by André N. Verdier, Managing Director Middle East, Blue Yonder
With much of the Middle East now in some stage of re-opening society and re-igniting the economy, businesses are evaluating how new social norms and economic trends established by COVID-19 will shape future consumer behavior. Once again, the role of advanced technologies is proving paramount. Analysts at IDC have noted that 65% of the world’s GDP is set to be digitalized by 2022, with direct digital transformation investments to total $6.8 trillion between 2020 and 2023. On the local level, one recent IBM study of C-suite executives in the UAE also revealed that nearly half of organizations are increasingly prioritizing digital transformation.
Yet when it comes to groundbreaking tech, the length of time it takes some organizations to embrace their adoption seems almost contradictory. When technology is proven to be so essential to business competitiveness and productivity, why is there a delay in its application? The answer has little to do with the solutions themselves, but rather the human instinct. We are sometimes an inadvertent fault in the innovation chain.
In retail and across the supply chain, we’ve had a front-row seat to companies’ resistance when it comes to the adoption of artificial intelligence (AI) and machine learning, despite all statistics and data pointing toward its necessity. In other areas like the construction industry, even some of its own leaders have noted a relatively slow digital uptake. One recurring issue is the idea of an aging workforce and older decision-makers’ resistance to digitization. This, in part, explains the human element of the challenge. We can’t just presume these executives are resistant for resistance’s sake. Rather, this is more likely a sign of the disconnect between leadership and those who actually understand the need for these innovations. Those young upstarts, fresh from their studies, with ideas aplenty, are pushing for change but have no reputation nor influence to enact it.
It’s time to put outdated sources of pride aside and put more faith in those that are organically sitting on the cusp of innovation. Indeed, the World Bank has previously called on governments in the Middle East to launch a “moonshot” that will liberate the futures of their millions of tech-savvy youth. It all starts with education.
As an undergraduate, one accepts what they’re being taught, especially in science or engineering because it’s the culmination of centuries of research. That changes when embarking on a master’s or a Ph.D. Suddenly, the remit is to be critical and to question everything. It is why scientific breakthroughs take so long to become commonly accepted as fact. When one finishes their studies and enters their first full-time job, they often do so with knowledge and enthusiasm for the innovative thinking that they can bring to their new employers.
But then the new boss says no. For that same decision-maker brings their own experience from over the years, and has likely invested in their own strategies for success. Why would they disregard what made their business strong because the newest staff member seems adamant that there is now something better? Unfortunately, too often a company only takes on real innovation once competitors succeed with that same idea—as we’re now seeing with AI. By that time, it may be too late, or at least damaging in the short term.
Businesses must break free of this cycle for several reasons. Firstly, of course, being ahead of the game when it comes to digital breakthroughs can bring drastic advantages over market competitors. Secondly, as mentioned, you don’t want to be perennially behind the curve in terms of innovation — and your competitors. You’ll always be implementing the second most recent idea.
Thirdly and perhaps most importantly, there is a cultural element. By quashing the enthusiasm and genuine innovation of someone on the cusp of technological modernity, they’re far less likely to maintain that enthusiasm even as they become more embedded into the business. It is this concern that keeps the cycle of cynicism going. Through the disillusion of having your research or expertise ignored, you’re likely to become even more possessive of those ideas once you do reach a position of influence. The possibility of those same people then adhering to that culture, and shunning even newer ideas further down the line, is what keeps this cycle in place.
Experts at BCG have already predicted that as the economies of the region seek to diversify away from their historical dependence on oil and gas, the importance of innovation will only increase. When it comes to speeding up the rate of innovation, the answer is not built around digital at all. It’s about human instinct at every stage of the cycle. Science won’t change. Budding engineers and researchers will continue to be critical. They will continue to live on the tip of the innovation iceberg. Where the compromise should come is among businesses themselves.
The word ‘compromise’ is key. It’s not to say that a decision-maker should put their operations and progression in the hands of the most junior engineer at all times. It’s about not killing their input on day one just because it’s the freshest source of input. Having open conversations about how the company is run, why it has thrived, the technology that has gotten it there, and what the business implications of transformations are, will spark the inquisitive nature of every employee. At the very least, they won’t be cut off from the innovation chain altogether.