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Increasing the number of women entrepreneurs would grow the world economy by $5 trillion

An article published by the Boston Consulting Group (BCG) states that, if there were the same number of women and men entrepreneurs, the world’s GDP could grow by approximately 3% to 6%, which would represent between 2.500 and 5.000 billion dollars to the international economy. However, women entrepreneurs still need the support of various groups to realize their power, for example, venture capital firms, non-profit organizations and large companies. In addition, a sometimes overlooked difficulty needs to be addressed: the lack of networks to guide and provide real support to women entrepreneurs.

THE GENDER GAP IN ENTREPRENEURSHIP

To better understand the inequalities between men and women in entrepreneurship and to know how much progress is being made towards equality, BCG analyzed data on women’s entrepreneurship from the Global Entrepreneurship Monitor (GEM), both at the regional level and in each country. This analysis yielded the following results:

  • In all regions, the percentage of working-age men starting a business exceeds the corresponding percentage of working-age women by 4-6 percentage points.
  • Four countries (Vietnam, Mexico, Indonesia and the Philippines) are the exception to the above rule: more women than men started new businesses in 2016.
  • In 50% of the 100 countries studied, the gender gap in entrepreneurship is narrowing, with Turkey, South Korea and Slovakia leading the way.
  • However, in 40% of the countries, the gender gap is widening, particularly in Switzerland, Uruguay and South Africa.
    Although inequalities in entrepreneurial activity occur in a fairly homogeneous pattern in most countries, differences in the rate of long-term business success are more pronounced. For example, in the Middle East and North Africa, a company founded by a woman is 50% less likely to continue operating after three and a half years compared to a company created by a man. In Latin America, the “survival” rate of businesses founded by women is 11 percentage points lower. In all regions except North America, female-led businesses have lower “survival” rates than male-led businesses.

Although inequalities in entrepreneurial activity occur in a fairly homogeneous pattern in most countries, differences in the rate of long-term business success are more pronounced. For example, in the Middle East and North Africa, a company founded by a woman is 50% less likely to continue operating after three and a half years compared to a company created by a man. In Latin America, the “survival” rate of businesses founded by women is 11 percentage points lower. In all regions except North America, female-led businesses have lower “survival” rates than male-led businesses.

NETWORKS POWER

What can countries do to ensure that women-led businesses survive and thrive?

Inequalities in access to financial support largely determine the gender gap, especially for women starting new businesses. According to BCG’s analysis of 2018 data from MassChallenge (a US-based global network of accelerators), the average investment in companies founded or co-founded by women was $935,000, less than half of the $2.1 million invested on average in companies founded by men. This disparity exists despite the fact that new companies founded or co-founded by women actually performed better over time and generated 10% more cumulative income over a five-year period: $730,000 compared to $662,000.

Obviously, access to start-up capital is not the only problem. Women entrepreneurs must also correct the deficit in the “survival” and growth rates of their businesses, that is, counteract the tendency to stagnate over time.

The study shows that, while there are many reasons for these deficits (including differences in access to human and social capital and ongoing economic resources), a key factor is women’s relatively limited access to strong support networks. In low- and middle-income countries, for example, the increased availability and use of entrepreneurial networks is related to the narrowing of the gender gap in the “survival” rate of enterprises. Being able to connect with other women entrepreneurs encourages women to set higher expectations for their businesses, focus on growth and integrate innovation.

In Nigeria, the Cherie Blair Foundation for Women, supported by the ExxonMobil Foundation, conducted a pilot project called Road to Women’s Business Growth, which helped women business owners to improve their business skills and access financial institutions and new markets. An independent evaluation of this programme revealed that some of the greatest benefits came from the professional networks it facilitated. As one entrepreneur explained, “if you have difficulties and need contacts, just say so and your ‘sisters’ will come to your aid. That’s why we’re like a ‘sisterhood’ of entrepreneurs. The economic performance of women-led businesses also improved, with average profit growing by 31%.
In BCG’s experience, the best networks are based on three principles: intention, inclusion and interaction.

  • Intention. We must start by defining the purpose of the network. Networks should be much more than an address book. What can women gain by joining the network? Will they gain access to human, economic and social capital? How can the network help women achieve tangible goals
  • Inclusion. The next step is to choose participants carefully. The best networks have a dedicated founder, intense participatory activity and a diverse participant base, with new female entrepreneurs and other business owners already established in the market. Ideally, the participants should have different cultural roots.
  • Interaction. Finally, the network needs to be structured to facilitate both formal and informal interactions. Formal training and education sessions should be organized, but informal interactions among participants are also crucial to build trust and ensure that the network continues to make sense over time. Online platforms can be essential for success in this area.

It is no exaggeration to say that women’s entrepreneurship has the power to change the world. And the benefits go far beyond increasing global GDP. Addressing gender inequalities in entrepreneurship and boosting the growth of women’s businesses will allow new ideas, services and products to be introduced into markets. And ultimately, these forces can redefine the future.

The phenomenon of women entrepreneurs is a growing worldwide and Spain is one of the countries in Europe with the highest rate of female entrepreneurship. María López, Partner at Boston Consulting Group, which leads the Women@BCG initiative in Iberia, points out that “in Spain the number of women entrepreneurs has grown, and they are no longer limited to creating their own start-ups, but are also investing in new businesses in all sectors, breaking gender stereotypes in that sense as well” “new projects and initiatives led by women are transforming not only the entrepreneurial ecosystem and the corporate environment, but also the way of working”.

Access the BCG press release thought this link

Why Data Science degrees are unattractive for STEM students?

According to the Boston Consulting Group and BCG GAMMA report “What’s Keeping Women out of Data Science?“, almost 50% of STEM students believe that data science is excessively theoretical and that work in companies in this discipline still has little impact. Furthermore, there is a feeling that data science is more competitive than other fields. A significant proportion of STEM women worldwide say that they do not have a good understanding of how a “career in Data Science” is structured and, above all, what the day-to-day work of a data scientist consists of in the workplace. This negative perception and lack of transparency converge to increase the gender gap: only 15-22% of Data Science professionals are women.

Perception reflects reality

Students around the world are focusing on an unfortunate reality: many companies are still trying to create real impact with artificial intelligence, and still lack a collaborative culture on their analysis teams. The study reveals that almost 75% of Data Science students are looking for the complete opposite of what they perceive working in this field to be right now, i.e. applied, tangible, high-impact work, in their future jobs. As long as companies approach and promote data science and artificial intelligence as theoretical efforts without a concrete and measurable value, STEM students will continue to consider access to this discipline uninteresting.

Finding the gaps in the approach to Data Science

BCG surveyed over 9,000 STEM men and women in Australia, Canada, China, France, Germany, India, Japan, Spain, the United Kingdom and the United States, with between 700 and 1,000 responses from each country and a homogeneous distribution between men and women in each case.

Regarding transparency, the study revealed that only about 63% of men and 55% of women are well informed about the various opportunities in relation to Data Science. Even among data science and computer science students themselves, almost half (47%) referred to the lack of clarity regarding career options within the field. Australia, France and Spain achieved high rankings in this field, while students in China, Japan and Germany reported low understanding of their options in this discipline. In terms of perceptions of impact and purpose, China and Japan ranked last, while students in the UK, USA and France reflected better opinions.

Companies must act

Despite these variations between countries, the problem is fundamentally global and affects gender diversity in this rapidly growing field. “Companies are letting the media take the lead and drive the excitement around Ariel Intelligence, in the hope that this will be enough to spark interest in Data Science among students,” says Llorenç Mitjavila, Partner & Managing Director of BCG and head of BCG GAMMA in Iberia. “But in view of the results, something else is needed. Creating a culture within Data Science teams that celebrates impact and rewards teamwork will be critical to providing tangible and engaging career opportunities for students of both genders”.

What can companies do better?

While companies already have recruitment strategies in place to attract talent interested in AI, they can encourage diversity more directly by being much more specific in their communication with students by directly addressing the concerns that women highlight as critical: the role of Data Science in business, how data scientists collaborate on case studies, and how a career in this field involves much more than simply programming.

They should approach students with real-life examples communicated by data science professionals that make their day-to-day lives tangible and directly confront negative perceptions about the work culture.

Spain, a country that perceives with less fear the competitiveness in Data Science

Of the ten countries included in the sample, Spanish STEM students are the ones with the lowest percentage regarding the perception that Data Science is a field with a high level of competence both in access and in work. In our country, 67% of students perceive the sector as highly competitive, compared to 84% and 83% respectively in China and Australia. Activities such as programming competitions or hackathons contribute decisively to generating this halo of competitiveness.

Companies can play an active role in promoting the knowledge of the Data Science discipline and make known its transformative impact not only in the different economic sectors but also in society and contribute to the search for a solution to the gender gap in this field.  “We need the female perspective to ensure that what we build for our society represents our society,” says BCG GAMMA partner Andrea Gallego, who adds that “the problem extends to other fields. She adds, “If we start building models with biased teams, we will find a number of longer-term effects, including ethical issues and models that propagate a bias that we are trying to stop.

You can access to the report’s press release through this link

Coronavirus: status, risks and implications

The latest update on Covid-2019, also know as Wuhan’s Coronavirus, informs that although deaths are still increasing, these are doing so at a slower rate than in previous weeks. However, we are faced with a cyclical risk in that we do not know when the pandemic will end. It also represents a financial risk because of China’s large presence in the productive, economic and financial sectors; ergo, what we see is a clear slowdown in the rate of growth, as well as in profits.

Covid-2019 has a high infection rate, but if we compare it with other pandemics that have emerged over the years, we see how it does not have such a high mortality rate. But we should not be optimistic, the situation may be complicated in regions with less capacity to respond to the pandemic. Hubei province is the most affected, with more than forty thousand cases, with a 72%.

Companies can invest in preventive measures to avoid the spread of Covid-2019 and prevent new threats. In the face of this threat, declared international by the World Health Organization resistance chains must be created in all production processes and strategies that companies have or will have.

These conclusions are contained in this BCG Henderson Institute report which can be accessed through this link

Acting to Combat Climate Change is More Cost-Effective Than Inaction

Boston Consulting Group’s new Center for Climate Action, in a recently published report determines that, in terms of climate change, the cost of inaction far outweighs the investment needed to combat it. Ignoring the problem comes at a very high price, estimated at a reduction in global GDP per capita of 30%, if not more, by 2100, far greater than the cost of tackling it, given the rapid technological advances in low-carbon technologies.

According to Boston Consulting Group’s recent publication Flipping The Script on Climate Action, the economic costs of climate change far outweigh the economic impact of a major investment in order to decarbonize the planet.

New advances and developments in low-carbon technologies have shown that reducing emissions has an increasingly positive economic impact. For many countries, this reduction in emissions translates into an increase in GDP. The report that captures these findings has been released by BCG’s new Climate Action Center (CCA), a specialized expert center, which aims to help businesses, governments and non-profit organizations lead the technological and economic transformation needed to address the growing threat of climate change.

“This is a global challenge for the coming decades, one of the most critical issues for many of our clients and a clear leadership imperative for BCG,” notes publication co-author Michel Frédeau, BCG Global Climate and Environment Leader and co-author of the publication. “The good news is that big emission reductions are not only possible, but they also make economic sense.”

A Basis for Economic Action

The publication analyses the dilemmas faced by different actors in tackling climate change. Existing research shows that uncontrolled warming will reduce global GDP by up to 30% by 2100, with significant additional risks given the far-reaching effects of global temperature increase and new evidence that continually points to more dramatic negative impacts than anticipated.

In direct comparison, these figures are far greater than the economic costs of taking action. According to the BCG report, most countries can already meet about 80% of the requirements of the Paris Agreement without resorting to immature or as yet undeveloped technologies. The relative economic impact of drastic reductions in CO2 emissions is therefore likely to be slightly negative or even positive for many countries (it will represent around +/- 1% of national GDP in 2050).

Based on this positive economic impact, the authors of the report urge governments, companies and investors to intensify their efforts to reduce CO2 emissions. In the absence of an international regulatory framework and a global price for emissions, governments should take unilateral action by adopting national CO2 pricing schemes, subsidies for green technologies, and existing sectoral regulatory models. For their part, companies must define their own roadmap towards total reduction of their emissions and accelerate initiatives that already have a positive or neutral economic impact, while developing new technologies that will play an increasingly important role in the coming decades. Those sectors with difficulties in reducing emissions must take action and partner with competitors, customers and suppliers in initiatives to share the risks of large investments in research and deployment of new technologies.

A Comprehensive Climate Campaign

Given the urgency of acting against climate change, BCG has integrated its intellectual capital, leadership in innovation, and experience in this area into a Center for Climate Action (CCA). The CCA will support the global drive for decarbonization and provide organizations with tools to achieve carbon dioxide emission reductions by focusing on three areas: business strategy, operations and stakeholder engagement. It will also work with governments, NGOs and social sector groups to define and implement strategies to reduce emissions.

As companies reorient their strategy to drive their own transformation to low-carbon operating models, CCA will work with them to assess trade and portfolio impacts in a variety of future climate scenarios. In terms of operations, the CCA will help companies identify and follow the most cost-effective path to emission reductions, both in their own operations and in their supply chains. The CCA will also collaborate with organisations in their efforts to engage with the climate change action agenda of their internal and external stakeholders.

“BCG’s Climate Action Centre has been created at a critical time, when both companies and governments need to accelerate progress to reduce carbon emissions,” says Patrick Herhold, Managing Director and Partner at BCG. “As detailed in our publication, a real boost is being generated from low-emission companies as they reinvent their business models and decarbonize their operations. The CCA will engage with business and government leaders and be a catalyst for climate impact.”

Access the study Flipping the Script on Climate Action

Only a small group of companies is harnessing the potential of AI

A new study from Boston Consulting Group and MIT Sloan Management Review reveals managers’ growing concerns about the risks of AI. Additionally, it highlights the five organizational behaviors that companies taking advantage of AI’s value have in common.

After many decades of progress, artificial intelligence is ready to become an important resource for many businesses, but according to the new study from MIT Sloan Management Review (MIT SMR), BCG GAMMA and BCG Henderson Institute from Boston Consulting Group, companies are still not yet aware of its potential. The study reveals that although managers consider AI to have the potential to be an important business opportunity, many are increasingly more worried about the strategic risks associated with AI.

Titiled Winning With AI: Pioneers Combine Strategy, Organizational Behavior, and Technology, the study is based off of a survey of more than 2,500 managers and 17 interviews with leaders and experts. The data reveals that:

  • Nine out of ten managers agree that AI presents a business opportunity for their companies.
  • Currently, seven out of ten companies refer to a minimal or zero impact of AI. 90% have made at least one investment related to artificial intelligence, but less than 40% claim to have earned income thanks to AI in the last three years.
  • In 2019, 45% perceive some sort of risk associated with AI, an increase from 37% in 2017.

“The report confirms that artificial intelligence is a relevant topic for leaders of all industries. However, despite the fact that some companies have already made significant progress, most still have difficulty generating value with artificial intelligence,” says Sam Ransbotham, one of the authors of the report. “How can corporate leaders seize opportunities, manage the risks and minimize the difficulties associated with AI? There are increasingly relevant unknowns that companies need to respond to move forward creating value associated with AI. ”

The study shows that businesses today that are managing to create value through their AI initiatives with these five common behaviors:

  1. They integrate their AI initiatives into their business strategy. 88% of respondents who found value in AI in their business strategies integrated their AI initiatives with their digital strategy.
  2. They unify their AI initiatives with their transformation strategies. To generate business value through AI, managers must be able to obtain data from different departments and initiatives and integrate them into work groups by establishing cross-functional collaboration.
  3. They take bigger risks, prioritizing revenue growth over cost reduction. Respondents who only highlighted cost reduction as a result of AI initiatives are less optimistic about the possibility of achieving greater savings with AI than those who have seen revenue growth. Only 44% of those who have managed to reduce costs expect the same results in the next five years, while 72% of those who have increased revenues expect that success to continue in the same period.
  4. They align the development of AI with its use. Beyond the tools, systems or processes to implement artificial intelligence, these companies ensure that employees use solutions that use AI, can measure results and are aware of the value generated.
  5. They avoid the “technology trap.” Companies that perceive that they increase value thanks to AI initiatives recognize that it is not only a technological opportunity, but also a strategic initiative that requires investments related to the recruitment and retention of talent, new ways of working and change management. Companies with AI initiatives supervised by the CIO, whose team usually manages technology initiatives, are almost 50% less likely to see the value that AI can bring.

“As business leaders develop a strategy with AI, talent is a complex problem without an easy answer. The capabilities that required of future workers will differ from current ones, not just for the relatively small number of workers who develop solutions related to artificial intelligence, but even more important for a much larger number of workers who will use artificial intelligence solutions directly or indirectly, “says report co-author Sam Ransbotham.

The results of the report regarding talent development reveal that 65% of respondents obtain business-related value in the use of AI when they use a varried approach: they build internal teams and rely less on external suppliers; selectively import talent with AI experience for technical leadership roles; and train their current employees in skills related to the understanding and management of artificial intelligence (upskilling).

In Spain, Llorenç Mitjavila, head partner of BCG Gamma in Iberia, believes that there is a virtuous circle in the development of AI. “Access to talent, the consolidation of Spain as a technological and innovation hub, and eminently positive media coverage, contribute to a general enthusiasm for Artificial Intelligence. Many of the big Spanish companies are investing in AI solutions, and we have a vibrant ecosystem of start-ups based on these technologies that are attracting very significant investments. ”

“AI is an important strategic opportunity, which entails strategic risks if companies do not act carefully. There is already a gap between winners and losers, and this gap will increase in the coming years. To obtain value, technology and algorithms are not enough, companies must integrate AI into their corporate strategies and processes, which is often much more difficult than the technology itself and to succeed in doing so requires new ways of working that differ from the approach required to obtain value from technological initiatives “concludes Shervin Khodabandeh, another one of the authors of the report.

 

Winning With AI: Pioneers Combine Strategy, Organizational Behavior, and Technology: Link

The Investment Priorities that Differentiate Digital Leaders

Companies that bet on expanding the capabilities of their staff and invest more in technology tend to show a higher degree of digital development than those that devote less resources to these priorities. This has been demonstrated by a study from the Boston Consulting Group (BCG), that surveyed 1,800 companies from Asia, the EU and the USA. Among the companies surveyed, financial institutions and telecommunications companies are more digitally developed, more than 25% can be considered digital leaders. The entities of the public sector and energy companies are behind, since more than 40% of them belong to the group of ‘digital stragglers’.

“Financial institutions are pioneers in digital maturity. Beyond digitizing their operations and undertaking new digital initiatives to improve the customer experience, they understand perfectly that the digitization of their organizations must be a priority,” stresses Jorge Colado, Partner & Managing Director of BCG in Spain.

“It is clear that prioritizing investments correctly is one of the surest ways to develop digitally,” says Michael Grebe, Senior Partner and technology expert at BCG. “If they want to remain competitive and not lose ground, the stragglers should look very closely at how industry leaders are distributing their investments,” says Michael Ruessmann, Senior Partner and digital transformation expert at BCG.

The digital acceleration index measures the degree of digital development

The study is based on BCG’s digital acceleration index (DAI). Managers and directors evaluated the degree of  their companies’ digital development based on a series of criteria using a scale of one to four in 35 categories. Then, those raw scores were added and values from 0 to 100 were assigned to each of the companies. Companies with a DAI between 67 and 100 were considered leaders, while those with an DAI of 43 or less were labeled as stragglers.

Where are the digital leaders?

The study was conducted across nine sectors and three regions of the world: Asia, Europe and the USA. The sector that obtained the best results was financial services in Asia, with a digital acceleration index (DAI) of approximately 60. Both in Europe and in the US, the telecommunications sector led the rankings. It should be noted that while some sectors showed excellent results in Asia, others lagged far behind. For example, consumer companies in Asia consider their level of digital development to be higher than that of their US and European counterparts. “This was the first year that we included Asia in the study and the Asian companies achieved very good results. Its degree of digital development in all sectors is high compared to similar companies in the rest of the world, “says Michael Ruessmann.

Digital leaders achieve magnificent results by activating three levers.

The study identified three levers that leaders use to develop digitally. First, they invest more than 5% of their OPEX in digital projects. In particular, the percentage of US leaders that allocate this amount (90%) is much higher than those of Asia (75%) and Europe (65%). Likewise, leaders around the world tend to assign more than 10% of their staff to digital positions and projects. In this case, Asian leaders (54%) are slightly ahead of their American counterparts (51%) and clearly ahead of those in Europe (44%). Focusing on their staff allows Asian companies to reach the highest scores in “new ways of working”. Finally, leaders also implement digital solutions on a larger scale than stragglers and are less likely to stall solutions relegating them to a single case. “After conducting the study for three years, we can say that these digital levers remain in force and allow us to distinguish the digital leaders,” says Michael Grebe.

Digital leaders are very clear about their investment priorities

The digital leaders increase their digital profiles and invest more than the stragglers in developing their staff. The study revealed that three out of four leaders plan to expand their digital workforce by more than 20%. By region, more than 90% of Asia’s leaders plan to increase their workforce at this rate, while those in the US and Europe are less ambitious and contemplate increases of 70% and 65% respectively.

However, digital leaders do not only look outside, but worry about what they already have within their companies. Half of them plan to develop the digital capabilities of more than 20% of their staff, something that less than a third of the stragglers are doing. It should be noted that the leaders spend 22% of their total digital investment on technology, unlike the stragglers, who invest 16%. However, by increasing investments, the digital acceleration index (DAI) in technology is much higher among the leaders than among the stragglers (78 vs. 29) and, it indicates that the difference between the two groups is likely to grow.

Asian leaders are at the forefront of artificial intelligence (AI)

Approximately 50% of leaders around the world devote more than 10% of their digital profiles to AI projects, while only 29% of the stragglers are betting on this policy. Asian companies are the ones with the most people working on AI solutions. The study revealed that the number of Asian companies that dedicate more than 10% of their digital workforce to AI projects is double what was recorded in the EU and US. Asian companies are also ahead in the adoption of AI: 87% compared to 78% in Europe and 74% in the US.

Workers: Optimists about the Future of Work

The BCG Henderson Institute and Harvard Business School presented Future Positive: How Companies Can Tap Into Employee Optimism to Navigate Tomorrow’s Workplace, a research project detailing a global forecast based on the perceptions of 6,500 business leaders and 11,000 middle-skill workers about the future of work. During times in which public debate about the future of work seems to be dominated by widespread fear of change, the BCG and HBS research has concluded that, in general, workers see opportunities in change and are optimistic about their future job prospects.

Of the 11 countries analyzed in the report, Spanish workers, after the French, give the greatest responsibility to the government in their preparation for the future. Even so, they still consider that they themselves are primarily responsible for their own training.

When facing the issue of transforming their organizations to adapt to the future of work, the findings reveal that business leaders underestimate the optimism of a workforce that claims to be happy in their jobs and eager to do the necessary future adjustments. To successfully face this challenge, business leaders have to put aside their preconceived notions and bridge the gap between their perceptions and the reality of their workers positivity.

“The workers who shape and will shape work environments in the coming years are diverse. What the findings of this report show is that business leaders are overlooking a key partner in their efforts to prepare for the future: their own workforce,” says Joseph Fuller, a professor at Harvard Business School and co-chair of the project Managing the Future of Work. “Rather than fearing the future of work, employees around the world are absolutely willing to accept change and take action. It is the responsibility of business leaders to recognize this opportunity and be proactive in supporting their employees and generating concrete action plans.”

“It might be surprising, but generally across all of the countries studied, employees do not consider technology to be the culprit of an uncertain future, but rather as an opportunity.” The workers who have participated in our research are optimistic and look to the future with confidence. They also believe that technology can be part of the solution,” says Judith Wallenstein, partner at Boston Consulting Group (BCG) and director of the BCG Henderson Institute in Europe. “Business leaders need to take advantage of their employees willingness to help create new organizations based on progress and learning that is fit for the future.

Researchers asked middle-skill workers and business leaders to describe their point of view on the trends and forces that can influence their work in the coming years. These topics included: new technologies, teleworking, government responsibility, and regulatory changes.

The report includes concrete recommendations for companies, highlighting a series of innovative businesses that have already begun the preparation of their workers and the adaptation of their companies for the future. Some examples of initiatives that these companies have undertaken include: the use of artificial intelligence tools to determine if a candidate has the cognitive ability to be a high-performance worker, the commitment to train workers to learn new skills through disruptive standards, and the use of technology to provide a completely service-oriented business model.

Data from the Report

Managers have a misconception about the outlook of their employees on the future of work:

  • 39% of business leaders believe that the lack of employees with new skills is already having an impact on their organizations. In addition, they frequently cite (29%) that their workers fear of change as the reason preventing them from preparing for the future.
  • Almost half of the workers worldwide (46%) consider themselves personally responsible for preparing for changes and 45% believe that changes in the working environment will result in better wages. 75% say that they will probably or definitely need to prepare to adapt to the future trends in work.

Middle-skill workers (without university training) are happy in their current positions:

  • 52% of workers without university training are happy in their current jobs.
  • Swedish workers are the happiest with their current employment situation (66%), ahead of Americans (64%).
  • Additionally, 45% of workers around the world indicate that their employment situation has improved over the last 5 years.

While business leaders try to find out which trends will be key to the future of companies, the most common significant issues have been:

  • Development and training of the workforce (30%)
  • Sudden changes in customer needs (27%)
  • Expectations of employees in relation to labor flexibility (27%)

Business leaders point to several reasons as to why their organizations are not preparing for the future:

  • Half of business leaders (50%) believe that their organizations have other strategic priorities.
  • 39% believe that the impact of change in their organization is still far away.
  • More than a third (34%) of business leaders claim that their organization lacks visibility about future trends and their specific impacts.

Workers believe that changes and technology will have a positive effect:

  • Almost half of the workers (45%) believe that changes in the workplace will result in better wages.
  • In general, 61% of workers are optimistic about the impact that technology will have on their work in the future.

Workers and business leaders agree that they do not perceive the impact of technology as a priority issue.

 

Future Positive: How Companies Can Tap Into Employee Optimism to Navigate Tomorrow’s Workplace

Full report

Methodology

In order to understand the readiness of companies and workers to adapt to the broad array of forces affecting the workplace – beyond technology- Harvard Business School’s Project on Managing the Future of Work and Boston Consulting Group’s Henderson Institute conducted two global surveys. The first canvassed 11,000 middle-skills workers from 11 countries to learn how those with education levels less than a four-year bachelor’s degree perceive the effect of 15 forces of change (see Table I) on their future prospects. The second polled 6,500 C-suite and senior leaders in 8 countries to understand how to prepare companies and their workforces were to tackle the 17 tectonic shifts (see Table 2) underway.

Artificial Intelligence, A Key Element among the 50 Most Innovative Companies

For innovative companies, the current landscape is still marked by the growing importance of digital technology. In particular, a new BCG report entitled The Most Innovative Companies 2019: The Rise of AI, Platforms, and Ecosystems, reveals that companies that excel in innovation increasingly implement more AI tools to develop new products and services, and improve internal innovation. In addition, they create technological platforms and ecosystems that allow them to take advantage of external innovation sources.

“Digital technology and external innovation have become key factors,” says Ramón Baeza, BCG’s Senior Partner and co-author of the report. “The main challenge for companies will not be to identify and access cutting-edge technological development, which will have to be sought outside of organizations, but to implement that technology within the company itself, integrating it with existing processes.”

As the main conclusion of the report, companies agree that the application of artificial intelligence in their processes is gaining ground. 90% of respondents (2,500 senior managers in the innovation area) stated that their companies are investing in AI, more than 30% expect AI to be one of the innovation areas with the greatest impact on their business during the next three or five years and another 30% give AI a leading role in their respective innovation programs.

The report shows that there is a big difference in the skills that companies have in terms of AI. More than 65% of the so-called “strong” innovators claim to be above the average in this area, compared to the mere 2% of “weak” innovators. Nearly 20% of respondents consider their companies to be “strong” innovators and exceed the average in terms of AI (a group that the report calls “leaders” in IA). Among these leaders, 94% believe that AI is important for the future growth of their companies, compared to 56% of “laggards” (respondents who consider that the capacities of their companies in AI are below the average).

AI will have a substantial impact on business processes, but its greatest potential lies in its ability to develop new products and services that provide large revenue streams over time,” says Michael Ringel, BCG Senior Partner and co-author Of the report. He also affirms that “the ‘leaders’ in AI are already making their way,” noting that, in these companies, the products and services based on AI solutions introduced in the last three years had meant a much higher percentage of sales.

Some 46% of “leaders” in AI declare that products and services based on AI tools represented 16% or more of their sales, compared to a mere 10% among “laggards”. Both agree that AI will gain ground in the future: 54% of “leaders” and 22% of “laggards” expect that AI enhanced products and services will contribute more than 16% of sales in the next five years.

Great Innovators Take Advantage of External Resources

The increasing use of AI is one of the factors that have fueled interest in platforms and ecosystems. The “leaders” in AI claim that they are more likely to turn to external providers for their AI projects. Moreover, some 36% depend entirely on external suppliers and another 48% mainly uses external services or a combination of internal and external capacities. This approach may be helping “leaders” to travel quickly through the AI learning experience curve, since knowledge is still scarce at present.

This year’s report shows that companies increasingly look abroad in search of new ideas. Collaboration models are booming: between 2015 and 2018 the number of great innovators using incubators grew (from 59% to 75%), as well as collaboration in the academic realm (from 60% to 81%) and in business (from 65% to 83%).

“Digital technologies facilitate collaboration platforms and these in turn enable ecosystems that bring together a group of organizations to develop new capacities or offer new products or services, even to promote a new field of science or technology,” says Florian Grassl , BCG Partner and co-author of the report. “However, not all ecosystems are the same. Participants are united by different types of incentives/interests. Of course, one of them is financial, but the knowledge, data, skills and community can be equally important.”

Some ecosystems are mere extensions of traditional ways of organizing and doing business. They tend to revolve around an orchestrator with whom all other participants interact and have established hierarchies and structures. Other ecosystems, including many of those involved in the first phase of R&D, tend to be more dynamic. They depend less on a central orchestrator and more on versatile interactions among the participants.

Since 2004, the Boston Consulting Group has surveyed the top managers of the innovation area from a wide range of sectors and countries on 13 occasions in order to better understand the role and status of innovation in companies.

With the ranking of the 50 most innovative companies, for the first time there have been notable movements in the first five positions on the list. Following the global survey, Apple, which led the ranking in all previous editions, descended to third place, while Google (or its parent, Alphabet) and Amazon rose to first and second place respectively. At the remainder of the top 5 table were Microsoft and Samsung.

Although technology companies occupy nine of the top ten, conventional companies account for more than half the list. Adidas (10th), BASF (12th), Johnson & Johnson (14th) and DowDuPont (15th) are among the top 15 and there are newcomers such as T-Mobile (13th), DowDuPont, Stryker (35th) and Rio Tinto (49th).

Why should Netflix Worry about Apple TV Plus?

It is, at the very least, ironic that only a few weeks after we concluded the Steven Spielberg vs. Netflix conflict, that just a few days later, the director would spearhead something that will represents his greatest competition. That the face in the very first close-up of Spielberg initiates the new era of Apple TV plus is, without a doubt, a nuanced declaration of his intentions. “Want me to help you find your opening? ” he asks in his first speech, both revealing and overwhelming. That the king of roller coasters – as far as plot development is concerned – would actually start this phase could not be more meaningful. The first peak of a roller coaster designed by the leading company in market value. “… And then, like the Big Bang, it explodes.”

Apple wanted to announce that a new player has entered the world of streaming and video on demand. But not just any old player, and not just at any period in time. Just when Disney was preparing its own platform – after breaking off all of its relations with Netflix – and just when Warner was starting to rearm itself, the ‘apple’ arrives with Spielberg. Amidst the consolidated platforms of Netflix, Amazon, Hulu, and those in the works from Warner and Disney, Apple breaks in. When everyone demanded from Apple an innovation capable of driving them back to technological, creative and even social leadership, Tim Cook is placed his bets on the same thing as the leading companies of the audiovisual market. The same? Maybe not. From the outset, they have an advantage in terms of devices, estimated at more than 1 billion worldwide. With 15% of subscribers also having Apple TV Plus, Netflix would be knocked down. In addition, the platform will be available in this year’s final quarter for Smart TVs from Samsung, Sony and LG, among other brands.

The Statistics for On-Demand Video

To explain the context through figures, it’s worth noting that Netflix expected to end March with 150 million subscribers globally, while Amazon Prime exceeded 100 million in 2018 and Hulu, popular mainly in the US, has a level of about 25 million users. In addition, after the recent acquisition of Fox by Disney, the company of Mickey, Pixar, Marvel, Star Wars and other totems now owns 60% of Hulu (adds to its 30% to the percentage of Fox). After these three platforms, two players will barge through with force. On one hand, we have the aforementioned case of Disney and, on the other, Warner. The recently approved merger between AT&T and Time Warner (owner of Warnes Bros, HBO, CNN and TNT, among others) and the incorporation of Bob Greenblatt demonstrate the commitment to the development of a leading platform. Thus, an exciting dispute is looming.

But, as we can see from the presentation of Apple TV Plus, Netflix should not only fear the figures, but also the potential content. Tim Cook wanted to differentiate himself from the start, from the strategic first spot. What if the innovation is not in the device? What if the innovation is in its content? It’s as absurd as it is shortsighted to think that in audiovisual communication, specifically in cinematographic art, that everything has already invented. An art with little more than a century of history has an immeasurable journey. Hamlet and Don Quixote were written 24 centuries after The Iliad, how many more innovations in narrative or content are left to be discovered in the seventh art?

It’s undeniable that Apple, as an innovative company, has fallen in terms of its periods of greatest success. The Boston Consulting Group report The most innovative companies of 2019 shows this by placing the company in third place after leading the ranking in all previous editions.

Innovation gives way to vision, gives way to a foreground, gives way to light, gives way to a new era of video on demand with more players commited to reign decisively in all possible fields. But, the most significant of all is that it gives way to an audiovisual era yet to be exploited … “and then, like the Big Bang, it explodes.”



Álvaro Ramos Izquierdo
Senior Communications Consultant, aficionado of the eminently artistic essence of film and, nonetheless, a mythomaniac of the Oscars.

Rafael Villaseca, former CEO of Gas Natural, will participate in the next PROA Comunicación Observatory

Rafael Villaseca, President of the Naturgy Foundation and former CEO of Gas Natural, will participate in a new edition of the PROA Communication Observatory titled ‘What Happens in the Spanish Electricity Sector‘. The Observatory will be held on Wednesday, April 10, 2019 at 09:00 AM at the Boston Consulting Group offices in Madrid (c / Alcalá 95).

Rafael Villaseca is an industrial engineer from the Polytechnic University of Catalonia (UPC) and has an MBA IESE. He was the CEO of Gas Natural Fenosa for thirteen years. He currently chairs the Naturgy Foundation (formerly Gas Natural Fenosa), serves as a director of Cementos Molins and VidaCaixa and is also a member of the Consultative Council of Foment del Treball Nacional and also member of the Spanish Chapter of the Club of Rome.

Among his recognitions, he received the 2010 Best CEO of the Year award by Platts Global Energy Awards, one of the most prestigious awards in the energy sector, which was awarded to him in New York. This award, which recognizes the professional career and the most recent achievements of its recipient, puts value on strategic vision, decision making and leadership, as well as the demonstration of clear vision, judgment and sufficient motivation by managers to pioneer transformation within their respective organizations.

The Observatory PROA Communication is conceived as a forum to welcome distinguished personalities of Spanish public life: politicians, businessmen, social leaders and respected intellectuals, among relevant figures in the entire country

The Observatory was born as an open meeting space, in which genuine, original and intellectual dialogue and discourse are fostered, a place to go to share ideas, not as a platform for scripted talking points and arguments akin to clichés.