Time to rethink resilience
This report explores what resilience means today and how enterprises are developing strategies to circumvent the effects of future disruptive world events.
Introduction
Recent situations reveal the complexity and interlinked effects of different disruptive events.
The war on Ukraine. The COVID pandemic. Natural disasters. These occurrences raise alarms about the lack of readiness for what is to come and spark recognition that many major events, no matter their origin, tend to have ripple effects.
Take the current supply chain disruption faced by many countries – while only occurring in a few markets, it has driven price hikes on a global scale. For example, trade energy embargoes on fossil fuels headed for central Europe also increased electricity costs in northern Europe1. Due to the interconnection of ecosystems, cascading impacts become broader than the initial cause and could jeopardize some of the Sustainable Development Goals (SDG), such as SDG 7 – affordable and clean energy2.
Resilience is a term used within the business community and academia, often with various meanings. It commonly refers to the ability to bounce back and return to a previous state after a disturbance. In the context of enterprises, the term describes the ability to maintain
core capabilities, identity and structure, and the capacity for agile transformation3. This report considers all of the above in its definition of resilience. For an enterprise to be resilient, it thus needs to be capable of handling systemic disruptions that can be random, accidental, or even intentional.
Living in an uncertain world where ecosystems grow in number and complexity brings into focus ways to deal with, survive and even evolve around disruptive events. Recent world events such as the pandemic and its consequences on businesses have intensified discussions on disruptive changes, risk management and other means of strengthening resilience.
How can an enterprise not only survive but also evolve and thrive during times of crises and disruptive changes? What is the role of technology (including digitalization, cloud, telepresence solutions and mobile connectivity such as 5G) and society in this context? How do enterprises relate to sustainability within a resilience framework? What are the differences between resilience and sustainability and why are they important?
To answer these questions, we interviewed 9,200 decision-makers and employees from 23 markets across all industry segments.
Key findings
1. A more disruptive future awaits
- Four times as many decision-makers and employees agree than disagree that there will be more frequent and severe disruptive events in the future.
- Natural disasters caused by climate change (such as flooding and storms) are key challenges for 42 percent of decision-makers and more expect it in the future.
- Not all events are equal – energy crises, pandemics and cyberattacks are regarded as the likeliest and most severe events.
2. Enterprises are more prepared for disruptive events, enabled through digitalization and automation
- 49 percent of decision-makers say their company has a well-defined strategy to handle disruptive events, while 4 percent do not agree. Amongst employees, eight times more say they are prepared than not.
- Companies that have experienced an event are 10 percentage points more likely to be prepared for it again.
- 90 percent of companies with a well-defined resilience strategy invest in digitalization and automation to become more resilient – 50 percent higher than those without a strategy.
3. Societal and digital support is necessary for enterprises to handle future crises
- Decision-makers (89 percent) and employees (83 percent) say societal support is critical during disruptive events.
- 58 percent of employees think well-functioning cooperation with partners, suppliers and others is key to increasing their workplace’s ability to handle disruptive events.
- Almost 6 out of 10 decision-makers want an AI-based service that learns from previous events and provides early preventive recommendations or warnings of disruptive events, and almost as many want Virtual Reality (VR) resilience training systems for their employees.
4. Enterprises can avoid the vicious circle of decreased environmental sustainability by balancing efficiency and redundancy
- As enterprises experience more disruptive events, their reliance on redundant solutions increases. This could become a vicious circle with increased resource usage and higher environmental impact.
- To counter this, dematerialization through digitalization could enable enterprises to become more resource efficient.
- Nearly half of the surveyed enterprises say they already consider both efficiency and redundancy to find the best trade-off.
5. There are five paths to resiliency that enterprises tend to follow
- Depending on the nature of each enterprise, this study identified five different paths enterprises take to achieve resilience: “Employee-led”, “Agile and cost-efficient”, “Automation first”, “Sustainability pays off” and “Innovation through digitalization.”
- Despite the differences between these paths, some characteristics are also shared to varying degrees, such as innovation, digitalization, proactive risk management and environmental sustainability.
6. It is time to rethink resilience
- None of the five paths is sufficient to reach long-term resilience – a sustainable future for all. Two key shifts will be imperative going forward.
- Short-term redundancy-based resilience needs to shift to a more environmentally sustainable, long-term efficiency-based resilience. Achieving this is challenging, as almost 8 out of 10 enterprises are still increasing supply chain redundancy today.
- Recovery-oriented resilience needs to shift towards pro-active business model innovation. Already today 80 percent of decision-makers include this in their resilience strategy, and close to 60 percent of them plan to intensify their efforts in the future.
Explore the report
Methodology
Quantitative data was collected from 23 markets through 9,200 online interviews held with respondents aged 18 and older, in Australia, Brazil, Canada, Chile, China, Colombia, France, Germany, Greece, Hungary, India, Indonesia, Italy, KSA, Malaysia, Mexico, Singapore, South Africa, Spain, Sweden, Thailand, UK, and US.
All industry segments, except for NGOs, were included in the scope of this study. Of these respondents, 4,600 were decision-makers in companies with more than five employees. The remaining 4,600 respondents were employees. These respondents are estimated to represent around 809 million out of 1390 million employees active in the type of surveyed companies in the covered markets. The early-adopter profile of many of these respondents make them important when it comes to exploring the future evolution of enterprises.
The online survey was conducted between March 8th and April 26th, 2022. Qualitative insights were gathered through 19 telepresence interviews with decision-makers, subject matter experts and academic researchers in the US and Europe. The interviews were conducted between January 12th and March 11th, 2022.
About the authors
Patrik Hedlund
Patrik Hedlund is senior researcher at Ericsson IndustryLab. His research is focused on the role of new technology for industries and society. He has extensive experience from the telecom sector with previous positions in business development, product management and marketing. Hedlund holds a Master of Science in electronic engineering from the University of Uppsala.
Sepideh Matinfar
Sepideh Matinfar is senior researcher at Ericsson IndustryLab. She has been working with different sustainability questions, performing Life Cycle Assessment of ICT products and services. Recently she has broadened her area of research to Industry and enterprise field. She holds an MSc in Environmental Science from Stockholm University.
Anders Erlandsson
Anders Erlandsson is heading up Ericsson IndustryLab. He has worked extensively with consumer and industry market research since 2005. Anders is based in Stockholm, Sweden and has previously held various Product Management, Business Development, Sales and Marketing positions in Sweden and in the UK. He holds an MSc in Industrial Engineering and Management from the Linköping Institute of Technology.
Jana Uthayakumar
Jana Uthayakumar is a Senior data & analytics researcher at Ericsson Consumer & IndustryLab. He has over 8 years of experience working in market research, specializing in marketing and data science. As a key member of the team, he leads the analytical framework in projects by translating business questions into data-driven solutions as well as identifying innovative methodologies.
Gunnar Ehrnborg
Gunnar Ehrnborg is Principal Researcher & Chief Statistician at Ericsson Consumer & IndustryLab. He is responsible for analyzing market insights, behaviors and trends as well as driving the development of statistical analyses. He has worked on 100+ projects for different customers - analyzing current and changed ICT-behavior all over the world.
About Consumer & IndustryLab
Ericsson Consumer & IndustryLab explore the future of technology for consumers, enterprises, and a sustainable society. We deliver world-class market research, actionable insights, and design concepts to drive innovation and sustainable business development. We provide a scientific fact-based analysis regarding environmental, social, and economic impacts and opportunities of ICT.
Our knowledge is gained from global consumer, enterprise, and sustainability research programs, including collaborations with leading customers, industry partners, universities, and research institutions. Our research programs cover in-depth studies and over 100,000 interviews with consumers, working people and decision-makers each year, in 30 countries – statistically representing the views of 1.1 billion people.
All IndustryLab reports can be found at: www.ericsson.com/industrylab
