The challenge for society in this era of rapid technological change, automation and machine learning is to use its opportunities not only to improve our quality of life but also our purpose.
This technological revolution affords us new techniques and approaches to find out more about the forces and processes which govern life on our planet, and to adapt the way we work in the light of what we learn.
With every day that passes, we get to know more about our world and how it works. Technology is enabling us to be more responsive to change as it happens, providing us with a wealth of timely data and insight into mankind’s many interactions with the natural world and their effects.
And technology is also demanding of us that we be more responsible in our management of this planet and its resources. Information demands action. Our deeper knowledge about the effects of our actions on our world demand that we act responsibly as a consequence.
The changing face of consumption
The result of technological change is that our society is changing fast, and that is having exciting impacts on all other aspects of the way we live. I believe it is the responsibility of the world’s leaders to share the new opportunities provided by technology to benefit everyone.
Take the world of business for example. Companies are embracing two major changes that we are seeing globally – the digital revolution and the changing way we consume things.
Across every industry, country and economy, the vast ability to store information in the cloud, the huge processing power available in our pockets, the desire for consumerism and acceptance of digital – all of these are driving a digital revolution. Every two minutes, more photographs are taken than were taken in the whole of the 19th century. As much data is being created every two days as was created in the history of human civilization up to 2003.
Last June, following the UK’s EU referendum vote, Thomson Reuters Financial and Risk business distributed more than 79 billion data updates in 24 hours.
And importantly more machines than people have been consuming that data, analysis and insight: it feeds algorithms and our customers’ own systems, at speeds significantly faster than a human can read off a screen. When we discuss customer loyalty, we now focus on machines and technologists; developers not just end users. This trend will continue and will grow.
There is also the imminent blockchain revolution: annual revenue for enterprise applications of blockchain is expected to grow from $2.5 billion worldwide in 2016 to around $20 billion in the next decade. There are now some 25 global consortiums of companies working together to bring new applications of so-called distributed ledger technologies to the market. The unique genius of blockchain is that it encourages this kind of collaboration. We hosted a hackathon last autumn inviting developers to build on our enabling technology BlockOne ID, which we then put online in beta for further development. The results of this collaborative approach have been really encouraging.
Distributed ledger technology has the potential to make transactions simpler and safer. And not just financial transactions: the opportunities for providing digital identification to enable smart contracts is enormously exciting, and is something which is generating much discussion among my colleagues on the Forum’s Disruptive Innovation in Financial Services steering group.Changing expectations, and how to respond
At the same time as these technological advances, or perhaps because of them, consumer expectations have changed. The way in which we consume everything has changed – shopping, reading, music, TV, news, data. We want it delivered to us in a readily consumable form; we want to adapt it and customize it to our convenience. This experience in our consumer lives translates to how we experience things in our professional lives. It is now difficult to separate the two.
Traditional industries such as financial services need to respond to these changing expectations, both from consumers and from business customers. In short, they need to be more responsive.
Technology is also enabling businesses to act more responsibly – indeed forcing them to do so. The increasing amount of data and insight into company supply chains, for instance, means that companies have the means to find out a great deal more about the source of their raw materials, and the conditions under which their sub-contractors operate. In countries such as the UK this has become a legal requirement: the Modern Slavery Act requires companies to declare annually the steps they have taken to ensure they are not (inadvertently or otherwise) exposed to slavery. The International Labour Organisation estimates forced labour is a $150 billion industry which enslaves some 21 million people.
At Thomson Reuters we are working with campaigning organizations to build new resources to identify those involved in such crimes. The ability to search large amounts of data is helping to reveal where companies are most at risk of being exposed to this terrible crime.
At the same time, the availability of more data and information about companies’ practices is revealing bottom-line benefits for those firms acting as responsible corporate citizens.
The increased accountability of managers to customers and shareholders in the information age means business have to demonstrate they are conducting responsible practices. Issues such as climate change, biodiversity, human rights, business ethics and corporate governance are at the forefront of public and political attention. How companies respond to these issues plays a central role in investors’ decision-making efforts to identify opportunities and risks for companies.
An extraordinary opportunity, and a warning
We have developed new tools empowering investors with the means to analyse environmental, social and governance (ESG) factors and incorporate them into portfolio analysis, equity research, screening and quantitative analysis – all in real time. Investors are using these tools not only because they indicate ethical business practices, but also because they demonstrate a company is undertaking genuinely long-term thinking: a good record on ESG factors may indicate a company that is likely to outperform in future.
Similarly, we are now ranking thousands of publicly listed companies against factors that define diverse and inclusive workplaces – and all of this is transparent, standardized information on which investors can and do trade. Companies with a diverse, inclusive workforce are more likely to attract a broad base of customers, as they have a broader social and cultural understanding of those customers and their needs. Our Diversity & Inclusion Index demonstrates consistently better returns against the FTSE4GOOD 100 GLOBAL, MSCI World and Thomson Reuters Global Developed Index.
One word of warning, though.
The extraordinary opportunities we face are all based on the assumption that the technology provides us with accurate, actionable data and information.
And here mankind retains its timeless ability to disappoint.
One of the defining characteristics of the past year has been the recognition of “post-truth” as a concept: the idea that public opinion places less value on objective facts than on appeals to emotion and personal belief. Depressingly, Oxford Dictionaries made “post-truth” their word of the year for 2016.
It stands to reason that responsible leaders ensure the integrity and veracity of all of the factors that lead to their decision making. For instance, in recent months the news agency Reuters has unveiled its Reuters News Tracer tool, which surveys social media postings, identifies news events as they break and verifies algorithmically whether the purported event actually has occurred.It is a smart way of using new technology to embed responsibility into the newsgathering process. In the US, consumers find more than half their news via social and messaging platforms. It is more important than ever that this news is accurate and true.
In a society where real-time information is completed by ever more powerful analysis tools, and where businesses are driven to be ever more responsive to change, the need to verify has never been more important. The need to ensure trusted answers is the ongoing challenge for everyone involved in this Fourth Industrial Revolution.
David Craig is President of the Financial & Risk business division at Thomson Reuters.