Yu info opening keynote, 20190310 final

© Inlumino Consulting, 2018 | 1
Where Do We
Go From Here?
Jožek Gruškovnjak, MBA
Managing Partner and Principal Consultant
Inlumino Consulting
inlumino
c o n s u l t i n g

Big
Bang
13 Billion Years Ago
Solar
System
Formed
4.5 B
First
Simple
Life
3.75 B

Dinosaurs
Extinct
65 Million Years Ago
“Humans turned out to be unusually good at extracting resources from the
environment. Their advantage lay in their ability to share information
and ideas with precision that no other animal could match. And over time,
their shared knowledge accumulated , enabling each generation to build on
the knowledge of earlier generations.”
David Christian, Time Maps
Homo
Sapiens
200,000
Human
Settlements
10,000

First Cities
5,000
Information
Age
50
Agricultural
Era
10,000 years ago
Industrial
Era
400

© Inlumino Consulting, 2018 | 5© Inlumino Consulting, 2018 | 5
Key forcesshaping
human evolution and history…
TECHNOLOGY
D
EM
O
G
RAPH
IC
S
EC
O
N
O
M
Y
Culture
Environment
…

Key forcesshaping
TECHNOLOGY

Does technology matter?

5
10
15
20
25
#ofEmployees(millions)
Manufacturing – Jobs vs. Production
(1972 – 2018)
Manufacturing - All Employees
1970 1980 1990 2000 2010
25% less employees
Where have the
manufacturing jobs
gone?

0
20
40
60
80
100
120
5
10
15
20
25
IndustrialProduction–Manufacturing(2012=100)
#ofEmployees(millions)
Manufacturing – Jobs vs. Production
(1972 – 2018)
Manufacturing - All Employees
Industrial Production - Manufacturing
1970 1980 1990 2000 2010
Technology in the
form of
automation
drove U.S.
manufacturing
productivity in the
last 50 years.
25% less employees
2.9 x increase in production

© Inlumino Consulting, 2018 | 10 10
The Five Great Technology Revolutions of
“Modern Times” and the sixth is gaining momentum
Industrial
revolution Age of steam Age of steel
Age of oil and
automobile
Age IT and
the Internet
Next technology
revolution
Digital Age
1771 1830 1875 1907 1971 2020?
Source: Carlota Perez; World Economic Forum, BC,G,
Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0
First mechanical
weaving loom
1784
First assembly line
1870
First
programmable
control logic
1969
Digitalization - merging
of real and virtual
worlds, cyber-physical
production systems

Digital is the
representation of physical
items or activities through
binary code. When used as
an adjective, it describes the
dominant use of the latest
digital technologies to
improve organizational
processes, improve
interactions between people,
organizations and things, or
make new business models
possible.
Process
Things
People
Data
Business
Mobile
Physical
Home
Digital
People-to-People
(P2P)
Machine-to-Machine
(M2M)
People-to-Machine
(P2M)
Source: Cisco IBSG

Internet of
Things
Mobile
Autonomous
Things /
Robotics
Quantum
Computing
Social
Cloud
Computing
Cyber
Security
Blockchain
Artificial
Intelligence
Big Data /
Analytics
Digital
Our digital
world is enabled
and continuously
expanded by
technologies
(a non-exhaustive
list…)
Illustrative, non
exhaustive

Internet of Things – IoT – was
generating a lot of excitement in the
past few years.
Sources: IDC
Internet of Things
noun phrase
Definition of Internet of Things
: the networking capability that allows information
to be sent to and received from objects and
devices (such as fixtures and kitchen appliances)
using the Internet
Source: Merriam-Webster Dictionary
Devices
Native
5G
LPWA
LTE/M
SigFox
Connectivity
Platform
Enterprise
Systems
Application
IoT
Sensors
Amazon IOT IBM Bluemix
Major focus of investment – $745B in 2019
(15.4% growth over 2018)

A myriad of applications in the
IoT realm, with tremendous
potential to generate
economic value.
1.2
0.9
0.2
0.4
0.6
0.2
0.2
0.2
0.1
4.0
3.7
1.7
1.6
1.2
0.9
0.9
0.7
0.3 0.2 11.2
Factory City Human
body
Retail Outside Worksite Cars Home Office Total
Sources: McKinsey, Machina Research, Inlumino Consulting analysis
POTENTIAL ECONOMIC VALUE THAT IOT CAN GENERATE IS
FROM $4 TO $11 TRILLION BY 2025
Potential economic impact by segment

Source: “Accenture, PWC
The Term
Artificial
Intelligence
Encompasses many
Different
Technologies and
Capabilities
Sense Think Act
Ability to see, hear,
speak, smell, feel,
understand
gestures, interface
with your brain
Moving from
automated
intelligence to
augmented
intelligence.
AI is equaling or
surpassing humans in a
number of other
activities – playing
games, driving cars,
recommendations
(movies, books, finance,
research) etc.

AI and other analytical tools have
potential to create major
economic impact across
industries, functions and business
problems…
Marketing and sales
up to $2.6 trillion
Sully-chain
management and
manufacturing
up to
$2.0 trillion
0.2
0.1
0.1
0.1
Up to
0.4
0.2Risk
Service
operations
Other
operations
Finance
and IT
Product
development
HR
Strategy and
corporate
finance (<0.1)
2017 2018
March: Pan-
Canadian AI
Strategy
May; AI
Singapore
Announced
October: AI
Strategy 20131
December:
Finland’s AI
Strategy
January:
Budget for AI
Taiwan
March: AI at
the service of
Citizens
April: First
workshop for
AI Strategy
April UK AI
Sector Deal
May: White
House Summit
on AI
May Sweden’s
AI Strategy
June: Towards
and AI Strategy
Fall: 2018:
EU’s AI
Strategy
March: AI
Technology
Strategy
July: Next
Generation AI
Plan
December:
Three-Year
Action Plan
January:
Blockchain and
AI Task Force
January:
Strategy for
Digital Growth
March:
France’s AI
Strategy
April:
Communication
on AI
May: Australian
AI Budget
May: AI R&D
Strategy
June: National
Strategy for AI
Fall 2018:
Germany’s AI
Strategy
…and
governments
are getting serious
involved

Robots are taking over
our jobs!
Not really, but their impact will be significant.
DECREASING COST OF AUTOMATION
INCREASING VARIETY, SIZE RANGE AND CAPABILITIES OF ROBOTS
Index of average robot prices and
labor compensation in manufacturing
in the United States.
1990 = 100%
Sources: EIU; IMB; Institut für Arbeitsmarkt- und Berufsforschung; International
Robot Federation US Social Security data; McKinsey analysis
1%
8%
18%
26%
34%
42%
51%
62%
73%
91%
100%
100 > 90 > 80 > 70 > 60 > 50 > 40 > 30 > 20 > 10 > 0
About 60% of occupations
have at least 30% of
their activities that
are automatable.
HIGHEST POTENTIAL
81% predictable physical
activities
69% processing data
64% collecting data
TECHNICAL AUTIMATION POTENTIAL

Our digital
world is enabled
and continuously
expanded by these
technologies.
Their interplay and
interaction is
further enhancing
capabilities and
accelerating
change.
Internet of
Things
Mobile
Autonomous
Things /
Robotics
Quantum
Computing
Social
Cloud
Computing
Cyber
Security
Blockchain
Artificial
Intelligence
Big Data /
Analytics
Digital

TopROI
Top-line
Growth
Bottom-line
Impact
Risk
Mitigation
IncreasedSales
Timeto
Market
Customer
Service
Efficiency
Costs&
ProfitabilityInventory
QualityMaintenance
Compliance
Customer Insight-Driven Marketing
Predictive Maintenance
Innovation
Make-to-Order
Anything-as-a-Service
Remote Maintenance
Resource Management
Process AutomationDemand Forecasting
Smart Warehousing
Q&A Automation
End-to-End Visibility
Remote monitoring
Within Industry 4.0
context digital
technologies
are being combined
to provide new
external and internal
digital services.

TopROI
Top-line
Growth
Bottom-line
Impact
Risk
Mitigation
IncreasedSales
Timeto
Market
Customer
Service
Efficiency
Costs&
QualityMaintenance
Compliance
Innovation
Make-to-Order
Remote Maintenance
Resource Management
Smart Warehousing
Q&A Automation
Remote monitoring
Within Industry 4.0
context digital
technologies
are being combined
to provide new
digital services.
Mobile Cloud Social
BI /
Analytics
AI

TopROI
Top-line
Growth
Bottom-line
Impact
Risk
Mitigation
IncreasedSales
Timeto
Market
Customer
Service
Efficiency
Costs&
QualityMaintenance
Compliance
Innovation
Make-to-Order
Remote Maintenance
Resource Management
Smart Warehousing
Q&A Automation
Remote monitoring
Within Industry 4.0
context digital
technologies
are being combined
to provide new
digital services.
Mobile
IOT
BI /
Analytics
AI
Cloud

Next generation of robots
§ Don’t kick the robots ;-)
Don’t kkiicckk
the robots…

…they may
remember.

If 87% of business executives expect to be
disrupted1 by digital, how come less then
half are preparing adequately?
1
Source: MIT Sloan Management Review, 2018; 451 Research Voice of the Enterprise Digital Pulse, Budgets & Outlook, 2018
11%
59%
33%
28%
23%
9%
25%
3%
8%
87% anticipate disruption
Great extent Moderate
extent
Small
extent
Not al all
Strongly
agree
Organization is adequately preparing
for disruptions projected to occur in
my industry due to digital trends.
To what extent do you believe that digital
technologies will disrupt your industry?
Agree Neither
agree or
disagree
Disagree Strongly
disagree
44% are preparing adequately
Execution
39%
Evaluation
31%
`Consideration
21%
No strategy
9%
When it comes to
digital
transformation,
more businesses are laggards
than leaders.

0.4%
16.7%
19.1%
20.3%
36.9%
46.0%
54.2%
64.6%
Other
Decline in business performance
New standards in regulatory and
compliance
Lack of expertise, literacy and
understanding of digital trends
Proactive investment to fight
disruption
Growth opportunities in new
markets
Increased competitive pressure
Evolving customer and employee
behaviors and preferences
4.2%
6.1%
10.6%
19.7%
23.7%
24.6%
30.1%
30.5%
30.5%
30.9%
31.4%
Respondents have not
experienced any of these…
No leadership driving efforts
Lack of data or ROI to justify
value of digital transformation
No sense of urgency
Human barriers (e.g. politics,
egos, sabotaging, fear)
Legal, risk management, and/or
compliance concerns
Lack of staff resources
Company Culture
Lack of budget
Digital transformation is viewed as
a cost center
Low digital literacy or expertise
among employees and leadership
Source: Altimeter Digital Strategist Survey, August 2017
KEY DRIVERS OF DIGITAL TRANSFORMATION TOP CHALLENGES FOR DIGITAL TRANSFORMATION
While drivers and potential benefits are clear,
digital transformation is not easy…

Driven by the rise of digitalization and stiffer
competition, more companies will realize the
true value of IT.
“IT2020: Preparing for the Future”, AT Kearny

Digital and digitalization are driving a major transformation of the
IT function, fundamentally changing how IT operates.
IT Craftsmanship Industrialization of IT Digitalization
Focus on Technology Processes Business models
IT core capabilities
Programming, systems
management
IT management, service
management
Digital leadership
Engagement
Isolated – disengaged both
internally and externally
Treating business units and
functions as customers; not
engaged with external
customers
Treating business units and
functions as partners;
engaged with external
customers
Outputs and outcomes
Applications, sporadic
automation and innovation,
frequent issues
Services and solutions,
improved efficiency and
effectiveness
Digital business innovation,
new types of value
Source: Gartner

To be able to deliver
on expectations from
their new role, IT
leaders need to
develop new
competencies.
Operational
stewardship
Entrepreneurship
§ Driving business agility
§ Ensuring security and
resilience
§ Leveraging ecosystems
§ Shaping innovation agenda
§ Engaging customers
§ Digitizing the business
IT Leadership
§ Fusing business and
technology strategy
§ Developing talent
§ Designing IT operating model
Anticipate
and align
with business
needs.
Optimize
business
operations.
Deliver
competitive
advantage.

Dressing up won’t do in the future...
…both business and IT must embrace
digital transformation in earnest

Key forcesshaping
TECHNOLOGY
D
EM
O
G
RAPH
IC
S
EC
O
N
O
M
Y

ECONOMY

5,000
10,000
15,000
20,000
25,000
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
WorldExports(USDbillions,current$)
Exports of Goods and Services
East Asia & Pacific South Asia Central Asia Sub-Saharan Africa
Middle East & North Africa Latin America & Caribbean North America Europe
Globalization
has significantly
shifted trade
flows and
balance.
67%
In 1960
45%
In 2013
Share of Europe and North America
in total world exports
Source: World Bank – World Development Indicators Database

Source: World Bank WDI, Telegeography, Inlumino analysis
While international flows of goods and
services remain stable cross-border
dataflows are surging.
0
100
200
300
400
500
600
-
10
20
30
40
50
60
70
80
90
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
UserCross-borderBandwidth(Tbps)
WorldExports(T$)
Exports Bandwidth
88
66
56
51
10
16
32
17
2
18
12
32
0% 20% 40% 60% 80% 100%
US and Canada
Latin America
Africa
Asia Pacific
■ United States ■ Europe ■ Asia Pacific ■ Others
The US continues to be the largest producer of digital
content across the globe
Location of top 100 websites requested by users
% of users by region, April 2015
42
31
12
15
100% =
1 million
websites
Hosting location of top
1 million websites, 2013
USED INTRAREGIONAL BANDWIDTH (2016)

Globalization is changing – towards
Globalization V2.0 20th
CENTURY
21st
CENTURY
Tangible flow of physical goods Intangible flow of data and information
Flows mainly between advanced
economies
Grater participation by emerging
economies
Capital and labor intensive flows More knowledge-intensive flows
Transportation and infrastructure are
critical
Digital infrastructure becomes equally
important
Multinational companies drive the flows
Growing role of small enterprises and
individuals
Flows mainly of monetized transactions
More exchange of free content and
services
Ideas diffuse slowly across borders Instant global access to information
Innovation flows from advanced to
emerging economies
Innovation flows in both directions
Digital technologies
are changing how
business is done
across borders and
broadening
participation.
Source: McKinsey

Key forcesshaping
TECHNOLOGY
D
EM
O
G
RAPH
IC
S
EC
O
N
O
M
Y

DEMOGRAPHICS

During this session there will be:
8,627
births
3,386
deaths
5,240
net new people on
earth
+ − =
10,481
per hour
414,085
per day
91,812,002
in a year
Source: https://countrymeters.info/ - 2018 estimates
London, New York, Mexico City, Moscow, Madrid, Bangkok → Each year, a new city as big
as these cities COMBINED

5.8%
5.8%
5.6%
5.7%
6.5%
7.1%
7.1%
6.9%
7.1%
7.0%
7.3%
6.8%
6.0%
5.1%
3.7%
3.0%
1.9%
1.1%
0.4%
0.1%
0.0%
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
100+
5.2%
5.3%
5.1%
5.2%
5.9%
6.5%
6.6%
6.5%
6.8%
6.7%
7.1%
6.9%
6.4%
5.6%
4.4%
4.0%
2.9%
1.9%
0.9%
0.2%
0.0%
DDeevveellooppeedd NNaattiioonnss
Male Female
10.1%
9.5%
9.0%
8.7%
8.7%
8.7%
7.6%
6.8%
6.5%
6.0%
5.1%
4.1%
3.4%
2.3%
1.6%
1.0%
0.6%
0.2%
0.1%
0.0%
0.0%
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
100+
9.7%
9.1%
8.7%
8.4%
8.5%
8.6%
7.6%
6.8%
6.5%
6.1%
5.2%
4.3%
3.6%
2.6%
1.8%
1.3%
0.8%
0.4%
0.1%
0.0%
0.0%
LLeessss--ddeevveellooppeedd NNaattiioonnss
Male Female
Source: World Development Indicators, World Bank
PPooppuullaattiioonn DDiissttrriibbuuttiioonn bbyy AAggee -- 22001155
17%
29%
32%
36%
34%
34%
34%
33%
33%
32%
32%
32%
32%
31%
31%
30%
28%
28%
27%
26%
26%
26%
25%
25%
22%
20%
18%
14%
14%
More developed nations
Less developed (excl. China)
Least developed
Zimbabwe
Afghanistan
Palestinian Territories
Yemen
Syria
Guatemala
Haiti
Iraq
Jordan
Pakistan
Nigeria
Philippines
Bangladesh
Egypt
India
Venezuela
Indonesia
Libya
Saudi Arabia
Brazil
Iran
China
United States
Canada
Italy
Japan
World average: 25%
291 074
272 744 269 005
459 141
757 788
676 484
62 773
251 317
395 476
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1950 2015 2050
Population by Age Group – Developed Nations
Children Working age Retired (65+)
36%
56%
8%
21%
59%
20%
20%
50%
29%
Uneven population growth
Developing nations are contributing majority of growth.
The youth bulge forming up
The youth (between 10 and 24 years old) represents 32% of population in
least developed countries (world average 25%, developed countries 17%).
Problems: can the counties create enough jobs? What is the quality of
education? Is the youth employable within country or abroad?
Migrations are on the rise
Search for economic opportunities and avoiding wars. At the moment
most migrations are contained within the regions. Economic impact: +
remittances are a strong contributor to economies of less developed
nations.; - brain drain.
Ageing population in developed countries
Rapidly declining ration between working population and retirees in
developed nations (1950: 7.3 to 1, 2015: 3 to 1, 2040: 1.7 to 1). Can get
worse wit potential economic upheavals...
However, this is becoming a global problem (e.g. China)…
Key
demographic
trends show
significant
imbalances that
can lead to
increased
tensions and
instability.

It Definitely Feels
Like a Perfect
Storm
D
EM
O
G
RAPH
IC
S EC
O
N
O
M
Y
TECHNOLOGYCulture
Environment
…

The Question?
How can we – as individuals, businesses and societies
– deal with the coming disruptions and not just survive
but thrive?

“To improve is to
change; to be perfect
is to change often.”
Winston Churchill

Thank You!
Jožek Gruškovnjak
jg@inlumino.ch
inlumino
c o n s u l t i n g

Yu info opening keynote, 20190310 final

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