Ernst & Young executive Martin Fiore discusses how humanity and technology converge and how globalization, innovation and changing demographics are shaping the future. He reminds leaders of the primacy of inclusivity and sustainability, though he recognizes their challenges. Providing a succinct summary of topics – such as trust and ethics – that more specialized authors cover in depth, Fiore addresses leaders who are uneasy about the constantly shifting status quo.
- Technological advances must align with core human values.
- Shifts in globalization, innovation and demographics drive change.
- Trends shaping the world include autonomous systems, consumer empowerment and health care transformation.
- "Smart" machines help humans do what they do best: be human.
- Leaders must face new realities in a world that demands continuous innovation.
- Trust governs markets.
- Having machines make decisions can lead to unintended consequences.
- Factor the inherent risks of rapid innovation into your decision-making.
Technological advances must align with core human values.
Humans’ use of technology has accelerated since the First Industrial Revolution (1765-1870), when machines replaced handmade tools. The Second Industrial Revolution (1870-1969) involved the spread of mass production, and the Third Industrial Revolution (1969-2000) charted technology’s rapid expansion into daily life. The Fourth Industrial Revolution (2000-2018) spread digitization, automation and artificial intelligence (AI).
Humanity now faces the beginnings of the Fifth Industrial Revolution. For millennia, the human brain was the most complex thinking machine on the planet. Today’s intelligent machines augment human’s ability to collect data, analyze and interpret it, and solve problems. These machines operate faster than former models and with greater accuracy. What does this mean for humanity, leaders and business organizations?
“In this era of unrelenting technological transformation, we must raise awareness, facilitate debate, and be intentional in our actions to preserve and maximize the best of what it means to be human.”
To harness technological advancements to improve human lives, people must agree on what improvement entails, and then dedicate themselves to it and spread positive results. People must prioritize human needs over the transactional factors that drive today’s world: productivity, efficiency, convenience and money.
To solve problems and facilitate change, people rely on a shared foundation of trust, ethics, sustainability, personal privacy and widespread education. These values are the framework for discussions about a more just, equitable world.
Shifts in globalization, innovation and demographics drive change.
Humans didn’t create the world or the biological systems that govern it; they shaped it to accommodate their relentless curiosity and imperative for transformation. Since 2000, inexorable drivers – including globalization, demographic change and innovation – have pushed people into new frontiers in business and personal development. Many facets of these relentless instruments of change require thoughtful handling, particularly with innovations such as artificial intelligence that pose ethical issues for businesses.
“The incredible difficulty of staying on top of change underscore[s] the importance of thinking clearly about where this change is taking us.”
In 2000, 95% of the largest global companies were in developed nations. But by the end of the 2020s, this proportion will shift to developing regions in the Middle East, Africa, Asia and Latin America.Globalization increases urbanization and population density, exposing people to different ways of life. In the urban melting pot, people become both more open-minded and more vulnerable, because economic inequality increases with labor distribution. However, more widespread commercial development can build employment, creating jobs that can help equalize access to opportunity.
Trends shaping the world include autonomous systems, consumer empowerment and health care transformation.
Amid changing demographics, economic prosperity has become linked to both rapidly growing populations and rapidly aging populations.
“Even a trend that appears minor, slow-moving and short-lived can compound to generate enormous social, economic, political, environmental or technological change.”
Society must manage these disruptions, along with others, and harness them to create a better life for everyone. The six mega-trends already driving this change are:
- Data-driven autonomous systems – Technology is more active now than passive. To be autonomous, a technology must gather data, analyze it and use that analysis to make decisions. Examples include virtual reality (VR), blockchain and self-driving vehicles.
- Consumer empowerment – Relationships matter in a global marketplace. Web-savvy consumers want personalized products and services delivered speedily and without friction.
- Health care transformation – Wearable devices and telehealth will make health care more accessible, but providers must protect patients’ data and their privacy.
- Work transformation – The COVID-19 pandemic forced businesses to change their working models, allowing for more remote work and flexible hours. Augmentation with AI will help people gain the time to pursue higher goals.
- Improved corporate responsibility – Leaders must be authentic and make meaningful commitments. They need to understand and be willing to tackle contemporary threats to their business.
- Business as ecosystem – Market competition has given way to market collaboration.
“Smart” machines help humans do what they do best: be human.
Technology disrupts business, yet it resolves some issues at the same time. Tech can bring people together, and it can alienate them. It both erases barriers and forms new ones. While machines outpace humans in their ability to gather and interpret enormous amounts of data, they cannot – yet – excel in any area that requires imagination, empathy or the ability to draw nonlinear conclusions. Technology that performs mundane, repetitive tasks – such as data entry – frees workers to collaborate, brainstorm, negotiate and build on their knowledge and experience. The pandemic intensified reliance on automated systems as remote work relieved tedious commutes.
“The human desire to satisfy our curiosity by expanding our frames of reference and increasing our problem-solving capabilities can go a long way to making us more comfortable with technological change.”
To take advantage of the possibilities of newer technologies, high schools and trade schools need to collaborate with employers to prepare young people appropriately. For example, Ernst & Young’s “Day One Ready” program equips young people with competencies the future will require through courses in such topics as Lean Six Sigma and negotiation. Apprenticeships enable young people to learn a new skill quickly by working closely with experts.
Continuous education via webcasts, book summaries, online seminars and conferences keeps higher-level employees up-t0-date. Employees with elite STEM skills have built up companies’ technology infrastructure in recent decades. The future will demand specific soft skills, such as critical and analytical thinking, problem-solving and strategizing.
Leaders must face new realities in a world that demands continuous innovation.
The COVID-19 pandemic altered how employers think about office space, technology and employee needs.
“Our objective in these changing times must be to find the best technology tools while simultaneously adding value for people. ”
Leaders must make sure their people have the tools and systems they need to succeed. To respond to new challenges, leaders must embrace these values:
- Adaptability – Change is difficult. Leaders should learn from experts, foster innovation in corporate culture, and constantly monitor up-to-date thinking about organizational strengths and competencies.
- Fostering the next generation – Younger workers value independence more than climbing in a corporate hierarchy. They seek the flexibility to work anywhere at any time. They value transparency, equity and open communication, and they need a sense of purpose.
- Continuous learning – Employees also need deep organizational knowledge. They must understand the competition and build soft and hard skills to maintain an advantage in a fast-paced world.
- Remote work – Job loss during the pandemic encouraged people to start businesses at home. To retain your best employees, offer greater flexibility and improved perks.
- Diversity and inclusivity – Candidates for jobs want to express themselves, rather than fit into a mold. They want to see D&I in action.
Trust governs markets.
Employees need to trust their employers. They must have confidence that innovations will serve positive ends. For instance, to be comfortable with technology, people need to know that autonomous machines will serve humanity, not oppress it.
“Without trust, and the behavior it drives, where would we get the power, the spark to unlock innovation or the confidence to try new things and ultimately grow?”
Millennials and younger workers have far more implicit trust in technology to connect them to products and services. They expect frictionless transactions. To build and maintain organizational trust, they demand accountability from their employers.
People are more creative and better critical thinkers when they trust their employers. Trust helps them express values, admit mistakes and ask for help.
Leaders must back up their promises with real, measurable actions. “Show, don’t tell” is the crucial maxim for products and services that build trust.Leaders also must acknowledge the ethical challenges of a rapidly changing world and must share the values of sustainability, equity and human rights.
Having machines make decisions can lead to unintended consequences.
Humans and machines have worked together for centuries, but only in recent years have machines been programmed with the ability to make independent decisions based on built-in parameters. Artificial intelligence is a watershed in how machines will shape work and other human endeavors. Innovation moves so quickly that leaders scarcely have time to acquaint themselves with the newest thing, let alone determine its impact on people’s lives.
“As the space between consequential developments gets shorter, the amount of time allowed for careful assessment also has shrunk. ”
The technology that changes fastest gains the greatest ability to generate unintended – and potentially detrimental – consequences. Data increasingly drives the world, but what will society do with all the data now being amassed? How can people use it purposefully to build a better future?
Leaders must consider what decisions they will permit machines to make and then create an auditing process for continuous evaluation. They must establish guidelines to align innovation with corporate goals. Leaders should ask:
- How does this technology add value?
- What are the tradeoffs?
- What are the safeguards?
- How does this technology align or misalign with our company’s ethics?
- How will the company monitor its activities?
- What role do regulators play?
Factor the inherent risks of rapid innovation into your decision-making.
Dangerous unintended consequences arise when companies adopt new innovations without fully vetting them. This risk stems from the human tendency to act on intuition instead of information. Artificial intelligence might make quicker, more accurate decisions than human beings in some cases, but developers admit they don’t always know how AI arrives at its conclusions.
Bias is a problem, because the people who make the machines bring their human flaws into their work. Automation can lead to job loss and economic insecurity for the most vulnerable employees. Historically, major technological change heralds social and economic turbulence.
Sustainability is a difficult goal, but businesses must work to achieve it, especially as governments lag or falter. Innovation’s effect on the global climate and the Earth’s environment is beyond prediction. For now, companies can both prosper and do good for the environment, but meaningful improvements have not yet emerged. Reliance on fossil fuels persists, and regulations are turning out to be insufficient, particularly in rapidly growing developing nations.
“Humankind will continue to follow the arc of progress.”
Creating a “circular economy” that reuses more resources and more broadly implementing the Internet of Things (which will create more efficient mechanical devices) could drive sustainability. Wall Street’s interest in corporate social responsibility may encourage businesses to be more accountable and to embrace sustainable practices.
Society must reach a consensus regarding how humanity can thrive sustainably, while pursuing ambitious innovation and transformation in work and life. While innovation brings risk, people must set aside their differences to advance human culture collectively. The best leaders will facilitate this progress.
About the Author
Martin Fiore is a tax managing partner at Ernst & Young LLP (EY) US East Region, where he serves as a member of its Americas Tax Leadership team and the Americas Inclusiveness Advisory Council.
This document is restricted to personal use only.