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Huge investment is going into digital technology. Some fear this won't boost productivity as much as the steam engine, the assembly line, or the computer did in previous waves of technical change. Others are more optimistic. New research from the World Economic Forum and Accenture suggests there’s room for hope.
Based on data from 16,000 companies using four technologies -- Artificial Intelligence and Big Data, the Internet of Things, Robotics, and mobile/social media -- the following trends emerged.
1. The Internet of Things will lead the surge in digital investment
Total technology investment is set to reach $2.4 trillion by 2020. By then, investment in the Internet of Things -- which brings everything from coffee makers to oil rig drills online -- will become the most favoured investment by far. The IoT is considered the glue that will bind the next phase of digital together, allowing billions of devices to send and receive data.
2. Technology Investment works better for some industries than others
Asset-heavy industries like chemicals and mining do better from investment in hardware, with robotics more productive than the Internet of Things. Meanwhile, asset-light industries like professional and financial services do much better with investment in software -- cognitive technologies and social/mobile media.
3. The top 20% of companies get more than double the returns of the rest
Leaders, those companies that are in the top 20% of their sector by productivity, are particularly good at harvesting gains from robotics and mobile/social media. The bottom 80% do better on the Internet of Things and Cognitive Technologies.
4. Productivity gains are three times higher when technologies are deployed together
Predictably, Robotics does best in boosting labour productivity. Mobile and Cognitive Technologies are best for revenue. But best of all is a combination.
5. Investing in all four technologies together makes sense whether you’re in heavy industry or the service sector
Heavy industry gets more value from robotics; services industries get more from mobile and social media. But when an holistic approach to using all four technologies then the returns are broadly the same.
Not forgetting the human factor
Discussions with industry groups suggest that getting big returns from the less mature Cognitive Technology and IOT will require the right kind of company culture. In particular, an agile and digital-savvy leadership, a digital mindset in the workforce, collaboration with suppliers, distributors, customers and other groups outside the organisation.