This post originally appeared on LinkedIn. Written by eBay Inc. SVP EMEA, Paul Todd.
The annual World Economic Forum in Davos is unique. It brings together thousands of world leaders from business, politics, academia and news media for an intense exchange of views that is rich in both content and perspective. The event always attracts criticism and in 2017 this was particularly acute, with attendees accused of being a ‘disconnected global elite’. In many senses this is a truism and applies more broadly than to just the attendees at Davos. How else could so many leaders and expert commentators have been caught completely off guard by the Brexit vote and Trump win unless they really were disconnected from the reality of life for so many voters?
In this context, there is enormous value in a gathering where global leaders can confront this reality and start to lay out a prescription to help people share in the benefits of globalisation and technology advances. It was encouraging that this year’s theme, ‘Responsive and Responsible Leadership,’ reflected that imperative to better understand which communities feel disconnected and left behind by globalisation, and how to bring about changes that will empower and enable people to participate in and benefit from global economic growth in the digital age. Specifically, three themes from the event stood out for me:
- Reconnecting with the disconnected.
- How to manage the impact of accelerating technology and business model innovation?
- Governance for the digital future – the role of policy & regulation.
Reconnecting with the disconnected
The forces of liberalisation, free trade and globalisation are not working for everyone. Most often, those who are older, and those who live in economically deprived areas, feel alienated from technological and social change; many don’t see how the digital economy works in their favour. So what can leaders do to increase inclusiveness? How can we help those who feel disenfranchised from the digital economy to participate and share in its benefits? Much discussion at Davos focused on how to re-connect these communities to the economy physically (through expanded internet access and connectivity), socially (by addressing inequality) and professionally (re-skilling individuals and preparing for lifelong learning).
Efforts such as eBay’s work in Diepholz, Monchengladbach and L’Aquila are examples of communities using technology to overcome perceived barriers to trade and commerce, connecting them to the benefits of globalisation.
Managing the impact of accelerating technology and business model innovation
Innovation continues in technology and there were many discussions about technologies such as artificial intelligence (AI), the Internet of Things (IoT) and robotics/ autonomous systems. AI is starting to have a significant impact in specific vertical markets, such as medical diagnosis in healthcare and greater personalisation in retailing. It is starting to shift competitive advantage away from those whose strength is distribution to those who have content (big data). This will tilt even further as the IoT grows from 16 billion connected devices today to 100 trillion by 2030. Machine-to-machine communication will create vast data streams and new sources of learning for AI systems. In retail we can already see the potential disruptive impact of robotics and autonomous systems in warehousing and in the automotive and logistics industries.
There is also significant innovation in new business models. Companies such as Uber, Airbnb and Rent the Runway are reinventing the concept of ownership. Digital personal assistants will curate unique product and service sets for individual consumers. Consumers are beginning to move away from simply buying products to having authentic real life experiences. All of these changes are rewriting patterns of consumption and the rules of trade. All of them will have (indeed, are already having) an impact on society and on employment.
In fact, we’re at a point where technology and innovation no longer limit the scale and speed of change. The obstacle is society’s level of comfort and ability to adapt. There are some big questions we must answer:
- What is our understanding of 'work' in the digital future? What does it mean to employ/to be employed in the so-called gig economy? How do we balance the loss of traditional jobs with the arrival of others which require quite different skills?
- How can we build trust in a world where organisations hold lots of our data and personal information? How far do we trust the cloud? (They say there are two kinds of business: those who know they’ve been hacked and those who don’t know they’ve been hacked.)
- What is the role of regulation and how should we co-ordinate cross border ownership of assets and data flows?
- How do people renew skills throughout their lifetime so they can participate in the new economy? Learning can’t stop after school or higher education. Everyone will need basic digital fluency and technology literacy skills (even those who aren’t digital natives).
Finding solutions is essential if we are to reconnect those who feel disengaged from the global economy and help them to participate in the upside.
Governance for the digital future
Trust and security in the digital economy is a growing concern and this worry is exacerbated by geopolitical shifts across the globe. Brexit, unresolved debt issues in the EU and the constraints of the Euro in addressing them, the rise of populist and nationalist leaders all contribute to uncertainty about the way ahead. Historical alignments between Europe and the US, relationships with China and Russia, all seem in danger of splintering, raising issues of security and threats to open trade. In this context, the European Project must re-establish ownership of its democratic, open values on the global stage. EU institutions need to change and adapt, to meet current and future challenges.
What’s clear is that in this shifting geopolitical framework, the Internet will face new governance and security challenges. We need to look afresh at governance frameworks – both to protect consumers and to remove barriers to business growth. Tim Berners-Lee has proposed a ‘Magna Carta’ for the digital age, a bill of rights to protect the openness and independence of the web and its users. Co-ordinated regulation is needed to build consumer trust and to promote investment. The EU’s Digital Single Market is a good start. But more work is needed globally.
Time for responsive and responsible leadership
How do we drive greater inclusiveness in sharing the benefits of globalisation, free trade and liberalisation? Ultimately this is a leadership challenge in both the public and private sectors. At eBay, we will continue to lead by removing barriers to digital engagement so that businesses and individuals everywhere can connect with global opportunities and share in economic prosperity.
The purpose of eBay has always been to connect people. We are proud of our role in empowering millions of individuals and businesses to participate in and benefit from the digital economy – especially the small and medium sized enterprises (SMEs) which fuel economic growth in developed economies.
We know that digital skills and international trade (exports) are common factors for successful small businesses. Technology-enabled small businesses export at a higher rate (over 90%[i]), to more countries (19 on average[ii]) and with higher survivability rates (twice has high[iii]) than their offline counterparts. And this holds true across the globe: a small business in India, South Africa or Peru has exactly the same opportunity for success as a small business in the United States, France or Australia. That’s inclusion.
[i] 96% of European SMBs and micro enterprises on eBay exported in 2015
[ii] These businesses served customers in 19 different countries on average
[iii] Research carried out by eBay between 2011-2014 across the EU’s 28 member states showed the chances of surviving as an exporter are more than twice as high on eBay compared to the traditional economy.