We develop a framework linking organizational and industry architectures to value creation and value capture and apply it to the case of Industry 4.0 (the coordinated use of digitally-enabled technologies like robots, sensors, and artificial intelligence) in the automotive industry. We argue that if factory owners develop automation methods that capitalize on their greater access to the context in which production data is generated, they will be better able to prevent value from migrating to “digital entrants” that offer automation consulting and data analytics. Manufacturers can do this by adopting an organizational architecture that empowers shop-floor workers to combine their local knowledge with digital tools. Conversely, to the extent that digital entrants develop a more abstract version of these tools that they spread across industries, they will capture more value.

A much-publicized Freelancers Union/Upwork (FU/U) study in 2014 claimed that freelancers comprised 53 million workers representing about 34 percent of all workers; a second, recently released study finds 54 million freelancers. The FU/U estimate stands in stark contrast to what the Bureau of Labor Statistics (BLS) tells us: there were just 14.8 million self-employed workers in 2014 representing 10.1 percent of employment. Who is right?

Our paper offers several predictions about how Industry 4.0—the coordinated use of robots, sensors, AI, and other digitally-enabled technologies in manufacturing—will affect which firms and occupations capture value in manufacturing. We develop our insights using in-depth interviews with manufacturers that are part of the automotive value chain, including parts suppliers and automakers, and with integrators who provide robotics and other advanced automation to manufacturers. Among other findings, we highlight that value migration within firms likely affects whether and how value migration occurs across firms.

This paper establishes that the rise in the income share of information and communication technology accounts for half of the decline in labor income share in the United States. This decline can be decomposed into a sharp decline in the income share of “routine” labor—which is relatively more prone to automation—and a milder rise in the non-routine share. Quantitatively, this decomposition suggests large effects of information and communication technology on the income distribution within labor, but only moderate effects on the distribution of income between capital and labor. A production structure calibrated to match these trends suggests modest aggregate welfare gains from automation.

In summary, RPA can be used as a tool to increase engagement and satisfaction and is an enabler of ongoing transformation that touches upon many dimensions in the workplace. It therefore needs to be connected to a broader talent strategy, and companies will need to change their operating models to maximize value. Simply put, the benefit of RPA easily transcends headcount and cost reduction.

Individuals and businesses alike are embracing the digital revolution, utilizing mobile interactive tools to communicate, make decisions and facilitate purchases. Impacting virtually every industry, this global trend is certainly top of mind for automotive companies. As they rethink what customers value most and create operating models that take advantage of new possibilities for competitive differentiation in areas such as connected vehicles and mobility services, the most pressing challenge for auto companies is how fast and far they can go on their path to digital transformation.

The workplace flexibility movement began years ago when many organizations launched talent initiatives to accommodate working mothers. Over time, flexibility options mushroomed: from compressed workweeks to job sharing, telecommuting to adjustable schedules, career lattices to career re-entry. From its birth as an employee entitlement, workplace flexibility has grown to become a requirement for organizations that want to make the most of its people’s productivity. Consider these statistics: • Women without children would rather have more free time than make more money (68 percent)—even more than those with children (62 percent).1 • About 40 percent of professional men work more than 50 hours per week. Of these, 80 percent would like to work fewer hours.2 • One of every five employees cares for elderly parents, a number that could increase to almost half of the workforce over the next several years..3 • By 2025, Gen Y employees, now in their 20s, will grow to represent 75 percent of the workforce. For this emerging generation, work-life fit is valued more than compensation growth or skill development.4 Workplace flexibility has become table stakes for attracting and retaining employees. Now companies must align their flexibility strategy with their core strategy to realize the benefits. Workplace flexibility is vital for many employees and a welcome option for others. It can be just as beneficial to organizations—but only if they execute it well. That means seeing it from a business strategy perspective. Technology made today’s brand of flexibility possible, but companies can’t view workplace flexibility as a technology issue; it’s a management challenge. Of course, implementing an effective flexibility strategy is not easy. Demanding clients and customers want to be served at their convenience. Peak loads—and undesirable shifts—must be covered. Managers accustomed to face to-face supervision worry that homebound employees will fritter away work time. Remote team members fear they will miss a midnight email. And sometimes, employees who remain in the office believe they’re taking on heavier workloads while others take “flex time” — and they'll resent it, whether or not it’s true. Management should be prepared to nurture and grow an effective flexible work environment over time—it can’t be left to chance.

The theme of this year’s Tech Trends report is the kinetic enterprise, an idea that describes companies that are developing the dexterity and vision required not only to overcome operational inertia but to thrive in a business environment that is, and will remain, in flux. This is no small task. Though the technology advances we see today embody potential, only a select few may ultimately deliver real value. Indeed, some are more hype than substance. We need to do a better job of sifting through the noise to identify truly ground-breaking innovations that can deliver value. Then we need to act. Passively wondering and waiting are not options. As in Newtonian physics, the task before us is turning energy’s potential into reality. This is our eighth Tech Trends report. The beauty of following a broad swath of technology advances over time is that amid the incredible pace of change, we can recognize familiar themes. For example, the five macro forces—digital, analytics, cloud, the reimagining of core systems, and the changing role of IT within the enterprise—have remained constant, year after year driving disruption and transformation. Despite the omnipresence of these five forces, enterprise adoption of them continues to vary widely. Some companies are only beginning to explore trends we wrote about in 2010, while others have advanced rapidly along the maturity curve. To the former, arriving late to the party doesn’t necessarily diminish the opportunities you are pursuing. You have the advantage of being able to leverage compounded years of evolution within, say, mobile or analytics without having to work sequentially through the incremental advances represented in our annual Trends reports.

Nokia's leaders reflect on the Bridge program, lessons learned during its implementation, and the business benefits it brought to the company. Nokia's Bridge program resulted in 60% of employees knowing their next step the day they exited the firm. It also helped employees start 1,000 new companies and replaced jobs in communities where Nokia was a major employer. One-third of all mobile phone sales between 2011–2012 came from new products that were developed at R&D sites and manufactured at factories that were to be closed down or downsized as part of the restructuring.