Against a background of economic constraints, in the U.K. – as elsewhere – there are many things to consider on the future of digital – and disruption. One answer is co-creation.
Yesterday it was announced that the U.K is to invest an extra £23 billion ($28.6bn) – between 1% and 1.2% of GDP – every year from 2020 in economic infrastructure – defined collectively as transport, energy, flood defenses, water, waste and digital communications. Philip Hammond, the U.K.’s Chancellor of the Exchequer, updated Parliament on the government’s taxation and spending plans, based on the updated economic projections provided by the Office for Budget Responsibility (OBR) – a body set up in 2010 to provide independent economic forecasts.
Britain is currently spending just 0.8% of its GDP on infrastructure. The OECD has for some time been calling for more public investment. But in a big change in its predictions, the OBR has predicted the U.K. government will borrow an extra £122 bn ($152 bn) by 2020-21, the need for half of which is attributed to the vote for Brexit. The total amount of government debt amassed by 2020-21 is now expected to be £1.95 trillion, an increase of £210bn from the £1.74 trillion the OBR predicted in March.
This is what Tech UK, which represents the tech industry in the UK called for from this ‘Autumn Statement’ on the economy. Here is its summary of the key commitments that have been made. The role of the private sector in taking digital forward – for profit, but also for the common good - is clearly critical.
A study just out by Cognizant, in conjunction with Roubini Global Economics, indicates that European businesses could unlock huge waves of digital value. Some 800 senior executives were surveyed as part of a larger, global study into understanding the changing nature of work in a digital age. The research The Work Ahead – Europe’s Digital Imperative indicates that revenue could dramatically increase by up to $578 billion by 2018 through the application of digital tools and technologies across their processes.
Business leaders, it says, need to be “more proactive in fusing the physical and virtual worlds.” The main obstacles firms face when shifting to digital are not just budget constraints (21%) but security fears (24%) and talent gaps (14%).
However, one third of respondents do not believe they have the right executive leadership in place to deliver digital strategies, or worse, one that does not know what needs to be done. Some 30% of those surveyed claim that their leadership does not invest enough in new technologies while 29% show reluctance to new ways of working.
This is by now a familiar story, reflected here previously on Forbes.
But an interesting global study just released by Fujitsu quotes more than half of business leaders (52%) surveyed as saying that digital disruption means their organizations will not exist in their current forms by 2021.
Almost all (98%) – of 1180 C-Suite decision makers within mid to large sized businesses across public sector, financial services, retail and manufacturing – said their organization “has already been impacted and will continue to be impacted by digital disruption.”
Predictably, when assessing what drives their response to the challenge of digital disruption, almost half (45%) pointed to the C-suite or leadership team. This is the interesting bit: looking externally, most business leaders identified customers (45%) ahead of competitors (31%) as the most influential group driving their organization’s response to digital disruption.
When asked who is leading digital disruption in their sectors, only 12% of execs pointed to themselves – compared to the 45% who pointed to start-ups and organizations from outside their sectors.
“Digital disruption transforms business models and revenue streams, operations and processes, customer relationships and service and more. It is exactly this potential that is causing concern. The fact that despite the potential benefits, a third (33%) of executives wish they weren’t experiencing digital disruption is stark reading” said Duncan Tait, SEVP and Head of EMEIA and Americas region at Fujitsu.
According to the survey, almost three-quarters (72%) of business leaders recognize the need to collaborate more strategically with organizations that can help shape their response to digital disruption. 73% believe that technology lies at the heart of an organization’s ability to succeed in a digital world, while 67% say their organization needs to collaborate with third-party technology experts.
Fujitsu recently announced that it was cutting 1,800 jobs in Britain as part of a “transformation program” but that the move was not linked to the country’s Brexit vote. Mr Tait last week said that Fujitsu will be investing €5 billion ($5.28 bn) in its own innovation response to the digitally disrupted world.
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Reacting to the U.K’s Autumn Statement he told me: ” The Digital Infrastructure Investment Fund is a vital step in enabling U.K.businesses to remain competitive in the digitally disrupted world. Businesses are facing a greater threat than ever before from digital disruptors in every sector, spanning Airbnb in tourism to Uber in transport.”
“To survive, businesses must be able to innovate using the latest technologies, such as the Internet of Things and artificial intelligence. Collaborating closely with technology experts will be crucial – at Fujitsu for example we’re collaborating on more than 200 co-creation projects to help businesses flourish amidst digital disruption. For this companies need reliable, fast broadband speeds.”
Fujitsu has just also announced the extension of its partnership with Bridgestone Europe, part of the world’s largest tire and rubber company, which it says will be based on the principle of co-creation. “By collaborating with Fujitsu for the ongoing transformation of our IT infrastructure, we can strike the optimum balance between short term benefits and long term gain. Furthermore, this contract means that we can direct all our energy and expertise into developing innovative solutions that will keep us at the forefront of our industry” said Michael Johnson, Vice President of IT at Bridgestone Europe.
It’s a multi-million Euro contract to provide IT infrastructure services – but is that co-creation – or outsourcing? Either way, it’s coming from a collaborative approach.
“The ability to pool knowledge, ideas and resources with a partner which understands what it takes to flourish in a digital world is a vital capability which business leaders know will help them through this transitional, and therefore challenging, time. If all digital stakeholders work together to navigate through this disruption, businesses will not be overrun by digital; they will forge ahead, innovating and prospering to reap all the benefits the digital age offers” said Mr Tait on the launch of the report.
“Many companies still haven’t grasped the enormous impact that digital disruption will have on their industry. We should be concerned that many European business leaders seem to feel no immediate pressure to prepare for the shift to a digital economy” said David Mills, CEO of Ricoh Europe on the Fujitsu research, speaking ahead of yesterday’s Autumn Statement.
“Recent Ricoh research found that 92% of European businesses still aren’t ready for the EU Digital Single Market, even though it is literally at their doorstep. By streamlining and digitizing core processes now, forward-thinking businesses will be at a distinct competitive advantage. This is particularly crucial in Europe if we are going to create home-grown digital giants that can compete on a global stage” he added.
This article was written by Dina Medland from Forbes and was legally licensed through the NewsCred publisher network.