The digitization and automation of processes and delivery vehicles will reduce logistics costs for standardized transport by 47% by 2030, according to a new report from PwC’s Strategy& consultancy.
The Global Truck Study 2018 has found that around 80% of these savings will be attributable to the reduction of personnel in the transport and logistics industry. In addition, there will be enormous increases in efficiency: autonomous lorries, for example, will be able to travel 78% of the time from 2030 onwards, as opposed to 29% of the time since 2030. This will be because there will be no breaks for drivers and idling time will be reduced through the use of algorithms.
“Within just a few years, the commercial vehicle and logistics industries will merge to form an ecosystem that will be managed digitally and efficiently. Robots are already being used in distribution centers and electric vehicles for last-mile logistics,” explains Dr. Gerhard Nowak, Partner at Strategy& Germany.
“The missing piece of the puzzle is currently the automated comparison of freight and available vehicles. In a fully automated supply chain, a product on an Industry 4.0 production line would already be produced with the digital information to book the transport for its own delivery shortly before its completion.”
A consistently digitized supply chain saves administrative overheads, replaces time-consuming inventory, and reduces insurance costs by cutting error rates. In total, savings of up to 41% are possible by 2030 compared to today’s supply chains.
The first-mile delivery of products will become more efficient over the next few years, primarily as a result of the automated assignment of freight to the truck, and platform solutions will replace manual administration tasks, which will release savings potential of 45% by 2030. For last-mile deliveries, data-driven demand analysis, automated deliveries (for example through drones) and reduced administrative overhead could see costs fall by 51%.
“The logistics industry is undergoing massive technological change, changing well-known business models and traditional roles of freight forwarders, truck operators or truck drivers. The change to an autonomous truck is also reducing the importance of equipment features and ride comfort for manufacturers – in the future, it is about offering the better cost balance per kilometer.
“To remain competitive, original equipment manufacturers (OEMs) need to develop business models with mobility services. In this area, they are in direct competition with leasing companies and above all with the big tech players, who are already planning autonomous truck fleets. This ultimately puts them in direct competition with their current customers – a delicate challenge,” concludes Gerhard Nowak.
Tech Trends 2019: Beyond the digital frontier
Deloitte released its milestone 10th annual report on technology trends, “Tech Trends 2019: Beyond the digital frontier.” The report explores how the convergence of new technologies with powerful technological forces is driving disruption across industries. New technologies include advanced networking, serverless computing and intelligent interfaces; and technological forces encompassing digital experiences, cognitive and cloud.
Ten years ago, when smartphones and mobile apps were gaining traction, and technologies like cloud and the Internet of Things were emerging on the scene, Deloitte released its first Tech Trends report. The organization has watched this evolution unfold as the digital imperative and the changing role of technology redefine the enterprise, yet adoption of these trends continues to vary widely. Some companies are only beginning to explore trends Deloitte wrote about in 2010, while others have advanced rapidly along the maturity curve.
“Tech Trends 2019: Beyond the digital frontier” begins with a reflection on a decade of disruptive change driven by nine macro forces: digital experience, analytics, cloud, core modernization, cyber, business of information technology, cognitive, blockchain, and digital reality. The report further explores where these forces are headed.
Next, six trends that are giving rise to new operating models, redefining the nature of work, and dramatically changing IT’s relationship with the business are detailed:
AI-fueled organizations: Leading companies are systematically deploying rapidly maturing technologies – machine learning, natural language processing, RPA, and cognitive – not just to every core business process, but into products, services and the future of industries. Those organizations’ use of artificial intelligence is moving from “Why?” to “Why not?”
NoOps in a serverless world: We’ve reached the next stage in the evolution of cloud computing, with technical resources completely abstracted and management tasks increasingly automated. Freed from mundane responsibilities, IT talent can focus on activities that more directly support business outcomes.
Connectivity of tomorrow: At both macro and micro levels, technologies like 5G, mesh networks, and edge computing are expanding business’ reach to both the far corners of the world — and the smallest spaces in warehouses, retail stores, and other places with utmost precision. Advanced networking is the unsung hero driving development of new products and services and is transforming how work gets done.
Intelligent interfaces: Today, people interact with technology through ever more intelligent interfaces that combine the latest in human-centered design techniques with leading-edge technologies such as computer vision, conversational voice, auditory analytics, augmented reality and virtual reality. Working in concert, these technologies and techniques are transforming the way we engage with machines, data and each other.
Beyond Marketing—Experience reimagined: To deliver the highly personalized, contextualized experiences that today’s customers expect, some chief marketing officers are trading long-standing, traditional agency relationships for closer partnerships with their own CIOs. Enabled by a new generation of marketing tools and techniques focused on personalized, contextual and dynamic experiences, CIOs and CMOs can illuminate and engage customer needs and desires most effectively.
DevSecOps and the cyber imperative: DevSecOps fundamentally transforms cyber, security, privacy and risk management from being compliance-based activities—typically undertaken late in the development lifecycle—into essential framing mindsets across the product journey.
The final chapter explores how modern businesses can navigate digital transformation—building a roadmap that incorporates the right technologies, techniques, talent and executive support.
Asia must prepare today for tomorrow’s jobs
Technology optimists argue that progress creates many more jobs than it destroys. They say fears over job losses are as misplaced as Luddite worries in the 19th century over the loss of jobs like horse and buggy driver or loom weaver. More recently, the introduction of ATMs also supports this view since the machines haven’t replaced bank tellers but broadened their roles into customer relationship management.
Certainly, the skyscrapers in cities like Manila and Mumbai are filled with people doing new jobs that have moved them and many others from poverty into the middle class. The last two decades have seen a wave of new professional jobs created in developing Asia, from research analysts to programmers, environmental scientists and data engineers.
But in many cases, even well-paid, new jobs are under threat. Not from technology itself, though artificial intelligence and high-performance robots are a challenge. Rather, policies are lagging the changes happening in industry at large. For Asian countries to overcome the threat to their progress, policymakers need to work with the full range of stakeholders—from employers to educators to workers and unions—and focus on ensuring relevant education and labor regulation.
Take the example of the Philippines. In less than 15 years, the country has built a thriving business process outsourcing (BPO) sector that has created over a million well-paid clerical jobs. The sector now accounts for over 6 percent of annual gross domestic product.
But recently, employment growth has slowed because the sector now requires fewer of the customer service agents that the Philippines most often provides and far more specialized analysts, designers, and researchers. Estimates from the Information Technology and Business Process Association of the Philippines show that the share of low-skilled workers in BPO will decline from 47 percent in 2016 to 27 percent in 2022 while high-skill BPO jobs will increase from 15 percent to 46 percent.
Going forward, automation of basic BPO services, notably robotic process automation, will continue to transform the sector in ways we cannot even conceive of today. This means that the government, education institutions, and BPOs need to work together to train workers for the jobs of the future.
One way to do this is to align education more closely with industry needs. Universities need to speak to employers to find out exactly which IT skills are needed and create courses targeted to their needs. But while it is imperative to increase quality and access to tertiary education in computer and IT-related fields, it is also crucial to create links between vocational and higher education so workers can learn new skills or upgrade their existing skills as employer demands shift. That would create a larger and better educated labor force with a more relevant and diverse skill set.
Other skills for the future are those that develop high cognitive and social abilities useful for roles in research, analysis, or management. We estimate that every year, employment in jobs that have an IT, cognitive, or social focus grows an average of 2.6 percentage points faster than overall employment.
Incorporating digital literacy into standard school curricula from an early age and ensuring that schools develop not only reading, writing, and numeracy skills, but also social and emotional skills is likely to be the most effective way of teaching and providing a foundation for future learning and re-learning.
Labor laws and protections also need a rethink. More than ever before, labor market regulations need to protect workers rather than jobs. In practical terms, this means that stiff regulatory barriers to employee layoffs or to certain types of contracts such as fixed term contracts—common in countries such as India and Indonesia—need to be reconsidered and modern systems of social protection introduced.
Such systems would include minimum wages covering a large pool of workers, workfare programs, regulations on work hours and conditions, and new ways of promoting equal opportunity. Workers of the future may well work part-time, on-call, or in temporary placements, perhaps with multiple employers at the same time. Even full-time employees are likely to switch jobs frequently.
Some forms of unemployment insurance – tailored to reflect the fiscal health of the government in question – would also help to protect people between jobs. This calls for healthcare, pension, and other benefits that are attached to the worker, rather than the firm, and can be carried from job to job.
Digital technologies using biometric information will make all that easier, and there are good models in place such as India’s Aadhaar system which now covers 1.2 billion people, Indonesia’s e-KTP, Pakistan’s NADRA, and Malaysia’s MyKad.
There are many reasons to be bullish about the power of technology to create new and better jobs and the Asia and Pacific region is well-placed to benefit. But we cannot be complacent. Policymakers need to confront bottlenecks in their education and regulatory systems that could impede the rise of a middle class.
The future of work and the region’s prosperity depend on it.
Skills for the future: Learning to learn through technology is the new skills visa
Digital technologies – such as artificial intelligence, 3D printing, cognitive computing, big data, automation, the Internet of Things, advanced robotics and blockchain – are affecting many occupations, both jobs and tasks. The types of skills being demanded by employers are also changing, causing disruption in the task and skill profiles of traditional occupations, such as those in the manufacturing sector. The gig economy also emerged, with people working flexible hours, often producing deliverables with the help of technology.
In my previous blog I highlighted some of the effects the drivers of change are having on the types of skills anticipated for the future labour market, such as readiness to change. Now I would like to look deeper into current and emerging digital innovations for acquiring agility and resilience through Life Long Learning (LLL).
Adopting the LLL approach can help all countries, both developed and developing, not only to produce digital catalysts and entrepreneurs for the labour market, but also an agile and digitally savvy workforce – young and old – who are skilled, re-skilled, and up-skilled to adapt to technology affecting their careers.
This requires investment in digital skills through the education system, vocational skills training across age groups, and investment by enterprises in the training of workers. For example, new learners can start with core, generic, digital skills such as basic digital literacy, sending emails and using social media. They could then advance to learning programming skills, customer management skills, and digital media and design. Thereafter, more advanced learners could opt for acquiring specialized ‘Industry 4.0’ digital skills for creating, managing and maintaining advanced technologies in the manufacturing sector.
To unfold this digital education and training strategy, and work towards developing and implementing a digital learning policy, countries need to have both trainers and infrastructure. Interestingly, both low and high-technology can facilitate LLL in a cost-effective manner.
Digital technology is being increasingly used worldwide to provide greater, low cost, access to high quality, personalized learning, through online videos, Massive Open Online Courses (MOOCs), online learning portals, mobile applications, and challenge-based games. Instructors and schools are using digital technologies to track the learning outcomes of educational programmes using assessment exercises that capture individual learner progress through tablets and smartphones.
The results are presented on virtual dashboards for instructors. Programmes utilizing artificial intelligence and data analytics then identify trends in computerized databases, and produce reports for learners and parents on areas of improvement. Computerized Education Management Information Systems (EMIS) and Labour Market Information Systems (LMIS) can provide information on access to education, and assessment results by gender and the location of schools (e.g. urban/rural). Low-end digital technologies such as pre-recorded educational videos, satellite-based tools, television and radio programmes are also very powerful tools in reaching learners from vulnerable and disadvantaged communities, even in remote areas. Cross-country technology transfer and knowledge-sharing are the keys to demystifying and delivering the benefits the technology revolution offers. Employers’ and workers’ organizations frequently have a leading role in life-long learning, including anticipating future skill requirements and participating in their delivery.
So, can we use innovation to steer LLL? Yes, we can. Whether you are a young person looking for a job, a worker worried about losing your job because of increasing automation, or, someone who is simply in awe of the different technologies, acquiring new skills that meet changing market demands could improve your employability, and this can be achieved through modern technologies.
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