 Good afternoon everybody and welcome to this press conference from the annual meeting of the new champions in Dalian China You are watching either here in the room or at home the press conference of the World Economic Forum together with its strategic partner PWC prize Waterhouse Coopers We're talking today about a very interesting topic You you're truly aware that this that this event is focused very much on technology on digital technology on innovation And so it's a great pleasure to have this press conference on the topic of driving greater value from digital and data And I'm joined by an expert panel on this particular subject Which I'm happy to introduce to you to my immediate left is Dan D. Filippo He's the global and us data and analytics leader of PWC based in the US In the middle Scott Lycans, who is the leader and analytics for analytics consulting for China in Hong Kong He's also based in Hong Kong and last but definitely not least We're joined today by Adam Shu who is the practice lead of consumer in retail industry And if I'm informed correctly also the lead on digital strategy for China So we have a global perspective here on the panel We have a greater China and China Chinese perspective on the panel. So I think it's a very good mix You're very lucky today both here in the room and at the live stream because what we are getting today It's also a sneak preview of a report that PWC has put together that will only be published by the end of this month So what you're hearing here today is really fresh off the press and without further ado, Dan This report. What is it and what are the key findings of it, please? Thank you for being here. I will take you through some of our key findings And I will ask Scott and Adam to also to chime in and to give some Local commentary and some color to some of the results that I'm about to take you through So we are previewing with you our seventh annual digital IQ survey We surveyed 1836 senior and C-suite executives that that group encompassed more than 50 countries and 50 of those respondents were from here in China Our it was an online survey across many many industry sectors our respondents were broke out 50-50 between maybe business unit executives versus Technology executives and the company size ranged anywhere from 50 million plus in some of the smaller Countries to more than 500 million in revenue So on to the findings so first we found that Companies in China are spending a significant portion of their revenue on digital investments In fact, we found that 56% of the group were spending in excess of 10% of their revenue on digital investments And and another 10% of the group was spending Was spending more than 20% of their revenue on digital investments So clearly a significant area of spend here in China for Chinese companies Looking to get in the digital game and improve their digital performance I think we've seen this internet boom in China force companies across every industry to focus on What we'd call digital but almost specifically on e-commerce It's been across each industry thinking about how can we invest in this technology, but it's been very focused I think the digital consumer in China has caused this faster than we've seen anywhere else in the Western world So it's very interesting to watch but very telling that the investments being made very quickly here Thanks, Scott So moving on and sharing some other information with you So the business leaders in China are actually very confident on their organization's digital vision and capabilities So we asked them to score themselves or to rate themselves their own digital IQ on a scale that ran up to 100 And we asked them, you know, do you feel your digital IQ is greater than 90 greater than 80? It's et cetera and so on down the scale and more than half of the companies in the in the group from China Rate their digital capability as greater than 80% It's actually quite high and on the other end of the scale only 8% of the companies rated their digital capability as lower than 50% So the confidence both on the high side and the number even on the low side expressed more confidence Here in the Chinese companies in their own digital capabilities than the global average did for the survey itself And then finally I would say that in the 90 to 100 category those that rated themselves, you know 91 to 100 in a digital IQ that was twice as high as their global peers So clearly the organizations here are spending and investing into the digital space And they're also feeling quite confident and quite capable around the abilities that they have and and what they've invested in Yeah, maybe since primarily talk about internet plus I think it has become a catchword for all of us and for all enterprise regarding Awareness and the mindset for all the Chinese companies. No doubt everyone understands importance And they're really willing to invest we see that among all our clients in China Okay, thank you But on the other hand the respondents in China are less confident in their use of data compared to their global peers So we asked the question around extracting value and we asked How many are you know to what extent are the companies confident that they effectively utilize the data? that they Capture to drive business value and in China only 16% of the company strongly agreed That that they are doing this effectively and our global average was 30% If you take the strongly agree and agree that they are effectively using data in China It's 32% at the global average. It's 65% So clearly a recognition that yes, there's we're making investments We have capability but in terms of actually using the data effectively utilizing that data to drive business value We see some drop off there some clearly. There's less confidence in that regard than in the digital investment and capability And it's also important to note that just over half of the companies in China Do not consider that their data analytics skills are as highly developed as they need to be in important finding I think and but really presenting some opportunity here to Capitalize on that investment even further than they have so far Scott if you want to make a comment around that sure, you know I think it's exciting we're in the early days of the maturity of using data science here in China China's ten years ahead of the world in the scale of data being created But ten years behind in using it, but they've been you know, there's confidence around digital technologies and e-commerce has Has been a boom to their businesses. So data is now the focus. How do we use that data to be more efficient? How do we look at our operations? How do we engage our customers differently? How do we create new products based on the data? You're seeing the internet giants in China use that data and that will start to slowly trickle into the other Industries, I think the challenge around talent is very real We're in the early days of getting the universities to to train and create curriculum around data science So that will start to mature over the next few years, but again, we have a we have to tackle the scale of data We have to fix the quality of data and we have to start to integrate that data in real time And that's the challenge ahead for China We asked another important question to the survey respondents We asked how important do you believe effective use of each type of data will be to your competitiveness? And we listed several different examples and here where China was really leading the pack was around location aware data and Also around mobile customer interaction data so clearly that that investment is going into this space and is also giving Chinese companies the the confidence to to rely on that type of data and And and and that will you know will bode well obviously as as they go further down this digital and data analytics path And I just add you know nowhere Is it more exciting to think about the internet of things if we think about the amount of sensors and Machines that are going to create information here in China capturing that is is the real opportunity ahead Understanding the social data Chinese consumers trust their networks more than brands. So how do we tap into that sort of unstructured data? I think we're starting to see that it's still early days, but it's exciting So we went a bit further on this digital investment question. We asked well, where where are you spending the money? Where in what type of areas in your organization and interestingly we found some important differences here between the companies that Responded in China versus those outside China particularly those in the US where the where the contrast was even more stark So the the two areas that China seems to be investing in most most heavily in the digital space is really around revenue growth and Also in information technology, which perhaps is not a surprise and and you might ask well Where else would you spend well compared to their global peers? Where else includes in customer service and customer attention in operations and some of the support functions that go behind and support that revenue growth driver So very important differences here We see and I would expect that as as Chinese companies get a bit further down this road They too will start to look at that customer space a bit more as well as the operations and the support functions Adam yeah, no I think if very much we reflect the transition of economy and we used to be very much selling the products Less on the service but with the transitional economy going to the new growth phase Service is more important than customer experience operation investment will be really critical second actually China's doing a very fragmented distributions many of the companies to Manufacturing mindset and how do you write the party? There's just no data so a lot of marketing and we know with the economy growth the concentration of distribution Will increase with that especially the digital technology will be a much more B2C directly facing consumer So where you invest will be really shifting to as then comments on customer service And then potentially seeing that link between that and revenue growth, so it's not necessarily an either or Just moving on these in the survey. We asked the respondents to talk about the skills They see as most important to their business And here again we saw some important differences between companies here in China and elsewhere So the companies in China see technology skills as more important than analytics skills And that was a big difference than what we saw in the global group so the number one skill that was responded to as as Most important to the business was technology architecture and design far and away the lead here in China versus The what the global respondents talked about On the other hand data and analytics was one of was the leading response from the global group But actually the lowest or the least responded to From the Chinese companies, so you know here again We see not necessarily a right or wrong just to suggest that we see the Chinese companies as we've talked about and seen in other Parts of the survey Investing into the technology a bit more Whereas some of the peers from around the world are starting to look more at the analytics that flow from some of that technology investment I think we're also seeing different strategies as multinationals try to enter China. They realize very quickly They need to adapt to the e-commerce or mobile generation that's here the mobile only generation So the investment in technology is not surprising I think a lot of companies are looking at platforms like we chat or e-commerce platforms as the first entry As we start to collect the data that will be be the next wave of of evolution for these companies So it's it's quite early in the days. I think We also looked at we asked the survey respondents had you categorize your approach to adopting new and emerging technologies And here what we saw here in china again different from the global group. The big drive was towards technology driven We evaluate many new and emerging technologies that might have an impact on business performance As opposed to business driven here in from the global group. We saw a greater response in terms of You know, we have a proactive and systemic approach Of filtering technology based on defined business criteria So we do see this difference of being either technology led Or being more business led and using technology to support that business aim So an important difference again that came through in the survey We we also looked at when when organizations look to Identify and explore new or emerging technologies. Where do they look to where? What's the source of that and again another important difference in the survey Chinese companies by and large The the the most widely responded to response there was Looking at third parties having third parties helped them understand What are some of these technology trends? What's new? What should we be looking at as opposed to the global group was quite Very much more looking at sort of their own data labs or Dedicated innovation at you know on their own facility or from their own resources So this was another difference that we see And and I would fully expect that over time the Chinese companies will also Start to develop that sort of internal capability and start to create And create some of their own resources that they can use in lab type environment to start to look at the technology that And and how it fits best in their environment I think as adam mentioned as we see this transition into the the new economy There's more of a need to be open around innovation around being more agile and Reflecting on what's happening to the customers of the economy in front of you So the you know the the challenge ahead will be bringing this inside bringing Fostering the right talent and environment to create that innovative Culture within the Chinese companies right now they they go externally for this But to me that's not a sustainable strategy. They have to find ways to Foster the talent internally and spread a culture of innovation to be successful So just to summarize and then we'll we'll take questions In in summary, so the the companies in china are very confident about their digital understanding and capability Confidently investing into that space But we do see significant opportunities for growth as those as as these organizations get further down the road First around broadening definition of digital to be more enterprise-wide And less focused on the traditional it and the technology itself Secondly around integrating that digital strategy and the business strategy So making sure that all c-suite executives are involved in setting that digital strategy We did see quite a lot of ceo support from the chinese companies in that digital strategy But we see we see it being more widely adopted in in some with some of the respondents from outside of china Thirdly increasing that digital spend as we talked about earlier on some of that customer Customer focused investment And looking at operations and some of those important supporting capabilities to help drive that revenue growth we talked about earlier Taking a more business driven approach to adopting new technologies as we talked about again that difference between technology led or business led And then finally but importantly developing the analytic skills And looking more closely at new and existing data sets available to support decision making and to create competitive advantage So that's just a preview as as york said the the full study will be out and available in a few weeks time But a little bit of a preview of some of the findings and obviously some of the findings we see In chinese companies vis-a-vis the the global field Thank you very much. Thank you for to all of you before I open the the floor for questions and we have microphones here Adam you mentioned a time period of 10 years To to closing some of these gaps now I've been in dalyan for two years ago for the last time and I know that that the chinese build things That would take a german to build 10 years and two years So, uh, what are the factors that could speed up that development? And please for the other panelists step in if you want to add something. No, I think um Actually, what money can solve the problem? They'll be really quick look at how chinese governments Sorry, not governments chinese enterprise Institution deployed the resource on the road on the machines The hard part for this transition from hardware to software From it to analytics is about people it's about mind science. It's about knowledge I think they take generational shifts Taking additional education to make that happen. I don't want to say we are chinese We can do everything very quick This one does take some time and need help And I would just add I mean, I think it's a challenge for any company based anywhere in the world We talk quite a lot about the change management that needs to happen in order to capitalize on Some of the data and the algorithms and the techniques and the technologies that are out there The organization needs to be responsive To new ways of thinking about the issue to new Insights that may come from some of the data. So I think that's uh, some of that is not specific to china And then some of it as you point out of this Thank you very much. Uh, can I have a show of hands if there are any questions? So then we take the opportunity we ask our followers on facebook for for question And somebody wrote to us who is obviously interested in in data, but also a star trek fan because he said when captain p car From that tv series faced a complex problem. He would always listen to his team colleague data And the question is basically are chinese companies listening to data enough already? Yeah, I I would say the survey tells us not as much as the rest of the world I think again the challenge has become there's too much data So we have to get past big data and get to the smart data that can drive a decision So I think the the pace of decision making has increased in china. So the scale becomes a problem There's a quality problem getting quality data that's unstructured and and harnessing the value So I'd say there's a lot of opportunity. Uh, it's starting. It's in the early days But there's a lot of opportunity to use it more and more in decision making Thank you Yes, there's a gentleman in back if you could state your name and organization places. Thank you Kiku.com I got a question for the What are the obstacles that chinese companies don't use the Fully use the data I wonder why I'm sorry. What are the main obstacles for chinese companies to use data more efficiently? I think scott touched on a couple Let me start and then my colleagues will join in so one just the availability of data You know in is just not exactly the same as it is in in other parts of the world So I think first foremost that there's an issue. Uh, there's an issue there Uh, secondly, there's a dearth of uh, of skilled Data technicians data analysts statisticians econometricians PhDs data scientists all of that Everywhere in the world right now and and china is not different in that regard. So I think that's also Uh an area that um, you know, we'll be it will be an obstacle And um, and then you know again, I think just some of it is just, you know, some Thinking differently and uh making decisions in different ways that are not it's not easy things for organizations And so I'm sure china will overcome that But as we see right now the emphasis and the focus is is not quite there as much as it is on the leading technology I would just add shifting the mindset away from just the revenue focus using data around revenue focus strategies and being more enterprise focused There's plenty of data to use it's where are you going to use it to be more operationally efficient More customer focused etc versus just looking at the revenue side of it that that's just a change that has to happen Thank you very much Are there any other questions? Yes, the lady in the back, please Out of the 50 companies you surveyed in china. What kind of enterprises are they? Yeah, we we did see and intentionally so we tried to cut a broad swath across You know almost every industry And also in terms of size Um, we did see obviously some of the larger companies in the sample came from some of the larger countries But in in no case was one country looking at just one particular size or sector of company Thank you So can I see a show of hands if there are any other questions? Well, then I'll I'll take the privilege and ask one more question that we received through social media Actually, we received it in different different forms several times from From our chinese audience especially and you mentioned skills and it's very much in line what professor schwab says that Human capital and and talent is actually the currency that will decide the competitiveness of of enterprises in the future What what should I study if i'm a young chinese person? What should I study to to work in that field? What would you what would your personal recommendation be? Well having two boys in university myself Um, you know, it's funny You know when I when I got out of school that everybody was running towards wall street and and they wanted to get involved In investment banking now. This is actually the area that seems to have all the juice whether it's around You know the technology itself or the analytics piece and so I think we are going to see we are already seeing and we'll continue to see Uh, very much of a drive towards that type of um, you know, whether it's statistics or econometrics or just you know mathematics certainly computer science I think we're going to see continued focus in that in that space Okay, and I would just add a another unique perspective would be the visualization of data It really requires a different set of skills So experience design creative thinking a way to visualize such massive amounts of data is a different skill set So beyond the the the math and science of statistics the art of creating a simple message or on complex data That's the hard skill to find right now Okay, thank you Yeah, just maybe add one more on the creativity side and as Chinese students Follow a lot of textbooks the key is just open minded Be creative on how to use the data to solve the problems taking a more problem solving approach to mindset in using Thank you very much and the mindful of the field schedule of the gentleman on the panel Thank you everyone for joining us today And stay tuned on the 30th of september the seventh annual digital IQ survey of pwc will be launched Stay tuned for that and thank you for joining