A new report by the World Economic Forum (WEF) shows that investment in innovative technologies is increasing productivity and earnings before interest, taxes, depreciation, and amortisation (EBITDA).
The report looked at the factors which impact return on investment in innovative technologies, particularly those that are forming the fourth industrial revolution. These technologies include robotics, social media and mobile communications, the internet of things, artificial intelligence, and big data analytics.
The ‘Maximising the Return on
Digital Investments’ report found that overall, investment in these areas was improving productivity and EBITDA across 14 different industries, but also indicated that gains are not evenly distributed. The report warns that without policy changes, a small group of industry leaders could pull ahead of SMEs in the rest of the economy, which could create competitive disadvantages.
What did the report suggest?
The WEF, in collaboration with Accenture, surveyed more than 16,000 businesses between 2015 and 2016, in an attempt to accurately quantify for the first time the business impact of investment in innovative technologies.
The results showed that on average, heavy industries realise greater returns in productivity following investment in digital technology. Chemistry and materials industries registered the greatest returns, although again this demonstrated the emerging equality gap: industry-leading businesses achieved 160% additional EBITDA per employee, while the remainder of the sector registered 120% additional EBITDA.
Heavier industries demonstrated the highest gains from investment in robotics, while service-oriented companies benefited the most from investment in social media. Looking ahead, the report estimates that internet of things technologies will receive the greatest investment from 2016 to 2020.
What has the World Economic Forum said?
Bruce Weinelt, head of digital transformation at the WEF, said that the report could make investing in new technologies safer for businesses by illuminating the potential consequences, tackling the level of risk associated with this type of investment.
He explained: “Companies are running the risk of investing in digital technologies without a full picture of the impact of those decisions. This is either because they find the benefits hard to quantify, they are worried about disrupting their own business model or they just don’t know how to make the right investments. This report provides proof of positive returns on digital investments and offers executives practical guidelines.”
