SystemInitiativeonShapingtheFutureofDigitalEconomyandSocietyOurSharedDigitalFutureResponsibleDigitalTransformation–BoardBriefingWorldEconomicForum91-93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744Email:contact@weforum.org©2019WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.ThiswhitepaperhasbeenpublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinareare-sultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForum,butwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.3OurSharedDigitalFutureForewordExecutiveSummaryToolkitlistofboardquestionsProjectFindingsTopic1:Cyber-Resilience–TheImmediateChallengeTopic2:DataPrivacy–AUniversalIssueTopic3:InternetofThings(IoT)–TheGatewaytoAutomationTopic4:Blockchain–DistributedLedgerTechnology(DLT)Topic5:ArtificialIntelligence(AI)andMachineLearningConclusionContributorsGeneralPrinciplesandGlossaryEndnotes567881012141516171819Contents4OurSharedDigitalFuture5OurSharedDigitalFutureForewordBy2022,60%oftheglobalGDPwillbedigitized.Yettodayonly45%ofpeopletrustthattechnologywillimprovetheirlives.Everysectorisbeginningtofacedeepquestionsaboutwhattheimplicationsofthistransformationwillbe.PreviouscollaborativeresearchundertakenbyindustrycommunitiesattheWorldEconomicForumoutlinedthetremendousbenefitsthatcouldbegainedfromthistransformation.Theseincludecreatingsignificantneweconomicvalue,meaningfulandrewardingemployment,andnewproducts,servicesandmarketsthatcontributetowardssustainabilityandsocietalvalue.Atthesametime,however,publicunderstandingisgrowingaboutthepotentialrisks,intermsofprivacy,securityandjobinsecurity.Digitizationisrewritingthesocialcontract–changingtherelationshipbetweenindividualsandthestateandindividualsandbusiness.Fromabusinessperspective,thefirstchallengeisimmediateandexistential.Digitizationreducesbarrierstoentryandopensthepossibilityfornewbusinessmodelsthatdisruptincumbents.Digitizationwillultimatelyreshapemarkets,sectorsandtheroleofcompaniesinwaysthatareyettobecomefullyclear.Businessmodelswillevolverapidly,andcross-industryplatformsandecosystemsarealreadyemerging.Onmanyissues,businessistodaybeingincreasinglychallengedaboutitsroleinsociety.Inthedigitalcontext,theresponsibilitiesoforganizationsastheprimarystewardsofourdata,orasprovidersofconnecteddevicesthatwerelyonforsafety,areequallybeingcalledintoquestion.Aseverycompanybecomesatechcompany,thesenewresponsibilitieswillaffecteverydigitallyenabledorganization.Whatthismeansisclear:Wemustdevelopourunderstandingandpracticesalongmultiplestrandsatonce.Wemustrapidlyengageintransformationandinnovationprogrammes.Wemustencourageandparticipateinmultistakeholderdialogueonthesocietalimpactsoftechnologyandourroleinshapingpositiveoutcomes.Andwemustimproveourindividualandcollectiveunderstandingofthestateofplayonkeytechnologiestoday,inordertosupportgooddecision-making.Inthisfinalregard,boardsplayacriticalrole–astheysetthedirectionfortheirorganizations.Wehopethispaperwillmakeausefulcontributionandbeagoodstartingpointforimprovingunderstanding,supportinginformeddecision-makingandenablingallorganizationstocontributepositivelytoatrusted,inclusiveandsustainabledigitaleconomy.DerekO’Halloran,Head,FutureofDigitalEconomyandSocietyMemberoftheExecutiveCommittee,WorldEconomicForumWinstonGriffin,ProjectCollaborator,SecondedtotheWorldEconomicForumbyProcter&Gamble6OurSharedDigitalFutureExecutiveSummaryAresponsibleapproachfrombusinesswillbeessentialtomanagingdigitaltransformation.Themotivationtoachievethiscomesfromtheneedtoreconciletwoforces.Onthenegativesideisconcernintheneartermoverpotentialliabilityforenterprisesthatarenotwellprepared.Andonthepositiveside,thisisauniquemomentforenterprisestorisetothechallenge,atatimewhenindustriesarerewritingsocialcontracts.TheWorldEconomicForum(theForum),viaitsGlobalSystemInitiativeonShapingtheFutureofDigitalEconomyandSociety,isdrivingtheagendaof“OurSharedDigitalFuture”.Oneofitsgoalsisdeliveringresponsibledigitaltransformation(RDT),andthispaperaimstoprovideaframeworkonhowtothinkabouttheimpactsfromfiveemergingdigitaldevelopmentsofcyber-resilience,dataprivacy,theinternetofthings(IoT),blockchainandartificialintelligence(AI).Thetargetaudienceforthispaperaretheboardsofallorganizations,andtheobjectiveistoprovideapracticaltoolkitforusebythe“normalboard”.Thispotentialglobalaudienceincludeslistedandprivatecompanies,non-profitorganizationsandpublic-servicedeliveryorganizations.Wehopethatgovernmentagenciesoverseeingcommercialandeconomicactivitieswillfindinsightsforpolicy-makingandreachabetterunderstandingoftheneedsofthebusinesscommunityintermsofregulatoryframeworksandtheenablingenvironment.Aspartofthework,theForumranaconsultationwithbusinessleadersandregulatorsdurin