Future of Cities Featured

A Preview to Building a Hyperconnected City

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Last year, Econsult Solutions’ thought leadership team, ESI ThoughtLab produced Smarter Cities 2025, a global benchmarking study which assessed various smart city initiatives to better understand how governments, citizens, and businesses were embracing new digital technologies.

Currently, our team is well under way with the 2019 follow-up study, Building a Hyperconnected City. This year’s research dives deeper, providing insights into specific business models, use cases, performance metrics, and other hard-to-access data on cities.

Below is a list of cities currently participating in our program. All cities that participate will receive a free, comprehensive database showing how their smart investments, plans, and outcomes compare to their peers.

So, what exactly is a hyperconnected city?

A ‘hyperconnected city’ is one that leverages new digital technologies to transform and interconnect key areas of an urban ecosystem in order to unlock the greatest potential economic and social value for its citizens.

Hyperconnected cities are using new technologies to provide the same services they have always provided for their citizens – however, now these solutions are becoming smarter, cleaner, and faster. Whether the value is captured in reduced waiting times for public transportation or safer city streets based on smart mobility solutions, cities around the world are employing new technologies to improve the lives of their citizens.

Preliminary Findings

Over the past 4 months, our team of economists and thought leaders have surveyed government officials spanning 50 countries to better understand their use of data and analytics across various dimensions such as energy and water, public health and safety, and mobility and transportation. Using the results from the survey, we have created The Hyperconnected Cities Index. The index is comprised of four main pillars–The Connected Citizen, Technology, Data and Analytics, and Cybersecurity.

ESI ThoughtLab classified smart cities into three categories: leaders, advancers, and implementers, based on their progress in becoming truly hyperconnected.

Preliminary findings include:

  • Cities are employing new technologies for a variety of purposes. For example, of the cities investing in AI, 60% are using it to drive IT infrastructure initiatives, 43% for mobility, and 42% for physical and cybersecurity.
  • Smart city leaders aim to deliver myriad benefits to their stakeholders. These benefits include attracting and retaining businesses (39%), filling significant talent gaps (35%), allaying public health concerns (32%), mitigating security risks (29%), and addressing income inequality (28%).
  • Smart initiatives are paying off.For instance, 38% of cities deploying smart mobility solutions have bolstered customer satisfaction and 32% have increased productivity and delivery times for business. Likewise, 45% of cities deploying smart environmental and energy initiatives have improved citizen health, 44% have reduced pollution, and 43% have stabilized energy prices.
  • Smart programs provide tangible gains in terms of ROI.Except for predictive policing, all 62 smart city initiatives in our study showed positive investment returns. The highest returns came in the mobility and transportation area: curb management (4.5%), and congestion charging (4.3%).
  • If not managed effectively, these initiatives can expose urban areas to increased cyber risks.For cities in our survey, the total cost of cyber loss events over the last year averaged $3.4 million, with 10% suffering losses between $10m and $20m.
  • Over half of the cities said that they were not well prepared for cyberattacks.The biggest vulnerabilities cited were financial and payment systems (54%), IT infrastructure and telecoms (51%), and mobility and transportation (40%). To cope with rising cyber risks, 82% of cities plan to increase their cybersecurity budgets next year, 39% by more than 10%.

Using these pillars, our thought leadership team has created a preliminary ranking of the 100 participating cities. Preliminary results from our index show many typical contenders such as Singapore, London, and New York but also revealed a few, surprising newcomers, such as Zurich and Tel Aviv. However, it is important to note that these are only preliminary results—we are still collecting more data on these cities, and adding new geographies to the list of participants.

As our database expands, followers of the program will be able to compare cities and their solutions using our city benchmarking tool. The tool will not only allow users to understand how the world is becoming more hyperconnected, but it will also provide a more transparent view into what an individual city is doing across various dimensions. Users will also be able to compare cities against one another.

The full results of our study, including the final ranking of cities overall, and by specific areas of connectivity, will be publicly available in late November, after being officially unveiled at the Smart City Expo World Congress in Barcelona, Spain. We are excited to continue our research of smart cities and can’t wait to share our findings with you!

 

Rebecca DeJoseph Rebecca DeJoseph is an Associate Director at ESI and a Senior Economist at ESI ThoughtLab. Prior to joining ESI, Rebecca worked as a senior economist in the Economic Analysis and Information branch of the Bureau of Labor Statistics.

The Next Phase of Telemedicine is Coming, is Philadelphia Ready?

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Healthcare is entering a phase of renewal as the industry returns to the original model of assisting patients in their homes and communities. Decentralized care was initially phased out in the early years of the US healthcare system as a result of difficult and extensive travel, a barrier which was initially resolved by centralizing care via the implementation of hospitals and clinics throughout the country. Now, rather than the traditional obstacles that once impeded patient services and outcomes, the greatest challenges in the US healthcare system come as a result of high cost of care and patient satisfaction. Technology could be the answer to these widespread issues in the healthcare system by providing patient-centered care quickly and at a lower cost, while eliminating long wait times, inconvenient travel, and high inpatient costs.

Telemedicine is a collective term for the use of digital and other telecommunication pathways in healthcare delivery and patient care. The infrastructure of telemedicine now includes the use of technologies such as the internet, wireless and terrestrial communications, video conferencing, chatbots, streaming media, and other digital channels.

The rapid infrastructural advancements being laid in the healthcare industry will lead to a drastic shift in healthcare employment in the country as technology becomes increasingly prominent in all levels of the field. Specifically, data analytics, data security, and other information technology positions will increase in demand as hospitals begin to implement telemedicine into present structures. According to the Bureau of Labor Statistics Occupational Outlook Handbook, the healthcare industry is expected to grow 18 percent from 2016 to 2026, more than any other industry in the country. A notable portion of these jobs will require computer literacy and data analysis skills as care continues to be delivered increasingly through telemedicine avenues.

According to HealthCare Weekly, the telemedicine industry is projected to grow at a compound annual growth rate (CAGR) of 19.2 percent and exceed $130 billion by 2025, up from $26.5 billion in 2018. By 2018, it’s estimated that 65 percent of interactions with healthcare facilities will occur through mobile devices. According to a 2015 research2guidance report, 80 percent of doctors already use smartphones and medical apps in their practice. Other trends include hospitals and insurance companies storing medical records in the cloud so that patients can access their test results online at any time.

In Philadelphia, telemedicine initiatives have already begun to reshape the region’s healthcare landscape with programs including Penn Medicine’s Center for Connected Care, Children’s Hospital of Philadelphia’s Dermatology Program, Temple Hospital’s Chronic Obstructive Pulmonary Disease Program, and Jefferson Hospital’s JeffConnect. These programs are bringing new innovative technologies and opportunities to the city and bridging the gap between those with and those without access to healthcare in the city whether it be due to distance, time, or economic disparity. Below is a map of the health centers in Philadelphia. From looking at the map, it is evident that there are areas in the city such as Kensington, Haddington, and Frankford that are underserved and in need of more healthcare service facilities. One way in which telemedicine is able to better serve these areas is by accessing these areas remotely through devices such as mobile phones, sensors that track real time data, and schools with access to remote physicians.

 

health care centers in philadelphia
Source: Open Data Philly

The next phase of telemedicine will include the introduction of widespread 5G, larger broadband reach, and the integration of telemedicine and insurance policies. In order for Philadelphia to remain a leading city in healthcare innovation, steps must be taken to improve the technological infrastructure of the city which is, as of now, less developed than the country average. Across the United States in 2017, the national broadband penetration rate by household was 83.5 percent in 2017 and in the Philadelphia suburbs, including South Jersey, it was 88.1 percent. In Philadelphia, the rate was 71.6 percent, the second lowest among the 25 largest cities. Below is a map of broadband access throughout the city. When comparing the above and below map, it is evident that the low-income areas which lack healthcare facilities also lack broadband access. In order to bridge the healthcare gap through the use of telemedicine, we must first bridge the digital divide of the city.

According to Pew Research, mobile phones have become a short-term solution to bridging this divide in Philadelphia and it is reported that 26 percent of low-income households are dependent on their mobile devices for internet access, up from 13 percent in 2013.  In order for Philadelphia residents to benefit from access to telemedicine services, forward thinking initiatives must be explored to create the steps towards more sophisticated technological infrastructures that would bring internet to low income areas of the city such as universal wi-fi, low-cost internet packages, and increased public facilities with internet access. In 2012, Comcast launched “Internet Essentials”, high-speed internet services to low-income parents with school-age children for the price of $10 a month, later expanding the program low-income veterans and senior citizens.

More importantly, state policy initiatives must draw level to the rapid technological shifts taking place in the healthcare industry in order for patients to gain access to telemedicine prospects. In the US, more than 32 states have passed a law that would facilitate the integration of telemedicine in today’s healthcare system. These laws would allow for healthcare professionals to be billed for telemedicine at a similar rate to in-person visits. This step is vital to the advancement of telemedicine in healthcare as insurance remains a prime gatekeeper to healthcare access. Without proper integration of telemedicine in insurance policy, we get what we are seeing today: low reimbursement rates and lack of service coverage for telemedicine services. In Pennsylvania, health insurers are able to classify telemedicine services differently from traditional services and often do not cover these services or offer reimbursements at traditional rates, preventing practices from adopting them.  In 2012, Senate Bill 780 failed to pass in Pennsylvania, a bill that would have authorized the regulation of telemedicine and the reimbursement of telemedicine services.

As we continue to see new technologies develop, we must also focus on laying a strong technical and policy foundation in Philadelphia that will allow for easy integration of new service opportunities in the field of telemedicine and healthcare. Both must work in unison in order for the city to excel in future healthcare prospects and take advantage of the increasingly technological advances happening in healthcare.

 

Kaitlyn MacLennan was an intern at ESI for the summer of 2019. Ms. MacLennan graduated from Temple University in May 2019, with Bachelor Degrees in Economics and Spanish. We wish Kaitlyn the best of luck in her future endeavors and thank her for her contributions to ESI this summer!

The Path to a Hyperconnected City

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For this Present Value post, we asked our research coalition behind Building a Hyperconnected City to offer their perspectives on the future of smart city solutions. Businesses and residents are embracing technological innovation faster than many cities can reach. These professionals and thought leaders span multiple industries and locations across the globe, providing a holistic view to creating an interconnected urban ecosystem.

In your opinion, what do you see as the biggest hurdle for cities to overcome in becoming a smart city of the future?

 

Nancy MacDonald, Vice President, Interim Director, Stantec’s Urban Places: Many cities around the world have already implemented some form of smart technology, but none have really achieved the perfect harmony of sustainability, affordability, mobility, and economic opportunity. It’s going to require some big thinking, and while technology is an important piece of the puzzle, we need intelligent planning to make our ideas work together and find solutions to urban problems that improve outcomes for the people living in our cities.

Maduabuchi Gerald, Co-founder, Uchald Integrated Ltd: The knowledge gap among investors, regulators, government officials and entrepreneurs. Inefficient business development processes, failure to localize business concepts in line with the people’s culture and social behavior, and inadequate research or studies for workable business plans before business start-ups has resulted in the failure of most business in Africa.

Steve Hamilton, Senior Manager, GPS Risk and Financial Advisory, Deloitte Transactions and Business Analytics LLP: Taxpayers seldom embrace expensive projects whose value they may not recognize, and cities often face budget constraints. The benefits, economic and other, need to be communicated and demonstrated. In communicating the value of these projects, there is tremendous room to experiment with multiple innovative financing models like pay-for-performance, share value capture, social or green impact bonds, various types of public-private partnerships, and data and asset monetization through things like road user charging or smarter curb management. Procurement and innovation models are changing, and we are just beginning to understand both the financial and non-financial opportunities.

Suparno Banerjee, Global Public Sector Lead, Enterprise, Nokia: New challenges and new opportunities will keep emerging. In a digital world, innovation can keep pace with these changes. Unlike previous development models, where new systems were meant to last almost unchanged for a significant length of time, the connected smart city requires that we think of innovation on a continuous basis.

Chungha Cha, Co-founder & Chair, Re-imagining Cities Foundation: Finance is absolutely the biggest hurdle. Governments do not have enough capital to fund many smart city initiatives. This results in a diverse range of small smart city projects in “silos” and, in most cases, have failed to ramp up into larger, impactful projects.  Governments need to attract private investors, in the form public-private partnerships into large, impactful projects worth investing in and showcasing to other cities to learn and benchmark. And, in order to attract the attention of large private investors, the size of projects need to be US$50-100 million or more. Lessons learned from a smart cities workshop earlier this year and, hopefully, more detailed workshops to understand how we can build “smarter and greener” without over investing so that we can achieve the investment returns required to attract private capital.

 

What is the first step cities should take in becoming ‘hyperconnected’?

 

Joan Ricart, Co-academic Director, IESE: Becoming hyperconnected is a journey that starts with data integration and the development of an open data strategy, followed by the necessary technical infrastructure for connectivity. With this foundation, different steps of collaboration come into play, representing a total reorganization of City Hall.

Nancy MacDonald, Vice President, Interim Director, Stantec’s Urban Places: As an urban planner, I’m trained to listen to communities about their needs and then incorporate their ideas into the solutions we recommend—and that’s often where the best ideas come from. We have to start with the challenges we’re facing, and then think differently about potential solutions. It’s not about technology for technology’s sake. Integrated mobility, adaptable utilities, better buildings, and thoughtfully designed public spaces have the power to change the way we live for the better, but these solutions will be far more effective with input from the community.

Xiao Yang, Researcher, Urban Issues, ANBOUND: The construction of a smart city is not only a project, but also a process. Only by defining the design of the top layer, considering the overall situation and the long-term perspective, can we identify the advantages and disadvantages of a smart city, find a breakthrough point, break the inherent interests of various departments, and achieve optimal allocation of effective resources. Good top-level design will help clarify the staged goals of information digitalization, internet integration, and digital intelligence. In this way, the construction of smart cities can be clearly leveled and promoted in good order. Only then can we strengthen the integration with the surrounding cities, make good use of their experience of smart city construction, existing information, and platform resources, and reduce redundant construction.

Suparno Banerjee, Global Public Sector Lead, Enterprise, Nokia:   The first step for a city is to clearly define top priorities, so they will know where to focus their resources. Then key and relevant stakeholders can be brought together around the same table. Their work will include identifying which KPIs will define success, establishing ways to align for common and mutual success, beginning to build a platform that will allow onboarding of innovations and services that can improve the way the city operates and, overall, defining a roadmap of service delivery.

Chungha Cha, Co-founder & Chair, Re-imagining Cities Foundation: We strongly believe that the first step is to understand “WHY”… so why does any city want to get “hyperconnected”?  We strongly agree with ESI ThoughLab that, “by making cities smarter—not just in using technology but in all that they do—government leaders hope to drive competitiveness and growth, while making massive social, business and environmental improvements. But without a clear playbook for the future, cities run the risk of falling behind their peers.”

So, we believe the first step should be to come up with a masterplan. After finance, the next biggest hurdle is knowledge and manpower to effectively “develop, implement and manage” a holistic smart city masterplan.  We like what Orlando did by issuing an RFP to engage experts in the private sector to help develop a masterplan together.

 

What can residents do to move the conversation further on smart city solutions?

 

Bill Baver, Go to Market Leader, Smart World team, NTT Data: Residents have a key role in defining and validating the outcomes from smart city solution implementations. Residents should actively communicate with their elected officials and encourage others to get involved and attend in-person town hall meetings to be a voice for a smart city innovation. Residents should also actively utilize new technologies being implemented and provide feedback on the smart city solutions.

Kathleen O’Dell, Principal, Deloitte Consulting LLP: Residents can be an important source of data generation, solution development, and testing for both governments and businesses. They increasingly play the role of “prosumers” in smart cities—producing and consuming the data for better decision-making. For instance, with the growing ubiquity of wearable and connected devices, citizens can co-create data itself like reporting of potholes and helping to identify homeless people. Citizens can take a proactive role as co-creators in shaping smart city policies and initiatives. They can also be conscious and vocal about the change that smart city transformation will entail.

Maduabuchi Gerald, Co-founder, Uchald Integrated Ltd: Residents can create forums that will enlighten the public on the importance of having smart cities. This rise in awareness can create pressure on government to consider the option to deploy it within the cities. Forums can be online based, social media based, etc.

Wayne Best, Chief Economist, Visa: The best thing that residents can do is to engage and participate. Gain a level of understanding of the benefits and balance them against any concerns (security, privacy or otherwise) so that they are contributing to the process.

 

How important will cybersecurity be in ensuring trust in hyperconnected systems?

 

Joseph Viscuso, Senior Vice President and Director of Strategic Growth, Pennoni: Cybersecurity may be one of the most important aspects when implementing hyperconnected systems. As cyber attacks have become common, the public expects security measures to be in place, and that will extend to technologies throughout hyperconnected systems.

Suparno Banerjee, Global Public Sector Lead, Enterprise, Nokia: Cybersecurity will be absolutely essential to both protect citizens’ privacy and ensure that critical city services (such as public transportation, energy and public safety systems) can run smoothly and securely, twenty-four hours a day, every day.

Nancy MacDonald, Vice President, Interim Director, Stantec’s Urban Places: Data protection is a paramount consideration any time we look at deploying technology in our infrastructure. There are a lot of ways that data can be anonymized, and those discussions are happening around the world.

At the end of the day, technology is a means to building better communities, and it rests on a foundation of trust. Fostering community engagement is a great way to keep these trust levels high.

Wayne Best, Chief Economist, Visa: It will be crucial. At the core of a hyperconnected system is data that is aggregated, processed, and analyzed to deliver insights about consumption, movement and changing trends across a city. Data can be very powerful when applied to anticipate needs in real time as well as provide cities with insight that can help with future planning.

Typically data is quite segmented and decentralized across multiple city agencies, so creating a safe and reliable security design and process of governance to manage privacy concerns across a multi-stakeholder ecosystem is what will ultimately ensure trust in the system.

 

What are you most excited to see/looking forward to seeing in smart cities of the future?

 

Joseph Viscuso, Senior Vice President and Director of Strategic Growth, Pennoni: Improved mobility. As the population has increased with an influx of baby boomers and millennials, ride sharing has become more common in our urban centers to combat increased congestion. Implementing smart solutions centered around improved mobility will be a tremendous asset to our urban environments and improve the lives of city residents.

Rana Sen, GPS Managing Director, Deloitte Consulting LLP: How smart city initiatives deliver human outcomes and help solve social problems. The smartest cities can become more inclusive through service design, infrastructure planning, and mobility solutions, driving economic growth for everyone. It would be great to see how smart cities can enhance livability and drive more sustainable development for all.

Chungha Cha, Co-founder & Chair, Re-imagining Cities Foundation: Over the past several years, investments in property technology, referred to as “proptech” has skyrocketed to almost US$20 billion in 2018 and cumulatively approximately US$70 billion. Large real estate players are starting to invest in and adopt proptech to help enhance the performance of their assets. We see proptech as one of the key accelerators toward better buildings and smarter cities.

Xiaoqi Fang, Researcher, Urban Issues, ANBOUND: We hope that through the construction of smart cities, we can leave a wealth of digital assets for the history of human development. Cultural and artistic information is also in the process of rapid digitization. These are valuable urban digital assets that are relevant to future generations. Promoting a city’s history and cultural digital assets will enrich the most critical content platform of smart cities. It will also maintain the vitality of cultural assets in the digital and information age. In the future, smart cities should focus more on the city’s digital assets as a key value point, making them shine in the fields of culture, tourism and urban value.

Bill Baver, Go to Market Leader, Smart World team, NTT Data: Investments in smart technologies that enable less energy usage, reduce pollution and making the environment healthier for ourselves and the generations to follow will significantly help improve citizen health and reduce associated healthcare costs for individuals, employers and cities.

Wayne Best, Chief Economist, Visa: We see digital payments as one of the ways that cities can get creative and innovative in their smart city approach, which in turn helps to attract more business investment, residents and visitors. It really opens up a new frontier for cities all around the world.

 

How can businesses and government work together to provide the solutions that will generate substantial ROI (financial impact and social impact)

 

Raul Garcia Rodriguez, Regional Director of Operations, Bogaris: Governments should cover the financial gap for businesses to take on the SDGs until the moment they realize that sustainability is, in itself, increasing the ROI in the mid-long term, while the “traditional” model focuses more on the short-mid term ROI, which is no longer sustainable.

Rana Sen, GPS Managing Director, Deloitte Consulting LLP: Whether in mobility, energy, or any other domain, delivering the promise of a smart, hyperconnected city will require a true ecosystem of participants. Neither governments nor the private sector can do it alone. While private players gain more business, governments gain greater cost-efficiency and expertise. Leveraging private sector expertise, asset reuse, unlocking data value are some of the ways businesses and governments can generate a return on investments. The key, again, is to keep the constituent at the center of these initiatives.

Joseph Viscuso, Senior Vice President and Director of Strategic Growth, Pennoni: Cities that are not “smart” will not attract the best and brightest workforce, which in turn will not invite the most innovative existing and new business ventures. Additionally, cities are no longer competing within their own region, state or country, they are competing with cities around the world. Government must be educated that the old methodical ways of procurement will not serve them well in this movement.

Joan Ricart, Co-academic Director, IESE: Business and government need to find organizational mechanisms to co-create solutions and to implement and manage them through Public-Private Partnerships. Collaboration is the name of the game!

 

Successful thought leadership is a team sport, requiring close collaboration with our clients and the right blend of analytical, editorial, and marketing skills. Econsult Solutions and ESI ThoughtLab would like to give special thanks to our research coalition and participating cities committed to Building a Hyperconnected City.

 

Mike DalyMike Daly is a senior business development and marketing associate at ESI, and communications specialist for ESI ThoughtLab. Mike is responsible for enhancing ESI’s brand and work through traditional and social media, content development for the web, and managing the ESI blog, Present Value.

 

Lindsay Durkalec is a business development and marketing associate at ESI. In addition to assisting with proposals, Ms. Durkalec is responsible for enhancing ESI’s brand and work through traditional and social media, content development for the web, and managing the ESI blog, Present Value.

 

Companies Boost Budgets to Fight Evolving Cyberattacks

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Budgets will increase by 34% next year, according to a global survey conducted by ESI ThoughtLab and WSJ Pro Cybersecurity.

Companies worldwide expect to boost their cybersecurity investments by 34% in the next fiscal year, after raising them by 17% the previous year, according to a just-released study covering 467 firms across industries and based in 17 countries. About 12% of companies surveyed plan to bolster their cybersecurity investments by over 50%.

These increases come in the face of growing annual losses from cyberattacks, which for companies surveyed averaged $4.7 million in the last fiscal year—with more than one in ten firms losing over $10 million. That average loss equates to 0.114% of revenue across all firms surveyed. Losses are more severe for mid-sized companies than for large and very large companies, which have already taken greater action to secure their businesses.

Many executives believe that their cybersecurity investments are paying off. Firms report a decline in the impact from untrained staff, social engineers, and unsophisticated hackers over the last nine months. ESI ThoughtLab’s survey shows that the impact of cyberattacks from malware, phishing, and mobile phone apps also decreased over that period. Yet the escalation in overall reported cyber losses highlights that cybersecurity is an ever-evolving struggle, as hackers target not just individual companies but whole industries, searching for any vulnerability.

Although the impact from certain types of attacks has fallen, the survey shows a rise in others, such as incursions through company supply chains and ecosystems. “This is an example of what we call the ‘balloon effect’ in cybersecurity, where squeezing down on risks in one place causes others to appear elsewhere,” said Lou Celi, ESI ThoughtLab’s chief executive officer. “Thanks to improved cybersecurity, companies are more effectively mitigating risks from unintentional and less sophisticated threat actors, but more advanced adversaries are still finding a way in.”

The research shows that to combat evolving risks, companies need to take a proactive, multi-layered defense. Firms are responding by allocating the biggest share of their budgets to technology, while seeking the right balance between investments in people and process. They are also focusing more on risk identification to address emerging vulnerabilities and are investing more in resilience to ensure they can respond quickly to successful attacks.

Other calls to action from the study include:

  • Make sure you are investing enough in cybersecurity. Some industries, such as media and consumer markets, are allocating less and may be more exposed to cyber risks.
  • Think of cybersecurity like any other existential threat to your business. The risks are not just about privacy, liability, and stealing data; they also can create huge operational risks if business is interrupted and can have reputational impacts that can hurt market positions.
  • Pay attention to risks from partners and your supply chain. As firms draw on ecosystems of third parties to drive digital transformation, they increase their vulnerabilities to cyber risks.
  • Be aware that legal and regulatory risks are also rising substantially. Companies that do not comply with new standards face hefty penalties and legal consequences.
  • Implement rigorous incident training. To do so, put key stakeholders through a strong scenario exercise to prepare them for events when they occur, and to plan on how to respond quickly.
  • Measure your full losses, costs, and returns. When hit by a successful cyberattack, you need to understand all your costs—direct and indirect, tangible and intangible.

ESI ThoughtLab and WSJ Pro Cybersecurity carried out the survey in the spring of 2019 as part of a global research initiative titled The Cybersecurity Imperative. The current survey is a follow-up to a more comprehensive survey of 1,300 companies conducted in the fall of 2018. The latest survey was developed to track how executives’ investments, plans, and perspectives have changed over the last nine months. Learn more about our 2018 research initiative The Cybersecurity Imperative.

The Cybersecurity Imperative program was conducted with a coalition of leading organizations with expertise across the cybersecurity space, including Baker McKenzie, CyberCube, HP, KnowBe4, Opus, Protiviti, the Security Industry Association, and Willis Towers Watson. Each organization is an expert in its own field and provided valuable insights to help guide our research methodology and scope.

Download The Cybersecurity Imperative Pulse Report

Download the press release

What Do Jobs of the Future Look Like?

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We asked ESI’s experts and our partners, ANBOUND, a Beijing, China based global think tank, to give their insights on the future of technology, so we can offer both a US and Chinese perspective. They focused on four major topics: smart cities, jobs of the future, autonomous vehicles, and tourism-related apps. To view our previous ESI/ANBOUND Present Value posts, please click here. 

This week, ANBOUND staff and ESI’s Steve Wray and Sidney Wong give us their thoughts on how jobs will change, and what skills will be required for the jobs of the future.

 

With advancements in technology, what will be the jobs of the future?

ANBOUND: The development of technology has replaced some occupations with robots and machines, but it has also created numerous new jobs. Which occupations will disappear under this development? What characteristics do these fading occupations possess? What skills are required in the newly created jobs? Which kinds of new jobs meet the needs of our age, and which cannot be replaced?

We believe the jobs that are likely to be replaced faster include those that rely on human physical labor, repetitive tasks, and those that require no special skills and advanced intellectual activities. Jobs that cannot be easily replaced require attributes from workers, such as human emotion and interaction (e.g. caring, comfort, experience, resonance), and also human dynamic intelligence (the ability to organize, cooperate, communicate, and coordinate).

The technological development will shift the labor market toward jobs that require a deeper sense of  thought. These jobs will be customized according to the needs of customers and clients, and at the same time they will be more refined. The changes are in three aspects:

  • Increase in mental labor;
  • Increase in demand-oriented labor;
  • Increase in customized and specialized services.

robot

What new technologies will drive this transformation?

ANBOUND: The rapid development of Artificial Intelligence (AI) will reshape the way people work. AI has the potential to replace many existing jobs, particularly those requiring repetitive and manual labor. Some future jobs are less likely to be replaced by AI, such as creative work (e.g. scientists, painters, writers, and entrepreneurs), customized work (e.g. therapists), flexible work, and adaptable work.

One concern is that the rapid development of AI may lead to serious structural and cyclical unemployment of many workers. However, AI will not decrease the total number of jobs in the long run, instead it will create more job opportunities. Additionally, in the future, people will have more time for leisure and creative work.

In terms of education, it is necessary to cultivate new professional skills. However, to identify skills that will be demanded, more dynamic and continuous tracking is needed, along with educators well versed in the demands of future work.

Soon, AI will have a strong, comprehensive impact on how people work and live. For example, the emergence of AI has completely changed the thinking and methods of go-players, and this is just the tip of the iceberg. As our Chief Researcher, Chen Gong pointed out, the future world will be completely different, AI is a disruptive revolution that is far more exciting and surprising than the advent of the steam engine. It is foreseeable that in the future, AI technology will play a great role in all competitive situations from production to war, from daily life to decision-making.

 

What skills will be needed for future jobs? And what is the role of government in helping to manage change?

Steve WrayESI–Steve: When we look at the jobs of the future, we see that most jobs will require technological literacy, and many jobs fundamentally changed due to advances in automation and AI. What this means is that while there may be fewer production or manufacturing jobs requiring direct human contact with the goods being produced, there will be new opportunities designing, programming, repairing, and interacting with the machines and technologies that are producing manufactured items. This should create new categories of jobs that require integration of human factors and machine learning to create new applications, tools, and products.

ANBOUND: There will be an increase of customized and professionalized services: health care, private doctors, personal care, and other services; occupations requiring person-to-person interaction with emotional and interpersonal communication, which is different from a machine’s interaction with people.

Freelance and entrepreneurial opportunities will increase. In a traditional industrial society with clear labor division, everyone is engaged in their own profession, one must complete work in front of machines and equipment every day without doing other things. Now, in the internet age, communication has become more convenient, coordination has become easier. You can coordinate with another person who is geographically far away from you. Moreover, people are free to choose their time and place of work. Freelancing is becoming more and more popular; for example, today’s experts and professionals are serving in multiple roles. They work with others in various companies and platforms, maximizing use of their knowledge and skills through the internet. This trend will become more and more obvious in the future.

ESI–Steve: In the US, we call that the “gig” economy, with many people often having a variety of jobs— they may drive for a rideshare at night and do computer coding during the day. But with more people working for themselves, the role of government in providing services that used to be provided by employers in the US, like health care insurance, and pensions and investment accounts, may need to be provided by government in some way.

In addition, government and local community institutions have a large role to play in managing the transition to a more technology-focused economy. Schools and higher education institutions will need to be able to rapidly change curriculum, retrain teachers, and work closely with students and parents to allow them to develop the skills needed to compete for these new jobs. Non-profit or public sector workforce development organizations will have to help older workers transition into new roles, providing them with the ability to retrain and gain new skills while leveraging their knowledge and understanding of industry.

technology

What are some of the challenges we face during this transition in training for future work?

ESI–Sidney: Many companies will be seeking technical and analytical workers who can effectively and dynamically identify and solve problems. They need to work flexibly in a team setting but also as an individual in various locations. Companies are becoming more like strategic brokers of talented people. Such work can be difficult to train for in our existing educational system which focuses on individual performance and the reward of educators as “paper publishers.” In October, I was in Hong Kong discussing this issue with a friend who was appointed to chair a new division, “integrative systems and design” for multidisciplinary education. We had a two-hour discussion about obstacles and challenges, like types of students, new kinds of instructors, new reward systems for faculty, corporate sponsorship, and so on.

Teamwork with free interaction is the essence of solving difficult problems with no preconceived boundaries. Currently, individuals who can learn fast and integrate multiple skills will adapt faster to the future job market. A higher education system that focuses on basic research but ignores application and problem solving is less capable of nurturing new workers.

 

ANBOUND is a multinational independent think tank that focuses on information research and analysis in the areas of public policy, finance, and risk. ANBOUND has provided strategic assessment, policy analysis, economic analysis, and other research and information services to governments, top 500 companies, and financial institutions in Mainland China.

 

Sidney Wong, Ph.D. is a senior advisor with Econsult Solutions, Inc., a fiscal impact expert, and the project lead of Community Data Analytics. He previously worked as a senior consultant with the World Bank in evaluating the quality of Project Appraisal Documents in the South Asia Region.

 

 

Steve WraySteve Wray is a vice president and director at Econsult Solutions. Mr. Wray leads projects focused on regional economic competitiveness and civic strategy and policy. He brings to ESI’s clients extensive experience connecting the public, private and non-profit sectors with analysis and strategy development of economic growth, talent development, infrastructure and governance issues.

Capitalizing on the Economics of Cybersecurity

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For most companies, analyzing the economics of cybersecurity is elusive—and as many have told us, more of an art than a science. According to our Cybersecurity Imperative study of 1,300 worldwide executives last year, only 29% felt that their cybersecurity metrics were well understood by senior management and the board. About three-quarters were taking active steps to improve these metrics.  

 One stumbling block is that companies often do not measure the full costs of a cyber-attack. For example, one out of five companies surveyed do not measure reputational or opportunity costs, and another 11% do not measure the productivity losses from disruptions caused by risk events. Far fewer measure the upside of cybersecurity, which can speed up digital transformation, improve competitive positioning, and increase customer retention.  

 Yet another challenge for CISOs is quantifying what your losses would have been without your cybersecurity investment, which requires more sophisticated risk probability formulas. Say your company spends $5 million on cybersecurity in one year and sustains $3 million in losses from cyberattacks that year. At first glance, the ROI may seem negative. But if your company would have suffered $20 million in losses without that investment, then in this example, your firm would have seen a benefit of $17 million.  

With our latest April 2018 cybersecurity pulse survey showing that companies plan to increase their cybersecurity investment by 23% over the next year, CISOs and their management teams need to have more clarity on the metrics of cybersecurity to make sure they make the right decisions and investments. Because of the secrecy around cybersecurity, CISOs across industries have told us that having access to proper benchmarking data is one of the biggest impediments they face.   

Filling the data gap 

That is why ESI ThoughtLab is teaming up again with Wall Street Journal Pro Cybersecurity and a multidisciplinary group of sponsors and advisors to conduct a rigorous study into the economics of cybersecurity. Our 2019 initiative, Driving Cybersecurity Performance will fill a wide information gap on the metrics of cybersecurity by gathering much-needed cybersecurity data from 1,000 CISOs across industries, sizes, and regions. This benchmarking data will include: 

  • Investment levels in people, process, and technology  
  • Budget allocations across the NIST framework: identify, detect, protect, respond and recover 
  • Organizational approaches and cybersecurity headcount and resources  
  • Performance results across a range of cybersecurity metrics   
  • Full costs of cyberattacks, including both direct and indirect costs, such as reputational and productivity losses  
  • The estimated ROI on these investments and risk probabilities of cyberattacks  

 

We are now actively seeking sponsors, advisors, and participants for this ground-breaking research initiative. Please get in touch with Barry Rutizer, Corporate Director and Vice President of Client Relationships, if you would like more information on how your organization can get involved.