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This year’s Enlit Europe, which took place between November 28 and November 30 in Paris, attracted almost 12,000 visitors,700 exhibitors from 100 countries and 500 speakers, — proving once again to be a reference point for the European (if not worldwide) utility sector.

Sessions on the energy transition (energy efficiency, electrification and decarbonization), flexibility, and digitalization, as well as numerous hub sessions, provided a great opportunity for knowledge sharing during the three-day event. Here are our key takeaways from discussions and debates with technology providers and utilities.

Among the conversations with various utility leaders, three key themes emerged that outline the direction in which this industry is moving.

  • Flexibility at the heart of energy transformation. One of the dominant conversations that continued this year at Enlit is the growing criticality of flexibility for the utility industry. With increasing renewable energy sources and the need to integrate distributed energy resources more effectively, utilities are increasingly focusing on operational flexibility. Additionally, booming electrification requires demand flexibility to mitigate the impact of the energy transition on grids, which are the invisible enabler of it all. Industry representatives stressed the importance of investing in technologies and systems that enable more dynamic grid management, ensuring more efficient and sustainable energy distribution and consumption.
  • The imperative of marketing. Another interesting aspect that emerged during the event was the growing success of utilities that understand the value of marketing, to change customers’ perception of their company and the industry as a whole, while improving their relationship with consumers. Utilities that have invested in understanding consumer needs and have built strong brands are reaping the benefits. Utilities are at the heart of a transformation that impacts everyone and will set the stage for the next generations, if done right and marketed well, companies can turn misconception of the industry on its head, leading to newfound success.
  • What about Generative AI? Despite growing interest over the last year, the topic of GenAI was not as apparent as we would have expected. Discussions we had were more focused on the benefits of horizontal applications of GenAI and very rarely on industry specific use cases that utilities should be digging into. Currently, the discourse on GenAI tends to be more high-level than practical, with utilities trying to figure out how to integrate this technology effectively into their daily operations. The largely uncharted territory of GenAI also raised additional conversations around artificial intelligence and machine learning overall and the untapped potential that still exists. And it all came back to the topic of “data” … the quality of the data, the frequency of the data, the amount of data, etc. The challenge now is for utilities to translate high-level discussions into concrete and practical action, successfully addressing industry challenges and capitalizing on emerging opportunities. And for this they need the help of their peers and the technology ecosystem that surrounds them.

Overall, it was positive to see an Enlit returning to its pre-COVID bustle, with a diverse pool of companies exhibiting on the floor, both from a software and a hardware perspective. Let’s hope the onsite enthusiasm trickles into utilities daily activities fostering more drive to the energy transition.

Here’s to quickening progress in 2024 to be discussed when we meet in Milan at next year’s Enlit Europe.

For more of our coverage on the energy market, visit our website.

In 2023, IDC analysts covered a wide range of topics affecting the technology industry from the economic downtown to the rapid implementation surge of GenAI. Over the course of the year, we developed a number of free resources to provide you with insight into our analyst research. Through the hundreds of resources developed, you may have missed one or two, so we wanted to highlight our most accessed content that may provide important insight to you and your company.

Starting Monday, December 11, we will be counting down our top 10 most popular content resources of 2023. Return each day to gain access to new insights:

Top 10 content 2023 content 1. Generative AI the path to impact blog. Image of city outside buildings people walking, looks distorted as if moving quickly.
Top 10 content 2023 content 2. FutureScape WW IT Predictions. Man holding tablet looking out over field.
Top 10 content 2023 content 3. Beyond Digital Transformation: What Comes Next? eBook. Man holding laptop with a cityscape coming out.
Top 10 content 2023 content 4. TRANSFORM YOUR BUSINESS WITH GENERATIVE AI eBook. AI on top of a computer chip.
Top 10 content 2023 content 5. Effective content that moves the needle. Conductor conducting orchestra with technology symbols overlayed.
Top 10 content 2023 content 6. 2024 FutureScape worldwide predictions webinar. Globe with city and colorful lines popping out.
Top 10 content 2023 content 7. Decoding data sovereignty eBook. AI robot pointing to data.
Top 10 content 2023 content 8. Decoding data sovereignty eBook. Hand typing on keyboard with security locks floating around.
Top 10 content 2023 content 9. No Turning Back: AI Everywhere blog. Woman looking at phone.
Top 10 content 2023 content 10. Guide to Thought Leadership Marketing; Navigating Disruptive Tech and Hyper-Educated Buyers eBook. Woman with VR headset looking at abstract shapes.

The Dawn of Augmented Reality

The recent metaverse hype catalyzed discussions around augmented reality. However, AR is not a new concept.

The first mention in science-fiction of the concept of augmented reality occurred already in the early 20th century. But only thanks to the incredibly fast technological advancements of the past decade did augmented reality become a science-based reality.

Indeed, the latest advancements in augmented and mixed reality technologies like Apple’s new headset are stirring a lot of interest. The past decade witnessed the emergence of the first modern augmented reality devices, starting with Google Glass released in 2012, the first Microsoft HoloLens or Magic Leap One headsets.

Until recently, the costs of augmented reality were substantial, but today things have changed and augmented reality is becoming available to businesses and consumers.

AR is Gaining Momentum

When Google Glass – the first augmented reality consumer-oriented device – was unveiled in 2012, it was supposed to revolutionize the wearables world. However, its clunky design, limited number of functionalities and its steep price of $1,500 did not convince the smart glasses consumer niche.

While Google Glass no longer exists, the technology lives on within the products that succeeded it. Other companies such as Vuzix or Microsoft have since expanded the niche in a way Google Glass was not able to.

While virtual reality is already enjoying much popularity in the market, especially in the consumer segment, augmented reality is slowly unveiling its potential. In Europe, the AR market reached $ 0.8 billion last year and since then is expected to almost triple by 2027 growing at a 21,7% five-year CAGR. As new use cases emerge, we will see a strong adoption curve of AR in the coming years.

The Pioneers in AR Implementation

The use of AR is increasingly common in the commercial sector. It is largely deployed in discrete and process manufacturing industry, in transportation and in retail. These four industries together absorb 55.0% of AR-related spending in Europe in 2023.

Augmented reality has revolutionized the way manufacturers design, produce, and distribute products.  Using AR, Intel has transformed its operations in its semiconductor fabrication facility in Ireland, one of the most advanced manufacturing facilities. Working in the smallest known geometry Intel manufacturing process is extremely complex. Manufacturing technicians use the HoloLens 2 which has become integral to Intel manufacturing processes from maintenance and repair tasks to remote communication and troubleshooting and training.

AR will see a boom in the consumer segment in the next five years, with purchases growing at a 53.6% five-year CAGR. In the commercial space, it is central government to see the most significant increase in AR spending as many European governments have committed to allocate substantial part of their national resilience plans to digitalization projects such as smart cities.

The Benefits of AR for Businesses

AR technology can revolutionize the way we work and live. It enriches the traditional work environment and optimizes business processes while providing significant benefits in terms of safety, efficiency, and productivity.

By allowing virtual objects and real-time information into the physical world, AR can dramatically expand the user’s access to information and performance. In production-driven industries like manufacturing, augmented reality allows us to display every feature of a machine, product, or component, visualize and streamline complex concepts and processes, and provide valuable insight into the operations. Employees can access and apply detailed instructions while they work and make better informed decisions which helps mitigate downtime and reduce errors. This in turn results in overall optimization of processes across the value chain enhancing time and costs efficiencies.

AR helps reduce work-related hazards and improve workplace safety, this is particularly important in the case of industrial organizations that have complex heavy machinery which might be unsafe to operate, or in remote or hard-to-reach locations, where carrying out operations may be time-consuming or dangerous. AR offers the opportunity to identify potential risks in real time or operate remotely.

AR has been shown to be enormously effective in improving the learning curve for the employees.  Immersive training is tailored to a particular worker and is more engaging with traditional learning methods leading to increased knowledge retention while reducing training time. European organizations recognize its potential and increasingly allocate a substantial portion of AR-related budget to virtual training. Investments in AR training will grow at a 46.7% CAGR by 2027.

Companies across Europe have long been struggling to find a qualified workforce. The pandemic accelerated digital transformation in organizations which would boost technical progress but would reveal how deepening skills gap creates bottleneck in the transformation.

According to IDC’s Future Enterprise and Resiliency Survey, organizations are seeing delays in digital transformation of more than eight months due to the lack of skills. In the current setting of ageing population and low supply of the talent from universities and professional courses which potentially undermine the technological progress, AR offers a great opportunity for businesses to increase their upskilling and reskilling initiatives from within.

Moreover, augmented reality contributes significantly to enterprises’ efforts towards sustainability. Remote maintenance helps minimize CO2 emissions from travel, contributing to the realization of a low-carbon society and addressing climate change. AR technology allows remote working, helping eliminate inequalities between urban and rural regions, and contribute to the creation of sustainable cities and communities.

Furthermore, remote tools allow employees to achieve higher productivity, contributing to more sustainable economic growth.

Not All Headsets Are Created Equal

Head-mounted displays (HMDs) come in various forms, but all we can divide them between tethered and standalone. Standalone devices are those whose processing is done within the device, usually capable of 3D mapping.

Some examples of standalone devices are Microsoft’s HoloLens 2 and Magic Leap 2. Tethered devices, however, are usually less capable and less expensive. Processing for these devices is done on an external device and most serve simply as an external virtual screen without being capable, by themselves, of 3D mapping. Brands focused in this category include XReal and Rokid.

The AR Market Landscape

The Augmented Reality market has historically been very focused on the commercial segment, with this segment taking approximately 70% of the market, but this is due to change. The dawn of less expensive devices that mainly function as portable screens, as well as new use cases, are bringing this technology to the masses.

If this trend continues, AR HMDs shipments are set to be 45% to consumers by 2027.

Whilst the more consumer focused VR market is still dominated by a couple of brands (with Meta’s share reaching 60-70%), the AR market is much more fragmented, counting 5 dominant brands. Magic Leap, a high end commercial-industrial focused brand, with devices selling for north of $3.000, is the dominant single brand responsible for about 30% of the AR market. Consumer focused brands that offer “portable screen solutions”, such as Xreal and Rokid take a combined 39% share in 3Q23.It should also be noted that this market has its peculiarities. Due to the reasons mentioned above, AR headsets are, on average, 5 times more expensive than their VR counterparts, this category’s ASP standing at around $2000. This ASP, along with the still limited use cases, is making these HMDs lagging behind VR, representing 8.1% of the combined ARVR market.

As this technology matures, we should expect a steep decrease in price, as well as substantial share growth of the consumer-focused brands who are proving that this form factor is getting closer to being able to replace laptop screens. When it comes to XR technologies, AR is clearly in a good position to become the fastest growing category.

The Future of AR

As mentioned previously, AR technologies, albeit currently niche, are becoming an important part of many companies’ workflows. Remote collaboration is made easier and seamless; high-fidelity pass-throughs can make digital models come to life and discard expensive physical ones. Handsfree AR screens can make specialist trips for maintenance work unnecessary, design processes are streamlined and made cheaper, as well as training and many other cases. This is what is currently possible with today’s technology, but these are still bulky, expensive, or lacking in features.

It is arguable that one of the most interesting developments in the horizon of technology is the evolution of AR. As breakthroughs are made in the AR space, these devices will become lighter smaller, and more affordable enabling access to a broader range of users, from professional across diverse fields to everyday consumers. If we can visualize a future in which HMDs resemble ordinary eyewear, we start imagining a future where individuals can seamlessly blend digital information with their surroundings.

Education serves a notable example of how we can take advantage of these advancements. Students and researchers will be able to interact with 3D models of anything, from the smallest cell to the entirety of the solar system. Field trips to historical landmarks, or to witness rare scientific phenomena will all be possible from the comfort of the classroom. This will increase retention and comprehension.

Accuracy and efficiency in vital sectors such as healthcare will also be improved to a great extent. Surgeons equipped with AR devices will have access to real-time data visualization during procedures and greater detail in the visualization of internal organs. Augmented reality will also allow patients to have therapy sessions, or to manage chronic conditions from their own home, providing more comfort to the patient and reducing the strain on the health services.

Moreover, entertainment will reach new heights with AR. Imagine watching sports with real-time statistics overlaid on the field or experiencing movies as immersive 3D adventures in your living room.

Whether for work, education, healthcare, or entertainment, as AR becomes more feature-rich and fashionable, the possibilities become limitless. Augmented reality is poised to reshape our perception of what technology is and how we use it to interact with the world around us. The future of AR is not a distant dream but a rapidly approaching reality.

The era of AI Everywhere coupled with the storms of disruption, such as inflationary pressures and a sea of digital sameness, has led to a positive trend for customer experience (CX). Its ability to augment value creation in knowledge management, customer service, and customer engagement has enabled greater personalization, more efficient issue resolution, and so on. Proof of this is that CX initiatives continue to be in the organization’s top investment areas and most immune to budget reduction in the next 12 months, according to IDC’s Future Enterprise Resiliency and Spending Survey (FERS) (Wave 8).

There is still a tug of power though as C-suite leaders fight internally for power and budget influence. The C-suite needs to shift towards a tug of value where everyone works together to create flows of value across the entire stakeholder system and connect them to quantifiable metrics.

However, there is still a lot more to be done by Asia/Pacific excluding Japan (APEJ) organizations to truly execute customer-centric CX transformation initiatives.  IDC’s Future of Customer Experience Survey 2023 found that the main obstacles hindering CX transformation journeys are:

  • Technological – legacy infrastructure, lack of unified customer view due to data siloes
  • Organizational – limited strategic support, challenges to provide business value, lack of focus on operational efficiency
  • People related – lack of skills and resources

Aside from implementing customer data platforms and data privacy regulations, which will play a pivotal role in setting the technology and data layers for value orchestration, IDC has recently released IDC FutureScape: Worldwide Future of Customer Experience 2024 Predictions — Asia/Pacific (Excluding Japan) Implications, which short-lists the 10 most urgent business and technology trends. CX executives must pay attention to and build a gameplan for these trends, to emerge resilient against increased similar offerings from competitors, maintain a competitive edge, and not get left behind in the race to demonstrate value and get buy-in from the C-suite.

Among the predictions, I will focus in this blog on #10: Value streams trump experiences. I will show this in real-life situations, and why IDC thinks that by 2027, to differentiate and drive loyalty, 30% of organizations will undergo structural and technological changes to deliver value outcomes, shifting focus from providing experiences to value parity.

While customers expect brands to deliver great experiences, experiences aren’t all that matters.

The value customers get in the exchange is what makes them come back and continue purchasing from the same brand. However, such value needs go both ways. It is when both brands and customers fulfill their goals in frictionless and contextually relevant engagements that value parity is achieved, which is exactly what prediction #10 is all about. However, to do this, brands will need to undergo structural and technological changes which we are now seeing in some organizations:

  • Starbucks, for example, has constantly been innovating through technological changes ranging from mobile apps (reinforcement learning), and greater customization (extra foam, less sweet) to more automated machines, and blockchain – they are planning to launch an NFT marketplace with the goal of attracting a new user base.
  • Telecom operators, such as Starhub and Singtel, are undergoing organizational restructuring and decentralization with the goal of coming closer to achieving strategic priorities and direct accountability respectively.

The end goal is simple. Value parity is what organizations will strive towards. It is the balance between delivering high-quality experiential value to the customer, as well as, bringing value back to the company and its ecosystem.

Donning my consumer hat, let me cite some examples:

Retail: Why do I go back to buy my coffee from Starbucks again and again, despite them not being a cost-friendly option? It’s because I know after a few purchases, I will be rewarded, whether with a size upgrade or 2$ off my next coffee. The idea of getting a bang for my buck allows me to outweigh the short-term cost with the long-term benefits. It also clearly benefits brands like Starbucks to build a loyal customer base and attract the most valuable customers. I also appreciate their proactive real-time issue resolution, such as when my coffee was flat and bitter, and they made me another cup as per my required customization. How a company takes action on a bad experience in real-time to rectify it is a crucial part of customer service and forms a lasting impression in the customer’s mind.

FSI: What makes customers put in the additional effort of setting up alternative wallets, such as GrabPay and ShopeePay in Singapore, and using these for transactions, especially when they can easily use PayNow or NETS to pay through their bank account? For me, like other customers, it is the added value I get in terms of rewards once I collect enough points. By ensuring continuous value gained from digital wallets, these companies are also able to ensure value parity when the value comes back to them through repeat transactions.

Telco: In the telco space, a very important aspect that appeals to customers is the freedom to choose and customize services. Losing an existing customer because of a single service can lead to unwanted loss across all the services the customer has signed up for. Personally, Giga is a great example of a mobile virtual network operator (MVNO) by Starhub, as it offers a great level of customization based on your data usage without any contractual obligation. Its transparency makes the porting-over process very smooth. Their incentives also make me want to continue my subscription. A recent example is a reward program where existing customers are rewarded with 0.2GB of data when they log onto the app every time it rains in Singapore. Simple but smart, isn’t it? By ensuring competitive pricing options and reducing the customer pain points of lock-in periods and contractual obligations, Giga enables customer retention. This further helps with continued subscription and customer advocacy, again enabling value parity.

A few other examples of companies in the region that have realized this and have moved in early are Klook (points), Shopee (cashback vouchers), and Yuu’s cashback tie-up with banks.

After all, which customer doesn’t like feeling rewarded? This is particularly a very evident trait in Asian customers; however, this goes both ways. As companies gain a lot in delivering this value, one bad experience may also cost them a lot. The minute a customer feels they are not getting value they will be quick to switch. Regardless, this area is still constantly growing, with more tie-ups between different vendors and innovations in the type of rewards (particularly crucial for Asia Pacific as rewards tend to lose power over time if customers don’t see value in them). This only goes to show that value is indeed considered a currency in today’s economy, but to effectively create mindshare, companies need to be quick and wise about their approach to creating this value.

Interested in finding out more about the IDC FutureScape: Worldwide Future of Customer Experience 2024 Predictions — Asia/Pacific (Excluding Japan) Implications?

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Lavanya Jindal - Senior Research Analyst - Channels & Ecosystem Strategies - IDC

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As a Senior Research Analyst at IDC Asia/Pacific, I focus on Channels & Ecosystem Strategies, analyzing trends and supporting strategic decision-making through research. Prior to this, my work encompassed customer experience (CX), Martech, ecommerce and product operations - highlighting my ability to adapt to various domains.

While electronic healthcare record (EHR) applications were initially born as digital repositories to replace paper medical record, they have gradually evolved into integrated platforms to address healthcare ecosystems market dynamics. They are now set to automate workflows, optimize clinical and administrative functionality, and offer more holistic and longitudinal views of patient information.

Healthcare systems, along with clinicians and patients, have primarily driven this revolutionary journey. They have gradually shaped the development of EHRs systems capabilities and workflows, through their digital technology investment decisions, to address their needs of a platform ecosystem approach.

The result is a next generation EHR application that stands out for the following 3 key features:

  • A modern IT infrastructure driven by data, to unlock the benefits of data sharing while simultaneously addressing emerging security and compliance concerns. Agile architectures become essential for seamless integration of diverse data sources, given the complex nature of healthcare data integration. A modern infrastructure supports the access to data and the ability to deliver insights at scale that allows EHR systems to enable an integrated care delivery model.
  • Sovereign cloud capabilities, to address concerns around data privacy in different organizational contexts, care settings, and regions. EHR systems need to be compliant with European data privacy, data residency and security regulation and frameworks. EHR vendors are addressing these security concerns, providing the option to deploy their solution in sovereign environments either with their own capabilities or through partners.
  • Advanced data analytics and AI capabilities, to optimize processes and automate clinical workflows in ways that lead to safer and more personalized care, as well as greater operational efficiency. The volume and the variety of data that populate the EHR require advanced technology to better leverage its value. Embedded advanced analytics support providers to benchmark and manage their populations in terms of quality and costs through structured clinical workflows and patient pathways. Integrating AI and more in particular generative AI, enables healthcare professionals to create/ integrate more accurate patients’ history (taking in consideration different clinical data sources, including patient generated data, data from connected medical devices, etc.) and providing order entry suggestions.

The Advantages of Implementing the Next Generation EHRs

Because of the above capabilities, the next generation EHR holds immense potential for renewing the healthcare delivery model, embedding the following key advantages:

  • Improved clinical and operational productivity. The EHR enables centralized access to patient data, seamless information sharing and efficient resource management. As such, it facilitates faster analysis for actionable insights, enhancing decision-making and compressing timeframes.
  • Empowered workforce experience. Embedding automation tools, including AI technologies EHRs alleviate information overload and decision fatigue for clinicians by granting timely access to diagnostic results and patient histories and eventually enhancing clinical decision making.
  • Enhanced patient care and safety. EHRs improve the accuracy of medical records, offering alerts and reminders for best practices and medication management protocols throughout the patient journey, ultimately contributing to reducing the incidence of medical errors.
  • Elevated patient engagement through personalized digital interactions. . By providing patients with easy access to their medical records, the EHR empowers patients to play a more active role in their care. AI can be incorporated into patient-facing services like registration and scheduling to streamline patient interactions further and foster a more empathetic approach to patient care.

To embrace the next generation EHRs and harness the key advantages it can brings to the overall ecosystems, healthcare organizations must:

  • Prepare the foundation to implement an authentic unified platform. EHR systems serve to store the data, synthetize information, learn, and embed insights into every aspect and at any point of care delivery. A new digital architecture, built on a modern infrastructure is critical to effectively collect, integrate, process and deliver information within and outside the organization to drive greater engagement and improved processes. It mitigates risks related to complexity, data privacy compliance pressures and enables the implementation of accurate data governance policies.
    • Enhance the overall data strategy to rely on accurate and truthful dataset.
    • Establish internal governance framework to guide toward an ethic and responsible use of patient data.
    • Implement a change management strategy to involve and educate employees for embracing a new set of skills and capabilities through either hiring, training, or professional services support.
  • Forge strategic partnerships. In the dynamic evolution of the European healthcare ecosystem, ensuring success in EHR projects requires partnering with vendors open to strategic alliances, possessing the capability to seamlessly integrate their solutions into the intricate fabric of the national healthcare system.
    • Prioritize industry expertise vendors, which are committed to privacy, security and transparency.
    • Select the ones that adopt a cautious behavior along with compliant and secure applications.

If you are interested to know more about the next generation EHR how vendors are shaping the competitive market in Europe, please have a look at the IDC MarketScape: Europe EHR vendor assessment 2023-2024.

For any further information please contact Adriana Allocato, Research Manager, or Silvia Piai, Research Director, IDC Health Insights, Europe.

In 2023, I attended and spoke at many IDC conferences, such as the IDC Government Xchange, IDC Portugal Directions, and non-IDC events, like the Smart Cities Expo and the ServiceNow World Forum in Rotterdam, to name a few. One common thread of many of the conversations that I had and the presentations I listened to was how executives felt the pressure to increase their organizations’ speed, to keep up with the fast pace of innovation.

Everyone seemed obsessed with speed being the big difference between how innovation happens today versus how it happened twenty, fifty or a hundred years ago. That may be true for enterprises that want to be fast followers, for instance to drive incremental productivity improvements through digital transformation; in fact, IDC’s research indicates that the average time to value of digital projects was in the 6 to 24 months range, two years ago, while now it is less than 10 months.

But enterprises that are looking for opportunities to re-shape their destiny and gain competitive advantage should take a closer look at the way technology innovation shapes the creation of new markets. And that is different today, not only because of its pace, but also because of the dynamics among the key attributes of a market.

No matter whether one tries to interpret market dynamics through the lenses of neoclassical economic, Austrian school of economics, institutional economics and other theories, the common elements of market formation are the exchange of products and services, the narratives built around buyer and seller values that define how they perceive the benefits and risks of those products and services, and the norms – including laws, policies, standards – that regulate the exchange to maximize benefits and reduce risks.

From Linear to Warped Innovation

In the past, the interplay between exchanges, narratives and norms not only took a long time to come together but was quite linear. When the car market formed, Daimler and others invented the product in the 1880s, then Henry Ford and Alfred Sloan at GM shaped the narratives of the car for the mass consumer in the early 1900, and it was not until the 1950s that car safety regulations started to become more pervasive.

Overall, it took over 70 years for exchanges, narratives, and norms to fall into place and in a linear sequence. Fast-forward to today to look at how the Generative AI market is shaping up. In 2017, Google researchers published a paper on transformer models that was born out of a specific need – making language translation more efficient – but was soon understood as the seminal moment of a new category of product and services based on large language models (LLMs).

In late 2022, OpenAI public launch of ChatGPT detonated a new narrative about mass usage of LLMs to search and synthesize knowledge and create new content, being images, text, or computer code. While ChatGPT was launching, the EU was finalizing its AI Act, but decided to delay the completion of the draft regulation, to consider the impact of GenAI.

In essence, over the course of six years, the development of products and services to be exchanged, the narratives and the norms started to interplay. And one year after the launch of ChatGPT, new products and services are constantly coming to market in the form of public platforms, domain-specific models, capabilities embedded in enterprise software; the narratives around the value and risk of GenAI have not yet crystallized at all, with suppliers and buyers that are trying to figure out the impact across the most disparate use cases; the AI Act was modified, and then went through a first approval cycle.

So, not only the timeline was compressed, but the dynamic interplay of exchanges, narratives, and norms, was (and still is) far from linear. It is a warped dynamic, meaning, not only happening at “warp speed” compared with the past, but also sometimes convoluted and unpredictable because of the feedback loops among all its determinants.

In many scientific fields new discoveries are accelerating, often powered by emerging tech such as AI and quantum computing, like in nano materials, bio-engineering, space-tech, and nuclear fusion. At the same time, there are plenty of societal challenges where technology innovation can find applications, such as energy efficiency and climate change resilience, healthy and sustainable food for all, smart and sustainable roads, sustainable use of precious water resources.

These momentous changes will bring more warped innovation and less linear innovation. Enterprises and their technology partners that want to shape new markets in this context need to consider that:

  • Proving the value or ROI of technology innovation will revolve around business and revenue model re-imagination, creation of new industries and ecosystems, nurturing of jobs and skills for the future, rather than considering only efficiency and speed of product and service development.
  • Governing innovation will require making organizations more permeable to bring together stakeholders across enterprises and often across industries to explore new ecosystems through virtual joint ventures and outcome-driven joint development projects, rather than scaling partnerships with suppliers and customers along familiar value chains.
  • Business value will be created by investing in organizational capacity and skills that nurture collaboration, curiosity, data literacy, storytelling and scenario narrative, user-centricity, and pervasive resilience that enables to withstand the failures and mistakes that come from serendipitous trial and error iterations.

Private and public sector leaders that want to succeed in shaping new markets in the world of warped innovation should concede some slowness and sloppiness to shape the intricate interplay between turning new scientific discoveries into products and services that can be exchanged, crystalizing the narrative around the social and economic values that drive buyers and sellers, and designing the norms that maximize benefits and minimize risks.

Massimiliano Claps - Research Director - IDC

Analyst Profile
Massimiliano (Max) Claps is the research director for the Worldwide National Government Platforms and Technologies research in IDC's Government Insights practice. In this role, Max provides research and advisory services to technology suppliers and national civilian government senior leaders in the US and globally. Specific areas of research include improving government digital experiences, data and data sharing, AI and automation, cloud-enabled system modernization, the future of government work, and data protection and digital sovereignty to drive social, economic, and environmental outcomes for agencies and the public.

As it’s ChatGPT’s first birthday, now seems like a good time to look back at what its arrival has sparked, and to look forward at what might happen next with Generative AI.

There is no doubt that when OpenAI launched ChatGPT in late November 2022, it kickstarted a huge new wave of excitement about the potential for AI within business. A major survey conducted by IDC in August 2023 showed that in just a few months, we arrived at the situation where 75% of European organizations said they were already working with Generative AI (GenAI) in some capacity. What’s more, 18% of European organizations said that GenAI had already disrupted their business to some extent.

In August 2023. That’s just 9 months after ChatGPT’s debut.

It’s important that we remember that GenAI didn’t come from nowhere: prior to ChatGPT’s launch, a number of organisations (including Google, and OpenAI itself) had been working on GenAI technologies for years. But it was ChatGPT’s user-friendly conversational interface, and free service, that created high levels of awareness about what GenAI might be able to do – in an extraordinarily short space of time.

Of course, it’s important to note (as we have in numerous publications) that the GenAI opportunity is about much more than chatbots. Organizations are exploring use cases spanning marketing content generation, knowledge management, automation of software development activities, and much more.

Together, this span of use cases is driving massive interest. Some other key insights from IDC’s August GenAI survey:

  • 55% of European organizations said their C-Suite leaders are actively engaged with IT leaders about GenAI on a regular basis.
  • European C-Suite leaders are most interested in how GenAI can have an impact on customer experience (24.3% said this was the most sought information); how it can improve the performance of decision making (18.1%) and how it can improve employee productivity (15.8%).
  • European C-Suite leaders want to move fast: 88% of respondents said their C-Suite leaders wanted to integrate GenAI into applications and processes within 18 months.
  • On average, European organizations expected that investments in GenAI would account for 11% of new IT project budget in the next 18 months.

IDC forecasts that worldwide spending on GenAI implementation will reach $143.1B by 2027: that accounts for about 28% of the expected overall spending on AI implementation in that year. At a 5-year CAGR of 73.3% between 2023 and 2027, this represents a colossal market opportunity, that will significantly affect existing hardware, software and services markets.

As a result, it’s natural that OpenAI has now been joined by many new competitors all aiming to provide commercial GenAI models. The company now has competition from AWS, Google, and IBM, as well as other specialists (Cohere, Anthropic, Mistral, Inflection and Aleph Alpha are some examples). And enterprise application vendors like SAP, Salesforce and ServiceNow are leveraging open-source alternatives as well as partnering with a wide range of commercial model providers, in order to embed GenAI features in their application suites and platforms.

So – with GenAI set to be a major force in enterprise technology over the coming years, what happens next?

I’ve long wondered whether OpenAI might be an outlier in terms of how it approaches the GenAI opportunity; and indeed, whether its strategy makes it risky to focus too much on what OpenAI does, as a way to get a sense of overall market direction. I’ve said multiple times to colleagues and clients that OpenAI is more like a research outfit that is figuring out how to make its tech available to the world, than a product company.

Certainly, OpenAI has been culturally distinct from its competitors since before the launch of ChatGPT. While its competitors are primarily focused on developing products that businesses can use, OpenAI has operated as a hybrid between a not-for-profit research outfit committed to trying to develop what it calls “AGI” (Artificial General Intelligence) – something that many commentators feel is a very long-term project – and a commercial venture. Because it is at least partly focused on this long term mission, OpenAI is less focused than many of its competitors on meeting the real-world current needs of business customers. Which means that although OpenAI created the market that we see today, its future as a significant force in the market is far from guaranteed.

This question has come into sharp focus in recent days, as a soap opera has rapidly unfolded at OpenAI. On November 17th, without any warning, the company’s board fired its CEO, Sam Altman. The company’s President and co-founder Greg Brockman also quit. But within 48 hours, investors in the company called for Altman’s reinstatement as CEO, and for the board to quit instead. At the same time, Satya Nadella, CEO of Microsoft (OpenAI’s strategic investment backer) announced that Altman and Brockman would join Microsoft to found a new AI research lab; and hundreds of OpenAI employees signed an open letter to OpenAI’s board, saying they would quit unless Altman and Brockman were reinstated.

At one year old, human children are a hot mess of crying, screaming and unexpected and unmanaged bodily functions. Based on current events, it looks like the organization behind ChatGPT, which kicked off so much industry excitement, might be exhibiting the same tendencies…

 

For more information on GenAI in EMEA download our eBook: Generative AI in EMEA: Opportunities, Risks, and Futures , or visit our website.  

Neil Ward-Dutton - VP AI, Automation, Data & Analytics Europe - IDC

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Neil Ward-Dutton is vice president, AI, Automation, Data & Analytics at IDC Europe. In this role he guides IDC’s research agendas, and helps enterprise and technology vendor clients alike make sense of the opportunities and challenges across these very fast-moving and complicated technology markets. In a 28-year career as a technology industry analyst, Neil has researched a wide range of enterprise software technologies, authored hundreds of reports and regularly appeared on TV and in print media.

Explore IDC’s top 10 worldwide predictions for digital business in 2024 and beyond, straight from the latest IDC FutureScape.

IDC has recently published its annual FutureScape report, IDC FutureScape: Worldwide Digital Business Strategies 2024 Predictions. This focuses on the external drivers that will alter the global business ecosystem over the next 12 to 24 months and the issues technology and IT teams will face as they define, build, and govern the technologies required to thrive in a digital-first world.

For years, digital transformation (DX) has been the focus for organizations looking to gain competitive advantages and modernize their processes and technology. The goal: to become digital businesses where value creation is based on the use of technologies for processes, products, services, and experiences.

Now, the digital business (DB) era has arrived. Companies are seeking new digital revenue streams while digitizing operations to reduce costs and increase efficiency. Spending on digital technologies is growing while traditional, nondigital spending is stagnating or even declining. And demand for digital experiences from customers, employees, partners, and suppliers has become an expectation.

“Digital transformation was only the first step — to truly gain value from change, companies need to move to an innovative state,” said Craig Powers, research director, Worldwide Digital Business Strategies at IDC. “IDC expects more companies to improve their innovation capabilities through 2024 because digital innovation — the process of ideating and testing new digital technologies — is increasingly prioritized. The time for companies to build up innovative capabilities and cultures of innovation is now if they want to stay competitive in the digital business era.”

Let’s take a closer look at IDC’s top ten predictions for digital business strategies:

  • Prediction 1: GenAI Will Be Used to Innovate – GenAI will be used to codevelop digital products and services by pinpointing market opportunities and allocating company resources. The companies that utilize GenAI in this way will more efficiently and effectively roll out new revenue-generating endeavors, leading to faster-paced growth that their competitors not using GenAI will struggle to match.
  • Prediction 2: The Pace of Investments in Digital Technologies Will Continue – Spending on digital technology by organizations will grow seven times faster than the overall economy in 2024, as companies are compelled by market demands to grow digital business models and strengthen digital capabilities.
  • Prediction 3: Elevating AI to the C-Suite – A recent IDC survey found that just over half of CIOs say their organization has or plans to have an individual leader responsible for AI, and approximately half of those CIOs believe the leader will be part of the C-suite executive team.
  • Prediction 4: Digital Native Businesses Will Embrace GenAI – Digital-native businesses rely on technology to support their disruptive business models and to create their competitive edge. These companies will be early adopters of GenAI and will invest heavily to further their competitive advantage.
  • Prediction 5: Digital Business Platforms Enable Success – Digital business platforms enable greater visibility into a company’s operations, allowing for greater insight into the impacts of their investments. As businesses mature digitally, they find measuring ROI to be more straightforward and they are more likely to build leading-edge capabilities that can drive successful digital revenue initiatives.
  • Prediction 6: AI Everywhere Will Supercharge New Digital Business Models – IDC expects that the combination of predictive AI, machine vision, and GenAI capabilities, and the provisioning of on-demand services through digital ecosystems, will take on a new dimension. This will open opportunities to create new products and services for customer segments that will appreciate the appeal of these capabilities.
  • Prediction 7: Measuring Success Will Require New KPIs – Tracking what is truly relevant to the business is critical for strategic decision-making. We expect to see new key performance indicators (KPIs) implemented that reflect a shift toward the creation and delivery of digital products, services, and experiences, which are the defining attributes of a digital business.
  • Prediction 8: Digital-First Becomes the Investment Priority – CEOs increasingly expect their organization’s technology leader to be focused on delivering better business outcomes, increasing business agility, and bringing in new revenue through digital products, services, and experiences.
  • Prediction 9: AI Will Impact Workflows and Drive Employee Retraining – The wholesale adoption of AI will bring challenges for employees who see their overall workflow and learning process impacted. To mitigate negative impact and drive adoption, employees will need to be reskilled to work alongside GenAI.
  • Prediction 10: Digital Technologies Will Be Used to Meet Sustainability Goals – To achieve their sustainability ambitions, organizations will require both business and IT leaders to pursue digital technology investments that are twofold: meeting their digital goals while taking sustainability into account.

“Investment in digital business, augmented by GenAI, will continue to drive new models and positive outcomes going forward. Those organizations that have already begun their digital business journeys have seen the value and will continue to invest and innovate. Those that have delayed are at risk of losing significant market share over the next five years,” Powers added.

Stay informed and be prepared for the AI revolution that will reshape the IT industry and the way businesses operate. Don’t miss our annual prediction webinar series to gain deeper insights into the future of technology and business:

  • Worldwide Artificial Intelligence and Automation 2024 Predictions, November 8 at 12:00 pm U.S. Eastern time, featuring Ritu Jyoti
  • Worldwide Digital Business 2024 Predictions, November 29 at 12:00 pm U.S. Eastern time, with Tony Olvet & Craig Powers
  • Worldwide CIO Agenda 2024 Predictions, December 6 at 12:00 pm U.S. Eastern time, with Daniel Saroff & Mona Liddell
  • Worldwide Emerging Technologies 2024 Predictions, December 13 at 12:00 pm U.S. Eastern time, featuring Rick Villars

Interested in learning more? Access the full IDC FutureScape event series and stay updated on the latest IT industry trends.

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Heavy machinery, automotive, and machine building typically have complex bills of material, multi-tier supply chain networks, and depend on carbon-intensive materials such as steel, aluminum, and plastics. To meet sustainability goals, these engineering-oriented value chains (EOVC) must undergo a transformative shift.

Manufacturing organizations stand at the forefront of decarbonization efforts worldwide. In 2022, IDC’s Industry Intelligence Survey found that customer requirements drove investments in sustainability as a strategic business priority for 45% of U.S. and 39% of European manufacturing respondents. For 40% of U.S and European respondents, regulatory requirements were the leading sustainability investment driver.

Decarbonizing the entire value chain — with a particular focus on Scope 3 emissions — is central to the evolution of EOVCs. Scope 3 emissions represent a significant share of a company’s overall carbon footprint, extending beyond direct operational activities (Scope 1) and indirect energy consumption (Scope 2). Scope 3 emissions encompass indirect emissions generated across the value chain, including the production of materials like steel, plastics, aluminum, batteries, and glass.

Understanding the dynamics of affordable (and available) clean and renewable energy is crucial to developing an emissions-free supply chain. Europe, however, faces significant challenges in deploying the low-carbon energy resources crucial to decarbonizing supply chains in general.

Many challenges related to value chain decarbonization are addressed at the C-suite level. However, the roles that must implement these strategies include material engineers, procurement department leaders, quality managers, and supplier management leaders.

As material and production technology evolves, new components are developed, and new regulations emerge, those in supplier network management-related positions must have detailed knowledge about the impact of component materials on carbon footprints. We are not talking about emissions related solely to logistics, but about the carbon footprint of the production process itself.

Products like steel, aluminum, electric batteries, and plastics are often referred to as “hotspots” — that is, making them produces major emissions of CO2 and other greenhouse gases and is a leading contributor to the auto industry’s emissions footprint.

According to a McKinsey & Company study, typical upstream EV emissions include the battery (40%–60%), steel (15%–20%), aluminum (10%–20%), and plastics (around 10%). Upstream internal combustion engine (ICE) vehicle emissions include steel (25%–35%), aluminum (20%–30%), and plastics (15%–20%).

Let’s briefly examine the carbon-emitting hotspots in EOVC supply chains.

Batteries

The rise of EVs has highlighted the environmental impact of battery production. Manufacturing lithium-ion batteries involves resource-intensive processes that contribute to Scope 3 emissions. EV batteries contain nickel, manganese, cobalt, lithium, and graphite, which emit substantial amounts of GHGs during their mining and refining processes.

Some processes in the production of anode and cathode active materials require high, energy-intensive temperatures. Other factors that determine the amount of embedded production carbon include battery chemistry, the production technology, the raw material suppliers, and transportation routes.

Oliver Zipse, chairman of the Board of Management of BMW, said in a statement that the company’s competence center near Munich is laying the technological foundations for the efficient and resource-saving production of battery cells along the entire value chain. The statement said sample production of sixth-generation round cells has already begun. These cells are characterized by an up to 20% higher energy density, and BMW has been able to reduce the CO2 footprint in cell production by up to 60%, according to the statement.

  • Worth Watching: On November 21, 2023, Swedish company Northvolt announced a state-of-the-art sodium-ion battery developed to expand cost-efficient and sustainable energy storage systems. The cell has been validated for an energy density of 160+ watt-hours per kilogram at the company’s R&D and industrialization campus in Västerås, Sweden. This energy density is close to that of the type of lithium batteries typically used in energy storage. Lithium batteries used in electric cars have an energy density of up to 250–300 watt-hours per kilogram.  Northvolt says the technology can minimize dependence on China for the green transition. Battery designers and engineers, as well as supply chain managers, are advised to keep an eye on the company’s efforts to scale the technology for industrial use.

Steel

Traditional methods of steel production cause high emissions due to the use of fossil fuels in the smelting process. Decarbonization efforts involve adopting innovative technologies like hydrogen-based steelmaking and electric arc furnaces powered by renewable energy. Transitioning to sustainable steel production is vital to mitigating the impact of Scope 3 emissions and reducing the automotive industry’s overall carbon footprint.

Plastics

Plastics, widely used in automotive components, pose an environmental and sustainability challenge. The production of plastics, particularly from petrochemical sources, contributes significantly to carbon emissions. Addressing this hotspot involves embracing circular economy principles, recycling plastics, and developing bio-based alternatives. Recycling initiatives and reducing dependence on fossil fuels for plastic production will enable the automotive industry to make substantial strides in Scope 3 emissions reduction.

Aluminum

Aluminum, valued for its lightweight properties crucial to fuel efficiency, is a key material in automotive manufacturing. Traditional aluminum production is energy-intensive and contributes to significant carbon emissions. The adoption of recycled aluminum, coupled with advancements in low-carbon primary aluminum production, is essential to mitigate environmental impacts. Innovations in aluminum production processes (e.g., smelting using renewable energy sources) offer promising avenues for reducing Scope 3 emissions.

Conclusion

Collaboration across the entire value chain — from raw material suppliers to manufacturers and consumers — is critical to drive meaningful change and accelerate the transition toward a low-carbon EOVC sector.

Establishing a transparent and trusted carbon-free environment requires an understanding of the entire Scope 3 upstream supplier footprint. Understanding the Scope 2 emissions of each supplier is also essential. Acquiring this level of transparency requires tools and data platforms that offer access to trusted information provided by suppliers and suppliers’ suppliers, as well as tools that monitor OEM compliance with regulatory obligations.

The future of decarbonization of the entire manufacturing supply chain is, of course, inevitably enabled by ubiquitous data. Sustainable zero-carbon efforts span not only the visible chain of tier suppliers but also primary and secondary raw material processing plants and green energy providers.

Automotive, machinery, and heavy machinery OEMs may share suppliers; hence, an OEM can benefit from the sustainability-related transparency of the supplier network established by another OEM.

Utilizing a secure, scalable, and transparent digital data collection platform is an absolute must to successfully achieve the net-zero supply chain transition. I was pleasantly surprised to find that 70% of global manufacturing respondents to IDC’s 2022 Industry Intelligence Survey were already using cloud infrastructure to support sustainability metrics.

My Recommendation: Go beyond the obvious. In addition to Scope 3, focus on Scope 1 and Scope 2 of each entity in your supply chain. Turn suppliers into ecosystem stakeholders. Provide them with knowledge, help develop their workforce, and offer digital technology support!

 

Find out more about our Manufacturing Insights coverage, visit our website.

GenAI has broad applicability across the marketing cycle and will have a significant impact on how future customer experiences will be designed, delivered, and scaled.

Future value exchanges between customers and brands will be premised on data and customer insights. In turn, the imperative for earning and sustaining customer trust increases while accountability for the security of customer data and respect for customer privacy unequivocally falls on the enterprise. 

As customer demands and expectations continue to rise, additional pressure is placed on relational aspects of the experience life cycle, such as delivering empathetic customer outcomes, proving customer value, and mitigating churn risk. By allowing better personalization and contextualization in customer-facing content, GenAI has the potential to improve — and create — the experiences customers have with businesses.

35% of customer experience (CX) executives agree that the acceleration of innovative capabilities such as GenAI and Web3 will most impact future CX strategy.

The C-Suite – particularly CMOs – must start with an assessment of their business needs before considering which technology or product to adopt through GenAI consulting services. The aim of these consulting services is to help organizations understand the potential for GenAI technology to reduce operational costs, cut time to market for new products and services, grow existing revenue streams, and identify and drive new revenue streams. They can help with ideating, prioritizing, triaging, piloting, and later scaling GenAI use cases across the organization.

IDC predicts that by 2026, 45% of the Global 2000 will use AI/ML to elevate context and nudge customers into unfamiliar and novel experiences that simultaneously improve sentiment metrics and brand upselling potential, and GenAI will play a role in this transformation.

Some of GenAI’s potential uses — and risks — are still being worked out; CMOs should paradoxically take an adoption approach that is both bold and cautious. Bold in the sense that the organization should experiment with something that is immature and has the potential for misuse, financial damage, and even brand degradation. Cautious in the sense that this experimentation should be done with close oversight and strong guardrails.

Because GenAI is a new and disruptive technology, ready-made uses cases may not be available, or they may have little short-term and medium-term performance data to validate the likely return on investment for the enterprise (let alone any long-term data). In these cases, adoption may start from a different — and more ideational and experimental — perspective, as organizations ask what the business benefits of the new technology could be.

Two of the biggest benefits of GenAI to enterprises are cost reduction and speed. Because GenAI is still maturing as technology and is in the nascent stages of adoption by enterprises, metrics are not standardized and formalized.

For these reasons, it’s a good idea to seek advice, project management, and implementation expertise from business and IT consultancies that have experience with AI and organizational change.

In terms of cost, GenAI obviously has the potential to reduce spending on human activity in parts of the marketing cycle, notably data-heavy research, reporting and analysis, and content generation and management. GenAI’s greatest potential benefit for marketing may be its ability to empower organizations to update existing content and re-factor it for new contexts of new distribution channels.

In terms of speed, GenAI’s nature as a relentless, always-on technology with massive processing power gives it the potential to significantly shorten delivery cycles for data-intensive work, such as market research, reporting, and analysis and for the production of creative content in draft form.

As with any new technology, there are benefits, but there are also risks. There are two forms of risk for GenAI: generic risk associated with any business and technology change project and risks specific to GenAI.

Generic risks include the possibility that the business case for GenAI may be miscalculated, that the technology may not perform as it should, is not configured properly, and that the “human side” of the project is not addressed adequately. For example, if training is inadequate, the purpose of the project is not explained to ground-level users of the new applications, or stakeholders do not buy into the project, they will not have success.

Risks that are specific to GenAI relate in part to its combination of immense processing power, unpredictability, and its ability to mimic human communication.

  • Offensive and brand-degrading content. GenAI does not truly understand human ideas and emotions and because it cannot make the culturally and politically nuanced decisions that humans make, it can create inappropriate and offensive and brand-degrading content.
  • Over-personalization. If GenAI is used at scale to produce personalized content it is possible that it will flood recipients with content that is both too frequent and possibly too personalized, perhaps even “creepy”.
  • Environmental cost. Widespread GenAI use may entail significant levels of net-new datacenter and network usage, which would not sit well with any public commitments your brand has made to safeguarding the environment.
  • Sameness. This is not a cheap technology to produce and train at scale, and it’s possible that enterprises will use GenAI services that are based on just a handful of large language model (LLM) providers globally, which can produce text and images in styles that are recognizably similar.  Consumers will quickly spot GenAI produced content and may come to discount this content, reducing its powers.
  • Bias. Because GenAI is trained on large volumes of existing content, it can adopt the cultural, racial, or sexual biases of this content, lessening the ability of a brand to communicate with certain social groups.
  • Legal liability. Because GenAI content is based on large data sets of existing data, there may be legal issues surrounding copyright laws.
  • Organizational conflict. GenAI has the potential to enrich existing jobs, but it also has the potential to deskill and degrade people’s experience of work and to reduce the perceived quality of the output of their work.

As organizations prepare to deploy GenAI  they must think through the technology change and process, workflow, and organizational structural changes that will be required to make best use of its business potential. It will also require close attention to the “human side” of the changes that GenAI will bring.

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