Embracing Disruptive Innovation
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In just six months, the number of smartphones in use today, estimated at 500 million, will increase by an incredible factor of eight to at least 4 billion. By 2020, there will be 50 billion networked devices globally – that is six smartphones, tablet computers, laptops, Internet-ready appliances and vehicles and other gadgets for every man, woman and child on the planet.
“We really are living in a hyperconnected reality,” marvelled Marissa Mayer, Chief Executive Officer, Yahoo, USA, in a session on The Global Agenda 2014. She acknowledged the disruption and potential risks, but reckoned that hyperconnectivity “can also be incredibly productive”.Marissa Mayer
Chief Executive Officer, Yahoo, USA; Co-Chair of the World Economic Forum Annual Meeting 2014
Marissa Mayer
Chief Executive Officer, Yahoo, USA; Co-Chair of the World Economic Forum Annual Meeting 2014
“2014 will be a tipping point. Mobile, bandwidth and the Internet of things are going to change people’s lives.”
“Disruption usually results in productivity gains and redistribution of wealth,” Mayer said. “We need to use that redistribution of wealth to fuel investment in education, communication and inclusion to get a nice virtual cycle and make sure that the productivity gets used to solve some of the global problems.”
It is a sentiment shared by the 2,500 public figures, business leaders and representatives from civil society, academia, the media and arts who took part in the Annual Meeting. In session after session, participants discussed the various strands of disruptive innovation that are changing the way we live, learn, communicate and collaborate.
Christophe de Margerie
Chairman and Chief Executive Officer, Total, France; Co-Chair of the World Economic Forum Annual Meeting 2014
Christophe de Margerie
Chairman and Chief Executive Officer, Total, France; Co-Chair of the World Economic Forum Annual Meeting 2014
“Today there is no more peak oil, but there is still peak capacity.”
The consensus was that the transformations must be managed in ways that optimize the gains and mitigate the risks. As Kris Gopalakrishnan, President, Confederation of Indian Industry (CII) and Vice-Chairman, Infosys, India, observed: “Technology is going to create significant opportunities, but how we as humans adapt to the changes will be very important.”

01: Steve Sedgwick, Presenter, CNBC, United Kingdom; Fatih Birol, Chief Economist, International Energy Agency, Paris; Gao Jifan, Chairman and Chief Executive Officer, Trina Solar, People’s Republic of China; Maria das Graças Silva Foster, Chief Executive Officer, Petroleo Brasileiro – PETROBRAS, Brazil; Ulrich Spiesshofer, Chief Executive Officer, ABB, Switzerland; Peter Terium, Chief Executive Officer, RWE, Germany; Energy Utilities and Technology Community Leader 2013 and Co-Chair of the Governors Meeting for the Electricity System; and Ichita Yamamoto, Minister of State for State for Science and Technology Policy and Minister of State for Space Policy of Japan
02: Huguette Labelle, Chair, Transparency International, Germany; Global Agenda Council on Responsible Mineral Resources Management
Innovation revolution
Virtually every sphere of human activity will be affected, no more so than the dynamics between citizens and institutions. The model of top-down leadership, where rulers and chief executive officers (CEOs) hand down diktats for everyone else to follow, is being upended. Hyperconnectivity and websites that offer crowdsourcing, analytics and predictive algorithms can potentially tell people at the top exactly what those in the middle and bottom of the pyramid are thinking and feeling.
Kris Gopalakrishnan
President, Confederation of Indian Industry (CII); Vice-Chairman, Infosys, India; Co-Chair of the World Economic Forum Annual Meeting 2014
Kris Gopalakrishnan
President, Confederation of Indian Industry (CII); Vice-Chairman, Infosys, India; Co-Chair of the World Economic Forum Annual Meeting 2014
“Technology is going to create significant opportunities, but how we as humans adapt to the changes will be very important.”
At the same time, the governed now have the means to keep tabs on their rulers and hold them accountable – and galvanize action against those that they see as not upholding their part of the social contract. The Arab Spring uprisings, for example, were enabled in large part by hyperconnectivity. Citizens learned what was going on via texts, tweets and blogs, and activists mobilized support and coordinated protests using mobile phones, social media and the Internet.
Commerce is also greatly affected. Retailing giants such as Wal-Mart are turning into IT companies that marry the digital and physical worlds in their operations and harness the power of analytics and algorithms to know how customers behave individually and collectively. “You need to navigate from yesterday to tomorrow using the tools of today,” said Doug McMillon, Incoming President and Chief Executive Officer, Wal-Mart Stores, USA, in a session on Disruptive Innovation Ahead!
Ellen Johnson-Sirleaf
President of the Republic of Liberia
Ellen Johnson-Sirleaf
President of the Republic of Liberia
“One has to build resilience when there is fragility in the economy.”
In an IdeasLab session on Advanced Manufacturing with the Massachusetts Institute of Technology, participants explored how automation, digitization, cloud computing, advanced robotics and 3D printing are some of the innovations that are transforming manufacturing, retailing, knowledge work and business processes. The rise of the sharing economy, which is enabled by hyperconnectivity, adds another dimension to change. When consumers rent instead of purchase, companies must focus on building community trust and good customer experience, or shift to products that do not lend themselves to sharing, such as luxury items.

01: Wang Weiguang, President, Chinese Academy of Social Sciences (CASS), People’s Republic of China
02: Alan Clark, Chief Executive Officer, SABMiller, United Kingdom
Benefits and risks
There is no doubt that innovation is helping to bring about a better world. Joseph Jimenez, Chief Executive Officer, Novartis, Switzerland, is convinced that emerging capabilities in bioinformatics, which combine computer science, statistics and engineering to process biological data, will transform the healthcare industry. “This will make advances in medicine that we have not seen in the past 10 years,” he said.
Benjamin Netanyahu
Prime Minister of Israel
Benjamin Netanyahu
Prime Minister of Israel
“Israel is often called a start-up nation. I call it the innovation nation.”
But innovation also brings risks. Excessive technology usage, for example, can contribute to mental illness. There are fears that robotics and other technologies are destroying jobs in manufacturing, information management and even teaching, because Internet courses can be offered to thousands of students at a time. “Software is eating the world,” warned Erik Brynjolfsson, Professor, Sloan School of Management, Massachusetts Institute of Technology, USA, in a Forum debate on Rethinking Technology and Employment.
“Big Brother” concerns pertaining to privacy rights are also coming to the fore. “This question of the right to privacy must be one of the defining issues of our time,” said Salil Shetty, Secretary-General, Amnesty International, United Kingdom; Global Agenda Council on the Role of Civil Society, in the Big Brother Problem session. Ubiquitous networked devices gather data, sometimes without the knowledge or consent of users, which organizations may access under the guise of national security or for competitive business advantage.
Enrique Peña Nieto
President of Mexico
Enrique Peña Nieto
President of Mexico
“We are ready to move forward, excel and have economic development opportunities.”
Cyber criminals are stealing credit card information and other commercially valuable data that companies store and are supposed to safeguard. But in a world of almost constant disruptive innovation, it is not too difficult to buy (or steal) ever sophisticated software tools to aid the criminal enterprise. For companies intent on protecting customer and other data, this is “a race without a finishing line,” as Peter T. Grauer, Chairman, Bloomberg, USA, aptly put it during a CEO Series session on Cracking the Code on Cyber Resilience.

01: Orit Gadiesh, Chairman, Bain & Company, USA; World Economic Forum Foundation Board Member
02: Klaus Schwab, Founder and Executive Chairman, World Economic Forum; and Hassan Rouhani, President of the Islamic Republic of Iran
Call to action
The answer is not to restrict or put a stop to innovation, even if that were possible. The right course is for governments and businesses to create a nurturing environment for innovation to flourish. The role of the public sector, said one panellist in the Regulating Innovation session, is to help “plant the seed”, which can be done by establishing business incubators and economic zones, easing the entry of foreign talent, and offering tax breaks and incentives for research and development.
Tony Abbott
Prime Minister of Australia
Tony Abbott
Prime Minister of Australia
“Ultimately, the G20 is not about us in government; it is about the people, our masters.”
At the same time, governments should be vigilant about detecting and prosecuting cyber crime, while being transparent about the way they themselves collect and use personal data. Government policies must preserve the anonymity of data, reduce over-collection of data, and set clear guidelines for the way personal data is collected and used. Businesses should consider establishing privacy boards to oversee management and collection of consumer data, and hire independent auditors to evaluate their data security processes.
While innovation inevitably kills some jobs, it does create new employment and business possibilities. But governments, schools and companies must help equip young people and those made redundant by innovation with the knowledge and skills required by these new jobs. Training and technical and financial help to develop entrepreneurship are also important – not necessarily an expensive undertaking with mass learning innovations such as Massive Open Online Courses.
David Cameron
Prime Minister of the United Kingdom
David Cameron
Prime Minister of the United Kingdom
“It’s time to bring the benefits of globalization home to ensure the benefits are felt by hard-working people in terms of security, stability and peace of mind.”
“I am optimistic that we will see new kinds of jobs created, particularly to help with youth unemployment,” said Judith Rodin, President, Rockefeller Foundation, USA, and Co-Chair of the Annual Meeting 2014. “Technology can be part of the solution instead of part of the problem.” It is up to governments, businesses, civil society and individuals themselves to make that statement come true.
For more about Embracing Disruptive Innovation:
Reshaping the World through Entrepreneuship, Education and Employment
http://wef.ch/52975
Disruptive Innovation Ahead!
http://wef.ch/52637
Regulating Innovation
http://wef.ch/52324
The Big Brother Problem
http://wef.ch/52092
The New Digital Context
http://wef.ch/52199
Can Technology turn traditional aid on its head?
http://wef.ch/f3F43
How can companies thrive in the age of disruption?
http://wef.ch/a3Al8