By Hussam Almughtham*

WITH income inequality and the gender gap as hot topics at the recently held World Economic Forum 2018, it’s not surprising that so many CEOs see investing in advanced technology a safer bet for bigger returns than putting their money into people and human capital.

In fact, in “The Trillion-Dollar Difference”, a recent Korn Ferry global economic survey, 67 percent of CEOs said they believe that technology will create greater value in the future than human capital will. And 63 percent believe technology will become their firm’s greatest source of future competitive advantage.

With income inequality and the gender gap such hot topics at World Economic Forum 2018, it’s not surprising so many CEOs see investing in advanced technology a safer bet for bigger returns than putting their money into people and human capital.

In fact, in “The Trillion-Dollar Difference”, a recent Korn Ferry global economic survey, 67 percent of CEOs said they believe that technology will create greater value in the future than human capital will. And 63 percent believe technology will become their firm’s greatest source of future competitive advantage.

But while business leaders see a perceived need to invest in technology to maintain a competitive advantage, many appear equally anxious about the ability to keep up with the incredible pace of change today. They are anxious about investing in technology to stay on par with disruptive interventions but also concerned about managing expectations of a new age workforce – the millennials who have different drivers and motivations.

And the general workforce is equally anxious as they want to be better prepared for the future of work where there are still plenty of opportunities but the needs and roles are now and different.

In his recent WEF keynote, Justin Trudeau, Prime Minister of Canada, a big proponent of investment in AI, empathized with those who fear the impact of advanced technology on the future of work around the world:

“This current step, involving automation and AI, as the obvious examples, will totally revolutionize the world of work – in many ways, they already have. As business leaders, I know you view these as both exciting and challenging advancements. You are rightly anxious about how quickly our existing business models are being disrupted. Still, if you’re anxious, imagine how the folks who aren’t in this room are feeling.”

The Kingdom of Saudi Arabia Vision 2030 recognizes the important role development of advanced technology, AI and industrial automation will play in the future of society, particularly as an economic diversification tool.

The National Digitation Unit (NDU) is aggressively pursuing a range of initiatives and public-private partnerships with the goal of making the Kingdom the new tech hub for the modern Arab world. The NDU will increase inter-governmental communication and coordination, advance the nation’s smart cities initiative and greatly improve access and convenience of government services to Saudi citizens while adding an estimated 200,000 jobs to the economy by 2025.

Under NDU, the nation also launched “Fekra Tech” or the new Tech Idea open platform initiative. Developed in cooperation with Saudi Telecom Company as an exclusive partner, “Fekra Tech” addresses the roles individuals, companies and institutions will contribute to the Kingdom’s national digital transformation. This initiative is the first of its kind to develop the social innovation environment and to attract inspiring ideas and projects in the field of digital transformation. The initiative will work on several vital tracks such as health, education and e-commerce. In addition, it will contribute to building technical solutions for many vital sectors, which will positively impact the individual and society at large.

“Fekra Tech” will lead the way for the Kingdom and the greater GCC to develop the skills of scores of young people in artificial intelligence to drive its industrial sector development strategy and to start preparing the Saudi workforce for a new wave of jobs.

Korn Ferry’s research covered more than 2,000 companies across the region. It showed the majority of any large employer’s workforce in the GCC, whether in government or the private sector, is in the 30 to 35-age bracket. The majority of top-level leaders are much younger than global counterparts. The average age of the leadership community is in their 40s as opposed to a global average where business leaders are in their late 50s. And in Saudi Arabia, approximately 70 percent of the total population is under age 30, a demographic more willing and able to easily adopt new technologies.

These demographics are both interesting and favorable to the region. They point to a greater need for people management with increased investments in talent assessments, leadership development and employee engagement. And they tell us the balance between investment in people and technology is even more crucial here.

That’s why it’s all about planning and preparing for the future for the well-being of the people. Not about choosing technology over people.

Today, too many CEOs have a blind spot when it comes to the choice of investing in people or technology. It’s not about one or the other. It’s about investing in and preparing the workforce of today and tomorrow to make sure businesses are best positioned to deliver the value creation and sustainable growth investment in technology is intended to deliver.

Korn Ferry’s “The Trillion-Dollar Difference” report shines a light on that blind spot. It showed that human capital represents to the global economy a potential value of $1,215 trillion, or 2.33 times greater than physical capital that includes tangible assets like technology, real estate and inventory, which should be valued globally at $521 trillion.

But what was more telling from the research was the evidence that human capital is the greatest value creator available to organizations. For every $1 invested in human capital, $11.39 is added to GDP. That return – value versus cost – should give a clear signal to CEOs that investing in people can generate greater value for an organization over time that significantly exceeds initial financial outlay.

The real challenge facing business leaders today isn’t about choice, whether to invest in people or technology. Both matter to competitive advantage and sustainable value creation. It’s about how to ensure business is best aligned and positioned to realize maximum return on investment from both sides of the equation.

That alignment comes from ensuring the workforce of today is being prepared to deliver as the workforce of tomorrow in three fundamental ways:

• It starts with making sure businesses are armed with the right talent, with people who bring to the table a certain set of skills and experience while at the same time are adaptable to growth and change.

• That growth and change comes from investing in well-structured leadership, talent and skills development programs, which have to ensure future leaders are better prepared for the future of work. Today’s leaders need to be more agile and accepting to new ideas and innovation from their people. And not just technology, but new processes and management ideas. This is a challenge for leaders in this market who tend to have a more directive leadership style in comparison to other mature economies around the world.

• And it’s about ensuring a company’s organizational structure and talent deployment strategy empower the right people in the right jobs. Many organizations have great core business leaders. And some have strong “born digital” leaders. But very few organizations have demonstrated an ability to develop a cadre of leaders who have core business and digital expertise coupled with the orientation to drive the right balance. Organizations need to proactively work towards building a pool of such leaders.

Our world leaders got it right putting AI and advanced technology on a global stage at WEF 2018. The pace of change can be both exciting and daunting. And it can make even the most experienced business leaders anxious. But CEOs as well as government leaders have an opportunity to do more and deliver more from their investments in both people and technology. If they get the balance right.

The writer is a Senior Partner, Korn Ferry Saudi Arabia, the preeminent organizational consulting firm.