2020

Newark Connected City

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New Jersey Institute of Technology (NJIT) in partnership with the City of Newark and Invest Newark engaged Econsult Solutions to craft a connected city plan for Newark, New Jersey. By becoming a connected city, Newark can leverage smart technologies to further interconnect the local government and its citizens. The Connected Newark plan serves as a framework for future policy and investment as Newark progressed along its connected city journey.

Newark is seeking to achieve economic, environmental, and social sustainability. With the growth of urbanization, cities are struggling to balance growing populations, increases in expenditures, shrinking housing supplies, depreciating infrastructure, and environmental concerns while competing with other cities to secure investments, jobs, and talent. Now more than ever, cities must turn to rapidly improving technologies to implement the best solutions for their residents.

The Strategic Plan for Newark’s Connected City Future prioritizes opportunities as well as highlights best practices, and defines implementation steps to help Newark realize its full technological potential. The plan reflects the values of Newark and their alignment with Mayor Baraka’s strategic goals for the city. The strategic plan provided a business case for adapting connected cities strategies through smart technologies to help shape the future of Newark.

ESI compiled information and then undertook a SWOT analysis and a review of COVID responses undertaken by the city. Those then informed a four-part plan for future City action.

Managing the Challenges of a Post-Pandemic World: Cities 4.0

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During the COVID-19 pandemic, ensuring a healthy, safe, and prosperous future for citizens has been a burning imperative for city leaders around the world. At the same time, the health crisis has raised the importance of the U.N.’s Sustainable Development Goals (SDGs), which many cities have adopted as a framework for achieving their social, environmental, and economic objectives. In a new survey of 167 cities conducted by ESI ThoughtLab for its study Smart City Solutions for a Riskier World, over a quarter of city leaders said that the pandemic had made the SDGs a higher priority. A third said the crisis had stimulated new thinking about their social priorities overall.

The pandemic also is accelerating the need for cities to adopt smart innovation and digital solutions, as it transforms citizen behaviors and expectations, and redefines how people work and live: for 63% of cities, the biggest lesson learned during the pandemic was just how crucial smart city programs were for their future. And it is underscoring the role of collaboration among business, government, and academia to address long-term urban challenges and to build resilience. Those cities that make the most progress on the SDGs while also leading in smart city innovation will be the most successful as we enter the post-pandemic world.

How Innovation Can Drive Sustainable Development Goal’s

A prime objective of this ongoing research is to assess how smart urban solutions can help cities achieve the SDGs. To measure the progress that cities have made in driving the SDGs, ESI ThoughtLab developed an SDG progress framework. Our framework categorizes cities into three groups: implementers, which are in an early stage of SDG adoption; advancers, which are making progress on a range of SDGs; and sprinters, which are making fast progress on most areas of sustainable development. Twenty-two percent are classified as implementers, 57% as advancers, and 21% as sprinters.

According to the research, nearly 8 in 10 cities have adopted the SDGs as part of their plans and around 60% have made considerable progress across all the 17 goals. Small cities with less than a million people are much farther along than larger cities in embracing the SDG framework. By region, North American and European cities are ahead, while those in Africa and Asia trail behind.

Our economists have also created a smart city maturity framework to assess which cities are ahead in using smart city solutions and technologies to achieve their social, environmental, and economic goals. A smart city leader was defined based on its maturity in the use of technology across the urban domains, its use of data, and the steps that it takes to ensure citizen and stakeholder engagement. Thirty percent of cities are classified as beginners, 49% as intermediates, and 21% as smart city leaders.

The Rise of Cities 4.0

To analyze the impact of smart city solutions on sustainability, we identified a subset of SDG champions that also lead in smart technology. These cities, which we call “Cities 4.0”, serve as models for the cities of the future. They continue the evolution of smart cities from Smart Cities 1.0 to Smart Cities 3.0 and go beyond, by showing how to effectively use technology, data, and citizen engagement to drive the SDGs. They are in step with new ways of working and excel at using an agile ecosystem of partners to spur change. They demonstrate how, with the expectations of citizens rising, and businesses gearing up for the Fourth Industrial Revolution, the most successful cities will be digitally transformed, fully sustainable, and skilled in entirely new ways.

What sets Cities 4.0 apart?

Cities 4.0 are well ahead in all aspects of data management. They are masters at collecting, integrating, protecting, and making data accessible to citizens. Most of them have policies, resources, and budgets in place to manage and analyze data at a high level of excellence. They also tend to be more open in their use of data and integrate it across city departments.

Cities 4.0 also unlock greater value from their ecosystems. They are better at proactively managing their partnerships and they develop partnership skills across their city domains. They prioritize public-private partnerships more than others and are more open to new ideas. And they enjoy greater personnel, fiscal, functional, and regulatory independence from national, state, and provincial control.

Cities 4.0 also ensure that citizens are engaged and digitally connected. They use a combination of digital and traditional methods to communicate with citizens. They actively engage citizens and stakeholders when setting goals, demonstrate the value of projects, and ensure that disadvantaged populations, including the poor and handicapped, are involved in the decision-making process.

 

ESI ThoughtLab’s ongoing research program into sustainability and smart city solutions will serve as a roadmap for city actors across the world looking for best practices and to compare solutions. Our full findings will be available in March 2021, but readers can already visit our Smart City Solutions for a Riskier World program microsite for the latest articles, insights, program updates, and planned events.

Dr. Daniel Miles is the Chief Operating Officer for ESI ThoughtLab, Econsult Solutions’ thought leadership arm. As part of his work for ESI ThoughtLab, Dr. Miles specializes in assessing the impact of technologies on companies, cities, industries, and business performance. He has served as the research director on Smarter Cities 2025: Building a Sustainable Business and Financing Plan, Building a Hyperconnected City, and Smart City Solutions for a Riskier World, to name a few. He has also led studies on cashless cities, autonomous vehicle readiness, the economics of cybersecurity, the ROI of artificial intelligence, and digital transformation of small businesses.

 

What are the Potential Benefits of Universal Access to Retirement Savings?

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In Collaboration with Georgetown University McCourt School of Public Policy, Center for Retirement Initiatives.

 

What are the Potential Benefits of Universal Access to Retirement Savings?

An Analysis of National Options to Expand Coverage

The Center for Retirement Initiatives (CRI) at Georgetown University engaged ESI to assist the Center in developing an analysis of national options to expand retirement savings coverage. The CRI study examines how characteristics such as account type (payroll deduction IRA vs. 401(k)), the employers required to participate, and default levels of employee contributions and any employer contributions will drive access, savings, asset growth, and retirement income over time. The approaches analyzed would result in significant expansions of access and participation among the estimated 57.3 million private sector employees who are not offered any workplace retirement plan today.

More than 57M Employees Lack Access to a Retirement Savings Plan in their Workplace (2020)

Modeling was undertaken on several policy scenarios, selected based on the range of state programs and national proposals, to under their impacts on retirement savings participation, savings, and government expenditures and revenues. Regardless of the model selected, the study concludes that the benefits to savers, retirees, and the nation’s fiscal and economic well-being can be enormous.

Depending on the design features, a national approach to universal access to retirement savings which would require some or all employers to offer their workers either an IRA or 401(k) could:

  • Increase the number of workers saving for retirement in the year 2040 by 28–40 million, with participation from about 50–70% of private sector workers who currently lack access;
  • Help a young worker with a modest income who starts saving early and follows savings defaults for 40 years to save enough to generate as much as $14,320 in additional annual income for retirement, increasing to $21,300 in annual income if eligible to take advantage of a refundable Saver’s Credit;
  • Increase cumulative total retirement savings between $1.4 trillion and $1.9 trillion by the year 2040; and
  • Accelerate economic growth, increasing national GDP by $72 billion to $96 billion in the year 2040.

This report draws from the experience of other countries and from the early state-facilitated retirement programs in the U.S. to make the case that universal access to retirement savings options can be achieved in a simple, cost-effective manner with private market providers ready to compete to offer options for workers.

Firms will Invest More in AI After the Pandemic, but Delivering ROI will take Skill, Scale, and Time

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ESI ThoughtLab study of 1,200 organizations reveals that generating ROI on AI is still a work in progress that requires a focus on strategic change

September 15, 2020 (Philadelphia, PA) – Two-thirds of senior executives across industries—and nearly nine out of ten leaders from the world’s largest enterprises—believe that artificial intelligence (AI) is vitally important for the future of their businesses and will be upping their investments in the post-pandemic era. Yet their companies are now seeing an average ROI of only 1.3%, and 40% of AI projects are not yet profitable, according to Driving ROI through AI, a just-released research study conducted by research firm ESI ThoughtLab and a coalition of AI leaders, including Appen, Cognizant, Cortex, Dataiku, DataRobot, Deloitte, and Publicis Sapient.

The reason for this paradox, according to the research, is that AI initiatives require time, expertise, and scale to deliver on their promise of high returns. With the pandemic speeding up the need for quick data-driven decision-making, companies should act now to develop the skills, platforms, and processes that can enable them to achieve the full strategic, operational, and financial benefits from AI.

As part of a rigorous research program, ESI ThoughtLab economists benchmarked the AI practices, performance results, and three-year plans of 1,200 companies in 12 industries and 15 countries, which together have a combined revenue of $15.5 trillion (or about $12.9 billion per firm). Conducted during the COVID-19 outbreak, the study reveals the value that AI can bring in a socially distancing, digital-first world—including access to time-critical data, events-driven forecasts, personalized digital experiences, flexible work processes, rapid decision-making, tighter cybersecurity, and greater cost efficiencies.

But executives should not expect fast results

The research shows that delivering ROI on AI can be elusive for the uninitiated and slow going even for experienced organizations. Those in earlier stages of AI adoption often see flat results. It is not until they scale AI more widely across their enterprises and become leaders that the ROI rises to 4.3%. With frequently high upfront costs in data preparation, technology adoption, and people development, it takes an average of 17 months for a firm to reach break-even and months more to generate significant returns.

Most companies, even leaders, are still relatively early in their AI journey. Only about one-quarter of AI projects are now in widespread deployment among AI leaders. Many AI projects are still in pilot or early deployment stages. However, firms are planning to boost their AI investments by an average of 8.3% annually over the next three years, bringing their annual AI spend from $38 million currently (or 0.75% of revenue) to over $48 million.

The ROI of AI comes from strategic change

As companies progress in AI use, they often shift their focus from automating internal employee and customer processes to delivering on strategic goals. For example, 31% of AI leaders report increased revenue, 22% greater market share, 22% new products and services, 21% faster time-to-market, 21% global expansion, 19% creation of new business models, and 14% higher shareholder value. In fact, the AI-enabled functions showing the highest returns are all fundamental to rethinking business strategies for a digital-first world: strategic planning, supply chain management, product development, and distribution and logistics.

The study found that automakers are at the forefront of AI excellence, as they rush to use AI to deliver on every part of their business strategy, from upgrading production processes and improving safety features to developing self-driving cars. Of the 12 industries benchmarked in the study, automotive employs the largest AI teams (557 people on average vs. 370 for all industries) and has the largest AI budgets ($59.4 million on average vs. $38.3 for all industries). With the government actively supporting AI under its Society 5.0 program, Japanese companies lead the pack in AI adoption. Unlike in the US, where AI is viewed often as a threat to jobs, firms in Japan tend to see AI a way to fill the employment gap caused by an aging population and stringent immigration laws.

Driving high ROI from AI

To drive AI performance, executives should consider these best practices uncovered by the research:

  1. Begin with pilots, then scale AI applications across the enterprise. Companies starting out should work closely with business teams to identify use cases and demonstrate AI’s worth through pilots. But the true value of AI can materialize only with widescale deployment when firms can offset their upfront costs with substantial business gains.
  2. Lay a firm foundation. Organizations should have the proper IT and data management system in place; have a secure and sufficient budget; work through the data security, privacy, and ethical risks of AI; develop a clear vision and plan that takes into account AI-driven strategic transformation; obtain senior management support; and have a robust ecosystem of partners and suppliers.
  3. Get your data right. Nine out of ten AI leaders are advanced in data management. But ensuring your data is in good shape is not enough; organizations should bring in a diverse set of data, such as psychographic, geospatial, and real-time data. The study found that combining different types of data can create a multiplier effect on AI returns.
  4. Solve the human side of the equation. AI is as much about people as technology. AI leaders spend 27% of their AI budget on developing and hiring people, almost twice the percentage that AI beginners spend. They are also more apt to appoint specialists, such as Chief AI and Data Officers, to lead their AI initiatives. They outsource less and build internal teams more.
  5. Adopt a culture of collaboration and learning. About 85% of companies that generate large AI returns work to ensure close collaboration between AI experts and business teams. AI leaders are better at providing non-data-scientists with AI skills. They also decentralize AI authority to help ensure that AI responsibility and expertise is distributed across their organizations

“As the pandemic propels businesses into a digital-first world, AI will become a key driver of corporate growth  and competitiveness. But building proficiency in AI is not easy,” said Lou Celi, ESI ThoughtLab CEO and program director for Driving ROI through AI. “AI is not a magic bullet. It can fail to deliver results if the wrong business case is selected, the data is  prepared incorrectly, or the model is not built for scale.”

Additional information on the study can be found by visiting www.esithoughtlab.com or by contacting:

Lou Celi, Program Director
ESI ThoughtLab
917-459-4614
Lceli@esithoughtlab.com   		     Mike Daly, Marketing Director
    ESI ThoughtLab
    215-717-2777
    Mdaly@esithoughtlab.com  

 

About the research coalition 

ESI ThoughtLab is an innovative thought leadership firm that creates fresh thinking and actionable insights through rigorous research and evidence-based analysis. Our firm specializes in using the latest quantitative and qualitative tools to examine the impact of technology on companies, cities, industries, and business performance. ESI ThoughtLab is the thought leadership arm of Econsult Solutions, a leading economic consultancy, with direct links to the academic community.  

Appen collects and labels images, text, speech, audio, and video used to build and continuously improve the world’s most innovative artificial intelligence systems. With expertise in more than 180 languages, a global crowd of over 1 million skilled contractors, and the industry’s most advanced AI-assisted data annotation platform, Appen solutions provide the quality, security, and speed required by leaders in technology, automotive, financial services, retail, manufacturing, and governments worldwide. Founded in 1996, Appen has customers and offices around the world. 

Cognizant is one of the world’s leading professional services companies, transforming client’s business, operating, and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build, and run more innovative and efficient businesses. Headquartered in the U.S., Cognizant is ranked 194 on the Fortune 500 and is consistently listed among the most admired companies in the world. 

Cortex is the enterprise SaaS solution for marketing executives at leading brands to predict the performance of their visuals using AI and machine learning. By leveraging Cortex’s powerful consumer insights, brands such as Marriot, Kao, Mondelez, and more are creating award-winning visual creative, at scale, that drives reliable results. 

Dataiku is the platform democratizing access to data and enabling enterprises to build their own path to AI. More than 300 customers and 30,000 users (from data scientists to architects to analysts) across retail, e-commerce, health care, finance, transportation, the public sector, manufacturing, pharmaceuticals, and more use Dataiku to massively scale AI efforts. 

DataRobot is the leader in enterprise AI, delivering trusted AI technology and ROI enablement services to global enterprises competing in today’s Intelligence Revolution. The company’s proven combination of cutting-edge software and world-class AI implementation, training, and support services empowers any organization—regardless of size, industry, or resources—to drive better business outcomes with AI. With a singular focus on AI since its inception, DataRobot has a proven track record of delivering AI with ROI. DataRobot has offices across the globe and $431 million in funding from top-tier firms, including New Enterprise Associates, Sapphire Ventures, Meritech, and DFJ Growth. For more information, please visit www.datarobot.com   

Deloitte provides industry-leading audit, consulting, tax, and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people work across the industry sectors that drive and shape today’s marketplace—delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthy society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Now celebrating 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s more than 312,000 people worldwide make an impact that matters at www.deloitte.com. 

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States, and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about  to learn more about our global network of member firms. 

Publicis Sapient is a digital transformation partner helping established organizations get digitally enabled, both in the way they work and the way they serve their customers. We help unlock value through a start-up mindset and modern methods, fusing strategy, consulting, and customer experience with agile engineering and problem-solving creativity. As digital pioneers with 20,000 people and 53 offices around the globe, our experience spanning technology, data sciences, consulting, and customer obsession—combined with our culture of curiosity and relentlessness—enables us to accelerate our clients’ businesses through designing the products and services their customers truly value. Publicis Sapient is the digital business transformation hub of Publicis Groupe.  

The Economic Impact of Montana Film Production: An Analysis of the Industry and the MEDIA Act, 2019-2020

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The production of feature films, television series, and commercials can generate significant economic activity for their host communities, drawing out-of-town spending, generating jobs, and supporting local businesses. Because of this potential boost to local economies, many states provide incentives to attract productions as an economic development initiative.

In 2020, the Montana Film Office retained ESI to quantify the economic impact of Montana film production and the Montana Economic Development Industry Advancement Act (MEDIA Act). The MEDIA Act was created to provide a transferable income tax incentive to attract film, television and other media production to the State.

Our report provided an analysis of the economic, fiscal, and societal impacts from film and television production in the State and specifically evaluates the impacts associated with the MEDIA Act Tax Credit Program. Impacts were evaluated for film, television, and other production activity over an 18-month period (January 2019–June 2020).

The benefits to local communities from the film and entertainment industry are considerable. When a production shoots on location, it brings jobs, revenue and related infrastructure development, providing an immediate boost to the local economy. Beyond these immediate impacts, productions that take place in Montana play a critical role in helping to shape the cultural image of the State.

KPMG 2020 Autonomous Vehicles Readiness Index

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Through Econsult Solutions’ thought leadership joint venture, ESI ThoughtLab, our team supported KPMG in developing The Autonomous Vehicles Readiness Index (AVRI),  a tool to help measure the level of preparedness for autonomous vehicles across 30 countries and jurisdictions. It is a composite index that combines 28 individual measures from a range of sources into a single score. The 2020 edition of the AVRI adds five new countries: Belgium, Chile, Denmark, Italy, and Taiwan. The AVRI indicators are organized by four key pillars—policy and legislation, technology and innovation, infrastructure, and consumer acceptance. As some countries and jurisdictions devolve responsibility for transport to local authorities, this year’s report also features coverage of five notable cities—Beijing, Detroit, Helsinki, Pittsburgh, and Seoul—which are undertaking ground-breaking work at a municipal level.