esg-embedded business model innovation based on digital
TRANSCRIPT
ESG-embedded
Business Model Innovation
based on Digital Transformation
Lecture @ UNPOG-SNU Session Series
Prof. Dr. Young-Sup Joo
Distinguished Professor, Korea University
Chairman, Korea ICT Convergence Network (KICON)
Former SME Minister of Korea
April 23, 2021
Young-Sup Joo, Ph.D. - April 2021
The World is ... in the Hyper-Change Era
Changes at Lightspeed
Changes in Global Economic Environment
4th Industrial Revolution / New Normal
Changes in Technology
Changes in Generation
Changes in Business Environment
Changes in Capitalism
Changes in Government Policy
Changes in Management Philosophy
Changes from COVID-19 Pandemic
Many New Changes including Climate Crisis . . .
Young-Sup Joo, Ph.D. - April 2021 (Source : DFKI, Modified by Y. Joo)
Industrie 4.0
Hyper-Connectivity +
IOT
Big Data
AI more . . .
Changes from 4th Industrial Revolution (IR)
Digital Transformation
Young-Sup Joo, Ph.D. - April 2021
4th IR’s Impact on Enterprises and Countermeasures
Major Impact of 4th IR on Enterprises is
Business Model Innovation enabled by Tech Innovation
4th IR
Digital Transformation
“Customization”
“Personalization”
Secure Speed & Flexibility Competitiveness
Innovate Business Model by Digital Transformation
Mass Production
& Consumption
Customized Production
& Consumption (Individual/Mass Customization)
Customized Product
Customized Service
Customized Healthcare
Customized Education
Young-Sup Joo, Ph.D. - April 2021
Changes from ‘New Normal’ after Financial Crisis
High Growth
Low Unemployment
Low Growth
High Unemployment
Global Growth Rate Sliding Down
Job Creation As Top Priority
Increasing Sentiment of Trade Protectionism
4.12
WORLD
OECD
2.66 3.55
2.20 3.75
2.61 2.56
0.94
8.3 7.5
10.0 11.3 11.5
4.6 5.8
9.6 8.1
6.2 USA
EU
Global
Financial Crisis
Low Growth & Stagnant Economy Job ‘Zero-Sum’ Situation
Growing Protectionism : The world is in a war to create jobs
2008~2009
G2 Trade War
Negative Impacts on High Export Countries (Korea, Germany, etc.)
Need to Innovate Global Business Strategy including Exports
Young-Sup Joo, Ph.D. - April 2021
Robotics
Physical Based Technology
Smart Sensor
3D Printing
IOT
Big Data
AI
Cyber Based Technology
Cyber Security
(+Block Chain)
AR/VR MR
5G CPS
Digital Twin HMI
UI/UX Energy System
Cloud Computing
Platform Technology
Changes in Technology
Core Technology for 4th IR : Digital Transformation
Young-Sup Joo, Ph.D. - April 2021
The 2020s will be
the Age of Data!
Changes in Technology – CES2020 Tech Trends
Young-Sup Joo, Ph.D. - April 2021
Connectivity Intelligence Data
5G AI
(Source : CTA, Modified by Y. Joo)
Changes in Technology – CES2020 Tech Trends
Open the ‘Age of Data’ by ‘Intelligence of Things’
Young-Sup Joo, Ph.D. - April 2021
Changes in Technology – CES2021 Tech Trends
(Source : CTA)
Young-Sup Joo, Ph.D. - April 2021
Changes in Generation
Generation Gap : Changes in Business Environment
(Source : JCI Institute)
Changes in
Customers
Employees
Stakeholders
Renovate Mgt. Strategy
Marketing
HR
External Relations
. . . etc.
Young-Sup Joo, Ph.D. - April 2021
Changes in Capitalism
“Capitalism 4.0” : Changes in Government Policy
A. Kaletsky
(2010)
2020 Davos Forum
(WEF)
Shareholder
Capitalism
Stakeholder
Capitalism
5.0 ?
Inclusive
Growth
Young-Sup Joo, Ph.D. - April 2021
Changes in Management Philosophy
Social Value(SV) Based ESG on the Rise
Corona19 Pandemic
4th Industrial
Revolution
Personalization
New Demand
for R&R of
Enterprises
SV-based Management
Digitization
Digital Transformation
To resolve Social
Pain Points and
Achieve Society Vision
ESG Management
Capitalism 4.0
Inclusive Growth
MZ Generation On the Rise
Young-Sup Joo, Ph.D. - April 2021
Changes from Unheard-of COVID-19 Pandemic
Unpredictable Black Swan
Human War against Virus
Medicine as a Key Solution
Vaccine, Cure Medicine
(Source : McKinsey, AFP)
Future Scenario
V-shaped Surge
U-shaped Recovery
W-shaped Disorder
L-shaped Recession
?
Social distancing or lockdown
could be temporary solution
to buy time until vaccination.
Young-Sup Joo, Ph.D. - April 2021
Actions for Post COVID-19 Pandemic
Post-Corona New Normal : Economic Perspectives
Need Survival-First Strategy Worst-Case Scenario
Accelerate 4th Industrial Revolution & Digital Transformation
AI Everywhere, Expand Online & Untact/Ontact Economy
E-Commerce, Telemedicine, Remote Work, Smart Education etc.
Restructuring of Global Value Chain (GVC) in Progress
Chian Exodus, Reshoring Great Opportunity for Korea
Expand Globalization by exploiting GVC Restructuring
Expedite Business Model Revolution
Product/Service, Product+Service, Platform, Online Economy etc.
Young-Sup Joo, Ph.D. - April 2021
More Major Changes Coming: Climate Crisis . . .
Climate Crisis : Even Larger Impact than Pandemics (Source : NASA)
Young-Sup Joo, Ph.D. - April 2021
More Major Changes Coming: Climate Crisis . . .
Carbon Neutral by 2050 (USA/EU/Korea/Japan), 2060 (China)
(Source : Carbon Neutral Pathways for the United States - SDSN, Berkeley Lab)
Young-Sup Joo, Ph.D. - April 2021
Enterprise Innovation in the Hyper-Change Era
Business Model Innovation
Product/Service, Product+Service, Platform, Online Economy etc.
Enterprise System Innovation
Innovate Manufacturing system: “Smart Manufacturing Innovation”
Human Resource Innovation
Expand HR Investment, Innovate Corporate Culture
driven by Human-Centered Entrepreneurship
Technology Innovation
Increase R&D Investment : Open Innovation & Collaboration
Market Innovation : Expand Globalization
Global Competitiveness, Global Win-Win Growth Model
Five Major Innovation based on Digital Transformation (DX)
Young-Sup Joo, Ph.D. - April 2021
Business Model Innovation
based on Digital Transformation
is most important
Young-Sup Joo, Ph.D. - April 2021
Definition of Business Model
Product/Services
Customers Revenue Model Operation Model
(Source : Gassmann et al)
Business Model Innovation : Definition
Young-Sup Joo, Ph.D. - April 2021
Business Model Innovation : Direction
Prepare Action Plans fit for each Industry and Enterprise
Product/Services
Operation Model
Revenue Model
Customers
As-Is To-Be
DX
-Based
BM
In
no
vati
on
Young-Sup Joo, Ph.D. - April 2021
[Product + Service] Convergence (P+S)
Product Servitization : XaaS, Subscription Model, etc.
Continued Development of New Business Models
Data Driven BM, O2O BM, IPR based BM, etc.
[Product + Finance] Convergence (P+F)
Product/Project Financing
Platform (P)
Digital Platform connecting Consumers and Suppliers
Total Solution Provider : Bundling related Products/Services
Execution of Business Model Innovation
Product/Service Innovation (P/S)
Customization/Personalization: MZ Generation, Gen C
Business Model Innovation : Direction - 1
Young-Sup Joo, Ph.D. - April 2021
Product/Service Innovation (P/S)
B2C Discrete
B2B Process
B2C Process
B2B Discrete
(Source : Yoram Koren, modified by Joo)
Pursue Customization & Personalization, but
Differentiate by Industry, Enterprise Type & Market
B2B B2C
Process B2B Process B2C Process
Discrete B2B Discrete B2C Discrete
Young-Sup Joo, Ph.D. - April 2021
Customization & Personalization using DX
Products & Services for Corona19 Pandemic,
including so-called “Homeconomy”
Eco-Friendly Products & Services : ESG
Fit for MZ Generation and Gen C
Product/Service Innovation (P/S)
Key Trends
Young-Sup Joo, Ph.D. - April 2021
Product Servitization & XaaS : Global Trend
Borders among Industries are disappearing
Product [Product + Service during Product Lifecycle]
Can create new value added and growth engine : Importance of Data
Cases in CES 2021
GM Ultifi : Integrated CX Service Platform for GM EV Customers
LGE PCC(Proactive Care Service) : Predictive Maintenance Service
Omron VitalSight : Integrated Blood Pressure Management Service
Product & Service Convergence (P+S)
Young-Sup Joo, Ph.D. - April 2021
Platform (P) - 1
Digital Platform BM : Connecting Consumers and Suppliers
Young-Sup Joo, Ph.D. - April 2021
“Total Solution Provider” BM
Packaging: “P+P”(Horizontal), “P+Parts+Service”(Vertical)
Case : EV & Mobility Solution, Plant, etc.
Train EV/PHEV
New & Renewable Energy Smart Grid
Charging Infra
Core Parts Battery/Motor
Power Plant
LSE-SME Coop
- Synergy
Coop among SMEs
- Network Enterprise
- Coop Projects
Platform (P) - 2
Young-Sup Joo, Ph.D. - April 2021
Product & Finance Convergence (P+F)
“Product + Finance” BM
Develop Various [P+F] Business Models
• New Financing Scheme, Tech-Based Financing, Subscription, etc.
Cases : Aircraft Engine, Turbine/Generator, EV, Plant, etc.
Aircraft Engine
Manufacturers
Aircraft Makers
Engine
GE Capital Aviation Co.
GE Aviation
GE
Engine
Aircraft
Lease
GE’s Business Model Innovation Case
甲
乙 甲
乙
Boeing
Airbus
GE Boeing
Airbus
Aircraft
Aircraft Makers Aircraft Engine
Manufacturer
Young-Sup Joo, Ph.D. - April 2021
ESG-Embedded Business Model Innovation : Global Trend
The Right Understanding & Direction of ESG is most important
E (Environment) :
- EnvironmentEnergy Tech, Energy Saving Tech, Circular Economy
Hydrogen Economy, Technology coping with Climate Change
S (Social) :
- Tech & Innovation to Accomplish Vision of Society/Nation/Mankind
and Resolve Social Pain Points and Problems
- Vision : Healthy, Sustainable, Smart, Safe, Growing Society
G (Governance) :
- Transparency, Fairness, Diversity, Inclusiveness
Need to approach from the Market Economy perspective
pursuing both Economic Value (EV) and Social Value (SV)
Business Model Innovation : Direction - 2
ESG : Concept & Philosophy
E
Environment S
Social
G
Governance
ESG Management
ESG Investment
ESG Index
Transparency, Fairness
Diversity, Inclusiveness
Environ.Energy Tech,
Energy Saving Tech,
Circular Economy,
Hydrogen Economy,
Technology coping
with Climate Change
Tech & Innovation
to Accomplish Vision
of Society/Nation/Mankind
and Resolve Social
Pain Points and Problems
Young-Sup Joo, Ph.D. - April 2021
Vision pursued by Society/Nation/Mankind
Goal of Business Model
Healthy
Society
Growing
Society
Safe
Society
Sustainable
Society
Smart
Society Vision of
Society/Nation/Mankind
ESG : Accomplish Vision of Society/Nation/Mankind
Young-Sup Joo, Ph.D. - April 2021
ESG-Embedded Business Model
Business Model Innovation based on Tech Innovation
esp. Digital Transformation
Expand R&D Investment : Create “Big Things”
Young-Sup Joo, Ph.D. - April 2021
ESG is the Core
of Business Model Innovation
“ESG-embedded
Business Model Innovation
based on DX” is important!
Thank you
for your attention!