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Quantum Computing for Business: Are You Ready for a Quantum-Powered World?

The development of quantum computing technology is happening faster than we think. How should IT leaders start the quantum conversation in their organizations if it’s not viable for business use just yet? In this exclusive interview, Raul Palacios, President at OneQuantum (Chile Chapter) and Multicloud Solutions Director at Gtd, shares valuable insights on the current and future business landscape of quantum computing, the relationship between AI and quantum computing, and why business leaders must jump on the quantum train before it’s too late.  

 

What is the current landscape for quantum computing?

Quantum physics is 100 years old so it’s quite new in comparison to traditional physics.  Thus, a differentiation between quantum computing and classical computing. This new science creates anxiety to be understood and used in today’s technology. However, when quantum science starts to become quantum technology, it will eventually become a possible solution to different problems that cannot be tackled with the current tools we have. Quantum computing and technology will start to become more in vogue and eventually create hype and excitement. New science and technology in tools can help us achieve different results in the case of very complex problems. Nowadays, our society is growing, and we face more complex challenges every day, from climate change to economics to cybersecurity. Those come with complex problems that tend to be quite challenging for existing classical computing tools.    

 

Would you consider 2024 as the absolute breakthrough year of quantum computing?

There is no such thing as an absolute year. But what we can see is that several companies are working on roadmaps for the development of the technology. During the last eight years, they’ve been successfully delivering on those roadmaps. We think about this absolute thing, and we go back to this binary wall, it is, or it is not.  

We are in a situation like what happened at the beginning of the computing stages.  Computers were mainly focused on solving very complex and expensive problems. There were no tools for day-to-day users. The adoption of computing for business happened 30 to 40 years later, depending on the maturity and location of the company.  

Today, computing is everywhere compared to the early days when it was used mostly in the private sector, and eventually in the space race. So, there were no computers at home or the office. Now, everybody’s expecting to have a quantum smartphone. That is not going to happen. So, when you take this into absolute mode, we’re going to be disappointed. It’s not going to happen in the next year, but we already see that the roadmaps are delivering as expected.

 

Are there quantum computing use cases impacting consumers already?

There’s a long way to go for quantum technology in the B2C realm in terms of owning a quantum smartphone or laptop. However, there are many areas where analysts are seeing quantum computing produce short or mid-term value. These areas include the sciences, simulation, finance, optimization, and cybersecurity.  

Cybersecurity is everyone’s business because day-to-day communication happens through an encrypted channel with standard encryptions. Those standards may be threatened by the power of quantum computing. The problem is not if, but when, and that ‘when’ has been accelerated. The industry has set this idea of a quantum breakthrough near 2030. That’s when they expect a quantum computer powerful enough to break current encryption systems.  

However, these expectations are based on the estimations of Shor’s algorithm. Based on the data I saw a few months ago, there have been improvements in the approach of Shor’s on how to break up the algorithm quicker and make it a prime factorization, which is the actual mathematical tool that will eventually break the encryption. When that happens, we’re going to be in serious trouble. Every kind of transaction that happens on the Internet may be exposed.  

Updating or enhancing IT security infrastructures can take easily 10 years, maybe five in the best-case scenario, putting aside quantum. For instance, if we see how the industry has progressed in upgrading to the AES encryption system, it’s been taking 30 years and counting. So, if we think there’s tool that could endanger our cybersecurity within 10 years, then we’re in trouble.  

Every corporation should face quantum technologies soon. Jumping only when the technology materializes will be too late.  

 

Although quantum computing has a long-term scope, why should business leaders make it a priority in their agendas today?

Quantum computing will have a short and long-term impact on two areas – cybersecurity and optimization.  

Optimization is pretty much infused into many different businesses. In terms of cybersecurity, ransomware is a trillion-dollar business. They are very effective attacks targeting IT people. So, we get certain vectors to reduce or mitigate the impact of ransomware. Ransomware uses these kinds of encryption techniques and data capture. This is why we need better encryption and prediction systems that need to be evaluated today.  

I know that it’s hard to create a quantum case because first, you need to start explaining what quantum is. Secondly, you need to create the business impact. Especially in security, it’s always difficult because some businesses are super focused on the short-term and that means they’re focusing on how they’re going to make the numbers by the end of the year, instead of focusing on cybersecurity and protection, which may be a three-year plan that does not fit with current business strategies.  

It’s challenging to make quantum tangible and build a business case around it.  

 

How can business leaders ensure that their organizations benefit from quantum computing in the long run?

Companies tend to devise their strategic plans in a period between three to five years. That’s the standard for traditional businesses today. The quantum evaluation may take a longer time. Some companies prioritize innovation, and they have teams working towards that. These teams may have a longer timeframe to work and evaluate and present future concerns. This is the main reference on how to tackle the challenges of quantum computing and quantum technologies in our current IT conversations. In the three-year timeframe, we may just start to see the quantum conversation moving forward. For those with a yearly plan, they tend to be a bit more reactive. They are not yet in the proactive mode of innovation because of budget or other reasons. So, those businesses are going to probably be the followers. Those that are more proactive and have plans to evaluate technologies may experience long-term business impact.  

 

What is the relationship between AI and quantum computing?

That’s a very interesting topic lately. For businesses who want to move forward, they are putting these into their innovation tracks. This will help them face disruptive technologies in a different timeframe. There is a certain traction lately with AI and there’s a specific field in the matter called quantum machine learning. However, there are a lot of data-related and computing-related challenges. Maybe we have a lot of small data, but the problem is too complex for the computing capacity to resolve. These are the areas where we currently see AI and quantum computing intersect.  

If you recall, just before AI we saw a lot of data science topics capturing headlines. Many data science topics have evolved to become AI-related topics. Nowadays, AI is quite oriented to processing large volumes of data. If we add the complexity of understanding that data, then we have an increased value of using quantum with AI. Quantum may help bridge the crossroads between large volumes of data. That’s why most of the ChatGPT moments are based on large language models, and then we get this idea of large data volumes. To solve complex problems, large volumes of data need to be processed. This is where quantum algorithms or quantum-inspired algorithms can help.  

The latest research points to reducing the amount of data required to produce better results from the AI perspective. This is also an area where the quantum computing way of thinking may help us to improve the technology. 

 

What quantum computing technological milestones have already made a short-term impact?

Counting qubits is fine for a specific technology approach but we should consider some other technology approaches. The quantum world is not only in superconducting qubits. We have quantum annealing and photonics, and there are many different technologies that may be measured. They have different KPIs so understanding those KPIs is important. The main milestone is achieving any kind of demonstrated success from the quantum perspective. Our current high-performance computing may produce results but if we see that, at a certain point, quantum may promise and improve performance computing and energy consumption, that’s something worth double-checking.  

 

What are your quantum computing predictions for the upcoming year?

Companies like IBM, Inq, and D-Wave Systems have been delivering roadmaps and are aggressively working to accelerate quantum. There is also a growing interest in quantum from a broader audience. A few years ago, the quantum community was small, but it’s been growing very fast. More IT and business leaders are keen to learn more about quantum.  

That’s a call to action for the quantum people. We need to translate what is required for our newer audiences. That’s a challenge because, in the next 12 months, we’re going to see more non-quantum people jumping into the technology. Existing quantum conversations were super technical, talking about qubits and physics, and it’s very hard to digest. Quantum experts need to figure out how to translate the value of the technology for business leaders.   

Sectors that can benefit from quantum computing the most are finance, telco, and retail. Most private companies are investing and researching related current technologies, security, process optimization, and energy consumption. There will be improved quantum processor units (QPUs) that may be on the same track as traditional CPUs and GPUs. There will be improvements in how we develop algorithms and how the technology integrates into existing system infrastructures.  

 

What are immediate things business leaders can do to get ahead of quantum technology?

It needs to be on the radar for innovation.  

Companies need to be given support to participate in quantum conferences and events. There are a lot of clever people making statements and clarifying what can and cannot be done. It’s also getting external support. Some companies may not be able to afford to hire experts, but they may afford to hire consultants to help them get on track. You don’t need to develop your own quantum computer; you can already consume the technology available using cloud computing. Anyone can use a credit card and start consuming and testing quantum ideas right now. 

 

*The interview answers have been edited for length and clarity. 

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Insights from BNP Paribas Fortis: Chief Economist’s Guide to Navigating 2024 and Beyond

In this exclusive interview, Koen de Leus, Chief Economist at BNP Paribas Fortis, shares five trends that will shape the new world economy, how they will impact businesses, and what business leaders can do to futureproof their organizations. He also answers burning questions on whether Europe is going into a recession and why companies must act now and play their parts in curbing the climate crisis.

 

Congratulations on the release of your book with Philippe Gijsels, The New World Economy in 5 Trends. What can business leaders, particularly CFOs, learn from the book?

Together with my colleague, Philippe Gijsels, who is the Chief Strategist at BNP Paribas Fortis, we identified five trends. Four of these trends are inflationary, and one trend is disinflationary. The disinflationary one is innovation, and I think it’s going to increase productivity in the long run, starting in five to 10 years and continuing for the next decades. But in the decades, we will see four trends as well that are going to push up inflation. Firstly, deglobalization, you have more walls around countries so that’s going to be inflationary. There’s aging that’s going to push up salaries which already has a big impact on companies. Next, the climate transition that is going to cause commodity shocks and supply chain shocks. And of course, there is the high debt level of the governments. If you have a little bit of inflation, it’s easier to control this high debt level.  

These are the four elements that are pushing in the direction of inflation, higher interest rates, and higher nominal interest rates. We think that The Great Moderation, the period of around 40 years of a gradual decrease in inflation and interest rates is over. CFOs who think inflation will go down to below 2% and stay there over the coming decades are wrong. We are not going back to a period of ultra-low interest rates. Interest rates are going to go down a little bit, but then will gradually increase in the next decade. The peak this time was around 5% in the United States. Maybe it will go down to 3% or even 2.5%, but then it will go back up to a higher level of 6% or 7%. That is something CFOs have to consider if they want to fix costs at a certain interest rate. 

In the past, CFOs had time to fix prices since they went gradually lower, decade after decade. In the future, interest rates will be more volatile because of the expected inflation shocks and will structurally move higher. This means that they risk missing the opportunity to fix interest rates at a relatively low level. So, CFOs need to be more agile there, as well as in their supply chains and fixing prices of commodities. This is because we are entering The Great Disequilibrium where prices are going to be much more volatile and supply chains are going to be disrupted further. With regards to commodities, CFOs need to fix prices much more frequently to take advantage of lower prices, because before you know it, they will shoot up. Maybe there is a trade war again between the United States and China or there is havoc in South America. Many events can disrupt the way of doing business.  

They have to plan just-in-case instead of just-in-time.  

They have to diversify where their goods are coming from, not just from one country anymore, perhaps China Plus One or China Plus Two. They’ll need to find suppliers in countries outside of China or countries that are in between China and Europe or in between China and the U.S., maybe they can have some more stocks or more warehousing. This is of course going to weigh a little bit on the margins, but they need to make sure that they can supply to their clients in times of disruption.  

 

One of the trends you identified in the book is the West’s aging population. How will this impact the labor force, especially with the increasing demand for tech talent?

With regard to tech talent and innovation, when I was studying this trend, I found that innovation accelerated after big shocks such as the pandemic. The demand for innovation, and tech talent as a result, was also high over the past years with the climate and energy crisis and the Russia-Ukraine war. So, there were many investments by companies in technology, which bodes well for innovation in the long term. I think that in the next decade, productivity levels will be one percentage point higher, from 0.2% to 1.2%. Now, what we also saw was an overinvesting by technology companies resulting in many layoffs. One positive outcome of the layoffs was that it gave other companies opportunities to hire those people and implement new technologies after the shocks.  

But as you point out, the impact of the aging population on the labor force will be huge. For example, China’s population will decrease by 40% to 45% between 2020 and 2100. Its working-age population will decrease by 65%. In Italy, the total population is going to drop to 37 million from 60 million by 2100, causing the working population to decrease by 50%. In Germany, its total population is going to be reduced from 83 to 69 million between 2020 and 2100, and the working population by 30%. So that is pretty dramatic.  

The demand is going to slow down as well as production. It’s going to be difficult for companies to find enough workers. Many people are saying artificial intelligence is dangerous. Five years ago, we did a survey with our corporate clients, and they found that artificial intelligence and automation are disruptive and will cause job loss. However, you see a change of mindset today. This change of mindset is very important, this means that companies are going to actively invest in technology to compensate for the dwindling working-age population. If companies want to produce more, the only way to do that is through automation.  

Artificial intelligence is a blessing in disguise, and we have to embrace it.  

 

Rising energy prices in Europe have accelerated the need for businesses to transition to greener alternatives. What can business leaders do to ensure their organizations are on the right track with the climate transition?

It’s difficult but you have to act fast. The longer you wait, the shorter the amount of time you have to do it. Today, we don’t have a global CO2 price yet. We have a CO2 price for European companies with the ETS system but sooner or later we will need a global CO2 price. We have to reduce the emission of CO2 much faster than what is happening today. 1.4°C of global warming was recorded in 2023. At the moment, there are quite a lot of countries that have not introduced any CO2 price. But sooner or later, the global carbon budget will be completely used up. At the present rate of emissions, we still have a budget of 6 years. That is the extra amount of CO2 that we can emit in the air to keep temperatures rising to 1.5°C. After that, every extra ton emitted will push global warming above 1.5°C.  

I think that at a certain point in time, there will be a big catastrophe. It will probably be in one of the big countries like the U.S., Europe, China, or Canada. And then everybody will realize the seriousness of the situation and sprint into action. A relatively high global CO2 price will be put into place which will be a big shock to the companies that are late to the game. They will be hit hard because they need to diminish their emission of CO2 from one year to the next. I think this will happen in 5 to 20 years. Companies that act too late risk going broke. When you have plans to invest, you need to have an internal CO2 price, $100 per ton for example. If your investment is not viable with that kind of CO2 pricing, don’t invest. Instead of just investing and looking at returns, include some kind of CO2 pricing.  

Another thing companies should consider is that banks are going to be stricter in giving loans to certain investments with high amounts of CO2 emissions. That is not because we want to be difficult, but we have rules that we need to adhere to, we have certain limits regarding our loan portfolio, how many loans we are going to give, and how green these loans must be. If these loans are not green at all, and we’re still investing in oil or coal, then we know that sooner or later, we are going to have problems, because some of these companies are going to go broke.  

There are new laws at the central banks that monitor these loans. As a bank, we’re following what was articulated by the International Energy Agency which is to achieve Net Zero by 2050. We are following that path as well in different sectors. For example, we are going to reduce the financing of oil exploration and production by 80% by 2040. That is something BNP Paribas is doing, and we’re going to reduce the financing of gas in our loan book by 30%. Like it or not, banks have to play the game, because they’re under the control of the central banks and many banks are following the Net Zero by 2050 path. At a certain point in time, companies won’t get a loan anymore. 

 

Is Europe going into a recession in 2024? How should business leaders prepare?

I don’t think we’re going into a recession. We’re going to have a very slow growth like in 2023. We had negative growth in Germany which is going in and out of a recession. The growth is not going to accelerate. What we saw was a slowdown in Q3 and Q4 2023 and will probably continue in Q1 2024 as well. But from Q2 2024, we will see a gradual acceleration of the economy. Of course, that has a lot to do with the decrease in interest rates, which we think will start to decrease around Q2 2024. This will give extra breathing space for the economy.  

Also, in the U.S. we think that – finally – the economy will decelerate. Will the increase in interest rates push the economy into a recession? That depends on how fast the Federal Reserve will react and the anticipation of markets on what the Federal Reserve will do. Although short-term interest rates at 5.5% are at their highest level since 2001, markets anticipate in January a steep decline to 4% by the end of 2024. So, long-term interest rates have come down in tandem to 4%. This has pushed mortgage rates down and kept residential investments abroad. This could mean a soft landing is in the making, although that is always the goal of the Federal Reserve, but it very rarely turns out that way.  

Another element that companies will have to take into account is that China’s growth will continue to be meager. Consumption remains low and residential real estate continues underperforming. This will have a positive impact on commodity prices, although the evolution of oil prices will depend as well on the situation in the Middle East. The fact that oil prices have remained contained so far has a lot to do with the U.S. and the additional output recently produced by shale oil producers. All in all, I expect a volatile year which will only be articulated by the fact that about half of the world’s adult population will vote, and the mother of all elections being held in the U.S.

 

What can attendees expect from your session at Executive Forum Finance later this year?

They can expect a long-term view of the future to see how they can prepare for this new future. We’re going from The Great Moderation to The Great Disequilibrium to The Great Chaos. So, we’re going to a completely new era, and this has quite a lot of consequences for companies. 

 

*The interview answers have been edited for length and clarity. 

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8 Tech Trends to Watch in 2024 by Bernard Marr, Futurist

Every company is now a tech company – with the exponential growth of computing and the value of data presenting itself as crucial to any organization’s success. Tech and business leaders alike understand the importance of having their fingers on the pulse of the latest tech trends or risk falling quickly behind and losing out on vast potential.  

World-renowned futurist, influencer, and thought leader in the field of business and tech, Bernard Marr, explored eight top tech trends that business leaders need to watch in 2024.  

 

1. Ubiquitous Computing

 

The first and foundational trend is ubiquitous computing. This was first enabled by cloud computing which allows as much data as you want to be stored in the cloud and processed almost immediately, and further enhanced with 5G connectivity. Edge computing is also part of this, allowing data to be processed directly on devices, making it a more efficient process.  

The exponential growth of computing power means that we now have reached the physical limits of how much computing power we can squeeze into a microchip. However, even this is changing.  

Bernard Marr noted: “Quantum computing is something that leverages the bizarre things that happen on a subatomic level where particles can be in more than one place at the same time. Instead of normal computers that process things sequentially, quantum computers can do it simultaneously, making complex computing tasks about a trillion times faster than the supercomputers we have today.” 

Eventually, quantum computing will be available on the cloud. Companies are already building these tools and integrating them into their cloud offering. Bernard projects that quantum computing will experience a big leap forward in 2024 and that in five years, it will be an important contribution to computing overall. Other data storage systems like DNA storage – where data is stored on DNA strands – will also contribute to ubiquitous computing.  

 

2. Datafication of the World

 

The second trend Bernard points out is datafication. Data has become an essential business asset to organizations. It is available at unprecedented levels – around 75 zettabytes of data, 90% of which was generated in the last five years. However, less than 1% of data is used in a meaningful way. In organizations, less than 0.1% of data is used. Data is also growing exponentially and is expected to grow to over 225 zettabytes by 2025.  

Using the example of how Netflix leverages data to drive its recommendation engine and create content, Bernard explained the importance of using the data you have to drive decision-making and business strategies.  

Another example is the use of satellite data by companies in the construction industry – in combination with machine vision technology – to keep tabs on their competitors’ progress and how they stack up against it.  

Crucially, Bernard highlights the importance of data literacy. He said, “When it comes to data, there is a challenge where we are lacking a lot of data literacy in our organizations. We have lots of people that don’t particularly like data. So, companies often build these big data lakes and warehouses, put nice analytics on the front end, and say that you can be your own data scientist and answer all your questions. But this doesn’t happen.  

What we need to do is more handholding. We need to put in place more help for people to understand what data they have and how they can use it.” 

Bernard shares the example of how Shell tackled this problem by building a data café at their headquarters. Here, employees can sit down with a data scientist to present their business challenges and questions and get help on how data can help them. Data scientists can help them understand what data they have access to and how best to use it. 

“It’s basically data translators. People that sit between business and data functions to help business units understand how to better use data in their everyday operations.” 

 

3. The Artificial Intelligence Revolution 

 

Ubiquitous computing and datafication lay the foundation for artificial intelligence (AI). Bernard emphasized that this is by far the biggest trend right now. This is where organizations should invest currently.  

“Every organization now is an AI business. AI is transforming pretty much any industry.” 

Citing Amazon as an example, Bernard talks about how AI is transforming the physical retail experience. Amazon Go stores utilize facial recognition technology and other AI tools to enable a smoother, easier shopping experience for their customers who can just pick stuff off the shelves, put it in their bags, and walk out as they are automatically charged for the items they bought.  

Another creative use of AI is in the fishing industry. A Norwegian salmon farming company connected their sea pens over 5G to a data center that allows them to track feeding systems with facial recognition technology to ensure all the fish are fed an equal amount and therefore mature at a similar rate. The connected sea pens also have a circular swimming system, in tandem with machine vision technology, that allows them to analyze the health of the animals, detect diseases, and isolate infected fish before the disease spreads to the entire population.  

On generative AI specifically, Bernard noted the significant advances in not only AI-generated text and images but also videos and voice. Though there are ethical concerns around generative AI, it can also be used for good such as in medical research to develop new drug formulas.  

“This is such a powerful technology that I believe will impact all of your businesses from today,” he emphasized.  

 

4. The World Becomes Immersive

 

Bernard believes that the world will become more immersive largely through augmented reality, virtual reality, and other similar technologies. Companies like Bollé, the French sunglasses brand, and Dalmore, the whiskey brand, have incorporated augmented and virtual reality into their customer experience journey. Bollé developed an app with augmented reality to allow their customers to virtually try on sunglasses as well as see through them via their phone cameras for a full experience.  

Dalmore created a whole virtual journey for their customers to experience a trip to the Dalmore distillery in the Scottish Highlands to see how their whiskey is made. At the end of this virtual trip, customers receive their order of a Dalmore whiskey cocktail.  

Immersive technology goes beyond just enhancing customer experience. Formula 1 racing team, Red Bull Racing, creates digital twins of their cars, circuit simulators, and full-body haptic suits to create an immersive racing experience. This allows drivers and engineers to test out the cars before they’re manufactured and make any fine-tuning necessary before 3D printing components. 

 

5. A Digitally Editable World

 

This leads to the next trend of a digitally editable world. This means being able to manipulate the real world from a digital world. Nanotechnology enables us to manipulate materials at nanoscale, allowing scientists to create completely new materials such as graphene – the thinnest material on the planet that is also incredibly strong. This has led to designs such as bendable screens.  

Other uses include creating cultured meat, something that is already being done today. In fact, there are sushi restaurants in Japan that 3D print sushi. If they have your DNA analysis, they can even 3D print sushi with the exact nutritional values that you need.  

Technologies like CRISPR/Cas9 have opened a world of gene editing that offers a major avenue for fighting hereditary diseases and cancer. Bernard noted, “A lot of work in cancer research and other diseases research is going towards identifying gene markers. If we can identify them, we can take them out. With CRISPR/Cas9, we can do that. This is amazing.” 

However, as with any powerful technology, there are ethical concerns. Bernards stressed, “On the flip side, it’s really scary because we can modify pretty much anything about any plant or any human being or animal. If you want to improve someone’s strength, IQ, eye color, skin color, height – you can do that in the future. So, there are huge ethical concerns again, but this is coming.” 

 

6. Rearchitecting Trust with Blockchain Technology

 

Last year, there was plenty of hype over blockchain technology and NFTs, but it quickly disappeared as people realized that spending money on digitally created photos with no inherent value isn’t great. It was the same with cryptocurrencies.  

Bernard said that while there are plenty of developments in this area, there still isn’t a standard blockchain technology. There is also no interoperability. However, he believes this is coming and that this technology will have major implications in various ways.  

For example, the United Arab Emirates is putting its property documents onto the blockchain, making the house-buying process much simpler than it is now. “Lots of the middleman functions will be eradicated through blockchain technology,” Bernard warned.  

As for NFTs, while they have developed a bad reputation, some companies have used this technology in creative ways. The whiskey company, Glenfiddich, created a limited edition 43-year-old whiskey that they sell at auctions. Usually, the company won’t know what happens to the bottles once they are delivered to the auction houses. However, this limited series of just 10 bottles were auctioned with NFTs. Buyers receive a digital certificate proving that they own the bottle, which physically is located in Singapore. If they want to sell it, they simply sell the NFT. If they want to drink it, they can swap the NFT for the actual bottle which will be delivered to them. This way, Glenfiddich knows exactly how many unopened bottles there are, which can be verified digitally.

 

7. Resilience is Safety and Sustainability 

 

Bernard said that the second trend organizations should invest in is cybersecurity. Pointing out that resilience is about safety and sustainability, Bernard cautioned that keeping data safe has never been more important.  

“Quantum computing will be able to break all the encryptions we have today. If you think the data you have is nicely encrypted, quantum computers will break it. There’s now work on how we can make our systems quantum safe.” 

Today, bad actors are already stealing data sets that they know they can break into in the future once they have access to quantum computing. This is an alarming situation that needs to be addressed.  

The other part of resilience is sustainability. A huge global challenge is climate change. Bernards points out, “The cloud industry combined now has a bigger carbon footprint than the entire global airline industry because they are running huge data centers that use huge energy, resources, and water. We need to start thinking about how we make this better.” 

 

8. Talented People Still Matter 

 

Bernard said he believes that being able to work alongside machines and guide machines is one of the most important jobs. While it’s true that data science and math skills are needed to a certain degree, the vast majority of work won’t need those specific skill sets as machines will be able to do it better than humans. ChatGPT can already write and debug programs.  

“What we need in the future is to have people that have the human skills, the soft skills,” Bernard explained, adding that data literacy, technical skills, and awareness of cyberthreats are just some of the types of skills that we need to equip ourselves with.  

Beyond these digital-related skills, we need the skills that make us intrinsically human such as critical thinking, complex decision-making, emotional intelligence, and creativity, among others.  

“These are the kinds of skills that will set people apart in the future. What we need to look for, and what we need to develop in our organizations, is people that have those skills and that are able to work alongside intelligent machines, to get the best of both worlds.” 

Bernard added, “There are huge opportunities. We need to sort out some of the problems, but I believe that all of the technologies I’ve talked about today will help us solve the biggest problems we are facing on this planet.” 

 

*The insights have been edited for length and clarity.

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Insights from Picnic’s CTO: Mastering Retail Resilience

Daniel Gebler, co-founder and CTO of online food shopping giant Picnic, provides valuable insights on how to build a resilient retail organization through the concept of anti-fragility. He also shares how Picnic navigated through black swan events with the anti-fragility mindset, leveraged customer feedback to revamp systems and processes, and improved the organization’s safety and sustainability scores with technology.  

 

RETHINKING THE ONLINE GROCERY DELIVERY SYSTEM

 

Generally, online food shopping hasn’t taken off with high delivery costs and wait times as major factors. “It’s very expensive to do food shopping online. If something is very expensive, you won’t do it. It’s not so much that you must pay higher prices for the products, you had to pay for deliveries. At this point, you also have to pay for deliveries for returns. That was not the case for other replicas.” 

To combat these obstacles, Gebler highlights the importance of accurate delivery windows and the need for faster delivery to make online food shopping more appealing. “It’s not so much that you deliver faster. It doesn’t work because you will run out of money. It’s not so much the waiting time, but the accuracy of delivery. If you say you can deliver this in one hour, then you have a much different proposition. That broke up the entire market. This is something you see again and again where everybody tries to copy what has worked in one market to another market.” 

Food shopping requires a different experience, as customers will purchase food every week, as opposed to a digital device that they will buy once every few years. “You never buy the same device again. However, food is a different dynamic. So, the entire shopping experience needs to be different.” 

Gebler proposes a new approach to e-commerce by owning both the front and back office, allowing for greater control and success. “What everybody was doing in e-commerce is only from the front office and the app, but nobody owns the logistics. That is a big issue because then you simply can’t control it. If you want to be successful in e-commerce, you need to own both the front and back office.” 

He also suggests taking a service position that is more suited for less convenient situations, such as offering delivery windows based on customer demand. “What would happen if you offered only one delivery window a day instead of ten? This model has simple logistics. If it’s not convenient for customers during that window, they can order for the next day. It’s basically a bus distribution system to get from street to street and never visit the same street twice. This is a very efficient delivery system.” 

 

REVAMP SYSTEMS AND PROCESSES TO WITHSTAND BLACK SWAN EVENTS 

 

With competition from local supermarkets and Amazon, Gebler emphasizes the importance of understanding people’s behavior in the market. He also discusses the concept of anti-fragility in business, where resilience and adaptability are crucial in the face of uncertainty and negative events. 

“If you think about uncertainty, maybe you think about probability. But there are black swan events, and we have been going through one over the last few years. The first thing that happened for Picnic was that we had 10x demand. So, most people can’t properly deliver to you from the supplier side as demand was skyrocketing. And then the entire logistics completely changed. The point of anti-fragility is that you innovate your business to become anti-fragile.” 

He defines fragility in business as a software system or logistical process that no longer grows because of an unexpected event. There is a need to move beyond traditional robustness measures and instead focus on creating systems that can benefit from unexpected events, making the organization stronger in both good and bad times. 

“With anti-fragility, you have built many infrastructure systems and mitigation steps to make processes and systems in the organization more robust. The real power of anti-fragility is that you move to a state where an external factor, even if it has a short-term negative impact on you, makes your organization stronger. If you can achieve that, then you grow not only in good times but also in challenging times, because you are prepared for whatever may come in the future.” 

 

LEVERAGING CUSTOMER FEEDBACK TO BECOME ANTI-FRAGILE

 

Picnic has designed a system to be anti-fragile by starting small, gathering customer feedback, and optimizing packaging and delivery. “How do you design a system that is prepared for anti-fragility? Firstly, if you’re a retailer, ask yourself, what are you selling? Maybe you stock 4,000 items. And at some point, you simply say, ‘We will serve more if you tell us what to serve.’ Therefore, we started to ask all our customers what kind of products they would like to have at Picnic.” 

It’s also important to find out what customers want but can’t find at the store. “If you get hold of that information, you can launch the product. If there are no suppliers for that product, you need to go one step further. If nobody’s producing what consumers are looking for, you need to do it yourself.” 

In addition, Picnic leverages AI and machine learning to improve customer service communications by analyzing past responses to provide better responses in the future. “If you put this all together in a database, if you take all the responses that agents have spoken in the past, you have a good measuring system to see what a quick response should be in the future.” 

 

OPTIMIZE FOOD DELIVERY LOGISTICS WITH AI 

 

Gebler discusses the importance of last-mile delivery logistics, including predicting delivery times and addressing customer questions. “On the logistical side, the last mile is a very important aspect. It is essentially the only real touch point that we have with a customer at Picnic.”  

He highlights the challenges of delivering to customers, such as navigating complex addresses and addressing customer concerns. Gebler discusses the importance of sharing real-time data with customers and suppliers to improve efficiency and safety in the delivery process.  

“How do you work with machine learning to create a customer experience? There are two factors at play, you need to predict how long the delivery will take, and how to make that prediction a reality. When you’re talking about AI, machine learning, and forecasting, you need to have a better prediction system. You need to also have a better operational system that makes the prediction happen.” 

 

LISTENING TO CONSUMER DEMAND TO REDUCE FOOD WASTE 

 

The environmental impact of online food delivery services is negative overall, with only 50% of food produced being consumed. Gebler also notes the potential of autonomous driving in the food industry. Although it is not yet practical for public roads, it could have a positive environmental impact in the long run. Gebler highlights the importance of avoiding waste in the supply chain, particularly with self-adapting supply chains and early consumer demand knowledge. 

“If you look at the entire food system, only around 50% of what’s harvested gets consumed. So, this is an extremely wasteful industry. If you look at physical retail, usually most supermarkets have waste, somewhere between 10% and 20%. Picnic’s is below 1%. That is something we are very proud of and what we find very important because this kind of waste is avoidable. By having a supply chain that is self-adapting and knowing the consumer demand very early on, we can avoid waste.” 

 

DATA COLLECTION FOR SAFETY AND SUSTAINABILITY 

 

Picnic has implemented a safety data collection process for self-driving cars, using data from vehicle sensors to identify areas of improvement. One of the data collection methods is the driver coaching feature, providing riders with feedback scores and suggestions for improvement after each ride.  

“The first step was to understand where we stand with safety. Let’s collect data from the vehicles. Where are people driving safely and where are they not? We have identified dangerous places that have not been given enough attention to drive safely in. It’s again about sharing data. So, what we do is give all our drivers some feedback once they have completed the ride. After a ride, our drivers are given a feedback score between 0 and 100. If you’re 80 and above, then you have actually completed a fantastic ride.” 

When it comes to sustainability, Gebler mentions the biggest challenge lies in poor transparency with third-party suppliers. “There’s a big obligation for the entire ecosystem to have more accurate data available for partners and consumers to get the full end-to-end view on sustainability.” 

 

COMPLEMENT DATA WITH VISION AND AMBITION  

 

Combining data with vision and understanding is paramount to creating a successful business. He encourages entrepreneurs to share early versions of their products with customers to gather feedback and create something meaningful. 

“If you have a big plan and you need to do 10 things, what are the first two things that create significant value? It’s easy to say, but it’s probably the hardest thing in building a business and innovating. While we are all collecting a lot of data and talking about data innovation, the reality is that you will never have enough data. You need to complement data with vision and ambition.” 

“This is important for leaders across all industries. The main role is that you complement data with your vision and understanding of the industry. The same applies to machine learning and deep learning. While this is important to build, you need to think about how to go live with a prototype today with minimal effort.” 

“While we are all trying to think about what it would mean to launch a product and put it in the hands of millions of customers, we are usually launching too late. There’s a saying in the startup world that goes, ‘If you’re not embarrassed by the first version that you put out, you’ve launched too late.’ There’s a real power in sharing with customers that very early version to get feedback. You don’t need big teams to create something meaningful.” 

Gebler discusses the challenges of labor shortages in the industry and how Picnic addresses this issue through small project ownership and early responsibility for young employees. 

“It’s very interesting to see typically very young people have a lot of ownership. For example, we have supply chain leaders who run fulfillment centers and lead 400 people. In many cases, these leaders are around 27 and 28 years old. That’s impressive from an industry perspective. We also have a young engineer leading our entire safety operation. That is 300,000 vehicles for him to turn around.” 

 

*The insights have been edited for length and clarity. 

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What is Beyond the AI Hype for Volvo Group?

Business leaders need to face a reality where AI isn’t just a buzzword, it’s the engine driving real business impact. Volvo Group is leading by example by weaving AI into the fabric of its operations, seeking tangible, transformative, and sustainable impact. In this exclusive interview, Robert Valton, Head of Data, Analytics & AI, Volvo Group Connected Solutions, shares valuable insights on the game-changing nature of AI, one of the key enablers to offer tailor-made end-to-end solutions to customers and to achieve Volvo Group’s long-term ambitions to be 100% safe, 100% fossil-free, and 100% more productive.

 

How did Volvo Group approach the implementation and scaling of AI technology? Can you share a few use cases that showcase the value of AI at Volvo?

Volvo Group has great products like trucks, buses, construction equipment, and marine and industrial engines. There has been a lot of focus on the products, but we also turn towards services and solutions where we can really utilize AI. For example, an iPhone has around 10 sensors like GPS, accelerator, gyroscope, and barometer. A truck has 10 times as many sensors as the iPhone. Imagine the possibilities we have with the truck’s data. I want to highlight that AI is a game changer, especially when you utilize real data. 

With synthetic data or transfer learning you might leverage AI with minimal or no data initially, but if we have real data, we can bring the full value of AI. 

To create value, you need to balance both data and AI technology, and you need to have a business need, a challenge to solve. It’s not always clear how to formulate the question, to know about the possibilities and the value of data and AI.  

This is our aim in the Volvo Group to help articulate this need, both the spoken and unspoken, addressing both the known and unknown questions.  

Traditionally, we have used AI for autonomous driving connected to a product. We have continued to explore AI around the product. For example, predictive maintenance to understand the product’s lifetime and its components. With AI, we can predict when a truck needs to go in for preventive service before the components malfunction to ensure we always have the truck on the road delivering goods. But this is still around the product. If we expand it to the driver or the operator, we can support driver training with fuel and energy coaching through digital twin technology.  

We also use AI for transportation optimization to understand if there are bottlenecks in a transportation flow. Generally, 50% of trucks in Europe transport empty. So, 50% don’t have cargo and 25% of trucks are standing still. That means we have a lot of underutilized capability and capacity. If we can utilize AI to address this, we can deliver more cargo with the existing fleet, which is better for the environment. 

You can use AI to solve all problems, but not all problems deserve AI.  

Sometimes deploying AI can be too cumbersome, expensive, and complex. We should always adjust the tool to the problem, so we are efficient. The right tool for the right use. Another aspect is AI for internal efficiency. For example, we have a lot of coding in-house, and AI is our coding buddy to verify and test code. You can also use AI to automate manual tasks or quality issues in a process.  

 

Generative AI (GenAI) has taken the business world by storm this year. For organizations who don’t know where to start with GenAI, how should they go about implementing the technology?

Start, try, and explore. Many people talk about GenAI but they haven’t tried it. So, I often ask in different meetings, “Have you tried AI technology? Have you tried for example AI tools like ChatGPT or DALL-E?” just to get an understanding.  

We decided to have a bit of a lean approach to this in our organization so we created AI in Action, a series of events where we explore how AI can support us both with internal efficiency and our services. We invite our entire organization, and we start with an inspirational event having presenters demonstrating how we can fully use AI in our context in a safe and compliant way. We have discussions about compliance, ethics, and all those questions that need to be on the table before trying out AI.  

We didn’t do this from a technology perspective, we did it from a business perspective. So, we started to ask our business stakeholders what their pain points are, focusing on that rather than on what AI can do. This was a super interesting journey because everyone’s eager to start using AI now. But let’s not forget why. So, we went back and talked about this, and found different pain points that we could address with AI. We have since calibrated some and decreased some, and now we are on four of those doing a hackathon.  

The great thing was that when we started this, we had 600 people in our organization globally who joined this inspirational event. You get the energy and passion from the complete organization, it’s not a top-down directive. It’s building the data-driven culture and transformation journey. It requires that you think of AI as more than GenAI, more than a tool or service. This is all about leadership, strategy, value, data, and compliance. Here we need to navigate and make sense of it.  

 

There is a lot of buzz around hiring a Chief AI Officer (CAIO). Do you think it’s time for board-level representation of AI?

The answer is connected to the size and the kind of organization you have. But I would say that we will see more CAIO roles in companies in general and at least one board member with an AI focus. Appointed owner of data, analytics & AI at C-level with the right focus and mandate will enable the company to be a leader in the “data to value” transformation.  

AI is more than a technology, it’s something that goes cross-organization and balances technology and business.  

If everyone now has access to AI, what makes you unique compared to other companies? What customer relationship would you like to have? That’s also something that you need to reflect on. Would you just like a digital interface for all your customers? Would you like to have a more personal interaction somewhere? That’s why I believe that AI should be on the top management and board level. If you handle that right, it gives you an advantage. If you don’t, it will probably be the end of your business. 

 

As an AI leader yourself, what challenges have you encountered with AI governance?

There are different maturity levels in an organization, and you need to have the dynamics to balance that. You need to talk about and address what should be centralized and distributed. You need to make sure that you build and support a data-driven culture, that everyone’s on board, and you have to figure out the right way to work. But at the same time, avoid having a lot of people reinventing the wheel. In an ideal setup, you would have one truth of information that is free-floating in the organization.  

This is why we need to address the governance part to make sure that everyone is on the same page, that we are smart about what tools we use, what processes we utilize, what we should make ourselves, what we should buy, and who we should partner with. It’s important to have a structured approach to all those questions.  

We also need to address that we might have old truths based on gut feelings. With a data-driven approach, with a black box that contains AI, you might come with a truth that challenges the old hypothesis. That’s about trust and change management. How do you handle that? Do we have leaders that believe that we can utilize this technology? It might require that we upskill people and completely change the way with AI in the equation. My firm belief is that AI Is not only for the tech geeks, instead we should focus on the value it gives. Coming back to the question about the CAIO, I believe that we need to have people balancing between business and technology here so we can also utilize AI effectively, not just because it’s a cool technology.  

 

The rapid development of AI technology requires leaders to have strong AI literacy. What are the top strategies to foster AI literacy in upper management?

We need to go from PowerPoints to action, from hype to reality. It’s a great opportunity to share with the top management how this can be used as a capability to drive transformation from data to value. Give concrete examples and support top management to try themselves. They need to understand and see concrete examples in a context. And if they aren’t already, help them ask the right questions.  

One thing that’s super important is for companies to define AI.  

GenAI is just one tool in the box. There’s natural language processing (NLP), computer vision, predictive analytics, simulations, optimization, and more. I’ve been working with AI for the last 10 years, but I’ve only worked with GenAI since last year. Another thing that will be important is to understand the business disruption that will happen because of AI. How can we relate to that? How can we make sure that we have the strength to be part of that and utilize AI to bring value to our business, both for customers and for internal efficiency?  

Also, work proactively with ethics. How would you like to see AI used in your organization? For example, I work a lot with recruitment. If you have an AI that is trained in a certain way that might choose certain individuals, that is not the way to go, we should have a diverse setup that goes with the right candidate regardless of age and gender to have diverse and dynamic teams. Coming back to the data, it will be a nominator moving forward, understanding the data that you have and the value that data can provide. Then you can decide what to do with the data, you can partner up and collaborate. You need to be dynamic with the way that you proceed. 

 

Europe has been a trailblazer when it comes to regulating AI and data privacy. How can business leaders navigate the complexities of compliance and not abandon innovation?

I believe it’s important that we are careful. Today we have what we call narrow AI. You have Siri, for example, you ask Siri a question and Siri will answer, the typical AI that many companies work with. But the next level is general AI, where AI can move between different tasks. So, imagine if Siri started to go into other areas like autonomous driving. That’s not what Siri is built for but if her intelligence expanded, she could take on new things.  

The next level of general intelligence is super intelligence, that’s when AI will outsmart humans. And in that era, AI will be more intelligent than mankind. We must find ways to relate to the evolution of AI. So, I’m receptive to regulations stating how we should evolve AI. It’s also important that we talk about compliance, ethics, and personal data protection.  

I don’t see that it’s either or, I think we can find a balance between compliance and innovation, especially innovation and AI for good.  

For example, if I say our goal is to enable more transportation with less climate impact, that’s quite a nice goal to have, and then we balance that with being compliant. I’m convinced that we will find that balance.   

 

How do you see AI growing in the next 5 years? How will it transform the automotive and transport industry?

AI is a game changer. Many people compare it to electricity or the Internet, and I agree. So, we do need to relate to AI. It’s not that we can live without it. Instead, we need to relate and adopt. 

Examples of data to value, supported by AI: 

  • Vehicle/machine: Secure uptime by predicting the lifetime of components and enable replacements of components before breakdown. 
  • Driver/operator: Train, coach, and provide feedback to drivers and operators for optimal fuel and energy consumption. 
  • Operation: Identifying anomalies like waiting time in transportation flows in real-time and automating manual steps. Potential to significantly improve transport cycles and increase operation efficiency.  
  • Transportation and mobility: Predicting the power demand as a result of future charging infrastructure to enable the transformation to electrified transportation. The insights from the work are presented to the Swedish government, the EU parliament, a number of grid companies, and was also instrumental in the development of the public tool “Behovskartan” and ACEA map of common truck stop locations. 

We need to understand how this will affect the complete organization and what strategies we should have to address this.  

Everything from the value creation to data to our target architecture to our teams. Whether we should upskill or reskill, we need to have a broad picture of this. For example, I heard a statement that it’s not AI that will take your job, it’s a person who utilizes AI that will. We should also be proactive. Instead of being in the backseat about regulations, I believe as big companies, we can take responsibility and drive things, so we make sure that AI is a tool to do good things. But it shouldn’t be that AI is on top of everything.  

Connected to Volvo Group’s industry, AI has the potential to help us reach 100% transport utilization. We can have a much more connected transportation flow because the current one is really scattered. With AI and connected data, we can do a lot of good things and secure mobility. One of Volvo Group’s higher goals is to address sustainability and reduce our climate impact.  

I think this is a very interesting time that we are in. I’m not a tech guy in that context. I’m not a data scientist. I’m coming more from sales, innovation, and leadership. It has been a good recipe for me to drive this and to bridge the gap between business and technology. 

 

*The interview answers have been edited for length and clarity. 

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Generali Group’s Dipak Sahoo: Why Every CIO Should Mentor Start-Ups

An increasingly tech-focused business environment demands CIOs to play a bigger role in driving investments and innovation in their organizations. One way for IT leaders to ignite that spark is to mentor start-ups and build mutually beneficial business relationships.   

In this exclusive interview, Dipak Sahoo shares expert insights on why mentoring start-ups is an excellent way for experienced CIOs to invest in their careers, share their knowledge, and gain new perspectives on emerging technologies and innovation culture.   

 
Dipak Sahoo is the Regional CIO Asia of Generali Group. As Regional CIO, he drives the implementation of IT strategies in Asia and identifies synergies between countries to improve customer experience effectiveness. Prior to that, he spent most of his career with global insurance companies in senior leadership roles in technology, operations, and transformation across APAC and Europe.
 

How do you currently collaborate with start-ups in your role?

We do it in multiple ways. For one, we are part of an innovation lab run by the likes of Accenture and others. We also directly interact with start-ups based on our needs. We also have a global innovation team. And we have innovation teams across multiple countries in the world. And we all come together as a group and engage with start-ups. In fact, I was in an innovation forum last week in Paris where we were looking at interacting with start-ups in the health tech space. We want to see how they can complement life insurance services and make meaningful customer engagement propositions for our customers.   

 

Can you share an example of a recent successful collaboration with a start-up?

One that comes to my mind is a company called EOS Microinsurance in Hong Kong. They run a microinsurance company, and what is quite innovative is that they run it on a blockchain platform. The insurance that they provide is embedded into the tasks that we typically do every day. In Hong Kong, when you take a ride on any public transport, you are entitled to certain types of insurance.  

They also have bite-sized insurance. For example, if you want to go on a hike, you could just select an insurance policy, so you are covered in case something happens to you. This model has been very successful. We also engage with start-ups in France. We have partnered with a company called Remedee Labs which works with chronic pain management. They are part of a joint venture that we have created called Future for Care.  

 

What about a collaboration that was not so successful?

I wouldn’t say there is any partnership that hasn’t gone well. There was one collaboration that we realized halfway through that it wasn’t exactly a partnership that will bring value to either party. So, we decided to end the partnership but still provided them support in terms of giving them access to our management team and subject-matter experts to refine their proposition to the market. But at a certain point, the initial focus that they had which was of interest to us wasn’t there anymore because they wanted to pivot to a different proposition that wasn’t aligned with what we were trying to do. Therefore, we amicably parted ways. 

When start-ups and companies like ours come together, we need to have a common purpose and aligned objectives.  

Start-ups expect a certain amount of expertise from our side and provide them the scale that they probably wouldn’t get in the testing phase. On the other hand, we look to start-ups to bring innovation and problem-solving skills or technology; or a proposition that enhances our market offerings.  

Sometimes, start-ups get frustrated with the pace of progress as larger companies typically have to go through multiple hooks. I hate to say this, but there are bureaucracies that we need to deal with, sometimes to do certain things. Sometimes the technology might be working on a smaller scale. So, there are a few reasons why a partnership does not work out. It could be culture, technology, or a change in the value proposition.  

 

Should every start-up have an experienced CIO as a mentor?

I don’t think so. Irrespective of whether the CIO comes from a large company or a start-up, it’s someone who brings value to the start-up in terms of the usage of technology and scaling that technology to take on the issues that the start-up could potentially face when they start ramping up their business. CIOs can bring value in terms of stakeholder management. For example, pitching to the investors to invest in technology in an area that probably not familiar with. I don’t think it’s just the CIO, it could be any C-level. So, I don’t want this to be seen that only the CIO can add value to start-ups.  

 

What are the challenges of a CIO of a large enterprise compared to a CIO of a start-up?

For large enterprise CIOs, resources vs. demand are a constant challenge. Most of the time, we are working to reduce costs but there are market challenges. Of course, managing the bureaucracy within large enterprises is another challenge that CIOs face. Changing the culture and mindset of more traditional companies to become more innovative is always difficult. But having said that, those things are changing rapidly as we speak because I don’t think you can find any large organization which isn’t trying to change or trying to bring in a certain amount of innovation and cultural mindset into the organization. Everyone is doing that, including us.  

As we partner with more start-ups, we are learning from them constantly. We’ve created innovation teams within every organization and as they demonstrate success, that success cascades to other parts of the business as well. So, those challenges are gradually transforming in terms of being hungry for resources. How can we compete with the start-ups that are stepping into large enterprise areas?  

For start-up CIOs, the biggest constraint would be the availability of funds needed to scale the business. But what I’ve seen many of the start-ups, the problems they try to solve are there in the first place because of the size of the organization. When start-ups solve those problems, they typically try to solve the problem when they’re small. But when they start growing, can they use the same technology to manage the inefficiencies if they grow into a large enterprise?  

For example, when insurtech companies start looking like traditional insurance companies. The questions that typically would be asked of them is “How have you managed your traditional performance KPIs?” If you’re not managing that, then you are running a loss-making business, right? Therefore, how start-ups manage the performance matrix would be key. 

 

How can CIOs benefit from mentoring a start-up?

The biggest thing that CIOs can learn from start-ups is the ability to innovate – how they work and solve problems using technology.  

The second thing would be how to do more with less. How do you create, test, and pitch a product to investors with limited resources? Larger organizations should start behaving like start-ups in terms of pitching to the management to get resources. They should demonstrate that they are effectively using those resources to create something that solves real-world problems faced by large organizations. CIOs can adopt the mindset of start-ups on what drives innovation and the culture. 

Before I choose to mentor a start-up, I’ll ask myself if I can add value to that start-up. There have been times when I’ve turned down start-ups because what I can offer may not be of use to them. The key thing for CIOs who are looking to mentor start-ups is to ask themselves whether they can bring value to the start-up through their skills, expertise, and experience.  

 

On the other hand, how do start-ups choose their mentors?

There are platforms such as industry forms and accelerators that bring start-ups and industry players together. CIOs who are genuinely interested in mentoring start-ups take a personal interest in attending those forums. Those are opportunities that start-ups could use to reach out and connect with CIOs. I also think the best way is for start-ups to reach out to companies or CIOs directly through social media platforms.  

 

Some CIOs of public institutions must adhere to certain procurement procedures which could hinder start-up mentoring opportunities. What are your thoughts?

As part of the procurement process, most organizations have one criterion which is the financial health or stability of the company. That’s where start-ups probably don’t do well because they don’t have a large balance sheet as they haven’t been in business for long. What we do in those cases is consider the technology or solution they bring to the table, whether it outweighs what is being offered by others. The three things we look at are functional fitment, technical fitment, and organizational fitment.  

Ideally, start-ups should make up for what they lose in the organizational one with the technology one. The next question is whether CIOs can build a business case saying that the technology can help the organization leapfrog the competition or make organizational processes better.  

Just because there are start-ups, I don’t want to leave them out of the equation. I’ve done that many times because it brings significant value to us. 

 

*The interview has been edited for length and clarity.  

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Adam Grant: Powerful Tactics to Unlock Your Hidden Potential

For today’s modern business leaders, innovation is key to success. 

“We live in a rapidly changing world with more uncertainty than ever before. This means we need to be better and faster at rethinking our assumptions.”

Innovating in a continuously developing tech environment requires leaders to challenge the status quo, rethink their assumptions, and be open to learning new skills. In this article, world-renowned organizational psychologist and best-selling author Adam Grant shares practical and actionable strategies to help leaders unlock the hidden potential in themselves and the people around them.  

 

1. BUILD A CHALLENGE NETWORK

 

Although a support network filled with mentors and sponsors is valuable, Grant introduces another kind of network that is critical for success.  

“Your challenge network is the group of thoughtful critics who you trust to hold up a mirror so you can see your own blind spots more clearly. They’re the people who have the courage to tell you the unpleasant truths.” 

However, Grant observes that many leaders around the world don’t have a challenge network. “That is a scary world to live in. So how do you get people to challenge your assumptions?” He shares a dynamic he’s been studying his whole career, the act of observing your network and identifying the givers and takers.  

GIVERS: “People who are constantly figuring out what they can do for you.” 

TAKERS: “People who want to know what you will do for them.” 

There is also the personality trait of agreeableness. “Agreeable people are warm, friendly, polite, and welcoming. Disagreeable people are more critical, skeptical, and challenging. For a long time, I assumed that agreeable people were always givers.” 

Grant then gathered data from 30,000 people around the world from different cultures and industries. The findings were surprising. “I found a zero correlation between how far you lean toward giving versus taking at work, and where you stood on that spectrum from agreeable to disagreeable personality.” He realized that the level of agreeableness was only a surface-level trait. On the other hand, giving and taking present an individual’s inner motives. “What are your real values and intentions when you deal with others?” 

To understand people more accurately, Grant categorizes people in the table below. “This is an oversimplification of all the complexity of human nature. But when you do this, you will find two combinations you recognize quickly, and maybe two that you overlook.”  

 
 

Ultimately, disagreeable givers are assets in a challenge network. “We need to do a much better job of valuing these people, as opposed to writing them off as prickly and a selfish taker.” Grant encourages business leaders to reach out to the disagreeable givers they know as a first step to building their challenge network. He has reached out to disagreeable givers in his network too. “As I’ve had those conversations, I’ve gotten much better, not only in constructive criticism but also coaching.” 

“I see honesty as the highest expression of loyalty. The more candid you are with me, the more I will know that you’re trying to help me grow.” 

 

2. CREATE PSYCHOLOGICAL SAFETY

 

Coined by Amy Edmonson, psychological safety is the sense that you can take a risk and speak up without being punished or fearing reprisal. People with psychological safety can freely admit their errors, study what caused them, and rethink routines to prevent them.  

“When organizations build psychological safety, people are not only more willing to think again, they’re also more courageous in telling you what you need to rethink.” 

Grant adds that in tech companies when people lack psychological safety, they bite their tongues. But when they have it, they let their ideas fly. “I see leaders do this by accident constantly, and they don’t even realize they’re doing it. One of the ways I catch it is when I hear leaders say, ‘Don’t bring me problems, bring me solutions.’ I get why leaders say it. You want people to take initiative and not whine and complain.” 

However, Grant says that this is a dangerous philosophy. If people only speak up when they have a solution, leaders will never hear their biggest problems which are too complex for any one person to solve.  

“The foundation of building psychological safety is encouraging people to raise problems, even if they don’t know how to fix them yet.”  

How can business leaders build psychological safety? “It’s really helpful to create a structure where people are rewarded for telling you what the problems are.”  

He gives an example of a Kill the Company exercise given by a consultant. “She divides the leadership team into small groups, and she says, ‘Your job is to put your own company out of business’. I’ve never seen a more energized group of executives in my life. The power of this exercise is people are more creative on offense. Psychological safety is built in when your job is to tell people how you would destroy your company. There is no problem that is unsafe to voice. So, I like to see leaders run this exercise twice a year because inevitably, the threats and opportunities will change.” 

Grant refers to these exercises as premortem exercises “where you imagine that one of your big decisions or your key strategies is going to fail in the next few years. And then you consider the most likely reasons why.” 

“You get better at seeing around corners, rethinking assumptions that are no longer true, and then evolving to improve your practices. We need to bake this into our interactions with people on a daily basis.” 

In addition, he advises business leaders to be more open to admitting their mistakes. It’s not enough for leaders to ask their team for criticism because they don’t know whether their leaders can handle the truth. “It’s often more effective for leaders to say, ‘Here are my mistakes.’ When leaders put their own weaknesses and imperfections on the table, their team has more psychological safety to speak up.  

In addition to claiming to want to hear criticism, leaders are proving that they can take it. “A simple way of doing this is to take your own review from your board or from your boss and share it with your team. I’ve seen a lot of leaders hesitate to do this; they don’t want to be too vulnerable. They’re trying to prove their competence.” 

“The people around you already know what you’re bad at. You can’t hide it from them. So, you might as well get credit for having the self-awareness to see it, and the humility and integrity to admit it out loud.” 

 

3. GET THE BEST IDEAS ON THE TABLE  

 

Grant also challenges the age-old practice of brainstorming. “There’s a strong tendency when we need creative ideas or make a critical decision to say, ‘Hey, let’s bring a group of people together to brainstorm because we know that five heads are better than two.’ Except for just one tiny wrinkle. It doesn’t work.”  

He explains that there is over 40 years of evidence that better ideas are generated if people work alone. In addition, he highlights three things that can go wrong in brainstorming groups:  

  • Production blocking: “We can’t all talk at once and some ideas get lost.” 
  • Ego threat: “I don’t want to look stupid, so I hold back on my most unconventional ideas.” 
  • Conformity pressure: “I want to jump on the bandwagon of the idea that the boss likes best or what’s most popular in the room.” 

To avoid the above from happening, Grant presents the idea-generating tactic of brainwriting.  

“You give people the problem or the topic and advance. You let them generate their own ideas independently. You collect them and then you have everyone in the group rate them. Once you have everybody’s independent ideas and judgment, you bring everyone together to figure out which possibilities are worth pursuing.” 

Why is brainwriting better than brainstorming?  

  • Individuals are more creative than groups but “they’re also terrible at judging their own ideas.” 
  • There is more variety of ideas that can be “adjusted and filtered by group wisdom, the wisdom of crowds should come in after we get all the possibilities on the table.” 
  • It works in a hybrid setting “where the chat window is made for brainwriting. The first 10 minutes is to type out your thoughts and then use the group’s judgment to assess and vet the potential in the room.” 
  • Provides a platform for the quieter voices “who might not be that comfortable selling and pitching their ideas but are the ones who have actually dreamed up the best ideas.”  

“[While] group brainstorming tends to record the loudest talker and the most extroverted person, brainwriting allows you to hear from the deepest thinker and the most creative voices.” 

 

4. RETHINK YOUR MINDSET 

 

After leaders have collected everybody’s independent ideas in a brainwriting process, how do they figure out which ideas work? Grant says it boils down to the mindset they bring to the table. “I’ve been studying the mental models that cause leaders to resist change, refuse to think again, and stymie the hidden potential in their organizations.”  

Those mental models can be organized into: 

  • Preacher: “You’re proselytizing your own views.” 
  • Prosecutor: “You’re attacking somebody else’s views.” 
  • Politician: “You don’t bother to listen to people unless they already agree with your views.

“I think it’s worth reflecting on which is your biggest vice of these three mental models. I’ll tell you that mine is prosecutor mode. If I think you’re wrong, I believe it’s my professional and moral responsibility to correct you. I know that when I go into prosecutor mode, I shut down and become less open to new ideas.” 

“Whether you’re preaching, prosecuting, or politicking, you’ve already concluded that you’re right and other people are wrong. That means you stop learning.” 

How can business leaders release themselves from those mental models? Grant suggests leaders approach new ideas like a scientist and not let ideas become a part of their identity. “We know that good scientists have the humility to know what they don’t know, and the curiosity to constantly seek new knowledge.” 

“We have a growing body of evidence that if you teach leaders to think more like scientists, they make better decisions.” 

Grant recalls his favorite demonstration of this approach in an experiment done with start-up founders in Italy. Hundreds of entrepreneurs were randomly assigned to a control group or a scientific thinking group. In the scientific thinking group, participants were asked to view their hypotheses as strategies and decisions as experiments. “Over the next year, the founders who have been randomly assigned to think like scientists brought on average more than 40 times the revenue of the control group.” 

As for the participants in the control group, Grant says, “When their product launch bombs, they still preach they were right. They prosecute their critics for being wrong, and they politic by lobbying the board to support the status quo.” 

“Learning to think like a scientist frees leaders from those traps. They start to listen to the ideas that make them think hard instead of just the opinions that make them feel good. They surround themselves with disagreeable givers who challenge their thought processes.” 

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UK CISO Outlook: 7 Areas to Prioritize in 2024

CISOs in the UK faced giant hurdles this year, from the persistent skills shortage and budget limitations to advanced cyberattacks and economic uncertainty. Despite these challenges, CISOs still had to fulfill the critical role of protecting their organization’s digital assets and driving cybersecurity investments. According to research by ECI Partners, CISOs are the most in-demand leadership role in the UK, and that demand will remain for the next five years.  

As the year draws to a close, what should UK CISOs prioritize in 2024 to ensure their organization is prepared for the evolving cybersecurity landscape? This article uncovers 7 key focus areas for UK CISOs to add to their agenda. 

 

1. BOLSTER CYBER RESILIENCE MEASURES  

According to PwC’s Cyber Security Outlook 2023, 90% of UK senior executives ranked the increased exposure to cyber risk due to accelerating digital transformation as the biggest cybersecurity challenge for their organization. Cyber risks trump other risks associated with inflation, macroeconomic volatility, climate change, and geopolitical conflict. 25% of UK business leaders are also bracing for their company to be highly exposed to cyber risks over the next five years.  

The Cyber Breaches Survey 2023 by the Department for Science, Innovation & Technology highlights the measures taken by large UK businesses to curb cyberattacks: 

  • 63% have undertaken cybersecurity risk assessments in the last year  
  • 72% have deployed security monitoring tools 
  • 55% are insured against cybersecurity risks 
  • 55% review the risks posed by their immediate suppliers 
 

Cybersecurity leaders at Dell and Accenture also suggest 3 key actions to CISOs to support cyber resilience and speed up recovery if attacked: 

  • Implement a “lifeboat” scenario: Review technology dependencies, identify critical processes and assets, understand RTO/RPO requirements, and implement and regularly test recovery processes. That way, organizations can maintain operations if they suffer from a cyberattack.  
  • Ensure the obligations of third parties align with the organization’s requirements: Identify which critical processes and assets are managed by third-party vendors, validate the scope and liabilities of contracted services, and ensure they align with the organization’s requirements. 
  • Test the organization’s recovery capabilities: Employ external experts to simulate attacks on the organization’s defenses. Oversee how the IT and the business team would react and provide guided recommendations for improved security posture and resilience. 
 

2. MAXIMIZE CLOUD SECURITY INVESTMENTS  

MAXIMIZE CLOUD SECURITY INVESTMENTS  

As multicloud environments become more prevalent across industries, so do the cyber risks associated with them. PwC’s Cyber Security Outlook 2023 highlighted the top cybersecurity concern among UK business leaders: cloud-related threats.  39% of CISOs expect cloud-related threats to affect their organization the most. Cloud security threats pose the most risks compared to threats from laptop and desktop endpoints, web applications, and software supply chain. Therefore, it makes sense that UK CISOs are allocating the most budget to cloud security.  

According to findings by Cybersecurity in Focus, the top 3 expenditure areas among UK CISOs are: 

  • 25% Cloud security  
  • 20% Identity access management  
  • 18% Security and vulnerability management  
 

Let’s look at how cloud security investments have paid off in the UK’s public and private sectors: 

  • The Houses of Parliament appointed Ascentor to create a new information assurance process to address the increasing use of cloud-based solutions. Ascentor introduced a risk appetite statement and three different assurance paths based on information sensitivity. The assurance process is now well-established, and risks are regularly reappraised and managed. 
  • Bravura chose Vodafone Cloud and Security as its hosting and connectivity partner to ensure the protection of business-critical data. Vodafone Cloud managed primary and backup hosting and fixed connectivity and security, freeing up the IT team’s time and increasing efficiency.  
  • The UK Data Service faced the challenge of providing access to big data while meeting stringent privacy and security requirements. Therefore, the government body deployed solutions from Amazon Web Services (AWS) to offer a seamless and powerful search and analytics experience, enabling them to query any concept held in the data lake at the cell level and enrich data for better insights. 
  • University of Sunderland sought help from CrowdStrike to modernize its cloud security systems after experiencing a data breach. CrowdStrike offered an effective solution to secure the university’s 5,000 endpoints with little administrative overhead with its unique combination of technology, threat intelligence, and skilled expertise.  
 

3. SECURE BIGGER CYBERSECURITY BUDGETS 

73% of CISOs predict that economic instability will negatively impact cybersecurity budgets (Proofpoint). Another report by iomart and Oxford Economics, Security’s Lament: The state of cybersecurity in the UK 2023, supports this, finding that UK businesses that experienced budgetary constraints suffered a 25% increase in cyber incidents.  

27% of organizations think their cybersecurity budget is inadequate to combat growing cyberthreats.  

Smaller budgets are hindering meeting cybersecurity goals and causing blind spots in cyber strategies. In addition, increasing cyber insurance premiums are taking a toll on overall budgets.  

On the other hand, a study by BSS, How CISOs can succeed in a challenging landscape, found that although 61% of CISOs reported increased funding, it was paired with unrealistic expectations and a lack of understanding by budget holders on business threats. Interestingly, 78% of CISOs only received extra funding after the organization experienced high-profile cyberattacks. This has led 55% of CISOs to use the funding to put out immediate fires instead of long-term investments in security solutions.  

 

Here are several strategies UK CISOs can take to seek more funding from the board:  

  • Get support from other C-suites: By getting back up from the CFO and CEO, CISOs can understand business risks better to frame their funding requests. They can also reach out to colleagues in the purchasing and business units that will benefit from the extra funding. 
  • Demonstrate ROI, TCO, and the bottom line: Communicating these three areas is crucial in securing cybersecurity funding. CISOs must take this opportunity to explore the right tools that can help illustrate the effectiveness and value of their security programs to the board.  
  • Calculate the cost of not implementing security technology: To get the board’s attention, CISOs must calculate and communicate the financial risk of not implementing the security solution, including the likelihood and impact of a breach. 
  • Understand the board’s risk appetite: How much expense the board is willing to incur in the event of a worst-case scenario varies depending on the organization’s industry, risk tolerance, cyber insurance coverage, data sensitivity, and regulatory environment. 
 

4. IMPROVE RELATIONSHIP WITH THE BOARD 

As cybersecurity-related matters align more closely with business strategy, communication between CISOs and board members is paramount.  Only 9% of CISOs state that information security is a top priority in the boardroom’s meeting agenda. 

Additionally, a mere 22% of CISOs participate in business strategy and decision-making (BSS). Board members are also not as concerned about the susceptibility of the organization to future cyberthreats. A whopping 79% of UK CISOs are worried about their liability in the event of a cybersecurity incident, while the board is more nonchalant; only 54% of directors expressed similar concerns.  

 

According to cyber risk management leader Bitsight, CISOs can improve board relationships with:  

  • Ongoing communication: Regular open communication with the board on the organization’s cybersecurity posture, emerging threats, and the status of ongoing security initiatives is beneficial. This communication may be quarterly or semi-annual, depending on the needs of the organization. 
  • Educational engagement: CISOs can provide the board with resources and updates on cybersecurity risks, their impact on the organization, and the measures being taken to mitigate them. This is especially important for board members without a technical background. 
  • Risk reporting: Cybersecurity risks must be presented in the context of business risks. Explaining the potential impact of cybersecurity vulnerabilities on reputation, financial stability, and regulatory compliance can help the board understand the importance of cybersecurity investments. Risk assessments, metrics, and KPIs can be used to illustrate the potential impact. 
  • Cybersecurity governance framework: This is a valuable tool for outlining the roles and responsibilities of the CISO, management, and the board in cybersecurity decision-making, budget approval, and incident response. 
  • Incident response planning: The board should be involved in the development and testing of incident response plans. Board members must be aware of the roles they play in managing and overseeing the response. 
  • Vendor and third-party risk management: The CISO should strategically manage and reduce risks associated with third-party vendors to increase the board’s confidence. The board should be informed of these risks and how the organization is mitigating them. 
 

5. NAVIGATE COMPLEX CYBERSECURITY REGULATIONS 

The UK’s cybersecurity regulation landscape is complex as the country does not have one unified cybersecurity law. Rather than a single regulation, UK organizations have to refer to a myriad of existing legislations and adapt them to their organization’s cybersecurity needs.  

However, UK companies are receptive to the implementation of data privacy regulations. 59% are very prepared for the Global Data Protection Regulation (GDPR) in the UK and EU, as well as the Data Protection Act 2018 (DPA), according to the 2023 Global Data Privacy Law Survey Report by Womble Bond Dickinson. UK respondents are also more comfortable about the impact of privacy regulations on their ability to conduct cross-border business, with 40% stating that they are willing to cover the extra costs incurred by the regulations. However, another study found that 29% of UK CISOs are frustrated with changing regulations. 64% of CISOs comment that regulations change before they can meet previous requirements (BSS).  

 

UK CISOs can do the following in the meantime: 

  • Identify which cyber laws the organization needs to comply with by conducting extensive research or hiring a security expert. This includes international regulations if the company serves customers worldwide.  
  • Create an Information Security Management System (ISMS) with processes the company needs to comply with. Refer to international standards such as ISO 27001 that can provide a suitable framework. 
  • Keep the board informed on evolving cybersecurity regulations and ensure the organization remains in compliance. This includes discussing the potential legal and financial implications of non-compliance. 
 

6. BOOST UPSKILLING AND TRAINING PROGRAMS 

A September 2023 report from the Public Accounts Committee (PAC) warns that a lack of cybersecurity experts in the UK government should be of significant concern. Additionally, 48% of respondents agree that their organization suffers from a lack of expertise. 62% noted at least a quarter of their permanent headcount isn’t based in the UK, which highlights a deficit when it comes to knowledge of local regulations, compliance, and risk.  

According to a report by the Chartered Institute of Information Security (CIISec), most also claim the industry is facing a shortage of skills rather than people, hinting that better training could help alleviate challenges in this area. Research by Robert Walters concludes that the greatest shortages will be felt in Yorkshire (73%), London (62%) and the North (55%). Additionally, cybersecurity (56%) is the most sought-after skill in organizations. Instead of taking on the task of training and upskilling existing staff themselves, CISOs can seek support from third parties who offer cybersecurity training.  

For example, BT partnered with CAPSLOCK, an accredited cybersecurity boot camp, to retrain 30 employees over 17 weeks. They wanted to make clear that employees don’t need prior IT or security qualifications to break into the industry. Eight months after the boot camp, all learners are working in cyber roles at BT, aligned with their strengths and achievements in the program. Those who excelled in governance topics were assigned roles in governance and assurance, while those who performed well in technical modules are working in fields such as DDoS, security architecture and design, and forensics. 

 

7. IMPROVE SELF-RESILIENCE AND BUILD A SUPPORT TEAM 

According to a study by Proofpoint, 74% of UK CISOs are experiencing unreasonable job expectations and overwhelming responsibilities. 79% are concerned about personal liability and 74% have experienced burnout in the past 12 months. Furthermore, 8% of UK CISOs work more than 55 hours per week, which is considered “a serious health hazard” by the World Health Organization (WHO).” Worryingly, 50% of respondents say their workload keeps them awake at night, more so than suffering from a cyberattack (CIISec). 

 

Global Resident CISO for Proofpoint, Lucia Milică Stacy, suggests the following on how organizations can support their cybersecurity leaders: 

  • Bring in cybersecurity experts on the board who understand what the organization and the cybersecurity team grapple with.  
  • Establish a cybersecurity risk oversight committee to interpret cyber risk and how it affects the broader business goals and the valuation of the organization.  
  • Make sure CISO’s frustrations are heard by the board so there is transparency on the threats the organization faces, as well as what the security team goes through to fight those threats. 
 

In addition, CISOs can reduce stress and the possibility of burnout by delegating tasks to other team members, leveraging time-saving tools and technologies to automate menial tasks, and seeking support from other cybersecurity leaders who share the same challenges by joining business networks and attending industry events.  

 

By focusing on these seven areas, UK CISOs can better protect their organizations from unprecedented risks in the years to come.  However, it is important to note that CISOs cannot do this alone. CISOs are under immense pressure, and it is important for organizations to recognize the critical and stressful nature of their role. The board and executive team must equip CISOs with enough support and resources, in addition to recognizing and rewarding CISOs for their contributions. 

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AI Takes the UK By Storm: 5 Strategic Developments

The United Kingdom (UK) is the beating heart of European tech as the continent’s best-funded country and investment attraction. The UK’s AI sector has been booming over the past few years, with a third of Europe’s AI start-up companies located in the UK. There are currently over 1,300 AI companies in the country – a whopping 600% increment over the last decade. Here are five important developments that highlight the UK’s journey to becoming a global AI superpower.  

 

1. The UK AI market is estimated to grow to over $1tn by 2035 

According to a 2023 study by The International Trade Administration, the current AI market in the UK is valued at over $21bn. That number is predicted to grow exponentially to more than $1tn by 2035 and may improve the UK’s current standing as the third largest AI market globally behind the U.S. and China.  

The UK is also attracting lucrative investments from tech companies across the pond. Salesforce is planning to invest $4 billion in its UK business in the next five years in response to strong demand for AI and digital transformation. Furthermore, Google has partnered with the University of Cambridge to drive progress in responsible AI through a multi-year research collaboration agreement and a grant for the university’s new Centre for Human-Inspired AI.  

Additionally, the UK is a market leader in open source AI, home to providers such as Significant Gravitas and Stability-AI. Founded in 2018, Significant Gravitas made a name for itself with the development of AutoGPT, a semiautonomous variant of ChatGPT. Significant Gravitas’ open AI code repository is number one in the UK and is the second AI project to gain 100,000 stars on GitHub.  

Furthermore, research by the Office for Artificial Intelligence and the Department for Science, Innovation, and Technology discovered that over 3,000 companies in the UK generated £10.6bn in AI-related revenue in 2022. 60% of AI businesses are purely AI companies, while 40% are diversified companies with AI offerings. 

The study also found that the industries that widely utilize AI are: 

  • Automotive 
  • Industrial automation and machinery 
  • Energy, utilities and renewables 
  • Health, wellbeing and medical practice 
  • Agricultural technology  
 

2. The UK AI sector is booming with £18.8bn investment, £3.7bn GVA, and 50,000 jobs 

More than 50,000 people work in AI-related roles, yielding £3.7bn in gross value added (GVA). The AI sector has also secured £18.8bn in private funding since 2016. Research from McKinsey also predicts that the value of generative AI could be equivalent to the UK’s total GDP to the work economy over the next few years. 

Recognizing AI’s potential to spur economic growth, the government introduced the National AI Strategy in 2021. This initiative sets out the UK’s strategic intent to guide action over the next ten years across three pillars: planning for the long-term needs of the AI ecosystem, ensuring AI benefits all sectors and regions, and getting national and international governance of AI technologies right. So far, the National AI Strategy has led to the publication of The Future of Compute Review, an AI regulation policy paper, which prompted a full range of stakeholder feedback.  

In addition, former Prime Minister Sir Tony Blair and William Hague, the former leader of the Conservative Party, released a joint report, A new national purpose: AI promises a world-leading future of Britain, which described AI as “the most important technology of our generation.” The report also indicated that the UK could pioneer the deployment and use of AI technology in the real world, “building next-generation companies and creating a 21st-century strategic state”. Strategies on how to achieve this include launching major AI talent programs, requiring generative AI companies to label synthetic media, and building AI-era infrastructure as a public asset. 

In early 2023, the UK government announced the building of a £900 million supercomputer to drive the country’s AI research and innovation capabilities that will be housed at the University of Bristol. The government also plans to invest £100m to position the country as a key player in producing AI-powered computer chips. An order of up to 5,000 graphics processing units (GPUs) from Nvidia is already in the advanced stages.  

There are numerous government initiatives to help UK companies fund solutions around AI development. For instance, the Fairness Innovation Challenge allows companies to apply for up to £400,000 in government investment to produce solutions to combat bias and discrimination in AI systems. This is in response to the challenges companies are facing with AI bias, such as inadequate access to data on demographics, and ensuring potential solutions meet legal requirements. According to a report by the Bank of England, AI bias could have serious repercussions in the finance sector, especially when incorrect data points affect mortgage lending practices.  

 

3. AI and machine learning are tech leaders’ priorities to drive innovation and efficiency 

AI is unsurprisingly a strong investment area among IT and digital leaders in the UK. A survey conducted by Info-Tech found that over 30% of IT leaders have investments in AI and machine learning in their organizations. When it comes to security tools, 79% of IT leaders favor those involving AI and machine learning functions (CyberEdge).  Another important finding from the survey is that AI is the fastest-growing technology for investment in 2023 and is the second most popular technology after cloud computing.  

Speaking of the cloud, AI capabilities are key to further cloud implementation. Both AI and machine learning are vital to accessing large volumes of data and scalability through the cloud. 

According to a 2023 study by Tata Consultancy Services: 

  • 74% of respondents have invested in AI and machine learning over the last two years to propel cloud innovation 
  • 78% plan to invest in the next year or two 
  • 80% reported that AI tools have boosted employee productivity, decision-making, and process efficiency 

According to the FIS Global Innovation Report, generative AI is a priority for many UK business leaders with 60% already adopting the technology and planning to increase spending within the next year to remain competitive. 

In April 2023, a report on post-pandemic economic growth by the House of Commons Business, Energy, and Industrial Strategy Committee highlighted the potential impact of AI on employee productivity in the UK. Based on original research by Deloitte, notable findings include that AI could boost UK labor market productivity by 25% by 2035. Additionally, research by EY found that senior business leaders in the UK are keen to develop AI technologies to spur economic growth and are looking for guidance due to the country’s complex AI regulation and compliance landscape.  

 

4. The UK government is tackling AI risks amid employee pushback on workplace usage   

Despite AI’s widespread adoption and visible benefits, AI has been officially classed as a security threat to the UK for the first time following the publication of the National Risk Register (NRR) 2023. There has also been pushback from employees on the usage of AI in the workplace.  

According to Randstad UK: 

  • 3 in 5 workers want AI banned from the workplace 
  • 60% of workers would support a government decision to ban AI from the workplace 
  • 37% would not use AI tools for work-related tasks, while 27% would consider it 
  • 2 in 5 workers said they were already using AI tools at work 

A separate study by Forbes Advisor found that the top AI concerns among UK citizens were:  

  • Dependence on AI and loss of human skills (42%) 
  • Autonomous AI systems making decisions without human intervention (39%) 
  • Job displacement and impact on employment (39%) 

In addition, only 45% of employees in the UK are confident that their organization’s risk management processes can support enterprise-wide generative AI integration (Avanade). Trade Union’s Congress (TUC), the UK’s biggest trade union, has created a task force to draft urgent legislation to protect workers’ rights and ensure jobs are not lost to AI. The task force aims to publish and lobby the AI and Employment Bill in 2024.  

The UK government has been proactive in developing frameworks and strategies around AI use to mitigate risks and increase transparency. For instance, the creation of the Frontier AI Taskforce to develop safe AI practices for the future and ensure the UK has sovereign capabilities and broad adoption of safe and reliable foundation models. The UK government will also host its Global AI Safety Summit in November 2023 where it will announce an international AI advisory group and kickstart international discussions on AI regulation. Leading up to the summit, the government body, UK Research and Innovation (UKRI), declared that it will invest £37m in AI projects to help businesses and research organizations pioneer AI and machine learning solutions.  

Additionally, the UK’s House of Lords Communications and Digital Committee opened its inquiry into large language models (LLMs) in September 2023. Issues that were covered in the session include how LLMs differ from other forms of AI and their evolution over the next three years, the role and structure of the Foundation Model Taskforce, and the government’s role in responding to the opportunities and risks presented by LLMs.  

 

5. AI has been adopted by the UK’s largest corporations, from Unilever to Rolls-Royce 

Let’s look at notable use cases across different industries in the UK: 

  • Consumer Goods: Unilever has harnessed GPT API to create AI tools that minimize food waste, auto-generate product listings, and filter emails sent to customer service, sorting spam from legitimate messages. AI tools reduced the amount of time customer service agents spent responding to customers by more than 90%. 
  • Aerospace and Defense: Rolls-Royce has adopted predictive analytics and machine learning to reduce aircraft engine emissions and optimize maintenance, enabling customers to keep planes in the air longer. AI-powered processes have helped Rolls-Royce extend the time between maintenance for some engines by up to 50% and save 22 million tons of carbon.  
  • Beauty and Cosmetics: Estée Lauder applied AI, augmented reality (AR), and machine learning capabilities to develop a Voice-enabled Makeup Assistant (VMA) to support visually impaired individuals in selecting suitable products. The VMA utilizes AI technologies to analyze makeup on the customer’s face and uses voice guidance to help customers create their ideal look.  
  • Retail: Marks & Spencer has deployed cutting-edge computer vision technology in over 500 of its stores. Using handheld devices with built-in AI, store associates can capture images of products on shelves and compare them to store-specific planograms in real time. This innovative approach ensures a well-organized and customer-friendly shopping experience. 
  • Finance: Nationwide Building Society (NBS) uses AI to create synthetic data that is statistically similar to real data but does not contain any personally identifiable information. This allows NBS to share data with vendors for validation and other purposes without compromising customer privacy. By using synthetic data, NBS has been able to reduce the time needed to supply data for vendors from six months to three days.  
  • Healthcare: KPMG developed a machine learning algorithm to predict which patients were likely to breach the 4-hour waiting time target in A&E, and to identify ways to reduce waiting times. The algorithm was trained on anonymized patient records and dynamic data about hospital operations. The algorithm was able to successfully identify 79% of patients who would breach the 4-hour waiting time target at the point of arrival. 
  • Manufacturing: ENEL partnered with AVEVA to develop an AI solution to help reduce greenhouse gas emissions and meet sustainability targets. The AI solution identifies risks within ENEL’s power generation fleet and provides instructions on how to mitigate those risks, minimizing the impact on major assets and production operations. The AI solution has detected dozens of issues, enabling ENEL to improve operational efficiency, lower maintenance costs, and ensure maximum power generation. 
 

Although there are numerous governmental initiatives, frameworks, and discussions on AI use, there is currently no comprehensive law governing the deployment of AI for UK businesses. Some clarity was given in a policy paper titled A pro-innovation approach to AI regulation that suggests an alternative approach to AI governance by only regulating AI when needed. However, the government is committed to staying ahead of AI developments and working with stakeholders to develop effective regulations to minimize risks and spur AI innovation.  

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AI Literacy: A Must-Have Skill for the Modern Business Leader

Today’s business leaders need to sharpen their AI literacy skills to implement, scale, and leverage the technology in their organizations effectively. In this exclusive interview, Daniel Käfer, former Danish Country Head for Meta and Global Digital Marketing Director at Ooredoo; shares expert insights on why AI implementation starts at the top, what makes a successful AI strategy, measures to recruit and retain AI talent, and more.  

 
Daniel Käfer’s remarkable career in tech includes roles as the Danish Country Head for Meta and Global Group Director of Digital Marketing at Ooredoo, a renowned international telecommunications provider across MENA and APAC. He is now considered a distinguished tech leader, author, and entrepreneur; and is a partner at www.supertrends.com – a platform that maps out both past and future tech innovations with help from AI.
 

Key Takeaways from Daniel Käfer 

  • “AI is not hype. In five years, ChatGPT and similar tools will be 10 times more effective than it is today. AI is going to grow quicker than anything we’ve seen before.” 
  • “It’s the responsibility of the CEO and board members to set the direction for AI in their organizations, not the Head of Digital or other roles.” 
  • “Building a digital transformation-AI team and retaining the most talented employees will be more challenging than ever.” 
  • “Get started today. Experiment with different AI tools to help you understand the technology. When you use your knowledge together with the tools, you will see the power of AI. Invest the time needed to get the best results.” 
 

Why is AI considered a super trend?

AI impacts all other trends. No trend in the world is bigger than AI and I believe we are just in the beginning. AI will impact every area of our life. I think we still see people divided. There are more people discussing AI than using it. AI is very underestimated; most people understand to what extent AI can support us with many of the challenges we face.  

When I speak to business leaders, AI is under-hyped and under-leveraged. There’s some fear when it comes to AI on many levels. Even when people consider their own career, right? How do you embrace something that will become more intelligent than you and will probably outcompete you in several areas?  

The average age of a board member in a S&P 500 company is well into his 60s. And if you look at the users of ChatGPT, it’s only really used among college students according to the numbers. There’s a generation gap to some extent and the 2% who have tried that ChatGPT has not really tried it. They scratched the surface but were left disappointed.

But it’s a complex tool. It’s like giving somebody a huge book and they only go through a few pages and say, “It’s not for me, I’m not sure what it can do for me.” So, I think it’s misunderstood. I think people do not invest the time they need in AI to really understand and leverage it at this point. 

 

What are the building blocks of a solid AI strategy?

Before we were discussing AI, we were discussing digital transformation. I’ve been part of putting a digital transformation team together myself and trust me, it’s difficult. It takes experts to hire experts. When you add AI to this complexity, it gets even more difficult. So where do you start?  

You need to start at the very top and make sure that AI is part of the strategy at the CEO and board level. You cannot just assign someone to take care of AI, it must be at the very top level. Get some people in and start working on strategy. The type of AI tools you choose doesn’t matter at this point.  

The most important questions now are, “Do we use AI?” And the answer should be yes. And the other one is, “How do we use it?” And then make some strategic decisions. For example, there could be areas in terms of copyright where you might not want to use AI for music or pictures. However, there could be other areas where AI could be leveraged, such as recording, transcribing, and summarizing meetings. You might also use it in recruiting or marketing.  

There are so many areas, but I think it’s more about defining how to use it, where to use it, and then creating a plan for using it. You might not start with a perfect tool. I don’t think that’s a big issue. It’s more about getting it at the right level and having a strategy in place. 

 

What jobs will AI replace? What can leaders do to prepare their employees?

I spoke with people from the advertising industry, and they admitted that a job that would normally take two to three weeks with four full-time people plus contractors can now be done by one person in a matter of hours with the help of AI.  

Firstly, people will not lose their jobs to AI, but they will lose their jobs to people using AI. There’s nothing we can do about that. That’s just the fact of the future and this will only accelerate. People always say, “If I only have more time to do this.” With AI you do have more time. When I was working at Ooredoo and Meta, there were a ton of projects where we wished we had more time. They were not completed because there were not enough resources.  

As long as we’re asking for more resources, and I’ve yet to meet a company that’s not doing that, AI does not have to displace jobs. However, I’m not saying that there’s no risk of losing your job to AI. Most people see the greater good of AI, but they do not want to be negatively impacted by it. I’m not going to sugarcoat it. Jobs with repetitive tasks will be the first to go. But skills like good communication and coming up with out-of-the-box ideas cannot be replicated by AI. 

Leaders need to encourage their people to be open to change and identify where they can add value in the future.  

 

Why must leaders include employees in the company’s AI strategy?

Transparency in communicating the benefits of AI is important. AI can be a big motivator in a way. For example, employees may want to know how AI will improve the company’s offerings.  

If AI replaces automatic tasks, then some roles won’t be needed anymore. But if those people pivot, they can do something much more interesting in the workplace. Therefore, leaders need to explain the benefits of AI and the expectations needed for their employees to reap its benefits. You can’t say nobody will get fired because of AI and do the opposite. When one person loses their job, everybody will panic.  

It’s about getting the process clear on the management level and then explaining the benefits to the employees. But of course, be clear about the risks of not moving forward and developing AI. 

One of the biggest pitfalls around AI implementation is talking about it but not doing it.  

When leaders talk about how important and effective AI is but don’t have a plan, employees will not feel involved at all. There will be a huge negative effect if you don’t build that strategy.  

 

Why should leaders consider a humble approach to AI adoption?

I think we are all riddled with fear that we need to be a know-it-all at the executive level. I listened to a keynote from one of the Coca-Cola executives last week. The funny thing is, he started out saying, “I’m just learning, I’m actually really new to this, I don’t know a lot.”  

And of course, he’s got a great career within Coca-Cola so I’m sure he’s brilliant. But he just had this very humble approach to say that they’re still testing things out, some of it works and some doesn’t, and they don’t always know why.  

If we could have this humble approach, I think that will help in the future to map out where we can add value instead of being a know-it-all. We are not self-critical enough to know where we can add value and where we count. 

 

What are the challenges of recruiting and retaining AI talent?

The first challenge is understanding what you want. You may want somebody who’s skilled in AI but what does that mean? Is that a prompt engineer or someone who understands AI strategy? I would always recommend getting the strategy right first to build the frame of your AI department. Actually, I don’t see it as an AI department, I see it as a digital transformation department anchored very high up in the organization. 

It’s a mindset more than a technical skill.  

It’s about creating processes and making decisions. You don’t need a super technical guy to use Bard or Midjourney. Anybody can learn that. It’s like going to the gym. Once you start, it gets easier. If you have a decent digital transformation team, they can probably be part of the process. I would get the AI strategy in place before I do anything else. Unless you want, for example, to build a sophisticated chatbot, then hire an external expert. 

 

What is your advice for dealing with risks associated with intellectual property and privacy?

A tool like Midjourney basically works like an artist who gets inspired by millions of different artists until it creates something new. I think the more the models are trained, the less likely a prompt will be so specific that a single work would infringe on another work.  

The other risk is how a model is trained and who would be liable. I’m not a lawyer but I think that, for example, if Midjourney is trained on certain works and the copyright owner doesn’t allow it, Midjourney would be the first target more than its users.  

But that said, this is where companies need to sit down with their lawyers and assess AI risks. We don’t know where this ends and I do foresee many lawsuits within art, graphic design, and music. We will also see regulation taking place differently across the globe. I think Europe will lead with regulation but lack innovation, unfortunately. It also depends on where you do business, whether you’re global or local.  

 

How can companies with limited resources utilize AI?

AI and big tech have created huge advantages for smaller companies. ChatGPT is just one of the tools, but you can have a whole army of tools playing together for a couple of $100 a month.  

It’s not that complex. If you use ChatGPT in your strategy process, if you learn how to have conversations with ChatGPT, you’re already halfway there. Then you start to understand how you can use AI. You don’t have to build your own AI systems. It’s a matter of looking at your processes to see where you can save time and which areas need improvement.  AI can offer quick help with some processes but sometimes it’s more about opening your mind. For example, asking AI if it’s realistic to break into a new market.  

While AI may not give you the answer in the first prompt, it will start a conversation. 

 

*The interview answers have been edited for length and clarity.