Is this the future of value creation through ICT?

COVID-19 has put significant restrictions on human society, causing significant damage to social lives and economies. However, what COVID-19 has showed us is the incredible power of information and communications technology (ICT) – something that didn’t even exist during the Spanish flu pandemic a century ago. Advancement of ICT has released human society from the constraints of “place” and “time”, and made it possible to create value – as seen in remote work, remote healthcare, and remote education – particularly from the perspective of inclusivity.

What’s more, the value creation that ICT makes possible, even when people are dispersed, presents an exciting new possibility: it can harness the independence and will of the individual, and connect individuals. Thus enabling the formation of a value chain in which each individual can share their values and integrate them with others to create enhanced value across virtual spaces.

Going forward, the “new normal” will be to incorporate ICT more actively in value creation. Here, I would like to consider some points regarding this “new normal” of value creation, as well as the formations and processes.

The first point of consideration is the power behind ICT, in other words its key components: computing power, networks, and software, including AI. Since the transition of mobile phone systems from analog to digital in 1995, these components have advanced at a lightning speed. In just 25 years, the processing power of a computer has become 2.6 million times greater, while mobile network transmission speed is 1 million times faster. As a society, we have gained the ability to collect and process large volumes of data almost instantly. We can say that the evolution of ICT components has resulted in the creation of three critical functionalities: real-time, remote, and dynamic. By dynamic, I am referring to the ability to dynamically convert into new value a large amount of collected data with AI.

These three functionalities truly embody the power of ICT and can be expected to contribute to outstanding value creation in enriching human society in the process. Where there is value creation through harnessing the power of ICT, it seems likely that examining and confirming whether these three functionalities have been used to their maximum potentials will be foundational to this “new normal”.

Human society has developed through various stages; from a hunting society, to an agricultural one, then onto an industrial society. In each of these societies, the source of value has been primarily focused on physical objects. The emergence of ICT, however, prompted the arrival of the information society, in which data can be a value source. Information is about creating value by gathering together data strongly correlated to a given event or phenomenon and shaping it into a format that can be easily understood, and then using the resulting value source to create value. In a sense, information creates value based on a subset of the vast amount of data in existence. This is the reason why the value can be thought of as a partially optimized, or individually optimized solution.

On the other hand, the evolution of ICT has gifted society the ability to instantly gather together and process a huge volume of data. It also means we can now handle data directly as a value source, allowing us to inductively create direct value from data. Compared to the volume of data handled by the information society, the evolution of ICT has made it possible to handle data in many more formats and at much greater volumes. This vast and diverse data can then be used as a value source, creating opportunities to derive solutions in the form of total optimization. Total optimization can be considered synonymous with smart solutions, meaning we can now offer smart solutions for the challenging agendas human society faces across many areas: environment, energy, healthcare, and efficient transport for people and goods.

Total optimization as value creation cannot simply be achieved by individuals or single companies. Not even a country can deliver and create sufficient value to tackle agendas alone, such as environmental issues. This is why it is so important for people and groups to widen discussions on the richness it can add to society, and develop common value sets. Diversity is important for every society and it is imperative not to become a exclusive society. Such formations require a framework enabling each individual to bring and share data so that the optimized value chain can be further enhanced. To achieve this, rather than just using KPIs, we need to develop something on a bigger scale, something that will benefit more people, namely Key Goal Indicators (KGIs).

In essence, creating totally optimized solutions requires a procedure for gaining consensus on KGIs that is not part of the conventional process. Each day our society becomes more and more diverse; and new data are created, and each one brings a new perspective about something into our society.

While large amount of data offers incredible potential to develop optimization to transform lives and businesses around the world, it’s important to create value by forming a chain of countries, companies, and people who share the same KGI value to overcome opinion differences while supporting the ideas of others. ICT can be a major aid in processing data generated from a diverse range of channels and to help create significant value, but if the level of consensus is low, the end result can only be something that is lacking. The formation of these value chains as part of the process of creating totally optimized value, the preparation of KGIs, and the seeking of consensus towards such KGIs are all processes that will become both basic and critical to the “new normal”.

Companies contribute to society through value creation, while society makes use of the value that companies create toward sustainability. Contributing to a sustainable society also contributes to the value of the company. For sustainability and continuity, the aims and activities of society and companies are two sides of the same coin. As such, solving challenges in society is a common goal of all humankind. And businesses can address such challenges by continuously having a deep dialogue with society, understanding its needs, and acting to create social value, while ensuring business continuity so that companies can sustain its contribution to humanity.

The creation of totally optimized solutions is one such vision, and the KGIs developed as part of the process should be regarded as an integral part of setting a long-term vision for society. I believe that the World Economic Forum, as a platform for companies to gather and discuss the nature of human society, is the ideal space to implement this sort of action and can function as a foundation upon which to build value chains offering positive, totally optimized and smart solutions.