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In 2023, widespread AI adoption, fueled by accessible no-code AI, transformed organizations. As we enter 2024, technology's ongoing innovation shapes our reliance on devices for daily tasks. Sustainability initiatives have surged over the past 5 years, with businesses and consumers prioritizing eco-friendly choices. A 2022 Simon Kucher survey reveals 24% of consumers see themselves as key in combating the climate crisis. Sustainable brands must provide opportunities for people to align with their values. Despite substantial investments from Meta and Microsoft, Metaverse user adoption fell short. Generative AI surprised the world, opening avenues for disruptive innovation and elevating the global AI market to $150.2 billion, with Goldman Sachs predicting $200 billion by the end of 2025.
In the automotive sector, autonomous systems in logistics experienced significant growth in the previous year. The Economist Intelligence Unit forecasts a 3% rise in global passenger car sales and a 1% increase in commercial vehicle sales for 2024. Despite sector sluggishness, electric vehicles (EVs) are projected to surge by 21%, driven by increased use of self-driving vehicles, drones, and warehouse automation. Another area where we saw significant investment in 2023 is Urban Air Vehicles. From current size of $2.6B+ market currently, it is expected to go to $36B in 2024 and $45B by 2036. This will transform the urban city landscape if the technology is viable for regular use.
Energy and the energy transition were also prominent in 2023, from rising renewable investments to concerns about leaving developing countries behind. Most countries, led by Sweden, Denmark, Norway, India, and Singapore, made significant gains in their energy transition journey. They are advancing across all three dimensions of the Forum's Energy Transition Index – equitable, secure, and sustainable.
Businesses must adapt to emerging technologies, navigating challenges and opportunities. Integrating key technology trends is crucial for organizational evolution, sustainability, and excellence. Digital Transformation, Autonomous Systems, and Sustainability Transition will continue evolving with AI and disruptive technologies. An effort to re align your organization to new decade is fairly complex and requires precision focus on five key areas in my view.
1. Building an Ecosystem of Intelligent Machines and AI Innovation
In 2024, AI and intelligent machines are pivotal for organizational operations. McKinsey's findings indicate a widespread adoption of AI/ML, especially in forecasting analytics and supply chain enhancements, impacting different Industry sectors. Transparency is emphasized, with 67% of leaders prioritizing outcomes traceability. Organizations are urged to invest in intelligent machines for streamlined processes, task automation, and AI-driven decision-making, leading to optimized resource allocation, reduced errors, and faster task completion.
Embracing intelligent machines provides a competitive edge, enabling businesses to deliver superior products, services, and customer experiences, fostering loyalty and reducing churn. This, in turn, results in customer loyalty and reduces churn, a critical aspect in industries like Automotive, Transportation, and Communication where customer satisfaction is paramount.
The paradigm shift towards intelligent machines not only enhances operational efficiency but also unlocks growth opportunities. In Healthcare, for instance, AI's transformative potential is evident in disease diagnosis, personalized treatment plans, and drug discovery. In Transportation, market trend prediction aids in optimizing routes, scheduling, and logistics. In the Energy & Utilities sector, AI contributes to grid management and energy optimization. Communication and Mining industries benefit from AI in traffic optimization and predictive maintenance, respectively.
Cultivating an AI innovation culture demands a learning environment, dedicated R&D teams, and cross-functional collaboration to drive continuous technological advancements and stay at the forefront of innovation to address evolving challenges and opportunities.
2. Advancing Sustainability Through Technology
The planet's health is rapidly declining, with global greenhouse gas emissions primarily driven by a staggering 73.2% from overall energy usage, surpassing agriculture at 18.4%. Renewables, accounting for 18% of electricity in 2015, have surged to 27% in 2022, aided by technology monitoring and optimizing energy consumption.
Recognizing the urgency, industries such as Automotive, Transportation, Healthcare, Energy & Utilities (E&U), Communication, and Mining are leveraging technology to advance sustainability.
In the Automotive sector, the focus is on electric vehicles (EVs) and alternative fuels to reduce emissions. Transportation, responsible for a substantial share of energy consumption, is exploring innovations in fuel efficiency, smart logistics, and electric mobility. Healthcare is integrating sustainable practices in medical facilities and supply chains, aiming for reduced carbon footprints. The Energy & Utilities sector is transitioning to renewable energy sources, including solar and wind, to decrease reliance on fossil fuels. Communication networks are adopting eco-friendly technologies to reduce energy consumption in data centers and network infrastructure. Mining companies are investing in sustainable practices, including renewable energy adoption and responsible resource extraction
"Green hydrogen," synthesized from low-carbon sources, expected to grow at a 40% CAGR through 2030, reaching $60.56 billion. Greener energy and hydrogen-based tech will further advance for organizational use. Technology, including IoT sensors, blockchain, and smart grids, plays a crucial role in reducing carbon footprints and promoting eco-friendly practices. Sustainable tech applications, spanning sectors like precision farming and intelligent routing, offer a competitive edge, contributing to environmental goals while enhancing operational efficiency. Prioritizing clean energy initiatives is essential for cost-effectiveness in a sustainable future.
3. Leveraging the Benefits of Process & Platform Digitalization
Digitalization is crucial for organizations, streamlining operations, and boosting competitiveness by automating tasks, reducing errors, and integrating systems. Technologies like Digital Twins and Cloudification bridge the digital-physical gap, highlighting innovation. Global spending on cloud computing infrastructure is projected to surpass $1 trillion in 2024, with Microsoft Azure contributing over half of the $110 billion cloud revenue in 2023. Organizations leverage digitalization for agility, enhancing collaboration and decision-making through digital platforms.
Digitalizing core processes brings benefits such as accuracy, cost reduction, faster turnaround, and improved customer experience, especially through automation in areas like invoice processing. Successful digitalization requires clear goals, stakeholder engagement, training, and continuous monitoring, optimizing operations and fostering innovation for a technology-driven future. With a successful rollout of process and platform digitalization, organizations optimize operations, improve efficiency, and drive innovation, setting the stage for a future-ready organization in the technology-driven world.
4. Navigating the Opportunities and Challenges of Data-driven Decision Making
The adage "Data is the new oil" remains pertinent. The ascent of Generative AI has heightened the complexity of the data landscape, urging organizations to utilize data and analytics for a competitive edge. A Gartner report discloses that poor data quality costs an average of $12.9 million annually, with 80% of data scientists' time spent on data cleaning rather than analysis. Data serves as the linchpin for strategic decisions, enhancing overall performance. Another survey by Transforming Data with Intelligence reveals that over 70% of respondents struggle to advance analytics maturity. The Product Data Mesh approach simplifies decision-making complexity by relying on accurate product data for reliable outcomes.
Amidst the ever-evolving regulatory landscape for data governance and privacy, staying current on regulations, securing personal data, obtaining proper consent, and transparently communicating data usage are imperative. Leveraging GenAI across industries promises outcomes that fortify operations and overall management. Our research reveals that supplier management, customer support, and diagnostics are pivotal business areas where extensive data is employed for analysis, significantly influencing key business decisions. These units are poised to experience maximum outputs, by integrating GenAI technology imaginatively and creatively.
5. Cultivating a Tech-Savvy Workforce for the Future
Invest, invest, and invest some more. Constant technological change defines our world. Investing in digital skills training is crucial for employees to navigate the latest trends, fostering a culture of innovation and efficiency. Reskilling and upskilling programs are essential, addressing skill gaps through targeted training, personalized learning paths, mentorship, and hands-on opportunities.
Cultivating a continuous learning culture is key for a tech-savvy workforce. Leading by example, providing resources for self-learning, and recognizing and rewarding learning contribute to a mindset of adaptability and growth.
With Intelligent Machines, AI, and other advancements, the employee's role has shifted to 'people+technology.' Acting as a "co-pilot" requires employees to orchestrate a more efficient workplace, making upskilling a critical necessity to drive this transformative shift.
Disrupt or be Disrupted. The choice is yours.
As we start 2024, it is a year filled with uncertainties. There is no predictability on how geo-political climates can drive decision making, environmental changes can influence strategy and which technology can drive faster transformation.
For organizations focusing on exponential growth, disruption needs to be a part of the strategy. Leaders must fearlessly push boundaries and embrace innovative solutions tailored to their sector—electric and autonomous tech in Automotive, smart logistics in Transportation, AI-driven diagnostics in Healthcare to name a few. The strategic integration of intelligent machines, sustainable technology, process and platform digitalization, data-driven decision making, and a tech-savvy workforce becomes the roadmap for success.
I would like to leave you with this thought.
"Disruptive Innovation for faster growth through technology led initiatives should be focus of every organization for 2024. This should definitely include Making your enterprise more digital, transforming your products to be more autonomous and creating a sustainable business.”
References
- Sustainability Study 2022 | Simon-Kucher
- Urban Air Mobility Market - UAM Companies & Forecast (mordorintelligence.com)
- Eight CEO priorities for 2024 | McKinsey
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