Oxford Economics Research Articles

Industry Outlook

Oxford Economics’ lead economist, Kiran Ahmed, shares insight into the consulting firm’s Global Pump Market Outlook published earlier this year

Relationship between the concepts of “Digital transformation” and “Industry 5.0”: bibliometric analysis

At the current stage of transformational transformations, the problems of transformation of the national economy are extremely relevant. And these questions are especially relevant in the conditions of rapid development of the digital economy. According to estimates by Forbes experts, 67% of the leaders of companies from the Global 2000 list chose digital transformation as a priority goal of their corporate strategy in 2018. According to a study by analysts International Data Corporation, the total global spending on digital technologies will grow by 16.8% annually and amounted to 2.1 trillion dollars in 2019. Research by Huawei and Oxford Economics has shown that intelligent network interaction will trigger the growth of the digital economy, which will reach 23 trillion dollars by 2025. This increase will be 78.3% compared to 2017 (12.9 trillion dollars). By 2025, the share of the digital economy is planned to increase by 7.2 percentage points, or from 17.1 to 24.3% of global GDP. According to the calculations of The Boston Consulting Group experts, the volume of the digital economy by 2035 will amount to 16 trillion dollars USA. In view of this, the purpose of this study is to determine the trends and key directions of digital transformation research in the era of Industry 5.0 based on bibliometric analysis using the VOSviewer software. The article carries out a bibliometric analysis of the relationship between the terms “digital transformation”, “digitalization”,”Industry 4.0”, “Industry 5.0”. It has been established that currently the problems of the digital transformation of the economy in the context of the implementation of the digital strategy of the European Union are gaining special relevance. Digital transformation is a key component of the overall strategy to transform the global economy. Correctly selected digital technologies combined with employee competencies, processes and operations will allow companies to quickly adapt to crisis situations, use promising opportunities to modernize work processes, meet new and constantly changing customer needs, stimulate growth and implement innovative and management solutions. The concept of digital transformation of the national economy in the context of Industry 5.0 should involve the use of digital tools and platforms to transform traditional business processes, improve interaction with customers, introduce innovative technologies and form a digital ecosystem. The main components of the digital transformation of critical infrastructure include: digital technologies (cloud computing, artificial intelligence, big data analytics and the Internet of Things (IoT); organizational changes (restructuring of processes to increase their flexibility, introduction of new methodologies (DevOps, Agile), formation of a digital culture); customer orientation and integration of digital channels. For effective digital transformation of the economy on a practical level, it is advisable to pay attention to such main aspects as: having a clear vision and strategy that meets business goals; involving different groups of stakeholders and ensuring the interest of the entire organization; constant monitoring and evaluation of the implementation of digital transformation initiatives; an adaptive and iterative approach that allows you to navigate the changing digital landscape. It has been proven that the priority direction of research in the future should be the substantiation of the theoretical and methodological provisions of the formation of the digital ecosystem.

Metaverse: the post--hype future

PurposeBeyond its initial hype, and based on original new surveying, this paper explores the impact of metaverse on business in the medium to long-term.MethodologyIBM Institute for Business Value, in collaboration with Oxford Economics, surveyed 400 C-Suite executives, (CEOs, CIO/CTOs and CMOs) in the U.S. across 25 industries on their investments in metaverse, business cases and outcomes.FindingsDespite the media hype, the majority of investment in metaverse is B2B.Although the biggest impacts of metaverse are medium to long-term, there are benefits immediately accessible in the short-term.More success is likely if organizations develop metaverse strategies with ecosystem partners.Research implicationsMetaverse was extremely fashionable, now far less so. Both extremes are inappropriate. Metaverse, especially as a B2B strategy, has an important role to play in an organizations' strategy.Practical implicationsMany businesses are making investments in metaverse. They should continue.Social implicationsMetaverse impacts extends beyond B2C applications into the B2B workplace.Originality and valueThis work is completely original, based on new data and analysis that has not been published elsewhere.

How generative AI will drive enterprise innovation

PurposeMost recent C-suite surveying suggests current applications of generative AI, although hyped, are fragmented and unlikely to yield major financial returns anticipated. Instead, business leaders expect major value from generative AI will be achieved through application of generative AI to innovation: operational innovation, product and service innovation, and most elusive of all, business model innovation.Design/methodology/approachFindings and analysis presented draws on data from several surveys of C-level executives conducted by IBM Institute for Business Value in collaboration with Oxford Economics during 2023. Each survey focused on the potential of generative AI in a particular business area. The n-count of each survey ranged from 100-3000.Findings1. Business leaders expect generative AI to build on returns achieved from investments in traditional AI, with 10 percent RoI expected on generative AI investments by 2025. 2. Executives anticipate that generative AI will have most impact when implemented to expand innovation. 3. Specific examples provided for operational innovation, product innovation, and business model innovationResearch limitations/implicationsWe are still very early in the generative AI development cycle. We have made best efforts to project, but only time will tell for sure.Practical implicationsBusiness application of generative AI are extremely fragmented. Despite the desire to throw investments at the wall to see what sticks, it is important that leaders take a structured approach to generative AI, focusing on RoI from innovation investments.Social implicationsTo alleviate negative impacts of generative AI, focusing on innovation potential and value maximization is crucial.Originality/valueThis research is based on completely new surveying and data. This papers adds to the sum total of new knowledge in the generative AI domain.

UNVEILING THE DIGITAL ECONOMY: HOW DIGITIZATION TRANSFORMS ECONOMIC STRUCTURES

Giorgi Abashidze E-mail: giorgi.abashidze@bsu.edu.ge PhD student Batumi Shota Rustaveli State University. Assistant of Batumi Navigation Teaching University Batumi,Georgia https://orcid.org/0000-0002-3233-6890 Abstract: One of the most significant processes currently underway in the modern economic system is the digital transformation, which results in the digitization of all economic sectors and creates the digital economy. This represents the current stage of economic development that affected all areas of human life and changed the way the economy functions and the way people live. The production processes, organizational relationships, distribution networks, marketing strategies, customer communication forms, and the way in which customers get goods and services have all undergone substantial change as a result of digital transformation. Consequently, the economic system is shifting from traditional markets to interconnected networks, from traditional consumers to active prosumer, from ownership-based models to access-based models, and from a consumer-driven economy to a sustainable economy (Rifkin, 2015). It should be mentioned that unlike traditional industries, which lack access to digital technologies, digital business and entrepreneurship can raise the rate of economic growth and create jobs in a short period of time. The digital economy has risen 2.5 times faster than the global GDP over the last 16 years (Huawei and Oxford Economics, 2017). Today, we are living in the process of the digital revolution, or the fourth industrial revolution, which has put a strong demand on individual countries to start digital transformation. This is critically important for small countries that are not rich in natural resources. As a result, it's critical to evaluate the current stage of digital business growth, trends in the emergence of digital business models and entrepreneurial initiatives, as well as the difficulties associated with the digitization of traditional industries. The study highlights the benefits of digital entrepreneurship and business over traditional ones. The stages of traditional businesses' digital transition are discussed, along with the models of digital business and entrepreneurship that are currently in use. Keywords: Digital Economy, Society 5.0, Technological Revolution, Transformation JEL classification: O3, L86.

TOURISM MARKET IN THE WORLD AND IN RUSSIA: MODERN STATE AND DEVELOPMENT PROSPECTS

Tourism plays a significant role in the GDP, job creation, and employment in many countries. According to the statistics of the World Travel & Tourism Council (WTTC) and Oxford Economics, there was a rapid recovery in the tourism sector in 2022, with its contribution to the global GDP increasing by 22% on an annual basis, reaching $7.7 trillion US dollars. There is a direct link between the trends in the development of the tourism industry and overall economic, technical, and social achievements. In recent years, the structure of tourist flows to the Russian Federation has changed significantly due to geopolitical and socio-economic factors.
 The aim of this research is to analyze the development of tourism in the post-pandemic period, taking into account the impact of international sanctions against Russia and restrictions on the travel of Russian citizens abroad.
 The objects of the study were tourist flows, their structure and dynamics, as well as a quantitative assessment of the entities and actors associated with tourism activities.
 This work is based on the authors’ own research and data provided by state statistics. Statistical methods and methods of general scientific research, including observation, data collection, and comparison of two or more objects to identify common and distinctive features, were used for analysis.
 Results. The paper presents economic indicators of the hospitality industry’s development, analyzes statistical indicators of the hospitality market for the years 2018-2022 and their structure. Problems and current trends in the development of the tourism and hotel markets in the Russian Federation are identified.
 Application of results. The results can be applied in the scientific and practical activities of regional authorities in addressing issues related to the development of international and domestic tourism.

Factors that make open innovation more successful than traditional approaches

PurposeFour management capabilities for successfully operationalizing open innovation are: strategy and culture, ecosystem capability, internal capability and technology enablement. Surveying more than 1,000 executives on current open innovation practices and capabilities, IBM IBV was able to identify how the different operating model capabilities interact and complement each other to drive better innovation and business performance.Design/methodology/approachTo help organizations build and improve their open innovation capabilities, the IBM Institute for Business Value (IBV) partnered with APQC to develop the Ecosystem-Enabled Innovation Maturity Model (EEIMM) - an open standards model encompassing four domain competencies required for successful open innovation. To assess the maturity and benchmark the performance of organizations’ open innovation capabilities, the IBV, in collaboration with Oxford Economics, used the EEIMM to survey over 1000 leaders responsible for open innovation at their organizations.FindingsFour management capabilities for successfully operationalizing open innovation are: strategy and culture, ecosystem capability, internal capability and technology enablement. IBV analysis found that organizations that are more advanced in developing the four building blocks see significantly better performance across key financial and innovation metrics.Practical implicationsFor every dollar of investment, the proportion of direct revenue attributed to open innovation is four times higher than for traditional innovation.Originality/valueLeading organizations are embracing open innovation as a critical component of innovation strategy and investment. They recognize that adopting open innovation yields far greater returns than traditional innovation can. Recent research by the IBM Institute for Business Value (IBM IBV) reveals, for example, that as many as 84 percent of executives now view open innovation as important for their organization’s future growth.

DEVELOPING HIGH-QUALITY HUMAN RESOURCES IN THE FIELD OF EDUCATION AND TRAINING: POLICIES, LEGAL PROVISIONS AND RECOMMENDATIONS FOR SOME SOLUTIONS

DEVELOPING HIGH-QUALITY HUMAN RESOURCES IN THE FIELD OF EDUCATION AND TRAINING: POLICIES, LEGAL PROVISIONS AND RECOMMENDATIONS FOR SOME SOLUTIONS

From efficiencies to transformation – tapping the full potential of process mining

PurposeBecause of its effectiveness, process mining is rapidly becoming ubiquitous. A recent IBM Institute for Business Value (IBV) survey found that 65 percent of organizations report actively using process mining to improve processes. And in partnership with software-as-a-service (SaaS) providers to add even greater insight into their processes, 69 percent compare their organization’s data with other SaaS customers. And as many as 77 percent of supply chain executives say they are at least at the implementation stage of process and task mining.Design/methodology/approachThe IBM Institute for Business Value and APQC, in cooperation with Oxford Economics, surveyed 2,000 C-level executives in first half of 2022 from 13 countries in all major geographies and across 22 industries. The IBV and APQC implemented an in-depth analysis of how organizations use benchmarking and process mining tools, the benefits they gain from use of these tools and how they anticipate using them in the future.FindingsBig data and digital technologies also creates new possibilities for measuring performance and revealing process improvement opportunities through process mining ? a relatively new discipline that applies data science to discover, validate and improve workflows in real time.Practical/implicationsBy utilizing data from IT systems to create a process model and then examining the end-to-end process, process mining enables root causes of variations from norms to be identified using specialized algorithms, and these insights enable management to see if processes are functioning as intended and identify new opportunities to optimize them.Originality/valueMore recently, the scope of process mining initiatives has widened to encompass more sophisticated mission-critical functions, notably human capital, cybersecurity and sales. Organizations that embrace process mining outperform others across key business measures, including profitability, innovation, agility, customer satisfaction and technological sophistication. 10;

A scientific rationale for the enhanced sequestration of CO2 in concrete

Oxford Economics forecasts that concrete construction will grow by 85% to USD 8 trillion worldwide by 2030 and will lead to significant usage of Portland cement (PC). Every 1 kg of PC production generates ≈0.8 kg of CO2, which is about 1.5 Gt of CO2 emission per year for PC production. One of the ways to reduce the carbon footprint of concrete is by sequestrating CO2 using of the following approaches: (i) pre-carbonation; (ii) wet-carbonation; or (iii) CO2 curing of concrete in various types of carbonation chambers. The efficiency of these methods is measured by calculating CO2 Sequestration Factor (CSF). It is reported that the CSF of carbonation curing approach is 10 to 15%. However, it was found that the method used for calculating CSF does not consider the un-carbonated parts of the specimens, hence it does not represent the actual efficiency of the CO2 sequestration methods. Therefore, modification for calculating the CSF is proposed in this paper. Using the modified method, it was found that the CSF of carbonation curing method is less than 2% and wet carbonation is the most efficient method (≈30%). Further, a way forward is proposed to enhance the CO2 sequestration in concrete, which will not compromise fresh or hardened properties of concrete and would significantly contribute to the net zero carbon agenda compared to existing approaches

Role of industries in employment and economy of Nagpur City

Nagpur city lies in the Nagpur district of the state of Maharashtra. It enjoys the status of being the second capital of Maharashtra and is located in the geo-graphical centre of India. It is the 13th largest city in India by population and according to an Oxford's Economics report, Nagpur is projected to be the fifth fastest growing city in the world from 2019 to 2035 with an average growth of 8.41% (Nagpur, n.d.) . It is also an administrative educational, commercial and cultural centre of Vidarbha region. This paper will be focusing on the existing economy condition of Nagpur City which includes employment in agricultural & non-agricultural activities. Working population, density of workers and per capita income will be the major area of research in this study.

A food revolution – cultivated meat

A food revolution – cultivated meat

Disruption in Supply Chain due to Covid-19 in Jordanian Economy

Disruption in Supply Chain due to Covid-19 in Jordanian Economy

Film Industry as Part of Global Creative Industry: Learning from Indonesia

This paper describes the post-reform Indonesian film industry as one of the creative industry sub-sector. The creative industry has contributed to developing a city and a country to increase the market and the global economy. Creative industries have great potential to boost the economy and the quality of life of the Indonesian people. The international film industry can obtain revenue up to $10,162,657,657 (approximately IDR 980 trillion), with ticket sales reaching 1,276,715,780 pieces and the number of moviegoers went more than a 700million people. Meanwhile, in Indonesia, according to research by Oxford Economics, considering the direct and indirect transactions caused, the total economic contribution of the film and television industry to GDP in 2010 reached USD 2.98billion or 0.43 percent of all national GDP. This study aims to analyze three sub-sectors of the film industry, namely production, distribution, and exhibition, as well as to describe how the conditions in the national film industry in the post-reform era since the film industry was lined up as one of the sub-sectors of the creative industry.

PROSPECTS AND PROBLEMS OF ROBOTIC DELIVERY OF THE LAST MILE. THE RELEVANCE OF THE PROBLEM AND THE CONCEPT OF THE SOLUTION. PART I.

The express delivery market in recent years has been growing at the level of 3-4%, and even in these conditions, not only is it not saturated, but the demand for it is growing. According to Oxford Economics, the growth of the air cargo market, which determines the volume of the express delivery market, accelerated at times up to 7% per year from 2013 to 2018 [1].
 The biggest changes took place in 2016-17 due to a technological breakthrough in the field of logistics with the introduction of services such as drone delivery, processing orders on the blockchain, calculation of the delivery mode using artificial intelligence, etc. It was expected that due to the growing demand on fast delivery guaranteed, the number of express delivery employees worldwide will grow to 4.5 million over the next few years. But the coronavirus pandemic has accelerated this process.
 In the study “The Future of Freight Transportation. How new technologies and new thinking can change the movement of goods”, presented by the international network of consulting companies Deloitte in 2017, states that carriers have already solved many of the problems associated with the transportation of goods. But the “last mile delivery” stage has remained limiting the development of the delivery service. At this stage, companies suffer losses due to the concentration of logistics, algorithmic and kinematic tasks that cannot be automated with modern means and technologies for replacing human labor.
 Consequently, the use of alternative, unconventional technologies at this stage is a key condition for the mass development of delivery.

How “Dynamic CEOs” outperformed by adopting a transformation mindset

Purpose The recent IBM Institute for Business Value CEO survey of 3,000 chief executives globally offers insight into CEO attitudes and behaviors in order to discern the strategies and actions most highly correlated to successful digital transformation and performance. Design/methodology/approach The IBM Institute for Business Value, in collaboration with the Oxford Economics, surveyed 3,000 CEOs and senior public sector executives between September and November 2020. The analysis identified a group of CEOs whose outlook on transformation and success with digital implementation sets them apart from others. Findings These Dynamic CEOs, who represent 38 percent of all commercial leaders in the IBM IBV research, shared two crucial insights: that traditional business models no longer differentiate their organizations; their organization?s digital transformation journey will never be complete. Practical/implications These Dynamic CEOs are almost 70 percent more likely to lead high performing organizations than other top leaders. Originality/value Almost 90 percent of Dynamic CEOs expect their business and IT investments to deliver a material improvement in business performance over the next three years, with the greatest emphasis on investments in customer experience improvement, decision-making processes and business agility.

TOURISM INDUSTRY AND THE COVID-19 PANDEMIC: IMPACT AND CONSEQUENCES

The study aims to explore the relationship between the pandemic and the tourism industry. The emergence of infectious diseases is one of the consequences of tourism and mobility of citizens. The article examines the scientific research of foreign authors on the impact of epidemiological diseases on the tourism industry. The pricing strategies of travel companies caused by the policy of curbing the spread of coronavirus infection are analyzed. The authors cite some forms of adaptation of the tourism industry to the conditions of the COVID-19 pandemic (in such countries as Costa Rica, Jamaica, the Republic of Fiji, Finland, Greece, Iceland, Israel, Japan, the UAE, China). A statistical analysis of the tourism development in the Russian Federation (the number of incoming and outgoing tourists, the number of hotels and similar accommodation facilities) was carried out. The COVID-19 pandemic has reoriented the outbound tourist flow to domestic destinations. The advantages of developing domestic trips in comparison with international ones regarding their role in the economic development of regions are presented. The pandemic has led to an inevitable surge in the use of digital technologies due to the norms of social distancing and nationwide restrictions. One of the most popular forms of technological applications in the tourism industry is virtual reality. The use of virtual reality can contribute to the creation of a new, more sustainable model of tourism. The article presents four scenarios for the recovery of world tourism, developed by the McKinsey Global Institute and the Oxford Institute of Economic Policy (Oxford Economics). The authors identified priority areas of transformation of the tourism industry in the post-pandemic period, including at the technological level.

How business is adapting to COVID-19: Executive insights reveal post-pandemic opportunities

Purpose IBM Institute for Business Value research suggests five key discoveries for the post-pandemic business landscape offering new perspectives on digital transformation, the future of work, transparency and sustainability. Design/methodology/approach The data referenced in this report were collected from a number of surveys: The IBM Institute for Business Value, in collaboration with Oxford Economics, surveyed 3,450 executives in 20 industries and 22 countries from April to June 2020. The IBM Institute for Business Value, again in collaboration with Oxford Economics, conducted in July and August 2020 an Executive Pulse survey of 400 CEOs, CIO/CTOs, COOs and Chief Transformation Officers in the US across 20 industries. The IBM Institute for Business Value has fielded a survey instrument with Survey Monkey since April 2020 with more than 50,000 adult respondents across eight countries. Findings Analysis confirms that the business competencies that account for the largest part of an organization’s expected growth are those centered on employees and customers. Practical implications The survey data also point to greater reliance on platform business models and partner networks. Originality/value The research highlights a gaping chasm between what executives think they are offering their employees and how those employees feel.

Ecosystems boost revenues from innovation initiatives

PurposeEcosystem partnerships are driving a dramatic change in the nature of business as industries as diverse as banking, automotive and retail are converging in unprecedented ways–and at an unprecedented rate. To learn how leading companies are embracing innovation in ecosystems to drive both value creation and competitiveness, the IBM Institute for Business Value in collaboration with Oxford Economics surveyed 1000 top executives in 19 industries and 29 countries between August and January 2019.Design/methodology/approachThe survey cohort included 250 Chief Executive Officers, 150 Chief Financial Officers, 150 Chief Innovation Officers, 150 Chief Marketing Officers, 150 Chief Operations Officer and 150 Chief Alliance/Partnership Officers.FindingsAnalysis revealed that organizations with high engagement in ecosystems generate greater revenues from innovation initiatives. Specifically, revenues tied to innovation were more than 14 percent higher for ecosystem-engaged businesses than their less ecosystem-oriented peers.Practical implicationsThe analysis showed that organizations differentiated on four innovation-enabling dimensions are more successful than others in ecosystem innovation. Their winning practices: 10;•9;They lead with platforms for innovating in ecosystems. 10;•9;They create the structures that enable the transformation of ideas into desired customer experiences in ecosystems 10;•9;They establish effective, meaningful measurements for successful innovation in ecosystems. 10;•9;They approach innovation with a collaborative mindset and create an environment of openness that shapes innovative behavior. 10;Originality/valueThe study identified the best practices of the most successful companies, ecosystem innovators. They excel across four innovation dimensions. They build platforms and employ ecosystems to better orchestrate customer experiences. They establish processes to effectively measure innovation within ecosystems in which they operate. They form organizational structures that institutionalize innovation. And they create and promote environments of openness and collaboration

Demand Hub: A Better Way to Meet Your Daily Needs!

Nowadays, there is a prominent bloom in the entrepreneurial sector in our country. Also, many existing business organizations are looking to expand their businesses and grow as quickly as possible.One of the most important factors when it comes to starting a new business or expanding an existing one is the location of the business. Many potentially good businesses fail to succeed due to the lack of proper location. 90% Indian startups failed within the first five years given in the report published by Are port published by IBM Institute for Business Value and Oxford Economics . The purpose of this system is to give people a platform where they can present their requirements and find the best possible location to put up a business. The system has data about all the pre-existing businesses and startups from all areas which we cover. Based on a combination of the existing data and the requests put up by the people recommendations and suggestions will be made to anyone who is in need of help to start a business or wishes to expand an existing one. Our clients include the users (people in general) and business providers. The users are people seeking certain services like ATMs, Hospitals in their locality. On the other hand, business providers are the people who want to get recommendations regarding the location and other aspects of the businesses. Our efficiency will be based on client needs and how efficiently and quickly they get fulfilled.