Energy and communication are parallel worlds

Energy and communication are parallel worlds

Luigia Ierace
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Digital systems and technology are having an impact on society, companies, communication and future leadership, improving economic and financial performance and strengthening international competitiveness. Interview with Paolo Borzatta, Senior Partner The European House – Ambrosetti

Just look back through history. Energy and communication are and will always be the engines of change on the planet. While coal and the invention of the steam engine were the protagonists of the industrial revolution, the newspapers brought culture out of literary circles. While, in the 1800s, oil changed the way people live on the planet, the telegraph revolutionized communication. While fuels have brought different worlds together, creating relationships between them, the phone has allowed them to talk and dialog. While the evolution of oil research has led to experimentation that increasingly pushes the boundaries of innovation, the Internet and all its developments have changed the paradigm of the economy.

Energy and communication can be seen as two parallel worlds that feed on the same source: innovation. And the latter becomes the meeting place, a kind of free zone, where the strategic, economic and technological dynamics and skills associated with energy and its infrastructure, as well as information and the media, take shape. Because the more technologies advance and condition history, the more we can perceive the distances between the two worlds shortening until they eventually meet.

The energy industry also needs knowledge so it can to avoid being unprepared and meet the challenges of the future. And communication must be at its side to support the change and understand its impacts. But it is precisely the speed with which technological innovations are propagated that imposes drastic changes in company organization and communication. Just look at the time taken by different innovations to reach 25% of the population. Electricity took 46 years, telephone 35, radio 31, television 26, PCs 16, cell phones 13, Internet 7 and smartphones 5. Irreversible impacts of technological change on society.

But other extraordinary technological revolutions mark our era: CyberSecurity, Advanced Materials, Renewable energies, New genetic technologies, Artificial Intelligence, Intelligent cars, Robotics, Internet of Things (IoT), 5G. AR and VR, Quantum Computing and Space Research. These are the 12 frontiers mapped by the study carried out by Group M,/The European House - Ambrosetti entitled “Change for Tech. Technology and Communication. Impacts on society, companies and leadership”, focusing on how digital systems and technology have an impact on society, companies, communication and  future leadership, improving economic and financial performance and strengthening international competitiveness. We discussed this with Paolo Borzatta, Senior Partner The European House – Ambrosetti.

 

 

In short, are we facing a scenario that requires a profound change?

Absolutely, it is easier to be certain how profound the change will be but much more difficult to understand what kind of change that will be. New digital technologies, from robotics to Artificial Intelligence (AI), could significantly change the way we behave and there will be no lack of resistance to change, especially with the arrival of artificial intelligence that will replace humans in physical and mental activities that have always been considered to be specifically human until now. We won’t go into whether AI will have a conscience or not, whether it will replace human beings or not, because that would be straying not into science fiction but into the limits of reason. It will certainly be difficult to accept that “non-humans” can do things that for 10 thousand years we have considered to be the exclusive prerogative of humans. And this is why it is so hard to say how things will change. These innovations will undoubtedly allow us increasingly to concentrate on doing things with a high human and creative content. In short, there will hopefully be more time for leisure and relief from a series of activities we have always done and that something else could perform in our place.

 

A profound change, even cultural. that will influence companies and their organization?

In 15-20 years’ time, company organization will be substantially different, but the fog is very thick. In general, we tend to say that there will be new occupations. This is probably true but it might only be a sweetened vision of the change which, as happened in the past, will see some tasks replaced by new ones. In reality, I fear that it is not only a question of new tasks but also of different behaviors, which today are difficult to predict. And it isn’t science fiction. Think of the film Her by Spike Jonze, in which the main character falls in love with an artificial intelligence, giving us an idea of what could happen once we have a virtual assistant like her in our lives. Clearly our behavior might change.

 

In essence, in order to seize new opportunities, in addition to introducing professionals and technological innovation, will CEOs have to rethink and transform their companies in a radical way?

So far CEOs have perceived technology as a tool and tried to grasp what benefits it could bring to their companies. This has been the case over the last 50 years, with the arrival of computers, digitalization, automation and every other innovation. Quite rightly, CEOs have always delegated the application of any innovations they considered useful to technical staff. What is emerging now, however, is that rather than just applying new technologies, they need to rethink the way in which businesses are actually run.  CEOs have to change culturally and design businesses that use the new technologies in a completely different way.

 

But the real strategic lever at all levels will be communication. Will the way we communicate also change?

Socio-economic, demographic, environmental, energy, technological changes are permeating the whole of society. But the digital revolution is leading to a series of changes affecting every company function, particularly marketing and communication. The impact is and will be increasingly disruptive and will require a radical review of the role that new technologies have not only on society and businesses, but above all on their leadership.

 

So does an unprecedented and challenging role await CEOs?

The faster pace of digital communication and the magnitude of its effects require the continuous presence and involvement of CEOs, who must prepare their companies to make the most of these changes rather than being subjected to them. CEOs must take ownership of the communication and take over the roles of Chief Communication Officer, Digital Leader and Company Sponsor. After having taken on these new roles, in addition to the traditional ones, they must ask themselves how to change the organizational structures, operating mechanisms and above all the internal corporate culture, intervening above all on human resources.

In fact, CEOs and the entire company must become aware of the value that technology can bring and understand how this value can be extracted to achieve further competitive advantages.

 

Have new technologies also profoundly changed the way we communicate?

The communication formula has changed. Previously, when you wanted to send a message, it was coded and sent through a channel to the recipient, but you didn't know whether he received it or what his reaction was. The cycle time was measured in months, now it is measured in seconds. With social media, the recipient becomes a transmitter again using different channels and perhaps even altering the message and personalizing it. All in a few seconds. This was previously unthinkable. Now we can find out about and see reactions in real time. This changes the world of communication and CEOs need the ability to manage such a complex system. From being a communicator, they become the manager of the communication page. A change that involves everyone and disrupts the traditional communication system: the communication agency model is becoming obsolete, the world of journalism is struggling to adapt to coexistence with digital communication, the current situation of newspapers can be defined as a transition phase. We're in the midst of a storm and no one knows which harbor we’re heading for. This does not necessarily mean the end of printed paper or that we are moving towards an uncontrolled proliferation of websites. The situation is unclear, but we need to face the storm, keep the ship steady and figure out which way to go.

 

Which technologies are most likely to transform communication in the coming years and what will their role be?

Virtually all of them. The Internet of Things and 5G will have the biggest impact in the short term. Connected objects will create ample space for communication and for creating networks between different objects for consumer engagement. By 2023, 5G will allow 1 billion people and 30 billion objects to be connected. Augmented Reality and Virtual Reality will create new communication channels. AR can revolutionize the ways in which we interact with the world around us, increasing and enriching what we see, feel and experience, improving our perception of reality. VR has significant impacts especially in the world of gaming, entertainment and business organization. Blockchain allows a large distributed, and therefore secure, database to be created and managed for managing transactions that can be shared between multiple nodes on a network. One of the potential applications in the field of communication is the micro-licensing of content. Robots will collect data on the lifestyle and consumption habits of the people they come into contact with and turn them into useful information for businesses. They will themselves become tools to communicate with users, in an increasingly relevant and contextualized way.

 

But which technology will have the greatest impact?

Definitely Artificial Intelligence. In any case it is the one that fertilizes them all as it applies to each one and gives them an extra boost. Artificial Intelligence will play a leading role in the future of work and communication, with two opposite impacts: on the one hand it will lead to the disappearance of jobs, in particular the most repetitive ones that can’t be saved; on the other hand, the increasing complementarity between man and machine will increase the potential of many activities currently carried out by human beings, making them faster and safer, creating new job opportunities that cannot be envisaged today. The technological advances brought by AI will enable a series of new customer engagement opportunities.

 

And which sectors will be involved?

All of them, from industry to services and the private sector. New technologies will increasingly automate industrial processes by moving towards even more advanced production systems that are able to renew and self-improve. In terms of services, with the use of artificial intelligence, the geography of work within professional offices will change, from the medical to the legal sector. This is already happening with Voice-Based Virtual Assistants. In the last few years, Alexa, Google Home, Siri, Cortana have entered our lives and our homes permanently, allowing us to automate and simplify the search for information and the management of interconnected digital systems: making shopping lists, keeping the diary, doing Internet searches. They relieve us of a large amount of work and we are only at the beginning, because while the role of humans may be essential today, it no longer will be in the future.

Direct interaction between virtual objects can be envisaged: for example, Alexa will speak directly to our refrigerator to order food that is running out.

These are the 12 frontiers mapped by the study carried out by Group M,/The European House - Ambrosetti entitled “Change for Tech. Technology and Communication. Impacts on society, companies and leadership”, focusing on how digital systems and technology have an impact on society, companies, communication and  future leadership, improving economic and financial performance and strengthening international competitiveness. We discussed this with Paolo Borzatta, Senior Partner The European House – Ambrosetti.