covid-19 from airlines to real estate, disrupted vide recipe ideas and has doubled and beyond. overnight. The companies best posi- the number of chatbots used by the tioned to cope with the crisis have brand to suggest recipes and give A nautical analogy been those in safer sectors, like cloud cooking tips, according to Ms Guil- John Seely Brown, co-chair at the computing and e-commerce, as well laume-Grabisch. Deloitte Centre for the Edge and vis- as those with the most agile, flexible iting scholar at the University of mindsets. Rewriting culture Southern California, conjures a nauti- The financial services industry, for There is, of course, much room for cal analogy for the transition that instance, has long been considered a improvement. Jon Messenger, tele- businesses have been contending slow-moving sector, with incumbent work expert at the UN’s International with in recent years. “Companies banks threatened by digital challeng- Labour Organisation, says that some moved from steam-liners to sailing ers that were out-innovating them frontline managers have not shifted boats to white-water kayaks,” he says. and winning growing numbers of optimally to the new remote-work “Until recently, you could predict what customers. But the response of main- reality. “There has been managerial was going to happen because the stream banks to the crisis has been resistance, among supervisors espe-

PB PB hcltech.com 29 hcltech.com hcltech.com cially, to managing remote staff,” he in the future. Yet Ms Johnson says: domains of data, technology and busi- says. “We have seen some cases of “Some disabled people want to work ness strategy. managers trying to claw back a com- in an office environment—and it’s The role of purpose mand-and-control style, such as by with responsibility of the organisation Finally, the pandemic has underscored contacting teleworkers all the time to make sure that is still possible.” the crucial role of purpose as part of and requiring constant updates. This Companies and staff also need to the navigating system of a modern shows that it’s not enough to give step up their reskilling efforts. Threat- company. Many brands, conscious of your blessing to telework; if there is ened perhaps by the rapid improve- their ability to contribute to the resistance down the chain, it won’t ment of automation technology, response, have lent time, resources work effectively.” Mr Messenger many workers – and companies — and effort to supporting public health: advises setting “clear expectations were already aware of the need to witness the fashion brands requisi- and accountability, giving workers strengthen their digital capabilities; tioning their facilities to mass-pro- time sovereignty and the ability to the pandemic has only strengthened duce masks, the hotels and room- manage themselves”. Autonomy was this imperative. “While we don’t yet booking apps offering facilities and already a key piece of the agility tool- know exactly what the ‘new normal’ services to accommodate health box before covid-19; it is a necessity will look like, one thing is clear: both workers,and the manufacturers now. new jobs that emerge and existing exploring ways to produce makeshift Companies also need to ensure jobs that remain will require digital ventilators. that when they adapt their processes, skills,” says Karin Kimbrough, chief Evan Goldberg, founder of Oracle like shifting permanently to hybrid or economist at LinkedIn. “And people NetSuite, identifies a trend in man- remote working, they factor in the will need to build more technology agement culture towards acknowl- needs and preferences of all staff, and skills — both basic and specialised — edging a company’s wider responsibil- especially those whose voices have in order to get back to work, creating ity within society; key moments too often been ignored, such as those a huge skilling challenge ahead.” include a high-profile annual letter to with disabilities. “This is an opportu- While not every job will require chief executives from Larry Fink, chair nity, if we harvest it and foster it, to advanced technology skills, Ms Kim- of management titan BlackRock, who make the world a more inclusive place,” brough explains, all roles will require advised leaders to run their compa- says Liz Johnson, a British Paralympic basic competencies such as digital nies with social good in mind. “This swimmer and gold medallist at the literacy, web development or graphic shift is driven in no small measure by Beijing Olympics who now advises design. “We’re already seeing roles in a new generation of employees who companies and organisations on inclu- areas like sales and marketing begin- want to feel a sense of purpose in sion best practices. “We have seen ning to require a basic understanding what they do,” says Mr Goldberg. that everyone can adapt, and it is of artificial intelligence (AI). And the “There needs to be a balance between possible to step away from the norms.” three fastest-growing clusters of jobs profit and the good of the world, and Ms Johnson warns, though, that one before coronavirus — cloud, engineer- that is trickling up to management should not make assumptions about ing and data clusters — require disrup- and executives.” The global crisis will what different workers want in the tive tech skills like AI, robotics or cloud provide companies with a golden future workspace once social-distanc- computing.” opportunity to prove their commit- ing policies end and firms shift The change in the composition of ment to goals that go beyond satisfy- towards either a return to normal or executive boards will also accelerate ing their shareholders. 7 a hybrid of working from home and as chief technology, data and informa- on company premises. One such tion officer functions acquire more assumption is that all people with dis- clout and companies emphasise abilities will want to work from home greater collaboration across the

PB PB hcltech.com 30 hcltech.com hcltech.com October 2020

Workforce adaptability as the foundation for resilience

he covid-19 pandemic ees are valued not just for filling a delivered sharp lessons narrowly defined role but for about digital transforma- contributions that reverberate across tion. Massive forced the business. These are the T-shaped Tchanges in workforce practices employees made famous by IDEO: occurred faster than anyone people with depth of expertise and expected, exposing weaknesses in the ability to collaborate. technology and As an added benefit, companies security stacks. open to adaptation attract the most Sudden digital reskilling brought desirable talent who bring the skills home the point that a culture of and creativity needed to enhance change is far more about the will to customer experiences. Frequent act than about a new technology retraining reinforces those traits. stack. Before the crisis, cultural In a company prepared for agility lagged behind technological adaptation, the guiding principle is Anand Birje, change in most organisations, readiness for change. Mutually Senior Corporate Vice President and hindering digital transformation. supporting technologies empower Global Head, Digital & Analytics, Remaining gaps between digital safe, rapid experimentation and HCL Technologies migrants and natives can no longer evolution. Composable systems be tolerated. Business and technol- provide building blocks of technol- ogy leaders must instil a culture of ogy services, reconfigurable for new adaptability that stands ready to challenges. Those blocks are easily meet customer expectations. consumed, encouraging creative When executives know that their responses from diverse contributors. organisation is primed for change, Flexible technology is important, management may act decisively, but forward momentum is sustain- even radically, with confidence that able only if a company cultivates a progress will occur. That makes it culture of embracing growth. possible to reliably evaluate near- Adaptability is important to busi- term impacts and to prepare for ness continuity, but, more impor- change in the long-term. tantly, flexibility creates a virtuous The adaptable organisation feedback loop in which change is a rejects siloed, top-down structures prized commodity that contributes in favour of multidisciplinary teams to long-term success. 7 headed by digital leaders. Employ-

31 hcltech.com Jul 6th 2019

A different dystopia July 2030 What if robots don’t take all the jobs?

The real danger to future prosperity could be too few robots, not too many. An imagined scenario from 2030

t is hard to believe now, but a little more Ithan a decade ago people were seriously populations age and workforces shrink. ny and Italy about 60% did. worried about robots taking all the jobs. What happened to the supposedly inexo- But these dire forecasts did not come Back in 2018 the chief economist of the rable march of the machines? to pass, for two reasons. First, AI failed to Bank of England, Andy Haldane, gave a At the height of the concern about advance as quickly as some people thought warning that “large swathes” of the pop- the coming jobs apocalypse, in the late it would. In 2018 Rodney Brooks, a profes- ulation would become “technologically 2010s, the most vulnerable people were sor at the Massachusetts Institute of Tech- unemployed”. He argued that the “fourth thought to be older, unskilled workers. In nology (MIT), forecast that driverless-car industrial revolution” of automation and 2017 the McKinsey Global Institute, part services comparable to conventional taxis artificial intelligence (AI) would create of a business consultancy, predicted that were unlikely before 2032 and that a ro- even more disruption to people’s working 800m people in 46 countries, or roughly bot which could navigate its way around lives than the previous three. Robots would a third of the workforce, could lose their the steps and clutter of an ordinary home do everything. There would be universal jobs to machines by 2030. Older workers would not become widespread until 2035. leisure but mass unemployment. Similar were thought to be especially vulnerable With just a few years to go, he seems likely warnings were a fixture at the World Eco- because they were engaged in repetitive, to be proved right on both counts. During nomic Forum’s annual meeting in Davos. unskilled manufacturing, the kind that the 2020s robots powered by AI became Bestselling books predicted dystopian was easiest to automate. In 2018 Mercer, more widespread, changing many indus- outcomes in which society split into a another consultancy, used an index of risk tries and taking over repetitive jobs. But wealthy, robot-owning plutocracy and an developed by Carl Frey and Michael Os- they were not cheap and still cannot han- unemployed underclass, and repressive borne of the Oxford Martin School to calcu- dle many tasks requiring human discretion governments would be needed to rein in late that three-quarters of Chinese workers or empathy. In nursing and social care, in social discontent. But robots did not take aged over 50 were at risk of being replaced particular, robots are not up to the job. all the jobs—and today, in 2030, much of by robots. In America just over half of older Second, the 2020s showed that the level the world faces the opposite problem as workers ran the same risk, while in Germa- of employment depends on more than just

32 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Jul 6th 2019

automation: it also depends ing that period. heavily in automation, it workers for employment in on ageing and immigration. That itself might not have might have been better able caring professions, both coun- As their populations aged, rich been an insuperable problem. to cope. As Daron Acemoglu tries softened the blow of the countries saw their workforces After all, the workforce was of MIT and Pascual Restrepo demographic transition and shrink. Many invested more in at least still growing, unlike of Boston University showed maintained high productivity robots as they aged, and some Japan’s or China’s. But Britain in 2018, countries which age growth. let in more migrants, plugging was already suffering from a fastest tend to invest the most Germany also had to deal some of the skills gaps and skills shortage, which sudden- in robotics—causing their GDP with an ageing, shrinking boosting productivity. Coun- ly got much worse. In 2015, 35% growth to hold up better than workforce but reaped the re- tries with relatively slow age- of the workers in health and you might expect. Britain, wards of allowing a large num- ing and lots of robots did best. social care, one of Britain’s big- though, was a technological ber of migrants into the country But those that underinvested gest employers, were over 50; laggard. According to the Inter- in 2015-16. America’s popula- in automation, or shut them- 18% were foreign born. A poll national Federation of Robotics tion did not age as quickly as selves off from the world, were in 2015 found that a third of its “robot density” (the number those in other rich countries hard hit. doctors in the National Health of industrial robots per 10,000 so its workforce did not con- Service were planning to retire manufacturing workers) was tract. After the isolation of the Help wanted by 2020. So as doctors retired only 85 in 2017, compared Trump years, the country has Britain was an extreme exam- and Spanish-born nurses went with an average of 106 across become more welcoming to ple of the second group. In the home, the country found it in- Europe, and 710 in South Ko- immigrants; it has also main- 2020s its economy was still creasingly difficult to replace rea. Risk-averse businesspeo- tained its traditionally high in- suffering a trade shock from them, giving rise to a series ple and technophobic unions vestment in automation. As for Brexit and its political system of stomach-churning medical ensured that Britain failed to China, its workforce has con- was in turmoil. But the longer- scandals which undermined catch up in the 2020s. tracted dramatically, damaging term problems were demo- the health service’s already- The results were painful. As the Communist Party’s attempt graphic, made worse by the tattered reputation. Similar- the workforce stopped grow- to introduce a proper pen- increased difficulty of hiring ly, successive governments’ ing, labour markets tightened sion- and social-security sys- workers from abroad. Between promises to build more houses and wages rose. But overall tem, and making it hard even 2000 and 2015 the British pop- foundered on a lack of suitable output stagnated and tax reve- to find enough soldiers for the ulation had expanded by 11% workers. In 2018 two-thirds nues fell, reducing the funding People’s Liberation Army. So- and the workforce had grown of small and medium-sized available for public and social cial disruption and discontent by 14%, thanks to an influx of building firms said they could services, just as they were also have reined in China’s global foreign-born workers. Over the not find enough bricklayers, being hit by skills shortages ambitions. next 15 years these trends went carpenters and joiners, in part and the increasing demands of The dystopia predicted in into reverse. As ageing began to because they had become over- an older population. Class siz- the late 2010s, of widespread have a larger effect, the popu- ly reliant on importing plumb- es increased as schools strug- technological unemployment, lation increased by just 6.5% ers from Poland and carpenters gled to find enough teachers. has not come to pass. Even at between 2016 and 2030, while from Hungary. Brexit meant Standards of service declined the time, the evidence for an net migration dropped to a few those options vanished alto- in health care, transport, imminent jobs apocalypse was thousand a year. The workforce gether in the 2020s. hospitality and other labour- noticeably lacking: employ- grew by barely 1% in total dur- Had Britain invested more intensive sectors. A series of ment across the rich world strikes successfully blocked reached record levels in 2019, an unpopular effort to raise re- while productivity growth in tirement ages more quickly. In many countries was anaemic. 2026, caught between the mili- That suggested machines were The 2020s showed that tancy of its supposed allies and not displacing human workers the hostility of markets, Jeremy after all, and their ability to do Corbyn’s Labour government so had been overstated. In ret- the level of employment prevaricated, backtracked, ap- rospect, the doom-mongers of pealed to voters and then fi- Davos were worried about the nally collapsed. wrong thing. Today another depends on more than Britain was an extreme case. dystopian scenario looms in- Other countries faced different stead: that of a world in which problems, or managed them there are too few robots, not just automation: it also better. Japan and South Korea too many. 7 have seen their workforces depends on ageing and shrink in absolute terms but, by investing in robots and software to perform repeti- immigration. tive tasks, and by retraining

33 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Oct 7th 2019

Human-machine interface Data-labelling startups want to help improve corporate AI

A clutch of firms is generating the feedstock for machine-learning algorithms: tagged data

orporate boards are besotted with taskmasters. Other firms specialise. Hive ity-conscious,” insists its boss, Alexandr Cartificial intelligence. Worldwide has turned data-labelling into something Wang. He says revenues have grown ten- spending on AI is expected to rise from “like playing Candy Crush”, explains its fold from a few million dollars last year. $38bn this year to $98bn by 2023, esti- boss, Kevin Guo, referring to a hit tile- Labelbox helps firms gauge the accuracy mates IDC, a research firm. So far, though, matching game. Its mobile app makes it of labelling. only one in five companies aware of the easy for users to identify objects, earning AI.Reverie goes further, dispensing technology’s potential has incorporated money instead of points. Its 1.5m players with human labellers altogether. It uses machine learning into its core business. across the world serve more than 100 cor- techniques developed for video games One reason for the slow uptake is the porate customers. to create and automatically label scenes dearth of quality data to teach algorithms Because human data-labelling is that can be used to train image-recog- to perform useful tasks. The most com- labour-intensive, most of it happens in nition algorithms. Its approach is par- mon form of AI, called “supervised learn- low-wage countries like India, Vietnam ticularly useful for exposing software to ing”, requires feeding software stacks of and the Philippines. In such places da- scenarios that might be hard to find in pre-tagged examples of, say, cat pictures ta-labelling “is the easiest way to earn data gleaned from the real world. It can until it can tell a feline image apart by money”, says Hafiz Arslan, a Pakistani generate scenes set underwater, or featur- itself. Data-labelling is the sort of grunt software engineer who was recently paid ing heavy fog or torrential rain. The com- work that corporate AI-users would pre- $200 for classifying 4,500 images by the pany’s backers include In-Q-Tel, a venture fer someone else to do for them. An in- sport they depicted (football, cricket or fund for America’s intelligence services. dustry is popping up to help. tennis). The industry’s short-term future The market for data-labelling servic- A distributed workforce is, however, seems assured. In the longer run a threat es may triple to $5bn by 2023, reckons prone to human error. That is a problem may come from developments in “unsu- Astasia Myers of Redpoint Ventures, a for AI, which is only as good as the data pervised learning”, which aims to iden- venture-capital firm. Some outfits, like it learns from. So other startups want tify patterns in data that have not been Mechanical Turk (owned by Amazon, an e- progressively to cut humans out of the labelled by humans. Manu Sharma, boss commerce giant), act as middlemen con- process. Scale AI, from San Francisco, of Labelbox, says this remains “primar- necting freelancers ready to perform all lets its own algorithms take a first pass ily an academic pursuit”. How long for is manner of “micro-tasks”, of which things at labelling with humans reviewing the anyone’s guess.7 like tagging pictures is one example, with work. “We are extremely, extremely qual-

34 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Oct 17th 2019

A distributed workforce is, however, prone to human error. That is a problem for AI, which is only as good as the data it learns from.

35 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com OPEN TO SUSTAINABLE CONSUMPTION The global imperative to weather the curve beyond covid-19

Commissioned by HCL 36 October 2020 5 hcltech.com The global imperative to weather the curve beyond covid-19

rgent action is needed on carbon emissions. Investors are ment and strategic decision-making if we are to prevent the pressing companies to act on climate process. Otherwise, multi-billion-dol- extreme droughts, risks and global standard-setting bod- lar infrastructure investments could heat, floods and pov- ies are promoting the development quickly depreciate in value or be ertyU that will be caused by global of climate risk tools that will be used rendered ineffective long before the warming. According to scientists, to assess corporate risk and perfor- expected time frame”. greenhouse-gas emissions would mance. Ørsted, for instance, says it can have to fall by 45% by 2030 to pre- “Companies are increasingly aware reduce emissions from its energy pro- vent ice caps disappearing, coral reefs of their climate risk profiles and tak- duction by 96% by 2023 because its dying and sea levels rising further. Yet ing steps to measure and manage fossil-fuel business had “started to global emissions are set to hit a record them,” says James McMahon, CEO of decline and present a real risk to our high this year and countries are at The Climate Service, a start-up that future profitability”. It has reinvented loggerheads over efforts to stop them provides climate risk analytics ser- itself to focus on renewables, divest- rising further. vices to clients, including the US fed- ing from oil and gas, replacing coal Against the backdrop of bruising eral government. “There are several in its power plants with sustainable international climate talks, many factors creating a large uptick in biomass and deploying offshore wind businesses have been steering them- demand for climate risk analytics, farms. selves towards a lower-carbon future. including regulation, pressure from Increasingly, this means setting “sci- investors and actual observed A technology-aided transition ence-based” targets that are in line instances of losses from climate- Advances in renewable energy, tech- with what scientists say is needed to related events.” nology and engineering have armed limit catastrophic climate change. The Task Force on Climate-related executives with more ways to clean Ahead of the 2019 climate nego- Financial Disclosures, set up by the up their businesses than ever before. tiations in Madrid, 87 companies, US Financial Stability Board to Companies can cover their roofs with with a combined market capitalisa- develop voluntary climate-related solar panels and replace delivery vehi- tion of over US$2.3trn, said that they financial risk disclosures, has been cles with lower-carbon upgrades. would set targets aligned with the “the main regulatory push that has Sophisticated route-planning soft- Paris Agreement goal of keeping been embraced by many of the ware can be deployed to cut the emis- global warming to 1.5°C above pre- world’s largest investors and busi- sions belched out by their service industrial levels. These targets apply nesses,” says Mr McMahon. “Investors vehicles. Businesses have used work- to their entire value chains, not just are increasingly putting pressure on from-home initiatives, enabled by the smaller operations that corpora- asset owners to measure and manage improved connectivity, to reduce the tions have tended to focus their cuts their climate-related risks and oppor- pollution created by their employees’ on in the past. tunities; large companies that don’t commutes. Some multinationals have gone do this are oblivious to one of the Investors caution, however, that further, pledging to slash their net biggest threats to asset valuations.” public incentives will be needed to emissions to zero by 2050. Others Companies see the financial con- bring more technologies to market as say that they will take more carbon sequences of catastrophic events and clean tech and sustainability are strug- out of the atmosphere than they put the broader sea change away from gling to attract major private invest- into it by investing in renewable fossil fuels in their bottom line. “With ment. “This is a sector of very high energy and carbon storage through financial losses from catastrophic inertia,” says Yossi Vardi, one of Isra- reforestation and agriculture. events rising every year”, says Mr el’s earliest and most successful high- Their motivations are not only McMahon, “it is incumbent on busi- tech entrepreneurs and former direc- reputational. Some executives are ness leaders to properly account for tor-general of Israel’s Ministry of acting in anticipation of future taxes the changing climate in their invest- Energy. “It can take decades compared

PB PB hcltech.com 37 hcltech.com hcltech.com with the digital sector where you can Defence Fund (EDF) says that over Staying the course during a crisis get 100m users in a few weeks. There time the “digitisation” of oilfields will As the covid-19 pandemic forced is a fundamental difference with allow companies not only to find and much of the world into lockdown, investing in high tech — internet, fix methane leaks more efficiently but daily global CO2 emissions fell by cyber, fintech or artificial intelligence also predict them and stop them 17% compared with 2019 levels. (AI) businesses and so on — and clean from happening. However, as economies restart and energy.” The same technologies can be pollution-as-usual sadly returns, an Mr Vardi, who has invested in start- applied to the businesses that still emerging worry is whether the ups acquired by the likes of AOL and shroud their emissions in secrecy. investments and initiatives that com- eBay, believes public-sector incen- Last year the then governor of Cali- panies were rolling out or planning tives will be critical. He is, however, fornia, Jerry Brown, announced that in 2019 will be dropped as they rush optimistic that the digital sector could his state would launch a satellite to to protect the bottom line. open up new opportunities in the area pinpoint emissions with “unprece- John Elkington, corporate respon- of energy demand management that dented precision, on a scale that’s sibility expert and author of the book might help citizens and businesses to never been done before”. The project Green Swans, thinks the real test of shrink their energy footprints. will complement a satellite to be companies’ commitment to sustain- Mr Vardi observes: “The beauty of launched by EDF in 2021 which will ability will come in the months ahead. a fully connected world is on the track emissions from oil- and gas “When the economic shocks hit at the demand side. Before the internet, you fields that account for about 80% of end of furlough and of subsidies, could only affect supply, not demand. global hydrocarbons output. when people lose their jobs and when You couldn’t get into the home of the Satellites and machine learning the aftershock or second-wave virus user and turn the air conditioning on are being used to keep an eye out goes through economies, I think peo- and off. Demand management is now for illegal logging and emissions in ple are going to be challenged to keep very interesting.” Combined with the power sector too. Watt Time, a some of the programmes and initia- energy-efficiency improvements in not-for-profit emissions-reductiontives they’ve been invested in. There technology, he believes that this trend software company backed by Goog- will be a shake-out.” towards demand optimisation can le’s philanthropic arm, recently Mr Elkington hopes that govern- reduce the amount of energy required announced that it will launch a satel- ments will take the opportunity to for each unit of GDP. lite system that will use AI to track preserve and even deepen the cli- the carbon dioxide (CO2) emitted by mate transition by tying aid and sub- Big data for the big clean-up every major power station on earth. sidies to green commitments from Big data and advanced analytics are Businesses are also using predic- recipients, especially in polluting important weapons in the fight to tive technologies to plan for how industries. European groups have reduce emissions. By installing sen- climate change might affect them. called for government bailouts of sec- sors across a factory or data centre Jupiter, a start-up that has raised tors like air transport in countries and using machine learning to make more than US$30m of investor cap- including France and Austria which sense of the readings, a company can ital in two years, uses AI and detailed include green conditions such as tran- tally its energy consumption, or information about an area’s terrain sitioning to cleaner fuels. locate harmful emissions along its to produce “climate risk assessments” Mr Elkington also believes that supply chain, and take action to that can peer up to 50 years into the the pandemic, and the worldwide reduce waste. future. Say a company owns a ware- anti-racism protests that have fol- Even in the dirtiest industries, house in a low-lying area. The maps lowed, should prompt the kind of remote surveillance and machine- Jupiter produces would alert it to major political and economic rethink learning technologies promise to what might happen if sea levels rise that has been lacking in climate dis- reduce emissions. Both Shell and or a hurricane strikes. If the building course so far. “Our economies and Norway’s Equinor have installed would be swamped, the company can societies are more fragile than we solar-powered devices that scout for plan to move it to higher ground, thought. We have to start investing leaks of methane, a planet-warming hedge with more insurance or focus in systemic change.”7 gas. The US-based Environmental future investment in another area.

PB PB hcltech.com 38 hcltech.com hcltech.com October 2020

The opportunity to shape a better world

ovid-19 revealed the can also use syringes to position pressing need to recon- individual atoms and control their sider the role of tech- quantum properties. Quantum com- nology in sustaining and puting facilitates high-resolution Cenhancing human life across the modelling of complex molecules to globe. We have an opportunity to accelerate drug development. make technology a healing force, Food supply chains buckled but this requires shifting the focus under the pressure exerted by from isolated problems to technol- covid-19, underscoring the need for ogy ecosystems that advance the technology that bolsters sustain- quality of life for all. Widening our ability. By tracking food wastage view reveals opportunities to using machine learning and improve the human condition. advanced imagery, recognising food Throughout the pandemic, as it is discarded and calculating its cumbersome healthcare systems value, it is possible to take Kalyan Kumar, were reshaped to become more informed action to reduce waste. Corporate Vice President and Chief effective. Patient-facing applications With copious data converted by Technology Officer, IT Services, increased their capacity to serve quantum computing into high-reso- HCL Technologies patients. We witnessed increased lution models, we are about to online enrollment of seniors, enter a new era of analytics and previously alienated by technology, visualisations that will be limited and streamlined approval of drugs. only by our imaginations. It is up Virtual doctor visits made it to us to create new platforms that possible to test treatment efficacy will be the foundation for an and drive iterative changes, increase efficient, unified system for knowledge and improve outcomes. addressing humanity’s greatest This is possible when technologies issues. pull together towards a single end. If there are to be benefits Enhanced diagnostic telemedi- derived from covid-19, it is essen- cine tools enabled clinicians to tial that technologies be considered evaluate remote patients. We can as part of a fabric of solutions that do more. Diabetes can be moni- improve lives. With their choices, tored through retinal scans rather tech visionaries and world leaders than blood tests. Syringes can be have an opportunity to improve infused with nanotechnology to human lives and the health of the make them tamper-proof. Through planet we inhabit. 7 quantum entanglement, researchers

39 hcltech.com Feb 28th 2019

Saving Water The best way to solve the world’s water woes is to use less of it

And much of that has to do with agriculture

f the world is to reduce its use of wa- systems introduced in Israel in the 1960s of the worldís total—will be irrigated. Iter, the most obvious area in which and since spread around the world. As Greater efficiency, however, comes to look for savings is where most water the name suggests, these direct limited with risks of its own: that farmers persist goes: agriculture. How much water this amounts of water to the plants them- in planting thirstier crops than is ration- accounts for varies enormously from selves, so that they get enough but not al in an arid climate, or switch to more country to country. In Britain, which is a too much. Avi Schweitzer, chief technol- water-intensive ones. Even in Israel, just huge importer of embedded or “virtual” ogy officer of Netafim, an Israeli compa- south of the shrinking Sea of Galilee, water (that consumed in producing any ny that sells drip-irrigation equipment swathes of irrigated land are covered in crop or product) accounting for as much and technology in 110 countries, says plastic-draped banana plantations. as two-thirds of its water needs, it is rela- that, by minimising both evaporation So reducing the water consumed by tively little. In Egypt it is about 84%, and and percolation, it manages to achieve agriculture will depend not just on im- in India as much as 90%. Viewed more 95-97% efficiency in delivering the water proving efficiency, but on rationalising broadly, as a global water “footprint”—a to the photosynthetic process. crop-planting. And that in turn will de- concept developed by Arjen Hoekstra, a This saves large amounts of water and pend on demand and hence on changes Dutch scientist —including not just the increases yields. Precise amounts of nu- in diet and even fashion. A foretaste of direct uses of water in agriculture, but trient and crop-protection chemicals can controversies to come was a furore that the indirect ones all the way along the be added to the irrigation water. And the arose last year over avocado-eating— chain from field to fork, agriculture ac- new generation of systems employ re- criticised by many as an emblem of counts for 92%. mote sensors that can monitor weather, selfish millennial hipsterdom. Avocado Much of this is wasted. “Flood” irriga- soil and plant conditions and calibrate consumption in America increased by tion systems, where water is released to how much water is delivered. Mr Sch- 300% (to about 4.25bn avocados a year) inundate fields or furrows, lose water to weitzer, however, concedes that, for now, from 2010 to 2015. Farmers scrambled evaporation, or to percolation (ie, to the the high capital cost precludes the use of to meet demand, including in very dry soil itself before it can be absorbed by the drip irrigation in much of the world, and places, such as some parts of Chile and crop’s roots). A common estimate is that limits its use to cash crops. The goals for in Mexico, where the craze was blamed flood-irrigation squanders 50% of the the future are to reduce costs for com- for a surge in deforestation. A kilo of water it releases. Sprinkler systems can modity crops such as grains, and to im- avocados can need up to 2,000 litres of help with efficiency. But these, too, are prove precision even more. The market water, so local sources were strained, and imprecise, vulnerable to the wind and to will expand. Climate change is likely to activists mobilised to campaign against loss of water through evaporation. mean that more rain-fed farmland—at the culinary fashion. Far more effective are “drip” irrigation present estimated to make up about 80% In future, people around the rich

40 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Feb 28th 2019

world at least are likely to by and use-by dates could be be made more aware of the replaced, it argues, by remote The goals for the future water footprint of what they sensor technologies, such as eat (and wear: the global av- near-infrared spectrometers erage water requirement for and hyperspectral imaging, are to reduce costs for producing a kilo of cotton is capable of evaluating the per- 9,359 litres). Avocados may ishability of individual items. commodity crops such as need more water than toma- It looks forward to the day toes (214 litres) but they are when the imaging technol- far more frugal in their water ogy is available on shoppers’ grains, and to improve needs than meat – chicken smartphones. takes 4,325 litres per kg, mut- A less visible but perhaps precision even more. The ton 10,412 and beef 15,415 (see more shocking waste is in chart). Globally, however, the the form of “non-revenue trend is not towards a low- water”—that is, water sup- market will expand. water diet. On the contrary, plied by utilities but never as countries such as China paid for. Some is diverted and Climate change is likely grow richer, meat-eating is on stolen; much is simply lost the increase. Over the past 50 through leakage. The lost rev- years, global meat production enue often leads to a vicious to mean that more rain- has quadrupled. circle. Money is too short to Another way in which maintain and repair the sys- fed farmland—at present water is used inefficiently in tem, leaks increase, prices agriculture is in waste or loss rise and theft becomes more of food, which adds up to as widespread. The problem is estimated to make up much as a third of global pro- most obvious in poor coun- duction. In countries such as tries. Delhi’s water board, for about 80% of the world’s India, the inadequacies of the example, reported in 2011 that cold chain and logistical hur- 53% of the water it distributed dles mean that much never was non-revenue. In Hanoi total—will be irrigated. reaches the shops. Even in that figure was 44%. But even rich countries, food shops in the rich world, where pipes and consumers end up dis- and other infrastructure may carding vast amounts of un- be old, rates can also be stag- self to send a pulse, which water, aiming to reduce usage eaten food. gering. London, for example, alters when there is a leak, in every product category be- A new report by the World reported 28% and Montreal can make it easier to pinpoint tween 2010 and 2020 (a tar- Economic Forum, a think- 40%. Again, technology is trouble-spots. get it says is already within tank, emphasises technologi- helping. Sensors and smart In almost every aspect of touching distance). In some cal fixes to this problem. Sell- valves that use the water it- water usage the scope for us- countries, for example, such ing less is enormous. It is a as America, Brazil and South question of incentives. Op- Africa it makes baby milk in timists point to signs that “zero-water” factories, re- this is changing. Some gov- claiming water evaporated ernments still use the avail- from cow’s milk used in the The worst for thirst ability of cheap and plentiful manufacturing. Volume of water required to produce kg water as a lure to foreign in- Unilever, another multina- vestors. But some businesses tional, also has set “sustain- , litres ’ are seeing water-efficiency as ability goals”. One is to keep 036912 15 18 both an economic goal in it- the water used in its manu- self and as an important part facturing processes to 2008 Chocolate of their image-building. In levels, despite greatly in- the Canadian province of On- creased production. Already, Beef tario, for example, the local it says, it has cut water use per arm of Nestle, a Swiss food- tonne of production by 39% Mutton and-drinks giant that is one since 2008 in seven water- of the world’s biggest sellers scarce countries representing Cotton of bottled water, has found half the world’s population. Chicken itself embroiled in a lawsuit Less successful has been its between First Nations repre- drive to reduce the amount Avocado sentatives and the provincial of water its customers use government, which has led to by making products, such as Banana a moratorium on issuing new detergents, for example, that bottling permits. need less water. Since 2010, Tomato Elsewhere, Nestle is mak- per-consumer use has fallen ing much of its efforts to save only by 2%. 7 Sources: Institute of Mechanical Engineers; Water Footprint Network

41 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Aug 22nd 2019

What are companies for? Big business is beginning to accept broader social responsibilities

Pursuing shareholder value is no longer enough, it seems

t a recent dinner in London, a chief ble confirmed them in their view. In a “Prosperity” is an attack on the concept Aexecutive promised that his airline free market, pursuing shareholder value of shareholder primacy, ESG has shot would soon offer electric flights. A cred- would in and of itself deliver the best yet further up investors’ agendas since. it provider enthused about increasing goods and services to the public, opti- Some of the world’s biggest asset man- financial inclusion in the developing mise employment and create the most agers, such as BlackRock, an indexation world; a luxury-car executive promised wealth—wealth which could then be put giant, are strongly in favour of this turn to replace the leather in her vehicles’ to all sorts of good uses. It is a view of in events. The firm’s boss, Larry Fink, has opulent interiors with pineapple mat- the world at the same time bracing in its repeatedly backed the notion that corpo- ting and mushroom-based faux leather. simple rigour and comforting in the lack rations should pursue a purpose as well They seemed to think such things made of social burdens it places on corporate as, or beyond, simple profits. the companies they run sound more backs. The discontent does not end with in- attractive. They probably felt that they It is also one which has faced in- vestors. Bright young workers of the sort were doing good. creasing pressure over the past decade. businesses most desire expect to work Businesspeople, being people, like Environmental, social and governance in a place that reflects their values much to feel they are doing good. Until the (ESG) criteria have come to play a role in more than their parents’ generation did. financial crisis, though, for a genera- more and more decisions about how to And the public at large sees a world with tion or so most had been happy to think allocate financial investment. The assets daunting problems—most notably cli- that they did good simply by doing well. managed under such criteria in Europe, mate change and economic inequality— They subscribed to the view that treat- America, Canada, Japan, Australia and that governments aren’t solving. It also ing their shareholders’ need for profit New Zealand rose from $22.9trn in 2016 sees companies which it holds partially as paramount represented their high- to $30.7trn at the start of 2018, according responsible for these dire straits using est purpose. Economists, business gu- to the Global Sustainable Investment Al- their ever greater profits (see chart 1) to rus and blue-chip CEOs like those who liance. According to Colin Mayer at the funnel cash to stockholders, rather than make up America’s Business Roundta- University of Oxford, whose recent book investing them in ways that make every-

42 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Aug 22nd 2019

Oliver Hart of Harvard Univer- 1 Whose company is it any- sity and Luigi Zingales of the They've got the money way? University of Chicago see his United States, global post-tax corporate profits The most quoted assertion of argument as principally moti- As % of GDP the primacy of shareholder vated by a form of the agency value comes from Milton problem; he didn’t like man- 12 Friedman, an economist. In agers being charitable with 1962 he wrote that “there is shareholders’ money, even if one and only one social re- it was ostensibly in the firm’s 10 sponsibility of business—to interests. The shareholders use its resources and engage could, after all, lavish their 8 in activities designed to in- profits on such good causes crease its profits so long as it themselves. 6 stays within the rules of the True, perhaps, back then, game, which is to say, engages say Mr Hart and Mr Zingales. 4 in open and free competition Now, they argue, the external- without deception or fraud.” ities that businesses impose At a time when govern- on society are sometimes im- 2 ments expected companies possible for shareholders to to be patriotic and communi- mitigate as individuals, par- 0 ties saw some of them as vital ticularly if the political and resources his forthrightness legal system is a barrier to 1950 60 70 80 90 2000 10 19 shocked many. But though change. Individual sharehold- Source: Bureau of Economic Analysis subsequently traduced as ex- ers cannot do much in law to treme, Friedman’s position prohibit weapons in America, had a fair amount of give in for example. But they can ex- it. He called on companies ercise their rights as owners not just to stay within the law to influence the firms that one’s life better. The lollygag- announced a change of heart but to honour society’s more sell guns. Thus companies gers should be pulling their about what public companies general ethical standards, too; can have purposes—but own- weight. are for. They now believe that he did not equate sharehold- ers must provide them, not If they won’t do so will- firms should indeed serve er interests with short-term managers. ingly, perhaps they should stakeholders as well as share- profitability. Others argue that the idea be forced. Senator Elizabeth holders. They should offer But that was not how it felt. of shareholder value, while Warren, one of the leading good value to customers; sup- The way that business schools still central, needs some mod- contenders for the Democratic port their workers with train- and management consultants ifications. Raghuram Rajan, presidential nomination, says ing; be inclusive in matters in America, Britain and conti- an economist at the Universi- that being a big company is of gender and race; deal fairly nental Europe proselytised for ty of Chicago and former head a privilege, not a right. She and ethically with all their shareholder value in the 1980s of India’s central bank, advo- wants big American compa- suppliers; support the com- and 1990s offered little by way cates taking note of the non- nies to apply for charters that munities in which they work; of nuance. The biggest corpo- financial investments work- would oblige them to look and protect the environment. rate-governance concern was ers and suppliers make in a after stakeholders, especially There was an immediate the agency problem: how to company with a new measure local ones. Those who let the backlash. The Council of Insti- align managers with the in- of “firm value” which explic- side down would have their tutional Investors, a non-prof- terests of the value-seeking itly takes note of a specified charters revoked. Ms Warren it group of asset managers, shareholders. “Any chief ex- set of such stakeholdings. talks of herself as a defender swiftly denounced it. Others ecutive who went against Some companies have of capitalism; many see her railed against it as “appease- [that] orthodoxy was regarded taken on board the idea that plans as bordering on the so- ment” of politicians like Ms as soft and told to get back on their increased power puts cialist. But that may not mat- Warren, and a decisive step to- the pitch,” recalls Rick Hay- new demands on them. Satya ter. Among young Americans, wards the death of capitalism. thornthwaite, the chairman Nadella, chief executive of socialism is ever less of a boo This might seem extreme: at of Mastercard. Microsoft, says that a sense word (see chart 2). first glance, the roundtable’s Such heretics can now hold of purpose—together with a In the face of this rising recommendations border on their heads up again. This is mission that is “aligned with tide, the Business Roundtable the anodyne. But if the pur- not simply because of the po- what the world needs”—is a has either seen the light or pose of the company slips its litical climate or the public powerful way for his compa- caved in, depending on whom shareholder-value moorings, mood. Some economists ar- ny to earn public trust. And you ask. On August 19th the who knows where it might gue that Friedman’s position because trust matters, this great and good of CEO-land end up? belongs to a simpler time. puts purpose at the core of

43 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Aug 22nd 2019

Microsoft’s business model. theoretical price of carbon to “As technology becomes so investment analysis but still 2 pervasive in our lives and so- keep pumping fossil fuel. And Not such a dirty word ciety, we as platform compa- net-zero pledges may rein- United States, respondents* who have a nies have more responsibil- force the misapprehension very or somewhat positive impression of… ity, whether it’s ethics around that the best way of fighting artificial intelligence, cyber- climate change is through the By age group, % security or privacy,” he says. choices of individual compa- “There is a moral obligation.” nies and consumers, rather Firms in other industries than a thoroughgoing econo- Socialism Capitalism are having similar thoughts. my-wide transition. In each business, says Mr Companies are also back- 020406080 020406080 Haythornthwaite of Master- ing liberal social causes. In -  -  Card, a wave of digitisation is 2015 Marc Benioff of Sales- likely to lead to one company force, a software firm, led - - pulling ahead. Because of that other bosses, including Ap- concentration of power, he ple’s Tim Cook, into opposing - - says, the winning platform a bill in Indiana that would will need to forge a close link have allowed discrimination with society to maintain trust. against gay people. After Pres- + + Climate change is perhaps ident Donald Trump’s election Source: Pew Research Centre *Polled Apr th-May th  the most obvious example of in November 2016, bosses companies doing more than mounted the barricades over they have to in a good cause. his ban on travel to America Twenty-five big American from Muslim-majority coun- companies, including four tries. In 2018 Nike created an strategies. Nike had little to was the company’s employees tech giants, campaigned advertisement featuring Colin fear from red-staters calling who complained about Sales- against America’s withdrawal Kaepernick, a quarterback for boycotts. Others may be force’s links to immigration from the Paris agreement in fired after kneeling during more susceptible. Backlash control. Last year, employees 2017. Globally, 232 firms that America’s national anthem can come from the other side, at Google forced the firm to are collectively worth over in protest against police rac- too; corporate sponsorship of stop providing the Pentagon $6trn have committed to cut ism. PayPal has blocked some Pride marches in London and with AI technology for drone their carbon emissions in line groups, including white na- New York has led some LGBTQ strikes and to drop out of the with the accord’s goal of lim- tionalists, from using its ser- activists to organise alterna- procurement process for JEDI, iting global warming to less vices. tive events from which busi- a cloud-computing facility than 2ëC. The firm’s boss, Dan Schul- ness is excluded. for the armed forces. Google Some 1,400 companies man, says PayPal’s aim is to depends, perhaps more than around the world either al- broadcast its broader pur- From each according to any of its peers, on a small- ready use internal carbon pric- pose. Others might deride it their abilities ish number of cutting-edge es or soon will. Many big firms as “virtue signalling”. But that There is also the problem of data scientists and software now aim for carbon neutrality modish phrase does not quite setting yourself up for a fall. engineers; their views carry in their operations. Some have capture what is going on. In Salesforce stumbled last year weight. Microsoft, despite made big investments to that economics and evolutionary when its software turned out similar misgivings from its end. Apple has a renewable biology, where the idea of sig- to be being used by US Bor- employees, is still in the run- energy capacity equivalent to nalling grew up, a valid signal der Patrol to deal with illegal ning for the JEDI contract. its total energy use. needs to be costly—otherwise immigration. Ben & Jerry’s, Amazon, for its part, is facing Laudable as some of this it can be easily faked. These which sprinkles its ice cream employee pressure over con- is, it is hardly a response corporate positions do not with a do-the-right-thing an- tracts with oil and gas com- commensurate to the cli- look costly; indeed they may ti-capitalist vibe, found itself panies. mate crisis. Companies go- well be profitable. A stand in scolded by Britain’s advertis- If corporate political stanc- ing carbon-neutral are mostly favour of Colin Kaepernick ing regulator this summer for es can be justified in terms of consumer-facing ones, rather fits Nike’s brand, which cel- plastering ads for fatty frozen keeping workers or consum- than intensive emitters. Mon- ebrates the goal-oriented in- calories around schools in ers happy it does not mean ey for coal may now be scarce, dividual and has keen black London. that they are insincere—sim- at least in the rich world, fans. Nike’s stock dipped a tad The politics of the con- ply that they may be overde- but big institutional inves- when the controversy hit: but sumer are not the only ones termined. This can be irksome tors own a sizeable chunk of its sales rose immediately and that firms need to consider; for the right. Companies rare- the world’s major oil compa- its shares soon recovered. in tech, particularly, the poli- ly make a stand for the rights nies—many of which apply a There are risks to such tics of the workforce matter. It of the unborn, or for border

44 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com Aug 22nd 2019

security. But this is the mar- are enthusiastic. Paul Singer, ket at work. Companies tend founder of Elliott Manage- “As technology becomes to have a preference for both ment, the world’s biggest ac- consumers and employees tivist hedge fund, says that the who are young, educated and current debate over corporate so pervasive in our lives affluent—which is to say, who purpose “risks obscuring the can be expected to embrace fact that earning a rate of re- and society, we as socially liberal politics. turn for pension plans, retire- What the world has not ment accounts, universities, yet seen is a situation where hospitals, charitable endow- platform companies ESG issues come into mate- ments and so on is itself a rial, systemic conflict with social good—a very high one”. have more responsibility, profits. Purpose is flavour of What is more, he notes, this the month, says Stephen Bain- social good is one that no en- bridge, professor of law at the tity other than the corporation whether it’s ethics University of California, Los can sustainably provide. Angeles, “but are companies There is also a problem of around artificial really going to give sharehold- accountability. “Once the cor- ers a 10% haircut for the sake poration decides that earning of stakeholders?” returns is no longer its prima- intelligence, cyber Such issues become par- ry purpose, to whom will it be ticularly clear when it comes accountable?” says Mr Singer. security or privacy. There to increasing spending on the The answer, he thinks, is “the poorer parts of the workforce. loudest and most passionate Relentless downsizing makes political activists”—though is a moral obligation.” little sense. “There are dimin- others might hope the settled ishing returns from firing convictions of the sharehold- people over and over again,” ers would come into play. — Satya Nadella, chief executive, says Jeff Ubben of ValueAct One answer to these criti- Capital, a hedge fund. “It is cisms could be to devise a Microsoft not the right strategy for the framework that would al- future”. Some firms have lift- low companies and bosses to ed minimum wages and are state clearly that they want spending more on retraining to do more besides make a prove it is being fulfilled. Stat- By 2017, CalPERS was un- workers to cope with future profit. Almost 3,000 compa- ing the purpose in such a way derfunded to the tune of automation. But profits are nies worldwide have been as to make it open to such $139bn. Its ESG strategy had very sensitive to labour costs. certified “B corporations” in measurement, though, would cost only about $2bn. But According to Darren Walker, the past decade, which means prove hard. Mr Perez took the reasonable president of the Ford Foun- that their ethical, social and As capitalism takes flak view that a couple of billion dation, one of America’s big- environmental practices from all sides, it is hard for was real money. “Eleven peo- gest charitable endowments, have been certified by inde- those in the business and ple in my family are in law en- plenty of chief executives are pendent monitors to meet investing class to object to forcement and I had to make having conversations about the standards laid down by firms voluntarily doing their sure their pensions were pro- how to spend more on work- B Lab, a non-profit group in bit to tweak the system. But tected,” he says. To that end ers and benefits, but feel they Pennsylvania. But not many when reliable returns are put he campaigned for a board cannot do so alone. “They will big companies have applied. at risk, things can change. Last seat at CalPERS on the basis need cover,” he says; a broader Those which have are mostly year Jason Perez, a police ser- of letting the fund invest in shift towards corporate pur- consumer brands. geant in Corona, California, law-abiding, profit-maximis- pose could provide it. An alternative to this ap- had enough. His state could ing companies purely on the Many influential investors proach would be to have com- no longer afford wage increas- basis of potential returns. Pit- and bosses imagine a return panies say what purpose they es for police and other public ted against the fund’s chief to something like the “mana- had beyond shareholder value servants partly because CalP- ESG guru, Priya Mathur, he gerial capitalism” of earlier and then hold them to it. This ERS, one of the world’s biggest won. However companies re- times, when some CEOs, their is the approach Mr Mayer of pension funds, was under- set and refine their purposes interests presumably insuf- Oxford recommends for Brit- funded. It had also been an in the years to come, they will ficiently aligned with those ain: a legal requirement for early standard bearer for ESG still need to perform for peo- of shareholders, paid more companies to have a purpose investing. In 2001 it dumped ple like Mr Perez.7 attention to stakeholders and in their articles of associa- tobacco stock—which then local communities. Not all tion and provide measures to outperformed.

45 This article was originally published by The Economist newspaper. No amendments have been made. hcltech.com End Notes

Re-invention Disruption https://www.nytimes.com/2020/03/31/ https://econ.st/2DPT56Q climate/coronavirus-doctors-retire.html https://www.mckinsey.com/~/media/ https://www.ft.com/content/31c927c6- mckinsey/industries/financial%20 684a-11ea-a6ac-9122541af204 services/our%20insights/bracing https://www.brookings.edu/research/ %20for%20seven%20critical%20 budgeting-to-promote-social-objectives- changes%20as%20fintech%20matures/ a-primer-on-braiding-and-blending/ fintechnicolor-the-new-pictur e-in- https://jamanetwork.com/channels/ finance.ashx health-forum/fullarticle/2765238 https://seekingalpha.com/ https://www.nytimes.com/2020/03/31/ article/4298414-paypal-holdings-pypl- climate/coronavirus-doctors-retire.html ceo-dan-schulman-on-q3-20 19-results- https://www.ft.com/content/46baab28- earnings-call-transcript 6def-11ea-89df-41bea055720b https://www.fastcompany.com/company/ https://www.forbes.com/sites/ ant-financial solrogers/2020/04/03/the-immersive- https://home.kpmg/xx/en/home/​ technology-companies-offering- insights/2018/01/talking-to-bank-ceos- support-during-the-coronavirus- infographic.html crisis/#7e18bee74b2f https://cloud.uk.info.pwc.com/financial- https://www.ft.com/content/3d1c6ea6- services-disruption-report?Campaign=FS 97e3-4675-aa89-674fcea9a8d1 DisruptionTransforma tion&Channel=We https://www.wsj.com/articles/for- bsite&Medium=ArticleLP&Format=Organ newly-remote-workers-small-town-u- ic&Content=ArticleCTA s-a-will-lose-its-allure-soon-enough- 11592559006?mod=hp_featst_pos3 https://www.wsj.com/articles/remote- work-could-spark-housing-boom-in- suburbs-smaller-cities-11590843600 https://www.canstar.com.au/home-loans/ digital-mortgage-applications-covid-19/ https://www.ft.com/content/1c6e4c38- ef57-11e9-bfa4-b25f11f42901 https://www.spglobal.com/ marketintelligence/en/news-insights/ latest-news-headlines/coronavirus-crisis- could-prompt-amazon-other-retailers-to- invest-in-automation-57902598

46 hcltech.com Collaboration Sustainable consumption https://www.pgconnectdevelop.com/ https://www.weforum.org/ https://www.samsung.com/​ agenda/2018/10/how-big-data-can-help- semiconductor/about-us/open- us-fight-climate-change-faster/ innovation/ https://www.wri.org/news/2019/09/ https://www.unilever.com/about/​ release-87-major-companies-lead-way- innovation/open-innovation/ towards-15-c-future-un-clim ate-action- https://www.managementtoday.co.uk/ summit collective-intelligence-why-use-it/future- https://www.reuters.com/article/ business/article/ 1594636 us-climate-change-un-business/big- https://www.ibm.com/downloads/cas/ companies-commit-to-slash-emiss WGA2KWX5 ions-ahead-of-u-n-climate-summit- https://cci.mit.edu/​ idUSKBN1W7028 https://hbr.org/2015/09/design-thinking- https://newsroom.inter.ikea.com/about- comes-of-age [1] ​ https://www.aiche.org/​ us/our-view-on-climate-positive/s/ rapid/about c34096a3-a06e-429b-8932-b 28ff1007827 https://www.cesmii.org/ https://sciencebasedtargets.org/ https://www.csis.org/analysis/economic-​ wp-content/uploads/2018/03/ impact-cybercrime SBT_Orsted_CaseStudy.pdf https://​ https://www.policyforum.net/israels-​ sciencebasedtargets.org/wp-content/ cyber-ecosystem/ uploads/2018/03/SBT_Orsted_CaseStudy. https://ec.europa.eu/digital-single-​ pdf market/en/policies/cybersecurity https://thenextweb.com/ contributors/2018/09/25/how- technology-is-improving-the-carbon- footprint-of- businesses/ Adaptation https://www.edf.org/blog/2018/06/22/​ https://ec.europa.eu/info/priorities/ how-big-data-will-soon-tackle-pollution- justice-and-fundamental-rights/ plant-near-you data-protection/2018-reform-eu-data- https://www.weforum.org/ protection-rule s/eu-data-protection- agenda/2018/10/how-big-data-can-help- rules_en us-fight-climate-change-faster/ https://techcrunch.com/2019/11/14/ https://www.independent.co.uk/ californias-new-data-privacy-law-brings- environment/satellites-power-station- u-s-closer-to-gdpr/ emissions-climate-change-space- google- https://www.informationweek.com/ watt-time-a8922241.html strategic-cio/security-and-risk-strategy/ https://jupiterintel.com/about/ businesses-arent-ready-for-californias- https://www.forbes.com/sites/ data- privacy-act/a/d-id/1336405 susanadams/2019/06/24/the-real- https://agilemanifesto.org/​ cloud-wars-the-6-billion-battle- https://www2.deloitte.com/content/dam/​ over-the -future-of-weather- Deloitte/au/Documents/about-deloitte/ forecasting/#224ff2f3298f https://www. hrc-millennial-survey-report-2018.pdf wired.com/story/companies-can-predict- [1] ​ https://www.nytimes.com/2019/01/17/​ climate-catastrophes-for-you-as-a- business/dealbook/blackrock-larry-fink- service/ letter.html

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