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Digital Spending Increases, Greater Focus on Digital Strategy Is a Top Need for State Auditors

MD Staff

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photo: Deloitte

The 2018 Digital Government Transformation Survey released today by Deloitte and the National Association of State Auditors, Comptrollers and Treasurers (NASACT) reveals how its members are investing more in digital transformation, yet only 35 percent of respondents are satisfied with their organizations’ responses to digital trends. This is a drop of 29 points from the 2015 survey. Additionally, less than half of respondents stated they have a clear and coherent digital strategy.

“The survey reveals an eagerness for state financial professionals to use digital technologies on par with the private sector,” said R. Kinney Poynter, executive director, NASACT. “Our members want to take advantage of emerging technologies, but clearly impediments to being more digital remain.”

“One clear takeaway from the survey is that those NASACT member organizations who have a clear and coherent digital strategy consider their digital capabilities to be comparable or ahead of the private sector,” said Christina Dorfhuber, principal, Deloitte Consulting LLP, and a government and public services ERP strategy leader. “We also saw how respondents with a digital strategy were more satisfied with their organization’s reaction to new trends and more confident in their organization’s readiness to respond to new ones, demonstrating that much of an organization’s digital prowess hinges on that strategy.”

“The expectations for digital strategies and opportunities are clearly increasing for all organizations, including governments,” said Clark Partridge, state comptroller of Arizona and president-elect of NASACT. “As we expand our understanding, we can appropriately identify opportunities to leverage technology to re-engineer our processes and enhance the capacity of our workforce. The result is a greater capacity to successfully accomplish the work of government and deliver quality outcomes to citizens.”

The survey reveals three key themes:

A digital strategy is important. Most, but not all, respondents reported having a digital strategy and believe that there is more that needs to be done. Those with a digital strategy were more satisfied with their organization’s reaction to digital trends (54 percent versus 18 percent of respondents) and confident in the understanding of digital trends by their leaders (87 percent versus 30 percent).

Investing in automation and cognitive technologies. With more funding, organizations must determine which technologies to invest in. Currently only 11 percent of organizations reported a broad use of automation and cognitive technologies. Increasing these numbers will be critical as more audits are likely to be augmented by these technologies in the coming year.

Addressing the digital skills gap. While 65 percent of organizations indicated that training staff would be a key focus, 39 percent of organizations also noted they would augment staff with consultants and contractors. Additionally, only 48 percent of respondents believe their employees have sufficient skills to execute a digital strategy while 43 percent believe that employees have the skills for automation and cognitive technologies.

The report examined the need for more training and a skilled workforce in these new emerging technologies to eliminate the skills gap.

“Emerging technologies can have tremendous benefits for state organizations, but preparation is needed,” said William D. Eggers, executive director for Deloitte’s Center for Government Insights. “Public finance leaders looking to capitalize on emerging technologies should devise a roadmap for integrating these technologies into their day-to-day operations.”

The previous survey was conducted in 2015. This year’s survey includes feedback from more than 70 NASACT member offices. A more detailed analysis of the survey can be found here, including data specific to auditors, comptrollers and treasurers.

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Our Shared Digital Future

MD Staff

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Building a digital economy and society that is trusted, inclusive and sustainable requires urgent attention in six priority areas according to a new report, Our Shared Digital Future, published by the World Economic Forum today.

The report represents a collaborative effort by business, government and civil society leaders, experts and practitioners. It follows an 18-month dialogue aimed at restoring the internet’s capacity for delivering positive social and economic development.

The report comes at a historic moment on the day when, for the first time, more than one-half of the world’s population is now connected to the internet. At the same time, less than one-half of those already online trust that technology will make their lives better.

With 60% of the global economy forecast to be digitized by 2022, there remains huge potential for the Fourth Industrial Revolution to lift more people out of poverty and strengthen societies and communities. However, success depends on effective collaboration between all stakeholder groups. The authors, in addition to unveiling six key areas for action, also highlight several existing efforts at global and local levels where collaboration is helping to restore trust and deliver broad-based societal benefits.

The six priority areas for multistakeholder collaboration are:

Internet access and adoption

Internet access growth has slowed from 19% in 2007 to 6% in 2017. At the same time, we have reached the milestone of 50% of the world’s population being connected to the internet. To close the digital divide, more investment is needed to not only provide access, but also improve adoption.

Good digital identity

By 2020, the average internet user will have more than 200 online accounts and by 2022, 150 million people are forecast to have blockchain-based digital identities. However, 1 billion people currently lack a formal identity, which excludes them from the growing digital economy. Good digital identity solutions are key to addressing this divide, empowering individuals, and protecting their rights in society.

Positive impact on society

By 2022, an estimated 60% of global GDP will be digitized. In 2018, companies are expected to spend more than $1.2 trillion on digital transformation efforts. Yet, only 45% of the world’s population feel that technology will improve their lives. Companies need to navigate digital disruption and develop new responsible business models and practices.

Cybersecurity

Cyberattacks result in annual losses of up to $400 billion to the global economy. More than 4.5 billion records were compromised by malicious actors in the first half of 2018, up from 2.7 billion records for the whole of 2017. A safe and secure digital environment requires global norms and practices to mitigate cyber-risks.

Governance of the Fourth Industrial Revolution

Policy-makers and traditional governance models are being challenged by the sheer magnitude and speed of the technological changes of the Fourth Industrial Revolution. Developing new and participatory governance mechanisms to complement traditional policy and regulation is essential to ensure widespread benefits, close the digital divide and address the global nature of these developments.

Data

The amount of data that keeps the digital economy flowing is growing exponentially. By 2020, there will be more than 20 billion connected devices globally. Yet there is no consensus on whether data is a type of new currency for companies to trade or a common public good that needs stricter rules and protection. The digital economy and society must bridge this gap by developing innovations that allow society to benefit from data while protecting privacy, innovation and criminal justice.

“The digital environment is like our natural environment,” said Derek O’Halloran, Head, Future of Digital Economy and Society, the World Economic Forum. “We all – governments, businesses, individuals – have a duty to ensure it remains clean, safe and healthy. This paper marks a step forward in offering a blueprint for a better internet we can all work towards: One that is inclusive, trustworthy and sustainable.”

The report is part of ongoing work by the World Economic Forum to provide a platform to accelerate, amplify or catalyse collaborative efforts from business, government, academia and civil society to advance progress towards an inclusive, trustworthy and sustainable digital economy. The report provides an overview of key issues for the digital economy and society, establishes priorities for multistakeholder collaboration for the year ahead, and highlights existing key initiatives and resources.

“Our existing institutions, mechanisms and models are struggling to effectively respond to the pace of digital change and its distributed nature. This report identifies critical areas of focus for public-private partnerships to help restore trust in an inclusive and prosperous digital future,” said Jim Smith, Chief Executive Officer, Thomson Reuters and Co-Chair, World Economic Forum System Initiative on Shaping the Future of Digital Economy and Society.

“While recognizing that digital developments fuel many opportunities in political, commercial and social spheres, a key point of this paper is the need to focus on inclusion and addressing digital divides; only through incorporating more voices and views – in the development of political and commercial policies – will we be able to create a society that truly benefits all,” said Lynn St. Amour, Chair of the UN Internet Governance Forum (IGF)’s Multistakeholder Advisory Group, and Co-Chair, World Economic Forum System Initiative on Shaping the Future of Digital Economy and Society.

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Internet milestone reached: More than 50 per cent go online

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For the first time, more than half of the world’s population of nearly 8 billion will be using the internet by the end of 2018, the United Nations telecommunications agency announced on Friday.

International Telecommunication Union (ITU) global and regional estimates for 2018 are “a pointer to the great strides the world is making towards building a more inclusive global information society,” Houlin Zhao, ITU Secretary-General, said.

The record figure of 3.9 billion people, or 51.2 per cent that will be online by the end of December, is an important milestone in the digital revolution, according to the ITU. The agency insists that this increased connectivity will help promote sustainable development everywhere.

The latest figures also spotlight Africa, which shows the strongest rate of growth in internet access, from around two per cent in 2005, to more than 24 per cent of the African population this year.

Europe and the Americas are the regions with the slowest growth rates, though the current figures show that 79.6 per cent and 69.6 per cent are online, respectively.

Overall, said the ITU, “in developed countries, slow and steady growth increased the percentage of population using the Internet, from 51.3 per cent in 2005 to 80.9 per cent in 2018.”

Despite this progress, ITU has warned that a lot of communities worldwide, still do not use the internet, particularly women and girls. The statistics show older people also disproportionately remain offline, as do those with disabilities, indigenous populations and some people living in the world’s poorest places.

In a bid to reduce inequalities, the agency is calling on more infrastructure investment from the public and private sectors, and to focus on ensuring that access remains affordable for all.

“We must encourage more investment from the public and private sectors and create a good environment to attract investments, and support technology and business innovation so that the digital revolution leaves no one offline,” said Mr. Zhao.

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Utilizing Artificial Intelligence for Environmental Sustainability

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The improvement in human development is becoming vividly contingent on the surrounding natural environment, and may be confined by its future deterioration as a response to the negative stimulus. Man-made problems like increasing population, urbanization and industrialisation, of which our mother earth is a victim in this century, have forced society to consider whether human beings are changing the very conditions essential to life on Earth. Antediluvian technologies have played a very meager role in the planning, prediction, supervision and control of environmental processes at different scales and within various time spans. An effective environment protection policy is largely dependent on the quality of information available and the utility of contemporary technologies like Artificial intelligence (AI), deep learning and data analytics that can be used to take an appropriate decision at an appropriate time. This convergence can help AI move from in vitro (in research labs) to in vivo (in everyday lives).

The global environment is in a bad shape. Natural disasters around the world are happening at an alarming rate, we have witnessed earthquakes, wildfires and cyclones that cause mass flooding and property damage. Around twenty per cent of species currently face extinction, and that number could rise to 50 per cent by 2100. And even if all the world economies keep their Paris climate pledges, by 2100, it’s predicted that average global temperatures will be 3˚C higher than in pre-industrial times, making it an invincible environmental catastrophe. There are reports which suggest that the recent fire break in California, United States of America and the floods in Kerala, India could have been mitigated effectively with proper supervision and planning. Here comes the role of AI.AI is considered to be the most dynamic game-changer in the global economy. According to a World Economic Forum report, Harnessing Artificial Intelligence for the Earth, AI refers to computer systems that “can sense their environment, think, learn, and act in response to what they perceive and their programmed purposes.” AI has helped environment researchers clinch almost 90 per cent accuracy in spotting climate change factors like tropical cyclones, weather fronts, tidal changes and atmospheric rivers, which can cause heavy precipitation and are often impossible for humans to identify on their own.  In India, AI has helped farmers get 30 per cent higher yields per hectare by providing information on preparing the land, applying fertilizer and choosing sowing dates, as reported by the Government of India in 2018. In Norway, AI has penetrated into the field of policy-making and helped create a flexible and autonomous electric grid, integrating more renewable energy.

The long list of technology and economy shapers, who believe that artificial intelligence, often encompassing machine learning and deep learning, is a “game changer” for climate change and environmental issues, includes Microsoft, Google, IBM and Tesla among others. Microsoft’s AI for Earth program has committed $50 million over five years to develop and test novel tech-applications for AI. In China, IBM’ Green Horizon project is utilizing an AI system that can forecast air pollution, track pollution sources and develop potential strategies and solutions to tackle it. For instance, data analysis can be used to determine whether it would be more effective to restrict carbon output close certain power plants in order to reduce pollution in a particular zone. The Ocean Data Alliance is developing a machine learning system to provide data from satellites and ocean exploration so that decision-makers can monitor shipping, ocean mining, fishing, coral bleaching or the outbreak of a marine disease. Modern technologies like artificial intelligence, geographic information system tools and movement detectors, are revamping the way wildlife reserves and conservation bodies are working across India.AI can also help prophesy the spread of invasive materials, keep a track of marine litter and measure water pollution levels. The 21st century is the age of data, with accuracy as the key, decision-makers and authorities will be able to respond to problems more quickly with real-time data. Considering the global evolution of AI and its application, it is evidentially predicted that by 2030, AI will add up to USD 15.7 trillion of the global economy which is more than the present output of China and India combined.  The United Nations recognize that AI has the potential to accelerate progress towards a dignified life, in peace and prosperity, for all people. The UN Artificial Intelligence Summit held in Geneva (2017) suggested refocusing the use of this technology, on achieving sustainable development goals and assisting global economies to eliminate poverty and to conserve natural resources and protect the environment.

Countries and civil societies develop incredible AI application systems with diverse features, but sometimes these systems do not take into consideration the good of individuals and society. So, it is important to develop systems which can deliver the change required to build a clean, resource-secure and inclusive economy, enabled by technology and supported by public policy and investment. Many industry giants like Microsoft, Google and Tesla, while pushing the parameters for human innovations, have made productive efforts in developing ‘Earth Friendly’ or ‘Eco-Friendly’ AI mechanisms. For instance, Google’s brainchild DeepMind AI has helped the organization to curb their data centre energy usage by 40 per cent making them more energy efficient and reducing overall greenhouse gas emissions.AI innovation will also be fundamental to the attainment of the United Nations Sustainable Development Goals (SDGs) and will also promote the resolution of humanity’s grand challenges by maximizing on the unequalled quantities of data now being generated on sentiment behaviour, human health, migration and more.

For any country to maximally benefit from the AI revolution, it must adopt a deliberate policy to drive AI innovation and proliferation in sectors affecting climate change. With powerful economies making rapid progress in AI-based research, it is imperative that the World looks at AI as a critical element of environmental sustainability. These recent advances in AI are a wake-up call to policymakers as our climate is under increasing strain. Aiming for sustainability is an opportunity of this generation. AI and other Fourth Industrial revolution ideas are the new innovative solutions that can revolutionize environmental protection measures.

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