This interview is part of the Dialogue on Digital Transformation series, a series of conversations with world-leading experts that address some of the year’s most critical questions about digital transformation, from leveraging digital transformation to rebuild more inclusive economies and combating the digital divide to striking the crucial balance between competitiveness and human-centric innovation.
Gianna Sagazio is the Director of Innovation at the National Confederation of Industry – Brazil (CNI), responsible for the executive coordination of the Entrepreneurial Mobilization for Innovation (MEI). She is the Board Director of the Portulans Institute, member of the Board of Directors of the National Fund for Scientific and Technological Development (FNDCT); member of the Advisory Board of the Brazilian Agency for Innovation (FINEP); member of the Board of Directors of the Center for Management and Strategic Studies (CGEE); member of the Management Committee of the Innovation Office of the Ministry of Economy (ME) and member of the National Coordinating Commission of the Dialogues for Brazil Projects of the Brazilian Academy of Sciences (ABC). Before this, she worked at the National Development Bank (BNDES), the United Nations and the Dom Cabral Foundation. She holds a Master’s in Economic Development from the Catholic University of Brasilia and is certified by the Wharton School of Pennsylvania in Strategy and Innovation.
How can digital transformation be leveraged to rebuild more inclusive, diverse, and equitable economies and workplaces in the post-COVID world?
The COVID-19 crisis heightens awareness of social and economic problems, challenging government, business and people to devise long-term solutions. Dealing with the coronavirus crisis and its aftermath is an imperative issue nowadays.
Epidemiological and environmental factors are no longer restricted to the domain of public policies for social welfare. Today, they also serve as premises for economic activities. From a political, economic and social perspective, the effectiveness of the business world is and will be directly related to the ability to manage different habitats, together with epidemiological procedures, in real time. Therefore, the use of digital technologies will be increasingly intrinsic in corporate culture.
The challenges for Brazil are enormous. We have a diverse and uneven economy. Historically, islands of efficiency and prosperity have existed side by side with poverty and other social problems, such as access to good quality education, health care and several basic public services. In a country with these characteristics, science, technology and innovation are often unfortunately considered secondary issues.
However, it is precisely because of its shortcomings and weaknesses that the country should reinforce its bets on scientific and technological development. New technologies can contribute to reducing chronic problems, by improving public services and ensuring a more efficient use of natural resources, for instance.
Technology and innovation are among the main engines of a nation’s growth and economic development. To boost the development of countries that are distant from the technological frontier, such as Brazil, it is essential to rely on foreign technologies as well as on the development of endogenous ones.
Technical progress has long been known as one of the main drivers of economic development. Innovation, however, does not happen automatically or is driven only by market forces. One basic feature of innovation is that it creates strong positive externalities in the economy — the social benefits of innovation far outweigh private ones. These benefits justify the role played by States in this area. As an example, innovations in health care, apart from generating greater profits for the innovator, also create several social benefits, such as improved quality of life and increased life expectancy.
In addition to externalities, innovation is subject to a series of market failures, which, in the absence of public policies, can lead to lower investment levels in innovation than is socially desirable. In developing countries, such as Brazil, these market failures are even more frequent and more consequential than in developed ones.
How should firms and governments build a supportive ecosystem for digital leadership, leveraging technology, governance and people for impact?
Investments in all sectors depend on industry’s ability to provide appropriate instruments for new projects to be implemented with greater technological progress and innovations that can actually produce disruptive change. For this purpose, there is a need for a strong innovation ecosystem involving the private and public sector and academia.
Creating a supportive ecosystem for digital leadership, leveraging technology, governance, and people for impact is one of the goals of the Entrepreneurial Mobilization for Innovation (MEI), a group coordinated by the National Confederation of Industry – Brazil (CNI) that brings together more than 300 of the country’s main business leaders. MEI aims to insert innovation into the companies’ strategies, as well as to propose effective innovation policies to place Brazil among the most competitive countries in the world.
The priorities proposed by MEI to turn Brazil into an actually innovative country include six topics: regulation, governance, innovation funding, global insertion, talent development and support to small and medium enterprises.
How does the MEI focus on digital transformation?
Considering that it is essential to reduce the technological gap between Brazil and other economies to ensure a more prosperous future for the country, there are a lot of exponential technologies that can make companies increasingly digital, flexible and adapted to the long-awaited and customized mass production. But where and when to start are related problems.
Digital transformations are among the riskiest for established businesses because of the depth and breadth of the change involved, the capability disadvantage of many incumbents, the speed of adoption, and the fact that customers’ expectations are set by native digital companies. However, it’s important to focus on how such efforts are structured and carried out to avoid a number of hazards. Most world capital currently spent and reinvested is focused on the short term and is usually intended to improve inefficient processes and products. The long-term scenario, on the other hand, if we are to mitigate the typical errors that occur in the development journey, can be developed by innovation management.
One of the new MEI initiatives is a partnership led by CNI and the Ministry of Science, Technology, Innovation and Communications (MCTI) to support innovation management for the digital transformation of the productive sector, Nagi Digital. This initiative will develop digital transformation pilots within companies, which can later be scaled on a platform to support multi-criteria decision-making combining different technologies and innovation management processes, leading to an exponential number of new businesses solutions.
Besides that, in an indebted world (the world debt of states and companies in 2019 amounted to more than 250 trillion dollars), the “new normal” business models after Covid-19 will probably be more open, allowing the presence of different actors, creating the advantage of mitigating the weaknesses of people, systems and technologies by better understanding the demands of business.
It’s also important to highlight the CNI-SOSA partnership, created to leverage the innovation capacity of Brazilian industries and startups and place them in the global market, improving their competitive advantage by inserting themselves into benchmark innovation hubs.
The program offers companies and entrepreneurs the opportunity to connect with technology hubs in Tel Aviv and New York and access to disruptive technologies that are being developed outside of Brazil. Participating companies will join a network of global corporations, investors and technology companies linked to SOSA, develop proof of concepts, strategic partnerships and use tools to build businesses focused on innovation. Startups, on the other hand, will have access to open innovation ecosystems in Tel Aviv and New York, where they will approach multinational corporations, venture capitals, investors and other technology companies. Startups will also participate in curated technical events, with global business opportunities, including meetings, round tables, panels and professional workshops designed to provide the tools and best practices needed to build a global company.
One of the NRI’s main pillars is people. How does the MEI agenda address this issue?
As human-machine collaboration becomes both necessary and prevalent, more than focusing on technology, workers’ experience must emerge as the focal point of organizational transformation.
Digital workers will also need to adapt to more agile and innovative organizational structures, as technologically adept networks of teams emerge to work agnostically with sales, marketing, service and operational assets.
Due to the diffusion of digital technologies, such as automation, the Internet of Things, artificial intelligence, etc., companies are being forced to review their strategies, including for qualifying the workforce. It is critical to discuss policies and instruments that prepare workers for the future, to lead technological development and business innovation — which are central for economies to increase their productivity and competitiveness.
Convergence between industrial development, technology and work involves the availability of human resources for innovation as a key element for business success and economic development in the new technological paradigm of industry.
In this context, particular attention is being paid to the engineering area, due to the role it plays in technological innovation processes. In Brazil, MEI created a working group bringing together companies, government and academia to address specific changes required to modernize and strengthen engineering in the country, including, among other actions, coming up with recommendations for improving engineering education in Brazil, contributing to defining new national guidelines for engineering courses. Universities have 2 years to adapt themselves to these new guidelines.
The Group is currently preparing a document to support and encourage universities in the process of adopting these guidelines. This is being done in partnership with representatives of academia, government, and professional systems, in order to increase their potential impact. The Group has also started to address the debate on STEM education, since it has been considered crucial in the education scenario worldwide.
Among other activities, the group is discussing the future of education in a post-coronavirus scenario. The Covid-19 pandemic has changed the way education is offered to students. Mostly habituated to classroom teaching, faculties and students in several countries have had to quickly adapt to remote teaching practices and deal with adversities such as lack of infrastructure, equipment and even the inexperience of students and teachers with online teaching.
It is too early to indicate which changes will remain in the long run. But it seems plausible that forms of hybrid models of education can be intensified, as well the dissemination of courses focused on the digital age and on strengthening STEM approaches, since science and technology are crucial for facing and overcoming the crisis.