There is a strong link between corporate growth and technology, according to the first report in The Economist Intelligence Unit’s Tailored with Technology research programme sponsored by ANZ Bank. The report, which is focused on corporate growth, is based on a survey of more than 750 executives in eight economies: Australia, New Zealand, China, Hong Kong, India, Singapore, the United Kingdom and the United States. In the coming weeks, additional reports and articles will be published on the topics of sustainability and the macro-economy, as well as specific industries.

Nine in ten of firms surveyed have strong plans to increase technology adoption in the next five years Improving data analytics was the most popular form of technology, with 44% of the more than 750 executives selecting it as the top benefit The challenges are many, with 51% firms citing security and privacy as a concern and 43% citing technology skills among employees

The link between corporate growth and technology has always existed, but it’s growing stronger, with nine in ten executives responding that they have plans to increase their adoption of new and emerging technologies. These technologies include robotics, software-defined network, and machine learning, among others. They are being used to accomplish a range of objectives, such as improving efficiency, growing internationally and reducing costs.

The most popular trend today in the survey was big data and analytics. Nearly 38% of respondents selected it as being among their top three priorities, higher than cyber security, artificial intelligence and cloud computing. Big data and analytics are being used by firms for client attraction and retention, as well as risk management and forecasting.

There are barriers to technological adoption, however. Security and privacy is chief among them, with more than 51% of respondents selecting it as one of the three biggest challenges. It was followed at 43% by technology skills among employees and at 39% technology standards and regulation. Many organisations see organisational solutions to these problems, whether it is fostering more cooperation between the chief technology officer and his c-suite counterparts or changing individual mindsets in the workforce.

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Executives surveyed for this report are optimistic. Of 660 executives we surveyed across eight countries and three industry groupings, fifty-three percent responded that technology will be “much more important” to economic growth five years from now and 42% responded that it will be ”more important.” Only 3.5% answered that the impact of technology would be “about the same” and less than 1% answered it would be “less important.”

Other findings from the research include:

Not surprisingly, the fourth sector surveyed, technology, was the most optimistic, with 61% of executives answering that tech would be “much more important.” At the market level, in Hong Kong just 31% of executives believe tech will be “much more important” in five years. On the other end of the spectrum was India, where 73% answered that tech will be “much more important.” Executives from larger firms, which we define for the purposes of this study as having annual revenue of A$200mn and above (roughly US$137mn at current exchange rates), were more positive on the importance of tech to economic growth than were executives at smaller firms. When asked what their primary considerations are for selecting a technology partner, the two most-popular answers among the six options provided were “the company reputation” and evidence of “ongoing development and investment in the technology and/or platform.” Both received 54% of responses.

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Tailored with technology: Economic growth is the third in a series of papers from The Economist Intelligence Unit sponsored by ANZ. This report is based on the results of a survey of more than 750 executives across eight markets.

This paper was written by Chris Clague. Findings from the survey were supplemented with research and in-depth interviews with experts and executives. Our thanks are due to the following people, listed alphabetically by surname:

Simon Evenett, professor of international trade and economic development, University of St Gallen Gog Soon Joo, chief futurist and chief skills officer, Skills Future Singapore Andrew Hoad, chief executive officer, Asia, DP World Ritesh Kumar, chief executive officer, Indonomics Consulting Jayant Menon, lead economist, Office of the chief economist and director general, Asian Development Bank Yasunori Mochizuki, fellow for IoT, robotics and smart cities, World Economic Forum

"Where today’s mainstream economic debates are usually couched in liberal versus conservative ideology, we felt a much deeper inquiry was required, one that examined the unquestioned assumptions of both the left and the right."

John Fullerton, Managing Director, JP Morgan (1982 -2001), currently founder and president of Capital Institute, a US-based think tank

 

We are increasingly surrounded by claims of "sustainability". Investors claim to have found a more "sustainable" strategy which accounts for environmental, social or governance (ESG) risk. Regulators in places like the EU or South Africa have moved to require companies to disclose their performance related to non-financial, ESG factors. Data providers like Thomson Reuters, Bloomberg and others provide spreadsheets which allow for ranking corporate and government actors using different "sustainability" metrics, like CO2 emissions, or water-use per dollar of revenue earned.

These data-sets, white papers, rankings and even global policy pronouncements (e.g., UN summits) are important steps forward in terms of our ability to develop a common language for non-financial risk which is so clearly material to many aspects of our lives.

One critical question I’m hearing asked more often now though is whether we are even asking the right questions. We understand the "best" environmental performers in an economic sector as the most "sustainable". But what if our planet, as a whole, across social and environmental systems, is not actually being managed sustainably even with the best performance in our current paradigms?

What if our current ideas of what is "sustainable" actually are not?

This is where a thought leader like John Fullerton can help with defining this possibility. Mr Fullerton was previously the managing director of JPMorgan where he managed multiple capital markets and derivatives businesses around the globe. He understands global finance and therefore one of the most important variables in the sustainability question.

On April 21st, 2015, the Capital Institute and Yale’s Centre for Business and the Environment launched a sweeping new report called "Regenerative Capitalism, How Universal Principles And Patterns Will Shape Our New Economy". In it, Mr Fullerton explains how when viewed holistically, we are creating broad systemic risk in our planetary systems:

"Global economic activity is already breaching four of nine critical 'planetary boundaries'– atmospheric carbon, nitrogen and phosphorous flows from agriculture dumped into our river systems, land use changes, and the rate of biodiversity loss. Fresh water stress in specific locations is on the rise. In the process, we are compromising the Earth’s interconnected life support systems."

Source: Rockstrom, Johan et al, "Planetary Boundaries, A Safe Operating Space for Humanity", updated 2015. Stockholm Resilience Centre.

Mr Fullerton continues, "These boundaries are depicted individually in the graphic above, but it is important to realise that since everything is connected to everything else, any one breach of a critical scientific boundary is enough to shift the entire system into destabilising collapse. In short, we are playing with fire."

Mr Fullerton argues that sustainability, in a systemic sense, hinges on the adoption of eight core principles which together describe how our systems of individual and collective existence depend on each other.

It’s a story which, in a way, steps back from our planet and says, okay, we are going to have to learn how to get along now that we are bumping into our own physical and existential limits. To not do so creates ever-increasing risk that we will break the life-giving systems on which we depend.

Described economically as a function of energy inputs and increasing/decreasing levels of sustainability, the picture looks like this, with our status-quo somewhere in the "conventional" and "green" range:

Mr Fullerton is not suggesting that we embark on some utopian journey which discards our current systems and their benefits. What he is saying though is that we are in a period of great change, and that empirical, systemic thinking in the "regenerative" capitalist way is an important way to navigate risk which we can glimpse only in part, and which is rooted in an economic system which puts us in a losing game of reaction to accelerating crisis du jour.

In order to illustrate these empirical, universal principles at work in our economic context, Capital Institute provides a "Field Guide to Investing in a Regenerative Economy" with 25 stories of the regenerative economy taking place in the real world, even if still largely at small scale.

Even if you profoundly disagree with some or all of this thinking, it is at least worth considering that there is systemic risk baked into our current economic system where the planet is viewed as a resource which serves the unwavering, undifferentiated goal of economic growth, rather than economic growth serving goals which will allow current and subsequent generations to live meaningful and healthy lives.

 

A version of this blog post first appeared on the Thomson Reuters blog.

 

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.