Guest Author: Alex Slater, Managing Director, Capgemini Invent UK
From humble beginnings with the invention of the transistor to the cutting-edge advancements in cloud computing and artificial intelligence (AI), the evolution of digital technology has followed a remarkable trajectory. Its journey underscores the profound significance of the digital economy, not only in fostering innovation and productivity, but also in driving economic growth on a global scale.
The next stage of this journey looks to be characterised by the dual transition towards a more digital and sustainable future, which we’re observing globally. We’re calling it the “eco-digital era.” In this period the emergence of digital ecosystems is being fuelled by a greater exploration of the value that digital technologies bring to businesses; including their crucial role in achieving sustainability goals. According to Capgemini’s most recent research, ‘The Eco-Digital Era™: The dual transition to a sustainable and digital economy’, the eco-digital economy is poised for substantial growth and is projected to expand from the current $16.6 trillion to around $33 trillion by 2028.
With digital technology playing an important role in solving some of today’s most pressing business challenges – including economic turbulence, carbon reduction, innovation, and collaboration – it will be up to business leaders to keep their focus on the latest advances to secure overall success.
Organisations around the globe are prioritising investment into evolving eco-digital technologies such as generative AI or edge computing, yet we’ve seen notable variation in different geographies, with data indicating that UK companies are in danger of falling behind in the race to unlock the enormous benefits on offer. Leaders must pay attention to where current untapped opportunities lie, and which digital technologies UK businesses need to prioritise to set themselves up for long term success.
Reducing emissions with sustainable digital technologies
As awareness of environmental issues has increased across the market, and consumer demands for transparency and action have grown, it is a non-negotiable that businesses should look to become more sustainable in their operations and outlook. Almost all industries are beginning to embrace green technologies and renewable energy sources where possible, as well as circular-economy principles that emphasise reuse and recycling to minimise waste across all areas of the value chain. In fact, our research showed that sustainability is on the agenda for every C-suite executive at almost two thirds (64%) of global organisations.
Despite the worldwide focus on sustainability, the implementation of climate-related and clean technologies is lagging behind in the UK. Only 5% of UK organisations are currently implementing such technologies (vs. 13% of global organisations), with as many as 37% still stuck in the planning stage. This is difficult to believe when these technologies offer such immense value in achieving sustainability goals and promoting further innovation and collaboration.
The organisations in our research that have adopted digital technologies in their sustainability initiatives have already realised a 20.9% reduction in Green House Gases (GHG) emissions over the last five years. By continuing to scale up this adoption, they have the potential to grow this number to 30% by the end of the decade.
Outside of GHG emissions reduction, utilising digital technologies to power sustainability offers other multifaceted benefits, including optimising resource usage, reducing environmental impact through data-driven decisions, and promoting transparency in supply chains. Beyond the evident efficiency gains, the latest technologies can also contribute positively to society by generating job opportunities, mitigating bias and discrimination, and empowering small businesses, among other significant advantages.
Improving innovation efficiency and unlocking sustainable product design
Our research indicated that another area of technology UK businesses may be overlooking is digital twins. Only 6% of organisations in the UK are implementing digital twins, a further 8% have this technology on their roadmap, and as many as 43% say they are thinking about them but have made no advances in planning. Again, this compares to a global implementation average of 13%.
While cost reduction, technological advancement and reduced time to market are the top drivers of digital twin investments, the technology’s many benefits also extend to sustainability. By providing real-time monitoring and analysis of processes, assets, and energy consumption, the use of digital twins enables businesses to reduce downtime and minimise waste. Additionally, digital twins can provide businesses with more flexible ways of working to mitigate risks and extend collaboration, allowing operations to be virtual before they become physical.
Our findings showed that global organisations using digital twins have realised an average improvement of 16% in sustainability as a result. A good example of one such company is Rolls-Royce, which is using digital twin technology and machine learning to extend maintenance time for some of its airplane engines by up to 50%. Vastly improving the efficiency of its engines, this has saved around 22 million tonnes of carbon to date.
Significant business benefits await those organisations that can harness eco-digital technology
Future investment and implementation of eco-digital technologies will not only strengthen the financial position of businesses, but also unlock the flexibility to channel funds into innovative initiatives, technological advancements, and sustainability, thereby driving the transition towards an eco-digital era.
It’s apparent that UK organisations need to rethink their current technological approaches and prioritise eco-digital technologies to minimise environmental impact and maximise economic value if they wish to establish a foundation for sustained success.
Of course, investment in technology in isolation is only part of the solve. At an organisational level, challenges may arise in aligning existing business structures with new eco-digital initiatives, hindering seamless integration. Lack of management commitment, compounded by insufficient budget allocations, for example, can impede prioritisation and execution of digital projects. People-related hurdles include employee resistance to change, lack of a collaborative digital culture, and a dearth of digital talent.
It will be crucial for organisations to address these challenges alongside their eco-digital investments to ensure their potential can be truly unleashed.
