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Connected industries ecosystems in Society 5.0_recording-2.pptx
- 1. Promoting economic development and solving social issues within connected industries ecosystems in Society 5.0 Elizabeth Koumpan Chief Architect Source-to-Pay IBM Global Business Services Anna Topol Chief Technology Officer, Distinguished Engineer IBM Research IBM Academy of Technology
- 2. The rapid evolution of Information and Communications Technology is bringing drastic changes to society. Society 5.0 to transform commerce and workforce requirements to a point where individuals can appreciate life minus all potential limitations. Key concepts: Data sharing Personalized insights Connected ecosystems IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 2
- 3. Society 5.0 is the vision for a human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space. Defining Society 5.0 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 3 Source: CAO Japan New society “Society 5.0” Society 1.0 Hunting & gathering Society 2.0 Agricultural Society 3.0 Industrial Society 4.0 Information
- 4. Data sharing is balanced with need to preserve individuals’ and businesses’ privacy and confidentiality Systemic disparity in data and AI models is eliminated to enlarge the value pie for all ecosystem participants. Services are produced and developed in cooperation with people and according to actual demand among the relevant segment Organisations share situational awareness and segment data to serve people (customers) based on various network- based collaboration models. Future-proofing is accomplished in cross- sectoral cooperation and increasingly through collaborative development between the public, private sectors. Society 5.0 unlocks the potential of data by sharing it across connected ecosystems, industries and resolving existing challenges. IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 4
- 5. Generating new client value and new interaction models in Society 5.0 requires a move to connected industry ecosystems. Connected Industries represents a vision of industries creating new added value and providing solutions to societal challenges by connecting a variety of data, technologies, people, and organizations in the midst of the global rise of the internet of things (IoT) and artificial intelligence (AI). Single-Sided Market Model. Transaction based. Limited scaling. Multi-Sided Ecosystem Model. Own Network & Users. Scales well. IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 5 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021
- 6. The economy has taken a hit Foot traffic to stores down by 70% in Italy & US (YTY) 3’2020) Payment wallet industry flow down 20-30% for leading apps in Asia despite growing # of users). Economic indicators pointing towards a steep drop in growth expectations for 2020 and 2021. Supply chain struggling to keep up Merchants struggling with payment processes Merchants looking into new ways to handle payments - Seeking partners with capabilities to increase transactions and reduce the complexity of payments IBM Framework for Connected Industry Ecosystems in Society 5.0 (Dec 2020), © Copyright IBM Corporation 2021 COVID-19 highlighted many issues in current economy. The way people work, learn, buy and how businesses interact with their consumers, partners and one another will be forever changed Food supply chain highly reliant upon SMBs SMBs are very vulnerable to breaks in their supply chain and delays in their cash flow. Food waste is a massive issue. Global food loss and waste amount to between 1/3 and ½ off all food produced. Consumer behavior is shifting Consumer spending down around the world How and where consumers choose to spend their money has also shifted Surge towards digital payments.
- 7. A shift to Society 5.0 will require innovations in areas such as supply chains, payments and SMB resiliency. Improved SMB resilience to provide better business planning analytics to smaller participants in the network Alternative demand supply to build a network where traditionally competitive suppliers make surplus inventory readily available. Enhanced digital payments and bartering to level the playing field around access to electronic payments. Integrate the payment system with the network. 7 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021
- 8. Utilising new data that can be more easily captured and carried with transactions can inform and shape new services, and better overall understanding of customer behaviour, leading to increased personalisation and an array of added features. Next generation of Financial Service capabilities will focus on new forecasting and resiliency capabilities. 8 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 Continuous discovery (new) vs. episodic modeling (today) Improved resilience Finance Discovery Lab: Discovery-driven Enterprise Source: IBM Research
- 9. Value frameworks need further refinement to be more sensitive to reflect the natural capital, social capital and cultural capital arising from human interactions with ecosystems. Can we anticipate enough of the right kind of risks, to be prepared for the unexpected? By analyzing social media/publicly available data, customer reviews /comments, weather, people movement and other data we can understand the needs of the consumer and provide recommendations on how to improve business planning. 9 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 Improved resilience to anticipate changes in a complex environment AI- based Scenario Planning Advisor (SPA) Today 2025 Source: S. Sohrabi et al, AAAI-18 Main forces: economic environment, technology, currency, social order/unrest, corruption, natural disasters, government stability Alternative futures to show what might happen, with the purpose to make better decisions Interactive and creative diversity of perspectives
- 10. Value frameworks need further refinement to be more sensitive to reflect the natural capital, social capital and cultural capital arising from human interactions with ecosystems. One4All Digital Platform for SMBs - An Opportunity for Growth Buyers (Consumers/Users) (Demand) – example: Restaurant Free services • Simple Lookup: suppliers / users • Product & workforce Demand Forecasting Goal: Sharing information to provide unique insights for SMBs in connected supply chain, simplifying payments with digital wallets, bring together digitally accessible services to provide participants with end to end experience Sellers (Suppliers/Products) (Supply) – example: Tomato Farm Premium services • Personalized demand forecasting • Prescriptive analytics • Dynamical pricing Premium services • Personalized demand forecasting • Prescriptive analytics • Dynamic pricing Free services • Weather forecast • Simple Lookup: users/ product and services needs • Product & workforce Demand Forecasting Business Partners Services (Management Services, Financial Services, Business Services, Real Estate Services, Legal, Regulations, Employments/workforce, FDA, Distribution,) Match supply & demand Digital Platform FoodProduct ( tomatoes) Supplier- Farm ( green house) Produced Electricity provider Packaging Restaurant Retail store Distributing/ Delivery Food recipes; nutrition educational programs Water provider Packaging supply PersonalIn home delivered Food regulations & safety test Labor regulations and availability Ingredient for different can products Tomato juice Tomato sauce Pizza used ………………… … Processing Nutrients to grow Harvesting equipment Ecosystems Payments Orchestration/Operation/Monetization/Growth 10 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 Improved SMB resilience Match Supply & Demand Digital Platform Orchestration /Operation /Monetization /Growth Payments Ecosystem
- 11. Value frameworks need further refinement to be more sensitive to reflect the natural capital, social capital and cultural capital arising from human interactions with ecosystems. Adapt supply chains to alternative societal demand sensing sources. 11 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 Alternative demand supply Target food waste avoidance by providing alternative, low-cost distribution channels for surplus inventory The appeal to the food producers/providers (farmers, distributors, retailers and restaurants) will be in waste avoidance, which costs companies Millions every year. This requires rethinking traditional inventory visibility and optimization approaches to build a environment where competitive suppliers make surplus inventory readily available centrally.
- 12. Payments, Anywhere, Anytime, Frictionless and Transparent To make the platform stickier to the users, the payment needs to be seamless and integrated into the whole process so that participants do a full end- to-end transaction without coming off the platform. 12 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 Enhanced digital payments and bartering
- 13. Value frameworks need further refinement to be more sensitive to reflect the natural capital, social capital and cultural capital arising from human interactions with ecosystems. Payments in connected ecosystems will be integrated offerings tied in with services to optimize the way merchants do business. “Integrated payments" include features that range from inventory management to invoicing. The payment needs to be a frictionless facet of the overall process so that participants can complete an end-to-end transaction without coming off the platform, making it stickier to the users 13 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021 Enhanced digital payments and bartering Source: 451 Research, 2020 (Fig 9 Payments Orchestration Platforms Can Simplify a Merchant's Payments Environment
- 14. Next Steps: Addressing Challenges 14 Dynamic adaption of new requirements and rules to enable matching of supply and demand Data & infrastructure sharing + engagement in new business models to enable growth and eliminate barriers to ecosystem partnership Adoption of new technologies (AI, edge computing) to enable improvements in convenience and productivity, social and structural challenges that society has not been able to deal in the past Refinement of the value frameworks to be more sensitive in reflecting the natural capital, social capital and cultural capital arising from human interactions with ecosystems 14 IBM Framework for Connected Industry Ecosystems in Society 5.0 / © Copyright IBM Corporation 2021
Editor's Notes
- The rapid evolution of Information and Communications Technology is bringing drastic changes to society. Society 5.0 represents a vision of industries creating new added value and solutions to societal challenges by connecting a variety of data, technologies, people, and organizations during the global rise of the internet of things (IoT) & artificial intelligence (AI). The goal of Society 5.0 is to transform commerce and workforce requirements to a point where individuals can appreciate life minus all potential limitations. Sharing the data is the key in this concept, allowing business and society to deliver new innovative personalized insights across multiple connected ecosystems.
- Society 5.0 is the vision for a human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space. Society 5.0 follows the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0). A goal for Society 5.0 is to free humans from everyday cumbersome, mundane or dangerous work and, through the creation of new value, enable commerce ecosystems to provision only those products and services that are needed to the people that need them at the time they are needed, thereby optimizing the entire social and organizational system.
- Balancing data sharing with preserving individuals’ and businesses’ privacy and confidentiality The elimination of systemic disparity in data and AI models to enlarge the value pie for all ecosystem participants. Services are produced and developed in cooperation with people and according to actual demand among the relevant segment In a human-centric model, organisations share situational awareness and segment data to serve people (customers) based on various network-based collaboration models. Future-proofing is done in cross-sectoral cooperation and increasingly through collaborative development between the public, private sectors.
- The way people work, learn, buy and how businesses interact with their consumers, partners and one another will be forever changed. COVID-19 demands a new level of data gathering and management. Pandemics demand collaboration beyond the public sector involving enterprises, expert SMEs, and coordinating non-governmental organizations (NGOs). The economy has taken a hit. In the middle of March 2020, foot traffic to stores was down by around 20 percent in the UK and by more than 70 percent in Italy and the US (compared with the same period last year). The payment wallet industry is also affected, with some leading apps in Asia reporting 20-30% less flows, despite the growing number of users. As the world tries to adapt to the changing situation with the COVID-19 pandemic, economic indicators point towards a steep drop in growth expectations for 2020 and 2021. The supply chain is struggling to keep up The food supply chain is highly reliant upon SMBs, but SMBs are very vulnerable to breaks in their supply chain and delays in their cash flow. SMB revenue in the food chain, especially in retail are significantly down. Food waste is a massive issue. Global food loss and waste amount to between one-third and one-half of all food produced. In low-income countries, most loss occurs during production, while in developed countries much food – about 100 kilograms (220 lb) per person per year – is wasted at the consumption stage. Merchants are struggling with payment processes. With COVID-19 the merchants are looking into new ways to handle payments will be at an advantage. Merchants will need to seek the partners that have capabilities to increase transactions and reduce the complexity of payments to allow them to refocus on selling goods and services. Consumer behavior is shifting. While consumer spending is down around the world, how and where consumers choose to spend their money has also shifted, and the reduction in in person transactions has driven a surge towards digital payments.
- Improved SMB Resilience – Leverage socio-economic data and consumer buy / spend habits to provide better business planning analytics to smaller participants in the network Alternative demand supply chain - Adapt supply chains to alternative societal demand sensing sources. Rethink traditional inventory visibility and optimization approaches to build a network where traditionally competitive suppliers make surplus inventory readily available. EnahncedDigital Payments & Bartering - Simplify payments with digital wallets. Leverage ”stable coin” platforms, micro loans and e-bartering to level the playing field around access to electronic payments. Integrate the payment system with the network.
- As the world tries to adapt to the changing situation with the COVID-19 pandemic. Utilising new data that can be more easily captured and carried with transactions can inform and shape new services, and better overall understanding of customer behaviour, leading to increased personalisation and an array of added features. The goal is to move toward the Discovery-driven enterprises Discover new insights & factors for exploitation Identify novel data and validate hypotheses Continuously feed and augment downstream Discovery (exploration) continuously enhances business decisions and operations (exploitation)
- Planning for Enterprise Risk Management (ERM) and looking ahead to future events that can have positive or negative impacts on the business To anticipate changed in a complex environment. Main forces: economic environment, Technology, Currency, social order/unrest, corruption, natural disasters, government stability Requirements: Automatically generating multiple scenarios that explore unanticipated outcomes and/or unanticipated ways to getting to those outcomes. Find where an important event/impact hasn’t yet happened, or happens in a new/unanticipated way; Help decision-makers go beyond their comfort zone and encourage them to consider new/different outcomes, and/or new paths to outcomes Reduces bias Expanding scope by bringing in a diversity of causal perspectives and mechanically generating scenarios tends to identify unbiased results. Build Causal models that are accessible to anyone, and easy enough for most people understand and contribute to. This breaks down the perception of the “black box” and humanizes outcomes. Resolving the problem Use deep neural network-based language models to extract from documents the causal knowledge needed to craft inciteful planning models Provide analysts with what-if exploration of plausible futures Employ current state awareness, to provide hints about where to focus what-if scenario analyses EXTRA BACKGROUND: https://www.ibm.com/blogs/research/2018/07/ai-scenario-planning/ or https://researcher.watson.ibm.com/researcher/view_group.php?id=9444 The Scenario Planning Advisor (SPA) is a technology created by IBM Research that automatically projects many plausible high-impact future scenarios, to provide insights for strategic decision making. SPA allows domain experts to generate diverse alternate scenarios of the future, enhancing their ability to imagine various possible outcomes, including unlikely but potentially impactful futures. Unlike most forecasting approaches, SPA does not rely on traditional statistical forecasting techniques. This is especially important where a key event or impact has never happened (or happens in a new way) and where little or no data exists from which to forecast its occurrence. Instead, SPA uses Artificial Intelligence Planning to generate scenarios, and uses Natural Language Understanding to extract knowledge from documents to craft the planning models needed to generate the scenarios. SPA provides the ability to engage in what-if analyses – whereby users identify risks to be explored – and SPA generates, prioritizes, prunes and presents scenarios that can be instrumental in strategic decision-making. SPA also employs current state awareness, to provide hints about where to focus what-if scenario analyses. Potential users of SPA engage in Scenario Planning, to help them envision and plan for important future risks and opportunities. They look ahead to future events that can have positive or negative impacts on the business, and look for ways to: encourage/promote/enable the positive impact prevent the negative impact remediate, where prevention isn't possible or doesn't work
- Accelerating Trends Global supply chain networks are long, heavily interconnected, and have many hidden dependencies Broken links prevent matching supply with demand Better visibility in the financial, supply needs and dynamic partnership forecasting is required across the industry Solution: One4All Platform Creating strong relationships with consumers that are both physical and emotional by leveraging multiple connection points and personalized communication with highly-connected customers.
- Industries are dealing with a disruption in the supply chain as a result of the outbreak of COVID-19 and as a result many weak points have been exposed. Resolving this requires rethinking traditional inventory visibility and optimization approaches Digitization is still happening in pieces, leaving large parts of businesses digitally disconnected or still heavily reliant on high touch manual process. There is a need to identify alternative demand sensing sources over regular market-driven sources to reduce both waste and product shortfalls. Supply chain management has transformed from purely operational logistics siloed function to an independent function focusing on the integration across the company with advanced planning processes Supply chain management complexity created a greater need for a more seamless integrated supply chain to collaborate effectively and real time with partners outside the organization with the ability to gather and share data to all other participants within the value chain. The appeal to the food producers/providers (farmers, distributors, retailers and restaurants) will be in waste avoidance, which costs companies Millions every year. This requires rethinking traditional inventory visibility and optimization approaches to build a environment where competitive suppliers make surplus inventory readily available centrally.
- A payment is no longer a payment, but an integrated offering of processing money movement along with services to optimize the way merchants do business to deliver the "integrated payment," including features that range from inventory management integration to invoicing. If we move in tomorrow world and considering current situation - there is less and less actual currency money going around, more digital currency, frictionless payments - linking physical and digital world, and digital wallet disruption, digital bartering – exchange of services in lieu of funds. To make the platform stickier to the users, the payment needs to be seamless and integrated into that whole process so that participants do a full end-to-end transaction without coming off the platform.
- Team Findings and Conclusions Accelerate plans to reach unbanked or unserved customers who are increasingly unable to use physical payments methods, explore capabilities that give customers and businesses more insight and control over their finances and payments, reducing friction and enabling customers to progress with their businesses and lives – is the way to move in Society 5.0. Using digital currencies can reduce cost, speed settlement, and serve as a foundation for digital wallets to reduce friction in payment services. Digital currency is not the equivalent to cryptocurrency and can be used with or without use of blockchain. In the current environment it is difficult to manage the complexity of transactions between sellers and buyers. They are complicated by rapidly changing business interactions, supply chains, emergence of B2B payments and complex regulatory landscapes. Governments also have issues with managing payments and invoices related to corporate taxes. This provides opportunity for implementing digital invoicing (e-invoicing) technology. With COVID-19 the merchants are looking into new ways to handle payments will be at an advantage. Merchants will need to seek the partners that have capabilities to increase transactions and reduce the complexity of payments to allow them to refocus on selling goods and services.
- COVID-19 exposed the complexity and fragility of global supply chains. Broken links prevented matching of supply and demand. Lack of information has inhibited dynamic adaptation to the new requirements and rules, resulting in large economic damage. Many ecosystem leaders and participants lock-in captured data behind their firewalls to gain a competitive advantage, raising barriers to entry for potential new competitors. In order to further grow, these businesses need to share the data accumulated and engage in new business models. Cross- industry information sharing, adopting the common use of shared infrastructures, expanding areas for cooperation, will help to further the development of advanced AI systems to solve social challenges, promoting competitiveness and establishing new industry structures. It is expected that AI technology will spread widely throughout society in the future, and enable improvements in convenience and productivity, social and structural challenges that society has not been able to deal in the past. Value frameworks need further refinement to be more sensitive to reflect the natural capital, social capital and cultural capital arising from human interactions with ecosystems.