行业研究报告哪里找-PDF版-三个皮匠报告 (2023)

APQC：2023年供应链优先事项与挑战调研报告（英文版）（40页）.pdf

2023 SUPPLY CHAIN PRIORITIES AND CHALLENGESSurvey ReportJanuary 2023K0130332023 APQC.ALL RIGHTS RESERVED.2347Valid Global ParticipantsABOUT THIS RESEARCHAPQC concluded its ninth annual Supply Chain Management Priorities and Challenges research in early 2023.The purpose of this research is to learn about organizations supply chain management priorities,performance,and trends.This research focuses on:How well supply chains have performed considering the global pandemic and multiple disruptionsTrends impacting supply chainObstacles to improving supply chain processesOrganizational priorities for supply chain in 20232023 APQC.ALL RIGHTS RESERVED.3A Brief Look Back at 2022122023 Changes and Challenges32023 Priorities4Recommended Relevant APQC ContentCONTENTS5Participant DemographicsA LOOK BACK AT 202212023 APQC.ALL RIGHTS RESERVED.5EVALUATING SUPPLY CHAIN RESPONSE TO COVID-19(YEAR 3!)2%Completely failed9rely survived17%Neutral44%Had modest success20%Completely saved the day*9%of respondents supply chains were not significantly impacted by COVID-19In 2022,supply chains continued to adapt and respond to pandemic-driven disruptions.Many showed their resilience,and almost 2/3 rated themselves successful to some extent.One in 5 reported completely saving the day.However,the percentage that barely survived or failed(11 percent)almost doubled from the prior year.N=3472023 APQC.ALL RIGHTS RESERVED.6PERFORMANCE ON 2022 BUSINESS GOALSN=347Were supply chains successful in 2022?Although almost 80 percent reported surviving 2022,surviving doesnt mean thriving.Almost half(47 percent)of respondents missed the target for their business goals in 2022.This performance is similar to what we saw in 2021.The many different disruptions facing supply chains,including the multi-year pandemic-induced disruptions as well as labor and geopolitical challenges,continue to take their toll.53%on target/achieved/exceeded all business goals for 202234%on target/exceeded competitors/peers performance 2023 APQC.ALL RIGHTS RESERVED.7PERFORMANCE ON BUSINESS GOALS OVER TIMELooking at the percentage of respondents that achieved their annual business goals,the level of performance is stabilizing as supply chains adapt to the challenges facing them and strive to return to pre-pandemic performance levels.However,having only slightly more than half achieve their goals is not encouraging.In 2023,we anticipate organizations continuing to try to catch up to their peers as they seek new ways to meet their goals as they face new and different challenges.56(TSP$04%0 0P 19N=2342020N=4552021N=2612022N=347On target/have achieved/exceeded all our business goals for the yearOn target with/exceeded our competitors/peers performance2023 APQC.ALL RIGHTS RESERVED.8PERFORMANCE ON SPECIFIC 2022 GOALS Text placeholderN=13#4%On target/achieved return on investment goalsOn target/achieved customer satisfaction goalsOn target/achieved inventory goalsOn target/achieved cost savings goalsOn target/achieved customer service goalsOn target/met/exceeded sales goalsN=3472023 APQC.ALL RIGHTS RESERVED.9ACHIEVING SPECIFIC GOALS YEAR OVER YEARIn 2019,prior to the onset of the COVID-19 pandemic,supply chain organizations struggled to achieve their goals.However,they did better that year than in any subsequent year.Interestingly,in 2022 organizations reported better performance in terms of cost savings goals but fewer met or exceeded their customer service targets.This internal focus on saving money while not satisfying customers is worrisome for longer-term success.To turn this around,2023 needs to be a year of focusing on increased transparency with a customer focus as well as increasing resilience in our supply chains.0%5 %05EP 19N=2342020N=4552021N=2612022N=347Percentage of Organizations On-Target/Met/Exceeded GoalsCustomer service goalsSales goalsCost savings goalsCustomer satisfaction goalsInventory goalsReturn on investment goals2023 CHANGES AND CHALLENGES22023 APQC.ALL RIGHTS RESERVED.11TOP 6 TRENDS ANTICIPATED TO IMPACT SUPPLY CHAINS BY 2026Supply chains are in the spotlight for 2023 and will likely remain so for the foreseeable future.The top three biggest impacts respondents anticipate over the next three years are from big data and analytics,global trade/tariff uncertainties,and sustainability.As the volume of data that supply chain professionals are facing continues to increase,emerging technologies for analytics can enable organizations to make faster and ideally,better,decisions.Global trade/tariff uncertainties rose on the list this year,reflecting the recognition of increased challenges facing global supply chains.Sustainability moved up the list from 2022,reflecting organizations renewed focuses on the impact of environmental and social issues on supply chains.N=347360A144AIQGH#!%Artificial intelligence/cognitivecomputingProcess standardizationDigitalization of the supply chainSustainability/environmental,social,and corporate governance(ESG)factorsGlobal trade/tariff uncertaintiesBig data and advanced analyticsMajor impactModerate impactMinor/No impactTrends are listed in order by Major Moderate impact2023 APQC.ALL RIGHTS RESERVED.12ADDITIONAL TRENDS ANTICIPATED TO IMPACT SUPPLY CHAINS BY 2026Numerous additional trends are anticipated to impact supply chains over the next three years.For example,the ongoing COVID-19 pandemic,renamed by some as“endemic”due to its continued presence,will continue to impact supply chains in unpredictable ways.As technology continues to evolve,supply chains will also.Greater automation has enabled remote work in some supply chain roles.And organizations are still figuring out what the longer-term implications are for increased working from home across the supply chain.N=34726&3467BE998920(&$%BlockchainRobotic process automationWorking from homeMobile technologiesCloud servicesGlobal COVID-19 pandemicMajor impactModerate impactMinor/No impactTrends are listed in order by Major Moderate impact2023 APQC.ALL RIGHTS RESERVED.1322(013448A%Knowledge is hard to accessTechnology gets in the wayLack of governanceLimited workforce engagementToo much changeLack of budget/resources available forprocess improvementRegulations/requirements make changedifficultCommunication challengesLack of collaboration across functions andexternallyStaffing ShortagesOBSTACLES TO IMPROVING SUPPLY CHAIN PROCESSESN=344The top obstacle to improving supply chain processes in 2023 is staffing shortages.Supply chains are not alone when it comes to as dealing with labor concerns like vacant positions in 2023.However,given the business-critical role that supply chain plays in getting products and services to the customer,addressing this obstacle needs to be an organizational priority.Lack of collaboration,last years top barrier,remains near the top of the list because it can be toxic in a supply chain context.Disconnects in the supply chain can lead to ripple effects that impact customers and their ability to receive orders on time,in full,damage-free,and with accurate documentation.2023 APQC.ALL RIGHTS RESERVED.14OVERCOMING OBSTACLES80 %YesNoHave you evaluated/modified your supply chain strategy to help head off the obstacles your organization is facing?N=335Eighty percent of respondents across industries report they have modified their supply chain strategy to help head off current challenges.Flexibility in the face of challenges is vital to success during chaos.For some industries,like industrial products,the events of 2022 forced as many as 95 percent to make modifications to their supply chain strategies.For others,like electronics organizations,only 71 percent modified their strategies.2023 APQC.ALL RIGHTS RESERVED.15SUPPLY CHAIN BUDGET TREND9crease41%Stay the same50%IncreaseN=347When it comes to budgets for supply chain management tools,technology,innovation,and initiatives,we see a shift toward a larger percentage of organizations holding the investment constant compared to last year.Although 50 percent of respondents anticipate an increase in their budget for supply chain,another 41 percent expect that investment to stay the same.These percentages reflect a 16 percent shift in organizations compared to last year when only 25 percent expected the status quo and 66 percent anticipated an increase in funding.2023 APQC.ALL RIGHTS RESERVED.16372(%Increase serviceIncrease market shareDecrease costsDESIRED SUPPLY CHAIN OUTCOMESOverall Outcome Focus for 2023N=347APQCs research shows supply chain leaders are still feeling pressure from multiple directions when it comes to achieving overall organizational outcomes.For 2023,increasing service has taken the lead(37 percent)in terms of allocation of organizational focus over increasing market share(32 percent)and decreasing costs(28 percent).Please note:Respondents allocated 100 percent across these categories to indicate organizational focus on overall outcomes in supply chain for 2023.The chart represents mean values for each category.2023 PRIORITIES32023 APQC.ALL RIGHTS RESERVED.182023 OVERALL SUPPLY CHAIN AREAS OF FOCUSN=347Supply chain planning remains in the top spot as a priority for the coming year(selected by 86 percent of respondents).With the continued need to build resilience and flexibility,thats not a surprise.Sourcing and procurement is in second place at 75 percent,followed by Innovation at 73 percent.Logistics and inventory management rounds out the top four focus areas at 67 percent.Order management(61 percent)slightly edged out manufacturing(60 percent)as a focus for 2023,followed by product development at 57 percent.86%Supply Chain Planning 75%Sourcing&Procurement73%Innovation67%Logistics&Inventory Management57%Product Development61%Order Management60%Manufacturing2023 APQC.ALL RIGHTS RESERVED.19TOP FOCUS AREAS IN SUPPLY CHAIN PLANNINGN=286In supply chain planning,the number-one focus area is demand planning and forecasting(30 percent),followed by automation and digitization(28 percent).Demand planning and forecasting are key to success in supply chain planning,especially in the face of continued disruptions.Automation and digitization can enable the organization to make faster decisions,leveraging larger quantities of data,while freeing up staff for more value-added activities.10 #%(0%Network redesignSales forecastingTalent acquisition and retentionMaster data managementAnalytics and measurementSales and operations planningIntegrated business planningAutomation and digitizationDemand planning and forecastingNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.2023 APQC.ALL RIGHTS RESERVED.202023 PRIORITIES:SUPPLY CHAIN PLANNINGNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.3023ABC%Shorten cycle timeStandardize processesEvaluate and compare performance throughbenchmarkingIdentify and implement best practicesImprove forecasting accuracyImplement new technologies and capabilitiesImprove collaboration and communicationN=233For 2023,improving collaboration and communication moved to the top of the list for actionable strategies in supply chain planning,reflecting the increased recognition of the need for enhanced cross-functional relationships and data sharing.Given the complexities of supply chain planning,it is not surprising that 42 percent of respondents plan to implement new technologies and capabilities.2023 APQC.ALL RIGHTS RESERVED.21TOP FOCUS AREAS IN SOURCING AND PROCUREMENTN=248In sourcing and procurement,the top focus area for 2023 continues to be vendor/supplier relationship management or SRM(33 percent).Multiple disruptions and ongoing challenges have made clear the connection between an organizations success and its suppliers success.With this recognition,there is a greater interest in improving supplier relationship management.At the same time,sustainability has moved up the list as a focus in procurement and sourcing.With increasing regulation,what was voluntary disclosure in the past is now required.Many businesses now must disclose and verify their suppliers sustainability data or face the threat of financial penalties or disrupted shipments.13#%)13%Procure-to-payTalent acquisition and retentionContractingAdvanced analyticsAutomation and digitizationPurchasingSustainabilityVendor/Supplier relationshipmanagementNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.2023 APQC.ALL RIGHTS RESERVED.222023 PRIORITIES:SOURCING AND PROCUREMENTNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.27)012478%Shorten cycle timeStandardize processesImplement methods to reduce supplier costsIdentify and implement best practicesFocus on supplier sustainabilityEvaluate and compare performance through benchmarkingImprove collaboration and communicationImprove key supplier relationshipsImplement new technologies and capabilitiesN=248For sourcing and procurement,the top two actionable strategies in 2023 are tied to improving efficiency and effectiveness.Many organizations learned the hard way that headlines related to their suppliers can come back to them.Implementing new procurement and sourcing technologies and capabilities as well as building better relationships can enable stronger and more transparent supply chains.2023 APQC.ALL RIGHTS RESERVED.23TOP FOCUS AREAS IN INNOVATIONN=239Innovation is essential to survival in a fast-changing world.The top two priorities in this area,improving collaboration and operational/process innovation(29 percent),speak to the need organizations have to find better and different ways of working while building strong ecosystems across their value chains to better serve internal and external customers.18!%&)%Talent acquisition and retentionBuilding and maintaining an innovativecultureAutomation and digitizationInnovation analyticsCreativityProduct and service innovationOperational/process innovationImproving collaborationNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.2023 APQC.ALL RIGHTS RESERVED.242023 PRIORITIES:INNOVATIONNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.302344578opt a culture of creativityImplement new technologies and capabilitiesIdentify and implement best practicesEmbrace new business modelsEvaluate and compare performance through benchmarkingIncrease open innovation/external ecosystem collaborationIntegrate innovation into organizational goalsAdopt a structured approach to innovationN=239Adopting a structured approach to innovation(38 percent)moved up the list of priorities as respondents recognize the need to implement repeatable processes for finding new and novel solutions to the challenges facing supply chains.Thirty-seven percent of respondents are seeking to integrate innovation into organizational goals.This shift takes innovation from something“they”do to something that each employee feels accountability and ownership for putting into action.2023 APQC.ALL RIGHTS RESERVED.25TOP FOCUS AREAS IN LOGISTICS AND INVENTORY MANAGEMENTN=221In logistics,inventory management(33 percent)is the number-one focus area for respondents,echoing the past several years.Inventory management in 2023 will continue to be challenged by ongoing disruptions and forecasting difficulties.Some industries started the year with a glut of inventory and no room to store it,while others are still dealing with shortages.Automation and digitization(28 percent)can bring greater transparency and traceability to inventory all throughout the supply chain.13!$(3%Inbound material flowOutbound transportationTalent acquisition and retentionReturns management/Reverse logisticsWarehousingSustainabilityAdvanced analyticsAutomation and digitizationInventory managementNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.2023 APQC.ALL RIGHTS RESERVED.262023 PRIORITIES:LOGISTICS AND INVENTORY MANAGEMENTNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.30113556D%Identify and implement best practicesEvaluate and compare performance through benchmarkingStandardize processesShorten cycle timeImplement new technologies and capabilitiesImprove collaboration and communicationImplement methods to reduce transportation costsOptimize inventoryN=221More than 4 out of 10 respondents(44 percent)are prioritizing the need to optimize inventory this year.Thirty-six percent report that they are focusing on implementing methods to reduce transportation costs to maintain their logistics organizations performance in the face of ongoing challenges and inflationary pressures.2023 APQC.ALL RIGHTS RESERVED.27TOP FOCUS AREAS IN ORDER MANAGEMENTN=198In order management,a focus on customer service moved to the top of the list for 2023.Customers are increasingly demanding greater transparency for their orders,pushing organizations to focus on them more and not only on internal costs and process improvement.Improved automation and digitization,the top priority from 2022,can lead to faster order cycle times,fewer errors from manual interventions,and improved customer service.Going digital in this area helps organizations respond faster in times of disruption by increasing transparency,supporting the prioritization of specific orders,and reducing reshipping and inventory problems.21%27E%Omnichannel and cross-channelconsistencyTalent acquisition and retentionOrder-to-cashAdvanced analytics and measurementAutomation and digitizationCustomer ServiceNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.2023 APQC.ALL RIGHTS RESERVED.282023 PRIORITIES:ORDER MANAGEMENTNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.29022226%Standardize processesShorten cycle timeImplement new technologies and capabilitiesEnable greater customer self-serviceEvaluate and compare performance through benchmarkingEnhance customer serviceIdentify and implement best practicesImprove collaboration and communicationN=198The number one priority for order management in 2023,according to respondents,is to improve collaboration and communication(40 percent).This goal is echoed across other parts of the supply chain as well.2023 APQC.ALL RIGHTS RESERVED.29TOP FOCUS AREAS IN MANUFACTURINGN=195For manufacturing,production management and sustainability moved ahead of automation and digitization as top focus areas for 2023.The focus on production managementwhich includes planning,coordination,control and decision-making regarding resources and outputs of the production processshould drive the successful implementation of the organizations production strategy.Sustainability as a focus is important in 2023 as new and pending regulations force organizations to shift from voluntary reporting into mandatory compliance to avoid penalties and fines.19039F%LeanTalent acquisition and retentionAdvanced analyticsAutomation and digitizationSustainabilityProduction managementNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.2023 APQC.ALL RIGHTS RESERVED.30TOP FOCUS AREAS IN PRODUCT DEVELOPMENTN=186In Product Development,new product development and sustainability rank as the top two priority areas for 2023.Organizations are focusing on improving the process,methods,and results for how they get new ideas to market.They are also looking at how new products can be designed in such a way that the product or its components can be reused,recycled,repaired,or refurbished.Designing new products with sustainability in mind will help organizations achieve more circular supply chains where waste is reduced.18 $%(8%Portfolio managementTalent acquisition and retentionAutomation and digitizationProduct development analyticsProduct designProduct management and planningSustainabilityNew product developmentNote:The values in the graph displayed do not add up to 100 percent because it was a“select all that apply”question.RECOMMENDED RELEVANT APQC CONTENTNow in the Resource Library:Supply Chain Management42023 APQC.ALL RIGHTS RESERVED.32SUPPLY CHAIN PLANNINGRecommended ContentThree Frameworks for Creative Problem Solving in Supply ChainInteractive Supply Chain Planning Tune-Up Diagnostic Sales&Operations Planning in Supply Chain Quick Poll Summary ReportIf Disruption Is The New Normal,Operational Resilience Is The New NecessitySupply Chain Planning:Blueprint for Success CollectionsImproving Supply Chain PlanningSupply Chain Planning Key BenchmarksSupply Chain Planning PracticesSupply Chain Planning:Capability Model SpotlightsGlobal Supply Chain Network and Control Tower:Case Studies and Templates2023 APQC.ALL RIGHTS RESERVED.33SOURCING AND PROCUREMENTRecommended ContentSourcing and Procurement Blueprint for SuccessAddressing Supplier Risk with Business Continuity Plans Procurements Role in SustainabilityRPA Needs the Right Foundations for Success in Supply Chain Driving Effective Transformation in Procurement CollectionsUnderstanding Procurement Benchmarks and Best PracticesProcurement Key BenchmarksProcurement Practices ReportsTransforming Procurement and Procure-to-Pay 2023 APQC.ALL RIGHTS RESERVED.34INNOVATIONCostovation:Bring Innovation to the Cost Side of the BusinessBreaking Down Silos for Better CollaborationOpen Innovation:Creating Flexible CollaborationAddress Internal Resistance to Open Innovation Innovation:Driving Successful ChangeCore Capabilities for Organizational ResilienceInnovation:A Core Capability for Organizational ResilienceUse Innovation to Improve Organizational ResiliencePost-Disruption Innovation:The Path To Recovery Three Ways to Embrace Failure on The Road to Innovation 2023 APQC.ALL RIGHTS RESERVED.35LOGISTICSCollections Key Logistics BenchmarksLogistics:Current State Practices ReportsBlueprint for Success:LogisticsContentLogistics Tune-up Diagnostic Interactive Logistics Tune-Up DiagnosticInvest in Developing Your Logistics EmployeesUnderstanding Logistics ProcessesMeet Customer Expectations Through Last-Mile LogisticsEmissions Reduction Practices in LogisticsShipping Hope and Help-Logistics for the GoodPARTICIPANT DEMOGRAPHICS52023 APQC.ALL RIGHTS RESERVED.37DEMOGRAPHICSN=347Annual RevenueLess than$500 million9%$500 million to less than$1 billion20%$1 billion and less than$5 billion21%$5 billion to less than$10 billion11%$10 billion to less than$20 billion18%$20 billion or greater21%Role Head of Business15%VP/Senior Executive25%Director/Senior Manager26%Manager/Process Owner26%Specialist/Analyst8%Consultant1%Region United States and Canada40ntral and South America7%Europe,Africa,and Middle East29%Asia/Pacific24%Primary Organization RoleManufacturing40%Services41%Hybrid20 23 APQC.ALL RIGHTS RESERVED.38TOP 10 PARTICIPATING INDUSTRIESN=347Other industries also included:Petroleum/Chemical,Government/Military,Services,Professional Services/Consulting,Education,Media and Entertainment,Telecom,Insurance,Waste Management/Environmental,Utility,Rental,Non-Profit,Mining,Research Organization,and Agriculture.Top 10 IndustriesIndustrial Products16%Retail and Wholesale15%Consumer Products/Packaged Goods8%Financial Services/Banking8%Healthcare7%Automotive7%Electronics6%Distribution/Transportation5rospace5%Pharmaceutical4%CONTACT USmbrownapqc.orgMarisa BrownSenior Principal Research Lead,Supply Chain Management Thalin SiengResearch Associatetsiengapqc.org800-766-9676www.apqc.orgCONNECTWITH USwww.apqc.org/linkedinwww.apqc.org/blogapqcwww.apqc.org/

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APQC：2023年流程和绩效管理优先事项与挑战调研报告（英文版）（28页）.pdf

2023 PROCESS&PERFORMANCE MANAGEMENT PRIORITIES&CHALLENGESSurvey ReportJanuary 2023K0130402023 APQC.ALL RIGHTS RESERVED.2ABOUT THIS REPORTThis report explores trends in process and performance work and reveals the top five priorities and challenges in:process management:business process management,and continuous improvement.organizational performance management:measurement and data,andstrategic planning.Additional topicsproject management,andbenchmarking.160Valid Participants In December of 2022,APQC conducted a survey to understand the common challenges and priorities of process and performance management(PPM)practitioners for 2023.2023 APQC.ALL RIGHTS RESERVED.3CONTENTSChallenges&PrioritiesEvolution of Process ManagementProcess TeamsAdditional Resources12345Survey DemographicsCHALLENGES AND PRIORITIES12023 APQC.ALL RIGHTS RESERVED.5TOPIC AREA PRIORITIESN=15991pWT%ProcessManagementContinuousImprovementData andMeasurementProjectManagementStrategic PlanningBenchmarkingGenerally,foundational process components like process management and continuous improvement are the highest priority topic areas for the respondents.This is followed by performance-related areas such as data and measurement.2023 APQC.ALL RIGHTS RESERVED.6Top 5 BPM Challenges29fining and mapping end-to-end processes28%Improving the maturity level of process management practices26%Picking the right key performance indicators(KPIs)for processesEstablishing governance in process management254%Moving from a function-based to process-thinking culturePROCESS MANAGEMENT(BPM)CHALLENGESTips and SolutionsN=14212Managing end-to-end processes remains the top challenge for organizations.Organizations can use criteria such as complexity,impact,and alignment to goalsto prioritize their efforts.Improving the maturity level of process management practices is increasingly important.To get started on this,organizations should conduct a process audit of their current process maturityto identify areas for improvement.2023 APQC.ALL RIGHTS RESERVED.7Tips and SolutionsCONTINUOUS IMPROVEMENTTop 5 Continuous Improvement ChallengesN=12412Approaching improvement opportunities systematically can lead to efficiencies,cost-savings,and greater employee buy-in and engagement.Organizations can make a culture shifttoward continuous improvement by identifying shared values,organizing for change,creating a shared language,and mapping the tools necessary to make the change.47%Creating a continuous improvement culture43%Creating a systematic approach to identifying improvement opportunities27veloping criteria for project prioritization and selectionSelecting the success measures for improvement projects26R%Aligning continuous improvement efforts across the organization2023 APQC.ALL RIGHTS RESERVED.8Top 6 Data and Measurement Challenges28%Establishing a data-driven culture25%Ensuring performance measures are relevant to the purpose24%Using consistent performance measures throughout the organizationsConveying information through data visualization235%Aggregating analysis into a dashboard to support decision makingDATA AND MEASUREMENT CHALLENGESTips and SolutionsN=10212Shifting to a data-driven culture poses challenges,but organizations should consider best practices for this culture shift,including ways to ensure employee engagement.Data visualization can improve the way that information is represented in business.Establishing a successful data visualization foundation begins with equipping employees with the tools needed to accurately convey information.23%Identifying the right mix of leading,in-process,and lagging measures2023 APQC.ALL RIGHTS RESERVED.9STRATEGIC PLANNING CHALLENGESTop 5 Strategic Planning Challenges35%Applying change management principles to strategy creation and implementation33%Identifying measures for strategic objectives31%Aligning division-level strategies with corporate objectivesEnacting business model or organizational transformation308%Tracking strategic initiatives progress and impactN=80Tips and Solutions12Strategic alignment between process and the organization ensures BPM teams provide intrinsic value.One way to achieve this is through working in tandem with strategic planning and PMO groups to execute the organizations strategic initiatives.Utilizing a strategic planning methodology can greatly increase the likelihood of a successful initiative and help track impact and progress.2023 APQC.ALL RIGHTS RESERVED.10Top 5 Benchmarking Challenges38%Finding best-practice organizations to compare to your organization29%Identifying valid data for performance benchmarking 26%Integrating benchmarks into reporting mechanismsGuiding how benchmarks are used to support decision making21%Identifying the right benchmarks and their sourcesBENCHMARKING CHALLENGESTips and SolutionsN=7612Organizations must recognize the barriers to better benchmarking and combat them by using open standards,choosing the right partners,aligning value to decision-maker needs,and utilizing process mining.Benchmarking is an essential foundation for organizational success.Thus,it is important to prioritize the use of open standards and benchmarking to achieve better productivity,satisfaction,and more.2023 APQC.ALL RIGHTS RESERVED.11Tips and SolutionsPROJECT MANAGEMENT CHALLENGESTop 6 Project Management ChallengesN=8312Portfolio measures include a mix of milestone and value measures.The value measures of projects typically reflect the goal of the project(e.g.,revenue,satisfaction,cost reduction,or productivity improvement.)Organizations should assess which flexible project management method is a best fit based on scale,complexity,and project type.38%Establishing clear goals for measuring the success of projects30%Establishing a knowledge management system for project management28%Ensuring accountability of team members on projectsApplying a portfolio management strategy to prioritize and manage interdependencies between projects26%Measuring the success of projects based upon business resultsManaging scope creep during projects26%EVOLUTION OF PROCESS MANAGEMENT 22023 APQC.ALL RIGHTS RESERVED.135U%4%Very EffectiveEffectiveNeitherIneffectiveVery IneffectivePROCESS PROGRAM EFFECTIVENESSN=108Almost two-thirds of organizations surveyed feel their process management team has been effective or very effective in the past year.One-fourth of respondents feel their team has been neither effective nor ineffective.2023 APQC.ALL RIGHTS RESERVED.1412U$%8%2%Very ResponsiveResponsiveNeitherUnresponsiveVery Unresponsive10F%8%Strongly AgreeSomewhat AgreeNeitherSomewhat DisagreeDisagreeResponsiveness to Changing ConditionsSTATE OF THE PROCESS MANAGEMENT DISCIPLINEMeets Organizations NeedsN=112N=112The majority of organizations feel that the process management discipline is effective in responding to changing conditions and is meeting organizational needs,though more respondents feel that there is room for improvement in meeting organizational needs.2023 APQC.ALL RIGHTS RESERVED.15DRIVERS OF CHANGEN=110Digital transformation initiatives are considered to be the top driver of change in the process management discipline.of respondents say that change is necessary in the discipline Top 5 Trends Drivers of Change in Process Management Discipline 25(02Q%Increased amount of unstructured work within theorganizationEmphasis on customer-centric processesPace of change of businessPressure to reduce cycletime and/or costs ofprocess management workDigital transformation initiatives99 23 APQC.ALL RIGHTS RESERVED.16NEEDED CHANGES N=111The top five changes needed in the process management discipline are given almost equal weight in importance.Integration with IT is considered the most necessary change,along with creating a collaborative culture or environment.Updates to methodologies and skillsets are also considered very necessary.Top 5 Needed Changes in the Process Management Discipline389ABC%SkillsetsProcess management methodologiesChange management methodologiesCollaborative culture or environmentIntegration with IT2023 APQC.ALL RIGHTS RESERVED.17STAYING RELEVANT N=110Design thinking and change management skillsets are the top areas for development in process management teams in order to stay relevant.Data-based skillsets,like data visualization and data management have also become increasingly important over time.Top 5 Skillsets for Development in Process Management Teams 3467%Problem solvingData managementData visualizationChange managementDesign thinkingPROCESS TEAMS32023 APQC.ALL RIGHTS RESERVED.1948!%Less than 3 years3 to 5 years6 to 10 yearsMore than 10 yearsLONGEVITY OF TEAMSN=149Of organizations that have a process management team,almost half of the teams have been in place for less than three years.Longevity of Process Management Teamsof respondents say they have Process Management team69 23 APQC.ALL RIGHTS RESERVED.2051%3%2%Under$250,000 USD$250,000 to$499,000 USD$500,000 to$999,999 USD$1 milion to$4.9 million USD$5 million to$9.9 million USD$10 million or more USDProcess Management FTEsPROCESS MANAGEMENT TEAMS Annual Process Management BudgetN=82N=65Process management teams tend to be relatively small with a moderate budget.3.07.020.00.05.010.015.020.025.025th QuartileMedian75th Quartile2023 APQC.ALL RIGHTS RESERVED.211.02.04.02.05.010.03.010.025.00.05.010.015.020.025.030.025th QuartileMedian75th QuartileLarge-ScaleMedium-ScaleSmall-ScaleBPM PROJECTS N=81Small-scale BPM projects are the most common across all organizations,though most organizations also conduct several medium-scale and a few large-scale projects.Number of Annual BPM ProjectsADDITIONAL RESOURCES42023 APQC.ALL RIGHTS RESERVED.23AVAILABLE SOLUTIONSProcess Management Process Improvement:People and Culture Making Process Improvement Systematic Process Improvement Criteria:Making Smart Decisions in Project Selection Process Improvement Approach and Seven Tenets Practices Seven Tenets of Process Management Common Process Management Roles End-to-End Process Maps and Measures(Collection)How to Apply the Process Classification Framework(PCF)Making Change Management Mindful Process Supporting the BusinessContinuous Improvement2023 APQC.ALL RIGHTS RESERVED.24AVAILABLE SOLUTIONS Best Practices for Driving Agility:Better Structures and Strategy Practices Aligning Strategy and Productivity Through Better Measures End-to-End Process Map and Measures:Vision-to-Strategy Fundamentals of Measures Dive into Data Visualization Tackling the Measure Selection Process Picking Process Measures and Benchmarking:How to Apply the PCF Change Management Practices for Establishing a Data-driven Culture(Best Practices Report)Data and MeasurementStrategic Planning2023 APQC.ALL RIGHTS RESERVED.25AVAILABLE SOLUTIONSData&AnalyticsBenchmarking Benchmarking 2022:Evolution of Strategic Value Benchmarking Basics Applying a Process Framework:Benchmarking Benchmarking Code of Conduct Benchmarking and Improvement ToolsProject Management Unparalleled Portfolio Management:Best-Practice Processes and Lessons Learned Introduction to Flexible Project Management Establishing a Project Management Office(PMO)Roadmap for Establishing a Project Management Office Managing Project Knowledge(Collection)BenchmarkingSURVEY DEMOGRAPHICS52023 APQC.ALL RIGHTS RESERVED.27DEMOGRAPHICSN=160Number of FTEsFewer than 100150-99923%1,000-9,99929,000-49,99923P,000-99,99940,000 or more7%Annual RevenueLess than$100 million USD24%$100 million to less than$500 million USD13%$500 million to less than$1 billion USD9%$1 billion to less than$5 billion USD16%$5 billion to less than$10 billion USD4%$10 billion to less than$20 billion USD6%$20 billion or greater8%Top 6 Participating FunctionsProcess Management44%Transformation9%Knowledge Management6%Quality6%Corporate Strategy5%IT5%Top 6 Participating IndustriesServices14%Software/Technology14%Government/Military9%Petroleum/Chemical6%Consumer Products/Package Goods6%Financial Services/Banking6%CONTACT USKelli SouthResearch Managerksouthapqc.org800-766-9676www.apqc.org

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罗兰贝格：全球IPv6发展指数报告2022（英文版）（49页）.pdf

01.2023 Global IPv6 Development Report 2022 Measurement,analysis on socioeconomic impact and policy recommendations 2 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Table of Contents 1.IPv6:definition and value.5 1.1 Overview of IPv6.5 1.2 Necessity of transition to IPv6 Enhanced Innovation.6 1.3 Economic and social benefits of IPv6 Enhanced Innovation.7 2.Industry Economic Value by IPv6.8 2.1 IPv6 economic impact 2025 estimate.8 2.2 Major impacts and industry use cases of IPv6.9 3.IPv6 Development Index and Country Analysis.10 3.1 IPv6 Development Index.10 3.2 Benchmarking country analysis.22 3.3 Typical country analysis.26 4.Policy Recommendation.47 4.1 Challenges faced in IPv6 Enhanced Innovation development.47 4.2 General recommendations by group.47 4.3 Detailed recommendations by group.47 3 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Executive Summary With the advent of new communication and information technologies,everything in the world is more closely connected,forming a huge network that bridges people and things.Future-shaping technologies such as AI,5G,cloud,and IoT are like threads that connect us together.A fundamental enabler lies at the core of all these technologies:the IP address.It gives devices a key that they need to connect to the network;without it,they cant talk to each other.The previous protocol used for IP addressing was IPv4,which was designed in the early 1980s with a maximum total of only 4.3 billion addresses.The explosive growth of intelligent devices has exhausted the available IPv4 addresses,and IPv6 was introduced to solve this problem once and for all.With 3.8*1038 total addresses available,IPv6 would be able to assign every grain of sand on earth an IP address.On the basis of providing massive address resources,IPv6 is also developing continuously.In addition to providing basic IP addresses,IPv6 provides higher-quality and smarter connections through the combination of emerging technologies,namely IPv6 Enhanced Innovation12,offering more future possibilities and accelerainge the deployment of advanced business applications like 5G,cloud,and industrial IoT.At this moment,we find it necessary to reflect on how the world has progressed in this transition and summarize the concrete socio-economic value IPv6 Enhanced Innovation have created.We construct an IPv6 Development Index and reference data from public databases to calculate and provide a country-level measurement of IPv6 development status.The framework is based on the well-acknowledged approaches previously adopted by the Latin American and Caribbean Internet Address Registry(LACNIC)3,the Organization for Economic Cooperation and Development(OECD)4,and Cisco5.In terms of data sources,we use data from Asia Pacific Internet Network Information Center(APNIC),Cisco and authoritative research institutions and organizations such as Routeviews,OVH and WOS as raw data input to ensure data reliability and objectivity.Based on datasets referenced from above databases,we used the Index model to calculate Index result for 92 countries to measure their IPv6 development status,and conducted a quantitative analysis of the economic impact of IPv6 Enhanced Innovation in various industries.On this basis,we divided 92 countries into three groups according to the level of IPv6 development and identified 3 countries as benchmark countries,and performed an in-depth analysis of their development.In addition,this years report further analyzes the value,status,and reasons for IPv6 development in 15 countries around the world and puts forward tailored recommendations.In policy recommendations,this report has been comprehensively upgraded compared with the 2021 study.Based on the common challenges and main differences between the development of IPv6 Enhanced Innovationin different groups of countries,we put forward detailed and executable recommendations for different country ranking groups of IPv6 Development Index.1 ETSI White Paper No.35“IPv6 Best Practices Benefits Transition Challenges and the Way Forward”,2020.08 2 ETSI GR IPE 001“IPv6 Enhanced Innovation:Gap Analysis”,2021.08 3IPv6 Deployment for Social and Economic Development 4Internet Addressing:Measuring Deployment of IPv6,K.Perset,OECD digital economy paper No.172,Apr 2010 5Internet IPv6 Adoption:Methodology,Measurement and Tools 4 GLOBAL IPV6 DEVELOPMENT REPORT 2022 The results are strongly in favor of IPv6 Enhanced Innovation development though our analyses and estimates may be subject to limitations in sample scope and size:In 2025,it is estimated that the total industry value brought by IPv6 Enhanced Innovation will reach 7.3 trillion US dollars.In conclusion,now is the perfect time for deployment of IPv6 Enhanced Innovation.Industry-wide adoption of IPv6 Enhanced Innovation has taken off.Major telecom operators,internet content providers,and equipment manufacturers have all participated in the rush into a new digital world.5 GLOBAL IPV6 DEVELOPMENT REPORT 2022 1.IPv6:definition and value In todays world,IP address is an important basic resource of the Internet,the basis for identification and data transmission between systems,and an important infrastructure for high-quality development of the global economy.However,with the wide application of the Internet,challenges and constraints of the global Internet Protocol version 4(IPv4),such as the exhaustion of IP addresses and the difficulty in guaranteeing service quality,have become increasingly prominent due to the undervalued demand for both size and quality for IP addresses by the development of the Internet and the digital economy in the early stage of Internet design.In this context,it is gradually becoming a globally acknowledged consensus that we should vigorously develop and deploy Internet Protocol Version 6(IPv6)following the guidelines and best practices from IPv6 Enhanced Innovation.This will provide sufficient network addresses and broad innovation space for Internet and the digital economy.IPv6 Enhnaced Innovation guide to a proper deployment of IPv6 protocol as a basis to other functionalities defined in IETF,like SRv6.Innovative applications will provide much more convenient,open,intelligent,and secure internet and to facilitate an intelligent world where everything is intelligently connected.1.1 Overview of IPv6 The IP address is the basis of the IP protocol(Internet Protocol)and is the unique identifier for network devices to access the Internet or a local network.Internet Protocol version 6(IPv6)is the latest IP revision,developed as a successor to IPv4.While greatly enhancing the address pool,IPv6 and its updated technologies can connect and empower more other technologies to promote the overall development of society.Figure 1.Development of IP technology IPv6 technical advantages:6 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 2.IPv6 technical advantages Advantages and technical features of IPv6 Enhanced Innovation Based on IPv6 massive addresses,IPv6 Enhanced Innovation comprehensively improves IP network capabilities in six dimensions of ultra-broadband,wide connection,determinism,low latency,automation and security,and provides services for governments,operators,enterprises and enterprises in various industries and usage scenarios.The requirements of end users in various usage scenarios provide a high-quality foundation.Figure 3.IPv6 Enhanced Innovation advantages and technical features6 Key technologies in IPv6 Enhanced Innovation includes SRv6,IPv6 Enhanced Innovation Network Slicing,IFIT,BIERv6 and APN6,etc.1.2 Necessity of transition to IPv6 Enhanced Innovation To fully support the development of the digital economy,large-scale deployment of IPv6 is the basis and necessary foundation for realizing an intelligent world where everything is connected.Actively deploying IPv6 Enhanced Innovation innovative applications is an 6ETSI GR IPE 001“IPv6 Enhanced Innovation:Gap Analysis”,2021.08 7 GLOBAL IPV6 DEVELOPMENT REPORT 2022 important measure to achieve higher-quality development based on IPv6 to better facilitate the 5G and cloud era.Figure 4.Necessity of Developing IPv6 Enhanced Innovation 1.3 Economic and social benefits of IPv6 Enhanced Innovation Figure 5.Social and economic benefits of IPv6 Enhanced Innovation 8 GLOBAL IPV6 DEVELOPMENT REPORT 2022 2.Industry Economic Value by IPv6 2.1 IPv6 economic impact 2025 estimate 2.1.1 IPv6 industry-sector economic impact model Today the scope of IPv6 is not only IP addresses,but also includes IPv6 Enhanced Innovations including SRv6 and other technologies.IPv6 development will positively affect virtually every industry sector.Since industries have differing economic and regulatory structures that will affect the timing for IPv6 adoption,we chose 2025 as the analysis timeframe and focused on short-to-mid-term impact.After analyzing the micro-and macro-economic impacts expected by IPv6,we projected forward to 2025,and looked at the economic contributions of IPv6 Enhanced Innovation through three lenses in 12 major industry sectors(See Appendix A for details).The first lens examined the value created by innovative technologies and their application scenarios,mainly focusing on 5G/IoT/cloud,empowered by IPv6 Enhanced Innovation.The second lens focused on the level of efficiency improvements enabled by IPv6 and IPv6 Enhanced Innovation.The third lens examined cost reduction by preventing data security issues with different issue type.The following provides an overview of the methodology for these three impacts.Figure 6.Methodology of IPv6 value creation by industry 2.1.2 IPv6 value creation by industry result analysis Based on our model and expert input,we estimate that potential global value created across multiple industry sectors enabled by IPv6 could reach$7.3 trillion in 2025.This represents about 3.7%of all global real output in 2025.IPv6 industry value creation:The following figure presents the consolidated value enablement findings by industry,ranking from highest impact(information&communication,5.1%of its total sales)to lowest impact(construction&real estate,1.9%of its total sales).9 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 7.Global IPv6 value creation by industry 2.2 Major impacts and industry use cases of IPv67 IPv6 as a fundamental enabler for other technologies have a wide range of impact on different industries.A detailed introduction of IPv6 Innovation enabled industry use-cases can be found in the full report.Figure 8.IPv6 enabled scenarios in each industry 7 Based on desktop research from various press release and official websites 10 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.IPv6 Development Index and Country Analysis 3.1 IPv6 Development Index Although IPv6 has great potential for economic value creation,each country has a different level of development.We construct an IPv6 Development Index that aims to provide a country-level measurement of IPv6 deployment status.The IPv6 Development Index is based on the well-acknowledged methodologies of the Latin American and Caribbean Internet Address Registry(LACNIC)8,the Organization for Economic Cooperation and Development(OECD)9,and Cisco10.3.1.1 Methodology Based on references to the LACNIC,OECD and Cisco,we constructed the IPv6 Index by measuring the specificity of IPv6 in three major areas of deployment.These three aspects are IPv6 pennetration(including IPv6 address planning,IPv6 deployment in networks,IPv6 deployment in content providers and user access to the network via IPv6),the performance of IPv6,and the level of innovation emphasizing on IPv6 Enhanced Innovation(including technical standards,policy,academics and pilot commercial projects of IPv6 Enhanced Innovation).Figure 9.Methodology of IPv6 Development Index 8IPv6 Deployment for Social and Economic Development 9Internet Addressing:Measuring Deployment of IPv6,K.Perset,OECD digital economy paper No.172,Apr 2010 10Internet IPv6 Adoption:Methodology,Measurement and Tools 11 GLOBAL IPV6 DEVELOPMENT REPORT 2022 11 Data set in this report are as of August 2022;source includes APNIC IPv6(https:/v6pop(https:/v6perf(https:/roas(https:/desktop research Index Type Level 1 dimension Level 2 dimension Type Index Indication Index Description Source11 Weight IPv6 penetration Planning Ratio of allocated v6 prefixes to allocated v4 prefixes;Ratio of allocated IPv6 prefixes from which traffic has been seen to all allocated v6 prefixes Allocation of IPv6 prefixes Ratio of allocated v6 prefixes to allocated v4 prefixes APNIC 8v.of advertised IPv6 prefixes Ratio of advertised v6 prefixes to allocated v6 prefixes APNIC 8%Network Measure the level of deployment of IPv6 in the network,incl.data centers of telecom operators and cloud service providers Adoption of IPv6 transit AS Ratio of dual-stack IPv6 Transit AS to all dual-stack Transit AS Routeviews 17%Content Measure the level of deployment of IPv6 in websites from content providers The websites support for IPv6 Weighted ratio of IPv6 enabled to tested top 500 websites OVH,Cisco,Google,Alexa 17%Users Measure the accessibility to the internet through IPv6 for end-users End-user accessibility to IPv6 Ratio of IPv6 capable users to number of internet users APNIC 17%Performance Performance Measure the quality of network and effects of IPv6 deployment during end-users visits to the internet through IPv6 Speed of IPv6 network connection Average RTT difference between IPv6 and IPv4 on dual stack end devices APNIC 8%Reliability of IPv6 network connection IPv6 failure rate on dual-stack end devices APNIC 8%Innovation Standard contribution Measure the contribution to international standards of IPv6 and IPv6 Enhanced innovation by each country Standard contribution#of companies,universities and other institutions in working groups of IEEE and IETF IEEE,IETF 3%Policy support Measure the#of organizations and supportive policies to promote IPv6 and IPv6 Enhanced innovation by each country Policy support#of org.established and policies published by the gov.to regulate the development of IPv6 and IPv6 Enhanced Official websites 3ademic contribution Measure the academic contribution to IPv6 and IPv6 Enhanced innovation by each country Academic contribution#of academic papers on IPv6 and IPv6 Enhanced innovation technology published in top-level publications WOS 3%Innovative application Measure the level of deployment of IPv6 Enhanced innovation innovation projects to evaluate the capabilities of future innovation Innovative application#of operators and enterprises with IPv6 Enhanced Innovation pilots or commercial use cases Desktop research 8 GLOBAL IPV6 DEVELOPMENT REPORT 2022 We use the weighting method to sum the sub-indicators involved in the three dimensions to calculate the final IPv6 development index of each country.The weight of each sub-indicator refers to the distribution of the indicator to balance different input variables.Finally,the IPv6 development index is calculated by normalizing different sub-indices,and the average value of each sub-indicator is calculated to determine the weight of the actual application.The framework is based on approaches previously adopted by the OECD12,LACNIC13 and Cisco14.In terms of data sources,we use Asia Pacific Internet Network Information Center(APNIC),Cisco and other authoritative research institutions and organizations such as Routeviews,OVH and WOS as raw data input to ensure data reliability.3.1.2 IPv6 Development Index result The numerical range of the IPv6 development index is from 0 to 1,and a higher index value means a better development process of IPv6 and its innovative applications.We selected 92 countries around the world and calculated the IPv6 development index for each country in 2022 using data from the Asia-Pacific Internet Network Information Center(APNIC)and other relevant sources.Based on the specific index values,we divide these countries into three categories:frontrunners,accelerators and starters.The Frontrunner countries are the top 25%of the IPv6 development index,the Starters are the bottom 25%of the countries,and the rest are the Accelerator countries.For the sake of comparability of indicators among different countries,we measure the deployment of IPv6 compared with IPv4 in the index.12Internet Addressing:Measuring Deployment of IPv6,K.Perset,OECD digital economy paper No.172,Apr 2010 13IPv6 Deployment for Social and Economic Development 14Internet IPv6 Adoption:Methodology,Measurement and Tools 13 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.1.2.1 Global country ranking&groups Figure 10.Country ranking of IPv6 Dvelopment Index 14 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 11.Country Ranking of Global IPv6 Development Index 3.1.2.2 Regional country ranking Asia Pacific Figure 12.Country ranking of global IPv6 Development Index Asia Pacific Middle East Figure 13.Country ranking of global IPv6 Development Index Middle East 15 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Northern Africa Figure 14.Country ranking of global IPv6 Development Index Northern Africa Southern Africa Figure 15.Country ranking of global IPv6 Development Index Southern Africa Southern and Central America 16 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 16.Country ranking of global IPv6 Development Index Southern and Central America North America Figure 17.Country ranking of global IPv6 Development Index North America Northern and eastern Europe Figure 18.Country ranking of global IPv6 Development Index Northern and eastern Europe Western Europe 17 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 19.Country ranking of global IPv6 Development Index Western Europe Eurasia Figure 20.Country ranking of global IPv6 Development Index Eurasia 3.1.2.3 Analysis of differences among groups The average value of different development stages varies greatly,and the grouping method can better summarize and reflect the characteristics of the development stages of countries in each group and the elements that need to be completed.We categorize countries into three groups:Front-runners,Adopters and Starters.Among them,the leaders are countries that are relatively leading in the development of IPv6 and its innovative applications.18 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 21.Average index score by groups Driver analysis：At the sub-indicator level of the IPv6 Development Index,the differences between countries mainly come from the four dimensions of network,users,performance and innovation.This illustrates the importance of improving users ability to access the Internet through IPv6,deploying cutting-edge IPv6 innovative applications to improve IPv6 performance,and making sufficient cutting-edge preparations for the future.Figure 22.Average index score by groups In the comparison of the various groups of the IPv6 Development Index,we found that performance and innovation are the main factors that separate the differences among the three groups of front-runners,adopters,and starters:Performance:There are certain differences among the three groups End-to-end equipment quality:the quality of operator networks,content provider networks,and terminal equipment will directly affect the deployment of IPv6.The digitalization level of most starters and some accelerator countries is in the initial stage.Since operators have a relatively weak foundation in digital infrastructure equipment and applications,the deployment performance of IPv6 may be poor compared to the frontrunners.IPv4 deployment maturity:Since the deployment of IPv4 line equipment in many countries is very mature,and IPv4-related optimization is complete,IPv6 equipment still needs time to be optimized.As a result,compared with IPv4,the performance advantages of IPv6 are difficult to fully reflect.19 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 23.Country ranking of IPv6 Development Index Performance Innovation:There are certain differences among the three groups The development process of IPv6 Enhanced innovation pilot projects:the innovation initiatives of adopters and starters are more focused on carrying out commercial project pilot projects of IPv6IPv6 Enhanced innovative technologies in line with the trend.Most of the front-runners already have IPv6 Enhanced innovation commercial pilot projects such as SRv6,which has achieved an intergenerational leap in technology.IPv6 Enhanced technical capabilities:Most of the leading countries are in the leading position in the accumulation of IPv6 Enhanced innovation and communication-related technologies and the degree of advanced disciplines,have strong capabilities to form technological breakthroughs and innovations,and deeply participate in the formulation of IPv6IPv6 Enhanced innovation-related industry standards.Figure 24.Ranking of deployment of IPv6 innovation In IPv6 penetration rate,the network and users are also aspects with large differences in the performance of different groups,but the specific manifestations are different:Network:There is a big difference between starters with frontrunners&adopters Digitalization level:The digitalization level and the development requirements of 5G and IoT will increase the motivation of operators to deploy IPv6.Front-runners and adopters generally have a high level of digitalization,and their terminals have a high demand for 5G and IoT development.The motivation of their domestic operators to deploy IPv6 will also increase significantly.Operator industry concentration:Many countries among front-runners and adopters have a 20 GLOBAL IPV6 DEVELOPMENT REPORT 2022 high degree of operator industry concentration and a large average size of operators.Since the penetration of new technologies generally starts from leading enterprises and gradually develops to small and medium-sized enterprises,the resistance encountered during IPv6 transformation is relatively small,so the transformation speed is relatively fast.Figure 25.Country ranking of IPv6 Development Index Network Users:There is a big difference between the frontrunners and the starters,mainly affected by the level of digitalization and equipment supply Digitization level:Frontrunners have a high level of digitalization,and end users have high requirements for IPv6 and IoT applications.IPv6 deployment in the public sector:IPv6 deployment within the government also widely exists in leading countries,which further affects the popularization of terminal IPv6.Ratio of terminal stock to increase:some frontrunners belong to latecomer countries and have accelerated the development of digital construction in recent years;due to a large number of new users,new terminal increments can directly deploy IPv6 equipment,and deployment is more resistant than equipment replacement small.Concentration of operators:Among the starters,the concentration of operators in many countries is relatively low,and the market competition is full.Since terminal routes are mainly provided by operators,it will take a long time for IPv6 to be recognized by the market,and the speed of implementation and deployment in terminals is relatively slow.Figure 26.Country ranking of IPv6 Development Index Users 3.1.2.4 IPv6 Penetration analysis In the IPv6 development index,the four indexes of planning,network,content and user represent the penetration of IPv6 in each link of end-to-end deployment.21 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 27.Country ranking of IPv6 Development Index IPv6 penetration 22 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 28.Country ranking of IPv6 penetration 3.2 Benchmarking country analysis Among many countries,we selected the United States,China and Germany from the front-runners group for analysis as benchmark countries,in order to summarize their strengths and provide reference cases and leading deployment for other countries.23 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.2.1 USA The United States is a digitalization pioneer.It now has a highly developed digital industry,resulting in high demand for IP addresses.As a result,IPv6 was implemented early in the United States,and its adoption rate is higher than in most other nations.On the other hand,the United States possesses a huge number of IPv4 addresses,and its equipment and services are optimized to meet the needs of IPv4,whereas the setup of IPv6 native equipment and services has not yet been optimized.Therefore,it will take time for the relative penetration of IPv6(in comparison to IPv4)to increase.Implications The legislative priorities of early adopters with a healthy digital economy must be forward-looking,such as making the connection between IPv6 and other emerging technologies such as 5G and IoT.Pioneering the investigation of cutting-edge technologies and trial applications to transform the digital infrastructure is the means for leading nations to keep their competitive advantage.Undoubtedly,the growth of the digital economy is the driving force behind the development of IPv6.The necessity and economic significance of adopting IPv6IPv6 Enhanced Innovations rises as the demand for IP inside the digital infrastructure rises.Enforcing end-to-end IPv6-only networks for government services,healthcare,and education,etc.,considerably increases the implementation of IPv6IPv6 Enhanced Innovations.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in the US would total$2.4 trillion by 2025,equivalent to 5.2%of the gross value of these industries in 2025.Figure 29.IPv6 industry value creation in United States IPv6 development status USA is ranked 7 out of 91 countries with a score of 0.53 and falls into the category of front-runners.This means that USA is considered a leader in development of IPv6.24 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 30.IPv6 development in United States 3.2.2 China The Chinese government has achieved significant results in driving the IPv6 transition among operators,content service providers,and key device manufacturers through a set of multi-level and highly binding policies.Implications National policies are observed to work the best when endorsed by a high-level strategic blueprint.The Digital China strategy outlined in the 14th Five-Year Plan is considered an example.To expedite the digital transition,it is recommended that governments embrace strategy that includes goals and support for the digital society,government,and economy.Binding policies with clearly defined targets and standards can effectively accelerate the penetration of IPv6 among operators,service providers,and users within a short time frame.Among all stakeholders,operators are most prone to policy influence and play the largest role in driving the deployment at the network and users end.The active deployment of IPv6/IPv6 Enhanced Innovations by the leading operators can have a substantial effect on the overall deployment rate in the national networks.Moreover,it secures the provision of an IPv6 network environment for content providers.The active deployment of IPv6/IPv6 Enhanced Innovations by the leading operators can have a substantial effect on the overall deployment rate in the national networks.Moreover,it secures the provision of an IPv6 network environment for content providers.Governments should also work to advance breakthrough digital infrastructure technologies.Government support for IPv6 Enhanced Innovations technologies and businesses,as well as pilot projects,will considerably ease the growth of the digital sector and boost the national digital economy in the future.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in the China would total$578 billion by 2025,equivalent to 1.7%of the gross value of these industries in 2025.25 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 31.IPv6 industry value creation in China IPv6 development status China is ranked 12 out of 92 countries with a score of 0.47 and falls into the category of front-runners.This means that China is considered a leader indevelopment of IPv6 Figure 32.IPv6 development status in China 3.2.3 Germany Due to a relatively high degree of digitalization,the users natural demand for IP addresses becomes a potent driver for IPv6 transition.In addition,as Germany began the deployment process early and the active public sector has contributed significantly to the promotion of IPv6,Germany is at the forefront of IPv6 implementation globally.Implications The government should take the lead in deploying IPv6 and then encourage the private sector to make the appropriate change.As the digital economies grow,the modernization of digital infrastructures in major industries(e.g.,manufacturing)is projected to generate enormous demand for IPv6 capabilities.Therefore,governments should integrate IPv6 into industrial settings(such as smart manufacturing)and support pilot projects for its implementations.26 GLOBAL IPV6 DEVELOPMENT REPORT 2022 IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Germany would total$288 billion by 2025,equivalent to 4.2%of the gross value of these industries in 2025.Figure 33.IPv6 industry value creation in Germany IPv6 development status Germany is ranked 4 out of 92 countries with a score of 0.53 and falls into the category of front-runners.This means that Germany is considered a leader indevelopment of IPv6 Figure 34.IPv6 development status in Germany 3.3 Typical country analysis 3.3.1 Front-runners 3.3.1.1 France France has a solid digital basis,as well as a strong academic reputation and influence in the telecommunication field.As the French public sector started deployment of IPv6 since 2012,the private sector shows good IPv6 penetration;however,due to the fragmented market of operators and content services,there are a large number of small operators and small websites that have not yet transformed to IPv6,and it will take time to further the penetration.27 GLOBAL IPV6 DEVELOPMENT REPORT 2022 IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in France could total$164 billion by 2025,equivalent to 3.6%of the gross value of these industries in 2025.Figure 35.IPv6 industry value creation in France IPv6 development status France is ranked 8 out of 92 countries with a score of 0.51 and falls into the category of front-runners.This means that France is considered a leader in the development of IPv6 Figure 36.IPv6 development status in France 28 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Recommendations Figure 37.Policy recommendations for France 3.3.1.2 Saudi Arabia Saudi Arabia has a high demand for IPv6 in the process of promoting the transformation of the digital economy.Around 2021,the government actively deployed IPv6 through the state-owned top operators,mandating quick IPv6 deployment and rapid penetration by the top operators.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Saudi Arabia would total$123 billion by 2025,equivalent to 6.5%of the gross value of these industries in 2025.Figure 38.IPv6 industry value creation in Saudi Arabia IPv6 development status Saudi Arabia has a high demand for IPv6 in the process of promoting digital economic transformation.Around 2021,the government will drive SOE head operators to carry out rapid IPv6 deployment,quickly infiltrate and lay out commercial pilot applications of IPv6 Enhanced Innovation cutting-edge technologies Saudi Arabia is ranked 10 out of 92 countries with a score of 0.51 and falls into the category of front-runners.This means that Saudi Arabia is considered a leader in the global deployment of IPv6 29 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 39.IPv6 development status in Saudi Arabia Recommendations Figure 40.Policy recommendations for Saudi Arabia 3.3.1.3 Malaysia Malaysia started the deployment process of IPv6 10 years ago and stepped up its policies in recent years.From 2020 onwards,IPv6 certification is made mandatory for all types of network equipment.However,due to a fragmented operator market,the deployment of IPv6 still needs time.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Malaysia would total$108 billion by 2025,equivalent to 3.2%of the gross value of these industries in 2025.30 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 41.IPv6 industry value creation in Malaysia IPv6 development status Malaysia is ranked 11 out of 92 countries with a score of 0.50 and falls into the category of front-runners.This means that Malaysia is considered a leader in the development of IPv6 globally.Figure 42.IPv6 development status in Malaysia Recommendations Figure 43.Policy recommendations for Malaysia 31 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.3.1.4 United Arab Emirates Large international enterprises account for a large proportion of the UAEs network operators and content providers,enabling the government to lead SOE operators to rapidly deploy IPv6 when IPv4 addresses are relatively abundant.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in UAE would total$218 billion by 2025,equivalent to 6.7%of the gross value of these industries in 2025.Figure 44.IPv6 industry value creation in United Arab Emirates IPv6 development status Figure 45.IPv6 development status in United Arab Emirates 32 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Recommendations Figure 46.Policy recommendations for United Arab Emirates 3.3.1.5 Brazil As one of the first-movers in South America,Brazil has a fairly substantial share of South American prefix resources.Nonetheless,development of 5G,AI,and other related industries that drive the growth of the user end demand began rather late,the level of government digitalization is also low.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Brazil would total$163 billion by 2025,equivalent to 1.1%of the gross value of these industries in 2025.Figure 47.IPv6 industry value creation in Brazil IPv6 development status Brazil is ranked 14 out of 92 countries with a score of 0.48 and falls into the category of front-runners.This means that Brazil is considered a leader in the development of IPv6 globally.33 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 48.IPv6 development status in Brazil Recommendations Figure 49.Policy recommendations for Brazil 3.3.1.6 Mexico Mexico is experiencing a time of fast growth in its digital economy.There are numerous new IP requirements for which IPv6 can be installed immediately,making it easier to popularize IPv6 on the user end.Due to the huge number of small operators,however,IPv6 upgrade on the network side will take some time.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Mexico would total$26 billion by 2025,equivalent to 1.1%of the gross value of these industries in 2025.34 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 50.IPv6 industry value creation in Mexico IPv6 development status Mexico is ranked 16 out of 92 countries with a score of 0.47 and falls into the category of front-runners.This means that Mexico is considered a leader in the development of IPv6 globally.Figure 51.IPv6 development status in Mexico Recommendations Figure 52.Policy recommendations for Mexico 35 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.3.2 Adopters 3.3.2.1 Thailand Lack of IPv4 address incentivize both public and private sectors in Thailand to migrate to IPv6.Thailands continuing top-down IPv6 strategic planning has enabled a seamless IPv6 transition,although frontier technology and forward-looking projects are still lacking.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Thailand would total$31 billion by 2025,equivalent to 3.4%of the gross value of these industries in 2025.Figure 53.IPv6 industry value creation in Thailand IPv6 development status The Thailand 4.0 strategy proposed in 2016 focuses on consolidating existing industrial development capabilities(focusing on industries like automobiles and smart appliances),establishing new industries(focusing on industries like robotics and digitalization),and forming high-tech value chains(focusing on industries like networking,electromechanical integration,and innovation and culture),which are in line with the IPv6 value plateau of information technology.Therefore,IPv6 implementation can in large facilitate Thailands strategic change.Thailand is ranked 36 out of 92 countries with a score of 0.40 and falls into the category of adopters.This means the level of IPv6 development in Thailand is in the medium level in the world.Figure 54.IPv6 development status in Thailand 36 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Recommendations Figure 55.Policy recommendations for Thailand 3.3.2.2 Philippines Not high levels of digitalization and demand for addresses are observed.Because of the insufficient infrastructure,however,a substantial number of new end devices can directly implement IPv6,reducing transition costs and facilitating user adoption.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Philippines would total$25 billion by 2025,equivalent to 3.9%of the gross value of these industries in 2025.Figure 56.IPv6 industry value creation in Philippines IPv6 development status Philippines ranks 43 out of 92 countries with a score of 0.37,grouped as an adopter.This means the level of IPv6 development in Philipines is in the medium level in the world.37 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 57.IPv6 development status in Philippines Recommendations Figure 58.Policy recommendations for Philippines 3.3.2.3 Italy Italy has an edge in advanced technology research and academic contributions,but due to its high number of SMEs and poor digital economy penetration,there is less demand for IP addresses and a lack of impetus in IPv6 deployment by big operators.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Italy would total$104 billion by 2025,equivalent to 3.3%of the gross value of these industries in 2025.38 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 59.IPv6 industry value creation in Italy IPv6 development status Italy ranks 48 out of 92 countries with a score of 0.35,grouped as an adopter.This means the level of IPv6 development in Italy is in the medium level in the world.Figure 60.IPv6 development status in Italy Recommendations Figure 61.Policy recommendations for Italy 39 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.3.2.4 Algeria The rapid growth of the ICT industry in Algeria in recent years,the strong government investment in critical ICT infrastructure and the constantly updated legal framework and regulations have all contributed in part to the deployment of IPv6.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Algeria would total$5.2 billion by 2025,equivalent to 1.0%of the gross value of these industries in 2025.Figure 62.IPv6 industry value creation in Algeria IPv6 development status Algeria ranks 52 out of 92 countries with a score of 0.34,grouped as an adopter.This means the level of IPv6 development in Algeria is in medium level in the world.Figure 63.IPv6 development status in Algeria 40 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Recommendations Figure 64.Policy recommendations for Algeria 3.3.2.5 South Africa The general level of digitalization in South Africa is low,and in the lack of larger incentives,terminal demand for IPv6 is still modest,and operators are just beginning to switch to IPv6 due to the oversupply of IPv4 addresses in the country.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in South Africa would total$45 billion by 2025,equivalent to 5.1%of the gross value of these industries in 2025.Figure 65.IPv6 industry value creation in South Africa IPv6 development status South Africa ranks 54 out of 92 countries with a score of 0.34,grouped as an adopter.This means the level of IPv6 development in South Africa is in the medium level in the world.41 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 66.IPv6 development status in South Africa Recommendations Figure 67.Policy recommendations for South Africa 3.3.2.6 Spain Spain began the development of IPv6 technology early and has certain advantages in advanced technology development and academic contributions,but the major operators lack motivation in IPv6 deployment and there is no effective policy to promote the implementation;therefore,it has not yet surpassed the United States as the global leader in IPv6 deployment.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Spain would total$75 billion by 2025,equivalent to 3.3%of the gross value of these industries in 2025.42 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 68.IPv6 industry value creation in Spain IPv6 development status Spain ranks 61 out of 92 countries with a score of 0.33,grouped as an adopter.This means the level of IPv6 development in Spain is in medium level in the world.Figure 69.IPv6 development status in Spain Recommendations Figure 70.Policy recommendations for Spain 43 GLOBAL IPV6 DEVELOPMENT REPORT 2022 3.3.2.7 Nigeria As the most populous country in Africa,Nigeria is valued by many multinational content providers of large sizes and leading expertise,resulting in satisfactory content support for IPv6.However,limited by its low level of digitization,in the absence of significant growth in the digital industry,IPv6 deployment in Nigeria remains at a medium level in the world.IPv6 industry sector impact We estimate that the potential value of IPv6 deployment across multiple industries in Nigeria could total US$52 billion by 2025,which is equivalent to 5.8%of the total real output value of these industries in 2025.Figure 71.IPv6 industry value creation in Nigeria IPv6 development status Nigeria ranks 67 out of 92 countries with a score of 0.30 and is grouped as adopter.This means Nigerias IPv6 deployment level is in the middle of the world Figure 72.IPv6 development status in Nigeria 44 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Recommendations Figure 73.Policy recommendations for Nigeria 3.3.2.8 Egypt The digitalization infrastructure in Egypt is very limited,but the digital economy has grown fast over the past few years.IPv6 and digitalization have evolved concurrently.Due to the absence of a mandated regulation,the digital economys increased need for intellectual property must nevertheless be relayed to operators and end users.IPv6 industry sector impact We estimate that the potential value created by deploying IPv6 across multiple industries in Egypt would total$47 billion by 2025,equivalent to 5.0%of the gross value of these industries in 2025.Figure 74.IPv6 industry value creation in Egypt IPv6 development status Egypt ranks 70 out of 92 countries with a score of 0.30,grouped as an adopter.This means the level of IPv6 development in Egypt is in medium level in the world 45 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 75.IPv6 development status in Egypt Recommendations Figure 76.Policy recommendations for Egypt 3.3.3 Starters 3.3.3.1 Indonesia Due to the low level of digitalization among terminals and therefore lack of demand,Indonesia faces weak incentives from leading ISPs and content providers to migrate to IPv6.However,it is among the worlds leading countries in the deployment of cutting-edge IPv6 technologies.IPv6 industry sector impact We estimate that the potential value of IPv6 deployment across multiple industries in Indonesia could total US$78 billion by 2025,which is equivalent to 3.0%of the total real output value of these industries in 2025.46 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 77.IPv6 industry value creation in Indonesia IPv6 development status Indonesia ranks 74 in 92 countries,with a score of 0.29,and is grouped as an adopter.This means that IPv6 deployment status in Indonesia is in medium level.Figure 78.IPv6 development status in Indonesia Recommendations Figure 79.Policy recommendations for Indonesia 47 GLOBAL IPV6 DEVELOPMENT REPORT 2022 4.Policy Recommendation 4.1 Challenges faced in IPv6 Enhanced Innovation development Figure 80.The three roles and nine initiatives of government 4.2 General recommendations by group In general,for countries in different development stage,the government have varied emphasis:Figure 81.Policy focus for different segments 4.3 Detailed recommendations by group 4.3.1 Front-runners 48 GLOBAL IPV6 DEVELOPMENT REPORT 2022 Figure 82.Policy recommendations for front-runners 4.3.2 Adopters Figure 83.Policy recommendations for adopters 4.3.3 Starters Figure 84.Policy recommendations for starters 长风破浪，顺势争先12 PUBLISHER:ROLAND BERGER 23/F Jing An Kerry Centre Tower 1 1515 West Nanjing Road,Shanghai 86 21 5298-6677 EMLYON BUSINESS SCHOOL 2F,Global Education Center,East China Normal University,N.3663 North Zhongshan Road,Shanghai,China. 86 21 6260 8160 infoem-

2人已浏览 2023-02-06 49页 5星级

Perforce：自动、半自动和传统汽车软件合规指南（英文版）（9页）.pdf

Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)IntroductionAn essential part of the automotive software development process is ensuring that it is compliant with key industry coding standards and guidelines.However,that process can be complex and time-consuming without the right software development tools and best practices.Here,we provide an overview of the key automotive software standards and the best practices for compliance.WHITE PAPERGuide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional VehiclesWHITE PAPERGuide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)ContentsAutomotive Software.3Key Automotive Coding Guidelines.3Coding Guideline Best Practices for Software Safety and Security.4Automotive Software Functional Safety General.4ISO 26262:Automotive Functional Safety.4ASIL Overview.4Automotive Software Functional Safety Autonomous Vehicles.6SOTIF(ISO/PAS 21448)Overview.6How SOTIF(ISO/PAS 21448)Relates to ISO 26262.7UL 4600 Overview.7Automotive Software Functional Security.8How Perforce Static Analysis Tools Help Ensure Secure,Reliable,and Standards-Compliant Automotive Software.9WHITE PAPER3|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)Automotive SoftwareAll vehicle components regardless of whether they are for autonomous,semi-autonomous,or traditional vehicles have safety and security requirements,but the level of coverage varies depending on the functionality of the component.It is obvious that a braking system has major safety requirements,and an In-Vehicle Infotainment(IVI)that has external communication will have to consider cybersecurity.Going forward,there will be an increase in domain and area controllers within the vehicle,where many separate,distinct components are consolidated into a single,distributed platform for the entire vehicle.This leads to safety,scheduling,and security concerns.Many of these concerns can be addressed by enforcing functional safety and security standards.All components are required to meet ISO 26262 and in the future there will be a mandatory requirement to cover ISO/SAE 21434 for automotive cybersecurity.Both functional standards recommend the use of coding guidelines to detect undefined and critical unspecified behavior in programming languages.Key Automotive Coding GuidelinesMISRAMISRA,originally developed for the automotive industry,provides coding standards for developing safety-critical systems and has been extended to cover security.It is now used in all industries where there are critical systems.MISRA C was originally published in 1998,and the latest version is MISRA C:2012 third edition first revision with subsequent amendments covers C90,C99,and C11.It is now the most widely used set of coding guidelines for C around the world.In 2008,MISRA C was published and is now used extensively by safety-critical developers.An update is forthcoming within the next year to cover the later versions of C .All MISRA guidelines are assigned a category to determine which are of the highest risk.AUTOSAR C 14The AUTOSAR coding guidelines are for the use of the C 14 language in critical and safety-related systems.They were developed for use in the AUTOSAR Adaptive Platform but are applicable to any safety-critical applications written in C .AUTOSAR C 14 is based on MISRA C :2008 coding guidelines but with the addition of the best features of other C coding standards,such as JSF and CERT C .It allows for the use of some features that are not permitted by other C coding standards,including:Dynamic Memory Exceptions Templates Inheritance Virtual FunctionsThe AUTOSAR guidelines are classified according to the obligation level which indicates the risk of failing to resolve violations.CERTCERT is a secure coding standard that supports commonly used programming languages such as C,C ,and Java.It is composed of rules and recommendations that target insecure coding practices and undefined behaviors that lead to security risks.The rules provide requirements for the code while the requirements provide guidance that,when followed,should improve the safety,reliability,and security of software systems.WHITE PAPER4|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)Each guideline in the CERT Coding Standards contains a risk assessment section that attempts to provide software developers with an indication of the potential consequences of not addressing a particular rule or recommendation.Coding Guideline Best Practices for Software Safety and SecurityWhen selecting and implementing coding guidelines,there needs to be consideration of the application.Obviously,the programming language is the first step,but often that is already determined by the project.This will then lead to the available coding guidelines.Next,the scope of the application are there safety-critical or cybersecurity concerns,or both?All defensive implementation techniques should start with the use of recognized coding guidelines.MISRA C:2012 Revision 1 and CERT C(and by extension MISRA C and AUTOSAR C 14)identify critical and unspecified language behavior by implementing a language subset.This makes the resulting code more reliable,less prone to errors,and easier to maintain.The level of coverage required may vary depending on the functionality of the component.It may be that it is sufficient to only apply rules that detect high-risk violations.CERT defines the severity of each rule,and MISRA C applies a category.This allows a subset of rules to be enforced.However,any decision to disable rules from any coding guidelines must be considered carefully as a justification will often be necessary.Automotive Software Functional Safety GeneralAn essential part of the automotive software development process is verifying that the software is compliant with key industry standards and guidelines to ensure safety and security.ISO 26262:Automotive Functional SafetyISO 26262“Road vehicles functional safety”,is the major functional safety standard used in the automotive industry.It is a risk-based safety standard and applies to electric and/or electronic systems in production vehicles.This includes driver assistance,propulsion,and vehicle dynamics control systems.ISO 26262 covers the functional safety aspects of the entire development process from requirements specification through design and implementation to verification and validation.WHY ISO 26262 IS IMPORTANT FOR AUTOMOTIVE SOFTWAREISO 26262 is important for automotive software because all road vehicles are required to comply with it to ensure safety throughout the lifecycle of the automotive equipment and systems.Specific steps are required in each phase to ensure safety from the earliest concept to the point when the vehicle is decommissioned.Compliance helps developers avoid or control systematic failures and mitigate the effects of failure.ASIL OverviewAutomotive Safety Integrity Levels(ASILs)are a key element of ISO 26262 and are used to measure the risk of a specific system component.The more complex the system,the greater the risk of systematic failures and random hardware failures.There are four ASIL values,A-D.ASIL A is the minimum level of risk and ASIL D is the maximum.WHITE PAPER5|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)Compliance requirements become stricter going from A to D.QM(quality management)is an additional option that is used to note that there is no safety requirement for a particular component.For more information on how to determine Automotive Safety Integrity Levels,download our white paper,How to Comply with the ISO 26262 Standard.ISO 26262 FUNCTIONAL SAFETY FOR SOFTWARE DEVELOPERSISO 26262 is comprised of 11 parts,where Part 6:Product Development at the Software Level and Part 8:Supporting Processes are particularly applicable to electric vehicle software development.Part 6 contains a series of tables that includes methods to define software processes.(The full list of the tables supported by static analysis can be found in our white paper,How to Comply with the ISO 26262 Standard.)For each method,the degree of recommendation to use the corresponding method depends on the ASIL and is categorized as follows:“ ”indicates that the method is highly recommended for the identified ASIL.“ ”indicates that the method is recommended for the identified ASIL.“o”indicates that the method has no recommendation for or against its usage for the identified ASIL.For example,in Table 6 below,method a.one entry and one exit point in subprograms and functions is highly recommended for all ASILs,whereas method j.no recursions is only recommended for the lower levels.Table 6 Design Principles for Software Unit Design and Implementationa.One entry and one exit point in subprograms and functionsb.No dynamic objects or variables,or else online test during their creationc.Initialization of variablesd.No multiple use of variable namese.Avoid global variables or else justify their usagef.Restricted use of pointersg.No implicit type conversionsh.No hidden data flow or control flowi.No unconditional jumpsj.No recursions MethodsASILABCDWHITE PAPER6|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)HOW TO MEET ISO 26262 COMPLIANCE REQUIREMENTSISO 26262 recommends that a coding standard is applied to cover many of the coding principles listed in the tables in Part 6.Applying a coding guideline such as MISRA or AUTOSAR C 14,can be made easier by using a static analysis tool.Any tool which is relied upon to show compliance with ISO 26262 must be qualified to ensure that it is suitable for use in a safety-related environment.Therefore,it is easier to use a tool that has already been certified,such as Perforce static analysis tools Helix QAC and Klocwork which have been certified by TV-SD for use in safety-related development.Automotive Software Functional Safety Autonomous VehiclesWhile the same functional safety and security standards that are essential for a traditionally powered vehicles are also relevant for autonomous vehicles,there are additional standards that should be followed.SOTIF(ISO/PAS 21448)OverviewSOTIF which stands for Safety of the Intended Functionality is the absence of unreasonable risk due to hazards resulting from functional insufficiencies of the intended functionality or by reasonably foreseeable misuse.ISO/PAS 21448(SOTIF)was developed to address the new safety challenges for autonomous and semi-autonomous vehicle software,which rely on artificial intelligence(AI)and machine learning(ML).The aim is the same as for ISO 26262,the protection of humans from harm and injuries,but while the objective of ISO 26262is to avoid unreasonable risks derived from hazards caused by a malfunctioning of a system,the objective of ISO/PAS 21448(SOTIF)is to avoid unreasonable risks due to potentially hazardous behaviors related to functional insufficiencies or deficiencies.The need to cover this specific aspect of safety arose in the automotive field in relation to the development of self-driving cars.But,considering that the self-driving cars which will soon be able to drive without any human involvement are a product located at the intersection of automotive and robotics areas,it may be expected that SOTIF will apply,maybe with some adjustments,to robotics as well.ISO 21448 provides guidance on design and verification and validation measures.By applying these measures,automotive software developers can achieve safety in situations without failure and thus achieving SOTIF.It is applied to intended functionality where proper situational awareness is critical to safety,and where that situational awareness is derived from complex sensors and processing algorithms as used by AI and MLWHY SOTIF(ISO/PAS 21448)IS IMPORTANTSOTIF is important because verifying automated systems is difficult.In general,automated systems have huge volumes of data,which is fed to complex algorithms.Artificial intelligence and machine learning(AI/ML)are critical for developing these systems.To avoid potential safety hazards,the AI will need to make decisions in a variety of scenarios,including those that require situational awareness.SOTIF is key to ensuring that the AI can make the best decision for a given scenario to avoid safety hazards.WHITE PAPER7|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)WHERE SOTIF(ISO/PAS 21448)APPLIESSOTIF applies to safety violations that occur without the failure of a system.To better illustrate what this means,here is an example of situational awareness.It has been snowing and the road has become icy.The AI-based system installed in your self-driving car is unable to comprehend the situation and respond properly,impacting its ability to operate safely.Without being able to sense the icy road conditions,your self-driving car instead decides to drive faster than what would be safe putting your life,as well as those in your car and on the road,at risk.However,lets instead imagine that your self-driving cars software has fulfilled the SOTIF requirements.By doing so,it is able to take the road conditions into account and make a decision based on the probability of what could happen.Which means that instead of speeding up,your car makes the decision to slow down.How SOTIF(ISO/PAS 21448)Relates to ISO 26262ISO/PAS 21448(SOTIF)applies to systems that can have safety hazards without a system failure.Examples of these types of systems include emergency intervention systems and advanced driver assistance systems(ADAS).It does not apply to cases covered by the ISO 26262 or to hazards directly caused by the system technology.ISO 26262 covers functional safety in the event of system failures and applies to existing,established systems such as dynamic stability control(DSC)systems or airbags.For these systems,safety is ensured by mitigating the risk of system failure.Simply put,SOTIF compliments ISO 26262 to ensure that autonomous and semi-autonomous vehicles are as safe as possible.UL 4600 OverviewUL 4600 Standard for Safety for the Evaluation of Autonomous Products addresses the safety principles and processes for evaluating fully autonomous systems that operate with no human intervention.It is intended to address the changes required from traditional safety practices to take into account autonomy,such as lack of human operator to take fault mitigation actions.WHITE PAPER8|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)It includes safety case construction,risk analysis,safety relevant aspects of design process,testing,tool qualification,autonomy validation,data integrity,human-machine interaction(for non-drivers),life cycle concerns,metrics,and conformance assessment.The approach is claim-based approach prescribing topics that must be addressed in creating a safety case.It does not define pass/fail criteria for safety or set acceptable risk levels.UL 4600 FUNCTIONAL SAFETY FOR AUTONOMOUS VEHICLE DEVELOPERSUL 4600 is explicitly designed to help developers and manufacturers of automated products like self-driving cars to build a safety case for their product.It sets out a methodology by which the developer or manufacturer can explain why an autonomous vehicle is acceptably safe through a comprehensive and structured set of claims or goals.These claims or goals must then be supported by arguments and evidence.In addition,UL 4600 sets out a structure for the safety case,dividing claims into areas such as“risk assessment”;“interacting with Non-Driver Humans”;and“verification,validation,and testing”.Throughout the standard are extensive lists to“prompt”users to consider things which the standard defines as“mandatory”,“required”,“highly recommended”,and“recommended”.It also specifies how conformity with these prompts will be achieved and potential“pitfalls”.UL 4600 requires developers to consider the use of the vehicle throughout its operational life.This approach also requires that the supply chain for the maintenance of the vehicle has been considered.They must also have processes for managing any uncertainties,assumptions,and potential gaps in the safety case on an ongoing basis.It is mandatory that there is a structured software development process and evidence provided to show that it is followed at all levels from unit through to system.This can be difficult for some levels of autonomy,for example machine-learning,but the steps in development must be defined.Therefore,it is highly recommended that processes from traditional safety standards like ISO 26262 are adopted.In addition,it is also highly recommended that evidence of compliance to safety and security standard coding guidelines like MISRA is provided.Automotive Software Functional SecurityThe frequency of cyberattacks on vehicles increased 225%from 2018 to 2021,according to the Upstreams 2022 Global Automotive Cybersecurity Report.This staggering increase highlights how automotive software security is no longer optional but absolutely necessary.ISO/SAE 21434:AUTOMOTIVE SOFTWARE SECURITYISO/SAE 21434“Road vehicles cybersecurity engineering”is an automotive standard that focuses on the cybersecurity risk in road vehicle electronic systems.The standard covers all stages of a vehicles lifecycle from the initial design to end-of-life decommissioning,by the application of cybersecurity engineering.This applies to all electronic systems,components,and software in the vehicle,plus any external connectivity.In addition,ISO/SAE 21434 provides a comprehensive approach to implementing security safeguards that span the entire supplier chain.WHY ISO/SAE 21434 IS IMPORTANT FOR AUTOMOTIVE SOFTWAREISO/SAE 21434 is important for automotive software as current safety-critical standards are not sufficient to cover cybersecurity risks.The standard provides a structured process to ensure that cybersecurity considerations are incorporated into automotive products throughout their lifetime.The standard requires automotive manufacturers and suppliers to demonstrate due diligence in the implementation of cybersecurity engineering and that cybersecurity management is applied throughout the supply chain to support it.WHITE PAPER9|Guide to Automotive Software Compliance:Autonomous,Semi-Autonomous,and Traditional V Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0620RB22)About PerforcePerforce powers innovation at unrivaled scale.Perforce solutions future-proof competitive advantage by driving quality,security,compliance,collaboration,and speed across the technology lifecycle.We bring deep domain and vertical expertise to every customer,so nothing stands in the way of success.Our global footprint spans more than 80 countries and includes over 75%of the Fortune 100.Perforce is trusted by the worlds leading brands to deliver solutions to even the toughest challenges.Accelerate technology delivery,with no shortcuts.Get the Power of Perforce.HOW TO MEET ISO/SAE 21434 REQUIREMENTSISO/SAE 21434 requires that cybersecurity is at the forefront of all design decisions including the selection of the programming language to be used for software development.There are several criteria to be considered when selecting a programming language,which include:Secure design and coding techniques.Unambiguous syntax and semantic definitions.However,some of these criteria may not be sufficiently addressed in the selected language.Therefore,it is recommended that coding guidelines such as MISRA and CERT are used to address the deficiencies of the chosen language.There is an additional requirement to verify the compliance with the selected coding guidelines,with the recommendation to use static analysis tools.Static analysis tools can both verify compliance with the coding guidelines and provide evidence of that compliance.This will provide overall consistency,correctness,and completeness with respect to cybersecurity requirements.In addition,a static analysis tool will make compliance simpler and help meet development guidelines to produce safe,secure,and reliable software.How Perforce Static Analysis Tools Help Ensure Secure,Reliable,and Standards-Compliant Automotive SoftwareTo effectively identify software security vulnerabilities and weaknesses,as well as to enforce recommended coding standards and guidelines,an industry standardized tool should be used specifically a static analysis tool.Static analysis tools such as Helix QAC and Klocwork can both verify compliance with coding standards and guidelines,and provide evidence of that compliance.This will provide overall consistency,correctness,and completeness with respect to functional safety and cybersecurity requirements.By using a static analysis tool,you can accelerate compliance by:Enforcing coding standards and detecting rule violations.Detecting compliance issues earlier in development.Accelerating code reviews and manual testing efforts.Reporting on compliance over time and across product versions.Perforce static analysis tools provide full compliance to both MISRA and CERT guidelines.They are also certified for use for safety-critical systems by TV-SD,including ISO 26262 up to ASIL level D.See for yourself how Perforce static analysis tools can help ensure the functional safety and security of your automotive software.Request your free trial today.STATIC ANALYSIS FREE TRIAL

4人已浏览 2023-02-06 9页 5星级

毕马威：2023年全球制造业展望报告（英文版）（16页）.pdf

KPMG InternationalThe CEO view:Sustaining growth amid turbulenceGlobal Manufacturing Prospects slowdown would impact profits and sales expansion,so how will CEOs react in the short term to maintain business momentum?Indeed,they will have to grow faster,come the rebound,to stay on track with their profit projections.Achieving these objectives will likely be a difficult balancing act,between the short and long term;investments in technology and people;onshoring and offshoring.For CEOs navigating these difficult waters,this report aims to provide key insights to help manage the journey.It can help companies benchmark themselves against their peers and offer some sound advice on what maps to take along with them.The future is unpredictable,so prepare carefully and assess the risks and opportunities from an enterprise-wide perspective.Unless otherwise indicated,throughout this report,“we”,“KPMG”,“us”and“our”refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.KPMG International provides no client services.No member firm has any authority to obligate or bind KPMG International or any other member firm vis-vis third parties,nor does KPMG International have any such authority to obligate or bind any member firm.In the preparation of this report,KPMG International polled 182 chief executive officers(CEOs)of large manufacturers for their views on the key issues facing their companies.Respondents are based in 11 countries in Europe,Asia,and North America.The findings show that CEOs perspectives are shifting.They are as confident about profitable growth inthe next three years as they were in the previous survey,but most expect to face a headwind in 2023.Stphane SouchetGlobal Head of Industrial ManufacturingKPMG InternationalGrant McDonaldGlobal Industry Leader,Aerospace and DefenceKPMG InternationalGlobal Manufacturing Prospects2 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Contents4Strong optimism despite headwinds8Zeroing in on ESG goals6Changing global supply chains11Rising value of skills7Building blocks of transformation13Digital and people15ConclusionZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionGlobal Manufacturing Prospects3Global Manufacturing Prospects3 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.In terms of growth prospects,please indicate your level of confidence in the following over the next 3 yearsSource:2022 Global CEO Outlook,KPMG InternationalStrong optimism despite headwindsThe global economy is slowing down and there are numerous challenges facing manufacturers,but CEOs remain confident of their companies growth prospects over the next three years.This level of confidence has hardly changed over the past 12 months.They are also optimistic about the growth of their industry between now and 2025,much more so than in previous polls.They are,however,less confident about the world economys short-term growth prospects,as governments tackle rising inflation by dampening demand.Despite the optimism about the longer term,more than three quarters admit that in case of an economic downturn,this may affect their companies three-year growth prospects.261R dH%5%3%3%4S%0 0Pp0%Growth prospects for your companyGrowth prospects for your industryGrowth prospects for the global economyGrowth prospects for your countryVery confidentConfidentNeutralNot very confidentZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionStrong optimism despite headwindsGlobal Manufacturing Prospects4 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.“In the face of mounting uncertainties,it is advisable to perform rolling scenario analysis and plan various responses,depending on possible paths for the business cycle,”says Stphane Souchet,Global Head of Industrial Manufacturing at KPMG.“The macro-economic outlook has brightened somewhat recently,and CEOs should prepare for a rebound at some point.If inflation comes under greater central bank control in 2023,there might be more positive momentum and companies should be ready to take advantage of a recovery.”To strengthen their organizations in the face of a slowdown,CEOs are planning for the possibility of an economic downturn,which can mean making difficult decisions.86 percent are planning to focus on boosting productivity,or have already done so.However,they are confident their companies will remain resilient over the next six months.Some sectors can expect to remain buoyant as a result of other geopolitical factors.“Amid all the discussion of an economic downturn,Aerospace&Defense(A&D)is,to some extent,working in a counter-cyclical direction,”says Grant McDonald,Global Sector Leader,Aerospace and Defense,at KPMG.“That is,the rebound in passenger travel has accelerated aircraft orders,and the continuing geopolitical conflicts have led to increased spending on defence equipment.”Aerospace&defence is a sector known for innovation.Depending on the digital maturity,productivity improvements can be achieved through additional investment in automation thatwillenhanceefficiencyandeffectiveness.Grant McDonald Global Industry Leader,Aerospace&DefenceKPMG InternationalZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionStrong optimism despite headwindsGlobal Manufacturing Prospects5 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Changing global supply chainsWhat steps have you already taken,and which do you plan to take in the next 6 months,to adjust your strategy in response to geopolitical challenges?Source:2022 Global CEO Outlook,KPMG InternationalThe economic picture remains very cloudy,not only because of government measures to dampen inflation,but also because of heightened geopolitical risks around the world.Divisions were growing before the war in Ukraine broke out in February,but since then,new global tensions have caused companies to rethink their international strategies.88 percent have discontinued operations in Russia in response to the war in Ukraine.But globalization is not necessarily retreating;it is more likely to be changing shape.“Manufacturing industries are global,which means that onshoring,nearshoring,and offshoring never go away.The picture is mixed from region to region,and you have to examine global trends in their entirety.Companies may use M&A(Mergers and Acquisitions)as a tool to gain more control of supply chains,and if they can onshore parts of their operations,they will,”says Grant McDonald.“This concept of strategic partnerships and alliances is also crucial to help build business relationships and to manage complex supply chains.”0 09ECC2TDB127%Diversify our supply chainReconsider investment strategies Adjust risk management procedures in light of geopolitical riskTransfer overseas operations locally/in house Discontinue working relationship with RussiaPause digital transformation strategyHave takenPlan to take in the nexy 6 monthsNo action plannedZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionChanging global supply chainsGlobal Manufacturing Prospects6 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.84 percent of CEOs are nearshoring or onshoring operations or bringing them in-house,and even more are diversifying their supply chain to mitigate vulnerabilities that emerged through the pandemic.The logic of investing close to major markets is still strong,but geopolitical uncertainty is raising the possibility of a divided global economy.“Supply chains have been like a roller coaster for manufacturers,which have faced some very tight bottlenecks,but its useful to note that some trends are reversing,”says Stphane Souchet.For example,there is increased shipping capacity on some trade routes.Market forces are working to loosen things up.Supply chains have been like a roller coaster for manufacturers,which have faced some very tight bottlenecks,but its useful to note that some trends arereversing.Stphane Souchet Global Head of Industrial Manufacturing KPMG InternationalZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionChanging global supply chainsGlobal Manufacturing Prospects7 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Source:2022 Global CEO Outlook,KPMG InternationalBuilding blocks of transformationCompanies are aiming to grow faster by both organic and inorganic means.CEOs say the top priorities for achieving growth objectives are strategic alliances and organic growth.Mergers&Acquisitions(M&A)are a slightly lower priority,but more than half of chief executives have a healthy appetite for M&A that will have a significant effect on their companies.Over the next 3 years,how would you describe your organizations M&A appetite?“Faced with market uncertainties and a softening of final demand,top line performance will be more challenging.So,to maintain valuation levels and put capital to work,manufacturing CEOs are still looking at tactical M&A to support topline growth,as well as filling gaps in their product portfolio,whilst continuing the optimization of their business portfolio.For example,the sale of non-core assets to private equity raises financing for the tactical acquisitions,”says Stphane Souchet.Despite a decline in M&A deals in 2022,corporate transactions(both disposals and acquisitions)remain a very important way for manufacturers to strengthen core operations and find faster ways to expand.It is a means of restructuring and accelerating transformation.“A strong appetite for M&A deals doesnt necessarily mean activity exceeds 2021s elevated level,but CEOs are always interested in making deals,”says Claudia Saran,National Sector Leader for Industrial Manufacturing,KPMG in the US.“The economic environment is a bit less predictable than before because of rising interest rates and the possibility of an economic slowdown,but M&A is an important way to rationalize the portfolio and shift toward higher growth opportunities.”Low M&A appetite-unlikely we will make any acquisitionsModerate M&A appetite-We will make acquisitions,but with moderate to my overall organizationHigh M&A appetite-Likely to undertake acquisitions which will have a significant impact to my overall organizationWe are seeking to be acquired ourselves-Likely we will be the target of an acquisition or merger 135Q%1%Zeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionBuilding blocks of transformationGlobal Manufacturing Prospects8 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Zeroing in on ESG goalsSustainability goals continue to be emphasized by CEOs,who say that the predominant source of pressure to promote more transparency about companies environmental,social and governance(ESG)objectives comes from employees rather than investors.To accelerate their ESG strategy,they will take a more proactive approach to societal issues,such as increased investments in a living wage and a focus on human rights.ESG goals are particularly important in the A&D sector,which has some of the highest carbon emissions a significant challenge in meeting the net zero objectives.“The industry is focused on making a difference and investments are being made in areas including sustainable fuels,hydrogen cells and electrification”,says Grant McDonald.“When it comes to ESG objectives,we ask clients to tell us their goals and priorities.We advise companies that there are a finite set of objectives they can focus on,so it is best to choose the ones that are important to them and where it can do the most,measurable good,”says Claudia Saran.To achieve this,companies need to take an enterprise-wide view of ESG.“The recent economic dislocations have revealed more than ever that CEOs must think of their business model from a holistic point of view.So,its not possible to focus on one topic to the detriment of others;theyre connected,”says Stphane Souchet.“Theres a link,for example,between supply chain issues and ESG,when you think of responsible purchasing.Sometimes there are conflicting agendas,so CEOs might have to change their priorities if they want to achieve their strategic goals.”In 3 years,what do you believe will be the key driver to accelerate your companys ESG strategy?Taking a more proactive approach to societal issues,such as increased investment in a living wage,human rights and a just transitionImplementing a net zero strategy and/or measuring and acting on your companys carbon footprintIncreasing measurement and governance to build a more robust and transparent approach to ESGDelivering on an actionable inclusion,diversity and equity strategy to address equity in leadership(e.g.pay equity,diversity in leadership and boards)33%Source:2022 Global CEO Outlook,KPMG InternationalZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionZeroing in on ESG goalsGlobal Manufacturing Prospects9 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Another core consideration of ESG is diversity,equity,and inclusion(DEI),which must be a priority for companies creating a representative workforce.For many enterprises,this means developing talent that will fill leadership slots.Four in five CEOs say that“achieving gender equity in the C-suite will help us meet our growth ambitions.”They are aware that scrutiny of their organizations performance on diversity will continue to increase,so they may need to accelerate the transition.Two thirds agree that progress on diversity and inclusion has been much too slow in the business world.“There is research showing that companies with a focus on DEI are achieving higher shareholder returns and they will gain the greatest benefit by building a diverse leadership team,”says Claudia Saran.“If you truly believe that a wide range of viewpoints will enable your company to achieve higher returns,then where better to focus than at the top,with diverse people who can help maximize the impact of business decisions.”Sustainability continues to be a critical global issue.There is growing evidence that a focus on this and wider ESG initiatives creates value for companies1 and ESG-focused institutional investment continues to rise rapidly in importance.Conversely,a failure to meet ESG goals exposes companies to financial risks,according to a June 2022 study by Dun&Bradstreet2.There are other costs,as well.CEOs think that it could be challenging to recruit the best talent if they do not meet candidates ESG expectations.Some have argued that coping with geopolitical disruption is causing companies to delay meeting their sustainability objectives.But Stphane Souchet does not believe its a choice of either/or.When we look at the geopolitics of energy supply,we see there are increasing efforts to enhance energy sovereignty and this leads to a greater willingness to increase the supply of renewable energy.Several countries have recently turned to nuclear power projects to reconcile ESG imperatives whilst its acceptability for society is increasing in most countries,”he says.When it comes to meeting net-zero goals,the biggest barrier is the complexity of implementation.The least important challenge is cost,a sign that technology is making it possible to achieve decarbonization goals within a reasonable timeframe.Wind and solar power,for example,are increasingly competitive sources of energy.The U.S.Department of Energy states that the cost of solar power fell by more than 75 percent between 2010 and 2021.Wind turbine costs have dropped by more than half over a similar period.What do you believe is the greatest barrier to achieving net zero or similar climate ambitions for global corporations?Source:2022 Global CEO Outlook,KPMG InternationalThe cost of decarbonization Complexity of decarbonizing supply chains Lack of skills and expertise to implement solutionsLack of internal governance/controls to operationalize it Lack of appropriate technology solutions 20 ) %2“Failing to meet ESG goals exposes companies to increased operational and financial risks,study finds,”Dun&Bradstreet,June 6,2022Zeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionZeroing in on ESG goalsGlobal Manufacturing Prospects10 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Rising value of skillsCEOs recognize that the quality of their workforce is crucial if their business is going to continue to expand.To achieve the companys growth targets over the next three years,the top priority is to attract and retain talent.Almost a third agree on this,10 percent more than the number emphasizing more digitization and connectivity.Skills shortages are a perennial problem,but at a time of market dislocation,as now,there are opportunities to fill talent gaps.Thousands of skilled workers in the technology industry have lost their jobs in 2022,so there is an opportunity to hire people who can help with the digital transformation of manufacturing.Recruitment is not the only tool CEOs should use,says Claudia Saran.“Companies are looking more broadly for sources of talent,including within their own ranks,and are finding ways to improve retention.One way is to use machine learning to match the existing workforce with new roles,retooling employees skills to fit demands for future innovation.”Allowing employees to work flexible hours and to do so from home,at least part of the time,are important ways to attract skilled people.This kind of flexibility can also benefit the organization.48 percent say that the impact of hybrid and remote work on innovation and collaboration has been neutral,but almost as many say it has been positive.Even so,only 38 percent think it has had a positive effect on employee morale,compared with 37 percent who say productivity has benefited.Companies are looking more broadly for sources for talent,including within their own ranks,and are finding ways to improve retention.One way is to use machine learning to match the existing workforce with new roles,retoolingemployees skills to fit demands for future innovation.Claudia Saran National Sector Lead,Industrial Manufacturing KPMG in the USZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionRising value of skillsGlobal Manufacturing Prospects11 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.“On one hand,collective intelligence can be gained and stimulated through physical presence.On the other hand,technology for remote working enables companies to pull together more resources from around the globe to face,and then solve,problems,”says Stphane Souchet.“Leveraging talent from a worldwide base can accelerate innovation in a large corporate organization.”Executives are keen to see employees spend more time in the office.In three years time,73 percent of CEOs predict their employees will have fully returned to the office and only 21 percent expect they will continue to work in a hybrid manner.It remains to be seen,however,whether employees share this view and will comply if asked to return to the office full time.Much will depend on the balance of bargaining power between the management and workers.“Employers are aware of this new balance and are developing strategies to attract and retain talent.Offering employees the option of hybrid work is part of that,”says Claudia Saran.“In striving to attract talent,employers should note that flexible work and location schedules are highly valued by job seekers.Its been almost three years since work patterns were disrupted by the pandemic and it may be difficult to persuade employees to return to the old normal,”she says.In the past 2 years,what kind of impact has hybrid/remote work had on your organization in regards to:Source:2022 Global CEO Outlook,KPMG International0 0CIC8EHQ%8BR%6R7%Collaboration and innovationInvestment in worklpace technologyProductivityEmployee morale Employee retentionHiringPositiveNeutralNegativeZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionRising value of skillsGlobal Manufacturing Prospects12 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Digital and peopleCEOs are divided about the position of their companies in relation to industrial transformation.78 percent say they need to be quicker to invest in digital opportunities,but 75 percent say they have the strategy to secure first-mover advantage.Manufacturers have already gone through several stages of transformation focusing on continuous improvement.“Now they are looking for changes in business models by using digital technology to achieve this.Any company that moves faster than its peers will have an edge,so they fear missing out on the opportunities if they dont accelerate their technology investments,”says Vinod Ramachandran,Global Head of Industry 4.0,KPMG International.If something is holding back transformation,two thirds say the main challenge is choosing the right technology.“One useful way of approaching this problem is to differentiate foundational technologies,which are a must for digital transformation,from specific applications integrated on top,”Vinod Ramachandran elaborates.“The former includes a very strong ERP platform,cloud infrastructure,data links and a data analytics platform,all interconnected.The foundational technology investments require a longer ROI.To what extent do you agree with the following statements about your digital transformation strategy?0 0#)IR%8%&CE#E$%8P!%New partnerships will be critical to continuing our pace of digital transformationContinuing to drive digital transformation at a rapid pace is critical to our competition for talent and customersWere content with where we are on digital transformation and are allocating investment resources elsewhereWe need to address burnout from accelerated digital transformation over the past 2 years before continuing on our transformation journeyWe need to be quicker to shift investment to digital opportunities and divest in those areas where we face digital obsolescenceWe have an aggressive digital investment strategy,intended to secure first-mover or fast-follower statusSource:2022 Global CEO Outlook,KPMG InternationalVery confidentConfidentNeutralNot very confidentNot at all confidentZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionDigits and peopleGlobal Manufacturing Prospects13 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Once that is in place,then specific applications can be built on top of it.For these,the ROI needs to be higher,because the pace of technological evolution is very fast.CEOs dont want a long payback period when the technology is quickly out of date,”says Vinod Ramachandran.Clearly,workforce attitudes need to be aligned with the companys goals for Industry 4.0,but there are signs of a divergence.CEOs say an even more important factor than technology for holding back their transformation efforts is the need to make sure employees adopt new ways of working.This suggests that it is important to ensure workers not only support the companys transformation strategy,but also work hard to help achieve it.Employees are at the center of digital transformation and technology should be used to help them play that role so that the digital share of work content goes up.Changing employees attitudes to the adoption of new technologies requires a lot of effort and time from managers.Yet when asked which is the higher priority to meet transformation objectives,57 percent chose investing in new technology and only 43 percent said skill development.“Both the technology and the workforce go hand in hand in driving digital transformation.New technologies enable new possibilities,but it is up to employees to realize those opportunities.The challenge is that the requisite skills are becoming harder to get,”Vinod Ramachandran continues.“Furthermore,employees need more than one skill.For example,an engineer in a workshop also needs to be proficient in data science so they can analyze and solve problems quickly and efficiently.Combining skills is becoming important to help ensure companies can maximize the benefits of technology.”Both the technology and the workforce go hand in hand in driving digital transformation.New technologies enable new possibilities,but it is up to employees to realize those opportunities.Vinod Ramachandran Global Head of Industry 4.0 KPMG InternationalZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionDigits and peopleGlobal Manufacturing Prospects14 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.In the 2022 report on global manufacturing prospects,it was clear that macroeconomic trends are driving executives to focus even more than before on a twin transformation:smart digitization and a focus on ESG.These remain key imperatives,but now the global picture has become distorted.The world economy is slowing down while technological change is accelerating.CEOs should not take their eye off the main prize:sustainable and profitable growth.To achieve it,they should recalibrate continuously while sticking to their core strengths and values.Given the dramatic changes in geopolitics,climate change and working practices,it is more challenging than ever to stay on track in meeting long-term corporate objectives.However,based on our survey,it is clear that CEOs are aware of both the challenges and opportunities in setting a solid course for the future.ConclusionZeroing in on ESG goalsStrong optimism despite headwindsRising value of skillsChanging global supply chainsDigits and peopleBuilding blocks of transformationConclusionConclusionGlobal Manufacturing Prospects15 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.Although we endeavor to provide accurate and timely information,there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.KPMG International Limited is a private English company limited by guarantee and does not provide services to clients.For more detail about our structure please visit home.kpmg/governance.The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.Throughout this document“we”,“KPMG”,“us”and“our”refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.ContactsStphane Souchet Global Head Industrial Manufacturing KPMG International 33(0)1 55 68 33 90 ssouchetkpmg.frTammy Brown Country Leader KPMG in Canada 1 416 777 8344 tammybrownkpmg.caVinod Ramachandran Partner and National Leader,Global Head Industry 4.0 KPMG in India 91 22 30 90 19 Claudia Saran Country Leader KPMG in the US 1 312 665 Grant McDonald Global Industry Leader,Aerospace and Defence KPMG International 1 246 233 7866 grantmcdonaldkpmg.bbNorbert MeyringCountry Leader KPMG China 86 21 22 12 27 07 Jun Okamoto Country Leader KPMG in Japan 81 33 54 85 Romain Liotard Global Sector Executive,Industrial Manufacturing KPMG International 33(0)1 55 68 96 84 rliotardkpmg.frToni JonesCountry Leader KPMG Australia 61 3 9288.auUlrich Ackermann Country Leader KPMG in Germany 49 711 9060-42000 Jonathon Gill Country Leader KPMG in the UK 44(0)776 871 0617jonathon.gillkpmg.co.uk

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思科（Cisco）：2023年全球网络趋势报告（英文版）（20页）.pdf

Global Networking Trends Report New Rules for a Multicloud World 2023 2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report1Table of contentsAdapting to the new rules 2Key findings 3Introduction 4Business trend:Lines of business are making their voices heard 5Technology trend:Simplicity and security are the must-haves 8Technology priorities:The most-wanted tools offer visibility and automation 10Operational trend:CloudOps and NetOps are finding more common ground 11Organizational trend:CloudOps and NetOps are working better,together 13Deployment trend:Cloud takes off,but on-premises stands firm 15Conclusion 17Why we did what we did 18 2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report22022 has been another year of global change and uncertainty.The disruption the world has faced has both hastened the move to digital business and made it more challenging.For IT teams,the pressure is on like never before,as they strive to keep up with the ever-evolving demands on them.Our recent Global Hybrid Cloud Trends report focused on how organizations are planning to accelerate cloud adoption to support business agility.In this Global Networking Trends Report,we examined how IT organizations are evolving their network technology,talent,and operations to drive their digital transformation and multicloud initiatives.We found that as businesses adapt to the changing environment,IT priorities are shifting.For the first time,agility and business performance have overtaken cost and network management as the key concerns for IT teams,with 42%of respondents citing a more agile development environment as their top reason for moving to multiple clouds.At the same time,organizations are grappling with unprecedented levels of complexity and uncertainty,which is fueling a search for simplicity and security.Solutions that offer end-to-end visibility,automation,and an easy on-ramp to a cloud-based operating model are in high demand.We surveyed more than 2500 IT decision makers in 13 countries to gather their opinions on the role of the network in a successful cloud strategy.In Part 1,we identify trends and priorities in managing workloads across multiple private and public cloud and edge environments.Part 2 will focus on networking trends for providing hybrid workers with secure access to cloud-based applications.We hope the data,perspectives,and guidance in this report will help you better understand the benefits and implications of networking in this fast-moving multicloud era,as you develop your own cloud networking strategies.Thomas Scheibe VP of Product Management Cisco Cloud NetworkingAdapting tothe new rules 2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report3Business trend:Lines of business are making their voices heardThe rising influence of lines of business on network operations planning.Together with security,agility and business performance now trump cost and network management as the key concerns for respondents.42%of cloud and networking professionals say that more agile and scalable application development is a key motivation for moving to multiple private and public clouds.Technology trend:Simplicity and security are the must-havesChallenges and objectives related to network complexity in the multicloud world,and their key drivers.56%of respondents say that security is the top networking challenge they face when managing distributed and hybrid workloads.The complexity of end-to-end management isnt far behindits cited by 53%of respondents.Technology priorities:The most-wanted tools offer visibility and automationKey networking technologies for improving cloud application connectivity.50%of IT teams rate end-to-end visibility as a top priority.48%say multicloud SDN is on their most-wanted list.Operational trend:CloudOps and NetOps are finding more common ground Greater alignment between the objectives of CloudOps and NetOps.49%of CloudOps and 42%of NetOps respondents say security is their top motivation for using multiple clouds.Both say business performance,security,and agility are top priorities.Organizational trend:CloudOps and NetOps are working better,together More cross-functional collaboration between CloudOps and NetOps,and a corresponding rise in benefits.45%of respondents say that improving cloud security is their main motivation for increasing collaboration.41%say greater efficiency is driving the shift.Deployment trend:Cloud takes off,but on-premises stands firm On-premises infrastructure is still important for most companies,even in multicloud environments.Although cloud adoption continues apace,50%of respondents say that the majority of their workloads are still deployed on-premises.Even two years from now,38%still expect most workloads to be deployed on-premises.Key findings 2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report4IntroductionIn his groundbreaking book The Black Swan,Nassim Nicholas Taleb wrote,“History does not crawl.It jumps.”In early 2020,COVID-19 forced the world to jump.With people confined to their homes,activities that once took place face to facein stores,restaurants,offices,and schoolsmoved into the digital realm.People and businesses had to find ways to adapt to the new reality.Close on the heels of the pandemic,geopolitical,supply chain,and economic disruptions created yet more uncertainty.Overnight,the ability to act quickly became the top priority.Businesses discovered that if they were going to thrive,or even just survive,they needed new tools and new ways of doing things.In response to these changes,many organizations have accelerated their adoption of public cloud(infrastructure as a service IaaS and software as a service SaaS),with 56ploying more than 20%of their workloads in the cloud to support new applications and keep their increasingly digital businesses going.Today,the network is both the tool for digital transformation and the main means of keeping the lights on.In 2020,network operations professionals needed to find a new way to work in the increasingly multicloud world.For customers,partners,and employees,the network is the grand highway to a consistent and meaningful multicloud application experience.So its not surprising that connecting to and between distributed cloud and edge workloads is still top of mind today and a key networking priority for 2023.If a company is to have a viable future,the network needs to be multicloud-enabled,ubiquitous,reliable,secure,and agile.This report is designed to guide you in your journey toward a sustainable and scalable multicloud network infrastructure.Our research identifies actions and technologies that can help you not only survive the shift to a multicloud-centric model,but flourish as a result of itnow and into the future.In it,we unearth data supporting“bridge”processes,strategies,and objectives that have become the emerging norm for network operations in a multicloud world.We uncover trends from early adopters and gain insights into future cloud networking technology objectives,management processes,and deployments.This global networking trends report will be released in two parts.:Part 1:Hybrid Cloud Network Trends A look at how networks are enabling the secure,fast,and reliable deployment and management of workloads,applications,and services across private clouds,public clouds,and networks.Part 2:Secure Multicloud Access Trends Will explore how businesses are deploying networks to support the secure access of increasingly distributed workers,partners,and customers to increasingly distributed IaaS and SaaS applications.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report5Business trend:Lines of business are making their voices heardFor several years,analysts,vendors,and IT professionals have talked about the importance of business outcomes in guiding IT operations.Weve often highlighted how technology budgets controlled by the lines of business were growing at a substantially higher annual rate than those owned by the IT teams.While this trend should have meant that business units were having more influence on IT decisions,there hadnt been a great deal of evidence that this was actually happening.However,survey respondents seem to indicate that line-of-business priorities are now influencing IT like never before.When 2020 forced the shift from physical to digital engagement,cloud services and the associated network went from being a means of increasing productivity to the life support system of the business.Quite simply,the cloud and the cloud network kept businesses alive.42BA54)#%What are the most significant motivations for your organization to use multiple clouds?More agile development environmentManaging securityBest-of-breed services and applicationsBusiness agilityBusiness resilienceReduce cloud costsPrevent cloud lock inRegional compliance 2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report6The paramount importance of business outcomes is made clear in the reasons network and cloud operations professionals give for moving more of their IT environment to multiple clouds.Agile development for business applications(42%),best-of-breed services and applications(41%),and business agility(40%)rank first,third,and fourth,respectively,in the top four tightly clustered responses,along with managing security.In our 2020 and 2021 Global Networking Trends Reports,cost and network management were respondents top concerns.This year,the focus has switched to agility and performance both of which have a direct impact on business outcomes.As part of this years survey,respondents also ranked what they saw as the most important benefits of hybrid cloud networking.Agility is a factor in the top three responses:faster problem resolution,faster changes,and proactive problem detection.Performance monitoring and performance forecasting also feature in the top responses.What features or benefits of hybrid cloud networking are most in demand?50HDB0&%7.0ster problem resolutionFaster provisioning/changeProactive problem detectionPerformance monitoringNetwork securityPerformance forecastingIntegration with CI/CDSelf-service configurationApplication topologyAgility is a factor in the top three responses:faster problem resolution,faster changes,and proactive problem detection.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report7Executive Guidance While cost and management will always be part of the network operations equation,there has been a huge shift toward creating new business applications and bringing them to market faster.Factors that impact these business outcomes and experience of the network and the applications now play a greater role in operations.Network operations teams are being asked to focus on helping their organization deploy new applications faster,support native cloud applications,and create automation that accommodates rapidly changing business directions.Adopting an effective cloud operating model for internal IT,until now so effective with cloud providers,is increasingly the answer.When supported by unified platforms,it can create cross-functional consistency and cloudlike agility,and make it easier to deploy services across multiple clouds and networks.Fabio Gori,Cisco Vice President,Networking Product and SolutionsBottom line:While the unpredictable world we live in challenges IT organizations,it also presents new opportunities for organizations that use technology to support dynamic business needs.IT needs to adopt an agile,cloudlike operations model for everything it doesincluding network operations.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report8What are the most significant networking challenges you face when managing hybrid cloud and distributed workloads?Complexity of securityComplexity of end-to-end managementDecentralized managementEnforcing change controlAutomate monitoring and reportsVisibilityNetwork performance SLAsTraffic flows and dependencies56SD972&%Technology trend:Simplicity and security are the must-havesAs endpoints(users and things)and applications become more dispersed and distributed,network complexity multiplies.While adoption of public cloud is growing,50%of workloads are still deployed on-premises.As a result,most environments will continue to be a mix of public cloud,hosted,private cloud,edge,and on-premises environments.For any transaction,each hop in the journey(from cloud to network,user to workload,private cloud to public cloud,cloud microservice to edge microservice)introduces new management,performance,and security considerations.Many of these elements are increasingly out of the direct control of the network operations teameven though the user experience is dependent on the end-to-end journey and is still very much the responsibility of IT.So,its understandable that complexity ranks highly in respondents minds.Complexity of security(56%)and of end-to-end management(53%)are the top two networking challenges in managing the hybrid cloud and distributed workloads.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report9Top difficulties of deploying networks that support cloud native342211)(%Secure traffic through microservicesSelf-service provisioning and change managementAutomating network workflowsVisibility and controlManage migrationsIntegrating DevOps processesIntegrating microservicesAPIs for network automationRemote interconnect for microservicesBottom line:Hybrid cloud models and distributed application models are compounding network complexity,making traditional manual management and security models untenable.Executive Guidance Complexity is a function of the decentralized nature of the network,clouds,and internet.But as both security and management get spread over a wider and more complex landscape,it simply isnt possible to manage everything manually.Adding more technologies to the mix wont necessarily help;solutions must be the right ones.Adopting a platforms approach will allow organizations to automate management and visibility,simplify their ever-growing complex networks,and deliver a unified experience from end to end.Platforms powered by AI and machine learning can support an effective cloud operating model that automates end-to-end policy for network and cloud management across different teams.By building more intelligence into common platforms,the network can work harder and take more of the administrative load.That means IT can spend more time focusing on the business experience and outcomes,where its needed most.Fabio Gori,Cisco Vice President,Networking Product and SolutionsAsked about networking specifically for cloud-native deployments,security was again respondents top concern.The number one challenge was securing microservices traffic(34%).The high ranking of automating network workflows(32%)and visibility and control(31%)also points to the pressing need to simplify network complexity for cloud-native environments.While adoption of public cloud is growing,50%of workloads are still deployed on-premises.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report10Bottom line:A unified platform-based networking model simplifies network lifecycle management and offers the end-to-end visibility and automation that can help deliver the agility and security the business needs.Technology priorities:The most-wanted tools offer visibility and automationThe complexity that has become such a challenge for hybrid cloud networking is having a clear impact on technology choices.Visibility is a recurring theme in much of our survey,and it represents two of the top five responses for network technology considerations.End-to-end visibility(50%)and full-stack observability(43%)are especially important in complex multicloud and cloud-native environments for ensuring the health of application performance and user experience.Because of their ability to simplify complex operations,orchestration and automation rank in the top three of such technologies.Software-defined networking(SDN)can also provide network consistency and enjoys a similar role in the hybrid cloud.Interestingly,direct-to-cloud networking,which delivers faster middle-mile conduits to cloud providers,is one of the top networking technologies businesses are embracing for hybrid cloud networking.End-to-end visibilityMulticloud SDNOrchestration and automationDirect-to-cloud networking servicesFull-stack observability Configuration verificationAPI gatewaysService meshKubernetesWhich of the following networking technologies are you considering or do you use to help manage distributed workloads?50HFCC5( 22 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report11Operational trend:CloudOps and NetOps are finding more common groundIn earlier Global Network Trends Reports,there was a marked difference between the objectives and concerns expressed by network operations and cloud operations teams,reflecting a sense of distinct visions and separate identities.But the current climate,and the shift toward the cloud,have made cross-functional collaboration essential.The focus on application experiences,and the resulting business outcomes,have demanded it.In this survey,weve seen a marked convergence of the objectives expressed by both teams.Both rank agility and security near the top of their motivations for using multiple clouds.Interestingly,though,cloud teams are considerably more convinced of the benefits of multiple clouds(49%)for managing security than network teams are(42%).Managing securityMore agile development environment Business agilityBest-of-breed services and applicationsBusiness resilienceReduce cloud costsPrevent cloud lock inRegional complianceWhat are the most significant motivations for your organization to use multiple(public and private)clouds for all services such as infrastructure as a service(IaaS),platform as a service(PaaS),and SaaS?49CBB300!BBAA65($%CloudOps NetOps 2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report12Executive GuidanceBecause the two operational units now share common objectives,this is the ideal time to promote greater collaboration and cross-functional priorities.Although there seems to be a great deal of collaboration happening already,its not as effective as it could be.Team members need a common north star to guide them.Its the role of management to provide this.IT managementfrom NetOps,CloudOps,DevOps,and SecOpsneeds to work together to spell out common priorities,objectives,and processes to shape collaboration across their teams in support of shared goals.Platforms,such as those that support an effective cloud operating model,can be invaluable for providing the consistency and guidance to govern these cross-functional efforts.Fabio Gori,Cisco Vice President,Networking Product and SolutionsIf we compare responses about which cloud strategies have been adopted to meet business objectives,the answers given by CloudOps and NetOps are generally within a few percentage points of each otherperhaps not surprising,given the shared difficulties both face in this multicloud world.Both teams identify the same two top challenges:security and complexity,and they rank within a few percentage points of each other.While CloudOps and NetOps are closely aligned on most things,they dont agree on the level of edge computing their organizations have adopted.It could be that NetOps teams arent fully aware of businesses edge computing deployments,despite being responsible for delivering the connectivity they require.There is an accelerated move to edge,with an average of 53%planning to adopt edge in two years,compared with 41%today.Bottom line:The objectives of CloudOps and NetOps are aligning,giving businesses the opportunity to break silos and share workflows,tools,and data to deliver better and more secure cloud services.What are the most significant challenges your organization faces using multiple clouds?SecurityComplexity CloudOps NetOps36976%There is an accelerated move to edge,with an average of 53%planning to adopt edge in two years,compared with 41%today.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report13Organizational trend:CloudOps and NetOps are working better,together As cross-functional objectives come into greater alignment,we would expect to see evidence of greater collaboration between cloud and network teams.And both CloudOps and NetOps do in fact identify greater cross-functional collaboration and a rise in corresponding benefits.95%of NetOps professionals were optimistic about their collaboration with CloudOpsand CloudOps professionals expressed similar levels of satisfaction.Improve cloud securityOverall greater efficiencyEnhanced cloud app performanceIntegrate cloud process flowsBetter SLAs for cloud requirementsIntegrate operation models Better SLAs for continuityAttract and retain talentWhat are the key motivations for greater networking/cloud collaboration?3034579AE 22 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report14Bottom line:The growing interdependence of cloud and networking is a given.IT management has the opportunity to deliver on the promise of better application performance and security,and to gain critical operational efficiencies,by helping NetOps and CloudOps teams to work more effectively together.But while teams share a desire to work together,some things get in the way.Competing priorities,lack of the right skills,cultural resistance,lack of direction,and unrealistic expectations all play a role in making collaboration less effective than it might be.Competing prioritiesShortage of skilled staffLack of cross-domain telemetryDifferent objectivesLack of clear directionUnrealistic expectationsCultural resistance32.33.85.4.0A.5A.5U.4%What are the top three roadblocks preventing more collaboration between teams?95%of NetOps professionals were optimistic about their collaboration with CloudOpsand CloudOps professionals.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report15Deployment trend:Cloud takes off,but on-premises stands firm Theres no denying that cloud has come of age,with report after report highlighting its explosive growth.Our survey also shows high adoption rates,with NetOps respondents indicating that 94%of their networks support cloud-native deployments and 90%support distributed workloads across multiple clouds.But cloud isnt the whole story.Even two years from now,38%of NetOps and CloudOps respondents expect the majority of workloads will still be deployed on-premises.While this is slightly down from the 50%that currently deploy most of their workloads on-premises,its still a substantial chunk.And interestingly,this trend isnt limited to network operations:CloudOps and DevOps agree on the ongoing need for on-premises infrastructure.CloudOps DevOps NetOpsWhat%of workloads are currently deployed on-premises?And in two years?41-6061-8021-4041-6061-8021-40CurrentIn two years23#FFR!)$498 22 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report16Theres a similar trend toward moving network management to the cloud,with the growing adoption of SaaS and network-as-a-service models.But as with workloads,both CloudOps and NetOps still see a need for on-premises management for access and networking infrastructure.Nearly 65%of network operations currently deploy and manage their cloud access networks for providing user access to cloud resources in-house.41ploy and manage cloud provider connectivity in-house,and 43ploy networking for hybrid cloud/edge in-house.While a large percentage of enterprise networks are still managed in-house with on-premises systems,management platforms that support an end-to-end cloud operating model can provide cloudlike benefits to the on-premises infrastructure.Since these platforms also offer easier lifecycle management and better integration possibilities between network and other IT platforms,we can expect their adoption to grow.What are your organizations preferred network consumption/deployment model for the following functions?Deployed and managed in-house Managed services with 3rd party aaS64.8C.1.4C.5%5.4).8%Secure accessto cloud apps7.2Q.9.9%Cloud providerconnectivityNetworkingbetween hybridcloud/edge41ploy and manage cloud provider connectivity in-house,and 43ploy networking for hybrid cloud/edge in-house.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report17Executive GuidanceBecause the hybrid and multicloud world can deliver more business value faster,cloud deployments continue to grow.But cloud alone isnt always the right solution.The best approach is to identify the organizations overall objectives and deploy the right technology to meet them.Even as hybrid work allows remote workers to roam ever more freely,for many organizations there will always be a need for on-premises infrastructure at headquarters to support more video-rich collaboration.Some industries just cant be fully remote.And some data,due to privacy compliance or data security,is best located in company-owned data centers.Whats needed for the foreseeable future is a mix of cloud and on-premises infrastructure.Choose technology thats complementary,not exclusive.Cloud and on-premises should work together seamlessly to give a unified experience.Fabio Gori,Cisco Vice President,Networking Product and SolutionsConclusion The trends in this report provide fresh insights that can help guide your network and cloud decisions over the next five years.In themselves,many of the ideas arent new:themes such as cross-functional collaboration,increased complexity,and business-driven network operations have been part of the conversation for several years.What is different this time around is that these issues are now having a real impact on day-to-day operations for technology leaders.The last two years of uncertainty meant that network operations had to quickly adopt a model that could support increased network and business agility,better security,and improved application performance.This tipped the balance in favor of processes and objectives that many organizations planned to implement someday and made that day today.Bottom line:In the medium term at least,IT teams need to plan for both cloud and on-premises infrastructure.To provide greater operational consistency and the best possible user experience,NetOps and CloudOps teams should consider management platforms that support a pervasive cloud operating model across the entire cloud/network stack.2022 Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report18Why we did what we did To make sure the report was as forward-looking as possible,we chose our survey participants carefully:We focused on network operations within organizations using cloud.Part 1 of the report,which focuses on hybrid cloud networking,is a sister report to Ciscos recent Hybrid Cloud Trends Report.According to Gartner,more than 80%of organizations have adopted multicloud environments for their IT needs.We built this survey to uncover how this multicloud environment impacts network operations.The 2023 Cisco Global Networking Trends Report is the result of a quantitative study of targeted technology topics and presents insights based on the results of that study.The survey data referenced in this report was commissioned by Cisco,collected by 451 Research,part of S&P Global Market Intelligence,and analyzed by Cisco as part of an independent web survey of over 2500 global IT decision makers and professionals in cloud computing,DevOps,and enterprise networking roles.The data was segmented by functional role,region,and company size.As much as possible,the survey participants are early adopters of cloud networking technology.Early adopters lead the way,trying and testing different tools and ways of doing things.That means they have much to teach us about which ones will reach broader acceptance.After compiling our initial survey data,we compared the results with earlier Cisco Global Networking Trends Reports,to help us identify how the experiences and priorities of network operations professionals have changed since the pandemic.The report was written between April 11 and September 30,2022.The survey was conducted in 13 countries across North America,Latin America,Asia/Pacific,and Western Europe(US,Canada,Brazil,Mexico,Australia,China,Indonesia,South Korea,Japan,Singapore,UK,France,and Germany).2022 Cisco and/or its affiliates.All rights reserved.Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S.and other countries.To view a list of Cisco trademarks,go to this URL:trademarks mentioned are the property of their respective owners.The use of the word partner does not imply a partnership relationship between Cisco and any other company.(1110R)11/22To learn more,visit Cisco and/or its affiliates.All rights reserved.2023 Global Networking Trends Report19

7人已浏览 2023-02-06 20页 5星级

Dealroom：2022年全球医疗初创企业及风险投资年度回顾报告（英文版）（13页）.pdf

Healthtech startups and venture capital2022 reviewJanuary 2023Page/2 Source:Dealroom.co$4BFintechGlobal VC funding by industry in 2022VC funding Growth by Industry,2022 vs 2021Healthtech&BiotechEnergyTransportationFoodMarketingSecurityMediaReal estate$79.6B$78.4B$46.4B$44.2B$25.6B$23.8B$22.8B$16.4B$14.9BTotal VC Funding 1%-7%-19%-29%-30%-31%-32%-32%-38%-32%EnergySemiconductorsMediaHealthtech and BiotechSecurityReal EstateGamingRoboticsFintechHealthtech&Biotech was the second most funded startup industry in 2022.Though funding fell 29%from 2021 highs.DonePage/3$4BDoneGlobal healthtech*startups are now valued at$1.9T.2022202120202019201820172016201520142013201220112010$2.0T$1.5T$1.0T$0.5T$1.9T$1.7T$1.1TSource:Dealroom.co.*Healthtech excludes biotech and pharma companies.2015202120102014 20052009 20002004 19951999 19941990Combined enterprise value of healthtech startups view onlineby launch yearPage/4 Healthtech startups raised$55B in 2022,remaining much higher than pre-pandemic levels.$13B$20B$15B$10B$5BSource:Dealroom.co.*Healthtech excludes biotech and pharma companies.$14B$15B$19B$13BGlobal venture capital investment in healthtech startups view online2018Q4Q3Q2Q12019Q4Q3Q2Q12020Q4Q3Q2Q12021Q4Q3Q2Q12022Q3Q2Q1$250m $100250m$40100m(series C)$1540m(series B)$415m(series A)$14m(seed)$01m(pre-seed)GrowthBreakoutEarlyQ4DoneGlobal venture capital investment in healthtech startups view online view onlineHealthtech startups with most raised in 2022DonePage/6$4BDoneEarly-stage allocation increased from 12%to 18%of all healthtech funding in 2022,while megarounds contracted.Source:Dealroom.co.100 %$250m $100250m$40100m(series C)$1540m(series B)$415m(series A)$14m(seed)$01m(pre-seed)GrowthBreakoutEarly201820172016202020222019202123&$%Global venture capital investment in healthtech startups view online$250m $100250m$40100m(series C)$1540m(series B)$415m(series A)$14m(seed)$01m(pre-seed)GrowthBreakoutEarlyPage/7$4BDoneJust 21 healthtech startups reached unicorn status in 2022,down from 82 in 2021.Source:Dealroom.co.28410620151025305Selected new unicorns in 2022Number of new healthtech unicorns globally view online 1Number of new healthtech unicorns globally view online Selected new unicorns in 20222018Q4Q3Q2Q12019Q4Q3Q2Q12020Q4Q3Q2Q12021Q4Q3Q2Q12022Q3Q2Q1Q4Page/8$4BDoneDespite frozen public markets,2022 saw over 750 Health M&A transactions,down only 4%on 2021.Source:Dealroom.co.Selected exits in 2022Number of exits by type view online Q42021Q32021Q22021Q22022Q42022Q12022Q32022Q12021300200100176245StartupExit roundValuationFocusAcquisition$1.0BHealth enterprise softwareBuyout650MLabtechAcquisition 750MEyecareAcquisition250MEyecareNumber of Health exits by type view online IPOs and SPACs M&A Selected exits in 2022 Top 100 Digital Therapeutics StartupsOpen Alternative protein landscapeWeve ranked the top 100 healthcare startups to watch based on Dealroom Signal:a powerful algorithm helping VCs,Corporates and Governments find the most promising up-and-coming startups.The input for each Signals algorithm includes company growth(team size,product growth),job openings,completion score and contextual data(does the company fit into segments of interest),timing(is the startup likely to raise their next round soon)and team composition.Top 100 Healthcare startups to watch Top 100 Healthcare Startups to watchPage/10$4BDoneAI-drug development and Telemedicine are the top sectors for attracted healthtech VC funding.Source:Dealroom.co.Drug discovery&development with AITelemedicineMental healthRemote monitoring&wearablesDigital therapeuticsHealth insuranceFemtechClinical trials softwarePharmacy$2.4B$2.2B$1.6B$1.4B$1.3B$1.1B$969M$932M$513MVC investment in 2022 by segment view online-48%-59%-70%-35%-60%-70%-60%-27%-86%VC investment in 2022 by segment view online Page/11 Geographically,healthtech funding fell in all major markets in 2022,with the US proving marginally more resilient.4.2%Total VC funding202220212020202220212020202220212020202220212020USA view onlineEurope view onlineAsia view onlineRest of world view online$4.1B$27B$46B$34B$4.7B$12B$7.4B$8.6B$13B$8.9B$1.2B$3.4B-25%-36%-31% 21%Source:Dealroom.co.DoneUSA view onlineEurope view onlineAsia view onlineRest of world view online202020212022202020212022202020212022202020212022$34B$46B$27B$4.7B$12B$7.4B$8.6B$13B$8.9B$4.1B$1.2B$3.4B 21%-31%-36%-25%DoneExplore the ecosystemhealth.dealroom.coPowered by Visit the platform

2人已浏览 2023-02-06 13页 5星级

CertiK： 2022年德国区块链报告（英文版）（67页）.pdf

THE GERMAN BLOCKCHAIN REPORT 20222THE GERMAN BLOCKCHAIN REPORT 2022 CONTENTS0101INTRODUCTIONIntroduction-4Editorial-5Foreword by BTC-ECHO-70202RESEARCH METHODOLOGYResearch Methodology-90303EXECUTIVE SUMMARYExecutive Summary-110404VENTURE FUNDING OVERVIEWThe State of Blockchain Venture Funding in Germany-17Startup Funding-A Snapshot-17Global Venture Funding-18European Venture Funding-18German Venture Funding-18Blockchain Venture Funding-A Snapshot-19 Global Blockchain Venture Funding-A Snapshot-19 European Blockchain Venture Funding Landscape-20 German Blockchain Venture Funding Landscape-21 Blockchain Funding Analysed by Industries-24German Unicorns-25Germany Investor Watchlist-310505GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWThe State of Blockchain Venture Funding in Germany-350606BLOCKCHAIN INDUSTRY DEVELOPMENTSIntroduction-46Different Types of Blockchains-46 Public Blockchains-46 Private Blockchains-46 Permissioned Blockchain-46The German Blockchain Industry-46Example Use Cases-47German Blockchain Companies-49Conclusion-520707BLOCKCHAIN INDUSTRY DEVELOPMENTSRegulatory Snapshot-55The Legal Position of Cryptocurrency in Germany-55 Applicable EU Regulations-55 Domestic German Regulations-55 Classification of Cryptocurrency-55 Upcoming Developments-56 Conclusion-560808REPORT CONCLUSIONReport Conclusion-600909ABOUTAbout-62CV VC Portfolio-63Previous Reports-65Disclaimer-66CONTENTSEXPERT ARTICLESCerik-Central Europes decentralization machine-14Lisk-Interoperability emerging as blockchains most important problem to solve-33Bank Frick-Banking the blockchain sector-44Berlin Partner-Blockchain&Web3“Made in Berlin”-53Fireblocks-Tokenization:The next phase of digital transformation-57Paragon Art-Transforming the$1.7 trillion investment art market-583THE GERMAN BLOCKCHAIN REPORT 202201.INTRODUCTION01INTRODUCTION4THE GERMAN BLOCKCHAIN REPORT 2022 01.INTRODUCTIONThere is no doubt that Germany is an integral cog in the machine that is the world economy.There is even less doubt about the nations role in the Eurozone.Although Germany does not tower above its European peers in terms of blockchain venture funding,there is no denying its importance as both a significant competitor and a swaying voice as the largest net contributor to the Eurozone.This report aims to shed some light on the current blockchain venture funding behavior and landscape in Germany compared to the rest of the world and Europe as a whole.We provide useful global and European venture funding context,which we compare against the activity in Germany specifically.The German Blockchain Report intends to be a no-nonsense,annual information repository that explores blockchain-specific funding data for Germany related to companies that have successfully raised blockchain venture funding in the country.This report highlights key blockchain industry developments and use cases that demonstrate the many applications of blockchain technology across various industry sectors in Germany.The report provides a snapshot of multiple points of interest,concluding with a section highlighting significant regulatory positions relating to cryptocurrency and its treatment in Germany and the EU.An ambitious,creative,and technologically-enabled youth has made sure that blockchain and cryptocurrency technologies have not only been noticed,but have been explored on many levels.So much so that regulators have taken a fair,progressive stance that has allowed for the development of ideas to culminate in businesses addressing real-world problems using blockchain and crypto technology.In this report,we highlight the fact that funders have not failed to recognize the opportunity presented by blockchain technology businesses in Germany.Particularly those that focus on sound business models as opposed to the“am Lautesten.”INTRODUCTIONGERMAN BLOCKCHAIN REPORT 2022:THE STATE OF THE BLOCKCHAIN IN GERMANY5THE GERMAN BLOCKCHAIN REPORT 2022 01.INTRODUCTIONRecent events in the crypto sector of the blockchain industry must now mark a global moment whereby a new clear focus is fixed.It is our opinion that this focus must be less on speculation and more on the utility of blockchain tech rather than only crypto which is the first innings of the revolutionary tech of the century.This is an opportunity for pioneers such as Switzerland and Germany to play a pivotal role in ensuring that this is a time where innovation,solid governance,and integrity will overtake short-term thinking and high speculation and instead continue to focus on the broader capability&capacity of blockchain-to build trust,better ways to transact and interact and truly enable a better future for humanity.Mapping technologys place in the world has become more exciting than ever.It is still the most trusted business sector,even with a recent trust bump after a period of turbulence.Amid traumatic geopolitics,economic crosswinds,shifting mandates,and changes in the very definition of technology one thing remains constant-technological innovations can solve socioeconomic challenges.In this post-pandemic chaotic world,distrust has become societys default emotion,and almost 60%of people are inclined to distrust organizations.We believe that blockchain is a powerful tool for transforming institutions and rebuilding trust.Many centuries ago,Germany created a tech,the printing press,which gave the people written unchangeable truths and equal access to information.The Gutenberg Bible was produced in 1455.It was the first printed book and allowed the spread of disruptive thinking and sowed the seed of a renaissance that swept over the world.Germany is once again playing a similar role in modern terms.It is evolving and spreading blockchain tech,the technology that allows for trust,security,independence and decentralization,thereby disrupting and heralding better ways to operate,interact,and trust.The huge global upheavals we are experiencing are changing the human mindset,which seeks trust,transparency,and renewal of functioning and well-being.We are in the eye of a modern-day renaissance where emerging new technologies,including the catalyst technology known as blockchain,are helping to bring about renewal.There is now a global blockchain ecosystem of which Germany is a focal hub.It is underpinning this renaissance that is helping humanity rebuild trust and tackles global socioeconomic challenges.CV VC is an early-stage blockchain investor,which,together with its ecosystem accelerator pillar,CV Labs,distinguishes brilliant blockchain minds who are razor focused on the utility of the technology.Headquartered in the heart of Crypto Valley,Zug,Switzerland,with hubs in Liechtenstein,Africa,and Germany,CV Labs has published The German Blockchain Report to demonstrate our appreciation and understanding of the German blockchain landscape.This is the first edition of an intended annual Germany report to gain macro insights over time,such as what we have produced relative to our other country hubs,Switzerland and Africa.Germanys uniqueness is that it has a considerable capability to execute the benefits that blockchain brings to the world,not just its citizens.CV VC is hugely committed to building the future together with blockchain founders in Germany and has already conducted four investments in startups in the country.Germany adopted a federal blockchain strategy in 2019 to enable the innovative potential offered by blockchain technology.In contrast,many other countries adopted and still embrace a wait-and-see attitude.Germanys position is a leadership and transformational one,and CV Labs is honored to have commenced activities in Berlin,the capital of the German blockchain ecosystem.Berlin offers an extensive startup ecosystem with access to education,innovative founders,investors,accelerators,and qualified employees.Berlin has an opportunity-driven mindset and a willingness to take risks.Theres an eagerness to try anything,a distrust of centralization,but a warm embrace of the unfamiliar and gritty.As a result of regulatory assuredness for data security and storage and abundant entrepreneurial activity,German blockchain is amply supported by universities offering degrees and professional training programs,as well as engaging in research and technology development activities.Such fertile ground has resulted in 343 blockchain startups,the third highest in the Euro region,next to Switzerland and the UK.With the majority of these EDITORIAL6THE GERMAN BLOCKCHAIN REPORT 2022 01.INTRODUCTIONbased in Berlin itself,it seems that blockchain companies are using Berlin as an indicator for success:If their application survives in this highly competitive ecosystem,it will most likely compete internationally.Driven by this enabling infrastructure,there has been a blockchain surge in Germany.As seen from the use-case studies in this report,bold new moves are already redefining traditional industrial,financial,health,entertainment,sport,and other sectors.This report focuses on venture capital activity to identify emerging trends in the German industry.This report assesses blockchain startup funding deals throughout Q1,Q2,and Q3 2022.Twenty companies examined have successfully raised$217.6m in funding during this period.Germanys blockchain funding accounts for 6.2%of European blockchain funding.Infrastructure and DeFi are two stronghold sectors for VC activity.The German blockchain world is thriving,it is a beacon in the global ecosystem,regularly top-rated,and many other industries are benefiting in the process.This report shows how Germany is making huge strides in bringing blockchain utility to fruition,we trust that it will enlighten and inform.Providing insights such as this focus on Germany is intrinsic to CV Labs education commitment.Stakes for humanity have never been higher.It is imperative blockchain businesses are given a global mandate and this is our intention in our move to Germany,where we are honored to become part of the vibrant blockchain industry and together ensure that blockchains mandate is achieved-build a better way for humanity to work,live,interact and transact.Ulrike Lierow-SchadMD Berlin,CV LabsFlorian KohlerChairman,CV LabsOlaf HannemannCo-Founder&CIO,CV VC7THE GERMAN BLOCKCHAIN REPORT 2022 FOREWORDPowered by BTC-ECHOwww.btc-echo.de/FOREWORDEspecially in turbulent times,strong ecosystems are essential for resilience and continuous progress alike.This is especially true for the blockchain ecosystem,which has been stirred up by political,economic,and internal events in recent months.Not a day goes by that we at BTC-ECHO do not report on and educate about the blockchain sectors problems,challenges,and potential.More than ever,the crucial question is:How strong are our blockchain ecosystems?This is precisely where CV VC as a venture capitalist and CV Labs as an accelerator and blockchain ecosystem supporter come in.They have been dedicated to building sustainable and innovative ecosystems since 2016.Despite the ups and downs in the market,CV VC and CV Labs have shown themselves to be reliable towards the startup sector.This stability and synergy must now be taken out into the world to build bridges between regionally located blockchain entrepreneurs.From Switzerland to Liechtenstein,to Africa,and now also to Germany.Because in line with the opening of the new location of CV Labs Berlin in November 2022,this German Blockchain Report is now intended to provide an important overview of the scenes status quo.This a must-read for anyone interested in the blockchain and crypto economy because one thing is certain:Only those who have the overview can also make good decisions.One might wonder why CV Labs chose Germany in particular as its next location.Of course,Germany has excellent market potential as the largest economy in Europe.However,there is much more to it than sheer economic size.Many of the beginnings of the blockchain economy had their roots in Germany and Berlin in particular.As a cosmopolitan city known for its open-minded lifestyle,Berlin attracts people who want to create something new.This is the case for many blockchain developers who,for example,made the beginnings of Ethereum possible from Berlin.In addition to the high level of developer activity in blockchain protocols,many crypto startups have also been able to establish themselves in Germany,as this report impressively shows.Thus,the CV Labs German Blockchain Report features the top 20 blockchain companies by funding and an overview of the various industries and use cases.What stands out most is the diversity of companies.After all,even though most blockchain projects are based in Berlin,promising startups can be found in the financial and industrial sectors all over Germany.Be it in Frankfurt as a financial metropolis or the industrial stronghold of Stuttgart.It is precisely this decentralized and diverse ecosystem that makes up the remarkable crypto landscape in Germany.For this ecosystem to continue to grow and prosper,we need to build bridges between the old and the new world.We need pioneers like CV Labs who understand the potential of the technology and,above all,help young companies put their ideas into practice.Because in the logic of Web3,its more than ever especially compared to Web 2.0 about cooperation.Lone fighters who isolate themselves dont stand a chance.This is about nothing less than giving the term“network effects”a new,positively connoted meaning.Blockchain technology moves us away from platform companies that undermine our data sovereignty and generate monopoly returns.Instead,blockchain companies,protocols,and crypto service providers are building a fair,inclusive,and sustainable economy that benefits everyone on the planet.But,to achieve this,we need to break down reservations about the blockchain and crypto economy and create regulatory frameworks that enable the balancing act between security and openness to innovation.An obstacle to this acceptance in Germany is the so-called“German Angst.”In some areas,this phenomenon is preventing crypto from establishing itself quickly,as reservations on the part of politicians and from sections of society are slowing down the pace of innovation.For this reason,exchange and education with and for all stakeholders are needed to overcome fears and uncertainties.CV Labs also makes a noticeable contribution by providing clarification and classification through publications and events.This is also the case with this report,which provides an overview of relevant regulations affecting the blockchain sector in Germany.This much should be revealed in advance:German crypto regulation delivers a mixed picture.While we are struggling in some areas,such as digital identity,there are progressive pushes from policymakers in digital securities.Accordingly,it is difficult to generalize about crypto-regulation in Germany.Especially since,as an EU country,important framework conditions come from Brussels.Finally,to return to the opening question of how strong our crypto ecosystems are,I am convinced they will emerge stronger from the current crisis.Even though we have seen many collapses and spectacular bankruptcies in the blockchain sector in 2022,the ecosystem is growing regionally and globally.In order for tomorrows innovations to survive even in stormy times,reliable partners like CV Labs are needed to act as pillars and intermediaries holding the crypto sector together.According to the German writer Hermann Hesse,who once wrote,“There is magic in every beginning,”CV Labs move to Berlin,including this publication,also represents a special beginning:The chance to network anew,forge new alliances and create a new dynamic in the ecosystem within the blockchain collective.Great to have you here.Cheers to a decentralized future!Sven WagenknechtEditor-in-ChiefBTC-ECHO8THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGY8THE GERMAN BLOCKCHAIN REPORT 202202.RESEARCH METHODOLOGY02RESEARCH METHODOLOGY9THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGYRESEARCH METHODOLOGY 1.REPORT INTENTIONThis is the first edition of an intended annual report providing insights into the German blockchain landscape,industry developments,regulatory overview,and the role of venture funding in the region.This report aims to provide a high-level overview of funding data and market participants in the hopes of identifying trends based on recent market activity.We aim to provide a high-level comparative synopsis to gain macro insights over time.Please note:This report depicts an analysis of Q1,2,and 3 of 2022.Since the report was published before Q4 was complete,this quarters data and insights have not been included in this report.We do take note of the fact that there have been significant events that have taken place during the 4th quarter of 2022.These events and their impact on the German blockchain ecosystem will be analyzed in the 2023 edition of the next German Report.2.COMPANY DATAWe have set out to provide a list of 20 blockchain startups that have raised funding from Q1 2022 through Q3 of the same year.We used various sources of data to compile a benchmark database.Sources include various public databases,research reports,LinkedIn profiles,reputable news outlets,press releases,investors,and entrepreneurs.Criteria are as follows:a.Inclusioni.Must meet one of the following criteria:1.The company is domiciled/headquartered in Germany.ii.Company characteristics:1.Currently operational,and2.Blockchain/cryptocurrency as a primary business or operational focus,and 3.Successfully raised a funding round between Jan 2022 and Sep 2022,and4.Active websiteiii.Funding:1.Private funding,and 2.Min funding=$100k,and 3.Disclosed,publicly verifiable funding deals.In the case where funding has been totaled,and undisclosed rounds have fallen in between disclosed rounds,the undisclosed rounds have been subtracted or omitted from the total figure.4.Equity funding and funding in the form of convertible notes from traditional financiers.5.All stagesb.Exclusioni.Company types:1.Publicly-traded businesses that trade on any exchange,or OTC,and 2.Consulting firms,and 3.Investors,and 4.Academia,and5.Events and event businesses,and6.Media houses.ii.Funding types:1.Contingent funding.Where an amount of funding is promised contingent on the fulfillment of certain milestones,but the business has only received a portion of such funds,the amount not received as yet has not been included.2.Debt(excepting convertible notes),and3.Publicly financed/traded,and 4.Crypto Coin or Token Offerings(ICOs/IEOs/ISOs/ITOs et al.)have not been included.5.Public and private grant funding.In the case where funding has been totaled,and grant funding has occurred in between private equity funding rounds,the grant funding has been subtracted or omitted from the total figure.a.*A special mention is made of Mintbase,who received a$5m grant from the NEAR Foundation in Apr 2022-which has been excluded.6.Non-cash contributions(such as Google Cloud Credits in the case of Google-accelerated ventures).3.GERMAN UNICORNSa.Inclusion i.A privately-owned tech company valued at$1 billion ,headquartered in Germany.ii.Although we specifically excluded non-equity funding rounds from our blockchain company funding data,we have included non-equity rounds in our unicorns section.iii.Unicorns across all industries are considered-not just blockchain-related businesses.b.Exclusion i.Publicly traded companies.ii.Companies that have not publicly disclosed their financial information.*Valuations of businesses included in the German Unicorns list have been sourced from Dealroom.*In cases where a business revenue range was not readily available,we have omitted this metric in this section.4.GERMAN INVESTOR WATCHLISTa.We have included a Watchlist of German investors within the report.i.Inclusion.1.These investors have closed at least two publicly-disclosed funding deals,specifically with German blockchain business.10THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGY5.GLOBAL CONTEXT AND FIGURESIn placing our company data in a broader context,we have included significant statistics from various core databases and venture funding reports.We have referenced these reports using hyperlinks in the relevant sections.In sections where the data found in industry-leading reports were contradictory,we have provided data ranges and averaged the data of the most credible reports to maintain consistency when drawing inferences from such data.6.CORE DATABASES AND REPORTS UTILIZEDa.CB Insights:State of Blockchain Q3 2022 b.CB Insights:State of Fintech Q3 2022 c.CB Insights:State of Venture Q3 2022d.Chain Analysis:Geography of Cryptocurrency 2022 e.CoinGecko:Q3 Cryptocurrency Report 2022f.Cointelegraph Research:Venture Capital Report Q3 2022 g.Crunchbase h.Dealroom i.Galaxy Digital Research:Crypto&Blockchain Venture Capital-Q3 2022j.KPMG:Venture Pulse Q3 2022k.Pitchbookl.TracxnShould you require any further clarity surrounding the research methodologies used or feel that your company has not been included where it should have been,please dont hesitate to reach out to 11THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGY11THE GERMAN BLOCKCHAIN REPORT 202203.EXECUTIVE SUMMARY03EXECUTIVE SUMMARY12THE GERMAN BLOCKCHAIN REPORT 2022 03.EXECUTIVE SUMMARYEurope makes up 15%of global venture funding.Europe saw$14.8b raised across 1,584 deals in Q3 of 2022,down 38%and 5%compared to the$23.7b raised and 1,670 deals in the same quarter of 2021.Europe has 158 unicorns,accounting for 13%of the global total and 12%of new global unicorn births.Early-stage businesses bagged 70%of the deal share in Europe for 2022.1,247DEALS26,294DEALS$4M MEDIAN DEAL SIZE34UNICORNS48COMPANIES158%5%$14.8BILLIONQ3 22$23.7BQ3 211670 DEALS-Q3 211584DEALSQ3 2270813%UNICORNS$8B2.40%-GLOBAL 12.40%-EUROPEAN 280DEALSYTDGermany currently boasts(see below-German Unicorns)Mega deals accounted for 145 deals YTD,down 11%from the 163 in 2021.The third quarter of 2022 saw a total of 23 mega deals accounting for$6.5b worth of funding or 44%of total European funding.Current Decocorns(valuation of$10b )Mega rounds and deals came in at$156b and 768 deals representing decreases of 41%and 34%respectively while early-stage deal share sits at 66%YTD.German businesses raised$8b across 220 deals YTD in 2022,down 28%from the same time last year.While total funding was down relatively significantly,deal counts are almost exactly on par with the previous year.Interesting to note,while Germanys venture funding value has experienced a significant decrease of 50%on a QoQ basis in 2022,deal count increased by 10%.The numbers coming in at$1.7b and 220 respectively.At$8b,Germany makes up 2.4%of global venture funding,and 12.4%of European venture funding YTD.European venture funding has decreased by 13%YTD when compared to Q3 2021,but the number of deals has marginally increased to 5,259.This reflects a total investment amount of$64.3b across all deals.Average YTD deal size is down 29%from$25m to$18m when compared to 2021 though the median deal size has remained constant at$4m.Global venture funding reached$329b across 26,294 deals by the close of Q3 of 2022.This represents a decline of 27%in funding compared to the same period a year ago while the deal count for the two periods was almost exactly on par.Asia and the US lead in global deal share,each concluding over 2,850 deals with Europe being next in line,trailing by 45%.Fintech has experienced its worst quarter since Q4 of 2020 raising$12.9b in Q3 of 2022,down 38%QoQ with the picture looking significantly diferent than it did at this point last year.27%$451BQ3 21$329BILLIONQ3 222,850 2,850 $3.4B-200 DEALSQ2 22$1.7B-220 DEALSEarly-stage deals in Germany represent 72%of thefunds raised to date this year,an increase of almost 10%compared to 2021.72%OF FUNDS RAISEDQ3 21YTDQ3 2210%ALMOST11)%5,259 DEALS$18MYTD$25M2021GLOBAL TOTALNEW GLOBALBIRTHS163 MEGA DEALS-2021145 MEGADEALSYTD$6.5B$64.3B44%TOTAL EUROPEAN FUNDING 23 MEGA DEALSQ3 22MEGAROUNDSYTD-34v8 DEALS-41%$156B 66RLY-STAGE DEAL SHARE DEALSDEALSDEALS1584 38%Q4 20Q3 22GLOBAL VENTURE FUNDINGGERMAN VENTURE FUNDINGBLOCKCHAIN VENTURE FUNDING13THE GERMAN BLOCKCHAIN REPORT 2022 03.EXECUTIVE SUMMARYAgain,the US leads in terms of deal share with almost half of all deals,with all other regions representing below 25ch.Every major category of blockchain venture funding,except two,have already outpaced 2021s funding figures by the close of Q3 of 2022.Infrastructure&Development saw funding and deal count increases of 55%and 39%respectively when comparing 2022 YTD figures to 2021.Mega deals(rounds of$100m )brought in$10.4b across 52 deals for the YTD,or 48%of all blockchain funding,with blockchain businesses receiving a 6.59%share of all global venture funding in 2022 thus far.Throughout this period,a total amount of$218m was raised across various types of rounds.H1 2022 saw the top 3 rounds of the year which included 1 mega deal.Between them,these 3 rounds together make up$146m in funding,or 67%of all funding.with 4 of these having gained their horns in the first 3 quarters of 2022 representing a 17%increase in the total number of unicorns in the nation.Thus far,blockchain businesses have raised an impressive$21.7b in funding across 1,380 deals.Just a handful of deals shy of breaking the 1,386 count of the entire 2021 calendar year and some$4.5b from reaching parity with total funds raised in that year.Early stage deals continue to make up 4 in 5 blockchain venture funding deals.500 UNICORNS were born in 2022341,386DEALS2021INFRASTRUCTURE&DEVELOPMENT54$146MUNICORNS ALMOSTDEAL SHARE$21.7B ACROSS 1380 DEALSYTD6.59U9H%$10.4BACROSS 52 DEALSEuropean blockchain startups raised$1b in Q3 of 2022,putting the region in second place for total blockchain venture funding raised in the quarter.Europe is flanked on either side by the US raising$2.8b and Asia who raised$0.6b over the same period.Europes blockchain venture funding has hit the$1b mark for the third time in as many quarters.This is the first time that this has ever occurred,with Q2 breaking the records for funding raised as well as deal count at$1.4b and 112 deals.In keeping with the global trend,the vast majority of deals done in Europe have been early-stage deals.Europes early-stage deals make up 86%of deal share,4%higher than the global early-stage deal share average.Berlin houses the highest number of unicorns by far at 22,followed by Munich with 5.Q3 22Q1 22Q2 22EUROPEUSAQ3 22$0.6BQ3 22$2.8BQ3 22$1B86AL SHAREEARLY-STAGE DEALS$1.4B$1B$1.1B112DEALS94 DEALS79DEALSMedian deal sizes for Europe and the US are at record high levels of$4 and$6 million respectively.This despite global blockchain mega deals having declined for the last two consecutive quarters.$218M17%FUNDS RAISED67rlin bagged 90%of blockchain venture funding.90%BLOCKCHAIN VENTURE FUNDINGIN TOTAL NUMBER OF UNICORNS225$6M$4MGermany is currently home toGLOBAL BLOCKCHAIN VENTURE FUNDING-A SNAPSHOTGERMAN BLOCKCHAIN VENTURE FUNDING LANDSCAPEGERMAN UNICORNSEUROPEAN BLOCKCHAIN VENTURE FUNDING LANDSCAPE14THE GERMAN BLOCKCHAIN REPORT 2022 GERMANY:CENTRAL EUROPES DECENTRALIZATION MACHINEPowered by CertiKGERMANY:CENTRAL EUROPES DECENTRALIZATION MACHINEBlockchain is all about decentralization.Its the whole point of the technology:if centralization is acceptable,then there are much more efficient ways to maintain databases than distributed ledgers.But if censorship resistance,deterministic execution,and unbeatable uptime matter,globally-distributed networks of independent nodes are a powerful solution.Centralization is not a binary;its a spectrum.And the world of blockchain has swung back and forth along this spectrum since its inception.Bitcoin was initially mined on just one computer:Satoshis.Then it was mined on thousands of enthusiasts machines.Before the advent of Application-Specific Integrated Circuit(ASIC),miners concentrated hash power in the hands of large,professional mining operations.While paving the way for future scaling improvements and providing a considerable reduction in energy consumption,the transition of Ethereum away from Proof of Work to Proof of Stake has yet to alleviate centralization concerns.Proof of Stake simply takes network power away from miners and gives it to validators.Coinbases recent announcement will automatically opt retail and institutional customers into receiving additional ETH staking rewards powered by MEV-boost(which censors transactions associated with addresses on the US Treasury Departments blacklist)represents one step further on the slippery slope towards irrevocable centralization.Ethereum is held to a higher standard of decentralization than other smart contract blockchains because it explicitly prizes this value.In contrast,other networks compromise on decentralization in favor of scalability gains or fee reductions.Maintaining Ethereums decentralization is key to ensuring the network continues to provide value to users.And this is where Germany has an important role to play.While a concerningly large percentage of Ethereum validators are located in the United States(45.3%),Germany with 22.8%of nodes is home to the next largest concentration of network validators.Germanys outsized contribution(it provides a little over half the number of network validators as the United States with just one-quarter of the population)is a powerful bulwark against geographical centralization.Geographical decentralization is key to overall network decentralization.Were any one nation or region to dominate node distribution too much,they would be in a position to censor transactions or control the network to their benefit.The idea is for the Ethereum network to be distributed globally,with validators from many different nations,each with their motivations,interests,and ideologies.This is how Ethereum accomplishes its mission of becoming the“worlds computer.”Decentralization as a National Security PriorityWeve already seen meaningful steps towards state censorship of Ethereum.The US Treasury Departments blacklisting of dozens of wallet addresses associated with the cryptocurrency mixer Tornado Cash is a prime example.This is not to say that OFAC was not acting well within its mandate.Still,a world in which the United States can enforce such dictates over the majority of Ethereum validators is a world in which it commands great influence over the options both political and practical available to other nations,including allies such as Germany.Decentralization could become a serious national security issue for governments that want to cut off access to certain platforms and protocols and governments that want to preserve access.Its not difficult to imagine a scenario in which the interests of Germany and the United States differ on foreign policy and financial sanctions including cryptocurrencies and decentralized financial protocols become a key point of contention.Preserving access to distributed networks becomes a matter of preserving national sovereignty,and access to globally-decentralized financial markets is a matter of survival.In such a scenario,the fact that Germany is home to the second-largest number of Ethereum network validators would be a significant strategic advantage.And this is not just hypothetical.We are already seeing the beginnings of a“decentralization arms race,”in which nations are vying for control over the distribution of network power to influence the direction of major protocols.However,the fundamentals of the technology are resistant(though not quite completely impervious)to this kind of influence.While nations exert a large degree of control over centralized financial networks and organizations,this is less practicable a possibility when it comes to DeFi.Governments must adapt their strategies to face the reality of censorship-resistant,globally-distributed networks.RegulationDespite previously lukewarm statements on the technology from officials,the blockchain industry dovetails nicely with the broader European mission of which Germany is a key driver.The motto of the European Union In varietate concordia(United in diversity)could just as easily be the motto of blockchain enthusiasts worldwide.The EU has been at the forefront of consumer data privacy,with the General Data Protection Regulation(GDPR)systems enforcement 15Powered by CertiKof transparency,security,and pseudo-anonymity serving as a model for regulation in nearly a dozen other countries.Encoding a right to privacy into the law is perfectly compatible with(and indeed even enhanced by)blockchain technology.The recent finalization of the text of the Markets in Crypto-Asset(MiCA)regulation provides insight into the future of blockchain and Web3 projects in Germany and Europe more broadly.Exempting DeFi protocols that can operate without any intermediary is an intelligent move that recognizes the realities of this new technology.And requiring projects to publish a whitepaper before being allowed onto regulated trading platforms should help cut down on the number of copy-paste scams that continue to plague the industry.The provision requiring team members and major stakeholders to provide personal details and proof of an absence of a criminal record sets a relatively high standard of doxxing.However,it is one that many retail users and investors may appreciate.CertiKs KYC process is the leading identity verification and due diligence service in Web3,providing private identity verification for project teams through a rigorous vetting process while maintaining the highest data protection standards.MiCAs omission of mandatory pre-deployment auditing and post-deployment monitoring feels like an oversight.Especially in light of federal authorities across the Atlantic recommending investors“ensure the DeFi investment platform has conducted code audits performed by independent auditors.”If regulators are happy to require the dissemination of a technical whitepaper,it would logically follow that these projects should undergo an audit to ensure that their code does what it says and lives up to the promises made in the whitepaper.Security is essential to consumer protection;a project could just as easily rug-pull its users with a deliberate scam as it could do so unintentionally with losses resulting from substandard security.Raising the level of transparency and security across the Web3 world involves setting standards that clearly communicate to users the risks and responsibilities of interacting with decentralized blockchain applications.CertiKs industry-standard pre-deployment auditing has secured the code of over 3,600 Web3 projects.Our combination of manual review,AI-powered automated review,and advanced formal verification ensures the most comprehensive error detection possible.Skynet is our proprietary on-chain monitoring and analysis platform.It performs continuous AI-based scanning of smart contract code using our growing database of vulnerabilities while working around the clock to identify anomalies the moment they occur with active flash loan detection and DEX liquidity monitoring.Blockchains Global FutureA world leader in engineering and manufacturing with a long history of precision and excellence,Germany is uniquely positioned to help shepherd decentralized blockchain technology into the mainstream.The countrys contribution to the decentralization of Ethereum the worlds largest smart contract platform is impressive and of fundamental importance to the security and functionality of the network.Nations that are ideologically committed to free,fair markets and censorship resistance are ideally positioned to benefit from decentralized blockchain technology.As the benefits of decentralized finance and other Web3 applications become clear to users and regulators alike,we are optimistic that the potential of this technology to provide security,privacy,and transparency will continue to be realized.The sovereignty that decentralized networks offer to middle powers Germany in particular is likely to become more evident in the years to come as larger global powers compete between themselves to exert maximum control over centralized systems.Decentralization is a value in and of itself,and security needs to be built into blockchain technology from the ground up to ensure maximum functionality and user protection.At CertiK,our mission is to raise security and transparency standards across the entire Web3 world,and we look forward to working with teams,projects,and organizations that share these values.Professor Gu is the Tang Family Assistant Professor of Computer Science at Columbia University.He holds a Ph.D.in Computer Science from Yale University and a Bachelors degree from Tsinghua University.He is the primary designer and developer of CertiKOS and SeKVM.Gu has received:an SOSP Best Paper Award,a CACM Research Highlight,and a Yale Distinguished Dissertation Award.Professor Ronghui GuCEO&Co-Founder,CertiKTHE GERMAN BLOCKCHAIN REPORT 2022 GERMANY:CENTRAL EUROPES DECENTRALIZATION MACHINE16THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGY16THE GERMAN BLOCKCHAIN REPORT 202204.VENTURE FUNDING OVERVIEW04VENTURE FUNDING OVERVIEW17THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWTHE STATE OF VENTURE FUNDING IN GERMANYINTRODUCTION This section investigates the state of blockchain and cryptocurrency venture funding in Germany in relation to sector-agnostic venture funding as a whole.We present the businesses that have successfully raised funding rounds in 2022 from Q1 through Q3 in order of funds raised,while also drawing attention to formidable blockchain businesses that have had a hand in sculpting a vibrant blockchain ecosystem in the already-vibrant startup hotspot that is Germany.This being the inaugural German Blockchain Report published by CV VC,we begin our blockchain venture funding data for specific companies in 2022,and hope to build on this in further installments of the Report as data accumulation occurs over time.STARTUP FUNDING-A SNAPSHOTA comparison of German blockchain-specific venture funding-particularly over a timespan of only three quarters-would not mean very much without some context relative to sector-agnostic venture funding both globally and in Europe.As we are all aware,much has changed globally over the past year as weve witnessed geopolitical,macroeconomic,and security shifts on a scale which has likely not been seen for nearly a century.Therefore we try to provide a means to make sense of figures in a broader context.It is important to point out that it has been a bumpy road for venture funding as of late.2021 saw a myriad of records broken on all fronts whereas 2022 saw the emergence of due caution and the brakes being applied across the board in venture funding generally.It would seem that investors have taken a far more prudential approach to venture funding in 2022 when compared to the more maverick attitude that was present in 2021.Caution has been highly prized and this years figures are modest in comparison to the figures achieved by this time last year.Somehow though,blockchain venture funding has bucked this trend with all indicators pointing to 2022 turning out to break all of the previous years records.By some measures certain pundits and sources have chalked the year up to already having surpassed previous highs set with regards to total funding as well as total deal count.In looking at the sector-agnostic venture funding data we can see that the annual variation in total European venture funding(for years 2018 through 2021)is over 60%of that of Global venture funding.The variation in Germany is more still,although it much more closely resembles European trends when compared to Global ones.The German startup scene has been vibrant throughout the last two decades,with the past 5 years only having seen this ramp up with the current years YTD total funding already having surpassed all but the highs of 2021.While it seems unlikely that 2022s total venture funds raised or total deals closed will transcend the highs of 2021 we do expect the figures to end up being shy by only a small margin.Germany enjoys a relatively unique position from an economic perspective where it has numerous cities that each contribute significantly,and uniquely to the economy.More so than in other European nations where only one or two cities are significant from an economic perspective.When it comes to startups however,the epicenter is undoubtedly Berlin.This is even more true when we consider blockchain startups.Berlin is certainly the Capital of capital when it comes to blockchain venture funding as evidenced by the city raising almost 90%of all blockchain venture funding for the Year to Date.We will now provide some key insights and figures into global venture funding before delving in to blockchain-specific venture funding.Below are some key insights:ANNUAL REGIONAL VENTURE FUNDING GROWTH COMPARISON2018$00%-50P00 0%000%YoY GrowthFunding(Billions)$100BL$200BL$300BL$400BL$500BL$600BL$700BL2019202020212022(YTD)GermanyEuropeGlobalYoY GrowthFundingGermanyEuropeGlobalGermanyEuropeGlobalYoY GrowthFundingGermanyEuropeGlobal18THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWGlobal Venture Funding:Global venture funding reached$329b across 26,294 deals by the close of Q3 of 2022.This represents a decline of 27%in funding compared to the same period a year ago while the deal count for the two periods was almost exactly on par.It seems unlikely that venture funding will breach the$630b level reached in 2021,though we may see a deal count very close to or perhaps exceeding the 35,821 deals concluded in that year.Average YTD deal size is down 29%from$25m to$18m when compared to 2021 though the median deal size has remained constant at$4m.Q3 VC global investment hit a QoQ low that has not been seen since Q2 of 2020 even though the US,China,Germany,Sweden all had one or more mega deals.All these jurisdictions saw decreases(even significant decreases)QoQ.Mega rounds and deals came in at$156b and 768 deals representing decreases of 41%and 34%respectively while early-stage deal share sits at 66%YTD.Global first-time venture financing is continuing at a steady rate in terms of deal size having already surpassed the deal value of all but one of the past 5 years(2021),with deal count looking set to do the same.Unicorn births have also fallen to 237 YTD for a total count of 1,192 compared with 400 and 871 at the close of Q3 in 2021.According to data compiled by Failory,the current Decocorn(valuation of$10b )count sits at 48 companies.Asia and the US lead the pack in global deal share each concluding over 2,850 deals with Europe being next in line,trailing by 45%.It is clear that there is a more conservative outlook for funders,and that they are looking for profitability and underlying,long term value as opposed to chasing the unjustified valuations that we have become used to in recent years.This is evidenced by a number of significant down rounds such as Klarnas$800m raise at a$6.7b valuation down 85%from$45.6 billion in 2021.Fintech has experienced its worst quarter since Q4 of 2020 raising$12.9b in Q3 of 2022,down 38%QoQ with the picture looking significantly different than it did at this point last year.The sector is down by almost all measures.European Venture Funding:Europe makes up 15%of global venture funding in 2022 Europe saw$14.8b raised across 1,584 deals in Q3 of 2022,down 38%and 5%compared to the$23.7b raised and 1,670 deals in the same quarter of 2021.European venture funding has decreased by 13%YTD when compared to Q3 2021,but the number of deals has marginally increased to 5,259.This reflects a total investment amount of$64.3b across all deals.Mega deals accounted for 145 deals YTD,down 11%from the 163 in 2021.The third quarter of 2022 saw a total of 23 mega deals accounting for$6.5b worth of funding or 44%of total European funding.Europes share of deals by region has remained constant throughout the first 3 quarters of 2022 at 20%.The other regions which have seen the same behaviour are Latin America and Canada.The likes of Africa and Australia have seen variances of up to 50%in 2022.Early-stage businesses bagged 70%of the deal share in Europe for 2022.Europes unicorn counts sits at 158 with 3 new unicorns having been born during Q3 of 2022.This represents 13%of the global unicorn total and 12%of new global unicorn births.German Venture Funding:At$8b,Germany makes up 2.4%of global venture funding,and 12.4%of European venture funding YTD.German businesses raised$8b across 220 deals YTD in 2022,down 28%from the same time last year.While total funding was down relatively significantly,deal counts are almost exactly on par with the previous year.Interesting to note is that while Germanys venture funding value has experienced a significant decrease of 50%on a QoQ basis in 2022,deal count increased by 10%.The numbers coming in at$1.7b and 220 respectively.Early-stage deals made up the lions share of all deals concluded in Germany at 72%for the funds raised to date this year,an increase of almost 10%over 2021s early-stage deal share.Germany currently boasts 34 unicorns.19THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWGLOBAL BLOCKCHAIN VENTURE FUNDING-A SNAPSHOT Thus far blockchain businesses have raised an impressive$21.7b in funding across 1,380 deals.Just a handful of deals shy of breaking the 1,386 count of the entire 2021 calendar year and some$4.5b from reaching parity with total funds raised in that year.Again,the US leads in terms of deal share with almost half of all deals going to the region,with all other regions representing below 25ch.Despite the prodigious changes in the geopolitical climate,the lagging effects of a global pandemic,and an overarching crypto market crash,it would seem that blockchain venture funding is poised to have another record-breaking year.This after global blockchain venture funding increased by 694%in 2021.If things continue at the current velocity,we believe that we may well see blockchain funding top its previous high despite the bear roaming the current crypto asset markets.Early stage deals continue to make up 4 in 5 blockchain venture funding deals,indicating a fast-growing,ambitious industry that funders are welcoming with open arms.It is becoming apparent that there is confidence in the longevity of cryptocurrency and blockchain technology for business use cases.Despite the current elevated levels of uncertainty that have caused a slowdown in global venture funding,value investments actively continue to flow in to businesses with solid use cases and profitable business models.Although blockchain unicorn births have slowed slightly from the astonishing 40 births seen in 2021,there have already been 30 unicorns born in 2022,and mega deals continue to roll in.Mega deals(rounds of$100m )brought in$10.4b across 52 deals for the year-to-date,or 48%of all blockchain funding with blockchain businesses receiving a 6.59%share of all global venture funding thus far in 2022.It is evident that blockchain venture funding as a percentage of all venture funding is on the rise both globally,as well as when comparing Europes blockchain funding to its regional venture funding total as a whole.Blockchain funding as a percentage of total venture funding is at a record high on a year-to-date basis both globally,as well as for Europe-where it currently sits at 5.44%for the year.Blockchain venture funding is in full swing,defying the softness in overall venture funding.Every major category of blockchain venture funding except two had already outpaced 2021s funding figures by the close of Q3 of 2022.The only categories where YTD funding had not topped 2021 funding levels were,Custody and Exchanges.There were also only two categories that had not broken 2021 deal count thresholds,these being Exchanges and DeFi.The most significant standout category being Infrastructure&Development which saw funding and deal count increases of 55%and 39%respectively when comparing 2022 YTD figures to the 2021 calendar year-which further contributes to our view that long-term investors are here to stay.ANNUAL REGIONAL BLOCKCHAIN VENTURE FUNDING GROWTH COMPARISON$00%-1000 0000P00%$5BL$10BL$15BL$20BL$25BL$30BL$35BL20182019202020212022(YTD)GermanyEuropeGlobalYoY GrowthFundingGermanyEuropeGlobal700%YoY GrowthFunding(Billions)$40BLBLOCKCHAIN FUNDING BY QUARTER 22GLOBAL$10BQ1 22$7.1BQ2 22$4.6BQ3 22$21.7BYTDEUROPE$1.1BQ1 22$1.4BQ2 22$1BQ3 22$3.5BYTDGERMANY$139.4MQ1 22$54.5MQ2 22$23.6MQ3 22$217.6MYTDBLOCKCHAIN DEALS BY QUARTER 22GLOBAL505Q1 22473Q2 22402Q3 221,380YTDEUROPE94Q1 22112Q2 2279Q3 22285YTDGERMANY7Q1 229Q2 224Q3 2220YTD20THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWEuropean Blockchain Venture Funding Landscape:European blockchain startups raised$1b in Q3 of 2022,putting the region in second place for total blockchain venture funding raised in the quarter.Europe is flanked on either side by the US raising$2.8b and Asia who raised$0.6b over the same period.The US showing 195 deals,Asia with 97,and Europe with 79 despite having raised more than Asia.Not only are global blockchain venture funding and deals showing signs of heading for a record breaking year,median deal sizes in Europe and the US specifically are already at record high levels with deal sizes of$4 and$6 million respectively.This record being broken despite global blockchain mega deals having declined for the last two consecutive quarters.In keeping with the global trend,the vast majority of deals done in Europe have been early-stage deals.Europes early-stage deals make up 86%of deal share,4%higher than the global early-stage deal share average.One of the few blockchain funding statistics in which Europe stands above the US is the total funding raised by crypto custody providers.Europe raised$177m against the US$165m specifically for crypto custody providers despite the US having a higher deal count of 11 to Europes 6.Europes blockchain venture funding has hit the$1b mark for the third time in as many quarters.This is the first time that this has ever occurred,with Q2 breaking the records for funding raised as well as deal count at$1.4b and 112 deals.GERMAN BLOCKCHAIN FUNDING AS A%OF BLOCKCHAIN FUNDING BY REGIONGERMAN BLOCKCHAIN FUNDING AS A%OF BLOCKCHAIN FUNDING BY REGION200%0%Q1 22Q2 22Q3 22YTDGlobalEuropeGlobalEurope200%0%Q1 22Q2 22Q3 22YTDGlobalEuropeGlobalEurope1%0.7%0.5%1%4%2%6%1%2%1%1%7%8%2%6%BLOCKCHAIN VENTURE FUNDING COMPARISON YTD VS 21GLOBAL$21.7BYTD$26.2B2021$4.5BYTD VS 2021(DIFF)EUROPE$3.5BYTD3.5B2021$0YTD VS 2021(DIFF)GERMANY$217.6MYTD$255M2021$37.3MQ3 2221THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEW3%|PRE-SEED#of companies:418%|SEED ROUND#of companies:924%|SERIES A#of companies:37%|VENTURE ROUND#of companies:248%|FUNDING ROUND#of companies:2GERMAN BLOCKCHAIN FUNDING BY ROUND TYPES(Q1-Q3 22)$103,600,000$15,500,000$38,610,901$52,375,315$7,539,573This section highlights 20 German blockchain companies to help create insights surrounding the blockchain venture funding landscape in Germany.The companies examined have successfully raised funding from the start of the 2022 calendar year through the end of Q3 2022.Throughout this period,a total amount of$218m was raised across various types of rounds.What was the most striking throughout the course of the research done for this report,was the lack of freely available data on blockchain companies in Germany.The country has long been competitive on the global stage as far as tech companies go.We found it to be rather perplexing as to why it would prove so painfully difficult to find freely-available blockchain funding data in a country with a budding startup scene along with hundreds of blockchain startups.Off the back of this,we went ahead and identified who the blockchain businesses were that have raised funding this year.Some of our key findings to follow.GERMAN BLOCKCHAIN VENTURE FUNDING LANDSCAPE TOP 20 FUNDING DATA SUMMARYBASECOMPANY COUNT20FUNDED IN TIME PERIOD$217,625,789 FUNDING ROUND-MODESeed Round22THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWGERMAN BLOCKCHAIN FUNDING BY CITY 22$195,014,888BERLIN$4,024,440DSSELDORF$11,195,065MUNICH$2,160,272STUTTGART$1,645,921EBERSWALDE$134,244HAMBURG$3,000,000GRNWALD$450,959LIMBURGERHOF$100,000,000 $10,000,000-$99,999,999$1,000,000-$9,999,999$125,000-$999,999BERLIN#of companies:121%|STUTTGART#of companies:15%|MUNICH#of companies:20.2%|LIMBURGERHOF#of companies:20.1%|HAMBURG#of companies:11%|GRNWALD#of companies:11%|EBERSWALDE#of companies:12%|DSSELDORF#of companies:190%5%GERMAN BLOCKCHAIN FUNDING BY CITY 2223THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWSome key takeaways for 2022:German blockchain businesses have raised$218m across 20 deals YTD,some$37m shy of 2021s$255m.Germanys blockchain funding accounts for only 1%of global blockchain funding while accounting for 6.2%of European blockchain funding.One of our primary criterion for inclusion in this report is that funding should be publicly available and verifiable.Interesting to note is that there were a total of 8 German blockchain businesses that raised funding within our time period that had undisclosed funding data.There were 8 German cities present in our data set.Out of the 8,Berlin bagged just under 90%of all German blockchain funding over the period with Munich being the only other city housing more than a single blockchain business that fit our criteria for inclusion.H1 2022 saw the top 3 rounds of the year which included 1 mega deal.Between them,these 3 rounds together make up$146m in funding,or 67%of all funding.The only current German unicorn which is crypto-centric is Worldcoin,though Trade Republic also has a large crypto offering,the former gaining its horn earlier this year.Although Germanys blockchain venture funding total is unlikely to reach levels from 2021,we expect to see more upcoming unicorn valuations in the near future.TOP 5 GERMAN BLOCKCHAIN FUNDING DEALS 22 YTDCOMPANYROUND AMOUNTCITY%OF FUNDINGWORLDCOIN$100,000,000 BERLIN46%COMPOSABLE FINANCE$32,000,000 BERLIN15%SOBA$13,600,000 BERLIN6%ULTIMATE(BY UNSTOPPABLE FINANCE)$12,875,315 BERLIN6%CHAINFLIP$10,000,000 BERLIN5%GERMAN BLOCKCHAIN QUARTERLY FUNDING 22GERMAN BLOCKCHAIN QUARTERLY DEALS 22$0-50%-75%-25%0%P%QoQGrowthFunding(Billions)$50BL$100BL$150BL$200BL$250BLQ1 22Q2 22Q3 22Funding(Per Quarter)Funding(YTD)QoQ GrowthDeals(Per Quarter)Deals(YTD)QoQ Growth0-50%-75%-25%0%P%QoQGrowthDeals510152025Q1 22Q2 22Q3 22BLOCKCHAIN FUNDING AS A%OF TOTAL VENTURE FUNDING BY REGION200%0 18201920202021GlobalEuropeEuropeGermany2022(YTD)2%3%1%1%4%7%1%2%4%5%3$THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEW$120,307,697INFRASTRUCTURE&DEVELOPMENT$57,734,501 DEFI$13,600,000GAMING$12,643,051 NFTS$7,595,065 CUSTODY$450,959 SELF SOVEREIGN IDENTITY$2,294,516 SUPPLY CHAIN&VERIFICATION$3,000,000 ANALYTICSGERMAN BLOCKCHAIN FUNDING BYINDUSTRY 22TOP 3 BLOCKCHAIN INDUSTRIES WITH THE MOST SUCCESSFULLY RAISED FUNDING IN 22(Q1-Q3)%Business Count$57,734,501 DEFI$120,307,697 INFRASTRUCTURE&DEVELOPMENT$12,643,051 NFTs56355%6%BLOCKCHAIN FUNDING ANALYSED BY INDUSTRIESIn keeping with global blockchain trends,Germanys highest-funded blockchain business industry was Infrastructure&Development making up an impressive 55%of all blockchain funding.DeFi was in second place with a comparatively-modest 27%.It is striking however,that Germany does not have a single exchange that was funded in the year-to-date.WHICH BLOCKCHAIN INDUSTRIES SUCCESSFULLY RAISED THE MOST FUNDS IN 2022(Q1-Q3)INDUSTRYFUNDS RAISED(2022 Q1-Q3)BUSINESS COUNT%ANALYTICS$3,000,00011%CUSTODY$7,595,06514FI$57,734,501627%GAMING$13,600,00016%INFRASTRUCTURE&DEVELOPMENT$120,307,697555%NFTS$12,643,05136%SELF SOVEREIGN IDENTITY$450,95910.2%SUPPLY CHAIN&VERIFICATION$2,294,51621%THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEW$3,100,000,000VALUATIONCelonis(2011)The Celonis Execution Management System offers tools and applications,the Celonis Studio,and platform capabilities for business executives and users.It helps companies manage every step of execution management,from analytics to strategy and planning,management,actions,and automation.Celonis has thousands of customers,including ABB,AstraZeneca,Bosch,Coca-Cola,Citibank,Dell,GSK,John Deere,LOral,Siemens,Uber,Vodafone,and Whirlpool.Headquarters:MunichIndustries:Analytics,Big Data,Business Intelligence,SaaSGrover(2015)Grover is a platform that allows users to rent tech products through monthly subscriptions.With Grover,subscribers have access to over 3,000 different tech products,including smartphones,laptops,virtual reality gear,wearables,and smart home appliances.This service allows users to keep,switch,buy,or return products depending on their needs and budget.Headquarters:BerlinIndustries:Consumer Electronics,E-Commerce,Rental,Subscription ServiceN26(2013)N26 provides mobile banking solutions to customers in the European Union through its subsidiary.It provides international money transfer,investment,overdraft,cash withdrawal,and store deposits.N26 offers easy mobile banking solutions that include online banking features like making and handling of current accounts,fixed accounts,and other banking services.This allows customers to manage and control their banking details conveniently via a smartphone application.Headquarters:BerlinIndustries:Banking,Finance,Financial Services,FinTechGorillas(2020)Gorillas is a grocery delivery service that strives to provide an aggregate of supermarket products to consumers within 10 minutes of ordering.Headquarters:BerlinIndustries:Delivery,Delivery Service,E-Commerce,E-Commerce Platforms,Grocerywefox(2015)Wefox is a digital insurance company that provides its own and third-party products through human advisors rather than through direct channels.By using analytics,wefox achieves better loss ratios than the market.Technology allows wefox to have 90%straight-through processing and a central product factory that ships product innovations internationally.Wefox has built up a network of thousands of digitally enabled advisors across Europe which increases customer satisfaction,reduces customer acquisition costs,increases cross-selling,and decreases churn.Headquarters:BerlinIndustries:FinTech,Insurance,InsurTech,SoftwareTrade Republic(2015)Trade Republic is a mobile-only broker that offers a commission-free platform,making it easier for investors to get started.The company is designed for a new generation of investors looking for a more mobile,intuitive,and faster experience.Headquarters:BerlinIndustries:Cryptocurrency,Finance,Financial Services,FinTech,Trading PlatformGERMAN UNICORNSCriteria:Private tech companies from all sectors valued at$1 billion and above that are headquartered in Germany.$13,000,000,000VALUATION$3,100,000,000VALUATION$9,000,000,000VALUATION$5,500,000,000VALUATION$1,000,000,000VALUATION$4,500,000,000VALUATION2.4FUNDING IN BILLIONS(USD)1.3FUNDING IN BILLIONS(USD)1.7FUNDING IN BILLIONS(USD)1.3FUNDING IN BILLIONS(USD)2.3FUNDING IN BILLIONS(USD)1.3FUNDING IN BILLIONS(USD)$10M TO$50MESTIMATED REVENUE$10M TO$50MESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE-ESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE26THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWFlixBus(2011)FlixMobility is a transportation company that offers new,affordable,and environmentally-friendly travel options via the FlixBus and FlixTrain brands.Thanks to a unique business model and innovative technology,the startup has quickly established Europes largest long-distance bus network and launched the first green long-distance trains in 2018.FlixMobility has changed how over 100 million people have traveled throughout Europe,and has created thousands of new jobs in the mobility industry.Headquarters:MunichIndustries:E-Commerce,Public Transportation,Transportation,TravelFlink Food(2020)Flink is a developer of an online platform used to order and deliver multi-category grocery products.Its application offers a wide selection of convenience items like fresh herbs,fruits,bread,essentials,and home supplies,which enable people to get necessities delivered to the door within ten minutes while saving transit costs.Headquarters:BerlinIndustries:E-Commerce,Food and Beverage,Food Delivery,GroceryBerlin Brands Group(2005)Berlin Brands Group(BBG)creates,builds,buys,and scales consumer brands globally.They distribute more than 4,800 products to consumers in 28 countries worldwide.In 2021,they achieved unicorn status,making them one of Europes largest digital companies.BBG products are sold across over 100 channels,including direct-to-consumer e-commerce,online marketplaces,and wholesale.Their passion lies in kitchen appliances,garden&living,sports,and HiFi.Headquarters:BerlinIndustries:Consumer Electronics,E-Commerce,RetailRazor Group(2020)Razor is a global consumer holding company that partners with e-commerce merchants to acquire and scale brands.Razor uses significant growth capital with extensive e-commerce expertise to take these acquired merchants to the next stage of development.Razor focuses on specific product categories,long-term value enhancement,and first-class customer satisfaction.Headquarters:BerlinIndustries:Brand Marketing,Business Development,E-Commerce,Internet,RetailGetYourGuide(2009)GetYourGuide is an online platform that allows users to book tours,attractions,and activities worldwide.The company offers various services,which can be booked and purchased through its website or mobile application.These services include tours and excursions,tickets to tourist attractions,and cooking classes.GetYourGuide operates by connecting customers with service providers;the customer service is free,but the provider pays GetYourGuide a commission on each sale.GetYourGuide has built an extensive database of providers and tourists from all over the world who use their services.Headquarters:BerlinIndustries:Consumer Reviews,E-Commerce,Hospitality,Recreation,Tourism,TravelEnpal(2017)Enpal is a solar leasing firm that provides customers with solar power systems to reduce their electricity expenditure.Enpals product is an all-inclusive green energy solution.Headquarters:BerlinIndustries:Energy,Environmental Consulting,Renewable Energy,Solar$3,100,000,000VALUATION$3,000,000,000VALUATION$1,000,000,000VALUATION$1,800,000,000VALUATION$1,000,000,000VALUATION$5,000,000,000VALUATION$1,200,000,000VALUATION1.2FUNDING IN BILLIONS(USD)0.96FUNDING IN BILLIONS(USD)1FUNDING IN BILLIONS(USD)0.78FUNDING IN BILLIONS(USD)1FUNDING IN BILLIONS(USD)0.89FUNDING IN BILLIONS(USD)$100M TO$500MESTIMATED REVENUE-ESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE-ESTIMATED REVENUE-ESTIMATED REVENUE$50M TO$100MESTIMATED REVENUE27THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWVolocopter(2011)Volocopter is an urban air mobility service provider that develops battery-powered electric air taxis.It offers a holistic approach to the UAM market by developing a full ecosystem to connect all the vital parts to get the industry off the ground.This includes multipurpose aircraft(VoloCity and VoloDrone),physical and digital infrastructure(VoloPort and VoloIQ),and partnerships with global leaders in their respective fields.Headquarters:BruchsalIndustries:Aerospace,Air Transportation,Drones,Robotics,TransportationSellerX(2020)SellerX is Europes leading aggregator of e-commerce businesses.Their goal is to be the Buyer of Choice for top Amazon FBA and other e-commerce sellers and to establish an innovative new model for the future of consumer goods globally.They have over 750 employees,over 40 brands,and sell over 25,000 products.Headquarters:BerlinIndustries:Brand Marketing,Consumer Goods,E-CommercePersonio(2015)Personio provides cloud-based HR management and recruiting solutions and software for startups,small-and medium-sized enterprises.The company enables its customers to store and manage all employee data and HR processes in one place,including vacation and sick days,approvals,salary,attendance,employee documents,performance,reporting,and employee onboarding.Its recruiting function comprises applicant tracking,interview scheduling,candidate reviews,and many other features.Headquarters:MunichIndustries:Employment,Human Resources,Recruiting,SaaSQontigo(2019)Qontigo provides solutions to empower investors with the intelligence they need to make targeted,sustainable investments.Their award-winning STOXX and DAX indices and Axioma analytics provide sophisticated solutions at scale,backed by modern technology and unparalleled client focus.Headquarters:EschbornIndustries:Finance,Financial Services,Risk ManagementTIER Mobility(2018)TIER Mobility provides shared,light electric vehicles like e-scooters,e-bikes,and e-mopeds.The company helps cities reduce their dependence on cars and is committed to being climate-neutral.Headquarters:BerlinIndustries:Electric Vehicle,GreenTech,Ride Sharing,TransportationInfarm(2013)Infarm is a company that builds and distributes efficient vertical farms throughout cities.Infarms smart modular farms offer a resilient,transparent,and affordable alternative food system.The company distributes its farms throughout the urban environment to grow fresh produce for the citys inhabitants.Headquarters:BerlinIndustries:Agriculture,AgTech,Internet of Things,Machine Learning$3,100,000,000VALUATION$1,700,000,000VALUATION-VALUATION$2,000,000,000VALUATION$1,000,000,000VALUATION$1,000,000,000VALUATION$2,000,000,000VALUATION0.78FUNDING IN BILLIONS(USD)0.72FUNDING IN BILLIONS(USD)0.72FUNDING IN BILLIONS(USD)0.61FUNDING IN BILLIONS(USD)0.77FUNDING IN BILLIONS(USD)0.65FUNDING IN BILLIONS(USD)-ESTIMATED REVENUE-ESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE-ESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE$100M TO$500MESTIMATED REVENUE28THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWForto(2016)The company provides innovative technology and services that improve global supply chains beyond just transportation from point A to point B.Their easy-to-use and intuitive platform allows customers to optimize their supply chains and improve their efficiency.With over 2,000 customers and 9 global offices,Forto employs over 200 people.Headquarters:BerlinIndustries:Freight Service,Logistics,Shipping,Software,Supply Chain ManagementNuCom Group(2018)NuCom Group is a strategic partner that helps digital consumer internet companies grow.They work with ProSiebenSat.1 Group to add marketing power and operational expertise in order to pursue buy-and-build strategies.In the Commerce&Ventures segment,ProSiebenSat.1 bundles the Groups majority and minority investment areas.Headquarters:UnterfohringIndustries:Consumer,E-Commerce,LifestyleOmio(2013)Omio provides a search tool that compares rail,air,bus,and car travel options for destinations.The tool is designed to suggest nearby airports and train routes connecting where travelers want to go.It also estimates the time length of each route.After pulling in diverse data sources to offer various route options,Omio makes it easier to visualize which routes are better and compare the cost of different travel options.The platform displays a comparative chart based on what is the cheapest or fastest.Omio was founded in 2012 and is headquartered in Berlin,Germany.Headquarters:BerlinIndustries:Internet,Search Engine,Software,Travel,Travel AccommodationsOneFootball(2008)OneFootball strives to fuel the worlds obsession with football.Reaching more than 70 million football fans worldwide every month across its platform and social media channels,OneFootball is the most popular football media platform for the new generation of football fans.It offers single live football matches in-app on a pay-per-view basis and operates a 24-hour newsroom to provide fans worldwide with the comprehensive football content they crave,from statistics and live scores of 200 leagues and competitions worldwide to breaking news,highlight clips,transfer rumors,and live streaming.Headquarters:BerlinIndustries:Apps,Mobile Apps,News,Software,SportsMambu(2011)Mambu is a software-as-a-service banking engine provider that empowers lenders and depositors of all sizes to design,launch,service,and scale their banking and lending portfolios.Mambus platform allows for more than 7,000 loan and deposit products,serving over eight million end customers in 46 countries.With over three million active accounts,Mambu is one of the worlds leading banking providers.Headquarters:BerlinIndustries:Banking,Financial Services,FinTech,Lending,SaaSSolarisbank(2016)Solarisbank is a technology company that offers modular banking services which enable other companies to offer their financial services.These partners integrate Solarisbanks services directly into their product offerings via APIs.The platform provides bank accounts and payment cards,identification and lending services,digital asset custody,and services provided by integrated third-party providers.Headquarters:BerlinIndustries:Banking,Financial Services,FinTech,Information Technology$3,100,000,000VALUATION$2,100,000,000VALUATION$1,000,000,000VALUATION$1,000,000,000VALUATION$1,500,000,000VALUATION$2,000,000,000VALUATION$5,400,000,000VALUATION0.59FUNDING IN BILLIONS(USD)0.44FUNDING IN BILLIONS(USD)0.48FUNDING IN BILLIONS(USD)0.4FUNDING IN BILLIONS(USD)0.5FUNDING IN BILLIONS(USD)0.4FUNDING IN BILLIONS(USD)$100M TO$500MESTIMATED REVENUE$10M TO$50MESTIMATED REVENUE$1M TO$10MESTIMATED REVENUE$10M TO$50MESTIMATED REVENUE$500M TO$1BESTIMATED REVENUE$1B TO$10BESTIMATED REVENUE29THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWContentful(2013)Contentful helps businesses create and manage digital experiences for their customers.It enables greater speed and scale than traditional CMS solutions.Contentful unifies content in a single hub,structures it for use in any digital channel,and integrates seamlessly with hundreds of other tools through open APIs.Companies such as Chanel,Bang&Olufsen,Shiseido,Shopify,BP,and many others rely on Contentfuls platform.Headquarters:BerlinIndustries:Cloud Computing,Content,Developer Tools,SaaS,Softwaresennder(2015)sennder is a digital freight forwarder that connects large commercial shippers with small freight carriers in continental Europe.sennder provides a new level of automation,transparency,and efficiency to the European road freight market.sennders digital connection to over 10,000 vehicles allows for almost unlimited capacities.sennder digitalizes the truckload-shipping ecosystem by providing mobile apps to drivers,fleet management tools to carrier managers,and logistics management solutions to shippers.Headquarters:BerlinIndustries:Freight Service,Industrial Automation,Logistics,Shipping,Supply Chain ManagementTaxfix(2016)Taxfix makes tax declarations accessible for everyone by simplifying complex tax filing systems.The Taxfix team includes more than 150 employees,including tax advisors,lawyers,and developers.Headquarters:BerlinIndustries:Accounting,Apps,Softwarecommercetools(2006)commercetools is a platform that enables companies to power their(e)commerce sites and businesses.It has a cloud-native and API-first architecture,which allows companies to adapt and scale in a fast-changing market.It is funded by Insight Partners and Accel and has offices in the United States,Germany,the Netherlands,Great Britain,Spain,Singapore,Vietnam,and Australia.Headquarters:MunichIndustries:Cloud Computing,E-Commerce,E-Commerce Platforms,Information Technology,SaaS,ShoppingStaffbase(2014)Staffbase is a platform that helps companies and their employees work together by providing an internal communications tool.Staffbase supports leaders in various industries with their own branded app to engage their diverse,disconnected,and distributed workforce.Headquarters:ChemnitzIndustries:Business Information Systems,Collaboration,Human Resources,Private Social Networking,Virtual WorkforceABOUT YOU(2014)ABOUT YOU is a fashion and technology corporation that aspires to digitalize classic shopping by creating an inspiring and personalized shopping experience for its customers.ABOUT YOU is a place where people can discover fashion that fits their personality from a range of more than 1,200 brands.Their consistent focus on personalization,inspiration,and mobile shopping makes ABOUT YOU one of the largest fashion e-tailers in Germany.Headquarters:HamburgIndustries:E-Commerce,Fashion,Marketing,Personalization,Retail,Shopping$3,100,000,000VALUATION$3,000,000,000VALUATION$1,900,000,000VALUATION$1,000,000,000VALUATION$659,000,000VALUATION$1,200,000,000VALUATION$1,100,000,000VALUATION0.35FUNDING IN BILLIONS(USD)0.31FUNDING IN BILLIONS(USD)0.33FUNDING IN BILLIONS(USD)0.3FUNDING IN BILLIONS(USD)0.34FUNDING IN BILLIONS(USD)0.31FUNDING IN BILLIONS(USD)$1M TO$10MESTIMATED REVENUE$10M TO$50MESTIMATED REVENUE-ESTIMATED REVENUE-ESTIMATED REVENUE$10M TO$50MESTIMATED REVENUE$1M TO$10MESTIMATED REVENUE30THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWAgile Robots AG(2018)Agile Robots provides intelligent robot system development and application services,with a focus on 7-degree-of-freedom lightweight arms and general-purpose robot controllers,as well as robot vision systems.Headquarters:GilchingIndustries:Artificial Intelligence,Industrial Automation,RoboticsLast funding Date:2022 Scalable Capital(2014)Scalable Capital is on its way to becoming one of Europes leading digital investment platforms.The fintech brings people and technology-based investing together with the goal of democratizing financial investments.In addition to services for private investors(B2C),Scalable Capital pursues numerous cooperations with renowned business clients(B2B).Headquarters:MunichIndustries:Asset Management,Financial Services,FinTechChrono24(2003)Chrono24 operates as a marketplace for luxury watches.More than 3,000 professional dealers and 30,000 private sellers list over 500,000 watches on the platform.Chrono24 attracts more than 20 million watch enthusiasts from over 120 countries.Headquarters:KarlsruheIndustries:E-Commerce,Fashion,Jewelry,MarketplaceWorldcoin(2019)Worldcoin is a new global digital currency that will launch by giving a free share to every human on Earth.This new global digital currency will offer a secure and efficient way for people to transfer money worldwide.Headquarters:BerlinIndustries:Cryptocurrency Global new unicorn births have slowed down significantly across all major regions with Q3 of 2022 seeing only 25 businesses gaining their horns representing a decline of 71%QoQ-the lowest unicorn birth rate since Q1 2020.Germany is currently home to 34 unicorns,with 4 of these having gained their horns in the first 3 quarters of 2022 representing a 17%increase in the total number of unicorns in the nation.In Germany,Berlin houses the highest number of unicorns by far at 22,followed by Munich with 5.NEW BLOCKCHAIN UNICORN BIRTHS BY YEAR20182019202020212022(YTD)GLOBAL3414133EUROPE10042$3,100,000,000VALUATION$1,000,000,000VALUATION$3,000,000,000VALUATION$946,000,000VALUATION$1,400,000,000VALUATION0.3FUNDING IN BILLIONS(USD)0.13FUNDING IN BILLIONS(USD)0.21FUNDING IN BILLIONS(USD)0.27FUNDING IN BILLIONS(USD)$50M TO$100MESTIMATED REVENUE-ESTIMATED REVENUE$10M TO$50MESTIMATED REVENUE-ESTIMATED REVENUE31THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWGERMAN INVESTOR WATCHLISTThe following investors have closed at least two publicly-disclosed blockchain venture funding deals.A&T CAPITALALSTIN CAPITALANIMOCA CAPITALATLANTIC LABSBITKRAFTBLOCKCHAIN FOUNDERS GROUPBLOCKROCKETBLOCKTOWER CAPITALCHAINLINKCOINBASE VENTURESCRYPTO.COM CAPITALEARLYBIRD VENTURE CAPITALF-LOG VENTURESGLOBAL FOUNDERS CAPITALGRAVITYX CAPITALGREENFIELD ONEHASHKEY CAPITALHIGH-TECH GRNDERFONDSILAVSKA VUILLERMOZ CAPITALMAPLEBLOCK CAPITAL32THE GERMAN BLOCKCHAIN REPORT 2022 04.VENTURE FUNDING OVERVIEWCONCLUSIONIt is clear that Germany has gathered significant momentum as a global cryptocurrency stakeholder.In addition to the friendly regulatory treatment of crypto assets that individuals enjoy,there is also a significant amount of funding being raised by businesses advancing the industry and its infrastructure as a whole.If we take these things in conjunction with the fact that German blockchain funding as a percentage of total funding has almost doubled,and the high number of blockchain startups,it is difficult to come to the conclusion that the future of blockchain in Germany is indeed bright.MULANA CAPITALPOLKABRIDGE VENTURESPOLYGON STUDIOSSCYTALE VENTURESSHIMA CAPITALTYKHE BLOCK VENTURESW3.FUND33THE GERMAN BLOCKCHAIN REPORT 2022 INTEROPERABILITY EMERGING AS BLOCKCHAINS MOST IMPORTANT PROBLEM TO SOLVEPowered by LINTEROPERABILITY EMERGING AS BLOCKCHAINS MOST IMPORTANT PROBLEM TO SOLVEEvery week,new corporations and institutions are making their move into blockchain.The capacity requirements for the rapidly expanding landscape have outgrown any single chain.In fact,thousands of independent blockchains for various use cases are now in operation.There has been tremendous innovation in these alternatives,but most cannot properly communicate with each other.Blockchains are independent protocols with strict communication standards,and while some scale was managed through this spread,it also fragmented the ecosystem.Many existing blockchains recognize this problem of accessibility and must now decide how to implement an interoperability solution on their live networks.Its hazardous to make significant upgrades in production and must be done carefully,but new projects can plan interoperability from the start.What is blockchain interoperability?There are different approaches,but to put it simply,blockchain interoperability is the ability to communicate securely across independent blockchain networks.“More precisely,we say that two blockchains are interoperable if a transaction or state transition of one chain can depend on a transaction or state transition of the other chain.”Lisks Head of Research Alessandro Ricottone,Ph.D.Some projects thoughtfully implemented cross-chain mechanisms into their concept at an early stage.They act as a base layer for other compliant blockchains to connect.These“layer 1”chains typically include a software development kit(SDK)for launching blockchains.Why is interoperability important for blockchain?Since each blockchain network is isolated,token holders of a specific chain will only have access to the services of that chain.Interoperability gives options to the individual and allows the capital to flow freely.It matters because empowering users is what Web3,aka the decentralized web,is all about.Many decentralized services and economic models will flourish when users can take advantage of interoperability.Decentralized finance(DeFi)is a promising blockchain use case that will be improved when tokens can easily be transferred from one chain to another.What are some blockchain interoperability solutions?Early interoperability models are already being tested.Were still in an experimental phase,but the future is promising.Here are some of the best blockchain interoperability concepts:Bridges:A bridge transfers assets from one chain to another.It uses a smart contract to lock access to tokens on one chain and mint a replacement version on another.The resulting replacement tokens are considered“wrapped”and are representative versions of the original.Tezos Wrap Protocol,Solana Wormhole,and Binance Smart Chain are among the top bridges by volume.Sidechains:These are autonomous blockchains that communicate via a two-way peg.They have a complete consensus mechanism,such as Delegated Proof-of-Stake(DPoS),and can continue to operate if there are problems with a connected chain.For example,Lisks solution for sidechains relies on cross-chain certification,meaning data from one chain is submitted by sending a signed object called a certificate.Its essential that upon the cross-chain handshake,both blockchains speak the same language,and applying a standard of communication is the key to that relationship.Oracles:Oracles add interoperability with real-world data.They bridge the gap between on-chain and off-chain knowledge and give smart contracts and blockchain apps what they need to execute.Its critical that data-starved blockchain networks can obtain a reliable source of truth.Many use cases rely on this information stream.The most common application is exchange rate data for decentralized finance(DeFi),but other uses include API data and verifiable random numbers.Atomic Swaps:They utilize a smart contract that enables two-way peer-to-peer decentralized trading.They ensure the success of a transaction by making both parties meet their obligations before they can continue.Decentralized exchanges can help,but atomic swaps dont require any intermediaries.Whats next for blockchain interoperability?Over the next few years,blockchain interoperability will provide the communication paths necessary for the decentralized web to thrive.It will heal the damage done to the cohesion of the greater blockchain ecosystem and usher in a new era of collaboration.New economic models and information systems that put the user first are possible,but well forever be divided and conquered unless we unite,tear down the walls,and build bridges.Max KordekCEO&Co-Founder,Lisk34THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGY34THE GERMAN BLOCKCHAIN REPORT 202205.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEW05GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEW35THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWANALYTICSCUSTODYDEFIGAMINGINFRASTRUCTURE&DEVELOPMENTNFTsIDENTITY&VERIFICATIONSELFSOVEREIGNSUPPLYCHAINGERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWINTRODUCTIONGermany is home to a number of innovative startups,as well as some of the largest companies in the world.Our data collection and research process identified 20 blockchain-specific companies that received funding between January 2022 and September 2022.One of the most notable aspects of the German blockchain scene is its diversity.The industry includes a wide range of companies,from startups,developing cutting-edge applications to established players looking to leverage the technology for their businesses.This section explores the various applications and integrations of blockchain technology in Germany.GERMAN BLOCKCHAIN INDUSTRY AND COMPANYOVERVIEW*Businesses in this section have been grouped first by the alphabetical order of their respective industry categories,and then in descending order by the amount of funds raised that they have raised in our funding time period.36THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWImmutable InsightImmutable Insight is an IT company that offers blockchain and cryptocurrency products and services such as analytical reports,asset analyses,portfolio strategies,back-testing of investment hypotheses,and advisory services for boards of directors.Founded:2018Headquarters:Grnwald$7,500,000TOTAL FUNDING$3,000,000FUNDING Q1-Q3 2022Seed RoundLAST FUNDING TYPE01ANALYTICSAnalytics companies focus on building tools to extract meaningful information about the data that has been recorded on blockchains.37THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWTanganyTangany provides a custody“Wallet as a Service”for businesses to easily integrate blockchain technology into legacy and new systems via an API.The provided infrastructure comes with the ability to create and store private keys safely,to sign transactions,and to send those transactions via connectors to the chosen blockchain.The connectors enable clients to connect to different public and private blockchains.Founded:2018Headquarters:Munich$7,800,000TOTAL FUNDING$7,600,000FUNDING Q1-Q3 2022Seed RoundLAST FUNDING TYPE02CUSTODYCustody businesses provide key storage and security-related products and services for businesses that require outsourced crypto asset security.38THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEW03DEFIDecentralized Finance(DeFi)encompasses financial products and services that run on public,permissionless blockchains.The offerings are similar to those in the traditional financial world but without the need for a trusted third-party intermediary to be involved.$39,000,000TOTAL FUNDING$2,900,000TOTAL FUNDING$18,100,000TOTAL FUNDING$2,800,000TOTAL FUNDING$1,800,000TOTAL FUNDING$5,500,000TOTAL FUNDING$32,000,000FUNDING Q1-Q3 2022$2,900,000FUNDING Q1-Q3 2022$12,900,000FUNDING Q1-Q3 2022$2,800,000FUNDING Q1-Q3 2022$1,645,921FUNDING Q1-Q3 2022$5,500,000FUNDING Q1-Q3 2022Series ALAST FUNDING TYPEPre-SeedLAST FUNDING TYPESeries ALAST FUNDING TYPEPre-SeedLAST FUNDING TYPESeed RoundLAST FUNDING TYPEVenture RoundLAST FUNDING TYPEComposable FinanceComposable Finance develops blockchain infrastructure and developer tools to address the issue of blockchain interoperability and to ease frictions in deploying dApps on Layer 1 as well as Layer 2 blockchains.Founded:2021Headquarters:BerlinUltimate(by Unstoppable Finance)Unstoppable Finance is building a next-gen crypto wallet to bring DeFi to retail investors globally.Founded:2021Headquarters:BerlinLI.FILI.FI is a company building DeFi middleware for the application layer of blockchains.A bridge and a DEX aggregation protocol simplifies abstracts away the most crucial financial infrastructure and software tools to move in and out of any position on any chain making it simple for DeFi and TradFi businesses to have interoperability between chains-while having tools for monitoring,analytics,and fail-safes.Founded:2021Headquarters:BerlinPilePile is a cryptocurrency as a service platform for fintechs,startups,and neobanks to easily integrate crypto and DeFi into their existing infrastructure.Founded:2022Headquarters:BerlinAlloyAlloy is a B2C DeFi company that focuses on building tools and infrastructure for legacy financial businesses to integrate into the world of DeFi.Founded:2021Headquarters:BerlinGreentradeGreentrade accelerates the funding of new carbon projects by turning long-term purchase agreement into tradeable digital assets and making them available for corporate investors.Founded:2021Headquarters:EberswaldeCompanies are sorted by descending order by the amount of funds raised39THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWSobaSoba is a web3 online multiplayer open world and gaming platform with integrated no-code game-making tools that will utilize NFTs to.Everyone can easily create their own games without needing to know how to code and play games that others have created.Founded:2018Headquarters:Berlin$13,600,000TOTAL FUNDING$13,600,000FUNDING Q1-Q3 2022Seed RoundLAST FUNDING TYPE04GAMINGGaming businesses include those businesses that are building games or related products in the web3 space.40THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEW05INFRASTRUCTURE&DEVELOPMENTInfrastructure and Development businesses are those that are building the underlying blockchain infrastructure and developer tools.This would include businesses that are working on protocols,consensus mechanisms,chain interoperability,developer tools et.al.$125,000,000TOTAL FUNDING$4,000,000TOTAL FUNDING$16,000,000TOTAL FUNDING$280,000TOTAL FUNDING$9,900,000TOTAL FUNDING$100,000,000FUNDING Q1-Q3 2022$4,000,000FUNDING Q1-Q3 2022$10,000,000FUNDING Q1-Q3 2022$280,000FUNDING Q1-Q3 2022$6,000,000FUNDING Q1-Q3 2022Funding RoundLAST FUNDING TYPESeed RoundLAST FUNDING TYPEVenture RoundLAST FUNDING TYPEPre-SeedLAST FUNDING TYPESeed RoundLAST FUNDING TYPEWorldcoinWorldcoin is currently building a privacy-focussed protocol called Privacy-Preserving Proof-of-Personhood Protocol(PPPoPP)and aims to onboard a billion users via an airdrop of tokens after they have confirmed their unique identity.Founded:2019Headquarters:BerlinChainflipChainflip is a decentralized,trustless protocol that enables cross-chain swaps between different blockchains.Founded:2020Headquarters:Berlinpeaqpeaq focuses on building decentralized infrastructure for the Economy of Things.Their EVM-compatible network aims to solve fragmentation,trust,scaling,and interoperability issues to enable devices and machines to autonomously exchange,synchronize and trade data in real-time.In addition to the network itself,peaq has also created a range of blockchain and software tools to make development and integration into their ecosystem seamless.Founded:2017Headquarters:BerlinChain4TravelChain4Travel performs the KYC,and provides the application suite for the Camino Network.A blockchain built specifically to cater to travel and leisure dApps.Founded:2021Headquarters:Dsseldorfbasenode.iobasenode.io is an accounting solution for digital assets that offers seamless crypto invoicing and portfolio tracking.Founded:2021Headquarters:BerlinCompanies are sorted by descending order by the amount of funds raised41THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEW06NFTsNon-fungible tokens are tokenized representations of value that are issued and administered on a blockchain.Think digital baseball cards or collectibles except with mathematical proof that your piece is 100%unique.$8,500,000TOTAL FUNDING$4,350,000TOTAL FUNDING$1,500,000TOTAL FUNDING$7,500,000FUNDING Q1-Q3 2022$3,600,000FUNDING Q1-Q3 2022$1,500,000FUNDING Q1-Q3 2022Series ALAST FUNDING TYPEFunding RoundLAST FUNDING TYPEPre-SeedLAST FUNDING TYPEMintbase IncMintbase develops tools to enable developers to create their own NFT platforms.Founded:2019Headquarters:BerlinbitsCrunchbitsCrunch is an analytics firm that provides AI-enabled securing services to protect the integrity of the blockchain and NFT ecosystems.bitsCrunch specializes in providing data-driven insights to combat wash trading,fraud,and inaccurate valuations relating to NFTs.Founded:2021Headquarters:MunichFUELFUEL platform enables creators to launch,manage,and grow their NFT collection using a broad range of tools.Founded:2022Headquarters:BerlinCompanies are sorted by descending order by the amount of funds raised42THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEWfilancorefilancore provides a Self Sovereign Identity management platform for the IoT space.Their Identity Gateway is an Identity as a Service solution that enables interactions between actors in an IoT ecosystem.Founded:2019Headquarters:Limburgerhof$450,000TOTAL FUNDING$450,000FUNDING Q1-Q3 2022Seed RoundLAST FUNDING TYPE07SELF SOVEREIGN IDENTITYSelf Sovereign Identity businesses focus on creating,managing,and verifying identity on a blockchain.43THE GERMAN BLOCKCHAIN REPORT 2022 05.GERMAN BLOCKCHAIN INDUSTRY AND COMPANY OVERVIEW08SUPPLY CHAIN&VERIFICATIONBlockchains are immutable,append-only,unhackable ledgers by design.As a result,they are an excellent means of providing proof of the current state of affairs.Supply chain&verification businesses make use of the technology to provide stakeholders with a flawless means to verify the authenticity of a product and its history.$2,200,000TOTAL FUNDING$160,000TOTAL FUNDING$2,200,000FUNDING Q1-Q3 2022$130,000FUNDING Q1-Q3 2022Seed RoundLAST FUNDING TYPESeed RoundLAST FUNDING TYPEAsvinasvin develops solutions for managing the cybersecurity and provenance of software supply chains for multiple domains such as automotive,aerospace,telecom,medical,energy,and industrial systems.asvin provides a distributed ledger-based solution and services to record software bills of materials,track and trace all software-related processes,document regulatory compliant methods,and derive software supplier risks analytic insights.Founded:2018Headquarters:StuttgartTracifierTracifier is a blockchain-based traceability application used for supply chain and certificate verification.The solution provides an authoritative record of provenance for role players throughout the agricultural and logistical supply chain.Founded:2019Headquarters:HamburgCompanies are sorted by descending order by the amount of funds raised44THE GERMAN BLOCKCHAIN REPORT 2022 BANKING THE BLOCKCHAIN SECTORPowered by Bank Frickwww.bankfrick.li/BANKING THE BLOCKCHAIN SECTORCurrently,nearly 10,000 tokens and coins are listed on Coinmarketcap.In addition,there are countless companies whose business model revolves around crypto assets or blockchain technology.These include centralized crypto exchanges,brokers,traders,and developers.These companies share a common problem they have struggled to open a business account or provide fiat access for their clients.Lack of regulatory frameworkThe banking sector has been one of the most heavily regulated sectors in the past 30 years.In particular,the global financial crisis triggered by the Lehman bankruptcy resulted in significantly tighter sector supervision through implementing guidelines such as Basel III and Mifid II.Understandably,most banks are still reluctant to expand their services to the blockchain sector.With the Markets in Crypto Assets(MiCA)regulation,the European Union is now the first major economic region in the world to come forward.If the last outstanding points are finally decided,it will still take another 18 months until the regulation finally comes into force time enough for banks to expand their resources,but this hardly helps the blockchain start-ups today.In addition,the banking world will likely continue to hold back until the US presents its regulations and provides clarity.The current administration is working flat out to balance enabling innovation in the financial sector and combating illegal activity.However,it remains unclear when these rules will be ready and applicable.Small jurisdictions lead the wayHowever,some jurisdictions and banks have recognized blockchains potential and have already implemented regulations.Among these select jurisdictions are Switzerland and Liechtenstein,over which Crypto Valley spans.While Switzerland introduced the legal framework in the DLT Act in 2021,the Principality of Liechtenstein already provided the necessary legal certainty for companies and banks in 2020.This legal certainty has meanwhile attracted over 1,128 companies to the region as of 2021(source:PWC).This includes giants such as Ethereum or the Cardano Foundation and put Crypto Valley on the international map as a future-driving location for the industry.With Liechtenstein,an EEA member is also represented,which enables the companies based there to offer their services to the rest of the EEA,effectively setting the course for the future via direct communication channels between the industry and the Financial Market Authority(FMA).Prerequisites for banking servicesThe banks from the region that are already working intensively on the subject thus create a decisive benefit.They enable young,emerging start-ups in the industry to access traditional banking services.At the same time,banks are actively driving innovation by implementing and expanding business areas in the blockchain industry.However,it is important to distinguish between traditional banks and neo-banks.Neo-banks have the advantage of being able to build a new business model from scratch and are primarily implementing new services such as custody,staking,lending,and asset management of digital assets.On the other hand,traditional banks are leading a transition to blockchain banking via the structures of traditional banking that have been in place for many years.This is done by providing access to well-established transactional banking while offering the entire infrastructure and range of classic banking services.Bank Frick refers to this integration as crossover finance.A key advantage of the banks of the Crypto Valley is the deep understanding of their clients business models,which they have acquired through the relationships built over the years with start-ups from all sectors of the blockchain industry.This allows banks to efficiently bridge compliance and make complex business cases understandable,removing the fear of the unknown.The regulation of the sector is advancing inexorably,and thus the market in the segment will be more fiercely contested in the future.However,while most banks continue to stand on the sidelines and watch or even scale back their tentative involvement,the banks of Crypto Valley have been actively gaining experience for many years and have been shaping the sector from the very beginning.This gives the Crypto Valley even more legitimacy to be the most important hub for the industry worldwide.Christos MaloussisSenior Relationship Manager-Blockchain Banking,Bank Frick45THE GERMAN BLOCKCHAIN REPORT 2022 02.RESEARCH METHODOLOGY45THE GERMAN BLOCKCHAIN REPORT 202206.GERMAN BLOCKCHAIN INDUSTRY DEVELOPMENTS06GERMAN BLOCKCHAIN INDUSTRY DEVELOPMENTS46THE GERMAN BLOCKCHAIN REPORT 2022 06.GERMAN BLOCKCHAIN INDUSTRY DEVELOPMENTSGERMAN BLOCKCHAIN INDUSTRY DEVELOPMENTSINTRODUCTION In 1450,a German goldsmith invented a technology that transformed the world.His name was Johannes Gutenberg,and his printing press disrupted Europes centuries-old ironclad power structures.The churchs control over the distribution of the written word was broken.Pope Alexander VI,in a belated overreaction,threatened ex-communication in 1501 to anyone printing non-approved items.Just sixteen years later,Martin Luther was hammering his 95 Theses to the door of the castle in Wittenberg,and the Reformation had begun.The repository of knowledge moved out of monasteries and into public libraries and open universities.Access to cheap books created a sudden rise in literacy and an explosion of ideas in art,science,and exploration.Ferdinand Magellan,Christopher Columbus,Amerigo Vespucci,and Marco Polo set off to discover new worlds.Botticelli painted The Birth of Venus,Da Vinci painted the Mona Lisa and The Last Supper,and Michelangelo carved the statue of David and painted The Creation of Adam on the roof of the Sistine Chapel.Galileo and Copernicus said the sun,not the Earth,was the center of the solar system,Thomas Hobbes wrote Leviathan,and Rene Descartes famously said,“Cogito ergo sum.”Its no exaggeration to say that Gutenbergs printing press was the catalyst that sparked the peak of the European Renaissance in the 1600s.The next great leap forward would be the steam-driven First Industrial Revolution in the late 1700s.The Second,in the 1870s,was driven by electricity and mass production,and the Third,around 1969,with nuclear power and the Internet.Throughout history,revolutionary technologies have driven transformation.When they occur,renewal emerges and nudges the world toward better efficiencies and improved well-being.We are currently undergoing another tectonic shift-a new Renaissance-underpinned by the revolutionary technology known as blockchain.Blockchain is powering a new wave of technological change that is disrupting the ironclad global power structures that currently control the Internet.Blockchain is much more than something on which cryptocurrencies are built.Its unique properties are redefining how we use the Internet and own data.It is driving a decisive new phase of the World Wide Web-Web3.Blockchain makes it possible for data to become decentralized and for ownership to be returned to the user.What Gutenbergs printing press did for the Renaissance,blockchain is doing to the Internet,and once again,Germany is playing a pivotal role in this new digital era.DIFFERENT TYPES OF BLOCKCHAINS While blockchain initially made a name for it

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E-BOOKA directive for retailers,brands and carriers across the globe to achieve superior last-mile deliveries that turn the consumer delivery experience into a competitive advantage by simplifying the complex delivery process and solving the delivery challenges companies have felt for years.The Last Mile Mandate2E-BOOK:THE LAST MILE MANDATEThe BigPictureThe Complex Last MileThe last mile,sometimes not even a mile and oftentimes much more.This final leg of the e-commerce supply chain that physically connects brands with consumers is a crucial step that can make or break the consumer experience and therefore,a companys reputation and future sales.Not only is the last mile the most critical to the consumer delivery experience,it is also typically the most complex and the most expensive leg of the entire supply chain.The complexities and added costs of the last mile arise in the form of additional variables that must be accounted for.Unlike the first and mid miles,the last mile is generally sporadic and unpredictable,with delivery destinations and timelines unknown until an order is placed.Combine that with various fulfillment and fleet types to choose from and you have a process ripe for inefficiency,delay and added risk.For consumers,a good e-commerce delivery experience is a bit like magic:place an order from a convenient device and within days,or even minutes,the order arrives at their doorstep.In contrast,an inefficient delivery process can turn this potential magic into a nightmare.Late deliveries,lost orders,long delivery windows and high delivery costs are each prone to compromising future sales and brand loyalty.Getting the delivery experience right is paramount for shippers and carriers in an increasingly e-commerce-driven world.Product and price are no longer the only considerations to winning sales and delighting consumers.Delivery has taken center stage as a key factor that consumers evaluate when deciding from where to purchase.A great delivery experience is a great competitive advantage.3E-BOOK:THE LAST MILE MANDATEA Changing,Challenging Landscape The world of last-mile delivery is rapidly changing.Carbon-neutral fleets,autonomous delivery vehicles,outsourced gig-fleets,hyper-local deliveries and omnichannel fulfillment methods-to name a few-are all giving con-sumers faster,cheaper and more sustainable delivery options.Increased variables in how,where and when deliveries depart and arrive are giving shippers and carriers alike greater flexibility but also invite even greater complexity to an already complicated process.It is imperative that ship-pers and carriers have the right logistics technology in place to tie these variables together to create more efficient last-mile deliveries.Even with these advancements in delivery,the reality is that the last mile has yet to be perfected.A full 88%of consumers are still abandoning their online shopping carts due to poor shipping terms today,and nearly 10%of deliveries fail to reach their intended destination on the first attempt.There is room for improvement.Putting the right technology in place can help.Key last-mile challenges that technology can help overcome include:routing,consumer experiences,omnichannel fulfillment,sustainability and returns.Shippers and carriers must simplify the complex delivery process and overcome these key last-mile challenges to achieve great delivery experiences.Better deliveries amount to better companies,happier consumers and a healthier planet.Better deliveries amount to better companies,happier consumers and a healthier planet.4E-BOOK:THE LAST MILE MANDATEIntroducing the Last Mile MandateFarEyes consumer survey conducted in June 2022 revealed that 85%of consumers will not shop with a retailer again due to a poor delivery experience.This finding alone-despite the growth in e-commerce and home delivery,and steps retailers have made to create better consumer experiences-signifies the need to fundamentally change the way orders are delivered and returned to achieve a consistent,branded consumer experience with every purchase.In response to these persistent challenges,FarEye has developed the Last Mile Mandate as the roadmap to a superior delivery experience.The Last Mile Mandate serves as a directive for retailers,brands and carriers across the globe to achieve superior last-mile deliveries that turn the consumer delivery experience into a competitive advantage by simplifying the complex delivery process and solving the delivery challenges companies have felt for years.With the right delivery platform,companies can ensure every delivery in the world reaches its destination every time,on-time,accurately,efficiently and with minimal environmental impact.5E-BOOK:THE LAST MILE MANDATEThe key to last-mile delivery excellence lies in five fundamental pillars that companies must address,each covering the most significant challenges of last-mile delivery and offering solutions for companies to act upon today.1.Logistics Complexity Dramatically simplify the most complicated aspects of delivery logistics2.Consumer Experience Deliver a cohesive experience from order to delivery3.Creating Differentiated Offerings Use Business Process Management(BPM)to create offerings that reflect dynamic consumer buying behaviors and speed of deliveries4.Sustainability Continuously improve the environmental impact from deliveries5.Reverse Logistics Create superior online returns experiencesWe cover each of these in detail in the following chapters.6E-BOOK:THE LAST MILE MANDATELogistics Complexity and the Last MileWorldwide,e-commerce sales are expected to reach$5 trillion in 2022 and$6 trillion by 2024.Thats more than the GDP of Germany(approximately$4.2 trillion in 2021).Today,more consumers are shopping online and demanding deliveries in increasingly shorter timeframes,despite continued supply chain disruptions.Companies must mitigate supply chain disruptions including weather,transportation delays and driver shortages.They must also continually adjust and adapt to increased consumer expectations.Last-mile logistics have never been more complex.As online retail grows,companies must refine the costliest part of their supply chain-the last mile.Last-mile delivery accounts for 53%of overall shipping costs.Wherever consumers live,whether in dense urban centers or in rural towns far from distribution centers,they expect speedy and efficient deliveries.Omnichannel fulfillment,which costs roughly 10%to 20%of overall sales in omnichannel retail,adds another layer of complexity.With so many options for companies to deliver to consumers,they must learn how to optimize end-to-end omnichannel fulfillment with precision while minimizing last-mile cost.More brands need to redefine their order-to-delivery journey while providing flexible and frictionless order tracking and fulfillment to achieve last-mile excellence.CHAPTER ONEDramatically simplify the most complicated aspects of delivery logistics7E-BOOK:THE LAST MILE MANDATEHow can retailers simplify last-mile delivery?Simplifying the last mile lies in redefining delivery orchestration throughout the delivery journey.Optimizing dynamic routing,scheduling,and tracking while ensuring delivery accuracy is fundamental to a superior delivery experience.Companies must:reduce last-mile complexity by providing predictive visibility and orchestration of their routes unify and manage multiple carrier fleets optimize routes through the use of artificial intelligence(AI)and machine learning(ML)provide end-to-end delivery visibility to all stakeholders act on insights gained to manage order exceptionsTechnology can help companies unify and manage multiple carrier fleets and integrate them into one system,so logging into multiple systems to view carrier status is no longer necessary.This creates a simplified way to gain knowledge of all the fleets utilized by a brand,whether owned or not.Technology that includes AI and ML can factor in traffic patterns,weather and road conditions to create dynamic routes with optimal efficiency.AI and ML can also analyze past performances of delivery routes and suggest predictions for efficient routing.Optimizing delivery routes through the use of technology creates flexible and efficient routes,which translates to cost savings.How can real-time visibility help?Providing real-time visibility to every stakeholder in the delivery process,whether they are a carrier,a retailer or a consumer,allows them to pinpoint an orders location and know when it will be delivered.This knowledge can reduce calls to customer service centers asking where is my order(WISMO),saving time and cost for the brand.Real-time visibility also allows a company to know if there will be an exception and allows them the ability to correct the exception or notify the consumer before a failed delivery.On average,a single failed delivery costs$17.78 and 5%of all last mile deliveries fail.A failed delivery costs more than money.Seven out of 10 consumers wont give a brand a second chance if they have a negative last-mile delivery experience.According to the Last Mile Mandate survey conducted by FarEye in 2022,28%of consumers rate the ability to have delivery tracking as part of a positive delivery experience.Fifty percent of consumers are not receiving ETA alerts on a majority of their orders,which leaves lots of room for improvement for companies to gain and retain customers.How can companies win in the last mile?Companies need to dramatically simplify the most complicated aspects of delivery logistics,especially in the last mile.They must optimize their end-to-end omnichannel fulfillment with precision while minimizing last-mile costs.Simplified orchestration from order to delivery through dynamic routing,managing outsourced fleets,scheduling and tracking is key,while also providing real-time visibility to all stakeholders.8E-BOOK:THE LAST MILE MANDATEConsumer ExperienceOnline shopping has turned the retail shopping experience on its head.Giving consumers the products they want is important but delivering a cohesive experience from order-to-delivery is now the holy grail for retailers worldwide.A crucial component of delivering a world-class brand experience is last-mile delivery.The stakes are extremely high in the last-mile.A positive last-mile interaction translates to strong brand equity and greater brand loyalty.A negative delivery can destroy brands.84%of consumers would not shop with a retailer after having a bad delivery experience.Price and product are no longer the most important differentiators for brands.FarEyes Last Mile Mandate survey reveals that 36%of consumers want fast delivery,while 28%of consumers want delivery tracking and ETA alerts.Speed and delivery tracking ability are the new differentiators that brands must focus on to win consumer loyalty.So how do businesses decode the last mile and deliver a superior brand experience to consumers while being cost-efficient?How does visibility impact the delivery experience?Delivery visibility leads to a better last-mile delivery experience for consumers.Dispatch managers get real-time information on the loading and unloading of packages,the assigned delivery agents,and how near or far these agents are from the package drop location-all this information is communicated to the consumers.Visibility helps in communicating accurate ETAs to consumers,enhancing brand experience.CHAPTER TWODeliver a cohesive experience from order to delivery9E-BOOK:THE LAST MILE MANDATELast-mile delivery visibility facilitates route efficiency which has a direct impact on delivery timelines.New-age visibility technologies are harnessing the powers of machine learning algorithms to provide predictive visibility empowering businesses to accurately forecast on-time or delayed deliveries and maximize consumer experience.How important is a personalized delivery experience?One of the greatest benefits of online shopping is personalization.The consumers choose when and where they want their purchased items.Different consumers may prefer different times and places for deliveries.Some may want last-minute changes to their order.Customizable deliveries are the backbone of seamless last-mile delivery experiences.Personalized last-mile delivery experiences are critical for creating a great consumer experience.In the post-pandemic world,consumers are either working remotely or in hybrid mode,and therefore giving them the flexibility of choosing when,where,and how they receive or return their packages becomes all the more important.Its not only about integrating consumer preferences while making deliveries.Personalization is needed when it comes to returns.A McKinsey report says that 33%of repeat consumers would choose to abandon a retailer if they had a“difficult”returns experience.Therefore,when it comes to building brand loyalty and long-term consumer relationships,retailers must also focus on delivering a flexible and easy returns experience.What is frictionless order tracking?From the retail warehouse to the consumers doorstep-providing real-time updates on orders enables businesses to enhance the post-purchase experience and increase brand credibility.Last-mile order tracking solutions keep consumers informed about their packages through text alerts.These alerts usually contain the order number,delivery vehicle,and delivery agents phone details.It also provides customers with information on the specific time slot they can expect the delivery agent to bring their order.The greater the communication with consumers in the last mile,the more likely they are to stick to the brand and recommend it to their family and friends.Throughout the pandemic,real-time communication expectations increased as 25%of customers expect access to real-time tracking information and up-to-date order location notifications throughout the order to delivery experience.However,according to FarEyes Last Mile Mandate survey findings,only 50%of consumers claim to be receiving alerts on a majority of their orders.Last Word on Last MileLast-mile delivery is not just about delivering products to people.Its become more about delivering products and superior consumer experiences.Its an extension of a companys brand image.Therefore,its essential that enterprises focus on making last-mile deliveries more customer-centric.It is only then that businesses will be able to deliver an excellent brand and customer experience and reap the long-term benefits of brand loyalty.10E-BOOK:THE LAST MILE MANDATECreating New Differentiated OfferingsBusiness Process Management(BPM)is about optimizing workflows and processes.It involves monitoring and analyzing the business operations of an organization and then making them better.Leveraging BPM to create new,differentiated offerings is pivotal to maintaining brand loyalty.Effective BPM is about constantly examining an enterprises business methods and practices-all to achieve key objectives and keep the end consumer happy and satisfied.BPM enables businesses to be more agile and flexible and thus better serve their customers.BPM can be defined as a method to discipline that uses various methods to discover,model,analyze,measure,improve and optimize business processes.Enterprises often invest in BPM tools and platforms that help them simplify their processes and make them more efficient and cost-effective.Often BPM platforms have optimized,pre-existing workflows that can be modified as per business needs.BPM helps in creating customized supply chain works,accommodating unique business needs,which ultimately leads to achieving desired outcomes like-fast delivery,cost savings due to streamlining,superior customer experience and brand loyalty.How can BPM improve last-mile orchestration?Enterprises can vastly improve their last-mile operations through BPM platforms.BPM platforms break down complicated aspects of delivery and provide a simplified,component-by-component view of the various tasks within the last-mile operations of an enterprise.Without a BPM engine managing their workflows,enterprises will struggle to manage even small changes in processes.BPM platforms with their hassle-free user interfaces make it extremely easy for managers to make CHAPTER THREEUse Business Process Management(BPM)to create offerings that reflect dynamic consumer buying behaviors and speed of deliveries11E-BOOK:THE LAST MILE MANDATEchanges to their existing processes.Enterprises do not need to stress over coding to make changes-a simple drag and drop is enough to make whatever process changes they want.And its not just about customizing workflows.BPM platforms offer the necessary flexibility to build new business or logistics processes that deliver higher value to consumers.For instance,an enterprise that uses its fleet for last-mile deliveries is looking to expand into new markets using third-party carriers.BPM platforms can make a simple change in logic to incorporate the change in delivery method.BPM also helps enterprises deliver unique,on-brand consumer experiences throughout the order to delivery experience.A good example can be a retail enterprise using configurations within the BPM engine to recommend more of its products on its shopping cart page.Such offerings enable brands to position themselves as different from their competitors.When organizations want to quickly adapt to consumer preferences and introduce new fulfillment options,they can go into the BPM platform and customize processes accordingly.An effective BPM platform helps enterprises keep pace with the fluctuating consumer demands and delivers last-mile solutions that keep consumers happy and satisfied.Delivering Dynamic Experiences using BPMA strong BPM platform can help enterprises scale with speed without requiring any additional resources.Once the BPM engine takes over,logistics managers can focus less on repetitive tasks and concentrate on other important tasks within the logistics ecosystem.BPM platforms also capture data that can be gleaned to make processes more efficient.12E-BOOK:THE LAST MILE MANDATESustainabilityParalleling e-commerces steady growth is a rise in carbon emissions.Parcel deliveries are estimated to increase by 78%globally by 2030,resulting in up to 30%greater emissions.With no interventions,we can expect a 32%jump in carbon emissions from urban delivery traffic by 2030.The pressure for brands to lower their carbon emissions swiftly and dramatically has never been greater.The demand for supply chain sustainability today comes from three distinct parties:consumers,governments,and financial institutions.Building efficiency into the emissions-heavy last mile resonates with each of these stakeholders.The 2021 COP26 Conference attracted delegates from 200 countries where they discussed accelerating efforts towards a sustainable future including the decarbonization of road transportation and achieving zero-emissions vehicles by 2040.Do consumers care about the carbon emission impacts of their deliveries?Globally,internet searches for sustainable products have increased 71%in recent years.According to the Global Sustainability Study 2021,sustainability is rated as an important purchase criterion for 60%of consumers globally.In the U.S.,this number is just over the global average at 61%.A 2022 FarEye study confirms that 56%of consumers are interested in seeing the carbon emission impact of their deliveries.Consumers want to see the impact of their deliveries and also be able to make a choice about their deliveries.Forty-three percent of consumers are more likely to choose retailers that offer more sustainable delivery options such as how and when those purchases will arrive,i.e.bundled deliveries.CHAPTER FOURContinuously improve the environmental impact from deliveries13E-BOOK:THE LAST MILE MANDATETwo-thirds of online shoppers claim a brands eco-friendly shipping practices influenced a purchase decision.Companies that are able to infuse eco-friendly practices into their supply chains and communicate this effectively are likely to gain and retain consumers.Sustainability is also on the minds of C-suite executives,who want to reduce the environmental impact of their brands,be seen as green forward and keep consumers returning to their products.How can brands achieve sustainability in the last mile?Making deliveries efficient and sustainable is a tough balancing act.Brands must make deliveries more quickly than ever to give their consumers the best possible experience while also worrying about reducing carbon emissions.The key to success lies in optimizing transportation,delivery,and reverse logistics to make the last mile more sustainable.There are several ways to help make the last mile more sustainable,through route optimization and by optimizing the delivery fleets.Utilizing green delivery fleets that are more energy efficient,including electric vehicles and alternate delivery vehicles such as drones will help reduce carbon emissions.Optimizing the deliveries themselves to create the most efficient routes includes driving less miles overall,contributing to a reduced carbon footprint.Creating efficient delivery routes that can also incorporate returns pickups also reduces miles driven and allows a higher amount of first-delivery attempts.By increasing first attempt delivery rates,associated costs and carbon footprint drop with no need to attempt a delivery multiple times.Additionally,validating shipping addresses and allowing consumers to indicate special delivery instructions helps increase first delivery success.Accurate inventory forecasting and management also help brands to reduce their carbon emissions.Inventory held in local distribution centers with shorter distances to travel than from regional centers also helps reduce delivery mileage and environmental impact.Can localized fulfillment options aid sustainability?Retailers worldwide continue to add new fulfillment options to help drive sustainability.According to research by Accenture,last-mile supply chain emissions can be reduced by up to 26%through 2025 by the use of local fulfillment centers.In-store fulfillment,pop-up distribution centers,micro-fulfillment centers and utilizing dark stores as fulfillment centers are all options for retailers to help increase their sustainability numbers.How can brands create efficient reverse logistics processes?As e-commerce grows,so too does the number of returns.Brands need a plan for the increasing numbers of returns while also reducing the carbon footprint associated with them.Integrating returns into delivery routes is one way to improve efficiency.Consolidating returns with third party vendors and drop-off points can further reduce returns volumes and carbon emissions.Utilizing local fulfillment centers for returns also can reduce driving and emission costs.Sustainability In The Last Mile Remains A Work In ProgressThe demand for sustainability in the last mile has never been greater.Concern for sustainability to help protect our planet from greenhouse gasses in transportation grows each year.Consumers want to see the impact their deliveries have on sustainability,companies want to be more sustainable in their supply chains and especially in the costliest last mile.Governments continue to push for ways to lower the carbon footprint of transportation,including last-mile deliveries.A brands carbon footprint,especially in the last mile,can be reduced through delivery fleet changes as well as route optimization.Consumers also need to help create sustainable last-mile deliveries through their delivery decisions during purchases.14E-BOOK:THE LAST MILE MANDATEReverse LogisticsMoving Backwards:Online Returns The flow of products across the last mile does not only move in one direction.Unwanted,damaged or broken products often travel in reverse from consumer back to retailer-a costly,inefficient and unsustainable process.As online retail sales continue to grow,so too will online returns.And consumers are increasingly evaluating returns policies when making online purchases.Retailers and carriers must optimize the returns process to reduce cost and risk to deliver a superior consumer returns experience.Around 30%of online orders are returned,compared to 9%for items purchased in-store.Much of this gap is due to the inability for consumers to see,feel and temporarily experience many of the goods they purchase online.Most retailers offer online returns policies,and consumers are using them.Returns cause major headaches for retailers and their logistics partners as they are costly and difficult to orchestrate.Even some of the biggest retailers in the world now see rampant returns as an existential threat,says the Atlantic.In the U.S.alone,it is estimated that$218 billion of online purchases were returned in 2021,boosting the growth of the global reverse logistics market that is forecast to reach nearly$1 trillion by 2028.Consumers Demand Superior Returns Nearly half of all online shoppers returned an online purchase in the past 12 months.Consumers are now more likely to evaluate returns policies when making an online purchase,as 86%of shoppers look for an easy returns process and 92%of shoppers will repurchase something if returns are easy.CHAPTER FIVECreate superior online returns experiences 15E-BOOK:THE LAST MILE MANDATEIn contrast,81%of shoppers will switch to a competitor if they have a bad returns experience.The returns process is crucial for many consumers and retailers and carriers must look to include returns as part of their business strategy.Consumers are driven to shop with online retailers that offer free returns shipping,convenient locations to return items,clear communication and visibility of the returns process,and fast refunds.Fees,a slow returns process and a lack of returns visibility deter consumers from shopping online retailers.So what does a perfect returns process look like:Free Including packaging Pre-paid return labelFlexible Long return window Many convenient drop-off locations,including consumers home No receipts neededVisible Tracking information Refund updatesSustainable Limited carbon footprint Reduced wasteWhen customers know that they can get their money back just as quickly as they can spend it,and in a fast and flexible process,theyll shop with more confidence and spend more.Returns vs.RetailersGetting the returns process right and giving consumers a returns process worth coming back for is difficult for retailers.Returns are costly even before the shipping process is accounted for,costing retailers on average$10-$20 per return before shipping.Many times,merchandise must be written off and discarded,and there are more cases of fraudulent returns,where consumers are sending the wrong items back or items that have been worn repeatedly.Fifty-seven percent of retailers claim that dealing with returns has a negative impact on their business,while 20%would increase the price of their products to make up for the cost of processing returns.The timeliness,orchestration and customer service are each pain points of the returns process that retailers must solve for.How can technology solve reverse logistics challenges?The solution to the online returns conundrum lies in innovative technology and enhanced partnerships between shippers,logistics providers and tech-enabled platforms.A perfect solution can offer free,fast,flexible and sustainable returns to consumers and low-cost,resource-light processes for retailers,ensuring both parties are satisfied.Route orchestration and optimization can increase capacity utilization for trucks carrying less than a full load to take on return deliveries.Retailers can enhance the use of their many omnichannel nodes to accommodate returns,using technology to determine which products should be sent back to where.Visibility technology can boost the communication between retailers,carriers and consumers,alerting consumers in real-time when 16E-BOOK:THE LAST MILE MANDATEtheir return is processed,and refunds can be made.All of these amount to a better experience for consumers,giving them immediate visibility to the cost and status of their return and greater choice in how their return is made.Each of these technology solutions will enhance the returns process by increasing speed,lowering costs,and maximizing flexibility while minimizing the impact on the environment.The retailers and carriers that can adopt reverse logistics technology quickly stand to gain competitive advantages by reducing operational costs and creating superior returns policies and experiences that consumers value.Last-mile delivery isnt a one-way street.With an increasing amount of products moving in reverse within supply chains,reverse logistics technology will become critical in the coming years for retailers and carriers alike.17E-BOOK:THE LAST MILE MANDATETying it All TogetherThe complexities of last-mile delivery can be simplified with the right logistics technology in place,aligned to the key attributes of the Last Mile Mandate.And with this simplification comes greater efficiency,which translates to lower costs,faster deliveries,increased labor productivity and reduced emissions-all of which can be passed on to consumers in the form of low cost,speedy and positive delivery experiences.And this matters.Poor delivery terms are forcing a majority of online shoppers to abandon shopping carts without making a purchase.Poor delivery experiences are causing shoppers to abandon retailers altogether.The time to act is now.Companies must recover lost sales and future business through improved last-mile delivery.Not only can they correct current inefficiencies but gain long-term competitive advantages that keep current consumers satisfied and their loyalties intact,or even heightened.The bottom line?Every business that considers itself consumer-centric must transform into a distribution and logistics company.To do this retailers,brands,shippers and carriers must adopt the principles within the Last Mile Mandate to simplify the complexities of last-mile logistics,deliver positive consumer experiences,create differentiated offerings and reduce environmental impact in the process.Competitive advantages and enhanced consumer loyalty await.FarEyes Intelligent Delivery platform turns deliveries into a competitive advantage.Retail,e-commerce and third-party logistics companies use FarEyes unique combination of orchestration,real-time visibility,and branded customer experiences to simplify complex last mile delivery logistics.The FarEye platform allows businesses to increase consumer loyalty and satisfaction,reduce costs and improve operational efficiencies.FarEye has 150 customers across 30 countries and five offices globally.FarEye,First Choice for Last Mile.LEARN MORE:Choice for Last M

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辉瑞（PFIZER）2022年财报.pdf

Breakthroughs that change patients lives January 31,2023Fourth Quarter 2022 Earnings TeleconferenceIntroductionChristopher StevoSenior Vice President,Chief Investor Relations Officer3Fourth Quarter 2022 EarningsForward-Looking Statements and Non-GAAP Financial InformationOur discussions during this conference call will include forward-looking statements that are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.We include forward-looking statements about,among other topics,our anticipated operating and financial performance;reorganizations;business plans,strategy and prospects;our Environmental,Social and Governance(ESG)priorities,strategy and goals;expectations for our product pipeline,in-line products and product candidates,including anticipated regulatory submissions,data read-outs,study starts,approvals,launches,clinical trial results and other developing data,revenue contribution and projections,pricing and reimbursement,potential market dynamics and size,growth,performance,timing of exclusivity and potential benefits;strategic reviews,capital allocation objectives,dividends and share repurchases;plans for and prospects of our acquisitions,dispositions and other business development activities;and our ability to successfully capitalize on these opportunities;manufacturing and product supply;our efforts to respond to COVID-19,including the Pfizer-BioNTech COVID-19 Vaccine(Comirnaty),the Pfizer-BioNTech COVID-19 Omicron BA.4/BA.5-adapted bivalent Vaccine(the Pfizer-BioNTech COVID-19 bivalent vaccine),other vaccines that may result from the BNT162 program,and our oral COVID-19 treatment(Paxlovid);and our expectations regarding the impact of COVID-19 on our business,operations and financial results.Among other things,statements regarding revenue and earnings per share growth;anticipated operating and financial performance;the development or commercial potential of our product pipeline,in-line products,product candidates and additional indications or combinations,including expected clinical trial protocols,the timing of the initiation and progress of clinical trials and data read-outs from trials;the timing for the submission of applications for and receipt of regulatory approvals;the timing of product launches;expected profile and labeling;potential revenue;and expected breakthrough,best or first-in-class or blockbuster status or expected market entry of our medicines or vaccines;the regulatory landscape;and the competitive landscape are forward-looking and are estimates that are subject to change and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success,availability of supply and competitive and market dynamics.These statements are subject to risks,uncertainties and other factors that may cause actual results to differ materially from past results,future plans and projected future results.Additional information regarding these and other factors can be found in Pfizers Annual Report on Form 10-K for the fiscal year ended December 31,2021 and its subsequent reports on Form 10-Q,including in the sections thereof captioned“Risk Factors”and“Forward-Looking Information and Factors That May Affect Future Results”,as well as in our subsequent reports on Form 8-K,all of which are filed with the U.S.Securities and Exchange Commission and available at www.sec.gov and.Potential risks and uncertainties also include global economic and/or geopolitical instability,foreign exchange rate fluctuations and inflationary pressures and the impact of COVID-19 on our sales and operations,including impacts on employees,manufacturing,supply chain,marketing,research and development and clinical trials.The forward-looking statements in this presentation speak only as of the original date of this presentation and we undertake no obligation to update or revise any of these statements.Also,the discussions during this conference call will include certain financial measures that were not prepared in accordance with U.S.generally accepted accounting principles(GAAP).Additional information regarding non-U.S.GAAP financial measures can be found on slides 29-32 and in our earnings release furnished with Pfizers Current Report on Form 8-K dated January 31,2023.Any non-U.S.GAAP financial measures presented are not,and should not be viewed as,substitutes for financial measures required by U.S.GAAP,have no standardized meaning prescribed by U.S.GAAP and may not be comparable to the calculation of similar measures of other companies.Todays discussions and presentation are intended for the investor community only;they are not intended to promote the products referenced herein or otherwise influence healthcare prescribing decisions.Definitive conclusions cannot be drawn from cross-trial comparisons or anticipated data as they may be confounded by various factors and should be interpreted with caution.All trademarks in this presentation are the property of their respective owners.Opening RemarksAlbert BourlaChairman and Chief Executive Officer5Fourth Quarter 2022 Earnings2022 Was an Outstanding Year for PfizerHistoric RevenuesAcceleratingR&D$100B First time in our 174-year history1.3BPatients treated globally with our medicines and vaccines1Patients TreatedMaintained industry-leading clinical success rates and further improved cycle times1The Patients Treated metric is calculated from Pfizer and third-party datasets.Figures may be limited given the coverage provided by external sources(e.g.calendar duration,geographic&product coverage).Numbers are estimates and assume US-like product usage and in some cases use global volume,daily dosage and#of treatment days to facilitate calculations and to extend applicability for the Rest of World.Methodologies to calculate estimates may vary by product type given the nature of the product and available data.Patients taking multiple Pfizer products may be counted as multiple patients towards total.Numbers include Access&Affordability patient estimates.Historical estimates may periodically be subject to revision due to restatements in the underlyingdata source.Ten Best Employer Lists6Fourth Quarter 2022 EarningsFY 2022 Revenues:Key Growth Drivers$1.7B*opU.S.$1.7B,*Intl$38M,*op$6.5B 14%opU.S.$3.8B, 21%Intl$2.7B, 5%op$2.4B 29%opU.S.$1.2B, 37%Intl$1.2B, 22%opAdult*Indicates year-over-year growth calculation not meaningful.1See Slides 29-32 for definitions.2Eliquis Alliance revenues&direct sales.3Vyndaqel family includes global revenues from Vyndaqel,as well as revenues for Vyndamax in the U.S.and Vynmac in Japan.4 Reflects revenues since October 2022,when we acquired these products.3$18.9B*opU.S.$10.5B,*Intl$8.4B,*op$37.8B 10%opU.S.$8.8B, 12%Intl$29.0B, 9%op$213M*opU.S.$211M,*Intl$2M,*op$73M*opU.S.$72M,*Intl,12family4447Fourth Quarter 2022 EarningsAnticipated Near-Term Growth Excluding COVID-19 Products(2023 Guidance)7-9%*Excluding COVID-19 products and FX impactComprised of:Potential new launches Newly acquired products In-line productsExpect Strong RevenueOp Growth ex-COVID*Key Recent andPotential LaunchesIncreased SI&AInvestments.to support up to 19 recent and potential launches through H1 20241Products from recent BD activity:etrasimod Nurtec ODT/Vydura zavegepant OxbrytaPotential launches:RSV for older adults elranatamab ritlecitinib Prevnar 20 pediatricNote:Preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success andavailability of supply.1 Through H1 2024,we expect to have up to 19 new products or indications in the market including the five for which we have already begun co-promotion orcommercialization in 2022.See slide 37 in Appendix.2Anticipate expansion of indication to adolescents(12-18 year olds)in U.S.in 2023,if approved.$1.3BRecent launches:Cibinqo adult28Fourth Quarter 2022 EarningsAnticipated Long-Term Growth Excluding COVID-19 Products*For illustrative purposes only and not intended to be at scale.All values at constant exchange rates.1Assumes actual 2022 non-COVID revenues($43.6B)and 2022-2025 CAGR of 6%.Excludes 2022-2025 BD.2 Internal expected negative LOE impact from products with a 2021 total revenue base of$18B as shown on slide 36 in Appendix.3 Internal 2030 risk-adjusted revenue expectations for NME and new indications launches,excluding COVID-19 vaccine BA.4/BA.5 variant,as shown on first twosections of slide 37 in Appendix.4Risk-adjusted 2030 revenue goal from BD deals.5Potential 2030 risk-adjusted revenues for new product launches as shown on slide 38 in Appendix.Note:Preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success andavailability of supply.LOE=Loss of Exclusivity;NME=New Molecular Entity;BD=Business DevelopmentIllustrative*$25B4$20B3$17B2$52B122-25 CAGR 6%with new launchesNew launches$XB5$84B25-30 CAGR 10%$70B25-30 CAGR 6%Current products9Fourth Quarter 2022 EarningsAnticipated Long-Term COVID-19 U.S.VaccinationsCOVID Vx OnlyImpact of COVID/Flu ComboU.S.Population=331M12022Actual22023Expected2024Expected2025 Expected3,42026 Expected3,4Est.%Population Vaccinated for COVID-1931$%0%Est.#People Vaccinated for COVID-19(M)104798299132Est.Average Doses/Vaccinated Patient1.41.31.31.21.2Total Market Doses Administered(M)144102104121153Est.Pfizer Market Share(%)64dddd%Total Pfizer Doses Administered(M)9265677798Note:Expected timing;all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial and regulatory success and availability of supply.1 World Population Prospects-Population Division-United Nations,data accessed April 2022.2Centers for Disease Control and Prevention-COVID Data Tracker and Pfizer internal analysis.3Assumes successful development,approval and launch of COVID/Influenza mRNA combination vaccine.4 Includes COVID/Influenza mRNA combination vaccine10Fourth Quarter 2022 EarningsCustomer inventorybuildDosesSold12Anticipated Long-Term Comirnaty U.S.Doses SoldCustomerinventoryabsorptionIllustrative and Not to ScaleNote:Expected timing;all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial and regulatory success and availability of supply.1Pandemic Price2 In 2023,we expect the majority of sales in the U.S.to be at commercial price,except for relatively minor deliveries under the last U.S.Government contract.3Commercial PriceDosesUsedDosesSold2DosesUsedDosesSold3DosesUsedDosesSold3DosesUsedDosesSold3DosesUsed11Fourth Quarter 2022 EarningsAnticipated Long-Term Global COVID-19 Oral Therapies Utilization(Excluding China)2022 Benchmark2023 Expected2024 Expected2025 Expected2026 ExpectedEst.#of Total Reported Symptomatic Infections(M)1101112114117119Est.%of Symptomatic Patients Treated with Oral Therapy12!7!%Est.#of Symptomatic Patients Treated with Oral Therapy(M)14219222526Est.Paxlovid Share of Oral Antiviral Market86%2(approaching 91%at year end)*90%Est.Total Demand for Paxlovid(treatment courses in M)122,317192121Note:Expected timing;all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial and regulatory success and availability of supply.1Varied in 2022 depending on how markets changed their approach to reporting infections,where PAXLOVID is available.Only includes individuals age 12 /18 where authorized/approved in accordance with local labeling2Derived from IQVIA and internal market research.3Based on supply constraints in Q1 2022,resulting in 9 months of Paxlovid utilization during the year.*In major markets12Fourth Quarter 2022 EarningsCustomer inventorybuildTherapiesSold1TherapiesUsed2Anticipated Long-Term Global Paxlovid Treatment Courses Sold(Excluding China)Customer inventoryabsorptionIllustrative and Not to ScaleTherapiesSold2TherapiesUsedTherapiesSold3TherapiesUsedTherapiesSold3TherapiesUsedTherapiesSold3TherapiesUsedNote:Expected timing;all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial and regulatory success and availability of supply.1Pandemic Price2 2023 will be a blend of pandemic price and commercial price.3Commercial Price13Fourth Quarter 2022 EarningsIncreased Demand for Paxlovid in China Since Fiscal 2022Fiscal 20221Dec 2022-Mar 2023From April 2023New but uncertain market opportunity,shipped only tens of thousands of coursesGovernment-Reimbursement Pre-NRDL2;since December*we shipped millions of courses,expect this to continue through March*first month of non-U.S.fiscal yearPotential for Private Market Self-Pay Sales via non-government hospitals and channels1See Slides 29-32 for definitions.2National Reimbursement Drug List.14Fourth Quarter 2022 EarningsFurther Strengthening our ROI for R&DDelivering PotentiallyHigher R&DROIs vs.PastReaching Potentially Larger Opportunities on AverageGoal to further improvecycle times AcceleratingEnd-to-EndCycle TimesSustaining Industry-LeadingEnd-to-EndSuccess Rates1Reducing Development Cost per Molecule2! 1020215%PfizerIndustryKey Drivers GLP-1 elranatamab mRNA&respiratory Vx IFN-1FIH to Approval success rates and median phase cycle times are based on 3-year rolling cohort for Phase 1 and 5-year rolling cohort for Phase 2 to Registration.The analysis is at the new molecular entity(NME)level.The“industry”in this analysis was based on the Pharmaceutical Benchmarking Forums companies-Current participants:AbbVie,Inc.;Astellas Pharma,Inc.;Bayer AG;Bristol-Myers Squibb Company;Eli Lilly and Company;Gilead Sciences,Inc.;Johnson&Johnson Corporation;Merck&Co,Inc.;Novartis AG;Pfizer;Roche,Inc.and Sanofi S.A.Industry-leading is defined as Top Quartile amongst CMR Benchmark.FIH=First in Human;NME=New Molecular Entity;AI=Artificial Intelligence;ML=Machine Learning Accelerating recruitment Innovating trial design Leveraging AI/ML,Digital Optimizing regulatory engagementFinancial ReviewDavid DentonChief Financial Officer,Executive Vice President16Fourth Quarter 2022 EarningsQuarterly Income Statement HighlightsRevenuesAdjusted1R&D ExpensesAdjusted1Cost of SalesDiluted EPSAdjusted1SI&A ExpensesFX Impacts$24.3B 13%opPrimarily driven by Comirnaty1in dev markets,Paxlovid ex-U.S.,Prevnar family in U.S.,Nurtec ODT/Vydura and Oxbryta,Vyndaqel family,Eliquis in U.S.,and Prevenar 13 in EM;ex-Comirnaty and Paxlovid,revenues grew 5%op$9.5B 9%op39%2-1.7 pptsDecrease in COS%primarily due to favorable changes in sales mix,including increased sales of Paxlovid and higher alliance revenues,as well as favorable FX impactsRep.1$0.87 48j.1$1.14 69%opIncrease in Adjusted Diluted EPS1was primarily driven by strong sales growth and lower acquired in-process R&D expenses$3.6B 7%opPrimarily driven by increased costs to support various vaccine and oncology programs and recently acquired assets$4.4B 17%opPrimarily driven by increased investments to support Paxlovid,Comirnaty1and recently acquired and launched productsRevenue$2.5B-11j.Dil.EPS1$0.19-24%Primarily driven by USD strengthening against Euro,Japanese Yen,and U.K.Pound1 See Slides 29-32 for definitions.2 Adjusted1cost of sales as a percentage of revenues(COS%).EM=Emerging Markets17Fourth Quarter 2022 Earnings2023 Financial Guidance1:Revenues and Adjusted1Diluted EPSMidpoint of Revenue Range Reflects 31%Op Decline Compared to 2022 Revenues;Midpoint of Adjusted Diluted EPS1Range Reflects 49%Op DeclineCompared to 20221 See Slides 29-32 for definitions and for additional information regarding Pfizers 2023 financial guidance.2022 Actual Results2023 Financial GuidanceRevenues$100.3 billion$67.0 to$71.0 billionOperational1Growth/(Decline)vs.Prior Year30%(33%)to(29%)Growth/(Decline)vs.Prior Year23%(33%)to(29%)Adjusted1Diluted EPS$6.58$3.25 to$3.45Operational1Growth/(Decline)vs.Prior Year71%(50%)to(47%)Growth/(Decline)vs.Prior Year62%(51%)to(48%)18Fourth Quarter 2022 Earnings2023 Financial Guidance1:Other ComponentsAdjusted1Cost of Sales as a Percentage of Revenues28.0%to 30.0justed1SI&A Expenses$13.8 to$14.8 BillionAdjusted1R&D Expenses$12.4 to$13.4 BillionAcquired IPR&D Expenses1,2Approximately$0.1 billionAdjusted1Other(Income)/DeductionsApproximately$1.5 billion of incomeEffective Tax Rate on Adjusted1IncomeApproximately 15.0%1 See Slides 29-32 for definitions and for additional information regarding Pfizers 2023 financial guidance.2We do not budget acquired IPR&D for unsigned deals.19Fourth Quarter 2022 Earnings2023 Financial Guidance:Key Assumptions(1 of 2)Key Assumptions for 2023 GuidanceCommentaryOperational revenue growth compared to 2022 excluding COVID-19 products7%to 9%Growth expected to be split among each of three categories:launch,acquired and in-line productsIncremental SI&A spend to support anticipated new launches,acquired assets and commercial launch of COVID-19 products$1.3 billionInvestments to support short-and long-term growth aspirationsIncremental R&D spend to support high-value pipeline programs and acquired assets$1.5 billionIncludes,among others:GLP-1,elranatamab,respiratory combination vaccines20Fourth Quarter 2022 EarningsComirnaty-2023 Guidance AssumptionsCommentaryEstimated proportion of U.S.population that receives a vaccine24%Compared to 31%in 2022;Decrease due to fewer primary vaccinations and lower complianceEstimated number of doses per vaccinated person per year,on average1.3 dosesCompared to 1.4 dosesin 2022;Decrease due to fewer primary vaccinationsEstimated Comirnaty market share-U.S.64%Consistent with share achieved with most recent bivalent booster in 2022Estimated total demand for Comirnaty doses-U.S.(includes use of existing government supply)65 million dosesCompared to 92 million dosesin 2022Assumed timing for delivery of the contracted doses of Comirnaty to the European CommissionRe-phased over multiple years(not all in 2023)Negotiations on re-phasing of delivery timelines are ongoingPaxlovid-2023 Guidance AssumptionsCommentaryEstimated number of total reported symptomatic infections-global*,excluding China112 millionCompared to 110 millionin 2022;Increase due to expected waning of population immune protection due to reduced vaccination ratesEstimated proportion of symptomatic COVID-19 patients treated with an oral antiviral treatment-global*,excluding China17%Compared to 12%in 2022(partial year only);Increase due to greater awareness/education and full-year implementationEstimated Paxlovid share of oral antiviral market-global*,excluding China90%Consistent with share achieved in 2022Estimated total demand for Paxlovid-global*,excluding China(includes use of existing government supply)17 million coursesCompared to 12 million coursesin 2022(partial year only);Increase due to broad product availability,greater awareness/education and full-year implementationPaxlovid sales to ChinaAssumes no sales after April 1,2023Temporary National Reimbursement Drug List currently set to end on April 1,2023General-2023 Guidance AssumptionCommentaryEstimated timing for transitioning Comirnaty and Paxlovid to commercial market in the U.S.Second half of 2023Assumes prior absorption of existing government supply2023 Financial Guidance:Key Assumptions(2 of 2)*Only includes markets where Paxlovid is available,and only includes individuals age 12 /18 where authorized/approved in accordance with local labeling.Actual 2022 market data is derived from a combination of public data sources and internal market research.Scientific UpdatesMikael DolstenChief Scientific Officer and President,Worldwide Research,Development and Medical22Fourth Quarter 2022 EarningsDriving Change From A Position of StrengthDelivering potential breakthroughs on a new scalePursuing External InnovationFocus where our scientific and business capabilities are uniqueInnovate in medicine design and lightspeed development to further improve industry leading success rates and cycle timesRethink our approach to Rare Disease Honing Internal FocusLeverage the best external and internal science to reach the most patients,as quickly as possibleActively pursue external biotech innovation and emerging platforms Aggressively access external differentiated medicines and vaccines23Fourth Quarter 2022 EarningsTransformative Potential in Inflammation&ImmunologyNear-term potential blockbusters and early-stage multispecific monoclonal antibody platform innovationPotential Blockbuster Launches and Pivotal StartsEtrasimod Ritlecitinib Anti-IFN-Phase 1 IV PK Profiles:Encouraging profile at initial dose levelsPotential for improved efficacy in Atopic Dermatitis via more potent IL-4/-13 neutralization plus:Expanded breadth of efficacy by blocking TSLPORRapid,enhanced itch reduction by blocking IL-33Next-Wave Pipeline InnovationAtopic Dermatitis Tri-specific mAbsSingle drug targets 3 cytokines Potential for improved efficacy for clinically validated targetsPhase 1 Tri-specific mAb Candidates:Anti-IL-4/-13/TSLP and Anti-IL-4/-13/-33 3mg IV IL4/13/33 3mg IV IL4/13/TSLP mAb:monoclonal antibody;IL:Interleukin;TSLP:Thymic stromal lymphopoietin;IV:IntravenousPreliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success and availability of supply24Fourth Quarter 2022 EarningsPreclinicalPhase 1Phase 2RegistrationalOncologyMultiple Myeloma ElranatamabLymphomas,MM TTI-622Sickle CellSickle Cell Disease VOC InclacumabSickle Cell Disease GBT-601Sickle Cell Disease VOC Anti-E-SelectinHemophiliaHemophilia B FidaVec GTxHemophiliaA GiroctoVec GTxHemophilia A/B MarstacimabStrengthening Leadership in HematologyIn-line portfolio and pipeline with blockbuster potentialSelect examplesGTx:Gene Therapy;MM:Multiple myeloma;VOC:Vaso-occlusive crisis;Preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success and availability of supply Study Phase:25Fourth Quarter 2022 EarningsElranatamab:Potential BCMA Leadership in Multiple Myeloma Transformative potential based on Phase 2 MagnetisMM-3 data at ASH 20221Achieved in Heavily Pre-treated MM Patient Population,Representing Highest Unmet NeedPotential Differentiation in Bi-specific mAb Class in Efficacy&Safety2Objective Response RateEarly and Deep Responses61%ORR1.Abstract 159 ASH 2022;BCMA:B Cell Maturation Antigen;MM:Multiple Myeloma;ASH:American Society of Hematology;CR:Complete Response;ORR:Objective Response Rate;PR:Partial Response;sCR:stringent Complete Response;VGPR:Very Good Partial Response;CRS:Cytokine Release Syndrome;BsAb:Bispecific antibody;Expected timing:all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success and availability of supply84%Probability of Maintaining Response at 9 monthsManageable Safety Profile56%CRS(all Gr1/2)0%Gr3 CRSPR(5.7)VGPR(27.6)CR(14.6)sCR(13.0)020406080Cohort A(n=123)Patients,%CR:27.6%VGPR:55.3%Potential Approval in 2023 for triple-class exposed patients Estimated potential peak revenue over$4B across multiple treatment lines with studies ongoing2Cannot draw definitive conclusions without head-to-head data26Fourth Quarter 2022 EarningsGBT-601:Transformative Potential in Sickle Cell DiseasePhase 1 data support potentially best-in-class profile of once-daily,oral,next-generation candidateASH 2022 Oral Presentation 10;ASH:American Society of Hematology;Hb:Hemoglobin;HbS:sickle hemoglobin;MAD:Multiple Ascending Dose;RBC:Red Blood Cell;qd:once daily;Cmax:maximum concentration;Expected timing:all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success and availability of supply%Hb Occupancy After Multiple Doses of GBT-601 in Phase 1 MAD StudyPhase 1 Study:Multiple ascending doses to reach a 30%Hb occupancy with maintenance doses of 50mg,100mg and 150mgNext-Generation HbS Polymerization Inhibitor Phase 1 MAD Data Presented at ASH 2022 Demonstrate:Improvements in hematocrit and Hb levels over timeDose-responsive increases in Hb occupancyMean Hb occupancy greater than 30%at 100mg and 150mg maintenance dosesImprovements in RBC health at 100mg and 150mgWell-tolerated daily maintenance dosesPhase 2/3 Study Ongoing with Potential NDA Approval in 2027a.Hb occupancy is calculated from the start of week 5,week 4,and week 6 of daily dosing for the 50,100,and 150 mg dose levels,respectively.Preliminary analysis based on apparent Cmax.b.Hb occupancy data from patient 0003 at 150 mg were excluded due to lack of adherence.c.Two patients did not move forward with the MAD-3 portion of the study because they initiated disease-modifying therapy before the start of MAD-3.27Fourth Quarter 2022 EarningsExpanding Leadership in Breast CancerNext-generation oral CDK4i:Potential to address unmet needs in hormonally driven cancersEarly efficacy and durability data in combination with ETConfirmed ORR nearly 30R approximately 50%Median PFS:24.7 weeksInvestigator-assessedWell tolerated with reduced hematologic AEs based on early data Gr 3 neutropenia=15%Potential to Improve Upon Current Standard of Care by Maximizing CDK4 Target Coverage12Additional data from complementary portfolio of next-wave breast cancer candidates anticipated H1 2023 CDK4i randomized study initiation anticipated before year-end 2023CDK4i:cyclin dependent kinase 4 inhibitor;CDK4:cyclin dependent kinase 4;ET:endocrine therapy;HR :hormone receptor positive;HER2:human epidermal growth factor receptor 2;MBC:metastatic breast cancer;LET:letrozole;PR:partial response;ORR:overall response rate;CBR:clinical benefit rate;PFS:progression free survival;AEs:adverse events;Expected timing:all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success and availability of supplyBaselineCDK4i LET Week 24*Patient:ER /HER2-metastatic breast cancerPrior therapies:ET CDK4/6 inhibitor,fulvestrant,chemotherapy Confirmed PR,on treatment for 47 weeksCDK4i PF-07220060 Phase 1 Dose Escalation28Fourth Quarter 2022 EarningsPAXLOVID NDA Approval2ndGen COVID-19 Antiviral Ph 2 Study StartSisunatovir RSV Antiviral Ph 3 Study StartIBRANCE PATINA HER2 Ph 3 DataARV-471 Ph 3 Study StartCDK4i Ph 2 DataKAT6i Ph 2 DataZavegepant Acute Migraine LaunchDanuglipron(GLP-1)Ph 2b Data Lotiglipron(PF1532)(GLP-1)Ph 2b DataEtrasimod UC LaunchRitlecitinib AA LaunchCIBINQO Adolescent AD LaunchAnti-IFN Ph 3 StartMenABCWY LaunchPREVNAR 20 Peds LaunchOlder Adult and Maternal RSV LaunchesGroup B Strep Ph 3 StartmodFlu mRNA Ph 3 DataZoster mRNA Ph 1/2 Study StartRespiratory Combo Study StartInflammation&ImmunologyStrong Execution and Next Wave CandidatesAnticipating a milestone rich 18 months across potential launches and key pipeline catalystsOncology:Breast CancerAnti-InfectivesVaccinesInternal MedicineExpected timing:all anticipated milestones are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success,ACIP,MMWR publication,and availability of supply;Ph:Phase;GTx:Gene Therapy;RSV:Respiratory syncytial virus;UC:Ulcerative colitis;AA:Alopecia areata;AD:Atopic dermatitis;NDA:US FDA New Drug Application29Fourth Quarter 2022 EarningsFootnotes(Page 1 of 4)(1)As used in this document,“Comirnaty”refers to,as applicable,and as authorized or approved,the Pfizer-BioNTech COVID-19 Vaccine,the Pfizer-BioNTech COVID-19 Vaccine,Bivalent(Original and Omicron BA.4/BA.5),the Comirnaty Original/Omicron BA.1 Vaccine,and Comirnaty Original/Omicron BA.4/BA.5 Vaccine.“Comirnaty”includes direct sales and alliance revenues related to sales of the above-mentioned vaccines,which are recorded within Pfizers Primary Care customer group.It does not include revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech,which are included in the Pfizer CentreOne contract development and manufacturing organization.Revenues related to these manufacturing activities totaled$80 million and$188 million for the fourth-quarter and full-year 2022,respectively,and$46 million and$320 million for the fourth-quarter and full-year 2021,respectively.(2)Revenues is defined as revenues in accordance with U.S.generally accepted accounting principles(GAAP).Reported net income and its components are defined as net income attributable to Pfizer Inc.and its components in accordance with U.S.GAAP.Reported diluted earnings per share(EPS)is defined as diluted EPS attributable to Pfizer Imon shareholders in accordance with U.S.GAAP.(3)Adjusted income and Adjusted diluted EPS are defined as U.S.GAAP net income attributable to Pfizer Imon shareholders and Reported diluted EPS attributable to Pfizer Imon shareholders before the impact of amortization of intangible assets,certain acquisition-related items,discontinued operations and certain significant items.See the reconciliations of certain GAAP Reported to Non-GAAP Adjusted information for fourth quarter and the full-year 2022 and 2021 in Pfizers earnings release furnished with Pfizers Current Report on Form 8-K dated January 31,2023.Adjusted income and its components and Adjusted diluted EPS measures are not,and should not be viewed as,substitutes for U.S.GAAP net income and its components and diluted EPS(2).See the Non-GAAP Financial Measure:Adjusted Income sections of Managements Discussion and Analysis of Financial Condition and Results of Operations in Pfizers 2021 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarterly period ended October 2,2022 and the Non-GAAP Financial Measure:Adjusted Income section of Pfizers earnings release furnished with Pfizers Current Report on Form 8-K dated January 31,2023 for a definition of each component of Adjusted income as well as other relevant information.(4)Pfizer does not provide guidance for GAAP Reported financial measures(other than revenues and acquired IPR&D expenses)or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP Reported financial measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of unusual gains and losses,certain acquisition-related expenses,gains and losses from equity securities,actuarial gains and losses from pension and postretirement plan remeasurements,potential future asset impairments and pending litigation without unreasonable effort.These items are uncertain,depend on various factors,and could have a material impact on GAAP Reported results for the guidance period.Financial guidance for full-year 2023 reflects the following:Does not assume the completion of any business development transactions not completed as of December 31,2022,except for signed transactions,if any,through mid-January 2023,which are expected to give rise to acquired in-process R&D(IPR&D)expenses during fiscal 2023.Reflects an anticipated negative revenue impact of$0.3 billion due to recent and expected generic and biosimilar competition for certain products that have recently lost patent protection or that are anticipated to lose patent protection during fiscal-year 2023.30Fourth Quarter 2022 EarningsFootnotes(Page 2 of 4)Exchange rates assumed are as of mid-January 2023.Financial guidance reflects the anticipated unfavorable impact of approximately$0.2 billion on revenues and approximately$0.02 on Adjusted diluted EPS(3)as a result of changes in foreign exchange rates relative to the U.S.dollar compared to foreign exchange rates from 2022.Guidance for Adjusted diluted EPS(3)assumes diluted weighted-average shares outstanding of approximately 5.75 billion shares,and assumes no share repurchases in 2023.(5)Pfizers fiscal year-end for international subsidiaries is November 30 while Pfizers fiscal year-end for U.S.subsidiaries is December 31.Therefore,Pfizers fourth quarter and full year for U.S.subsidiaries reflects the three and twelve months ended on December 31,2022 and December 31,2021 while Pfizers fourth quarter and full year for subsidiaries operating outside the U.S.reflects the three and twelve months ended on November 30,2022 and November 30,2021.(6)Beginning in the third quarter of 2022,Pfizer made several organizational changes to further transform its operations to better leverage its expertise in certain areas and in anticipation of potential future new product or indication launches.Biopharma,Pfizers innovative science-based biopharmaceutical business,is operating under a new commercial structure which is designed to better support and optimize performance across three broad customer groups:Primary Care,consisting of the former Internal Medicine and Vaccines product portfolios,products for COVID-19 prevention and treatment,and potential future mRNA and antiviral products.Specialty Care,consisting of the former Inflammation&Immunology,Rare Disease and Hospital(excluding Paxlovid)product portfolios.Oncology,consisting of the former Oncology product portfolio.(7)The following business development activity,among others,impacted financial results for the current or prior fiscal year:On October 5,2022,Pfizer announced the completion of its acquisition of Global Blood Therapeutics,Inc.(GBT)for$68.50 per share in cash,for payments of approximately$5.3 billion,net of cash acquired,plus repayment of third-party debt of$331 million for a total net cash deployment of approximately$5.6 billion.On October 3,2022,Pfizer announced the completion of its acquisition of all the outstanding shares of Biohaven Pharmaceutical Holding Company Ltd.(Biohaven)not already owned by Pfizer for$148.50 per share in cash,for payments of approximately$11.4 billion,net of cash acquired,plus repayment of third-party debt of$863 million and redemption of Biohavens redeemable preferred stock for$495 million,for a total net cash deployment of approximately$12.7 billion.Effective immediately prior to the closing of the acquisition,Biohaven completed the spin-off of Biohaven Ltd.(NYSE:BHVN),a new company that retained Biohavens non-calcitonin gene-related peptide(CGRP)development stage pipeline compounds.Shares of Biohaven Ltd.were distributed to Biohavens shareholders.Pfizer,a Biohaven shareholder,received a pro rata portion of the companys shares in the distribution and currently owns approximately 1.5%of Biohaven Ltd.On July 18,2022,GlaxoSmithKline plc.(GSK)completed its demerger of the Consumer Healthcare joint venture which became Haleon,an independent,publicly traded company listed on the London Stock Exchange that holds the joint Consumer Healthcare business of GSK and Pfizer following the demerger.For additional information,see Note 2C to the condensed consolidated financial statements in Pfizers Quarterly Report on Form 10-Q for the quarterly period ended October 2,2022.31Fourth Quarter 2022 EarningsFootnotes(Page 3 of 4)On June 9,2022,Pfizer announced the completion of its acquisition of ReViral Ltd.,a privately held,clinical-stage biopharmaceutical company focused on discovering,developing and commercializing novel antiviral therapeutics that target respiratory syncytial virus,for a total consideration of up to$536 million,including upfront and development milestones.In connection with the closing of the transaction,Pfizer recorded$426 million of acquired IPR&D expenses in its international third-quarter 2022.On March 11,2022,Pfizer announced the completion of its acquisition of Arena Pharmaceuticals,Inc.,a clinical-stage company developing innovative potential therapies for the treatment of several immuno-inflammatory diseases,for$100 per share,in cash.The total fair value of the consideration transferred was$6.6 billion($6.2 billion,net of cash acquired),plus$138 million in payments to Arena employees for previously unvested equity compensation awards recognized as an expense,for a total net cash deployment of$6.4 billion.On December 31,2021,Pfizer completed the sale of its Meridian subsidiary,the manufacturer of EpiPen and other auto-injector products,which generated approximately$300 million in annual revenues and which previously had been managed within the former Hospital therapeutic area.Beginning in the fourth quarter of 2021,the financial results of Meridian are reflected as discontinued operations for all periods presented.On December 24,2021,Pfizer entered into a multi-year research collaboration with Beam Therapeutics Inc.(Beam)to utilize Beams in vivo base editing programs,which use mRNA and lipid nanoparticles,for three targets for rare genetic diseases of the liver,muscle and central nervous system.Under the terms of the agreement,Pfizer paid Beam a$300 million upfront payment.If Pfizer elects to opt in to licenses for all three targets,Beam would be eligible for up to an additional$1.05 billion in development,regulatory and commercial milestone payments for a potential total deal consideration of up to$1.35 billion.Beam is also eligible to receive royalties on global net sales for each licensed program.On November 17,2021,Pfizer acquired all outstanding shares,warrants,options and deferred shares not already owned by Pfizer of Trillium Therapeutics Inc.,a clinical-stage immuno-oncology company developing therapies targeting cancer immune evasion pathways and specific cell targeting approaches,for a price of$18.50 per share in cash,for total consideration of$2.0 billion,net of cash acquired.Pfizer accounted for the transaction as an asset acquisition since the lead asset,TTI-622,represented substantially all of the fair value of the gross assets acquired.As a result,Pfizer recorded a$2.1 billion charge in fourth-quarter 2021,representing the acquired in-process R&D asset.On November 9,2021,Pfizer and Biohaven announced a strategic collaboration and license agreement for Pfizer to commercialize rimegepant and zavegepant for the treatment and prevention of migraines outside of the U.S.,subject to regulatory approval.Upon the closing of the transaction on January 4,2022,Pfizer paid Biohaven$500 million,including an upfront payment of$150 million and an equity investment of$350 million.Pfizer recognized$263 million for the upfront payment and premium paid on its equity investment in acquired IPR&Dexpenses.On July 22,2021,Arvinas Inc.(Arvinas)and Pfizer announced a global collaboration to develop and commercialize ARV-471,an investigational oral PROTAC(PROteolysis TArgeting Chimera)estrogen receptor protein degrader.The estrogen receptor is a well-known disease driver in most breast cancers.Under the terms of the agreement,Pfizer paid Arvinas$650 million upfront and made a$350 million equity investment in Arvinas.Arvinas is also eligible to receive up to$400 million in approval milestones and up to$1 billion in commercial milestones.The companies will equally share worldwide development costs,commercialization expenses and profits.(8)References to operational variances in this presentation pertain to period-over-period changes that exclude the impact of foreign exchange rates.Although exchange rate changes are part of Pfizers business,they are not within Pfizers control and since they can mask positive or negative trends in the business,Pfizer believes presenting operational variances excluding these foreign exchange changes provides useful information to evaluate Pfizers results.32Fourth Quarter 2022 EarningsFootnotes(Page 4 of 4)(9)Paxlovid and emergency uses of the Pfizer-BioNTech COVID-19 Vaccine or the Pfizer-BioNTech COVID-19 Vaccine,Bivalent(Original and Omicron BA.4/BA.5),have not been approved or licensed by the FDA.Paxlovid has not been approved,but has been authorized for emergency use by the FDA under an EUA,for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients(12 years of age and older weighing at least 40 kg 88 lbs)with positive results of direct SARS-CoV-2 viral testing,and who are at high-risk for progression to severe COVID-19,including hospitalization or death.Emergency uses of the Pfizer-BioNTech COVID-19 Vaccine and the Pfizer-BioNTech COVID-19 Vaccine,Bivalent have been authorized by the FDA under an EUA to prevent COVID-19 in individuals aged 6 months and older.The emergency uses are only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of the medical product during the COVID-19 pandemic under Section 564(b)(1)of the FFDCA unless the declaration is terminated or authorization revoked sooner.Please see the EUA Fact Sheets at and www.cvdvaccine-.The information contained on our website or any third-party website is not incorporated by reference into this presentation.Appendix34Fourth Quarter 2022 EarningsQ4 2022 Summary Figures(1 of 2)Revenue by Therapeutic Area($M)Total$24,290Top 7 Products by Revenue1($M)Primary CareSpecialty CareOncologyPC1Total20%-3%-3%1%Operational GrowthTotal$24,290Comirnaty2PaxlovidPrevnar family3Eliquis4IbranceVyndaqel family5Xeljanz3%*40%5%-41%-28%Operational Growth*Indicates calculation not meaningful.1 Product percentages are calculated using total company revenue as denominator.2 See Slides 29-32 for definitions.3Prevnar family include revenues from Prevnar 13/Prevenar 13(pediatric and adult)and Prevnar 20/Apexxnar(adult).4 Eliquis alliance revenues&direct sales.5Vyndaqel family includes global revenues from Vyndaqel,as well as revenues for Vyndamax in the U.S.and Vynmac in Japan.PC1=Pfizer CentreOne243535Fourth Quarter 2022 EarningsQ4 2022 Summary Figures(2 of 2)Revenue by Therapeutic Area,Ex-COVID1($M)Total$11,12746%of Total RevenueRevenue by Geography($M)Primary CareSpecialty CareOncologyPC1Total22%-3%-3%1%5%Operational Growth Ex-COVID1Total$24,290US2Dev EUDev ROWEMTotal10Y%-51%Operational Growth1 Excludes revenues from Comirnaty direct sales and alliance revenues and Paxlovid.Product percentages are calculated using$11,127Mas denominator,as opposed to total company revenue.2U.S.%presented here is%Reported Growth.PC1=Pfizer CentreOne;US=United States;EU=European Union;ROW=Rest of the World;EM=Emerging Markets36Fourth Quarter 2022 EarningsKey Products Included in the Expected$17 Billion in LOE Revenue Declines from 2025-2030Product2021 WW Revenues($millions)2021 U.S.Revenues($millions)2021 Dev.EU Revenues($millions)Year of Expected U.S.LOEYear of Expected EU LOEEliquis1$5,970$3,160$1,5202026*2026Inlyta$1,002$599$18120252025Ibrance$5,437$3,418$1,04420272028Xeljanz$2,455$1,647$30820252028Xtandi2$1,185$1,185N/A2027N/AVyndaqel family3$2,015$909$5722024(2028 pending PTE)2026*Date is based on the composition of matter patent.See Pfizers 2021 Annual Report on Form 10-K filed with the U.S.Securities and Exchange Commission for more information about potential scenarios that could affect the timing of generic entry in the U.S.1Eliquis alliance revenues&direct sales.2Xtandi alliance revenues.3Vyndaqel family includes global revenues from Vyndaqel,as well as revenues for Vyndamax in the U.S.and Vynmac in Japan.PTE=Patent Term Extension LOE=Loss of Exclusivity37Fourth Quarter 2022 EarningsNew Launches/Co-promotions and Potential Product Launches1Note:All dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success and availability of supply.1.Through H1 2024,we expect to have up to 19 new products or indications in the market including the five for which we have already begun co-promotion orcommercialization in 2022.2.Internal 2030 risk-adjusted revenue expectations for NME and new indications launches,excluding COVID-19 vaccine BA.4/BA.5variant.3.Risk-adjusted 2030 revenue goal from BD deals.4.Expected to contribute toward risk-adjusted 2030 revenue goal of$25B from BD deals.5.Through a standalone detailing arrangement.Vaccines Inflammation/Immunology OncologyRare DiseaseInternal Medicine$20BPotential Revenueexpected for NME andnew indications by 20302$25BPotential Revenueexpected from newBD deals by 203032022Ngenla(Ex-US)Growth Hormone Deficiency2023RitlecitinibAlopeciaAreata2023ElranatamabTriple Class Relapsed or Refractory Multiple Myeloma1H 2023*RSV Adults(60 )VaccinePrevention of RSV-associated LRTI in adults 60 yrs2H 2023*RSV Maternal VaccinePrevention of RSV-associated LRTI in infantsvia maternal immunization2H 2023*Pentavalent Meningococcal VaccinePrevention of meningococcal infection by serogroups ABCWY2023AbriladaAdalimumab Biosimilar2024*mRNA Flu VaccineInfluenzaNew Molecular Entity(NME)LaunchesAug 2022Pfizer co-promoteMyfembree EndometriosisSep 2022COVID-19 vaccine BA.4/BA.5 variantCOVID-192023CibinqoModerate to severe Atopic DermatitisAdolescent2023Braktovi/MektoviNon-Small Cell Lung Cancer(PHAROS)2023Talzenna Xtandi(Talazoparib Enzalutamide)Metastatic castration resistant prostate cancer(TALAPRO2)2023XtandiNon-Metastatic Castration Sensitive Prostate Cancer(EMBARK)1H 2023*Prevnar 20 PedsPrevention of invasive pneumococcal disease,otitis media-PediatricNew IndicationsAug 2022 Pfizer promotion5Nurtec ODT/VyduraAcute treatment of Migraine and preventive treatment of episodic Migraine2023Zavegepant(intranasal)Acute treatment of MigraineOct 2022 with merger closeOxbrytaSickle cell disease2H 2023EtrasimodModerate to severe Ulcerative ColitisRecently Announced Business Development(BD)Deals4*Estimated FDA decision;subject to regulatory approval,ACIP and MMWR to follow.38Fourth Quarter 2022 EarningsIntroductionProduct CandidateAnticipated Indication(s)Expected Potential LaunchNew Molecular Entity(NME)LaunchesDanuglipron or PF1532(oral GLP1s)Type 2 Diabetes,Obesity2024Anti-IFN-Antibody(PF3859)Dermatomyositis,Polymyositis2024COVID/Influenza mRNA Combination Vaccine1COVID-19&Influenza prevention2024Lyme Disease Vaccine(PF405)Lyme disease prevention2024mRNA Shingles Vaccine1Shingles(VZV)prevention2024HemA GTxHemophilia A gene therapy2024HemB GTxHemophilia B gene therapy2024DMD GTxDuchenne Muscular Dystrophy gene therapy2024sasanlimabNon-muscle invasive bladder Cancer2024marstacimabTreatment of Hem A/Hem B 2024ARV-471ER /HER2-BC2024TTI-622(PF801)Hematological malignancies2024Note:Expected timing;all dates are preliminary,subject to change,and subject to,among other risks,assumptions and uncertainties,clinical trial and regulatory success and availability of supply.1 In collaboration with BioNTech;and for COVID influenza combination,pending agreement between the partners.Additional Pipeline Potential Launches Through 2030 Selected Examples39Fourth Quarter 2022 Earnings2022 Financial Guidance vs.ResultsGuidanceResultsRevenues$99.5 to$102.0 billion$100.3 billionAdjusted1Cost of Sales as a Percentage of Revenues33.0%to 34.04.0justed1SI&A Expenses$12.8 to$13.3 billion$13.0 billionAdjusted1R&D Expenses$11.5 to$12.0 billion$11.4 billionAcquired IPR&D Expenses1Approximately$1.4 billion$1.0 billionAdjusted1Other(Income)/DeductionsApproximately$1.8 billion of income$2.0 billion of incomeEffective Tax Rate on Adjusted1IncomeApproximately 12.5.7justed1Diluted EPS$6.40 to$6.50$6.58Met or Exceeded All Components of 2022 Total Company Financial Guidance1 See Slides 29-32for definitions and for additional information regarding Pfizers 2023 financial guidance.40Fourth Quarter 2022 EarningsBolstering the Pipeline with Recent Business Development OpportunitiesYearTherapeutic AreaOrganizationAsset/IndicationStatus Since Close2019BRAFTOVI&MEKTOVI Cancer;LMNA CardiomyopathyApprovals:1;Pivotal Starts:2;FIH:31Cardiomyopathy discontinuedGTx Wilson DiseaseFast Track Designation(FDA);FIH:Dec 2022recifercept AchondroplasiaFailed Ph 2 interim analysis,discontinuedVupanorsen CV risk&severe hypertriglyceridemia2Discontinued and development rights returned to Ionis2020Vaccine Lyme DiseasePh 2 readouts:6,Ph 3 starts:2,Fast Track designationVaccine modRNA Flu3Ph 3 Start:1Vaccine COVID-19Approvals:24;EUAs:15;Ph 3 readouts:14AV-006(ARX-1796)Drug-resistant Gram-negative infectionsPh 1Relugolix Prostate Cancer&Womens HealthApprovals:3;Submissions:2;Ph 3 Readouts:252021Fosmanogepix Invasive fungal infectionsPh 2SPR206 Gram(-)infectionPh 1ER PROTAC Breast CancerPh 2(w.Ibrance);Ph 2(monotherapy dose expansion)TTI-622/621 OncologyPh 1b/2 new combination cohorts initiatedNurtec ODT/Vydura Migraine(outside the U.S.)6Approvals:5Myeloid DR-02 Platform Solid tumorsPre-clinicalEtrasimod GI(UC,Crohns focus)&Other Autoimmune DisordersPh 3 readouts:2;Submissions:3mRNA/Gene EditingPre-clinicalmRNA Program ShinglesPre-clinicalSelect Examples1.Approvals,pivotal starts and FIH apply to multiple assets acquired in Array agreement.2.Ionis fully acquired Akcea in August 2020.3.Transaction executed in 2018.4.2 U.S.approvals for COVID-19 vaccine for 16 and 12-15 yrs.5.Approvals,submissions and Phase 3 readouts apply to Relugolix-Myfembree in Endometriosis.6.Pfizer completed acquisition of Biohaven Pharmaceuticals in October 2022.FIH=First in Human;GTx=Gene Therapy;CV=Cardiovascular;GI=Gastrointestinal;UC=Ulcerative Colitis;modRNA=nucleoside-modified messenger RNA;EUA=Emergency Use AuthorizationOncology Internal MedicineHospitalRare Disease Vaccines Infla/ImmunWe also completed 4 transactions in China in 2020-21 with CStone(equity,development of future assets to be defined,co-promotion for NSCLC),LianBio(equity,future assets to be defined),CanSino(meningococcal vaccine),and Ferring(prostate cancer).41Fourth Quarter 2022 EarningsBolstering the Pipeline with Recent Business Development OpportunitiesYearTherapeutic AreaOrganizationAsset/IndicationStatus Since Close2022RSV antiviral therapeuticsSisunatovir(Ph2);RV299(N-protein inhibitor)(Ph 1)Nurtec ODT,zavegepant,5 pre-clinical CGRP assets Migraine(U.S.and global)Nurtec ODT(on market);zavegepant(PDUFA Q123)&addl Ph2 ongoingSickle Cell DiseaseOxbryta(on market,launched new 300 mg tablets for pediatrics);inclacumab Ph 3;GBT601 Ph 2(Dosing)Vaccine COVID-19/Influenza combinationPhase 1Select ExamplesOncology Internal MedicineHospitalRare Disease Vaccines Infla/ImmunCGRP=Calcitonin Gene-Related Peptide

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康桥汇世：2023年投资市场展望报告（英文版）（31页）.pdf

2023 OUTLOOK Published December 7,2022Introduction2022 has been a difficult year for investors.Equity and bond markets have experienced double-digit declines amid stubbornly high inflation,slowing economic growth,and the war in Ukraine.Recessions in the United States and euro area look increasingly likely in 2023,while the United Kingdom appears to already be in recession and Chinas economy has stalled.Risk assets and bonds may still have some downside given these challenging conditions.Yet as we say good riddance to 2022,we recognize that at least this past year left us with better valuations that may eventually lead to good long-term returns.In periods of market stress,many investors may be best served by focusing on three core activities.First,investors should understand what they own and stress test portfolios to ensure adequate liquidity to meet liabilities,capital calls,and other obligations.Second,investors should consider opportunities to better diversify portfolios.2022 showed the importance of diversification beyond traditional equities and bonds.Many investments,including sovereign bonds,now offer reasonable return and diversification potentiala rare combination in recent years.Finally,investors should look for investment opportunities in markets that have seen significant stress.These markets may also provide opportunities to upgrade manager rosters.In the next pages,we highlight our expectations for 2023.While events will undoubtedly diverge from these expectations to some extent,we are sure of one reality.Thoughtful deci-sionsnot rash actionsduring chaotic environments are what separate top-performing investors from everyone else.OUTLOOK 2023AN OVERVIEW OF OUR 2023 VIEWSOur investment views are rooted in an expectation that the cyclical backdrop will remain challenging in 2023.We believe global economic growth will be weak,with risks skewed to missing the current consensus expectation of 2%.And,while we expect inflation rates will trend downwards in general across those developed countries that experienced pandemic-related surges,we suspect risks are skewed to either match or exceed current consensus expectations,which for the euro area and United States are 6%and 4%,respectively.PORTFOLIO WIDEWe expect most investors should maintain equity allocations in line with policy targets.Consistent with this idea,we believe investors with portfolios that are more diversified across risk exposures will tend to fare better than investors holding more correlated investments.SUSTAINABILITY&IMPACTWe expect meaningful shifts in net zero and other sustainable and impact strategies toward more impactful implementation approaches.In line with this,we expect allocations to diverse managers to rise,as greater numbers of investors embrace stated investment policy objectives.INTEREST RATESWe expect interest rates will increase in many developed markets,as implied by market pricing.But we think the Fed will hold rates in restrictive territory for longer than expected.We dont believe any increases will prompt another European sovereign debt crisis.EQUITIESWe expect global earnings growth will be below average next year,as prior interest rate hikes increasingly bite.With this backdrop,we expect value equities will outperform,Chinese equity underperformance will correct,and Healthcare may present an overweight opportunity.CREDITSWe expect most liquid credits will generate higher returns in 2023 relative to 2022,given the better yields on offer.We also see private credit as offering opportunities,particularly in secondary trading.PRIVATE INVESTMENTSWe expect the cyclical backdrop to impact private equity and venture capital returns,ultimately influencing recently invested vintages the most.That said,we think the 2023 vintage could perform well.HEDGE FUNDSWe expect macro hedge funds to perform well,given our expectations that market volatilities will remain elevated and our view that inflation risks are skewed to exceeding expectations.We expect long/short managers will benefit from positive short rebates.REAL ASSETSWe expect energy equities will be resilient due to underinvestment in recent years.So,we dont think investors should underweight this economic sector in the near term despite some long-term headwinds from decarbonization efforts.In real estate,we think offices may finally offer some attractive opportunities for the discerning investor.CURRENCIESWe expect the US dollar to remain firm but with limited appreciation relative to 2022,given our view that it is near the end of its incredible multi-year run.We believe golds performance will improve and digital assets,in general,will not surpass prior highs,many of which were set in 2021.2OUTLOOK 2023Investors Following Rebalancing Plans Will Be Rewarded in 2023Kevin Rosenbaum Global Head of Capital Markets ResearchWe expect economic growth will be below trend,and while inflation rates will trend lower across major developed markets,with the United States leading Europe,we think inflation rates will remain uncomfortably high relative to central bank targets in 2023.This backdrop has typically been associated with elevated market volatilities and weak investment performances.Despite this reality,we dont think most investors will be well served by underweighting equity risk relative to policy portfolios.Attempting to time markets can easily lead to long-term underperformance.A key reason why we suggest sticking close to equity policy weights,rather than trying to time when you rebalance with when markets bottom,is the difficult nature of identifying equity market bottoms in real time.Consider March 2009,when equity markets bottomed during the Global Financial CrisisUS real GDP was contracting 5%annualized,US monthly retail sales were contracting 13%versus the prior year,and newspapers were highlighting financial system risks.Neither that backdrop nor the backdrops of any other major equity market bottom offered compelling evidence that equity markets were set to rally,meaning investors under-allocated to equities would not fully participate.Relatedly,when markets move violently in one direction,they tend to correct violently in the other direction.Looking back at the nine major global equity market downturns that have occurred since 1970,equity returns in the 12 months after the downturn ranged from 20%to 54%.These returns stand in stark contrast to the median one-year return across the 50-year period of 12%.Theory also supports this pattern.Collectively,investors suffer from behavioral biases,such as loss aversion,which tend to generate additional selling in down markets.This results in a disconnect between equity price levels and rational expectations,which eventually unwinds.So,investors that wrongly time rebalancing decisions during downturns may not fully participate in the rare chunky returns that tend to follow.But stepping back,stressful situations also tend to impact decision-making processes negatively.The best way to mitigate this challenge is to stick with decision-making frameworks and plans.EQUITY MARKET RECOVERIES TEND TO DELIVER ABNORMAL RETURNSDecember 31,1970 March 31,2021 MSCI World Total Return Index 1-Yr Returns Following Major Downturns(%)US DollarsSources:MSCI Inc.and Thomson Reuters Datastream.MSCI data provided as is without any express or implied warranties.29.925.037.520.224.524.923.752.454.0197071 197475 198283 198788 199091 199899 200304 200910 202021Median 1-Yr:12.33OUTLOOK 2023Portfolios Will Benefit from Diversification in 2023Thomas OMahony Investment Director,Capital Markets ResearchSubdued inflation,sustained growth,and relative peace provided a goldilocks envi-ronment for the balanced portfolio in recent decades.With concerns surrounding all three factors to various extents,tail risks for portfolios have not been as simultaneously elevated for some time.Therefore,thoughtful portfolio construction with regard to macro drivers and risk exposures should be a key concern in 2023.Inflation is slowing from its recent peak,but we doubt it will quickly settle at the low levels that we have become accustomed.Though equities do a good job of outper-forming inflation over long horizons,their performance can be challenged over shorter horizons when inflation exceeds expectations.Allocations to inflation-linked bonds or gold can play a partial role in mitigating such inflation exposure,albeit with interest rate risk.Other complementary methods include real assets investments,which range from direct commodity exposure in the form of commodity futures,to investments in real estate,natural resources equities,and infrastructure.At the same time,the lagged impact of the highest inflation rate in over 40 yearscombined with concerted global monetary tighteninghas the potential to drive a material slowing of growth and,subsequently,dampen inflation.Despite their recent subpar performance,US Treasuries remain best placed to thrive in the event of such an outcome,with the ten-year yield at 3.68%.Alternative fund structures,such as hedge funds,present further diversification possi-bilities.For example,macro regime shifts have proven to be fruitful periods for global macro funds.Trend following strategies can also help to cushion portfolio returns during prolonged bear markets,while allowing for participation in extended rallies.More esoteric strategies,inside and outside of the hedge fund umbrella,can also provide less correlated returns,such as the insurance-linked strategies discussed elsewhere.ASSET CLASS LEADERS VARY AS THE MACRO LANDSCAPE SHIFTS200520062007200820092010201120122013201420152016201720182019202020212022Asset ClassBESTPEPECBEPEREEERERECEPEEPECCCommoditiesCEPEREPEEPEPEPEPEPEPEPERECEPEREReal EstateREREREHFCREBREREEHFEBBPEHFEHFHedge FundsEHFEPEHFCCHFHFHFEREREHFHFBREPEPrivate EquityHFBHFEBBHFBCBBBHFEBREHFEGlobal EquityWORSTBCBCREHFECBCCHFCCRECBBGlobal BondsSources:Bloomberg Index Services Limited,Cambridge Associates LLC,Hedge Fund Research,Inc.,MSCI Inc.,National Council of Real Estate Investment Fiduciaries,and Standard&Poors.MSCI data provided as is without any express or implied warranties.Over long horizons,more diversified portfolios have delivered higher returns with lower volatility than the classic balanced portfolio.The combination of diversi-fiers that is most suitable for a portfolio depends on an investors specific goals and circumstances.But as we move forward into 2023,likely a period of continued macro uncertainty,we believe it is prudent to build resiliency into portfolios by using the diversity of investment opportunities available.4OUTLOOK 2023Approaches to Climate&Net Zero Shift from Window Dressing to Real Change in 2023Simon Hallett Head of Climate StrategySince the 2015 Paris Agreement,global attention has increased on limiting the global temperature rise to 1.5 degrees Celsius by achieving“net-zero”greenhouse gas emissions by 2050.Glasgows COP26 climate conference triggered greater scrutiny of targets set by the increasing number of investors making net-zero commitments.This has focused attention on what net zero should mean for an investment portfolio.At first,the common interpretation was to reduce“portfolio emissions”by selling high emission companies.This is called portfolio decarbonization.Since most emissions are concentrated among a small number of companies and sectors,it proved surprisingly easy.But it led to accusations of window dressing and greenwashing.While selling high carbon companies does tend to increase those companies costs of capital,it made little difference in the emissions those companies contributed.The focus is now shifting toward driving“real world change”rather than portfolio optics.The main lever is to encourage more portfolio companiesespecially the high emission onesto adopt“Paris-aligned”decarbonization plans with third-party veri-fication.This can be achieved through active ownershipvoting and engagement.It neednt imply portfolio changes,but it must have genuine bite,with investors and their managers prepared to challenge and vote against company management if necessary.It can even be followed by passive investors,though the sanction of divestment adds teeth to any engagement.Private fund general partners can often directly drive better climate performance than small public shareholders,as large or even controlling owners,so they should be held especially accountable.Voting and engagement works with established self-funding businesses that are hard to influence by public equity capital allocation.Elsewhere,credit strategies and private investments are more likely to provide net new financing to business;in this case,capital allocation does matter since it could fund new climate positive or negative activity.As an extension of this idea,investors increasingly seek opportunities among climate solutionsbusinesses that are rapidly decarbonizing or enabling others to do so.Source:CambridgeAssociatesLLC.EmissionIntensityLowHighFOSSILFUELPRODUCERSCARBONCONSUMERS/EMITTERS(MostoftheMarket)POSITIVESOLUTIONSEngageMainlyHereSeekforwardmomentumonclimatealignmentVC,growthcapital,andsustainablerealassetsprovidevaluablePrimaryCapitalHereManageTransitionRiskBuyMoreofThesePRAGMATIC PROGRESS OVER TIME MUST BE DRIVEN BY ACTIVITY IN THE REAL WORLD AND NOT JUST REBALANCING5OUTLOOK 2023Sustainable and Impact Investors Will Prune the Weeds in 2023Chavon Sutton Senior Investment Director,Sustainable&Impact InvestingIf there was a season of abundance in sustainable and impact investments(SII),it was the past three years.The letters“ESG”(environmental,social,and governance)became a calling cry,sprouting up on earnings calls in what appeared to be a seismic shift in companies wanting to approach business more sustainably.ESG and sustain-able exchange-traded fund inflows exploded,reflecting a heightened desire to use capital to right environmental and societal wrongs.The first net outflows since 2017 from the SII investment universe were seen in 2022,as investors began pruning the weeds in their portfolios.In other words,they trimmed sustainable investment alloca-tions that suffered relative underperformance or missed the mark on alignment with sustainability goals.*Cambridge Associates Social and Environmental Equity investing framework seeks to induce investment in SII themes through the application of a more systems-focused lens,breaking down cognitive bias in investment processes and reclassifying investment managers with stronger alignment to investable social and environmental equity themes.US COMPANIES CITING ESG ON EARNINGS CALLS HAS INCREASEDFirst Quarter 2018 Third Quarter 2022Source:FactSet Research Systems.020406080100120140160Q12018Q22018Q32018Q42018Q12019Q22019Q32019Q42019Q12020Q22020Q32020Q42020Q12021Q22021Q32021Q42021Q12022Q22022Q32022Investors turned their backs against a swell of so-called green-,blue-,and social-washed productsdesigned to attract assets rather than achieving genuine social and financial returns.And Russias invasion of Ukraine exacerbated this trend by amplifying an already extraordinary run-up in energy prices that hampered the relative performance of sustainability funds that often exclude such companies.As risk assets struggle with elevated inflation and below-trend economic growth,2023 will usher in a newmore cautious and demandingera of SII.A rebound in the pace of SII investing will be propelled by the application of more robust frameworks,*which refocus values,reframe risk,widen the investment opportunity set,and produce positive real-world outcomes.Global reporting and measurement standards should continue to converge,giving investors greater clarity around how best to set,measure,and track ESG and impact metrics.Investors will be more discerning in their manager selection,seeking those with greater intentionality around sustainability and impact themes,traceable through lines between intent and execution in their portfolios,and a penchant for risk management.A turbulent year will compel rigor,which we think is the right kind of fertilizer for newly planted SII seeds.6OUTLOOK 2023US Federal Reserve Pauses,but Does Not Pivot in 2023Celia Dallas,Chief Investment StrategistThe US Federal Reserve has sent clear signals that inflation is enemy number one and that defeating inflation requires further monetary policy tightening even if this results in recession.We see a pause in tightening as more likely than a pivot to easing in 2023 because inflation will be slow to decelerate,causing the Fed to hold rates in restrictive territory*for longer than many other cycles.Inflation is starting to decelerate in some segments of the economy;however,“sticky inflation”sources(e.g.,housing,services)continue to accelerate.Wages are supported by persistent labor market strength and will only ease as the economy softens.Unemployment remains near recent lows of 3.5%amid lower,but still robust,job growth.The number of job openings is down by more than 10%from its March peak,so the labor market is starting to soften,but it remains tight.*Restrictive territory refers to keeping policy rates above the neutral rate,or R*.R*is the equilibrium real rate of interest that balances between full capacity utilization of resources and low and stable inflation.R*can be estimated but is not an observable rate.With inflation decelerating slowly and labor markets showing resilience,the Fed will see little reason to pivot in 2023.At the end of November,the market is pricing in that the Fed will stop tightening in May 2023 with a terminal rate of 4.9%.This would imply an average degree of tightening based on tightening cycles since 1965 despite an above-average level of inflation.Still,markets will be far less vulnerable to rising rate risk in 2023 given the degree of tightening priced into the market.PRICES ARE MIXED WITH SLOWER MOVING ITEMS(E.G.,RENTS)STILL INCREASINGSeptember 30,2012 October 31,2022 Year-Over-Year Percent Change(%)Sources:Federal Reserve Bank of Atlanta and Thomson Reuters Datastream.-10-505101520201220142016201820202022Flexible CPISticky CPIHeadline CPI7OUTLOOK 2023Developed Markets Government Bonds will Rebound in 2023TJ Scavone Investment Director,Capital Markets ResearchGlobal bonds are on pace to suffer their worst year on record in 2022,with the FTSE World Government Bond Index returning-18.1%through November 30 in USD terms.Unlike today,yields offered on government bonds were near their all-time lows heading into 2022,which left them vulnerable to the sharp rise in yields that occurred as central banks tightened policies.Monetary policymakers have aggressively tightened policy in 2022 to bring down elevated inflation.Out of the 37 central banks tracked by the Bank for International Settlements,33 have raised policy rates so far in 2022,with the median central bank increasing rates by 275 basis points(bps).However,we expect most central banks to dial back(or pause)tightening efforts in 2023,which should support government bonds.There are several other reasons to suggest government bonds will perform better in 2023.For one,negative return years are rare.Ten-year US Treasuries have only experienced 11 negative return years out of 63 since 1960,and only once experienced back-to-back years of negative performance,in 2021 and 2022.Second,2022s sell-off was extreme.For example,on a rolling 12-month basis,ten-year UK gilt yields at one point had increased as much as 307 bps this year,which is the 13th largest increase since 1901,and the benchmark suffered its third worst 12-month performance on record over this period.Lastly,at some point,we expect the market will see stronger demand from buyers looking to lock in higher yields,such as pension funds.Government bonds could continue to struggle if inflation remains sticky and central banks tighten more than expected.However,investors are being fairly compensated for duration risk at current yields based on long-term trends in economic fundamentals.In the short term,growth is slowing,which should help limit any further rise in yields.If yields do overshoot,government bonds have less downside,as index yields have increased and duration has fallen,whereas if the aggressive tightening by global central banks does cause a recession next year,government bonds are better positioned to support portfolios.December 31,1969 November 30,2022 December 31,1969=100Sources:Federal Reserve,Global Financial Data,Inc.,Intercontinental Exchange,Inc.,and Thomson Reuters Datastream.10-YR US TREASURY EXCESS RETURN VS CASH TYPICALLY BOTTOMS WHEN THE FED STOPS TIGHTENING02004006008001000010020030040019691973197719811985198919931997200120052009201320172021Fed Tightening Cycles8OUTLOOK 2023Liquid Credit Markets Should Generate Higher Returns in 2023Wade OBrien Managing Director,Capital Markets ResearchFor many credit assets,2022 will likely go down as one of the worst on record,but the flipside of poor performance is higher yields,which will eventually generate higher returns.The path to these returns could be bumpy,however,and investors should plan accordingly.Current potential headwinds include higher interest rates than anticipated and decreased debt affordability.Many high-yield(HY)borrowers are prepared for a downturn,as gross leverage is nearly the lowest in a decade and refinancing needs over the next 12 months are limited.More importantly,prices offer investors cushion for future stress.B-rated HY bonds trade around$0.88,and CCC-rated bonds trade around$0.76pricing last seen during the COVID-related depths of March 2020 and before that,early 2016.So,while HY defaults will almost certainly rise from current depressed levels(1.5%on a trailing 12-month basis),even if they soar past current rating agency forecasts(around 3%to 4%over the next 12 months)and recoveries are in line with historical averages,inves-tors buying bonds at these prices could still see reasonable returns over a three-year period.Higher-quality credit investors should not ignore their own expanding opportunity set.Rising interest rates and credit spreads mean yields of assets such as AAA-related CLO debt(now over 6%)and US investment-grade corporate bonds(now over 5%)have more than doubled over the course of 2022.Given extremely limited historical default rates,the main risk to investors is marking-to-market from higher base rates.European investment-grade buyers also should relish the opportunity.Investment-grade sterling corporate bonds now yield 5.5%thanks to the recent LDI-driven volatility in the gilt market.This is more than sterling HY bonds were yielding as recently as February!Although we expect liquid credit performance will improve in 2023,investors should understand the markets are likely to be volatile and may get worse early in the year before improving.The near closure of new issue markets in recent weeks is an ominous sign.Still,those willing to weather volatility are likely to see attractive returns,given todays depressed valuations.CREDIT YIELDS HAVE RETRACED HIGHER IN 2022As of November 30,2022Sources:Bloomberg Index Services Limited,Credit Suisse,and J.P.Morgan Securities.8.637.7311.145.314.105.548.517.436.079.2314.048.90US HY Euro HYUS LLUS IGEuro IG GBP IG EM USD(Sov)EM USD(Corp)CLOAAACLOBBBCLOBBCMBSBBB12/31/20219OUTLOOK 2023Global Earnings Growth Will Be Below Average in 2023Corporate earnings proved resilient in 2022,with nominal earnings expected to grow 10%and inflation to rise 8%globally.This resiliency came even as several central banks raised their policy rates by large margins to address broadening inflationary pressures.We believe this tightening will further weaken the global economy,which is already struggling with the consequences of the war in Ukraine and Chinas slowdown.As a result,we expect below-average earnings growth among companies in 2023.Earnings growth has averaged 10.4ross the last 20-year period.Sales growth contributed roughly half of that growth and is strongly linked to the direction of the economy.As it stands,global real GDP is expected to grow by 2%in 2023.We suspect the risks to that view are skewed to the downside,given the difficulty in knowing the impact of higher interest rates on economic activity in real time and our expectation that the Federal Reserve will not quickly pivot to cutting interest rates.More cyclical areas of the economy,which tend to be leading indicators of the broader economys direction,highlight our concern.For instance,Australian,Canadian,and US home prices have all started to contract,and key export bellwethersGermany and Koreahave seen new order activity fall.Profit margin expansion has contributed the balance of earnings growth.Across the past two decades,margins increased from 4.6%to most recently 10.8%,which was a calendar-year high.Despite the large change in interest rates and current inflationary pressures,which impacts everything from wages to input prices,analysts expect margins to stay near record levels at 10.7ross full-year 2023.We suspect that expectation is optimistic.Margins typically come under pressure as economic growth weakens,and while we do think inflation will trend down next year with the United States leading Europe,we believe it will remain uncomfortably above central bank targets and a challenge for companies to confront.While we believe corporate earnings growth will be below average,equity price levels have tended to bottom before earnings in past downturns.Ultimately,we think most investors will be best served by sticking close to their policy equity allocation weight,as we detail elsewhere in this outlook.Kevin Rosenbaum Global Head of Capital Markets ResearchGLOBAL CORPORATE SALES GROWTH IS LINKED TO GLOBAL ECONOMIC GROWTH 20-Yr Period Ended 2021 Percent(%)Sources:I/B/E/S,MSCI Inc.,Oxford Economics,and Thomson Reuters Datastream.MSCI data provided“as is”without any express or implied warranties.R=0.58-8-40481216-10-505101520Global Economic GrowthGlobal Sales Growth 10OUTLOOK 2023Developed Markets Value Stocks Should Outperform Broader Equities in 2023Sean Duffin Investment Director,Capital Markets ResearchValue investors have not had much to cheer about since the end of the Global Financial Crisis.In fact,developed markets value stocks annual return was nearly 3 percentage points(ppts)lower than that of broader equities from 2010 through 2021.But value held up better in 2022,besting the broader market by more than 10 ppts,even as vola-tility permeated financial markets.Surging real interest rates have taken a toll on growth-oriented equities,which tend to have longer equity duration.As liquidity continues to get drained from the market,more speculative equities are likely to continue to feel pressure.High-flying technology companies have been hit particularly hard;the Goldman Sachs Non-Profitable Tech Index lost nearly 60%so far in 2022.Even after that decline,the index price still trades near pre-COVID levels,when financial conditions were much looser.While the end of the rate hike cycle may be in sight,we believe values outperfor-mance will persist.Financials and energytwo sectors that are more heavily weighted in developed markets value indexeshave historically benefited from elevated real interest rates and inflation.History also suggests that the recent leadership of growth-oriented sectors will not last,given value-oriented sectors have reclaimed market share from growth counterparts multiple times in the past 50 years as macro conditions changed.Even after richly valued technology stocks lost some of their froth in 2022,many still command high valuations and could decline further.SECTOR DOMINANCE DOES NOT LASTJanuary 31,1973 November 30,2022 Global Equity Sector Weights(%)Source:Thomson Reuters Datastream.102030401973197819831988199319982003200820132018Financials EnergyTechnology Consumer DiscretionaryMuch depends on the future path of inflation as central banks are attempting to thread a needle to reduce price pressures while also avoiding a severe recession.An economic hard landing could create a challenging environment for value,which is heavily weighted in some more cyclically sensitive sectors.But favorable starting valuations could help mitigate expected downside for value.Developed markets value trades at a normalized price-earnings multiple that is 0.68 that of broader equities,which ranks in just the 8th percentile of its history dating back to 1984.Thus,as we enter 2023,we favor equities that look better positioned to hold their value in an environment of elevated real interest rates and have attractive valuations to boot.11OUTLOOK 2023The Euro Area Risks Stagflation in 2023We expect euro area inflation to remain high in an environment of constrained energy supply.At the same time,high energy prices,reduced industrial production,and poten-tial energy rationing will hit economic growth,raising the risk of stagflation.Despite this outlook,relatively cheap euro area equity valuations reflect the outsized risk European equities are facing,and we remain neutral on the equity market.Nearly half of the EUs gas and a quarter of its oil were sourced from Russia.In an effort to offset the elimination of Russian gasalong with the loss of hydro power and nuclear productionEuropean countries are importing gas from other sources to the degree that their infrastructure allows,building more liquified natural gas terminals to increase import capacity,accelerating renewables investments,and seeking to reduce consumption.These efforts have resulted in a high energy price tag that is pressuring inflation beyond just energy and food prices.Looking beyond this winter,Europe will need to source gas and refill storage,likely without any Russian gas,putting continued pressure on gas prices and economic growth.Celia Dallas,Chief Investment StrategistEUROZONE INFLATION IS BROADENING OUTJanuary 31,2019 October 31,2022 Percent(Year-Over-Year)Sources:Eurostat and Thomson Reuters Datastream.-2024681012Jan-21Apr-21Jul-21Oct-21Jan-22Apr-22Jul-22Oct-22Non-Energy Industrial GoodsServicesFood,Alcohol,TobaccoEnergyEA HICPEA HICP-CoreSome corporations have cut back on production,and involuntary rationing may be necessary to get through the winter with limited energy supplies.Since March 2022,the consensus 2023 real GDP growth forecast for the Eurozone has fallen 260 basis points to 0.1%.At the same time,Europes central banks are likely to maintain a tight-ening bias.Meanwhile,governments are engaged in large-scale fiscal interventions aimed at easing the pain of rising energy prices.These challenging conditions are priced into the market to some degree.On a normal-ized basis,the price-tocash earnings ratio of Europe ex UK equities is close to its median historical level,compared to US and other developed equities that continue to trade at a considerable premium.Further,the euro has been the primary relief valve for stress in the euro area,falling 14%versus the US dollar over the first three quarters.12OUTLOOK 2023A European Sovereign Debt Crisis Will Not Occur in 2023European policymakers face a difficult challenge as the energy shock has increased the risk of stagflation,as we detail elsewhere in this outlook.The resulting mix of tight monetary and loose fiscal policies has heightened concerns about debt sustainability and put upward pressure on euro area(EA)government bond yields.However,while ten-year Italian government bond yields,for example,are the highest theyve been since the 200912 European Sovereign Debt Crisis,unlike previous“debt scares,”the rise in yields in 2022 has been driven by higher core EA country yields.The spread between ten-year Italian-German yields,while elevated,remains below its 2018 high and well below the heights reached in 2011.EA periphery yields may move higher as the European Central Bank(ECB)continues to tighten,or if the economic outlook deteriorates.But we do not expect spreads to blow out as they did in 201112.Italy likely represents the biggest risk to this view.With a debt-to-GDP ratio of 150%,Italy is one of the most indebted EA countries.The combination of higher borrowing costs,looser fiscal spending,and weaker growth threatens to further strain Italys fiscal position.Further complicating matters is the far-right coalitions recent election victory.However,high inflation and the low average cost and longer average maturity of outstanding Italian debt should mitigate the impact of higher borrowing costs and increased fiscal deficits.Italy also has less incentive to take a hardline stance toward the EU,as it did in 2018,given stronger support for the EU within Italy and the fact that Italy has grown increasingly dependent on the bloc.Quantitative tightening is also a risk,but the ECB is incentivized to prevent a periphery spread widening,as it would reduce its ability to address inflation via tightening.As such,it has added tools(e.g.,flexible pandemic emergency purchase programme rein-vestments and the Transmission Protection Instrument)to strengthen the credibility of its backstop.If there was a large move in Italian-German spreads above their 2018 highs,we would likely view it as a buying opportunity.TJ Scavone Investment Director,Capital Markets ResearchJanuary 31,2008 November 30,2022 Percent(%)Sources:Euro Area Business Cycle Network and Global Financial Data,Inc.CORE EURO AREA GOVERNMENT BOND YIELDS HAVE DRIVEN THE RISE IN PERIPHERY COUNTRY YIELDS1.943.871.93-10123456782008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Euro Area Business Cycle Network-defined Recessions10-Yr German Yield10-Yr Italian Yield10-Yr Italian-German Yield Spread13OUTLOOK 2023Chinese Equities Should Outperform Global Equities in 2023Aaron Costello Regional Head for AsiaThe Chinese economy and equity markets have been pummeled over the past two years due to self-inflicted policy actions,starting with the regulatory crackdown on the technology sector,a tightening of credit to the real estate sector,and the ongoing zero-COVID policy.From its peak in February 2021,the MSCI China All Shares Index declined more than 40%through the end of November,underperforming global equities by a wide margin.With Xi Jinping further consolidating power and giving no clear signal of a change in policies,investors have capitulated on any near-term recovery in the Chinese economy and dumped Chinese equities following the Party Congress in October.Yet,amid the investor gloom,China will likely surprise to the upside in 2023,both by unveiling new pro-growth policies and by moving away from the zero-COVID policy sooner than expected.The Politburo meetings and Central Economic Work Conference held in December will give more clarity on economic policy and spending plans,while rumors of a change in the zero-COVID policy propelled Chinese equities higher in early November.Although the official stance remains that zero-COVID is the appropriate policy for China,a subtle shift in government rhetoric seems to be underway,particularly regarding the viruss lethality and local governments lockdown procedures.Our view is that small policy tweaks will set the stage for a larger shift,given the negative economic impact of current policies.However,meaningful policy change may not occur until after first quarter 2023,given the required tilt in government rhetoric,and because major policies are formally approved and adopted at the National Peoples Congress in March.There may also be a desire to wait until any winter surge in global COVID-19 cases passes.Thus,while we shouldnt expect China to abandon its zero-COVID policy in the near-term,investors should watch what the government does,rather than what it says.Given depressed valuations and high skepticism,Chinese equities face a low bar heading into 2023.EASING OF LOCKDOWNS SHOULD SEE CHINESE EQUITIES OUTPERFORMDecember 31,2021 November 30,2022Sources:Goldman Sachs Global Investment Research,MSCI Inc.,and Thomson Reuters Datastream.MSCI data provided as is without any express or implied warranties.01020304050708090100110Dec-21Feb-22Apr-22Jun-22Aug-22Oct-22China All Shares vs ACWIDecember 31,2021=100(LHS)GS China Lockdown Index7-Day Moving Avg(RHS,inverted)14OUTLOOK 2023EM ex China Equity Performance Will Be Unremarkable in 2023Stuart Brown Investment Director,Capital Markets ResearchEmerging markets(EM)excluding China equities are on track to underperform developed markets(DM)in 2022 in USD terms.While elevated external pressures and a late business cycle environment temper our enthusiasm for EM ex China in 2023,this backdrop has largely been priced in by markets.The balanced outlook suggests performance could be unremarkable,and we think investors should hold EM ex China allocations in line with their policy.A continuation of dollar strength and restrictive Federal Reserve policy will weigh on EM ex China equities.In 2022,our EM external vulnerability gauge fell to its weakest level in 20 years,and capital outflows intensified.EM countries drew down foreign exchange reserves to shore up depreciating currencies and cover rising import bills,which adversely impacted current account balances.Although we expect the Fed will eventually pause its rate hiking cycle next year,EM stocks have typically underper-formed DM peers in the six and 12 months following the Feds final rate hike.Slowing economic activity poses another headwind.EM tends to lag DM during the latter stages of the business cycle.Weak economic activity will stifle export activity,with the World Trade Organization now expecting trade volume growth of just 1%in 2023.Resource-exporting EMs may be insulated if commodity prices remain elevated,but tech-heavy Asia faces the risk of waning semiconductor demand and heightened geopolitical tensions surrounding the sector.Still,these dynamics are already baked into markets.Analysts expect EM earnings growth will lag DM in 2023,even after EM earnings growth was downgraded by a larger degree than DM so far in 2022.And EM valuations are low by virtually any measure.The markets low expectations for EM limit the potential for excessive perfor-mance downside.EM ex China will likely rally when China ultimately relaxes its zero-COVID policy.Although a major policy shift by China may support EM equity performance,we suspect it may also benefit DM shares.In other words,we doubt EM ex China performance will meaningfully diverge from DM equities when China abandons its zero-COVID policy.EM EARNINGS EXPECTATIONS AND VALUATIONS ARE LOWAs of November 30,2022Sources:I/B/E/S,MSCI Inc.,and Thomson Reuters Datastream.MSCI data provided as is without any express or implied warranties.2.73.59.98.6EM EPSDM EPS2023 Growth Expectations(%)8.414.310.518.0EM CAPCEDM CAPCEValuation LevelsCurrentAs of 12/31/202115OUTLOOK 2023An Attractive Healthcare Equity Entry Point Lurks in 2023US healthcare stocks were a mixed bag in 2022.Large and mid caps declined but proved defensive amid the broader equity market drawdown.Small caps fared decid-edly worse,especially in the biotech and life sciences industries.Performance may again be difficult next year,as the earnings outlook appears weak and economic chal-lenges seem poised to persist.We expect this may present an attractive opportunity to overweight the sector,given its appealing long-term prospects.Earnings are expected to decline next year,which would be the only earnings contrac-tion on record based on available data beginning in 1993.There are two primary reasons for the diminished outlook.First,the one-time impact from COVID-19 is set to fade after the sector reported record profit growth in 2021.Second,inflation will bite in 2023.Since healthcare inflation tends to lag overall economy-wide inflation,it only started catching up to broader inflation in the second half of 2022 and looks set to continue accelerating.This may impact spending by way of reduced insurance benefits and higher out-of-pocket costs for consumers.At the same time,the industry faces headwinds from labor shortages and rising input costs.The macro environment will likely also weigh on the sector,particularly smaller compa-nies.These entities tend to have little to no current earnings,with the lions share of their value based on future growth.This makes them highly sensitive to elevated inflation and interest rate changes.Merger&acquisition activitya key driver of performanceis also likely to remain weak,given the higher cost of capital environment.There may be an opportunity to overweight the sector next year.An attractive entry point might emerge if performance meaningfully lags broader equities,valuations derate,and the earnings outlook rebounds.We also like the sectors longer-term prospects,given its compelling secular trends.These include the large demographic shifts in many developed countries,convergence of healthcare and technology,and innovation in drug development,among others,all of which have the potential to drive earnings and outperformance.Given the highly specialized nature of the industry,we suggest implementing allocations through active management.Stuart Brown Investment Director,Capital Markets ResearchANALYSTS EXPECT S&P 500 HEALTHCARE EARNINGS TO CONTRACT NEXT YEAR200323 Calendar Year Earnings Growth(%)Sources:I/B/E/S,Standard&Poors,and Thomson Reuters Datastream.-50510152025302003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023FORECASTS16OUTLOOK 2023Energy Equities at Benchmark Weights Will Benefit Investors in 2023Wade OBrien Managing Director,Capital Markets ResearchEnergy equities have massively outperformed in 2022,with the MSCI World Energy Index beating the broader MSCI World Index by around 70 percentage points through the end of November.Energy sector profits have rebounded as underlying commodity prices were boosted by the tragic events in Ukraine and related supply disruptions.Given this strong performance,investors may be tempted to underweight the sector,assuming weak growth or the long-term decarbonization and net-zero efforts of the global economy will trigger underperformance.But,in the short-term,we recommend benchmark weights,as energy equities remain inexpensively priced and could again surprise in 2023 under several scenarios.Depressed valuations suggest energy equities are almost universally unloved,despite rebounding profits and strengthening balance sheets.Forward earnings multiples for European and US energy stocks of 5.5x and 9.8x,respectively,are both in the bottom decile of historical observations.Volatile earnings are a consideration and sector earnings are expected to decline 11%next year(versus a 4%increase for the broad index).Risks are likely skewed to the downside if a recession occurs.Still,there is a more constructive case for energy equities.The sector has been disci-plined with capex in recent years and instead paid down debt,reducing the likelihood of a supply gut if global growth continues to slow.Energy companies also should continue to generate robust,if slightly reduced,free cash flow,offering ample cushion for dividends and buybacks.Even with reduced earnings in 2023,large US energy companies will generate enough cash flow to cover their expected dividend more than three times.Finally,there is a sad possibility that the war in Ukraine will escalate,likely putting a floor under commodity prices even amid a global slowdown.Many questions hang over energy equities heading into 2023.The slowly unfolding energy transition presents both a long-term threat and competing opportunity set,which investors should also be pursuing.However,with valuations depressed and cash flow generation high,investors should maintain neutral positions to public energy companies in the near term.Those doing so should consider active managers that are engaged with corporate management teams and working to accelerate the transition to a low carbon economy.ENERGY COMPANIES ARE WELL PLACED TO BOOST SHAREHOLDER RETURNS IN 2023201222 US Dollar(Billions)Sources:FactSet Research Systems and MSCI Inc.MSCI data provided as is without any express or implied warranties.287 277 269 149 114 155 202 167 74 203 194 010020030040020122013201420152016201720182019202020212022CAPEXDividends BuybacksEBITDA*Data for 2022 are through third quarter.*17OUTLOOK 2023Returns of Insurance-Linked Securities Will Improve,Benefiting From Better Pricing in 2023Christine Farquhar Global Co-Head of Credit Investment GroupInsurance-linked securities(ILS)provide a capital markets alternative to traditional reinsurance.Investors receive interest(insurance premiums)and repayment of prin-cipal,net of any claims.Over the last 15 years,these assets have been weakly correlated with equities and bonds.Yields rose through 2022,in response to regulatory pressures and a lack of underwriting discipline in Florida.We expect this back-up in yields will translate into great performance next year.Pricing on industry-loss warranties,*which allow investors to trade insurance risk on the basis of parametric industry loss triggers,has been offering yields not seen in more than a decade.ILS strategies can be complex,as portfolios need to be carefully constructed to limit the tail risk from major events.A combination of liquid catastrophe bonds(CAT bonds)and collateralized reinsurance contracts is best placed to deliver optimal reward for well-managed risk.Experienced managers with transparent track records and limited conflicts with parent company balance sheets are best positioned.The standard bench-mark is the Swiss Re Cat Bond Index,reflecting the more liquid end of the$97 billion ILS market(as of June 2022),but it is not directly investable.We believe the yields on offer provide a good return opportunity relative to risk next year,but investors clearly need to review the asset class on a regular basis,as it back-stops property against the risks of climate change and global warming.More frequent weather events and more severe loss outcomes have already put upward pressure on yields to compensate investors.Managers are factoring these developments(along with increased general claims inflation)into security selection.They are more careful selecting insurance counterparties in Florida and limiting exposure to aggregate contracts,which are more exposed to higher frequency events such as wildfires,hail-storms,and tornadoes.Explicit meteorological modelling and disciplined underwriting of insured risk increase our confidence in manager selection.Man-made risks,such as cyber,shipping,and aviation losses,are generally not as well rewarded for less transparent risk.In short,2023 represents a market dislocation and opportunity to invest in a diversifying asset on attractive historic yields.Joseph Tolen Investment Director,Credit Investments*An industry loss-warranty is a reinsurance contract that pays out when the financial losses experienced exceed a specified threshold.INDUSTRY-LOSS WARRANTY PRICING IS NOW MORE CONSERVATIVEFirst Quarter 2005 Third Quarter 2022 Percent(%)$50B Industry Loss Attachments ThresholdSource:Artemis.bm.161805101520200520072009201120132015201720192021US WindUS All Natural Perils18OUTLOOK 2023Positive Short Rebates Will Help Long/Short Equity Performance Improve in 2023Eric Costa Global Head of Hedge FundsWe expect the short rebate available to long/short managers will remain positive next year,given our view that the Federal Reserve will not pivot to cutting interest rates.This rebate,which short sellers receive when they borrow stock,has ranged between-50 basis points(bps)and 0 bps for much of the last 15 years.The recent shift of the short rebate into positive territory removes a clear hurdle for long/short equity funds,and we expect it will help performances in this space improve next year.In addition to the short rebate,the return components of long/short equity strategies include the long alpha,short alpha,beta,and fees.Skilled long/short equity managers typically generate long alpha on a consistent basis over time.Generating short alpha is challenging and often lumpy,while creating absolute dollar profits from the short portfolio is even more difficult.In fact,absolute short profits have been essentially non-existent since the Global Financial Crisis.A large,short rebate acts as a return floor,reduces performance volatility,and helps to cover management fees.Simply put,the short rebate is the current Fed funds rate minus a spread(typically 25 bps to 50 bps)multiplied by the total gross short exposure of the manager.Long/short equity managers with robust short portfolios of individual equities will benefit more than managers with small,short portfolios.This being said,the short rebate should not drive investment decisions.The ability to generate long and short alpha remains most critical.While directional,growth-oriented long/short equity managers benefited the most from the zero interest rate policy and quantitative easing regimes,the current economic environment should result in more obvious winners and losers as companies must now compete for capital.High-quality businesses should trade at a premium,while low-quality,cash-burning businesses should trade at a discount.Dispersion within equity markets is increasing as is volatility.This is an excellent backdrop for alpha creation on longs and shorts as long/short strategies tend to do well relative to equities during periods of heightened volatility.Stephen Mancini Senior Investment Director,Hedge Fund ResearchSHORT REBATE HAS RETURNED TO POSITIVE TERRITORYJanuary 31,1990 November 30,2022 Percent(%)Sources:Federal Reserve,National Bureau of Economic Research,and Thomson Reuters Datastream.02004006008001000-2024681990199219951997200020022005200820102013201520182021NBER-defined US Recessions19OUTLOOK 2023Continued Inflation Uncertainties Underpin Our Optimism in Macro Hedge Funds in 2023Meisan Lim Managing Director,Hedge Fund ResearchMore than at any time in recent history,both equities and bonds have been very sensitive to macro events,particularly to inflation prints.During periods of large positive US infla-tion surprises,macro hedge funds have tended to do better than a typical 60/40 portfolio.Conversely,when inflation has surprised materially to the downside,these managers have underperformed 60/40,though still managed to generate positive returns.After the high inflation experienced in 2022,is the case for macro hedge funds still intact?We believe so.First,we suspect risks are skewed to either matching or exceeding current inflation expectations in 2023,which for the United States and euro area are 4%and 6%,respectively,according to Bloomberg.As a group,macro funds have a wide range of resources to identify mispricing and can choose from a variety of instruments to maximize their payout.Other tailwinds support our thesis that macro strategy will do well in an environment susceptible to inflation surprises.Rather than focusing on promoting maximum employment as it did in the low-inflation era,the Federal Reserve is now forced to favor combating inflation by raising the Fed funds rate.The market is pricing in that the Fed will stop tightening in May 2023 with a terminal rate of 4.9%,and,as written else-where,we believe a pause in tightening after May is more likely than a pivot to easing policy rates.This will impact discount rates,making stocks and bonds vulnerable,and provide good short-selling opportunities for macro managers.Furthermore,when quantitative easing flushed the markets with liquidity and drove investors to reach for yields higher up the risk curve,concentrated beta-driven port-folios were more attractive than a diversified portfolio with many alpha sources.Now that monetary tightening is in effect and interest rates have risen,macro managers are in an opportune position to benefit from greater alpha opportunities and diversification of assets and geographies.With loose monetary conditions and unusually low inflation in the rear-view mirror,macro funds that are uncorrelated to traditional portfolios of stocks and bonds will prove useful diversifiers.First Quarter 1999 Third Quarter 2022 Percent(%)Sources:Bloomberg Index Services Limited,Citigroup,Hedge Fund Research,Inc.,MSCI Inc.,and Thomson Reuters Datastream.MSCI data provided as is without any express or implied warranties.MACRO HEDGE FUNDS TEND TO DO BETTER THAN 60/40 IN LARGE POSITIVE INFLATION SURPRISES 7.34.66.43.2-0.65.112.44.3-5051015Large Positive SurprisesModestly Positive toModestly NegativeSurprisesNegative SurprisesLarge Negative SurprisesHFRI Macro Total60/40 Portfolio20OUTLOOK 2023Credit Opportunity Strategies Should Deliver Above-Average Returns in 2023Vijay Padmanabhan Managing Director,Credit InvestmentsWe believe that the macro environment will continue to cause stress in the economy and create an attractive investment environment across a number of strategies.Primary market yields are attractive due to increased rates and credit spreads.Secondary trading opportunities are attractive,as supply chain issues and inflation are pressuring margins,creating the opportunity to buy the securities of good companies at discounted prices.While the opportunity is global,Europe is particularly attractive due to the geopolitical headwinds.As a result,we expect returns of private credit opportunity strategies to be above their long-term average of 10%in 2023.Shortly after the war in Ukraine began,European banks pulled away from lending and the public broadly syndicated loan and high-yield markets largely shut down.As a result,private credit managers have become the main liquidity providers,which has allowed them to demand good terms and pricing.Banks are saddled with underwritten deals they cannot syndicate,and they are desperate to get them off their balance sheets.Loans and bonds have traded lower,making the secondary market attractive.Inflation is driving down margins of otherwise good companies and creating opportu-nities to buy securities in the 70s that are likely to recover to par.We expect to see continued pressure on companies and anticipate default rates to rise from low levels.Historically,it takes a recession to bring inflation off its peak,and the central banks have made clear that they are willing to take that risk.While spreads have widened and defaults have increased,they are not near the levels of past economic downturns.Managers are patiently waiting for what is likely to be a prolonged distressed cycle across a range of industries.Credit opportunities managers normally have flexible mandates that allow them to generate double-digit returns deploying capital in performing credit and early-stage stress situations.In contrast,specialized managersincluding distressed managersmay not always find the environment conducive for investing.Performance of managers will vary,and managers with strong portfolio monitoring teams and experi-enced workout teams are likely to fair better.Frank Fama Global Co-Head of Credit Investment GroupSHARP DECLINE IN PUBLIC MARKETS NEW ISSUANCEJanuary 30,2021 November 30,2022 US$BillionsSources:Morningstar,Inc.LCD and PitchBook.0204060801001201401/213/215/217/219/2111/211/223/225/227/229/2211/22European LoansEuropean BondsUS LoansUS Bonds21OUTLOOK 2023*Diverse-owned firms are defined as those that are over 50%women-or minority-owned.*For more on this topic see Madeline Clark,“Sustainable and Impact Investing:Insights and Perspectives,”Cambridge Associates LLC,2022.Diverse Manager Net Flows Will Remain Positive,Supported by Governance Structures in 2023Jasmine Richards Head of Diverse Manager ResearchUS public pension plans have long been investors with diverse fund managers.In recent years,this focus has expanded to family offices,corporate pensions,endow-ments,and foundations.While allocators journeys have varied,many have created diverse investing objectives,codified these in investment policies,and begun imple-mentation.With structural changes in place,we expect allocators to continue driving capital to diverse managers in 2023.In the wake of increased social unrest due to global inequality,many asset owners have begun to examine diversity within their portfolios.Understanding that less than 2%of global assets are invested with women or people of color,*many asset owners are seeking to be more intentional about their investment with diverse managers.With this interest,diverse fund managers are on pace to raise historic levels of assets in 2022,which is even more notable given the challenging fundraising environment.Historically,allocations to diverse managers have waned during periods of market stress.During these periods,new manager relationships can be perceived as risky particularly with firms that are younger or have lower assets under management(AUM).Given that many asset owners are currently over-allocated to private invest-mentsthe area of highest new fund starts for diverse managersthe market could pose specific challenges for sustained AUM growth for diverse fund managers.Despite these headwinds,data indicates that governance revisions instituted in recent years will support continued commitment to increasing diversity among manager lineups of asset owners.Data from a recent CA client survey*show that 15%of survey respondents have codified their diversity,equity,and inclusion objectives in investment policy statements,an increase of more than 10 times since 2020.Of the respondents who have implemented diverse manager strategies,95%indicated that they have increased allocations over the last five years.Additionally,92%anticipate increasing their allocations even further over the next five years.While market headwinds create higher bars for new commitments,the structural policies and programs that have been implemented in the recent past will support continued commitment to investments in diverse fund managers.Carolina Gmez Associate Investment Director,Diverse Manager ResearchCAPITAL RAISED BY US PRIVATE DIVERSE MANAGERS HAS INCREASED OVER TIME201022*Data for 2022 are as of October 10.Source:Cambridge Associates LLC.02040600102030402010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Number of FundsCapital Raised vs Fund Size(US$Billions)Growth EquityBuyoutsVenture CapitalTotal Number of Funds*22OUTLOOK 2023Private Equity Will Sail in Stormy Seas in 2023Keirsten Lawton Co-Head of US Private Equity ResearchWe expect continued headwinds for private equity(PE).Weak economic activity,diffi-cult political environments,and tight credit markets will pressure current valuations and slow investment and realization activity.While public equities quickly reflected these concerns in 2022,private markets reacted more slowly.Multiples are trending lower but strong earnings growth has mitigated the mark-to-market impact thus far.In 2022,we saw a drop in activity.Heading into 2023,transaction activity should continue to be slower as valuations settle and lending costs increase,and this lull should favor buyers.General partners(GPs)with mature assets to sell may delay exits given volatile markets pressured by uncertainty.Investors should expect longer holds,and perhaps more GP-sponsored continuation vehicles.Fewer realizations will result in fewer limited partner(LP)distributions,which since the beginning of 2011 have averaged$1.49 for every PE dollar drawn,enabling new PE commitments.However,in 2023 we do expect capital calls to pick up given GPs have near-record dry powder.We believe new investment activity,while slower than recent years,will precede a return to robust realizations.The potential of fewer distributions raises the specter of liquidity concerns for LPs as they might need to fund their PE commitments from other sources for the first time in years.In the current market,GPs are focusing on company-specific actions,risks,and oppor-tunities.From a value creation perspective,revenue growth and EBITDA margins are primary levers of returns,but amid a tight labor market,GPs are also seeking to pull the talent management lever.On the risk side,GPs are revisiting recession scenarios,managing expenses,and monitoring sales.They have raised prices to compensate for higher inflation,which might not be a sustainable strategy.COVID-era PE returns were strong but largely unrealized and not likely to be sustained in the current market.History has shown that funds deployed at high valuations based on high growth expectations(such as the pre-GFC vintages)posted below-average net internal rates of return,and it is likely that recent vintages will suffer the same fate.Conversely,recession-era vintages,invested at more moderate valuations,have historically outperformed growth expectations and achieved multiple expansion at exit.So,while todays environment could hurt current portfolios,the 2023 vintage could benefit from the valuation reset.Caryn Slotsky Senior Investment Director,Private Investment Strategy ResearchRECESSION ERA VINTAGES HAVE SHOWN RESILIENCEAs of June 30,2022 Net to Limited PartnersSource:Cambridge Associates LLC.0.0 x0.5x1.0 x1.5x2.0 x2.5x3.0 x0%5 %0 00(65)2001(30)2002(22)2003(25)2004(42)2005(67)2006(67)2007(70)2008(55)2009(32)2010(24)2011(34)2012(46)2013(49)2014(57)2015(64)2016(63)2017(46)2018(68)2019(84)Multiple of Paid In CapitalNet to LP IRR(%)Vintage YearIRR(LHS)TVPI(RHS)DPI(RHS)23OUTLOOK 2023Venture Capital Interest in India and Southeast Asia will Continue to Increase in 2023Vish Ramaswami Managing Director,Head of Asia PE/VC ResearchGeopolitical dynamics and the uncertainty generated by Chinas zero-COVID policy have dampened investor activity in China venture capital(VC).Concurrently,interest has increased in India and Southeast Asia as potential alternative growth and venture markets,which we expect will continue next year.In India,the entrepreneur ecosystem is maturing and there has been a buildup of strong domestic and foreign VC presence.Government and private-sector initiatives introduced over the past decade have facilitated the development of financial and digital infrastructure,creating a fertile opportunity set for start-ups operating in the domestic consumer and enterprise space.Consumer technology,fintech,and soft-ware-as-a-service(SaaS)deals have dominated investment activity,leading to a rise in the number of India unicorns in recent years.While the India VC market is looking more proven and attractive vis-vis a decade ago,investors should be mindful that the market depth and track record of managers will continue to take time to build.The same investment themes apply in Southeast Asia,given the rise of internet penetration in markets such as Indonesia and Vietnam.The region likely boasts the second-largest slate of VC managers in Asia after China.However,the market is frag-mented across many countries with varied levels of infrastructure development and talent pools,posing unique challenges to scaling and growing businesses.As a result,Southeast Asia VC still lags China or India VC and requires more validation.In China,the story is mixed.Consumer technology themes have plateaued,given market developments and regulatory headwinds.But Chinas increased emphasis on self-sufficiency and innovation in the clean energy and“deep technology”sectors(e.g.,semiconductors,automation),supported by the already well-developed supply chain and advanced manufacturing capabilities,presents a secular growth opportunity for companies in these areas.A core challenge is whether the US or Chinese government will place restrictions on investing in these sectors.Meanwhile,any clarity on the lifting of Chinas zero-COVID policy could trigger a rebound in Chinas growth pros-pects and its financial markets,leading to a renewed surge in China VC deal activity and fundraising.CHINA VC FUNDRAISING AND DEAL ACTIVITY COOLED IN 2022201222 US$BillionsSource:PitchBook.0204060801001201400246810121420122013201420152016201720182019202020211H2022Total Deal ValueCapital Raised by USD-Denominated FundsForeign Investor Fundraising(LHS)Deal Activity(RHS)24OUTLOOK 2023The Office Sector Will Finally Present Attractive Investment Opportunities in 2023Marc Cardillo Global Head of Real AssetsAlthough it has been nearly three years since the pandemic began,considerable uncertainty remains regarding the future of the office sector.Performance has severely lagged other property types.MetLife estimates that remote work has contributed 400 basis points to the current elevated 16.8%US vacancy rate,although the impact on office cash flows has been limited,given the sectors long-term lease structures.However,this dynamic has begun to evolve as leases executed prior to COVID-19 begin to expire.Many office owners with looming debt maturities will be faced with the challenge of trying to refinance properties with declining cash flows in a higher interest rate and more restrictive lending environment.These pressures should lead to rising loan defaults and create opportunities for discerning investors to acquire high-quality office properties at attractive valuations.OFFICE RETURNS HAVE LAGGED OTHER PROPERTY TYPESAs of September 30,2022 Cumulative Trailing 12-Month Total ReturnSource:National Council of Real Estate Investment Fiduciaries(NCREIF)Property Index.34.6.2%6.6%3.2%IndustrialApartmentRetailOfficeHowever,investors will need to be highly selective,as value traps abound.The quality of physical space and a propertys amenities have grown in importance as tenants have more choices available to them and companies need to give their employees a compel-ling reason to come to the office.The building attributes with the greatest demand include flexible open space,shared meeting areas,sustainable building features,onsite food options,outdoor amenities,and even concierge services.Many of these require-ments are best met by modern office properties.As a result,the office sector has become increasingly bifurcated into a world of“haves”and“have nots,”with the newest,best amenitized properties garnering the lions share of leasing activity relative to older,class B products.JLL estimates that over the past two years,the office sector has experienced over 153 million square feet of negative net absorption.However,properties built after 2014 experienced positive net absorption of over 61 million square feet.The growing emphasis on sustainability will only accelerate the bifurcation in office markets.Opportunities will emerge to renovate and transform certain office buildings to meet the various green certification standards that tenants increasingly seek,partic-ularly in several European cities,which have more aggressive carbon reduction goals.25OUTLOOK 2023Gold Bullions Performance Should Improve in 2023 Sean Duffin Investment Director,Capital Markets ResearchEver since the gold price soared during the great inflation of the 1970s,many investors believed that gold would rally again whenever high inflation resurfaced.That inflation reckoning finally happened in 2022,and yet,gold declined in USD terms.The sharp rise in real yields and broad-based dollar strength were two key factors that drove this performance,but there are reasons to believe that these factors could lose potency in 2023.We expect golds performance will improve after declining 3.9%in 2022,which ranked near the bottom quartile of its annual returns since 1970.Gold has historically been sensitive to changes in real interest rates.The yield of the ten-year inflation-linked bond rose more than 250 basis points so far in 2022,but gold prices didnt decline as sharply as might be expected.This suggests that golds price was supported by demand linked to heightened geopolitical risks and inflationary concerns.We also shouldnt expect the same trajectory of steep yield increases in 2023.The forward market implies ten-year real yields will end 2023 at the same level as today.The dollars strength is another key reason the price of gold stumbled in 2022.Non-USD based investors have benefited from the currency gap,as the yellow metal posted positive returns in most major currencies.While the dollar is likely to remain supported in the near term,it is richly valued and has enjoyed a lengthy period of cyclical strength.This suggests the additional pressure the dollar will put on gold next year will likely be smaller than in 2022.Finally,given the uncertainty surrounding central banks efforts to rein in inflation,we expect economic growth will be weak.That could be another support for gold,as it has tended to be historically.Still,gold is speculative,and it is more difficult to own when fixed income securities offer better yields than a year ago.GOLD PRICES HAVE BEEN CLOSELY LINKED TO MOVEMENTS IN REAL YIELDSDecember 31,2005 November 30,2022 Sources:Intercontinental Exchange,Inc.and Thomson Reuters Datastream.-1.5%-0.5%0.5%1.5%2.5%3.5505007501,0001,2501,5001,7502,0002,250200520072009201120132015201720192021US$Gold Price(LHS)Real 10-Yr US Yield(Inverted RHS)26OUTLOOK 2023*Bitcoins largest calendar-year gain since 2015 was in 2017 when it was up 1,394%.In 2020,Ethereums best year,it returned 473%.Digital Assets Will Not Eclipse Prior Highs in 2023 Joseph Marenda Head of Digital Assets InvestingEconomic and interest rate headwinds,as well as simple math,will make it difficult for many digital assets to surpass prior highs in 2023.On the latter,digital assets that are down 50%would need to return 100%to reach prior highs,and those down 80%would need to return 500%!While bitcoin,ether,and altcoins have posted gains on this order of magnitude or greater,historically these gains were in the context of strong macro tailwinds.*Still,our long-term view of the blockchain as a positive new technology remains unchanged.To be sure,it is still developing use cases and building its user base,which will contribute to the asset classs volatility.But prior crypto winters have been periods of significant technological progress,and major innovations launched following those winters.Given the pace of venture investment during this winter,technological progress will likely again blossom.A difficult macro environment may set up an opportunity for some patient investors to enter the digital asset space.Historically,buying risk assets that have sold off heavily has typically been a good strategy.And while valuing digital assets is difficult,venture capital(VC)valuations in late 2022 are down materially,which suggests the ecosystem,broadly speaking,is more attractively priced today than a year ago.Investors typically enter the space via three main channels:buying digital assets,such as bitcoin,directly;VC funds;and hedge funds.We tend to prefer seed and early-stage venture,given valuations and the strong alignment between investor and founder.But hedge funds are also a possibility,as trading inefficiencies and information asymme-tries abound.Allocation size is highly portfolio specific,especially for investors with mature VC allocations,which most likely have exposure already.In 2023,other downside risks include(1)distress among bitcoin miners,which could force miners to sell their balance sheet bitcoin,driving down other tokens,(2)follow-on failures due to FTXs collapse,and(3)more FTX-like collapses linked to weak governance and poor business practices.DIGITAL ASSETS VOLATILITY IS HIGHAs of November 30,2022 Percent(%)Trailing Five YearsSources:Bitstamp LTD.,Bloomberg Index Services Limited,Intercontinental Exchange,Inc.,NASDAQ,Standard&Poors,and Thomson Reuters Datastream.5.113.221.418.482.3US TreasuriesGoldNasdaq 100US EquitiesBitcoin27OUTLOOK 20232023 Will Not be a Repeat of the Dollars Annus MirabilisThomas OMahony Investment Director,Capital Markets ResearchThe US dollar experienced a rapid appreciation during 2022.Based on our developed markets(DM)trade-weighted index,which keeps current weights constant,its year-to-date rise of 10.8%is on track to be the sixth largest calendar-year gain for the greenback based on data going back to 1972.Various factors drove this performance.It began with a widening of interest rate differ-entials,as the Federal Reserve became more hawkish.This was followed by a widening in expected growth differentials,as the implications of the war in Ukraine for activity in Europe started to become clear.The dollar also benefited all the while from its role as a risk-off currency and broader safe haven,as equity markets declined.The perfor-mance challenges facing other traditional safe havens,such as Treasuries and gold,helped its standing in this regard.This rally leaves the dollar looking expensive from a long-term perspective.Its real effective exchange rate reached the 100th percentile of our DM basket in October and now sits at the 98th percentile.In addition,the maximum real appreciation this cycle,at 62%,is comparable to the average of 68%seen in the two prior dollar cycles.In recent decades,peaks in the US dollar have typically been associated with troughs in global activity,alongside an easing Fed.Growing recessionary fears and the softer-than-anticipated US CPI data for October saw the dollar weaken in November,as the odds of these conditions being satisfied in 2023 rose.While it is possible that we have seen the peak in the dollar for this cycle,we see several factors continuing to act as supports for the greenback in 2023 even if further upside is limited.First,given we believe that inflation risks are skewed to either matching or exceeding current above-target expectations,we doubt the market will price in a deep rate-cutting cycle,keeping interest rate differentials extended.Second,additional rate hikes in Europe,even as a recession there seems likely,is a further headwind to growth beyond that of the direct impact of the energy crisis.Finally,were a meaningful US recession to take hold,further investor de-risking would likely see the dollar benefit from safe-haven seeking flows.THE DOLLARS REAL VALUATION IS HISTORICALLY ELEVATEDJune 30,1971 November 30,2022Sources:Eurostat,Federal Reserve,MSCI Inc.,OECD,Refinitiv,and Thomson Reuters Datastream.MSCI data provided“as is”without any express or implied warranties.9898025507510019711976198119861991199620012006201120162021Trade-WeightedEquity-Weighted28OUTLOOK 2023Figure Notes Equity Market Recoveries Tend to Deliver Abnormal Returns Data are monthly and reflect the one-year performance following each of the nine equity market downturns since 1970.The median one-year return in based on the entire index history,or 1970 to present.Bear markets are based on a peak-to-trough change in the MSCI World Price Index in USD terms of at least 20%.Asset Class Leaders Vary as the Macro Landscape Shifts Private indexes are one-year pooled horizon internal rate of return(IRR)calculations,net of fees,expenses,and carried interest.The timing and magnitude of fund cash flows are integral to the IRR performance calculation.Public indexes are average annual compounded return(AACR)calculations which are time weighted measures over the specified time horizon,and are shown for reference and directional purposes only.Due to the fundamental differences between the two calculations,direct comparison of IRRs to AACRs is not recommended.Hedge Fund Research,Inc.data revise prior five months data.Data for 2022 are as of June 30 for Private Equity,September 30 for Real Estate,October 31 for Hedge Funds,and November 30 for all others.US Companies Citing ESG on Earnings Calls Has Increased Data represent S&P 500 constituents.Data are based on the calendar quarter in which each earnings call took place.Prices Are Mixed With Slower Moving Items(e.g.,Rents)Still Increasing Flexible CPI and Sticky CPI are calculated by the Atlanta Fed and represent weighted baskets of CPI components,which tend to change quickly and slowly,respectively.According to the Atlanta Fed,Flexible CPI tends to respond more power-fully to economic conditions,whereas Sticky CPI is more associated with expectations about future inflation.10-Yr Us Treasury Excess Return vs Cash Typically Bottoms When the Fed Stops Tightening Data are monthly.Credit Yields Have Retraced Higher in 2022 Asset classes represented by:Bloomberg US Corporate High Yield Index(US HY),Bloomberg Pan-European High Yield Index(Euro HY),Credit Suisse Leveraged Loan Index(US LL),Bloomberg US Corporate Investment Grade Index(US IG),Bloomberg Pan-European Aggregate Corporate Index(Euro IG),Bloomberg Sterling Aggregate Corporate Index(GBP IG),J.P.Morgan EMBI Global Diversified Index(EM USD(Sov),J.P.Morgan CEMBI Diversified Index(EM USD(Corp),J.P.Morgan CLOIE AAA Index(CLO AAA),J.P.Morgan CLOIE BBB Index(CLO BBB),J.P.Morgan CLOIE BB Index(CLO BB),and Bloomberg US CMBS Baa Index(CMBS BBB).Global Corporate Sales Growth Is Linked to Global Economic Growth All data reflect nominal calendar year growth rates.The MSCI ACWI is used to determine global sales growth.Sector Dominance Does Not Last Graph represents sector weightings in the Datastream World equity index.Eurozone Inflation Is Broadening Out Eurozone core inflation excludes energy,food,alcohol,and tobacco.Core Euro Area Government Bond Yields Have Driven the Rise in Periphery Country Yields Data are monthly.Easing of Lockdowns Should See Chinese Equities Outperform GS China Effective Lockdown Index data are through November 29.EM Earnings Expectations and Valuations Are Low EPS growth numbers are based on I/B/E/S estimates.The cyclically adjusted price-tocash earnings(CAPCE)ratio is calculated by dividing the inflation-adjusted index price by trailing ten-year average inflation-adjusted cash earnings.Cash earnings are defined as net income from continuing operations plus depreciation and amortization expense.MSCI does not publish cash earnings for banks and insurance companies and therefore excludes these two industry groups from index-level cash earnings.EM is cyclically adjusted by trailing five-year data.Industry-Loss Warranty Pricing Is Now More Conservative An industry loss warranty is a reinsurance contract that pays out when the financial losses experienced exceed a specified threshold.Short Rebate Has Returned to Positive Territory The short rebate is represented by the effective federal funds rate minus a 50-bp spread.Macro Hedge Funds Tend to Do Better Than 60/40 in Large Positive Inflation Surprises The 60/40 portfolio is composed of MSCI ACWI(gross returns)and Bloomberg Aggregate Bond Index.Inflation surprises represented by the US Citigroup Economic Surprise Index and are divided into four separate quartiles,ranging from first quartile which represents large negative inflation surprises to fourth quartile which represents large positive inflation surprises.There have been 24 large positive inflation surprises,23 modestly positive to modestly negative inflation surprises,24 negative inflation surprises,and 24 large negative inflation surprises.Sharp Decline in Public Markets New Issuance Recent months data may revise.Capital Raised by US Private Diverse Managers Has Increased Over Time Figures represent capital raised by funds based in the United States.Vintage year is defined as expected year of first closing.Fund size is represented by fundraising target.“Diverse”classification is based on information provided by managers who reported a 33%diversity level on a Cambridge Associates survey.Minority groups include gender and race.Data are continuously updated and thus subject to change.29OUTLOOK 2023Recession Era Vintages Have Shown Resilience Internal rates of return are net of fees,expenses,and carried interest.Private equity includes buyout and growth equity funds.Numbers in parentheses represent fund count in each vintage year.Sample size for each cohort is shown in paren-theses.Vintage year is based on first cash flow.Funds less than three years old are considered too young to have produced meaningful returns;those vintages have been excluded from this analysis.Data are continuously updated and thus subject to change.China VC Fundraising and Deal Activity Cooled in 2022 Foreign investor fundraising reflects capital raised by USD-denominated funds.Deal activity reflects capital invested by both USD-and RMB-denominated funds.Digital Assets Volatility Is High Standard deviation based on monthly returns.The Dollars Real Valuation Is Historically Elevated Australian inflation data are quarterly and as of September 30,2022.Eurozone inflation data are as of November 30,2022,and are preliminary.All other inflation data are as of October 31,2022.iNDeX DescriptioNs Bloomberg US Aggregate Bond Index The Bloomberg US Aggregate Bond Index is market capitalizationweighted and includes Treasury securities,government agency bonds,mortgage-backed bonds,and corporate bonds.It excludes municipal bonds and Treasury inflation-pro-tected securities because of tax treatment.Bloomberg Pan-European Aggregate Corporate Index The Bloomberg Pan-European Aggregate Bond Index is a broad-based flagship benchmark that measures fixed-rate,investment grade securities in the following European currencies:Swiss Franc,Czech Koruna,Danish Krone,Euro,British Pound,Hungarian Forint,Norwegian Krone,Polish Zloty,Romanian Leu,Russian Ruble,and Swedish Krona.The principal asset classes are treasuries,government-related,corporate,and securitized,which include Pfandbriefe,other covered bonds and asset-backed securities.Inclusion is based on currency denomination of a bond and not country of risk of the issuer.The Pan-European Aggregate is a component of other flagship indexes,such as the multi-currency Global Aggregate Index.Bloomberg Pan-European High Yield Index The Bloomberg Pan-European High Yield Index measures the market of noninvestment-grade,fixed-rate corporate bonds denominated in the following currencies:euro,pound sterling,Danish krone,Norwegian krone,Swedish krona,and Swiss franc.Inclusion is based on the currency of issue,and not the domicile of the issuer.Bloomberg Sterling Aggregate Corporate Index The Bloomberg Sterling Aggregate Bond Index is a flagship benchmark that measures the investment grade,sterling-denom-inated,fixed-rate bond market,including treasuries,government-related,corporate,and securitized issues.Inclusion is based on the currency denomination of a bond,not country of risk of the issuer.The Sterling Aggregate is a component of other Bloomberg Barclays flagship indices such as the multi-currency Global Aggregate and Pan-European Aggregate Indexes.Bloomberg Barclays US CMBS Baa Index The Bloomberg Barclays CMBS Index has been designed to measure the performance of investment-grade commercial mortgage-backed securities(CMBS)market.This index is the Baa component of the Investment Grade CMBS index.For investment-grade sectors,securities must be rated investment grade(Baa3/BBB-or higher)by at least two of the following ratings agencies:Moodys,S&P,and Fitch.If only two of the three agencies rate the security,the lower rating is used to determine index eligibility.If only one of the three agencies rates a security,the rating must be investment grade.Bloomberg US Corporate High Yield Index The Bloomberg US Corporate High Yield Index measures the US corporate market of non-investment grade,fixed-rate corporate bonds.Securities are classified as high yield if the middle rating of Moodys,Fitch,and S&P is Ba1/BB /BB or below.Bloomberg US Corporate Investment Grade Bond Index The Bloomberg US Corporate Investment Grade Bond Index measures the investment-grade,fixed-rate,taxable corporate bond market.It includes USD-denominated securities publicly issued by US and non-US industrial,utility,and financial issuers.Credit Suisse Leveraged Loan Index Credit Suisse Leveraged Loan Index is a market-weighted index that tracks the performance of institutional leveraged loans.Goldman Sachs China Effective Lockdown Index(ELI)The GS China Effective Lockdown Index is a combination of official restrictions and actual mobility data.J.P.Morgan CEMBI Diversified Index The J.P.Morgan Corporate Emerging Markets Bond Index Broad Diversified(CEMBI Broad Diversified)is an expansion of the J.P.Morgan Corporate Emerging Markets Bond Index(CEMBI).The CEMBI is a market capitalization weighted index consisting of USD-denominated emerging markets corporate bonds.J.P.Morgan Collateralized Loan Obligation Index(CLOIE)CLOIE offers total returns and analytics based on observable pricings of a representative pool of bonds following a stated methodology and is published daily.The index holistically captures the USD-denominated CLO market,representing more than 3,000 instruments at a total par value of US$236.1 billion.Market participants can track securitized loan market valuations.CLOIE tracks floating-rate CLO securities in 2004present vintages.Additional sub-indices are divided by ratings AAA through BB,and further divided between pre-and post-crisis vintages.CLO 2.0,or post-crisis vintages,consists of deals issued in 2010 and later.CLOIE utilizes a market-value weighted methodology.30Copyright 2022 by Cambridge Associates LLC.All rights reserved.This report may not be displayed,reproduced,distributed,transmitted,or used to create derivative works in any form,in whole or in portion,by any means,without written permission from Cambridge Associates LLC(“CA”).Copying of this publication is a violation of US and global copyright laws(e.g.,17 U.S.C.101 et seq.).Violators of this copyright may be subject to liability for substantial monetary damages.This report is provided for informational purposes only.The information does not represent investment advice or recommendations,nor does it constitute an offer to sell or a solicitation of an offer to buy any securities.Any references to specific investments are for illustra-tive purposes only.The information herein does not constitute a personal recommendation or take into account the particular investment objectives,financial situations,or needs of individual clients.Information in this report or on which the information is based may be based on publicly available data.CA considers such data reliable but does not represent it as accurate,complete,or independently verified,and it should not be relied on as such.Nothing contained in this report should be construed as the provision of tax,accounting,or legal advice.Past performance is not indicative of future performance.Broad-based securities indexes are unmanaged and are not subject to fees and expenses typically associated with managed accounts or investment funds.Investments cannot be made directly in an index.Any information or opinions provided in this report are as of the date of the report,and CA is under no obligation to update the information or communicate that any updates have been made.Information contained herein may have been provided by third parties,including investment firms providing information on returns and assets under management,and may not have been independently verified.The terms CA or Cambridge Associates may refer to any one or more CA entity including:Cambridge Associates,LLC(a registered invest-ment adviser with the US Securities and Exchange Commission,a Commodity Trading Adviser registered with the US Commodity Futures Trading Commission and National Futures Association,and a Massachusetts limited liability company with offices in Arlington,VA;Boston,MA;Dallas,TX;Menlo Park,CA,New York,NY;and San Francisco,CA),Cambridge Associates Limited(a registered limited company in England and Wales,No.06135829,that is authorised and regulated by the UK Financial Conduct Authority in the conduct of Investment Business,reference number:474331);Cambridge Associates Limited,LLC(a registered investment adviser with the US Securities and Exchange Commission,an Exempt Market Dealer and Portfolio Manager in the Canadian provinces of Alberta,British Columbia,Manitoba,Newfoundland and Labrador,Nova Scotia,Ontario,Qubec,and Saskatchewan,and a Massachusetts limited liability company with a branch office in Sydney,Australia,ARBN 109 366 654),Cambridge Associates Investment Consultancy(Beijing)Ltd(a wholly owned subsidiary of Cambridge Associates,LLC which is registered with the Beijing Administration for Industry and Commerce,registration No.110000450174972),and Cambridge Associates Asia Pte Ltd(a Singapore corporation,registration No.200101063G,which holds a Capital Market Services License to conduct Fund Management for Accredited and/or Institutional Investors only by the Monetary Authority of Singapore).OUTLOOK 2023J.P.Morgan EMBI Global Diversified Index The J.P.Morgan EMBI Global Diversified Index is an unmanaged index that tracks total returns for dollar-denominated Brady bonds,Eurobonds,traded loans,and local market debt-instrument issues by sovereign and quasi-sovereign entities of emerging markets countries.MSCI All Country World Index The MSCI ACWI is a free floatadjusted,market capitalizationweighted index designed to measure the equity market performance of developed and emerging markets.The MSCI ACWI consists of 49 country indexes comprising 23 developed and 25 emerging markets country indexes.The developed markets country indexes included are:Australia,Austria,Belgium,Canada,Denmark,Finland,France,Germany,Hong Kong,Ireland,Israel,Italy,Japan,the Netherlands,New Zealand,Norway,Portugal,Singapore,Spain,Sweden,Switzerland,the United Kingdom,and the United States.The emerging markets country indexes included are:Argentina,Brazil,Chile,China,Colombia,Czech Republic,Egypt,Greece,Hungary,India,Indonesia,Korea,Malaysia,Mexico,Pakistan,Peru,Philippines,Poland,Qatar,Saudi Arabia,South Africa,Taiwan,Thailand,Turkey,and the United Arab Emirates.MSCI World Index The MSCI World Index represents a free floatadjusted,market capitalizationweighted index that is designed to measure the equity market performance of developed markets.It includes 23 developed markets country indexes:Australia,Austria,Belgium,Canada,Denmark,Finland,France,Germany,Hong Kong,Ireland,Israel,Italy,Japan,the Netherlands,New Zealand,Norway,Portugal,Singapore,Spain,Sweden,Switzerland,the United Kingdom,and the United States.S&P 500 Index The S&P 500 Index measures the stock performance of 500 large companies listed on stock exchanges in the United States.The S&P 500 is a capitalization-weighted index and the performance of the ten largest companies in the index account for 21.8%of the performance of the index.The average annual total return of the index,including dividends,since inception in 1926 has been 9.8%;however,there were several years where the index declined more than 30%.US Citigroup Economic Surprise Index Citigroup Economic Surprise Index represents the sum of the difference between official economic results and forecasts.With a sum over 0 its economic performance generally beats market expectations.With a sum below 0,its economic conditions are generally worse than expected.Drew Boyer,Tiffany DiLiberto,Christina Fenton-Neblett,Vivian Gan,Kristen Greiner,Song Han,David Kautter,Marcelo Morales,Kristin Roesch,and Ilona Vdovina also contributed to this publication.31

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世界经济论坛：爱迪生联盟：10亿人生活挑战（英文版）（21页）.pdf

1 Billion Lives ChallengeI M P A C T R E P O R TJ A N U A R Y 2 0 2 3ContentsImages:Getty Images,Wikipedia 2023 World Economic Forum.All rights reserved.No part of this publication may be reproduced or transmitted in any form or by any means,including photocopying and recording,or by any information storage and retrieval system.Disclaimer This document is published by the World Economic Forum as a contribution to a project,insight area or interaction.The findings,interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum,nor the entirety of its Members,Partners or other stakeholders.Foreword Executive summary1 Testimonials2 Progress overview2.1 By focus area2.2 By problem solved2.3 By geography2.4 By key enabler3 Call to action and outlook4 Impact stories5 AppendixContributorsEndnotes3459101112131415181920Edison Alliance:1 Billion Lives Challenge2ForewordThe digital divide separates who is part of global society and who is left out.In January 2021,we convened leaders from the private sector and governments around the world to create the EDISON Alliance.These champions recognize that we cannot move forward as a society unless everyone in the world can participate in a digital future that empowers people to take control of their health,financial well-being and leadership of their communities.Our founding members,Verizon,Apollo Hospitals,Mastercard,Vista Equity Partners,the Government of Rwanda and the United Nations Development Programme(UNDP)share the conviction that 21st-century infrastructure should be available to everyone regardless of where they were born or where they live.We made a pact to hold each other accountable to that goal.Although 95%of the worlds population lives in areas covered by a broadband network,2.7 billion people remain offline.1 Even among those connected,many struggle with connectivity speeds and cost.There is much work to be done,but by working together,the more than 100 chief executives,ministers,heads of international organizations,civil society leaders,innovators and universities behind the EDISON Alliance can bring the whole world online,and further the UN Sustainable Development Goals in the process.In September 2021,we launched the 1 Billion Lives Challenge.Our goal is to improve 1 billion lives through affordable and accessible digital solutions across three focus areas healthcare,education and financial services by 2025.Verizon is proud to have committed to providing 10 million youths with digital skills training and 1 million small businesses with resources to help them thrive in the digital economy.With 16 months into our work,we are pleased to share our first impact report,which presents the number of lives improved so far by EDISON Alliance partners.We will update this number in January every year through 2025.We are proud of the progress made by our partners in the EDISON Alliance and invite you to join our movement and make a commitment to the 1 Billion Lives Challenge so that we can continue to advance digital inclusion around the world.Hans Vestberg Chairman and Chief Executive Officer,Verizon;Chairman,EDISON AllianceDerek OHalloran Head,Shaping the Future of Digital Economy and New Value Creation,World Economic Forum1 Billion Lives ChallengeJanuary 2023people remain offline2.7bnEdison Alliance:1 Billion Lives Challenge3Executive summaryThe EDISON Alliance is achieving digital inclusion by demonstrating the power of commitment,innovation and collaboration.Bridging the digital divide is a complex challenge,and the EDISON Alliance believes in the importance of demonstrating it is achievable.Responding to the challenge,the Alliance launched the 1 Billion Lives Challenge in September 2021 and set an ambitious goal:improve 1 billion lives through affordable and accessible digital solutions in three focus areas healthcare,education and financial services by 2025.As such,the core metric is the outcome a life improved through new adoption of a digital service.Members are requested to make a commitment on the number of lives they aim to positively impact by 2025.Commitments must be backed by credible initiatives.The focus must align with one of the three focus areas above,or tackle one of the three structural barriers:access,affordability and usability.Many partners have joined the challenge and made sizeable public commitments to improve a quantified number of unique lives.They have recently reported back the progress made against their individual 2025 targets.Since January 2021,EDISON Alliance partners have positively impacted the lives of 454 million people around the world by activating over 250 initiatives across 90 countries.This represents 45%of the 1 billion target already,with three full years left until 2025.EDISON partners also reported back on how they have addressed key barriers,such as affordability,usability and accessibility,in different parts of the world.Edison Alliance:1 Billion Lives Challenge4TestimonialsFrom our board membersThe digital revolution is an empowering force for people and planet,yet billions,especially those most vulnerable populations of societies,remain offline or poorly connected.At UNDP,reimagining how we do development in the digital age has naturally led us to focus on no one being left behind.That is why UNDP became a founding member of the Edison Alliance,and we are very pleased to see how it has accelerated wider adoption of digital inclusion through collective advocacy and country-level initiatives.Achim Steiner,Administrator,United Nations Development Programme,New YorkTheres an opportunity to bring more people into the digital economy that makes communities more resilient and grows markets.An important example is the EDISON Alliance.Through partnerships like this,digital tools can benefit everyone,not just a few.It is one more important step in making technology as trusted,accessible and useful as possible.Michael Miebach,Chief Executive Officer,Mastercard,USARwanda is committed to becoming a cashless economy with 100%financial inclusion for our population by 2025.To achieve this,we are implementing programmes that will ensure that our citizens have access to affordable smart devices and possess appropriate digital skills to harness the benefits of a digital,cashless economy.We invite partners,corporates and governments,within the EDISON Alliance to accelerate their commitments to ensure universal and lasting digital inclusion for 1 billion lives.Paula Ingabire,Minister of Information Communication Technology and Innovation of RwandaThrough the Southern Communities Initiative(SCI)powered by Vista Equity Partners,PayPal and the Boston Consulting Group,we are building sustainable infrastructure that can generate a five-times economic return to close racial equity gaps from a$1.5 billion investment across the six southern communities home to over half of all African-Americans.Since Vista joined the EDISON Alliance,SCI has helped digitally connect 7,000 households in Charlotte,North Carolina,and 10,000 homes across Birmingham,Alabama,and will expand digital services to Historically Black Colleges and Universities in broadband deserts.The private sector must continue to complement the public sectors work if we are to digitally engage one billion people by 2025.Robert F.Smith,Founder,Chairman and Chief Executive Officer,Vista Equity Partners,USAInspired by the vision of the EDISON Alliance,Apollo Hospitals and ATC joined hands to launch five digital dispensaries in rural Madhya Pradesh,India.Through this partnership,we are bringing quality healthcare services to rural communities and providing them with primary,preventive and speciality teleconsultation services.I urge more organizations and governments to commit to the EDISON Alliances 1 Billion Lives Challenge and forge similar partnerships.Shobana Kamineni,Executive Vice-Chairperson,Apollo Hospitals Enterprise,India1Edison Alliance:1 Billion Lives Challenge5From our championsIn the past year,I saw first-hand how digital finance helped expectant mothers more efficiently receive healthcare during their pregnancies and how innovative insurance products protected rural farmers against climate-related crises during my UN visits to Tanzania,Cte dIvoire and Senegal.To ensure we scale these positive outcomes,we need continued investment and advocacy in digital infrastructure that enable delivery of services across sectors,beyond finance.We also need to ensure greater connectivity,digital IDs,fair competition,interoperable payment systems,consumer protection,data governance,and digital literacy allow marginalized communities to navigate these services in ways that work for them.Her Majesty Queen Mxima of the Netherlands,United Nations Secretary-Generals Special Advocate for Inclusive Finance for Development(UNSGSA)and Honorary Patron of the G20s Global Partnership for Financial InclusionIn 2022,Hewlett Packard Enterprise committed to helping an additional 4 million people access life-saving healthcare by 2025 through our cloud-enabled eHealth centres,COVID labs and vaccination centres.We cannot do this work alone and are honoured to engage with many partners,such as central and state government agencies.I would like to invite more companies and governments to join us in leveraging the potential of technology to increase access to modern,affordable and personalized healthcare.Antonio Neri,President and Chief Executive Officer,Hewlett Packard Enterprise,USACrescent Enterprises is actively working towards our commitment to the EDISON Alliance 1 Billion Lives Challenge of impacting 100,000 youth in the Middle East,North Africa and South Asia region by 2025.As part of this commitment,we have also invested in numerous start-ups that are increasing digital access across the global growth markets,along with empowering disadvantaged communities through financial inclusion,and access to digital health and digital education.While technology is an important tool in addressing global challenges,people are the true catalysts of change working collectively towards the advancement of humanity and the protection of our planet,we can bridge the digital divide and fully harness the transformative impact of technology.Badr Jafar,Chief Executive Officer,Crescent Enterprises,United Arab EmiratesEmpowering the next generation by ensuring that every young person has access to a quality internet connection and can acquire the necessary skills to thrive in a digital economy is critical.At Ericsson,we believe firmly in the power of public private partnerships to make lasting difference.This is why we joined the 1 Billion Live Challenge with a twofold contribution.First,we are a proud partner to UNICEF in support of the Giga initiative,which aims to connect every school to the internet by 2030.In addition,we are contributing through our Connect to Learn initiative,committing to support one million young people by 2025 with access to digital learning and skills.Brje Ekholm,President and Chief Executive Officer,Ericsson,SwedenEdison Alliance:1 Billion Lives Challenge6From our championsThe EDISON Alliance recognizes the importance of multistakeholder partnership in empowering people through digital inclusion.As an EDISON partner,ITU supports the 1 Billion Lives Challenge through the ITU/UNICEF Giga initiative to connect every school to the internet,our Partner2Connect connectivity pledging platform,which has already mobilized$30 billion for digital transformation initiatives around the world,and our work to address access and digital skills for the worlds most vulnerable communities.Doreen Bogdan-Martin,Secretary-General,International Telecommunication Union(ITU),GenevaInnovation does not happen in isolation.Through our partnership with Qure.ai,we are proud of our commitment to screen 5 million patients for potential lung cancer by 2025.Moving forward,we aim to deepen our collaboration with members of the EDISON Alliance and expand into more disease areas where scalable digital solutions can make healthcare more affordable,accessible and inclusive for patients in underserved communities around the world.Leif Johansson,Chairman of the Board,AstraZeneca,SwedenNokia joined the EDISON Alliance because we know digitalization improves lives.Look at El Salvador,where connectivity delivered to homes,schools,business and public services by Nokia is expected to add$25 billion to GDP,and create up to 1 million jobs,by 2030.Digital means growth,productivity and opportunity it deserves to be a global priority.Pekka Lundmark,President and Chief Executive Officer,Nokia,FinlandBharti Enterprises and its companies have been consistently working towards improving the lives of 200 million people across 15 countries.With a vision to train,equip and empower unbanked or underbanked users with formal financial services,Bhartis Airtel Payments Bank has created Indias largest retail banking network of 500,000 neighborhood banking points,now serving one in six villages in the country.We would encourage more organizations to join the EDISON Alliances 1 Billion Lives Challenge and commit to fostering collaboration and bridging the digital divide.Rajan Bharti Mittal,Vice-Chairman,Bharti Enterprises,IndiaIn 2022,Inmarsat included an additional 270,000 mariners into the digital society and provided communications to disaster impacted regions inhabited by nearly 7 million people.Using space technology to provide connectivity to these populations closes the digital divide,allows displaced people to connect with their families,and addresses welfare issues that are prevalent amongst the maritime community.We commend the EDISON Alliance and the 1 Billion Lives Challenge for their initiative.Rajeev Suri,Chief Executive Officer,Inmarsat Global,United KingdomEdison Alliance:1 Billion Lives Challenge7From our championsThrough the execution of our Ambition 2025 strategy,we continue to accelerate digital and financial inclusion across the African continent.We have built the largest and most valuable platforms to drive financial services adoption across Africa.Our offerings include wallet,insurance,lending,payments,e-commerce and international remittance enabling Africans to engage in e-commerce activity.Over 62 million people across our markets now access affordable,inclusive and comprehensive financial services through our platforms.I am pleased to confirm that we are on course to reach our Ambition 2025 target of 100 million fintech services users as we,together with all our partners in the Edison Alliance,work towards meeting the 1 Billion Lives Challenge.Ralph Mupita,Group President and Chief Executive Officer,MTN Group Limited,South AfricaInspired by the vision of the EDISON Alliance,Apollo Hospitals and American Tower joined hands to launch five digital dispensaries to provide primary,preventative and specialty teleconsultation services in rural Madhya Pradesh.The lesson of this collaboration is that multistakeholder partnerships have greater impact and encourage more organizations and governments to commit to the EDISON Alliances 1 Billion Lives challenge.Building this kind of collaborative ecosystem will enable us to bring quality and affordable healthcare to communities in need.Tom Bartlett,President and Chief Executive Officer,American Tower Corporation,USADigital Opportunity Trust(DOT)is proud to be a member of the EDISON Alliance global movement.Our commitment of digital inclusion to reach a million people in disadvantaged communities has been a rallying call within the DOT network of young people and with our partners.We continue to forge new relationships within the Alliance that will contribute to the expansion of mutual impact.Janet Longmore,Founder and Chief Executive Officer,Digital Opportunity Trust(DOT),CanadaThis year 56%of the beneficiaries of the Tony Elumelu Foundation Entrepreneurship Programme are women entrepreneurs.This is a testament to our commitment to promote gender inclusion in entrepreneurship and democratise luck for all African entrepreneurs.Since the foundation launched the TEF Entrepreneurship Programme,we have disbursed over$100million to over 18,000 African women and men who have gone on to solve Africas most pressing challenges.Since 2010,we have championed entrepreneurship as the catalyst for Africas economic and social growth.Now we are launching our Coalition for African Entrepreneurship,bringing together global and African partners,such as the 1 Billion Lives Challenges,to significantly increase the impact created by our unique platform for accessing,training and funding entrepreneurs across Africa.We look forward to a fruitful partnership with public and private sector players as we have a common goal a strong,confident,self-reliant Africa.Tony Elumelu,Chairman,UBA Group,NigeriaEdison Alliance:1 Billion Lives Challenge8To date,only 12%of partners have reached at least half of their 2025 target,while 50%of partners have reached less than 20%.The Alliance anticipates a strong uptick in the numbers in the next couple of years as the initiatives supporting commitments continue to build up momentum.Progress overview2The results presented in this report speak not only to the momentum the 1 Billion Lives Challenge has activated in the span of several months,but the seriousness with which governments,businesses,investors and academic institutions are tackling digital inclusion.The commitments originate from large public and private sector organizations supported by over 250 initiatives across 90 countries.1 Billion Lives Challenge progress overviewFIGURE 1454,440,483 lives improved between January 2021 and October 2022,45%of 2025 targetSupported by 250 initiativesIn90 countries14 Number of industriesEdison Alliance:1 Billion Lives Challenge9By Focus Area2.1Breakdown of initiatives by focus areaBreakdown of lives impacted by focus areaFIGURE 2.1FIGURE 2.274G%Digital infrastructureFinanceHealthEducation20b%4%Digital infrastructureFinanceHealthEducation In 2021,1.4 billion adults were unbanked.2 EDISON Alliance partners provided 280 million unserved and underserved people with access to digital financial services such as e-banking,mobile wallets and e-payments.EDISON Alliance partners brought 90 million people access to digital healthcare services such as remote/connected care,telehealth platforms and telemedicine services.In 2021,244 million children and youth between the ages of 6 and 18 worldwide were out of school.3 EDISON Alliance partners enabled 18 million unserved and underserved people and youth to access online quality education,remote learning solutions and job skills training.64 million people benefitted from digital infrastructure investment and deployment.While one-third of the 250 partner initiatives are pursuing online learning solutions,only 4%of the total number of lives were impacted through online education.The low conversion ratio demonstrates the difficulty and resources needed to offer meaningful services such as online education to underserved communities.Key takeaways*Less than 1%of partner initiatives could not be classified into one of these categories.Edison Alliance:1 Billion Lives Challenge10By problem solved2.2Breakdown of initiatives by type of problem solvedBreakdown of lives impacted by type of problem solvedFIGURE 3.1FIGURE 3.2UsabilityAffordabilityAccess41A(cessAffordabilityUsability 128 million people benefitted from increased affordability of connectivity and/or digital services(bringing down the cost of fixed and mobile broadband and of internet enabled devices as well as online services).270 million people gained access to connectivity or digital services.52 million people were given access to digital skills training,and/or relevant content to connect and use digital services.Digital literacy is a key priority,well covered by partner initiatives(40%of initiatives are aimed at increasing digital literacy),but it also requires time,capital and effort,which explains why only 11%of the total number of lives were impacted through digital skills training at this stage.One of the key barriers to closing the digital divide,which remains underappreciated,is affordability.Key takeaways*Less than 1%of partner initiatives could not be classified into one of these categories.Edison Alliance:1 Billion Lives Challenge11By geography2.3Lives impacted by country and region*FIGURE 4.1Source:Australian Bureau of Statistics,GeoNames,Microsoft,Navinfo,OpenStreetMap,TomTomBy countryBy regionRanking by country with most lives impacted by EDISON partners*8y%3%South Asia 79rica 10%Others 8%Americas 3%1.India 2.Bangladesh3.Pakistan4.Ethiopia5.Indonesia6.USA7.Zambia8.Myanmar9.Colombia10.Uganda11.Malawi12.Peru13.China14.Philippines15.Dominican Republic16.Tanzania17.Kenya18.Morocco19.Malaysia20.Viet Nam The two regions with most lives improved by EDISON partners are South Asia(79%of total)and Africa(10%)and map to the two regions most in need.4 Four out of the five countries with most lives improved are located in South Asia(India,Bangladesh,Pakistan and Indonesia).The combined population of these five countries totals over 2 billion people.Key takeaways Edison Alliance:1 Billion Lives Challenge12Out of the 10 countries with most partners activating commitments,two are high-income countries and three are upper middle-income countries.5 Digital deserts in rural and urban areas and the lack of sufficient connectivity speeds and skills to meaningfully connect are challenges that most countries in the world face,irrespective of GDP levels.Key takeaways Number of EDISON partners implementing commitments in country*FIGURE 4.21116Source:Australian Bureau of Statistics,GeoNames,Microsoft,Navinfo,OpenStreetMap,TomTom*Based on data submitted by partners able to report back at the country level.1.India2.USA 3.Kenya4.South Africa5.Ethiopia6.Uganda7.China8.UK9.Zambia10.PeruRanking by number of EDISON partners implementing commitments in country*1.Capacity development2.Commercial partnerships3.Non-commercial partnerships4.Investment5.Policy alignmentPartners also reported back on the key levers used to impact lives on the ground.They rank as follows:By key enabler2.4Edison Alliance:1 Billion Lives Challenge13Call to action and outlook3Inspiring the next wave of partner commitments and initiatives.The 1 Billion Lives Challenge is open to any organization or initiative that either makes an existing or new commitment to improve a quantified number of lives through digitally inclusive services,or provides a defined,verified,and material resource contribution towards an initiative with a recognized commitment.The impact on organizations that are choosing to develop targets for the first time is evident,taking inspiration and learning from those that have already done so.Success breeds success;confidence breeds confidence.There are also positive feedback loops across the network as these commitments and related initiatives build on each other for a more significant impact.In 2023,EDISON Alliance partners,informed by the learnings and key takeaways comprised in this impact report,will continue to address existing gaps and new ones,leverage the breadth and depth of EDISONs ecosystem of partners to ensure 2025 targets are met,and inspire new industries,governments and organizations to join this global movement.Edison Alliance:1 Billion Lives Challenge14Impact stories4The work of the Alliance is felt all over the world,directly impacting lives and livelihoods.Edison Alliance:1 Billion Lives Challenge15Communities living in the farthest reaches of Himachal Pradesh in India struggle to access healthcare and medical emergencies due to a shortage of healthcare professionals,a lack of connectivity,and at 4,267 metres above sea level,the terrain is challenging.Apollo Tele Health Services(ATHS)set out to transform the way healthcare is delivered to these communities.Along with the Government of Himachal Pradesh,they have set up telemedicine centres in four key areas,trained specialist staff,and harnessed the power of connectivity to bring virtually specialist medical expertise to thousands of people.22,727 tele-consultations have taken place(as of July 2021).Attended and stabilized over 1,300 tele-emergency cases The centres have achieved a female-male patient ratio of 51:49 enabling more women to get the healthcare they need.More than 4,000 people have enrolled in community outreach programmes offering screening for everything from NCDs to anaemia.IMPACT STORY 01Apollo Hospitals:Saving lives in the highest places on earthChar Kukri Mukri is located in Bhola,the southernmost district of Bangladesh.Disconnected from the mainland,the community finds itself excluded from basic public services,banking and commerce.a2i,the flagship digital transformation programme of the Bangladesh government,with support from UNDP,set out to transform the way public services are delivered to these communities by setting up one-stop shops known as Digital Centres in all 4,500 union councils.Whether it is aiding secure social safety net payments,applying for passports,engaging in ecommerce,or making the most of mobile money,the digital centres have transformed the way people especially the poor living in remote,rural areas look at and access services. 9,000 micro-entrepreneurs have delivered more than 700 million services to over 60 million Bangladeshis since 2010.Aggregated,citizens of Bangladesh have saved more than$16 billion,nearly 12 billion workdays and 7.5 billion visits in the last decade due to the more efficient delivery of public services alone.IMPACT STORY 02Government of Bangladesh:Empowering entrepreneurs with access to digital servicesEdison Alliance:1 Billion Lives Challenge16Millions of students in the US lack the connectivity,technology and skills required for success in todays digital economy.Verizon Innovative Learning helps school districts,teachers and students use technology to improve learning outcomes and to incorporate STEM topics and training into curriculum.Through online resources,distance mentorships,collaborations with other non-profits and in-person events,Verizon provides schools with resources to teach digital skills and support STEM education.In the 2021-2022 school year,Verizon signed up more than 500 schools nationwide for its Innovative Learning programme.It has impacted more than 650,000 students,investing nearly$1 billion since the start of the programme.IMPACT STORY 03Verizon:Inspiring students with tech innovations Digital Opportunity Trust(DOT)created the Digital Skill Programme to bridge the digital divide and enhance young women and mens employability,digital engagement,and reach the most vulnerable and unserved in Jordan-where the internet penetration rate stood at 66.8%of the total population at the start of 2022 and mobile connections were equivalent to 78%of the total population.Additionally,mobile phone ownership sits around 21%The programme is curated to provide a wide range of digital skills training,in basic digital literacy microwork,data management,design and social media management,website development,e-commerce,programming and mobile application development.Since launching,the Digital Skills Programme has led to more youth being prepared for jobs of the future with digital skills.3,933 participants have completed or are in the process of completing the Digital Skills Programme.5,337 training opportunities have been provided to youth.1:100 trainer to community member participant ratio-enabling 1 young trainer to empower 100 community members with digital skills for work.72%of participants identifying as women worked towards bridging the gender digital divide for young women and girls.40 trainers,15 identifying as women,worked towards delivering programmes and ensuring women and girls are included and feel safe.100%of content delivered in local languages and co-designed with young people.IMPACT STORY 04Digital Opportunity Trust:Preparing youth for the future of work with digital skillsEdison Alliance:1 Billion Lives Challenge17Appendix5MethodologyThe EDISON Alliance has gathered numerous commitments.However,tangible impact has always been the main priority for EDISON Alliance partners.The EDISON Alliance implemented a yearly commitment reporting exercise to measure impact on the ground and report progress against our collective 2025 target.What were partners asked to report back on?Partners were asked to report back on:The total number of lives improved,based on each partners latest reported numbers If the information was available,a breakdown by KPI:lives impacted by geography,focus area,problem being solved(i.e.,usability,affordability,access)and key enablersHow is progress tracked?All data comprised in this report was submitted by EDISON Alliance partners.Every organization and initiative have their own mechanisms for tracking and measuring the progress of their programmes;partners were relied on to track and share their progress.The EDISON Alliance wants to hold itself accountable to the aggregate impact of 1 billion lives.Therefore,we have mapped each partners reporting process to understand what they are tracking,and how and when they are reporting progress.To avoid force fitting a unique reporting calendar on partners,we built in flexibility for partners to report back numbers based on their own reporting cycles and availability of data provided.While collective progress will be communicated once a year at the Annual Meeting in Davos,partners follow tailored and individual reporting cadences,which remain the same year on year.Key considerations:Lives impacted before the launch of the EDISON Alliance in January 2021 are not included in reporting numbers.Since commitments are usually an aggregation of several digital inclusion initiatives,partners were asked,after consultations,to report back at the initiative level.No individual partner data is shared externally,only aggregated and collective progress.How have you managed potential double counting of lives?In collaboration with partners,we eliminated or reduced possible double counting if:Lives were counted more than once within the same initiative;we are counting unique beneficiaries and not counting usage and the number of clicks or calls.Lives were counted across more than one initiative within the same focus area;for example,if a student used two separate online learning platforms(education focus area)included in the same commitment.Lives were counted by more than one partner.In the case where two partners have made separate commitments but a subset of their commitment includes a partnership,we have avoided counting numbers twice.Ultimately,we want people using multiple digital services.This means there is meaningful collaboration and resources from more than one organization going into building a sustainable ecosystem and delivering a rich set of meaningful services for individuals.Edison Alliance:1 Billion Lives Challenge18ContributorsWorld Economic Forum Claude DyerCommunity Lead,World Economic ForumDerek OHalloranHead,Digital Economy and New Value Creation,World Economic ForumLisa MengProgramme Head,Digital Inclusion,World Economic ForumEdison Alliance:1 Billion Lives Challenge19Endnotes1.“Measuring digital development:Facts and Figures 2022”,International Telecommunication Union,November 2022,https:/www.itu.int/hub/publication/d-ind-ict_mdd-2022.2.“The Global Findex Database 2021:Financial Inclusion,Digital Payments,and Resilience in the Age of COVID-19”,World Bank Group,2021,https:/www.worldbank.org/en/publication/globalfindex.3.“Global Education Monitoring Report”,UNESCO,2021,https:/unesdoc.unesco.org/ark:/48223/pf0000379875.4.“Measuring digital development:Facts and Figures 2022”,International Telecommunication Union,November 2022,https:/www.itu.int/hub/publication/d-ind-ict_mdd-2022.5.“The World by Income and Region”,World Bank Group,2021-2022,https:/datatopics.worldbank.org/world-development-indicators/the-world-by-income-and-region.html.Edison Alliance:1 Billion Lives Challenge20World Economic Forum9193 route de la CapiteCH-1223 Cologny/GenevaSwitzerland Tel.: 41(0)22 869 1212Fax: 41(0)22 786 2744contactweforum.orgwww.weforum.orgThe World Economic Forum,committed to improving the state of the world,is the International Organization for Public-Private Cooperation.The Forum engages the foremost political,business and other leaders of society to shape global,regional and industry agendas.

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PayPal：2022年欧洲电子商务指数报告（英文版）（46页）.pdf

2022 PayPal Inc.Confidential and proprietary.EuropePayPal e-Commerce IndexNovember 20222 2022 PayPal Inc.Confidential and proprietary.About the researchThis research report was produced by PayPal,based on a study conducted by ACA Research with n=15,221*consumers and n=4,604 businesses.It contains general observations about trends in e-Commerce,social commerce,Buy Now Pay Later and cross border as well as involving cryptocurrency,NFTs and the metaverse.The study does not take into account the objectives,situation or needs of any specific business or individual.The consumer research conducted by ACA Research consisted of a 15-minute online survey of n=15,221*consumers across 12 different markets aged 18-75 years,exploring adoption,usage and sentiment towards e-Commerce,social commerce,Buy Now Pay Later and cross border as well as cryptocurrency,NFTs and the metaverse.In addition,ACA Research conducted a 10-minute online survey of n=4,604 with business decision makers within B2C retailers and businesses who operate entirely or partially online,across 12 different markets.It explored their attitudes and behavioursaround e-Commerce,social commerce,Buy Now Pay Later and cross border,as well as cryptocurrency,NFTs and the metaverse.METHODOLOGY:Online self-completion survey.The research was carried out in compliance with industry guidelines and privacy requirements.Sample was sourced through consumer and business research panels,with participants incentivised for completing the survey.The consumer sample was weighted by age,gender and location to ensure data was nationally representative.Significance testing on this sample was conducted at a 95%confidence interval,with a potential sampling error ranging from 2.2%to 3.1%.Quotas for the business sample were set on turnover and location.Significance testing on this sample was conducted at a 95%confidence interval,with a potential sampling error ranging from 4.3%to 6.9%.Please note that numbers may not add up to 100%due to rounding.TIMING:The research was in field from 15 June-22 July,with additional top-up sample collected between 26 August-9 September and 13-18 September.GENERATIONAL AGES:Generational Ages as at 2022:Gen Z(18-25 years);Gen Y(26-41 years);Gen X(42-57 years);Baby Boomer(58-75 years).SAMPLE:*NOTE:Total consumer sample for France&Germany includes additional participants from top-up studies on BNPL and Cross Border respectively.MarketConsumersBusinessesBelgium1,017405France*2,043*405Germany*2,038*400Greece1,014406Ireland1,012407Israel1,013200Italy1,014405The Netherlands1,015405Poland1,017255Spain1,017406Sweden1,009405UK2,012505 2022 PayPal Inc.Confidential and proprietary.3e-CommerceAt least weeklyTotal19F2%CQ2.How often do you do each of the following(MAKE PURCHASE OR PAYMENT)on a computer or mobile device?BASE:All Consumers 18-75,n=13,175e-CommerceOnline Shopping FrequencyConsumers almost universally make purchases and payments online,with two thirds making online purchases or payments each week;the Dutch and Greek stand out as the most frequent online shoppers.The research shows 97%of consumers across Europe and Israel make online purchases or payments.This isnt an occasional activity either,with two-in-three(65%)making online purchases or payments weekly or more often and the average amount of transactions for this group at almost four a week(3.7).This activity is led by the Dutch(78%shop/pay at least weekly,4.3 purchases/payments per week)and Greeks(76%weekly,4.8 purchases per week).Despite making a smaller number of purchases each week,consumers in Belgium and the UK are both also highly engaged with online commerce,with 72%of each group shopping or making online payments at least weekly.4Online Purchase or Payment Frequency(All Consumers 18-75 years)DailyWeeklyLess oftenNot e-Commerce Users(3%)78vrrggfeYUUG%NetherlandsGreeceBelgiumUKPolandIrelandIsraelSwedenGermanySpainItalyFranceDo at least weekly by CountryAverage purchases per week by Country3.7Average purchases or paymentsper week97%of consumers make payments or purchases online70%highlighted4&392 highlighted50%highlighted(348)(Kr4815)(1,234)(z1,215)66VTRRPPHGEA%UKSwedenItalyIrelandNetherlandsSpainGreeceBelgiumFrancePolandGermanyIsraelQ1c.Which of these devices do you prefer to use for online purchases or payments?BASE:All Consumers 18-75,n=13,175e-CommerceDevice PreferenceOn average,consumers narrowly prefer mobile devices(50%)for making online purchases and payments,this is highest in the UK where two thirds of Britons(66%)prefer mobile.On average,consumers have a preference for making purchases and payments online using mobiles(50%),ahead of those who choose computers(42%)or other devices(4%).While most countries are generally in line with the overall average,some do stand out significantly consumers in the UK are clearly the mobile leaders(66%prefer making online purchases of payments on mobile),while the high spending Swedes also skew to mobile(56%prefer mobile).At the other end of the spectrum,consumers in Israel and Germany prefer fixed devices(i.e.desktop or laptop computers)for their online shopping,with only 40%and 41%respectively choosing to make online purchases or payments on mobile.6Preference by Device TypeMobile Preference by Country42P%Total Mobile(Smartphone,Tablet)Total Computer(Desktop&Laptop)Non e-Commerce User(3%)Other Device(4%)(All Consumers 18-75)55%highlightedCQ3a.Thinking about when you make a purchase or pay online,which of the following payment options,if any,have you used in the last 6 months?Q3b:And which of the payment options that you use,if any,would you say is your preferred payment option?BASE:All Consumers 18-75,n=13,175 for both questions.e-CommercePayment PreferenceA quarter of consumers(25%)selected PayPal as their preferred payment option.PayPal is a popular payment method across Europe and Israel,with almost two thirds of consumers(61%)having used it in the last 6 months.One in four consumers(25%)selected PayPal as their top choice,ahead of Debit and Credit Cards(both 18%).This is driven by particularly high levels of engagement in Germany(46%prefer PayPal).Businessesclearly recognise theimportance of catering to consumer expectations,with almost three in four(70%)offering PayPal as a payment option.7Preferred Payment OptionsPayPal25bit Card18%Credit Card18%Other35%No preference4F20(&$%4%7%60#%6)%9%930C%466 (2icT%4%1%5%4%3%2%4%7%3%4%3%6%GermanyItalySpainIrelandFranceGreeceBelgiumIsraelUKNetherlandsSwedenPoland(All Consumers 18-75)PayPalDebit CardCredit CardOtherNo PreferencePreferred Payment Options By Market%consumer who used PayPalin the past 6 monthsALL MARKETS,PayPal(inc.BNPL options)61p%businesses that offer PayPalas a payment methodMQ3.Which of the following online payment options do you offer your customers?BASE:All Businesses n=4,6043 Key Highlightse-CommerceTop categories for online purchase and payments are:Clothing&Accessories(57%),Bill Payments(54%)and Food&Drink(42%).Consumers across Europe and Israel are regular online shoppers,spending 342 a month across essential and leisure purchases and payments.123One-in-four consumers list PayPal as their preferred option for online purchases and payments.2022 PayPal Inc.Confidential and proprietary.9e-Commerce Drivers&Barriers40%CQ9.Which,if any,of the following would lead to you being less likely to make an online purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersCheckoutSecurity concerns are the main barrier to online purchasing across all markets.Online shopping is complex,with a range of factors potentially facilitating or hindering the desired outcome.Despite consumers finding overly long or confusing purchasing processes off-putting,security concerns clearly stand out as the most significant barrier.This leads to almost half of consumers reporting that they are less likely to make a purchase if they have security or trust issues at checkout.In fact,Poland is the only country where a long checkout experience is a slightly more significant disincentive to purchase than security concerns.10Barriers To Making An Online PurchaseLong and confusing checkout47BF79629F6A8%Must create a new user account first/no guest checkout215)30 ()0&%highlighted(All Consumers 18-75 years)48%Security or trust issues at checkout58RQQPHHGDCC9%SpainGreeceIsraelGermanyIrelandItalyFranceUKPolandBelgiumSwedenNetherlandsCQ10.And,which of the following would lead to you being more likely to make an online purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersCheckoutSecurity concerns can be alleviated by merchants offering preferred payment type.There are many ways to reduce barriers to online purchase.Three key opportunities are offering preferred payment type,having an easy navigation and a fast checkout experience.Almost half(47%)of consumers stated that businesses offering their preferred payment types would make them more likely to purchase online.Focus should also be placed on improving the overall purchase experience through easier navigation and a speedier checkout.This stands out particularly for consumers in Greece,Israel,and Ireland.11Drivers That Encourage Online Purchases 47WVSPGFDDDCA5%GreeceGermanySwedenPolandIrelandSpainIsraelItalyNetherlandsUKBelgiumFrance43227B517(%(All Consumers 18-75 years)40%highlightedFast checkout experienceOffers my preferred payment type53998DGE7)735sy navigation404%CQ22.Which of the following online payment options would you trust to keep your payment secure and protect you should something go wrong with the purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersTrust Within ConsumersTwo thirds of consumers trust PayPal to keep their payments secure and protect them.The ability to use PayPal is an important factor when it comes to building trust in the purchase or payment process.Overall,two thirds of consumers trust PayPal to protect them and their payments,rising to more than three-in-four in both Germany and Ireland.1266%That Trust Paypal To Keep Their Payment Secure and Protect ThemDEIRGRPLIL82qxphg%ES62%NL60%FR4861%SE58%ITUK62%PayPal(all options incl.BNPL)PayPal(all options)PayPal(all options)(All Consumers 18-75 years)Q23.Which payment option do you trust the most when purchasing or transacting online?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersMost TrustedIn fact,almost one-in-three consumers view PayPal as their most trusted payment method,emphasising the position of trust it has built.Across the markets,almost one-in-three consumers(31%)selected PayPal as their trusted payment option,and was strongest in Germany(47%),Italy(45%)and Israel(42%).PayPal is selected as the preferred brand by at least one-in-four consumers in the majority of markets.13Most Trusted Payment Options47EB86(&%8B%6%5) %9%6& %993%2%9)8D%FaT%5%5%8%5%3%7%5%3%5%2%3%GermanyItalyIsraelIrelandGreeceSpainFranceBelgiumUKPolandNetherlandsSwedenPayPal 31%Credit Card16bit Card14%Other34%No preference5%(all options)(All Consumers 18-75)PayPalDebit CardCredit CardOther competitorsNo preference203 366311sT%ItalyIrelandGermanyGreeceSpainUKFrancePolandIsraelBelgiumSwedenNetherlandsUplift Among Markets on a Site that Accepts Payments via PayPal62%Product available on a site thataccepts payments via PayPalProduct available on a site thatdoesnt accept payments viaPayPal125%relative upliftCQ24.If you find a product that you want on two separate sites,both of which are offering it for the same price(including any shipping costs),how likely would you be to buy the product?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersTrust Within ConsumersOffering PayPal as a payment solution significantly strengthens the proposition for merchants,doubling the likelihood that a consumer would purchase their product or service(125%relative uplift).The high level of trust delivers a measurable impact on purchase likelihood.When asked to compare their likelihood to purchase identical products off two competing sites,consumers are more than twice as likely to purchase from the one that accepts payment via PayPal(62%likely to purchase)as the one that doesnt(27%).This translates to an average 125%uplift in purchase likelihood across markets.While we see some level of uplift in all markets,there are certain countries where this becomes significantly more pronounced:Italy 203%increase Ireland 203%increase Germany 186%increase14Purchase Likelihood(All Consumers 18-75 years)(All Consumers 18-75 years)150%highlighted72qppffdcbUI%IsraelIrelandSwedenGreeceFranceGermanyBelgiumNetherlandsSpainUKItalyPolandCQ8.Which,if any,of the following have you ever done when making a payment or purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersAbandonmentCart abandonment is common across markets(64%),driven by security concerns,lack of preferred payment options and poor customer experiences.Looking beyond trust,there are other factors at play when it comes to completing a purchase or payment online.Almost two-in-three consumers(64%)have abandoned an online payment or purchase,primarily citing an inability to use their preferred payment method(28%)or concerns about security(27%),ahead of process and shipping issues(21%and 19%respectively).Specific reasons do vary by country,with consumers in Germany(42%),Sweden(36%),and Greece(31%)most concerned about the payment methods on offer,while those in France(39%)and Israel(34%)were more significantly concerned by the security of the transaction.Spanish consumers were the only ones to prioritise both of these,with 31%citing security concerns and 30%the inability to use their preferred payment method.1564%Almost 2-in-3 consumers have abandoned a purchase or payment online28&61B)0$%4)&)9#)!1$#!&)& !$27!$%ALLIsraelIrelandSwedenGreeceFranceGermanyBelgiumNetherlandsSpainUKItalyPolandPreferred payment method wasnt availableConcernsabout securityProcess took too longThey did not deliver to my countryReasons For Abandonment(All Consumers 18-75 years)30%highlighted70%highlightedCQ9.Which,if any,of the following would lead to you being less likely to make an online purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersShipping and ReturnsShipping costs are also a significant barrier to purchasing,particularly if consumers are purchasing across borders.We saw earlier that delivery not being available to their country is(logically)a disincentive to purchase,but shipping is a more complex issue once we start unpacking it.Depending on a retailers approach to shipping fees and delivery times,it can either help support purchasing,or act as a significant barrier.Ultimately,this largely comes back to cost,with almost two-in-three consumers(63%)less likely to purchase if they feel shipping is too expensive.16Shipping Barriers For Online Purchases50%highlighted(All Consumers 18-75 years)Shipping too expensive63FB%Shipping times too longReturn shipping costs too high68gffccbbaWW%IrelandSwedenGreecePolandBelgiumSpainIsraelFranceUKItalyGermanyNetherlands46HIT9HQCGCEBBCF7T4DA9A%CQ10.And,which of the following would lead to you being more likely to make an online purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersShipping and ReturnsOn the flipside,free shipping or free return shipping are powerful incentives for consumers to make a purchase.While expensive shipping is a key barrier for consumers,two thirds of respondents are more likely to make a purchase if offered free shipping.For businesses that dont offer free shipping,it is important to note that more than half(53%)of consumers reported being more likely to purchase if they can access free return shipping,reducing the impact of making the wrong choice.17Shipping Drivers For Online Purchases50%highlighted(All Consumers 18-75 years)66%Free shippingOffers free return shippingOffers buy online and pick up or return in store 53CXaSSRVSQTPIGrpiiheddccaY%PolandSpainIrelandSwedenIsraelGreeceItalyFranceGermanyBelgiumUKNetherlands51PHDHHAD17C6TQGFFEEEDDCC%GreeceSwedenNetherlandsFranceItalyIsraelSpainIrelandGermanyUKBelgiumPolandCQ9.Which,if any,of the following would lead to you being less likely to make an online purchase?CQ10.And,which of the following would lead to you being more likely to make an online purchase?BASE:All Consumers 18-75,n=13,175e-Commerce Drivers&BarriersEthicsAlmost half of consumers(46%)consider ethical factors when making an online purchase,seeking out businesses whose values align with theirs.Ethical considerations have become more prevalent in society,with almost half of consumers(46%)reporting that these have some impact on their purchasing decisions.These ethical considerations encompasses a range of social and environmental factors,with consumers most actively focussed on:Worker pay and conditions 29%report it impacts their purchasing decisionsEnvironmental impact 26%report it impacts their purchasing decisionsWorker pay and conditions are important across all markets,but this was led by Greece(35%)and Sweden(33%);these two markets also largely led across the other categories.1846%Ethical Considerations in e-Commerce2953)(&)2)&%&0(%(#(#%$ ! !# %ALLGreeceSwedenNetherlandsFranceItalyIsraelSpainIrelandGermanyUKBelgiumPoland(All Consumers 18-75)of consumers make online purchasing decisions based on ethical considerations50%highlighted25%highlightedWorker pay and conditions either locally or in supply chainEnvironmental impactSocial causes that reflect personal valuesDiversity and inclusion3 Key Highlightse-Commerce Drivers&BarriersPayPal helps overcome some of these issues by being a trusted payment option,increasing purchase likelihood.Security concerns are the main barrier to online shopping,although lack of payment options,poor customer experience,and high shipping costs also put off prospective purchasers.Ethical considerations are becoming more important,with almost half of consumers now seeking out businesses whose values align with their own.123 2022 PayPal Inc.Confidential and proprietary.20Social Commerce20#0% &$!%ALLGreeceIsraelSwedenPolandGermanyUKItalyNetherlandsFranceIrelandBelgiumSpain54FFFECAAA977%GreeceIsraelSwedenPolandGermanyUKItalyNetherlandsFranceIrelandBelgiumSpain71pihgfeecYWU%IrelandIsraelSpainNetherlandsItalyGreecePolandSwedenBelgiumFranceGermanyUK43%consumers who have made a purchase through social media in the past 6 monthsCQ11.Which of the following social media or streaming platforms,if any,have you made a purchase or payment through in the last 6 months?MQ8.Do you currently,or will you in the next 6 months sell via social media platforms?BASE:All Consumers 18-75,n=13,175,All Merchants,n=4,604Social CommerceAdoptionAlmost half of consumers(43%)have purchased through social platforms in the last 6 months.Social commerce is a significant element of the e-Commerce landscape,with almost one-in-two consumers(43%)having purchased through social platforms in the last six months.This is driven by purchasing activity on more traditional social media platforms such as YouTube(20%),Facebook(19%)and Instagram(17%),with consumers in Greece and Germany standing out for the broadest usage of these platforms.Businesses recognise the opportunity,with almost two-in-three(65%)selling via social media platforms.While this varies by country,more than half in any individual market have embarked on their social commerce journey.2165%businesses who sell online,currently sell via social mediaTop 3 Social Platforms UsedYouTubeFacebookInstagram(All Consumers 18-75)70%highlighted50%highlighted20%highlightedCQ15.How often,if at all,do you make purchases or payments through social media or streaming platforms?CQ16.In total,how much money have you spent on all purchases or payments made through a social media or streaming platform in the last month?BASE:All Consumers 18-75,n=13,175,Social Shoppers,n=5,785Social Commerce FrequencyOne-in-six consumers(17%)shop through social media or streaming platforms each week,with an average monthly spend of 141.Consumers are regularly shopping through social media or streaming channels,with around one in six(17%)making weekly(or more frequent)purchases.This rises to more than one in five Greeks(25%),Israelis(22%)and Dutch(22%),while the Spanish(11%),Belgians(12%)and Irish(12%)are the least frequent social shoppers.When combined with purchasing volumes,this translates to an average monthly social commerce spend across the markets of 141,with the Israelis(186)and the Dutch(174)the highest spending consumers.22141Average monthly spend 6ACilyWeeklyLess Often17%Shop on social media or streaming platforms at least weekly(All Consumers 18-75)Social Shopping FrequencyDEUKIRESITGRPLILSEBEFRNL258226224183181151153142147121120112Shop on socialweeklyav.monthly spend(Social shoppers)Shop on socialweeklyav.monthly spend(Social shoppers)Never(Social Shoppers)(104)(Kr1,523)(894)(z1440)96%Promoteweekly24%av.%of salesvia social96%Promoteweekly30%av.%of salesvia social95%Promoteweekly25%av.%of salesvia social94%Promoteweekly15%av.%of salesvia social94%Promoteweekly29%av.%of salesvia social94%Promoteweekly29%av.%of salesvia social93%Promoteweekly16%av.%of salesvia social91%Promoteweekly29%av.%of salesvia social90%Promoteweekly27%av.%of salesvia social86%Promoteweekly19%av.%of salesvia social85%Promoteweekly24%av.%of salesvia social24%Average%of sales made via socialMQ4.Approximately what percentage of your sales are made through social media platforms?MQ7.Approximately,how often,if ever,does your business use each of the following social media platforms to promote/market your business?BASE:Businesses who sell online,n=4,604Social Commerce FrequencyBusinesses are achieving strong results off the back of their online posting and promotions,reporting that almost a quarter of sales(24%)are currently made through social channels.Businesses are almost universally(98%)promoting their products and services through social media channels.Social media platforms are proving to be an important revenue channel for businesses,with respondents in Ireland,the Netherlands,Israel and Poland reporting that one third of sales are made via these platforms.While slightly lower,businesses in Greece,Sweden,Belgium,France and Germany all report around one quarter of sales via social platforms.2398%of online businesses promote on social media92%6%2%WeeklyOccasionallyNeverDEUKIRESITGRPLILSEBEFRNL96%Promoteweekly25%av.%of salesvia social(Businesses that sell online)Business Social Media Promotion31#! 5453512560(!244%(!fWWUWRSUVIF9IRQBE55)%Clothing&AccessoriesHealth&BeautyTicketsOnline or Digital GamingToys&GamesElectronics&ComputingSubscriptionsSporting GoodsBooks&MagazinesTravel&TourismFood&DrinkBill PaymentsCharityHome&GardenDigital or Virtual GoodsGroceryTransportGovernment feesCryptocurrencyFuelCQ13.Which of the following product categories,if any,have you,or would you buy directly from your social media or streaming platforms(e.g.Instagram etc.)?BASE:Social Shoppers,n=5,785Social CommerceProduct CategoriesThere is still untapped growth in social shopping,with the potential to double penetration across most categories.Social shopping is diverse,with consumers purchasing products and services across a wide range of categories.With that said,one category stands out above all others-on average across the markets close to one-in-three consumers(31%)have purchased,and an additional third(35%)would purchase Clothing&Accessories through social channels.Beyond this,the spread across product categories is relatively even,with high levels of current purchasing activity also evident across:Health&Beauty 23%Tickets 22%Online or Digital Gaming 22%Toys and Games 22$Social Shopping Product CategoriesTop 5 Have Bought or Would Buy Social Shopping Categories3866621)($1%(%# !)&1$ (#)$!) % !$!%GreeceIrelandIsraelSwedenUKSpainFranceItalyPolandNetherlandsBelgiumGermanyClothing&AccessoriesHealth&BeautyTicketsOnline or Digital GamingToys&Games(Social Shoppers 18-75 years)(Social Shoppers 18-75 years)Have BoughtWould ConsiderNET30%highlightedCQ12.Thinking specifically about the social media or streaming platforms you use personally,which of the following,if any,do you feel apply to you?CQ14.Thinking about purchasing through social media or streaming platforms,which of the following statements,if any,do you feel apply to you personally?BASE:All Consumers 18-75,n=13,175Social CommercePurchasing MotivationsDespite widespread engagement with social commerce,more than one-in-three consumers still prefer to go directly to a website to make a purchase.While many consumers are comfortable purchasing through social channels,a significant minority(35%)still prefer to link through to the businesss website to make a purchase.This preference is most evident in Greece(47%agree)and Israel(41%agree),although others arent far behind.On average,one-in-four consumers state that they would only purchase through social media if they can use their PayPal account for convenience and safety.This is strongest in Greece(38%)and Spain(30%).We also see that some consumers are using social platforms for inspiration,with one-in-five across markets purchasing something after seeing it on a social or streaming platform.25Social Shopping Behaviours(All Consumers 18-75 years)35%Ive purchased something after seeing it on social media or a streaming platform25%Id only buy from a social media platform if I could use my PayPal account for convenience and safety18%discover products on social media that they dont find anywhere else47A87774432%GreeceIsraelSwedenIrelandItalySpainFranceNetherlandsUKBelgiumPolandGermany38)#0! %2$%&%! #! %When I see a product on social media,I prefer to go to the website to purchase25%highlighted28&%! %IsraelGreeceFranceSpainSwedenPolandIrelandUKItalyBelgiumNetherlandsGermany27($!# %9%9%9%7%CQ14.Thinking about purchasing through social media or streaming platforms,which of the following statements,if any,do you feel apply to you personally?BASE:All Consumers 18-75,n=13,175Social CommercePurchasing MotivationsEven if consumers are not purchasing through social channels,they play an important role in providing shopping inspiration.Social media platforms are clearly a place for businesses to be promoting themselves,with just over one-in-five consumers searching social media to see products or services they are interested in being used in real life.Influencers play a role in promoting products and services,with more than one-in-ten consumers having purchased products used by social media influencers.However,consumers appear more interested in posts from brands than influencers,with 21%of consumers saying they follow their favourite brands on social media.26Social Purchasing Motivations(All Consumers 18-75 years)21%I search social media for products/services I am interested in buying to see them used in real life13%Ive bought products or services used by social media influencers21%I follow my favourite brands on social media/streaming platforms13%I follow influencers on social media/streaming platforms to see what they are wearing/using20%highlighted3 Key HighlightsSocial shoppers spend an average of 141 a month.43%of consumers have made a purchase through social platforms in the last six month.Top product categories for social shopping are:Clothing&Accessories(31%),Health&Beauty(23%),Tickets(22%),Online or Digital Gaming(22%),Toys and Games(22%).123Social Commerce 2022 PayPal Inc.Confidential and proprietary.28Buy Now Pay Later BehavioursCQ4a.Thinking about when you make a purchase or pay online,which of the following Buy Now Pay Later services,if any,have you used in the last 6 months?Q4b.And which of the Buy Now Pay Later services that you use,if any,would you say is your preferred payment option?BASE:All Consumers 18-75 n=13,184,BNPL Users,n=1,898,*Only markets that have a PayPal BNPL product are displayed.*Results for Spain,Italy,Israel,Greece and Ireland not shown due to sample sizes under n=100Buy Now Pay LaterAdoption and UsageAround one in five consumers use BNPL,with the highest level of penetration in France,Sweden,the Netherlands,Germany and the UK.29Preference for PayPal BNPL options,where they are available*(BNPL Users 18-75 years)*28%#%FranceSwedenNetherlandsGermanyUKPolandBelgiumUsage of any Buy Now Pay Later service(All Consumers 18-75 years)21%of consumers are BNPL Users*20%highlightedFR47%Pay in 4XDE54zahlung nach 30 Tag&RatenzahlungUK29%Pay in 3One in five research respondents use Buy Now Pay Later(BNPL),but there are significant levels of variation in usage by market.At the upper end,this increases to more than one in four consumers in France and Sweden,and more than one in five in each of the Netherlands,Germany,and the UK.In Germany,PayPal Bezahlung nach 30 Tag&Ratenzahlung dominates more than half of preference in the market,with Pay in 4X performing strongly in France.CQ19.How many times have you made an online purchase using a Buy Now Pay Later service in the past 3 months?CQ20.How much have you spent across all of your Buy Now Pay Later accounts in the last 3 months?BASE:BNPL Users,n=1,898,*Results for Spain,Italy,Israel,Greece and Ireland not shown due to sample sizes under n=100Buy Now Pay LaterSpend and TransactionsThe average monthly spend on BNPL transactions is 147,led by Sweden,France,the Netherlands,and Germany.Looking at BNPL spend,we see the same three markets at the top of the list.Consumers in Sweden,France,and the Netherlands are not only the most likely to be using BNPL but are also more regular purchasers(among BNPL users).This unsurprisingly puts them at the top of the list for monthly spending,with the average BNPL users in Sweden spending almost 200 per month on BNPL purchases.Whilst spend does vary somewhat in other markets,BNPL users in all countries except Poland(99)spend at least 100 per month on purchases they make using BNPL.64 64 80 44 68 74 59 49All consumersSwedenFranceNetherlandsGermanyUKBelgiumPoland 147 197 165 150 141 125 118 99All consumersSwedenFranceNetherlandsGermanyUKBelgiumPolandAverage Spent on BNPL TransactionsAverage Number of BNPL Transactions(One month;BNPL Users 18-75*)150 highlightedBNPL Average Spend Per Transaction460 highlighted(One month;BNPL Users 18-75*)(One month;BNPL Users 18-75*)(108)(Kr1,972)(63)(Kr643)34343333(z371)(z195)30CQ18.Which of the following categories have you BNPL USERS/would you BNPL CONSIDERERS purchase using Buy Now Pay Later services?BASE:BNPL Users,n=1,898,*Results for Spain,Italy,Israel,Greece and Ireland not shown due to sample sizes under n=100While we can see varying levels of usage,there is still significant upside for BNPL across markets;ultimately consumers are open to purchasing most products and services using BNPL.Fashion is consistently the top BNPL category,with at least two-in-five BNPL users in all countries having purchased Clothing and Accessories using BNPL,rising to at least half of users in France,Sweden,the UK and the Netherlands.While technology is typically the next most popular category for BNPL purchases,it is outperformed by Health&Beauty products in some markets specifically,Sweden(47%vs.42%),the Netherlands(27%vs.26%),and Belgium(28%vs.22%).Meanwhile,BNPL users in Poland are choosing to purchase Home&Garden products more regularly using BNPL than any market other than France,making it the joint second most popular category in this country.Buy Now Pay LaterProduct Categories5273(&%$%$# 3ABEBCDB2632573xsirihifWYVbUUTI%Clothing&AccessoriesElectronics&ComputingHealth&BeautyToys&GamesHome&GardenSporting GoodsLuxury RetailTravel&TourismTicketsGrocerySubscriptionsFood&DrinkBooks&MagazinesBill PaymentsOnline or Digital GamesDigital or Virtual GoodsGovernment FeesHave BoughtWould ConsiderNETBuy Now Pay Later Product Categories(BNPL Users 18-75 years)Top 5 Have Bought Buy Now Pay Later Categories59VTTGFBgB2&1DG)%(F)%!#%F)#!1%FranceSwedenUKNetherlandsGermanyBelgiumPolandClothing&AccessoriesElectronic&ComputingHealth&BeautyToys&GamesHome&Garden(BNPL Users 18-75 years)30%highlighted31Relative uplift=%difference between the proportion of consumers who would buy on a site if it didnt vs did offer(any BNPL service/PayPal BNPL service)CQ24.If you find a product that you want on two separate sites,both of which are offering it for the same price(including any shipping costs),how likely would you be to buy the product?BASE:All Consumers 18-75,n=13,175PayPal can help play a role in delivering this growth,with consumers substantially more comfortable purchasing a product from a site that offers a PayPal BNPL service.For a business,offering BNPL on their site could provide a significant improvement to sales conversions,with consumers more likely to purchase from a site that offers BNPL than one that doesnt.The impact is most evident in Greece,France and Italy.Offering a PayPal BNPL service can take this even further,with consumers in Greece almost twice as likely to purchase the same product from a site that offers a PayPal BNPL service vs one that doesnt.Note:PayPal Pay Later eligibility and availability is subject to merchant status,sector and integration.Consumer eligibility is subject to status and approval.Product features differ by market.See relevant product terms for more details.PayPal Pay Later cross-border messaging is subject to approval by PayPal.Buy Now Pay LaterPreferred OptionsUplift Among Markets on a Site that Accepts BNPL Payments via PayPal(All Consumers 18-75 years)Relative uplift if a site offers a PayPal BNPL Service(vs.one that doesnt)Relative uplift if a site offers any BNPL Service(vs.one that doesnt)DEUKIRESITGRPLILSEBEFRNLALL 48GIIIHBF8C7E9%that would purchase on a site that offers a PayPal BNPL service45urWWSP9%$!H6C$%4%7(%823 Key HighlightsBuy Now Pay LaterClothing&Accessories is the top BNPL category in all but one market.Buy Now Pay Later usage is highest in France,followed by Sweden,the Netherlands,Germany and the UK.Businesses can benefit from offering PayPal BNPL,as it increases the likelihood of purchase when compared to sites that dont offer it.123 2022 PayPal Inc.Confidential and proprietary.34Cross BorderQ33.What proportion of your online shopping is from international retailers(i.e.based outside your country)?If unsure,please provide your best estimate.BASE:All Consumers 18-75,n=13,177Cross BorderInternational BuyingConsumers consistently shop internationally,with at least a fifth of purchases in each market originating from an international seller.The majority of consumers(74%)are shopping internationally,with an average of 31%of online shopping conducted with international retailers.French consumers are the least likely to shop internationally,but nonetheless almost two thirds(60%)of them have still engaged in this behaviour.At the other end of the spectrum,we see that in addition to a high proportion of consumers in Ireland,Germany and Israel shopping internationally,they also have the highest proportion of online shopping done via international retailers(44%Ireland,38%for both Germany and Israel).35(All Consumers 18-75)*Proportion of Consumers Shopping Internationally31%of online shoppingon average is done internationally2!$t%Shop InternationallyIRITGRPLILSEBEFRNLShop InternationallyAv.proportion international retailers87yvs3D8801%Shop InternationallyAv.proportion internationalretailers73riib)2%&! 0%international50-99%international20-49%international1-19%international0%internationalNot sureESUKDE18%1%Q22.In the last 6 months,approximately what percentage of your online sales turnover came from international customers?If you are unsure,please provide your best estimate.BASE:Online Businesses,n=4,604Cross BorderInternational SellingThis is also reflected on the business side,with a vast majority(85%)tapping into an international customer base.A high proportion of businesses sell internationally,with nearly a third of total revenue on average being generated from these sales.We can see that while French consumers are somewhat less likely to purchase from overseas businesses,French retailers have no doubts about selling into international markets,leading the way at 91%.Alongside France,the top export markets are Germany,Ireland,Poland,Israel,and Belgium(although the remaining markets are not far behind).36Proportion of Turnover from International Customers85%Sell InternationallyUKIRESITGRPLILSEBEFRNLSell Internationallyav.proportion turnover from internationalsales91305341%Sell Internationallyav.proportion turnover from internationalsales91-100%international51-90%international21-50%international1-20%international0%internationalNot sureDE85) ($0)%of revenue is generated from international salesQ35.You say you have made purchases online from websites in other countries.Please select your main reasons for shopping on websites in other countries rather than the country where you live?BASE:All Consumers 18-75,n=9665Cross BorderPurchasing MotivationsFrom a consumer perspective,there are two main reasons that drive international shopping access to better prices(50%)and access to products they cant find locally(39%).Price and access to products not found locally are the key drivers of international shopping;almost one in three do however also cite the ability to find new and interesting products as a reason to shop internationally,while one in five are motivated by the opportunity to use their preferred payment method.These sentiments appear to be felt more strongly in some of the smaller markets,with consumers in Israel and Greece in particular more likely to agree with all of these opinions.37Cross Border Purchasing Motivations(International Shoppers 18-75 years)*Better pricesI can discover new and interesting productsAccess to items not available in my own countryI can use my preferred payment method60VTTQQIIHGD5%IsraelGreeceIrelandBelgiumFranceSpainSwedenPolandGermanyItalyNetherlandsUK41BC649D89117511390&%#%$!#0%highlighted5019 WQPECC98554)%GreeceIrelandGermanyIsraelSpainItalyUKSwedenBelgiumNetherlandsFrancePolandQ24.If you find a product that you want on two separate sites,both of which are offering it for the same price(including any shipping costs),how likely would you be to buy the product if it?Q34.Thinking specifically about making a purchase online,which,if any,of the following statements do you agree with?BASE:All Consumers 18-75,n=13,177Cross BorderPurchasing MotivationsThere are trust concerns that emerge when consumers are purchasing in international markets;PayPal can help alleviate these.More than two in five consumers(42%)agreed that they feel more secure shopping with international retailers if PayPal is available,rising to more than half of consumers in Greece(57%)and Ireland(51%).Offering PayPal as a payment method can also positively impact the likelihood of consumers making a purchase.When comparing the same product from an international site that offers PayPal vs.one that doesnt offer PayPal,consumers in most countries are more than twice as likely to purchase from the one that does offer PayPal,rising to more than four times as likely in Germany,and more than three in Ireland and Italy.38Cross Border Purchasing Security(All Consumers 18-75 years)*When PayPal is available,I feel more secure to shop on international stores356$7!381532u%GermanyIrelandItalySpainGreeceFranceUKPolandSwedenIsraelBelgiumNetherlandsUplift Among Countries on Intl Sites that Accepts Payments via PayPal40%highlighted150%highlighted58$%Product available on anint.site that acceptspayments via PayPalProduct available on anint.site doesnt acceptpayments via PayPal146%relative upliftPurchase Likelihood on International Sites-PayPal vs No PayPal Option42%3 Key HighlightsCross BorderCross border shopping is largely driven by a desire for access to better prices and products not available in their home market.Most consumers shop internationally,with around a third of their purchases made from international businesses.123Security is key for consumers,with the availability of a trusted payment solution like PayPal providing a greater level of comfort when shopping in international stores.2022 PayPal Inc.Confidential and proprietary.40Tech Trends:Crypto,NFTs and the MetaverseCQ25.Which of the following best describes you when it comes to cryptocurrency?CQ31.Which,if any,of the following statements about cryptocurrencies do you agree with?BASE:All Consumers 18-75,n=13,175Tech TrendsCryptocurrencyMore than one-in-four consumers(27%)have owned cryptocurrencies at some point,however one-in-four are concerned about the safety and security when trading.More than a quarter of consumers have owned cryptocurrency at some point,with almost one-in-five still having funds invested.There are however divergent views among consumers,with one in four respondents indicating they were concerned about safety and security when trading cryptocurrency.Consumers in Greece are clearly the most engaged with cryptocurrency.More than two-in-five Greeks have owned cryptocurrency at some point,while approaching one in three(29%)are keen to learn more.41GEN ZGEN YGEN XCryptocurrency Ownership and Beliefs(All Consumers 18-75 years)29#! %5%6%7%9%8%8%9%6%GreeceNetherlandsPolandSpainItalyIrelandSwedenIsraelBelgiumGermanyUKFranceof consumers have owned cryptocurrency at some point27%Currently ownCurrently OwnOwned PreviouslyNET4141&%&)&%!%Concerned about the safety and security when trading cryptocurrency 20%Want to learn more about cryptocurrencies29(&%#! %GreeceIrelandPolandSpainIsraelSwedenUKBelgiumNetherlandsFranceGermanyItaly29%#1 %GreeceIrelandPolandSpainIsraelSwedenUKBelgiumNetherlandsFranceGermanyItaly25%highlightedCQ25.Which of the following best describes you when it comes to NFTs?CQ32.Which,if any,of the following statements about NFTs and virtual spaces/the metaverse do you agree with?BASE:All Consumers 18-75,n=13,175Tech TrendsNFTNon-Fungible Tokens(NFTs)are more of a niche product,with less than half as many consumers currently owning an NFT as those who currently own cryptocurrency.Non-Fungible Tokens(NFTs)are unique cryptographic assets that exist on a blockchain and cannot be replicated.They represent a niche investment option,with more consumers saying that they dont trust investing in NFTs(27%)or that they are concerned about the safety and security of trading NFTs(21%),than those who have either owned them(14%)or are interested in learning more(19%).Consumers in Greece are the most likely to own NFTs(14%),while those in Belgium and France lead the way in indicating interest in learning more about NFTs(31%and 25%respectively).42NFT Ownership and Beliefs(All Consumers 18-75 years)14%9%9%8%8%7%6%6%5%5%4%9%8%6%9%8%5%8%5%5%6%5%6%GreeceSwedenItalyNetherlandsIsraelGermanyPolandIrelandSpainUKBelgiumFranceof consumers have owned a NFT at some point14%Dont trust investing in NFTs21%Are concerned about the safety and security of trading NFTs19%Want to learn more about NFTs21#% $# 1%31(%!%SpainPolandItalyUKIrelandBelgiumGermanyFranceNetherlandsSwedenGreeceIsraelCurrently OwnOwned PreviouslyNET25%highlighted8%Currently own41XGEDCA720VGCGA99B840&9XGDD799776(9UCCCA9972&8UDCCB59863%ALLGreeceSpainPolandSwedenItalyIsraelUKIrelandNetherlandsGermanyBelgiumFranceCQ29.Thinking now about virtual spaces/the metaverse,which of the following best describes you?CQ30.Which of the following do you currently,or would you consider doing in a virtual space/the metaverseBASE:All Consumers 18-75,n=13,175Tech TrendsMetaverseThe metaverse stands out as an area with significant growth potential;almost one-in-four consumers(23%)have participated in virtual spaces,with a further 27%open to the idea.Half of consumers(50%)are either current metaverse participants(23%)or considering testing it out(27%).Focussing on current usage,we can again see Greek consumers at the top of the list,with more than one in three(34%)already having experience of virtual spaces.Following Greece,Sweden(30%),the Netherlands(27%),and Israel(26%)are the countries that are most engaged with virtual spaces.Looking to the future,there is clearly an appetite to use virtual spaces for a wide range of activities,including virtual browsing(41%)and shopping(39%),education and training(40%),online gaming(39%),virtual shopping(39%)and arts and live entertainment(38%).43Metaverse Participation(All Consumers 18-75 years)340&$#!4&!($&296#%GreeceSwedenNetherlandsIsraelUKIrelandGermanyPolandBelgiumSpainItalyFrance68VHTIPET9WS8%Top 5 Have Done/Would Consider Metaverse UsageVirtual browsingEducation and trainingOnline gamingVirtual shoppingArt and live entertainment(All Consumers 18-75 years)Have ParticipatedConsidering Participating40%highlightedNET27%Havent yet participated,but are considering doing so23%of consumers have participated in a virtual space/the metaverseCQ32.Which,if any,of the following statements about NFTs and virtual spaces/the metaverse do you agree with?BASE:All Consumers 18-75,n=13,175Tech TrendsMetaverseIn fact,around one-in-seven(14%)consumers already believe that more engagement will happen in virtual spaces than the real world in the future,and that virtual spaces will be an important shopping destination(13%).The potential to grow metaverse participation is highlighted by the fact that one in seven consumers(14%)already believe that more engagement will happen in virtual spaces than the real world,and that virtual spaces will become important shopping destinations(13%).As weve seen previously,Greek consumers are again the most engaged with new technologies and innovations,with one in four(25%)believing that virtual spaces will overtake real life in the future.Consumers are clearly also considering the future retail opportunity as part of this process,with around one in ten wanting their favourite store to exist within the virtual environment(11%),or to be able to purchase physical products within virtual spaces(10%).Activities in the Virtual Space/Metaverse(All Consumers 18-75 years)14lieve that,in the future,we will engage with more people in virtual spaces/the metaverse than in real life13lieve that virtual spaces/the metaverse will become important channels for shopping11%Would like their favourite store to exist within virtual spaces/the metaverse10%Would like to be able to purchase physical products within virtual spaces/the metaverse25%GreeceIsraelItalySwedenPolandIrelandSpainNetherlandsBelgiumFranceUKGermany20%9%9%9%7%8%9%8%9%9%8%6%9%7D15%highlighted3 Key HighlightsTech TrendsThe metaverse is coming,with half of consumers having either entered virtual spaces(23%),or being open to the idea(27%).There is a level of consumer interest in learning more about Cryptocurrencies and NFTs.More than one in ten consumers(13%)believe that virtual spaces/the metaverse will become important channels for shopping.12346 2022 PayPal Inc.Confidential and proprietary.The information in this report is provided as-is,and while we work to make sure information is accurate,PayPal takes no responsibility for users actions,inactions,or decisions based on the information presented.MEDIA CONTACT:About PayPal PayPal has remained at the forefront of the digital payment revolution for more than 20 years.By leveraging technology to make financial services and commerce more convenient,affordable,and secure,the PayPal platform is empowering more than 429 million consumers and businesses in more than 200 markets to join and thrive in the global economy.For more information,visit.To find out more about PayPals Enterprise solutions for your business,please visit your local page:BelgiumGermanyFranceGreeceIrelandItalyIsraelThe 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世界经济论坛：2023年领导者与内部创业者：推动前沿市场投资白皮书（英文版）（26页）.pdf

Leaders and Intrapreneurs:Driving Investment in Frontier MarketsW H I T E P A P E RJ A N U A R Y 2 0 2 3ContentsForewordExecutive summaryIntroduction1 International Committee of the Red Cross1.1 The Humanitarian Impact Bond1.2 The resource mobilization strategy2 European Commission:Directorate General for European Civil Protection and Humanitarian Aid Operations(DG ECHO)2.1 The Organizational Readiness good practices playbook2.2 Humanitarian blending3 The United Nations World Food Programme3.1 Building an organizational structure that fosters innovation3.2 Systems and procedures that enable innovation4 FMO Entrepreneurial Development Bank4.1 The MASSIF fund4.2 Creating the space to pursue investments in frontier marketsConclusionContributorsEndnotes 346899121313161717192020222324Cover:Auris,Getty Images Inside:Getty Images 2023 World Economic Forum.All rights reserved.No part of this publication may be reproduced or transmitted in any form or by any means,including photocopying and recording,or by any information storage and retrieval system.DisclaimerThis document is published by the World Economic Forum as a contribution to a project,insight area or interaction.The findings,interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum,nor the entirety of its Members,Partners or other stakeholders.Leaders and Intrapreneurs:Driving Investment in Frontier Markets2ForewordPrivate-sector engagement beyond philanthropy has increased significantly over the past decade in humanitarian and fragile contexts,but it has struggled to transition from small-scale pilots to achieve impact at scale.A key barrier preventing this transition is the organizational readiness of humanitarian and development organizations,donors,development finance institutions(DFIs)and private-sector investors to engage with each other in support of investable opportunities in these markets.Financial,cultural and institutional barriers continue to slow this process.Courageous leadership and intrapreneurship are needed to remove these barriers:from humanitarians and the private sector being more deliberate about collaborating beyond philanthropy to bilateral donors removing artificial divisions and DFIs increasing their risk appetite for lower-ticket or riskier investments in frontier markets.All need to move beyond declarations of intent to build readiness into their organizations so they can enter into these new types of partnerships.Unless these barriers are actively recognized and removed,it will be very difficult to deliver long-term sustainable impact for populations at risk of or affected by conflict and natural hazard-related disasters.There is positive momentum across the humanitarian and development ecosystems to address these barriers,and a number of pioneering organizations have already embarked on this journey.This paper draws attention to this work and highlights the need for leaders to prepare the space for change and for intrapreneurs to capitalize on that space and tackle the internal barriers preventing them from engaging in new types of partnerships.Peter Maurer Co-Chair,Humanitarian and Resilience Investing(HRI),World Economic ForumLeaders and Intrapreneurs:Driving Investment in Frontier MarketsJanuary 2023Sara Pantuliano Chief Executive,ODILeaders and Intrapreneurs:Driving Investment in Frontier Markets3Executive summaryThe paper identifies how leaders have created the space for change and stresses the importance of intrapreneurs driving action.The Humanitarian and Resilience Investing(HRI)initiative was launched in 2019 to encourage flows of public and private capital into financially sustainable opportunities that benefit communities in humanitarian and fragile contexts.1 A core enabler to achieve scale and unlock private capital in these contexts is organizational readiness,which refers to the preparedness of an organization to undergo a major change or take on a significant new project.Humanitarian and resilience investing not only introduces new financial instruments but also develops new partnerships and business models that challenge mindsets and push the boundaries of what is possible within the existing rules and systems.If organizations are not ready,new initiatives are likely to fail,because barriers will discourage or defeat intrapreneurs(entrepreneurs within an established organization)2 to drive change.The Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts playbook3 was published in 2020,to equip stakeholders with self-assessment and prioritization tools for identifying and tackling internal barriers across five organizational pillars:mandate;organizational support;systems and procedures;resources;and implementation.This paper builds on that playbook,detailing the best practices from four pioneering organizations and showcasing key actions taken across the organizational readiness pillars.This case study explores how the ICRC secured a mandate to enable partnerships with development and private-sector actors,broaden its resource base and deliver more sustainable humanitarian impact by embedding its work on new financing models in the ICRCs resource mobilization strategy(RMS).This was achieved by securing a meaningful and quantifiable target for innovative finance projects under this strategy.CASE STUDY 1International Committee of the Red Cross(ICRC)This case study explores how the Organizational Readiness good practices playbook helped DG ECHO to increase organizational support for longer-term humanitarian projects by enabling it to move beyond desk research on humanitarian-blended finance and empowering engagement with legal and finance colleagues.These moves unlocked the funding for humanitarian blended finance pilots and led to robust discussions in which colleagues across the organization began to understand the rationale for exploring new partnerships for longer-term action and to positively contribute to their co-creation.CASE STUDY 2European Commission:Directorate General for European Civil Protection and Humanitarian Aid Operations(DG ECHO)Leaders and Intrapreneurs:Driving Investment in Frontier Markets4This case study explores how having a strong understanding of WFPs existing systems and procedures enabled the WFP Innovation Accelerator to design innovation programmes that effectively combine the best practices from the private and public sectors,such as funding for-profit companies as part of WFPs Sprint Programme and Scale-up Enablement Programme,to further enable investment in frontier markets(humanitarian and fragile contexts with investable opportunities).CASE STUDY 3World Food Programme(WFP)This case study explores how the Netherlands Ministry of Foreign Affairs enabled FMO to invest in frontier markets by providing the resources to operate the MASSIF fund.MASSIF unlocked smaller-ticket investments in these markets and enabled higher-risk transactions in earlier-stage companies.CASE STUDY 4FMO Entrepreneurial Development BankThe four case studies presented in this paper showcase positive momentum across humanitarian organizations,donors and DFIs,to enable change and unlock investment in frontier markets.Leaders were able to create space for change by empowering their staff,removing bureaucratic and political barriers,and recognizing the learning opportunity from potential failures.Intrapreneurs capitalized on that space and were able to increase their organizations readiness through a number of different strategies.The HRI initiative will continue to work closely with humanitarian and development organizations,donors,DFIs and private-sector actors to support their journey,and identify additional tools and best practices that enable them to actively engage in HRI.Leaders should be willing to take risks and empower their staff to fail safely and learn from failure.Intrapreneurs should not be discouraged by the challenge ahead and know that their work will cement the foundations for change across the humanitarian and development environments to deliver long-term solutions for vulnerable people.Organizational readiness is indeed driven by leaders and intrapreneurs,and the result is a space for change that can live beyond its creators.Leaders and Intrapreneurs:Driving Investment in Frontier Markets5IntroductionThere is a pressing need to find new ways of working across the humanitarian and development sectors and with investors to deliver long-term solutions for people affected by conflict and disasters.Global humanitarian challenges continue to grow unabated.With the world still reeling from the impacts of the COVID-19 pandemic,the combined effects of unresolved conflict and climate change continue to add new crises to ongoing ones.In 2022,heavy floods in Pakistan have led to a large-scale disaster with long-term human consequences at the same time as famine has reappeared in the Horn of Africa following five consecutive failed rains.The war in Ukraine and the global food and cost-of-living crisis have led to further increases in the number of people in need of humanitarian assistance.The 2022 States of Fragility report published by the Organisation for Economic Co-operation and Development(OECD)estimates that fragile contexts“account for a quarter(23%)of the worlds population but three-quarters(73%)of people live in extreme poverty worldwide”.4 By contrast,the rapid growth of international humanitarian funding since the turn of the century has stalled since 2018.5Efforts to widen the resource base have been unsuccessful.There has been insufficient growth in sustained partnerships between the humanitarian and private sectors.6 Donors and aid organizations are beginning to recognize the opportunity to complement traditional humanitarian responses with long-term,market-driven solutions to support resilience and preparedness.The private sector recognizes the market opportunities that exist in crisis contexts,with examples such as Kakuma refugee camp,with a total annual consumption by refugees and host community estimated at$56 million.7 But financial,institutional and cultural barriers continue to slow progress for collaboration to scale market-driven solutions.The Humanitarian and Resilience Investing(HRI)initiative was launched in 2019 to encourage flows of private capital into financially sustainable opportunities that benefit communities in humanitarian and fragile contexts,while creating a financial return.8 A core enabler to achieve scale and unlock private capital in fragile contexts is organizational readiness,which refers to the preparedness of an organization to undergo a major change or take on a significant new project.Humanitarian and resilience investing not only introduces new financial instruments but also develops new partnerships and business models that challenge mindsets and push the boundaries of what is possible within the existing rules and systems.If organizations are not ready,new initiatives are likely to fail,as barriers will discourage or defeat intrapreneurs(entrepreneurs within an established organization)9 to drive change.To respond to this challenge,Switzerland and the Directorate General for European Civil Protection and Humanitarian Aid Operations(DG ECHO)came together in 2020,as part of their co-chairmanship for the Good Humanitarian Donorship(GHD)initiative,to support and fund the development of the playbook Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts.10 The playbook was developed by the Boston Consulting Group,with insights from more than 100 experts from upwards of 50 DFIs,donors,humanitarian-development organizations and private-sector institutions.It aimed to equip stakeholders with self-assessment and prioritization tools to identify and tackle internal barriers across five organizational pillars:mandate;organizational support;systems and procedures;resources;and implementation.In 2022 the HRI initiative brought together a group of pioneering organizations to operationalize this playbook and provide them with the structure and continuity to accelerate their organizational readiness while maintaining a safe space for sharing and learning.These organizations include the World Bank Group,FMO Entrepreneurial Development Bank,Proparco,the United States Agency for International Development(USAID),DG ECHO,Innovation Norway,the International Committee of the Red Cross(ICRC),the Danish Refugee Council(DRC),the International Rescue Committee(IRC),the World Food Programme(WFP)and Save the Children.This white paper highlights best practices from four of these pioneering organizations and showcases key actions that took place behind the scenes before they were able to successfully engage in humanitarian and resilience investing.Leaders and Intrapreneurs:Driving Investment in Frontier Markets6The paper identifies the role that leaders played in creating the space for change,and the role that individuals and teams played in using that space to implement the changes required to achieve traction.The case studies provide the reader with concrete actions taken across four of the five organizational readiness pillars.There is no specific case study for the implementation pillar,as all of the case studies presented showcase how actions in their respective pillar led to implementation.These case studies are intended to inspire leaders and intrapreneurs to take action that enables change for investment in frontier markets(humanitarian and fragile contexts with investable opportunities).Organizational readiness pillarsFIGURE 1 MandateOverarching organizational commitment that drives focus of senior leadershipand action among others throughout the organization to enable engagement in HRIOrganizational supportLeadership support and broader organizational buy-in to driveengagement in HRI,including organizational culture promoting stakeholder collaborationSystems and proceduresOperational infrastructure enabling engagement in HRIResourcesHuman capital and funding to enable engagement in HRIImplementationPractical experience in HRISource:Boston Consulting Group(BCG),“Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts:Good Practices Playbook”,May 2020:https:/www.ghdinitiative.org/assets/files/Resource Center/Humanitarian Financing/Innovative Financing/GHD-Organizational-Readiness-Playbook.pdfLeaders and Intrapreneurs:Driving Investment in Frontier Markets7International Committee of the Red Cross1Essential takeaways Leaders have a responsibility to identify political and bureaucratic barriers that prevent positive change within their organizations,enable actions to address them and invest time and resources to drive and secure such change.Securing a meaningful and quantifiable target for innovative finance-related projects within the organizations resource mobilization strategy(RMS)can provide a mandate and unlock the financial resources and organizational support to deliver on it.Mandates reflect the alignment of priorities and aspirations within the organization and are reinforced by governance bodies.They can be advanced by the organization and,importantly,serve as a catalyst for change.A strong mandate is essential to effective engagement in humanitarian and resilience investing.MandateLeaders and Intrapreneurs:Driving Investment in Frontier Markets8The International Committee of the Red Cross(ICRC)is an impartial,neutral and independent organization whose exclusively humanitarian mission is to protect the lives and dignity of victims of armed conflict and other situations of violence and to provide them with assistance.11 Today,the ICRC is one of the largest humanitarian organizations in the world,and its former president,Peter Maurer,has played an important part in creating a space for change within the humanitarian environment,enabling it to engage the private sector beyond traditional philanthropy.Maurer believes that“leaders have a responsibility to identify political and bureaucratic barriers that prevent positive change within organizations and enable actions to address them”.During his tenure as president of the ICRC,Maurer worked internally and with donors to remove barriers to new financing models(NFMs).The overall logic is that NFMs enable partnerships across sectors,broaden the resource base and deliver more sustainable humanitarian impact.Maurer addressed the political and bureaucratic barriers by empowering his team to create the Humanitarian Impact Bond(HIB),a pioneering payment-by-results mechanism that enabled private-sector investment in humanitarian contexts and allowed donors to provide funding based on achieved outcomes.The HIB was structured so that at the end of a five-year period,“outcome funders”committed to make payments to the ICRC according to the results achieved.These funds were in turn used to pay back the private-sector investors partially,in full or with an additional return,depending on how well the ICRC performed in terms of the efficiency of its new physical rehabilitation centres.Maurer engaged investors and donors in various fora,making the business case for the HIB,and worked with governments to address the legal barriers that prevented them from providing funding through the payment-by-results mechanism;in the case of Belgium,this culminated in a change in Belgian law to enable support for the HIB.On the ICRC front,Maurer empowered his staff to innovate,with a full understanding of the risk of failure;if this approach had gone wrong it could have caused significant reputational damage for Maurer and the organization.In the end,the HIB unlocked 18 million Swiss francs($19.1 million)from private-sector investors,which was used to build and run three new physical rehabilitation centres in Nigeria,Mali and the Democratic Republic of the Congo.These now provide physical rehabilitation services to more than 3,000 patients per year,with the potential to reach 5,000 patients per annum at full capacity.The Humanitarian Impact Bond1.1The HIB provided the foundation for further engagement with NFMs,but the reality was that the NFMs team was a one-person body,led by Juan Coderque,with a limited number of projects in the pipeline.Today,two more NFMs have been launched the ICRC Climate and Environment Transition Fund12 and the Goma West Water Project13 and Coderque leads a team of nine experts and has more than 10 projects in the pipeline,with the potential to improve over time the lives of hundreds of thousands of people affected by conflict and fragility.How was this accomplished?During the initial stages,Coderque was supported by external and internal allies,including the HIB partners and Volta Capital(previously known as Dalberg Capital),which provided full-on,six-month pro bono technical support for initial market assessments and feasibility studies.The Lombard Odier Foundation,the Credit Suisse Foundation,the ICRCs Innovation Board and the Netherlands government provided seed funding to explore NFMs.The Foundation for the ICRC provided funds to contract a second team member,Catherine Howell,who was instrumental in identifying and developing a new pipeline of projects.In parallel,the ICRC leadership hired Colin Bruce,a former World Bank Senior Advisor,now Special Envoy for Humanitarian and Development Affairs at the ICRC,who joined the ICRCs NFMs steering committee and provided support in consolidating narratives,explaining the value-add,securing progress for specific NFMs and ensuring more buy-in from ICRC headquarters and field staff.The partnership between the NFMs,the Water and Habitat unit and the Africa region around the Goma project also provided critical licence to operate.However,the key breakthrough that secured the NFMs teams mandate within the organization and enabled the team to grow to where it is today was the inclusion of NFMs as part of the 20202030 resource mobilization strategy(RMS).Up to this point,NFMs had been mentioned in the 20192024 ICRC institutional strategy,which highlighted the need“to explore,test and secure innovative and sustainable humanitarian financing solutions that go beyond grants and philanthropy The resource mobilization strategy1.2Leaders and Intrapreneurs:Driving Investment in Frontier Markets9and ensure impact-driven investments”.14 But Coderque explains that“this strategy initially remained a wish list without a mandate or resource allocation”.The 20202030 RMS provided the resources to deliver on the institutional strategy.By taking a business approach,the RMS stressed the need to spend funds to generate greater funds in the future.The NFMs team made its business case and secured a target to mobilize the equivalent of 5%of ICRCs annual expenditure by 2030,or 150 million Swiss francs(S159.2 million)per year in direct and parallel funding(direct funding refers to funding for the ICRC,and parallel funding refers to funding for the project but not for the ICRC).Such a target quantified the value of investing in NFMs and enabled the team to secure the financial resources and internal support required to start working on making this vision a reality.An example of how this mandate catalysed interest for NFMs can be seen through the attendance of more than 40 participants from across the ICRC to the first edition of the Driving Innovative Finance for Impact(DIFI)course,15 developed in partnership with IMD Business School,the ICRC,the Lombard Odier Foundation and the World Economic Forum.The course was developed in response to strong internal demand and aimed to increase organizational capacity to deliver innovative finance for impact at scale in fragile settings;it will open to other organizations from 2023.The Humanitarian Impact Bond and the inclusion of NFMs in the resource mobilization strategy laid strong foundations for new ways to deliver long-term impact at the ICRC.The secured mandate to enable partnerships across sectors,broaden the resource base and deliver more sustainable humanitarian impact through NFMs will remain in place until at least 2030.This mandate will continue to enable space for change even if the leaders and intrapreneurs who made it possible are no longer in post.It is an exciting opportunity to push ahead,and the Director-General of the ICRC,Robert Mardini,has expressed his commitment to continue making NFMs a priority in order to find more solutions to reach scale and speed for people and communities affected by armed conflict.16 ICRC Physical Rehabilitation Program(PRP).ICRCLeaders and Intrapreneurs:Driving Investment in Frontier Markets10HIB financial structureFIGURE 2SocialinvestorsOutcomefundersSocial investorsfinance the ICRCsprogrammeover five yearsIndividuals withphysical disabilitiesin the DRC,Maliand Nigeria261544341Conditional pledge2Investments3Programme implementation4Outcome evaluation and verification5Payment for results6RepaymentThe ICRC:carries out the programme provides quarterly status reports to the social investors and outcome funders holds semi-annual operational review commitee meetingsOutcome funderspledge to pay the ICRCat the end of year five.The amount of thepayment depends onthe resultsThe independentevaluator determinesthe outcome-basedstaff efficiency ratio(SER)IndependentevaluatorSource:ICRC,“Humanitarian Impact Bond In a Nutshell”,Switzerland,September 2017Leaders and Intrapreneurs:Driving Investment in Frontier Markets11European Commission:Directorate General for European Civil Protection and Humanitarian Aid Operations(DG ECHO)2Essential takeaways As donors,it is critical to explore new sources of funding for certain humanitarian needs to help close the humanitarian funding gap(the difference between needs and available mainly governmental resources),which stands at$27.55 billion.17 The barriers are significant,but the Organizational Readiness good practices playbook can provide a first step to help individuals engage with colleagues across the organization and provides an understanding of what is and isnt possible with regards to HRI engagement in an organization.However,moving towards working on concrete projects is crucial in building an understanding of what HRI opportunities mean in practice.Without discussions about actual projects,with tangible impacts on funding and addressing humanitarian needs,it is difficult to move the discussion forward and generate buy-in and support from colleagues across the organization for innovative finance.Maturity in this category entails developing an understanding of what humanitarian and resilience investing(HRI)is,why it is important and what needs to change within and outside an organization to make HRI opportunities happen.Leadership and organizational support are grounded in facts and focus on articulating the benefits of HRI both to the organization itself and to the people whom it serves.Organizational support Humanitarian aid for Syrian refugees in Jordan.Ten years after Zaatari camp opened in July 2012,it has become a vibrant place with more than 1,800 shops on its“Sham Elyses”a play on ash-Sham,a word Syrians use for Damascus,and the famous Parisian boulevard,Champs-lyses.European Union,2022(Photographer:Rajiv Raman)Leaders and Intrapreneurs:Driving Investment in Frontier Markets12The European Commissions Directorate General for European Civil Protection and Humanitarian Aid Operations(DG ECHO)is one of the leading humanitarian donors in the world with a budget of 2.4 billion($2.5 billion)at the end of 2022.Janez Lenari is currently serving as Commissioner for Crisis Management in the European Commission,a mandate he took up in December 2019.In this capacity,he is responsible for EU civil protection as well as humanitarian aid.18 Since his appointment,one of Commissioner Lenaris key concerns has been the growing gap between global humanitarian needs and the available resources.To help address this funding gap,one of the Commissioners political priorities has been to expand the donor and resource base for humanitarian action.As the European Commissions 2021 Communication on Humanitarian Aid19 sets out,expanding the resource base includes“leveraging additional funding through greater engagement with the private sector in support of humanitarian response”.On taking office,Commissioner Lenari gave the political steer to explore ways of expanding the donor base for humanitarian action.This included looking at ways of catalysing private finance to help address humanitarian needs.Following the Commissioners political mandate,DG ECHO stepped up its work on exploring entry points for a humanitarian donor to stimulate private investing.An initial opportunity came through the EUs 20202021 co-chairmanship with Switzerland of the Good Humanitarian Donorship(GHD)initiative.20 As part of the GHDs work programme,the Swiss government supported the development of its good practices playbook,Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Context.21 The playbook aimed to enable humanitarian and development organizations,donors,development finance institutions and private-sector actors to identify and address the internal barriers that prevented them from partnering with each other,strengthening public-private collaboration beyond philanthropy and driving financially sustainable projects that achieve impact at scale.Through the Commissioners membership of the high-level group of the HRI initiative,the work being done at the GHD was connected to the wider discussion on humanitarian investing.DG ECHO took the lead as the first organization to use the playbooks self-assessment tool to identify internal barriers and opportunities to support HRI opportunities.The results were shared with relevant stakeholders to demonstrate transparency and encourage others to undertake self-assessment in their respective organizations.While the exercise revealed that significant barriers existed,DG ECHO nonetheless aimed to navigate these barriers and set out ways to respond to the political mandate to engage with innovative finance,using the tools that were available and within the constraints of a European public administration.This process of exploring innovative financial instruments as a means of engaging private finance in humanitarian contexts22 would culminate with the launch of pilot projects in“humanitarian blended finance”.These projects aimed to move the discussion on humanitarian investing from theory to practice and provide a model for DG ECHO and its humanitarian and financial institution partners to follow in mainstreaming investment projects with humanitarian impact.The Organizational Readiness good practices playbook2.1In DG ECHOs view,“the Humanitarian Impact Bond(HIB),launched by ICRC in 2019,was instrumental in pushing humanitarian donors to better understand how they could engage in innovative financing”.As part of the process of exploring innovative financial models,DG ECHO had started an analysis of the legality of engaging with instruments such as the payment-by-results model used in the HIB.While the results-based financing models used in the HIB were ultimately difficult to reconcile with DG ECHOs funding practices and mandate,this exercise did reveal several opportunities to engage with other types of innovative financing mechanism.The political engagement of DG ECHOs senior management enabled the exercise to move beyond desk research and to engage colleagues across the organization,with legal and finance colleagues being instrumental in this process.Before carrying out this exercise,the received wisdom in DG ECHO had been that“engagement with innovative financing instruments may not have been compatible with our financing rules or mandate,which would not allow the Commission to contract the private sector directly on a project”.However,while these barriers existed,DG ECHO also realized it could engage in innovative financing and stimulate private-sector engagement by supporting its humanitarian partners and development finance institutions that already worked with the private sector.Humanitarian blending2.2Leaders and Intrapreneurs:Driving Investment in Frontier Markets13These results fed into DG ECHOs management decision to authorize a budget to pilot blended finance solutions,using humanitarian grants to stimulate,de-risk and draw in additional financing in humanitarian contexts.Two funding rounds took place between 2021 and 2022.The 2021 round supported humanitarian organizations in joining humanitarian blended finance projects and encouraged DFIs to engage in humanitarian contexts.Projects selected included a humanitarian-development partnership between the International Rescue Committee(IRC)and the European Bank for Reconstruction and Development(EBRD)on water infrastructure investment in West Irbid,Jordan,23 and a refugee investment facility led by the Danish Refugee Council(DRC),which provides impact-linked loans at favourable rates to small,growing and medium-sized private companies with positive impacts on refugees and host communities,rewarding achievement of pre-agreed impact indicators with more favourable repayment terms over the course of the loan.As part of the 2022 round of pilots,DG ECHO aimed to work directly with development finance institutions and will launch projects in early 2023.Moving from initial discussions with key actors on the idea of trialling blended finance solutions in humanitarian contexts to having workable project proposals was a complex process requiring discussions over the better part of two years between potential DFI partners and humanitarian specialists in DG ECHOs headquarters and the field.A key area of contention was the specificities of a humanitarian investment or blending project compared with a traditional development project.Investment projects almost by definition sit within the realm of economic/private-sector development.To justify financing such projects from a humanitarian budget,there needs to be a clear correspondence with the humanitarian mission to“save lives,prevent and alleviate human suffering,and safeguard the integrity and human dignity of populations affected by natural disasters and man-made crises”.24 This need to have a clear humanitarian(rather than development)impact required extensive explanations to financial institutions,which are more experienced in economic than humanitarian impact measurements.It also led to questions from staff on the humanitarian side about how compatible these projects were with the humanitarian mandate and whether,rather than helping to close the humanitarian financing gap,they would in fact widen it by pushing humanitarian donors into new areas of financing.DG ECHOs view was that innovative financing projects would clearly be deployed in the nexus between development and humanitarian aid,such as in protracted crises these types of financing model are very unlikely to be applicable at the sharp end of humanitarian crisis response.The key difference between a“humanitarian blending”project and a development one would be in terms of the identities of the beneficiaries targeted and the measurement of impact on humanitarian needs in addition to economic measurements.While these projects were breaking new ground,both within DG ECHO and partner organizations,and led to robust discussions,they also sparked positive conversations,in which colleagues across the organization began to understand the rationale for exploring these new partnerships and to positively contribute to their co-creation.The Innovative Finance team at DG ECHO believes that“having concrete projects to discuss is crucial to engage colleagues to get their buy-in and support for HRI opportunities.Without concrete examples its very difficult to move these conversations forward.”The organizational readiness self-assessment enabled DG ECHO not only to understand what it could and couldnt do but also to increase awareness about humanitarian and resilience investing across the organization and secure organizational support from colleagues.Leaders and Intrapreneurs:Driving Investment in Frontier Markets14Example of prioritization tool from the Organizational Readiness good practices playbookFIGURE 3IMPACTFEASIBILITYFuture effortsPrioritize wave 2Prioritize wave 111081917211920183122141322514236152471625261108191721192018312214132251423615247162526Commitment to make an impact in humanitarian contextsCommitment to engage the private sector and other stakeholdersPrevention,resilience and recovery to complement responseLearning and innovation capabilities,patienceSenior leadership support of HRIOrganizational support of HRIWillingness to collaborate across sectorsStakeholder relationships and understandingRisk appetiteDedicated team for HRIInternal expertise for HRIInvestment funds allocated to HRIIncentive structure to encourage development of HRI capabilitiesTrack record of investment and impact executionNetwork of potential partnersPipeline of potential dealsShare learnings with broader communityClear and disciplined risk assessment and funds deploymentFlexibility in contracting with counterpartiesBudgeting practicesSophistication of impact analysisImpact measurement and evaluationData managementTechnological capabilitiesMandateResourcesOrganizational supportImplementationSystems and proceduresRisk controls to provide protection but enable flexibilityAccounting flexibility and fund processingSource:BCG,“Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts:Good Practices Playbook”,May 2020:https:/www.ghdinitiative.org/assets/files/Resource Center/Humanitarian Financing/Innovative Financing/GHD-Organizational-Readiness-Playbook.pdfLeaders and Intrapreneurs:Driving Investment in Frontier Markets15The United Nations World Food Programme3Essential takeaways A value proposition closely connected to the organizations mission and strategic priorities is essential to getting executive and broad organizational buy-in for the innovation unit.The WFP Innovation Accelerator uses a lean start-up methodology,which favours quick learning and co-developing with users rather than elaborate planning,and user feedback and iterative design over large upfront development.Especially in humanitarian-linked advances,teams must be able to partner with colleagues with deep in-country expertise to drive and scale innovations in-house or through external partnerships.To better engage in humanitarian and resilience investing,organizations will likely need to optimize certain facets of their operations.Many of these adjustments entail willpower and organizational learning to enhance existing systems.While HRI engagement can be executed with existing systems,the speed and scale at which the humanitarian community embraces innovation and technology must accelerate.Systems and proceduresLeaders and Intrapreneurs:Driving Investment in Frontier Markets16The United Nations World Food Programme(WFP)is the largest humanitarian organization fighting hunger.Since its inception,WFP has embraced innovation and technology in its humanitarian operations,working to save and change lives.In 2015,the global WFP Innovation Accelerator was founded in Munich,Germany,to systematically identify,support and scale innovations to disrupt global hunger.From an initial focus on innovations for zero hunger,the WFP Innovation Accelerator has now built up a specific innovative finance capacity and innovation accelerator programmes as a service for other entities(e.g.the Bill&Melinda Gates Foundation and the United Nations Population Fund in areas addressing vaccine delivery,primary healthcare and gender equality).Valerie Guarnieri,WFPs Deputy Executive Director for Programme and Policy Development,who leads the organizations work in providing food,cash and technical assistance to help communities globally,explains that innovation allows the organization to achieve its full potential.“We know that business as usual will not get us to a world without hunger by 2030.With new solutions and new methodologies,we can solve some of the deeply rooted problems.”Gaining executive and organizational support has been imperative to the establishment and growth of the Accelerator.WFPs current strategic plan(20222025)25 prioritizes innovation as a critical enabler.Since the Accelerators inception,the WFP executive director has been a champion of bold innovation and improved collaboration with private-sector entities.The opportunities presented by innovation cannot be denied.The question that the Accelerator was challenged to solve was how to implement innovation projects safely in the humanitarian context.Guarnieri explains that innovation is part of the organizational DNA.“Risks are part and parcel of our work,which compels WFP to innovate.WFP has many needed systems and procedures to support and accelerate solutions.”Building an organizational structure that fosters innovation3.1The WFP Innovation Accelerator uses human-centred design and lean start-up methodologies,which favour quick learning and co-developing with users rather than elaborate planning,and iterative design over large upfront development.This allows the Accelerator to pilot and scale high-potential solutions with comparably smaller funds before larger amounts are invested in innovations with proven impact.To ensure that innovations address the right challenges,the WFP Innovation Accelerator takes a demand-driven approach that identifies and matches start-ups and innovations with WFPs present needs in specific country contexts.To do this,the Accelerator combines the expertise of two distinct groups of people:1)WFPs 23,000 staff in 123 countries and territories working directly with food-insecure people,their communities,humanitarian stakeholders and governments;and 2)a team of innovation experts,including social entrepreneurs,digital product managers and human-centred design experts.Bernhard Kowatsch,Head of the WFP Innovation Accelerator,explains that“the WFP Innovation Accelerator team and WFP colleagues across the globe are our secret superpower.Too often,people just look at concepts,but forget that you need cutting-edge talent to make it happen.”Creating a space for these two groups to work together towards a shared goal has been critical to the Accelerators success.WFP Innovation Bootcamps,one of the WFP Innovation Accelerators earliest programmes,are a space in which innovation can thrive.The WFP Innovation Bootcamp is a week-long intensive programme where non-profit organizations or internal innovation teams receive guidance,mentorship and pitch training to refine their project plans.Bootcamps culminate in a WFP pitch event at which innovation teams showcase their work to government partners,investors and private-sector entities.The best teams continue in the WFP Sprint Programme,where the Accelerator provides up to$100,000 of equity-free funding,hands-on support through partners and the Accelerator,and access to WFPs field operations.In 2018,in the light of an understanding that impact innovations also have specific scaling needs,WFPs Scale-up Enablement Programme was set up to support scaling of internal and external innovations.Since its inception,to increase private-sector engagement,the Accelerator has designed its innovation programmes to host external start-ups.Initially,funds for start-ups and companies were disbursed through the WFP procurement process.In 2021,the Accelerator transitioned to a grant-based modality to dispense such funding.Another development,over the years,has been to create more refined mechanisms to generate innovation.This new procedure includes,for example,innovation challenges that invite proposals from start-ups Systems and procedures that enable innovation3.2Leaders and Intrapreneurs:Driving Investment in Frontier Markets17and innovators worldwide.Each submitted project proposal undergoes a detailed assessment to ensure it addresses an existing food-security need across WFP.The Accelerator helps identify WFPs innovation priorities through regular consultations with country offices and programmatic units and matches them with applicable solutions.This new process increased the implementation of market-based solutions in the humanitarian and development context,while ensuring the required checks and balances.In 2021,WFP launched the asset-based loans model for the H2Grow hydroponics project in Kenya,26 where a lack of up-front investment was identified as a bottleneck for expansion.The WFP Kenya Country Office facilitates disbursement of loans from partners to participants of the programme and provides them with business training and technical assistance to ensure repayment.Understanding existing mandates and systems has also been critical to using partnerships with other UN agencies to stimulate investments at scale.In July 2022,WFP and the United Nations Capital Development Fund(UNCDF)signed a breakthrough partnership agreement to use UNCDFs investment instruments to invest in businesses aligned with WFPs mission.27 The new financing facility,WFP Innovation Bridge,will provide innovations with concessional loans and guarantees to stimulate investments and expedite their growth.This innovative partnership harnesses competitive advantages of the two UN agencies,supporting WFPs mandate to end world hunger while leveraging UNCDFs unique capital mandate and systems.The WFP Innovation Bridge aims to“bridge”the“missing middle”funding gap,de-risk investment opportunities and stimulate additional private-sector capital through co-investments.Kowatsch believes that“the WFP Innovation Bridge can help innovations reach the next frontier of impact,by channelling more private investment towards innovations disrupting hunger”.By the end of 2021 the WFP Innovation Accelerator had positively affected the lives of 9 million people through its global portfolio of innovations and start-ups.Having a strong understanding of WFPs existing systems and procedures enabled the Accelerator to design innovation programmes that effectively combine the best practices from the private and public sectors,such as funding for-profit companies as part of WFPs Sprint Programme and Scale-up Enablement Programme,to further enable investment in frontier markets.WFPs H2Grow innovation project uses low-cost hydroponics units to grow food.A farmer at a hydroponics garden in Kibera,Kenyas largest urban slum,says the project provides a reliable source of food and income for women and young farmers.WFP/Gulia RakhimovaLeaders and Intrapreneurs:Driving Investment in Frontier Markets18FMO Entrepreneurial Development Bank4Essential takeaways One of the biggest challenges that prevents DFIs from investing in frontier markets is investment size.DFIs tend to focus on larger investments,in order to make efficient use of their administrative capacity and human resources.Governments play a key role in enabling private-sector and DFI investment in frontier markets through concessional funding,technical assistance and diplomacy.Investment officers have the intrinsic motivation to achieve positive impact through their investments.MASSIF supports their intrinsic motivation by providing the funds to enable investments in frontier markets and by setting the targets that give them the time and space to do it.These enable transactions by providing personnel,funds to deploy and robust systems and technology.Resources Street view from FMO office in Johannesburg.Leaders and Intrapreneurs:Driving Investment in Frontier Markets19FMO Entrepreneurial Development Bank is a public-private development bank supervised by the Dutch Central Bank(DNB).Its mission is to enable entrepreneurs to increase inclusive and sustainable prosperity,and to demonstrate that strong financial returns and positive impact in developing economies and frontier markets can go hand in hand.28 Since 2006,FMO has been managing the MASSIF fund on behalf of the Dutch Ministry of Foreign Affairs.MASSIF enhances financial inclusion for micro and small and medium-sized enterprises(MSMEs)that are disproportionately affected by a lack of access to financial services.Since 2016,the fund has increased its focus in frontier markets,supporting intermediaries that reach out to MSMEs in fragile and low-income countries,MSMEs in rural areas and those dependent on agriculture,MSMEs owned by women and youth,and intermediaries providing access to productive goods and services for underserved individuals in the poorest social-economic segments.29 By 2022 the fund had invested 650 million($685 million)in 40 countries,with an average of 75 million($79 million)per year.One of the biggest challenges that prevents DFIs from investing in frontier markets is the investment size.DFIs tend to focus on larger investments in order to make efficient use of their administrative capacity and human resources.Such opportunities are scarce in frontier markets.This impedes investment officers from pursuing the smaller,more complex and more time-intensive investments that are common in frontier markets.30 Birgitta Tazelaar,Deputy Director-General for International Cooperation at the Netherlands Ministry of Foreign Affairs,recognizes that“investing in frontier markets can be challenging and time-consuming,and requires a high-risk appetite,perseverance,patience and sometimes the acceptance of setbacks”.She is convinced that“governments play a key role in enabling private-sector and DFI investment into frontier markets through concessional funding,technical assistance and diplomacy.The reward is seeing people being able to improve their circumstances and getting perspective on a better future for their children.”By supporting MASSIF,the Netherlands Ministry of Foreign Affairs hopes to inspire investment in pathways out of fragility,poverty and inequality.The MASSIF fund4.1Jeroen Harteveld,manager of the MASSIF fund,highlights that“FMOs investment officers already have the intrinsic motivation to achieve positive impact through their investments”.MASSIF further supports this motivation by providing the funds to enable investments in frontier markets and by setting the targets that give investment officers the time and space to do so.The funds provided unlock smaller-sized investments in frontier markets and enable higher-risk transactions in earlier-stage companies.This allows investment officers not only to follow their intrinsic motivation for impact but also to pursue pioneer investments in frontier markets.Harteveld highlights that the opportunity to be pioneers is also a big motivator that should not be underestimated.Dedicated MASSIF targets also enable investment officers to spend time on projects that might otherwise be deprioritized.Huib-Jan de Ruijter,FMOs Co-Chief Investment Officer,explains that“MASSIF targets are considered as important as any other targets.Meaning that smaller deals are not more or less important than bigger deals.”This enables FMO team leaders to address the issue of misaligned incentives and encourages investment officers to take the time needed to pursue investment opportunities in frontier markets.The investment made in 2021 in La Finance pour ELLE(FinElle),a microfinance institution dedicated to empowering women entrepreneurs in Cte dIvoire,is a great example of how MASSIF unlocked a smaller-sized investment in an early-stage institution and enabled Gilles Vercammen,the investment officer responsible for this transaction,to dedicate the necessary time to close the deal.When FinElle approached FMO for investment,the institution was still at an early stage of development and had not yet reached break-even.Even though the concept and target group supported by FinElle met the banks priority areas,the institutions risk profile was relatively high.Through MASSIF,FMO was able to approve a 5 million($5.3 million)investment in 2021 in FinElle that was structured so that the first part of the financing was accessible immediately and additional capital could be unlocked after reaching certain milestones.By 2022 FinElle had served more than 10,000 clients and ranked ninth among microfinance institutions in Cte dIvoire.31 Creating the space to pursue investments in frontier markets4.2Leaders and Intrapreneurs:Driving Investment in Frontier Markets20Another example of an investment enabled by MASSIF in collaboration with the European Fund for Sustainable Development is NASIRA,a risk-sharing facility for local financial institutions that supports young,female,displaced populations(including refugees,returnees and internally displaced people)and COVID-19-affected entrepreneurs in sub-Saharan Africa and countries neighbouring Europe.The fund has enabled investment officers to stimulate lending for groups they would normally perceive as too risky,such as refugees,through a guarantee portfolio.Vitas Palestine,a Palestinian microfinance institution supporting the needs of SMEs run by youth and women,received a$10 million investment enabled through this facility.32The investments made in FinElle and NASIRA demonstrate how public funds can enable DFIs to increase their risk appetite in frontier markets,address internal barriers preventing investment officers from pursuing smaller transactions with high impact and unlock the investments required to scale up HRI opportunities in frontier markets.Women entrepreneurs supported by FinElle in Cte dIvoire.FinElleLeaders and Intrapreneurs:Driving Investment in Frontier Markets21ConclusionThe case studies presented in this paper showcase positive momentum across humanitarian organizations,donors and DFIs,to enable change and unlock investment in frontier markets.They highlight positive momentum by humanitarian organizations that are being more deliberate about collaborating with the private sector beyond philanthropy,a donor working to remove humanitarian and development silos,and a DFI increasing its risk appetite for smaller investments in frontier markets.Leaders were able to create space for change by empowering their staff,removing bureaucratic and political barriers and recognizing the learning opportunity from potential failures.All of the initiatives discussed in this paper presented a high risk of failure because they were pushing their organizations to do something new,which if it had gone wrong could have caused significant reputational damages for the leaders and the institutions.Change will require risk-taking,and its up to pioneering leaders to create the space for their staff to innovate,fail safely and learn from potential failures.For intrapreneurs,organizational change can feel unattainable given all the elements that may need to align,but it is important to understand that it is not necessary to be ready at all levels.The case studies in this paper were slotted into the individual pillars of organizational readiness to provide intrapreneurs with concrete actions that they could take under each.However,taking action in one pillar will result in changes across other pillars.The creation of the Humanitarian Impact Bond by the ICRC led to the inclusion of new financing models in the ICRCs institutional and resource mobilization strategies,securing a mandate for its work and unlocking the resources required to expand its team.The same could be said about the DG ECHO case study,with the Organizational Readiness good practices playbook unlocking the resources to pilot humanitarian blending and increasing organizational support through conversations about these projects with staff in the field.Organizational readiness is not a linear process,and an essential takeaway from these case studies should be that actions in one pillar can stimulate additional positive changes across the organization.This white paper is an initial step to identify and share best practices across the organizational readiness pillars.The HRI initiative will continue to work closely with humanitarian and development organizations,donors,DFIs and private-sector actors to support their organizational readiness journey and identify additional tools and methodologies that enable them to actively engage in HRI.Leaders should be willing to take risks and empower their staff to fail safely.Intrapreneurs should not be dissuaded by the challenges ahead and should know that their work will cement the foundations for change across the humanitarian and development ecosystems to deliver long-term solutions for those most in need.Organizational readiness is indeed driven by leaders and intrapreneurs,and the result is a space for change that can live beyond its creators.Leaders and Intrapreneurs:Driving Investment in Frontier Markets22ContributorsLead AuthorsWorld Economic Forum Diego HakspielProject Specialist,Humanitarian and Resilience InvestingAndrej KirnHead of International Organizations and Humanitarian AgendaODI Patrick SaezSenior Research Fellow and Policy Lead in the Humanitarian Policy GroupCase Study AuthorsInternational Committee of the Red Cross Juan Luis Coderque GalligoHead of New Financing ModelsSantiago CortesInnovative Finance AdvisorEuropean Commission:Directorate General for European Civil Protection and Humanitarian Aid Operations(DG ECHO)Office of Commissioner Janez LenariThe United Nations World Food Programme Hila CohenChief of Staff and Head of Business DevelopmentBernhard KowatschHead of Innovation AcceleratorGulia RakhimovaKnowledge Management ConsultantFMO Entrepreneurial Development Bank Jeroen HarteveldPortfolio Manager MASSIFLeaders and Intrapreneurs:Driving Investment in Frontier Markets23Endnotes1.HRI,“About Us”:https:/initiatives.weforum.org/humanitarian-and-resilience-investing-initiative/about.2.Somers,Meredith,“Intrapreneurship,Explained”,MIT,June 2018:https:/initiatives.weforum.org/humanitarian-and-resilience-investing-initiative/about.3.Boston Consulting Group(BCG),“Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts:Good Practices Playbook”,May 2020:https:/www.ghdinitiative.org/assets/files/Resource Center/Humanitarian Financing/Innovative Financing/GHD-Organizational-Readiness-Playbook.pdf.4.Organisation for Economic Co-operation and Development,“States of Fragility”,September 2020:https:/www.oecd.org/dac/states-of-fragility-fa5a6770-en.htm.5.Development Initiatives,“Global Humanitarian Assistance Report 2022”,2022:https:/devinit.org/documents/1193/GHA2022_Digital_v8_DknWCsU.pdf.6.Willitts-King,Barnaby and Alexandra Spencer,“Reducing the Humanitarian Financing Gap”,ODI,April 2021:https:/cdn.odi.org/media/documents/Reducing_the_humanitarian_financing_gap_WEB.pdf.7.International Finance Corporation,“Kakuma as a Market Place”,April 2018:https:/www.ifc.org/wps/wcm/connect/0f3e93fb-35dc-4a80-a955-6a7028d0f77f/20180427_Kakuma-as-a-Marketplace_v1.pdf?MOD=AJPERES&CVID=mc8eL2K#:text=Kakuma as a Marketplace is,to enter a new market.8.HRI,“About Us”:https:/initiatives.weforum.org/humanitarian-and-resilience-investing-initiative/about.9.Somers,Meredith,“Intrapreneurship Explained”,MIT,June 2018:https:/mitsloan.mit.edu/ideas-made-to-matter/intrapreneurship-explained.10.Boston Consulting Group(BCG),“Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts:Good Practices Playbook”,May 2020:https:/www.ghdinitiative.org/assets/files/Resource Center/Humanitarian Financing/Innovative Financing/GHD-Organizational-Readiness-Playbook.pdf.11.International Committee of the Red Cross(ICRC),“The ICRCs Mandate and Mission”,December 2022:https:/www.icrc.org/en/mandate-and-mission.12.ICRC,“ICRC Launches a New Fund to Support Long-Term Climate and Environment Initiatives”,17 January 2022:https:/www.icrc.org/en/document/icrc-fund-climate-environment-initiatives.13.ICRC,“Democratic Republic of the Congo Goma West Resilient Water Supply Project:Bridging the Humanitarian and Development Divide”,2022:https:/www.icrc.org/en/download/file/243010/brochure_goma_west_water_project.pdf.14.ICRC,“ICRC Strategy 20192024”,11 June 2020:https:/www.icrc.org/en/publication/4354-icrc-strategy-2019-2022.15.IMD,“Driving Innovative Finance for Impact”:https:/www.imd.org/finance/difi/driving-innovative-finance-for-impact/?mc_phishing_protection_id=28047-cd8n6fidu81e06hvf5k0.16.IMD,“Scaling Innovative Finance for Impact through Partnerships”,December 2022:https:/www.imd.org/news/scaling-innovative-finance-for-impact-through-partnerships/.17.United Nations Office for the Coordination of Humanitarian Affairs(UN OCHA),“Global Humanitarian Overview 2023:At a Glance”,2022:https:/humanitarianaction.info.18.International Review of the Red Cross,“Interview with Janez Lenari”,2021:https:/international-review.icrc.org/sites/default/files/reviews-pdf/2022-02/interview-with-janez-lenarcic-916.pdf.19.European Commission,“Communication from the Commission to the European Parliament and the Council”,Brussels,10 March 2021:https:/ec.europa.eu/echo/files/aid/hacommunication2021.pdf.20.Good Humanitarian Donorship,“About Us”,December 2022:https:/www.ghdinitiative.org/ghd/gns/about-us/about-ghd.html.21.Boston Consulting Group(BCG),“Organizational Readiness and Enabling Private Capital for Innovative Financing in Humanitarian Contexts:Good Practices Playbook”,May 2020:https:/www.ghdinitiative.org/assets/files/Resource Center/Humanitarian Financing/Innovative Financing/GHD-Organizational-Readiness-Playbook.pdf.22.European Commission,“Communication from the Commission to the European Parliament and the Council”,Brussels,10 March 2021:https:/ec.europa.eu/echo/files/aid/hacommunication2021.pdf.23.European Bank for Reconstruction and Development,“MR3:West Irbid Wastewater Project”,August 2017:https:/Union Law,“Council Regulation(EC)No 1257/96 of 20 June 1996 Concerning Humanitarian Aid”,26 July 2019:https:/eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:31996R1257;European Union Law,“The European Consensus on Humanitarian Aid:Joint Statement by the Council and the Representatives of the Governments of the Member States Meeting within the Council,the European Parliament and the European Commission”,30 January 2008:https:/eur-lex.europa.eu/legal-content/EN/TXT/?qid=1431445468547&uri=CELEX:42008X0130(01).25.WFP,“WFP strategic plan(20222025)”,Executive Board second regular session,12 November 2021:https:/executiveboard.wfp.org/document_download/WFP-0000132205.Leaders and Intrapreneurs:Driving Investment in Frontier Markets2426.WFP,“H2Grow”,December 2022:https:/innovation.wfp.org/project/h2grow-hydroponics.27.WFP,“WFP and UNCDF Join Forces to Drive Action against Hunger through Innovative Financing”,1 July 2021:https:/www.wfp.org/news/wfp-and-uncdf-join-forces-drive-action-against-hunger-through-innovative-financing.28.FMO,“About FMO”:https:/www.fmo.nl/about-fmo.29.FMO,“MASSIF Annual Report 2021”,2021:https:/massif.fmo.nl/FbContent.ashx/pub_1000/downloads/v220429070645/Annual_Report_2021_MASSIF.pdf.30.Lions Head Global Partners,“Investing for Peace:Feasibility Study”,Berlin,2022:https:/investingforpeace.org/wp-content/uploads/gffo_feasibility_study_investing_for_peace.pdf.31.World Economic Forum,“Cultivating investment Opportunities in Fragile Contexts:Catalysing Market-Driven Solutions to Strengthen Community and Economy Resilience”,2022:https:/www3.weforum.org/docs/WEF_Cultivating_Investment_Opportunities_in_Fragile_Contexts_2022.pdf.32.FMO,“Nasira Fund”:http:/www.nasira.info/.Leaders and Intrapreneurs:Driving Investment in Frontier Markets25World Economic Forum9193 route de la CapiteCH-1223 Cologny/GenevaSwitzerland Tel.: 41(0)22 869 1212Fax: 41(0)22 786 2744contactweforum.orgwww.weforum.orgThe World Economic Forum,committed to improving the state of the world,is the International Organization for Public-Private Cooperation.The Forum engages the foremost political,business and other leaders of society to shape global,regional and industry agendas.Leaders and Intrapreneurs:Driving Investment in Frontier Markets26

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RACES:RESOURCES AWARENESS AND CIRCULAR ECONOMY STRATEGYRACES:Resources Awareness and Circular Economy Strategy2January 2023.AuthorsThis English publication was written by:Alain Chardon,Elsa Ota,Agathe Hellich,Charlotte LemaitreSpecial thanks to Stanislas Ancel,Clment Chenut,Julia Mller,Tejas Shinde and his team,Andr Sammarcelli,Ethinos team.Citation of this publication:Alain Chardon,December 2022,RACES:Resources Awareness and Circular Economy Strategy CAPGEMINI INVENT,60 pagesDownload(English):https:/of the content of this publication is based on a previous report published in French:Emmanuelle LEDOUX,Alain CHARDON,Avril 2022.SNBC sous contrainte de ressources Une approche intgre de la transition bas carbone circulaire-INEC,CAPGEMINI INVENT-Rapport complet et Annexe 1(144 pages),Annexe 2 Fiches domaines et ressources(62 pages),Annexe 3 lments quantitatifs(76 pages).Download(French):https:/Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 43EDITORIALBy Alain CHARDONCapgemini Sustainability PlatformsCompanies must transition from a paradigm of performance to a paradigm of resilience.Recent world events have forced companies to be radically agile,have put procurement and crisis management departments to the test,and have stretched supply chains to the breaking point-pushing CxOs to change their take on corporate management.The starting point for such a transformation is resources.World-wide industrial activities are bound together by their dependence on the availability of natural resources.The demand is growing,driven by the advent of resource-intensive industries,like tech and digital.Low-carbon trajectories,involving the electrification of transport and the rise of renewables,are generating further pressure on resources.From the decadal assumption that resources are widely available,industrial stakeholders inherited a mindset whereby one is not properly vigilant regarding the availability of resources.Carelessness does not only cause damage to the environment it also endangers a companys capacity to bounce back in times of trouble.Companies are on the verge of a resource crisis which threatens their core-business.In the near future,all business units from all companies not only procurement teams will bear the consequences of the 6 risks related to resources availability:geological and geopolitical availability of raw materials,competition between industrial sectors and countries,lack of substitution alternatives and recycling potential,and social and environmental impact.These risks will materialize through sky-rocketing commodity prices,severe supply chain disruptions and pressure from NGOs,customers and analysts to the point where the core-business is in jeopardy.CxOs must make circularity their main objective to make their company resilient.This pushes companies to rethink their resource management,and beyond that,to transform their business model and purpose.The solution is to fully embrace circular models.This fundamentally changes our approach to the circular economy as circular initiatives which were mostly motivated by sustainability efforts,are now driven to the center stage in business-driven strategies by risk-management.CxOs need a resource-aware vision and robust methods to achieve it.Integrating resource criticality awareness to your vision will bring exhaustivity&coherence to your initiatives.Circularity will soon become a key strategic element in every industrial activity,unleashing a myriad of business opportunities.CxOs have so far been missing two vital elements to properly assess resource-related risks and protect themselves:1/a resource-aware vision,2/a robust approach and tools to achieve it.The purpose of this report is to provide CxOs with these elements.RACES:Resource Awareness and Circular Economy StrategyAt Capgemini,we have developed a brand-new methodology built around two tangible tools,to evaluate your exposure to resource-related risks and assist you in building the best strategic response while improving business resilience:The 16 Circularity Business Segments(CBS)matrix to identify strategic levers of actions to achieve circularity,and business opportunities nestled in a circular model,each with a business case of their own.A new metric and Resource Criticality Factors(RCF)to quantify technologies,opportunities,business scenarios.Combining both will lead to a prioritization of CBS in a robust corporate strategy,No matter your starting point,RACES can help you turn resource criticality into business opportunities.In this report,you will find four different steps to build a robust corporate strategy leading to a successful,de-risked transformation and implementation phases on the field:Resource-awareness&vision to pre-assess vulnerability areas in your current AS IS business and start building a vision Circular Economy Strategy to identify opportunities using the 16 CBS and prepare robust TO BE scenarios Quantification of criticality and business case to make decisions,but also measure progress overtime Transformation plan with tangible action items and implementation examples.We hope the report helps you adapt your strategy to implement circularity at each step of your value chain and gain resilience.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 44F I G U R E 1The RACES approach and its 2 tools for an actionable global corporate strategy Company business,Territory activityRACESResource Awareness&Circular Economy Strategy16 CBS MATRIXCircular Business SegmentsUnique metric.CRITICALITYfor Resource Criticality Factors(RCF)Box INEC Capgemini studyThe examples displayed in this publication and the Resource Criticality Factor(RCF)have been created for the study“Circular low carbon economy an integrated approach”,co-published in April 2022 by Capgemini and the French National Institute for Circular Economy(INEC).In the study,the RCF quantification was derived for 15 product domains and 11 resources.Two strategic scenarios were scrutinized:low and high circularity.The 16 CBS matrix is an additional creation for the present English publication.The methodology is fully applicable by private companies for their products,branches,and geographies,whether their products are low carbon or not,as well as by public authorities for their territories.RACES:Resources Awareness and Circular Economy Strategy5Table of contents EDITORIAL 3Introduction:Reduce resource-risks at scale with a quantified circular strategy 8Chapter 1.Resource-awareness&vision 13 1.1 From carbon challenge to resource constraint 14 1.2 The resource constraint is exacerbated by the low carbon transition 15 1.3 All industries are affected by resource stress in their core activity 17 1.4 Six drivers of criticality convert resources in a challenge for CPOs,CTOs,and CSR leads.18 a.Geological reserves 18 b.Concentration of suppliers in a decoupling and multipolar world 18 c.Competition of usages:19 d.Substitutability 19 e.Recyclability 19 f.Social and environmental impacts&risks 19Chapter 2.Circular Business Strategy 24 2.1 Capgeminis 16 Circular Business Segments(CBS)25 2.2 Our practical approach to conduct As-is and To-be opportunity identification 31Chapter 3.Criticality quantification 32 3.1 How to build and unlock triple-metrics analytics 33 3.2 Key examples of utilization and findings 37 a.Merit orders in Energy,Automotive,Construction:does my technology portfolio make my company future proof?37 b.Triple metrics:how do scenarios compare?40 c.Product lines and resources:what is the exposure to risk in my Business As Usual scenario?41 d.Product lines and resources:what is the detailed breakdown of criticality in both scenarios?43 e.What new balance sheet to measure the progress of my business?Circular flows,gross and net needs,and waste.44 f.How will the CBS opportunities reduce my exposure?46 3.3 Taylor the methodology to your own scope,priorities and objectivesChapter 4.Implementation and transformation 47 4.1 Major strategic stakes&tangible implementation examples for a few handpicked industries 48 a.Transports:resource-criticality is heightened by the massive move for electrification 48 b.Construction:accelerating the penetration of circularity drivers requires large-scale design projects at all stages of the value chain 49 c.Equipment&High-Tech:hardware producers and retailers(tech,appliances,machines,)players are facing a paradigm shift from mass-market and single-use to component circularity 50RACES:Resources Awareness and Circular Economy Strategy6 d.Mines and Waste:extraction and first transformation industries and waste managers seem about to be left on the sideline by the advent of large-scale circularity but have in fact a lot to gain in it.51 4.2 All CXOs and their departments have a role to play in circular business.52 e.Eco-design,a transformative approach of products,services,as well as corporate strategy.52 f.Operations:Onward and reverse circular operations in the field requires the COO to plan and run coordinated central,local and onsite activities.52 g.Procurement is deeply impacted as materials flows and services change in nature.53 h.Digital:CDOs shall catalyze traceability,insurability and cost competitiveness in complexified circular operations 54Capgeminis value proposition and assets 56RACES:Resources Awareness and Circular Economy Strategy7INTRODUCTION:REDUCE RESOURCE RISKS AT SCALE WITH A QUANTIFIED CIRCULAR STRATEGYRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 48Introduction:Reduce resource-risks at scale with a quantified circular strategyMany industries are exposed to serious resource-related issues that will materialize as severe exposure to pricesurges,supply chain disruptions in a decoupling worldexposed to sanitary and geopolitical crisis,and negative social and environmental impacts.Meanwhile,regulations evolve and gradually impose stricter rules onresource-management,by penalizing players trailing behind,but also by rewarding proactive actions resulting in reduced use and impact.The Value Hill model1 Industry adds value to the economy when products are transformed from raw materials to finished goods sold to consumers.In the linear economy Value Hill model,after consumer use,value is destroyed each time a product is thrown away with all its included resources.Though material resources are as precious as energy to fuel the modern economies,they are spoiled.In the circular Value Hill model,since a products resources are only gradually destroyed when the product is damaged,each downhill stage is an opportunity to retain value and re-inject materials to the uphill path back to their respective stages of production.1 Source:circle-LINEAR VALUE HILLADD VALUEADD VALUEUSEUSEDESTROY VALUE RETAIN VALUE RepairShared EconomyResellRepurposeRemanufactureRecycleMineExtractionPRE USEPRE USEUSEUSEPOST USEPOST USEFirstTransformationManufacturingAssemblyRetailCIRCULAR VALUE HILLF I G U R E 2The value hill resource management modelSource:circle-,Sustainable Finance Lab,Circle Economy,Nuovalente,TUDelft,Het Groene Brein,Capgemini analysisRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 49Multiple co-benefits but a double challengePrivate companies need to build a resource-aware vision of their business and actionable circular economy plans to gain resilience,ensure the viability of their business plans,and create new opportunities encompassing a broader view of their supply chain,stakeholders,and clients.Moreover,as shown in Figure 3.a strategy taking into account resources and circular business cascades multiple co-benefits with high impact on nature and people,that would cost higher efforts to solve separately.Nevertheless and beyond economic maturity,circular economy resists to C-level executives for at least two reasons,lack of holistic view and lack of single metric,This document proposes two innovative tools.The 16 CBS matrix to build a holistic corporate strategyBuilding a global strategy remains a challenge as circular activities are currently scattered in a multiplication of local heterogeneous initiatives:per branch,per product,per stage of the value chain,per circular lever,per resource.The available frameworks(3Rs,5Rs,10Rs)remain quite theoretical,disconnected from the company departments,and keep more attached to resources than to businesses.That is why Capgemini has developed an actionable set of 16 Circularity Business Segments(CBSs).They will help industrial players to engage in solution-oriented actions to achieve circularity.Each segment can come with standalone business cases,which also bring along many benefits for companies&territories.A single metric for resources,in the same way tCO2 are the single metric for climateThere is currently no official single indicator covering the diversity of resources and challenges.Turning to a resource aware strategy entails that criticality be as relevant andhelpful as key indicators for business performance or carbon footprint2.CxOs need criticality measure to build and monitor a holistic resource vision and a circular strategy2 Financial KPIs,starting with margin levels,are required of all company boards to evaluate a companys performance.The tCO2eq is used to report on a companys GHGs emissions and monitor the implementation of low-carbon strategies.There is no such indicator for criticality.at the scale of their company.For that,Capgemini has built the ultimate Resource Criticality Factor(RCF),expressed in.criticality,resulting from the multiplication of volumes,price and impact.Resource Criticality Factors(RCF)can be used as prices and carbon emissions factors(CEF).These two tools are embedded in a structured approach named RACES:Resource Awareness and Circular Economy Strategy.With RACES and its two tools,companies can now build potent holistic resource and circular economy strategy.RACESResource Awareness,Circular Economy Strategy&QuantificationRESILIENT&FUTURE PROOFREDUCED COSTSREDUCED RISKS ON ACCESS TO RESOURCESWASTEPOLLUTANTS,HEALTHReduced IMPACTSIncreasedCIRCULAR ACTIVITIESReduced need forEXTRACTIVERESOURCESWATER,SOILSBIODIVERSITYBENEFITS FOR COMPANIESBENEFITS FOR TERRITORIESBENEFITS FOR NATURE&PEOPLEINDEPENDENCY&REINDUSTRIALI-SATIONRESILIENT&FUTURE PROOFCO2 EMISSIONSSCOPES 1,2,3 NATURAL SPACE ARTIFICIALISATIONF I G U R E 3The value hill resource management modelRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 410RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4111.RESOURCE AWARENESS2.CIRCULAR ECONOMY STRATEGY4.IMPLEMENTATION,TRANSFORMATION3.QUANTIFICATIONTCO2EUROSCRITICALITY SCORESRESOURCE CRITICALITY FACTORS(RCF)Build awareness on risks exposure through discussion of 6 criticality criteria,related potential disruptions,weight importance for company Define the scope(resources,products,business units)Set up first vision through scorings by resource and mapping of selected products and business units Implement projects:quick win opportunities,pilot initiatives,implementation at scale Transform functions such as operations&logis-tics,procurement,digital and ecodesign.KPI monitoring of resources and circular business in light of defined objectives and busi-nesses(.Criticality,TCO2eq,Euros)Scorings 1-5 per criteria and resource Translated in criticality impacts 1-100 Resources-related risks exposure CEF Carbon Emissions Factors(TCO2)Top line business revenues,savings,ROI,investments(k)AS IS situation,Baseline scenario TO BE opportunities Merit orders 3-5 company scenarios for decision making Resources tonnages(t)and prices(/t)RCF Resource Criticality Factors(.Criticality/t)Normative or per supplier Before/after circularity Use Capgeminis 16 Circular Business Segments(CBS)Analyse AS IS situation Identify TO BE opportunities Qualify the TO BE circular business opportunities Build 3-5 scenarios steered towards business resilience,performance,robust resource management and positive impact Decision making Roadmap Action plan1 month1 to 3 months6 to 18 monthsTHE METHODOLOGY CORNERRACES approach:Resource Awareness&Circular Economy StrategyF I G U R E 4RACES approach,4 tasks from vision to implementationRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4THE METHODOLOGY CORNERRACES approach:Resource Awareness&Circular Economy StrategyFour steps from vision to implementationCapgeminis comprehensive approach boils down to 2 1 streams mirroring each other before implementation.Each relies on one new tool that Capgemini brings to the table.The two first streams aim to assess corporate vulnerability to resource-criticality and to uncover the potential of circular business opportunities;the associated tool is the 16 Circular Business Segments(CBS)strategic matrix.The third stream aims to quantify this vulnerability,potential and business opportunity taking into account criticality;the associated tool is the resource-criticality factor(RCF).1.The Resource Awareness(RA)phase is intended to determine your companys maturity and vision regarding resource-criticality.These preliminary assessments include a first criticality-scoring to pinpoint factors contributing most to your risk exposure in terms of resource criticality,e.g.operational pain-points(key resources&products).This preliminary phase should conjure a big picture&outline strategic priorities to be considered in the next steps.2.Circular Economy Strategy(CES)comes in to enhance the traditional business approach with resource-criticality considerations.The 16 Circular Business Segments(CBS)will be key to assess your current circularity maturity and identify most relevant opportunities for the future.These opportunities will be leveraged into qualified business,resource-criticality wise.The opportunities will be rearranged in a few scenarios for decision-making and translated in a robust action plan down the line.3.The quantification stream provides the right decision-making metrics and enhances the opportunity qualification&scenario analysis.CxOs will be able to compare the opportunities and scenarios in terms of volume,cost,and.criticality;and infer business implications()in conjunction with operations and procurement departments.A circular and resource-aware strategy also comes with a co-benefits case,such as reduced carbon emissions,improved biodiversity footprint and lower social impact.4.Tangible implementation and transformation follow a robust strategy.Quick wins and pilot initiatives need to go hand in hand with long-term scaling initiatives and will provide first feedback with KPI monitoring including criticality in light of defined objectives.12RACES:Resources Awareness and Circular Economy Strategy1301RESOURCE-AWARENESS&VISIONA corporate strategy not tackling resource constraints jeopardizes the companyRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 41.1 From carbon challenge to resource constraintThe carbon challenge is now on top of many CxOs agendas.Resources and circular economy are the next and soon-to-come frontier in their agendas for three reasons.The first reason is that reducing GHG emissions to low levels requires necessarily reducing the impact of resources,both in terms of quantities extracted and in terms of transformation needed.Out of the 40 GtCO2e emitted yearly by human activities,the transformation of the mineral resources into goods and equipment by businesses account for 55%,i.e.more than the use of energy by final customers to run these goods,their homes and to travel,which only account for 45%3.3 10 GtCO2e/yr can be added for land,forest and related agro-industry emissions,summing up to 50 GTCO2e yearly.Emissions from Energy usage of goods and equipment by final customers 45%Emissions from Mineral resource transformation into goods and equipment(energy and process)55 GtCOe/yrSource:World Resource Institute,2019 figures,Capgemini analysis F I G U R E 5Weight of transformation of mineral resources in global emissions:No Net-Zero without Circular economy14RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4151.2 The resource constraint is exacerbated by the low carbon transitionThe second reason why we are moving from carbon challenge to resource constraint is that decarbonization plans highly count on resource-intensive technologies.Turning away from fossil-fuels means shifting the demand to other resources,inducing a major concern with the feasibility of many decarbonization strategies resource-wise.Capgeminis research led for INEC at the warns that if Frances economy remains predominantly linear,implementing its low carbon strategy will increase the cumulated.criticality4 of metals and minerals by a factor of 16 at the countrys scale by 2050(cf Figure 8).Green technologies,deemed from a low carbon transition point of view,are in fact a high risk regarding resources,electric cars being the most blatant example.Electric mobility will be responsible for the 65%increase in criticality deriving from the expansion of low carbon technologies as per the French low carbon strategy(cf Chapter 3,Figure 18).A high circularity scenario would limit this multiplication to a factor of 4.4 Cf explanation of the.criticality new holistic metric in Chapter 3.Criticality quantificationF I G U R E 6Low carbon high tech economy is not feasible without circular business(INEC Capgemini study)Scenario ABAU Business As Usual.Criticality.criticality in 2050.criticality todayfor 15 low carbon businesses in France.Criticalityx16x4Scenario BHigh circularityRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 416F I G U R E 6Low carbon high tech economy is not feasible without circular business(INEC Capgemini study)ELECTRIFICATION,HYDROGENHEAT AND BIOMASSCONSTRUCTION3 branches15 business domainsElectrification,H2 Electric vehicles Hydrogen vehicles H2 electrolysis Heat pumps Nuclear Onshore wind Offshore wind Solar PV Power gridsHeat and Biomass District heating Deep geothermal energy Gaseous biomass Solid biomassConstruction Buildings New build Buildings-RetrofitElectrification,H2 Lithium Cobalt Platinoids Rare earths Copper Graphite Silicon Aluminium Nickel Steel ConcreteHeat and Biomass Wood Agriculture Urban and industrial waste Steel ConcreteConstruction Steel Aluminium Concrete14 critical resourcesRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4171.3 All industries are affected by resource stress in their core activityThe third reason why resource constraints join up carbon challenge in the CxO priorities is that all the industries are impacted directly,intensifying in turn the need for resources and the impact on environment.From high price volatility to geopolitical disruptions,access to natural resources gets more and more precarious.Technology possibilities do not always prevent from being dependent on specific resources.Sustainability impacts not only include climate,but also other social and environmental risks generated by the intensive extraction and transformation of minerals.The service industry is exposed too:any weakness in the physical industry will pass on to the service industry,including financial services.Quantification shows that a circular strategy optimising the use of resource is absolutely necessary to ensure the resilience of the overall economy,the feasibility of the low-carbon transition,and the conservation of people and ecosystems.FINAL CUSTOMERSTHIRDTRANSFORMATIONSECONDTRANSFORMATIONPRIMARYTRANSFORMATIONEXTRACTIONINDUSTRYAUTOMOTIVERAIL,MARINEAERO&DEFENCECONSUMER GOODSMECHANICAL,ELECTRIC&PLASTIC COMPONENTS PACKAGINGSTEEL&METALSGLASSMINERALSINFRASTRUCTURESELECTRONICCOMPONENTSWIND,SOLAR,BATTERIES,H2BUILDINGSTELECOMDIGITALELECTRONICSPAPERDirect threatIndirect threatOIL&GASBIOMASSCHEMICALSPLASTICSLIFE SCIENCESUTILITIESFOODRETAIL&DISTRIBUTIONTRANSPORTS&LOGISTICSREAL ESTATE&HOSPITALITYHEALTHENTERTAINMENTCONSTRUCTIONDIGITALFOOD,ENERGY&CHEMICALSSERVICESMINESF I G U R E 8Most industries will be affected at different levels by mineral resource stress even indirectly services as they need equipment to operate.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4181.4 Six drivers of criticality convert resources in a challenge for CPOs,CTOs,and CSR leads.Resources raise six challenges not only to public authorities,but also to private business CEOs and their departments:Chief Procurement officers(CPOs)must solve the challenge of accessibility to resource(reserves,concentration of suppliers,competition of usages)Chief Operations and Technology Officers(COOs,CTOs)are concerned with replaceability and recyclability.CSR leads face social and environmental proven impacts and future risks.a.Geological reservesCPOs should assess if a resource is geologically scarce or if it will remain abundant and accessible for a long time.For instance,at current growth rate,the reserves for hafnium,antimony,strontium will be depleted in the 2020s and the reserves for lead,gold,tin,chromium,zinc,silver in the 2030s5.Possible investments in exploration and extraction might extend the access to certain resources,but overall reserves are declining.b.Concentration of suppliers in a decoupling and multipolar worldWhen extraction and first transformation markets are concentrated or even monopolistic(Figure 8),CPOs need to consider the supply risk across the whole value chain.Depending on the industry,geopolitical trends can pose difficulties in terms of dependency and price stability.5 USGS(2011 data),Barclays ResearchAUSCHLIDNAUSCHNCODCHNZAFCHNGINCHNPHLCHLUSARUSBRARUSBRACHNPERRUSCHNBMRAUSNORZWECAN0 0%AluminiumCopperNickelLithiumRare EarthsCobaltSiliconPlatinoidsGraphiteExtractionCHNCHNCHNCHNCHNCHNAUSCHLIDNCHLMYSFINBRAJPNJPNARGESTBEL0 0%AluminiumCopperNickelLithiumRareEarthsCobaltSiliconPlatinoidsGraphiteFirst TransformationGraphiteSiliconRare EarthsPlatinoidsCobaltLithiumNickelCopperAluminiumGraphiteSiliconRare EarthsPlatinoidsCobaltLithiumNickelCopperAluminiumF I G U R E 9Concentration of suppliersRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 419c.Competition of usages:Resources are coveted by many industries(low carbon industries,aerospace,defense,IT,digital equipment,telco,etc.)and countries,which CPOs need to monitor closely.Intense competition can inflate the demand and therefore criticality as well as questioning the willingness to pay in most exposed industries.d.SubstitutabilityEarly on the value chain,engineering&design functions must acquaint themselves with how much their business relies on a single kind of resource and look for available or soon available alternatives to reduce their exposure to criticality.e.RecyclabilityProduct development departments need to have in mind the recyclability of each critical resource in light of their own technological maturity regarding the latter.Relying on easily recyclable materials and existing recycling processes can help alleviate resource criticality.For instance,lithium is not recyclable and alloyed metals are not massively separable.Integrating recyclability considerations in the process requires innovation and simpler component design.f.Social and environmental impacts&risksCSRs tackle a growing number of risks that arise in relation to the extraction and exploitation of natural resources.They span from minor to major impacts and can render specific supply channels unacceptable to end customers.Major environmental impacts on ecosystems include water and land contamination,soils degradation,wildlife space fragmentation,deforestation,biodiversity losses,while social risks can go as far as subjugation of local population,threats on livelihood and culture,forced displacements,migrations,modern slavery,child-labor and other violation of human rights.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 420THE METHODOLOGY CORNERChoose the scope&raise awareness by pondering the criticality criteriaThe scoring methodology developed in this paper can be applied at various levels,giving CxOs the possibility to choose a criticality-analysis perimeter(market,company,business unit,)6.It provides a standard weighting grid to enable companies to compare to their peers(imagine an SBTi equivalent for resource-criticality),even though the analysis should be tailored to meet the companys assessment objectives.The scoring approach to criticality scoring follows 5 steps:Discuss&raise awareness on risks exposureGather a transversal task force including strategy,operations,technology procurement,CSR.For each resource,discuss the underlying criticality factors to raise awareness regarding the six resource-related business risk and weight.In Figure 10,allocated coefficients are 1 1 1 1 1 1 in the example,but could be for instance 2 2 2 3 3 6 if company wishes to balance the three criticality families,ie access,dependency,sustainability.Define the perimeterChoose the branches,products,geographies,operations,value chain to be included the analytical scope,based on the awareness sessions and the business objectives.6 An industry assessment on a global scale,based on international publications such as those from the International Energy Agency(IEA),the US SGDS agency and the European Commission,provides high-level resource-related stakes and macro-economic trends.More specific assessments by geography or by company will help assess how a better selection of supplier and procurement strategy can improve the rating,thus the resource-criticality exposure.F I G U R E 1 01-5 scores as weighted average of six criticality criteriaSCORES 1-5ACCESS TO RESOURCEChallenge for CPO Procurement,StrategyGEOLOGICAL RESERVES111111CONCENTRATION OF SUPPLYING COUNTRIESSUBSTITUTABILITYRECYCLABILITYCOMPETITION WITH OTHER STRATEGIC USAGESChallenge for COO CTOOperations,TechnologyChallenge for CSOCorporate SustainabilityRESOURCEDEPENDENCYSUSTAINABLE IMPACTSSOCIAL AND ENVIRONMENTALRISKS AND IMPACTSRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 421F I G U R E 1 1Scores 1-5 per resourceCPO:Geological reservesCPO:Concentration of supplying countriesCPO:Competition with other strategic usagesCTO:SubstitutabilityCPO average(Access to resource)CTO:RecyclabilityCTO average(Dependency to resource)CSR:Social and envivironmental risks and impactsCSR average(Social and environmental)Global Resource Score 1-5LITHIUMCOBALTPLATINOIDSSILICONRARE EARTHSALUMINIUMCOPPERNICKELGRAPHITESTEELCONCRETEWOOD BIOMASSAGRICULTURE BIOMASSWASTE BIOMASS4444444444444444443LICOCUGRSIALNISTPTDRAREScores 1-5ResourcesCONCAGRWASWOOD33333332222222222.02.02.02.02.01.32.53.03.03.03.05.05.05.05.03.53.83.74.04.23.03.03.03.04.34.34.32.53.73.73.73.53.33.53.03.52.02.02.02.02.32.03.02.51.81.72.72.72.72.72.82.82.82.02.04.02223333333333333333555511111111111111111555555555RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 422Assess and aggregate the 1-5 scores per resource.For each resource,proceed with the 6 multi-criteria scoring on a 1 to 5 scale.The 6 criteria are then averaged in a single score with the chosen weights(Figure 12).For the most mature companies,the scores may be differentiated per supplier.F I G U R E 1 2Rating grid for 1-5 scores12345MajorSCORECRITICALITYEXTRACTIONGEOLOGICAL RESERVESCOMPETITIONFOR RESOURCESSOCIAL ANDENVIRONMENTAL CONCENTRATION OF SUPPLYING COUNTRIESFIRSTTRANSFORMATIONR/PRESERVES VS PRODUCTION60%TOP 1TOP 3TOP 1TOP 360%Strong40%Medium20 %Minor10 %Not Critical200 yearsNoneNone10 %RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 423Expose first hotpoints with the heatmap of the company Build the heatmap(Figure 13)by crossing the branches or product lines with the resource scores.Get an overview of your overall risk exposure and highlight the hot points of criticality for your business.F I G U R E 1 3Qualitative heatmap per business domainsLITHIUMCOBALTPLATINOIDSSILICONRARE EARTHSALUMINIUMCOPPERNICKELGRAPHITESTEELCONCRETEWOOD BIOMASSAGRICULTURE BIOMASSWASTE BIOMASSLICOCUGRSIALNISTPTDRARECONCAGRWASWOODElectric VehiclesHeat PumpsOffshore WindDistrict HeatingGaseous BiomassHydrogen VehiclesNuclearSolar PVDeep Geothermal EnergyBuildings-New BuildHydrogen ElectrolysisOnshore WindElectric GridsSolid BiomassBuildings-Retrofit3.24.24.03.73.73.83.83.83.53.33.53.53.53.53.53.32.82.82.82.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.32.51.81.82.02.02.02.02.02.02.32.02.02.82.82.82.82.82.82.82.82.82.82.82.82.82.82.82.83.53.33.53.53.82.82.83.12.62.63.12.82.62.02.02.12.32.32.3Resource Heatmap(1-5)per business domainDerive first elements of visionDerive a first version of the learnings and vision for the future in terms of techs,business,suppliers,risks.Be aware that this phase is only qualitative.The full quantification described in Chapter 2 will deliver a more detailed picture,other learnings and food for action.Prepare in consequence the strategic and quantification phases(see chapters 2&3).RACES:Resources Awareness and Circular Economy Strategy2402CIRCULAR BUSINESS STRATEGYCapgeminis 16 circular business segments to steer your company towards a circular modelRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 425Capgemini has devised a strategic matrix featuring 16“Circular Business Segments”(CBS).Each can bear a specific business plan and business case.The 16 CBS matrix enables you to roll-out a strategic process,from assessing your current maturity to generating opportunities and envision scenarios to build a resilient corporate business strategy.2.1 Capgeminis 16 Circular Business Segments(CBS)The 16 CBS provide an exhaustive approach to all opportunities in circular economyThe 16 CBS matrix outlines actions to undertake to transition from a linear to a circular model.It holistically covers all aspects to be examined yet avoids redundancy and echoes the value hill framework.It also contains the central-local-onsite breakdown-for easier appropriation by operational decision makers(CSO,CMO,COO,CTO,CPO,CSR).This matrix will enable you to conduct a holistic assessment of what the state of art is in your firm in terms of circularity(“AS IS”),flag what is left to improve,and how.For each CBS,typical“To be”positioning decisions at short,medium and long term are No Go(let others try)Go(outsource),Go(insource)The vertical axis indicates where the CBSs encompass the conventional value chainThe vertical axis follows the conventional value chain of linear extractive economy,from mining activities(bottom)to manufacturing and retail activities(top).It sets up the reference for where the circular economy loops in and comes out.The Horizontal axis(1)reflects the direct and reverse operationsThe horizontal axis distinguishes two parts:the direct manufacturing and service process to clients(left part)and the reverse process dealing with end-of-life equipment and recovering value from goods or parts(right part).The combination of both parts creates the circular opportunities.The Horizontal axis(2)reflects the location and type of operations generated by the CBSs Onsite:in clients premises,as a part of the end-consumers journey Local:close to the end-consumers location(less than one hour or 100 km away)Centralized:the operations are carried out in large size sites serving a whole area,country or even region.The shift towards circular economy can be compared to the transition in the energy sector.Business and operating models become complementary between centralized large facilities(nuclear or gas plants in energy,large manufacturing and remanufacturing plants in circular economy),in between local or regional operations(wind farms in energy,service centers for repairing and repurposing in circular economy)and local on-site operations(solar roofs in energy,equipment in clients premises in circular economy).Intermingled yet well differentiated CBSSome CBSs echo each other,such as“recycle”vs“use recycled materials”or“repurpose”vs“use repurposed components”.We have split the usual ambiguous word“Repurpose”into several CBSs,as it involves a completevalue chain7 on which the company must make strategic choices Collecting and sorting Repurposing end of life products,which entails operations that are usually the role of waste companies but may have in the future to be strategically incorporated in the activities of the company Sourcing internally or externally the repurposed parts Use them in the industrial activities of the company:repair,retrofit,remanufacture Use them in the commercial activities of the company:resell,marketplaces.Conversely,the retrofit of a given equipment(left part)can use spare parts and materials from different origins(right part):repurposed second-life components,recycled materials,but also biomaterials and of course spare parts from conventional linear newbuilt origin.Procurement becomes key,as repurposed components or recycled materials may come from internal activities or purchased from external suppliers.Vice-versa,end-of-life products that have been collected,disassembled,and sorted may be sold rather than used internally.7 For the same reasons“Recycle”has been split in several CBS.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 426F I G U R E 1 4Mapping value chain,location and direct/reverse flows of circular activitiesCENTRAL PLANTSANTICIPATERETAIN VALUERECOVER VALUEMAINTAIN VALUECENTRAL PLANTSLOCAL OPERATIONSLOCAL OPERATIONSNEW REVERSE CIRCULARRetaining value(downhill)NEW ONWARD CIRCULARBuilding up&sustaining value(uphill)ONSITE CLIENTS RETAIL&TRADEASSEMBLY MANUFACTURINGFIRSTTRANSFORMATIONMINESEXTRACTIONANTICIPATEMAINTAINRETAINRECOVERThe role of CxOs8 in the Value Hill triangleThe 16 CBS are divided into 4 categories regarding the ways of sustaining value,echoing the value hill framework(sym-bolized by the background triangle and shapes in Figure 18)Anticipate:Limit gross resource requirements,through avoiding(CSO)and reducing(CTO),are strategic steps to work with minimized efforts towards a circular model boosting resilience,decarbonization and conservation of ecosystems.Maintain:Create new profitable value propositions(CMO)based on products in good state seeing their lifes-pan and usage extended.Retain:Manage onward production steps to yield new products(COO)that integrate looped components or materials procured internally and externally(CPO).Recover:Manage reverse operations to recover value form discarded objects,parts and materials and prepare them to re-integrate the production and the commercial cycles(COO).The circularity shift provides industrial players with the op-portunity to selectively diversify activities and expand their presence on value chains.8 CSO Chief Strategy Officer,CMO Chief Marketing officer in charge of products,clients,and experience marketing,COO Chief Operations Officer,CTO Chief Technology Officer,CPO Chief Procurement Officer,CSR Corporate Social Responsibility leadRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 427F I G U R E 1 5The 16 CBS matrix(Circular Business Segments)RETAIL&TRADEASSEMBLY 2-REDUCEEco-design&OptimizationFromproducts and servicesTo processesand operations1-AVOID(Decisions leading to lower gross need regarding portfolio,products,client usage,business models)6 MARKET PLACEfor any of the above or below flows,onward or reverse 3-SHARED ECONOMYCENTRAL PLANTSCENTRAL PLANTSLOCAL OPERATIONSANTICIPATEMAINTAINRETAINRECOVERLOCAL OPERATIONSNEW REVERSE CIRCULARRetaining value(downhill)NEW ONWARD CIRCULARBuilding up&sustaining value(uphill)ONSITE CLIENTS4-SECOND LIFE/RESELL 5-MAINTAIN/REPAIR13-DISASSEMBLE SORT products,components12-COLLECT-SORTproducts,components7 REFURBISH/RETROFIT8-REMANUFACTURE9-Use&source REPURPOSED COMPONENTS14-REPURPOSE COMPONENTS 10-Use&source RECYCLED MATERIALS15-RECYCLE MATERIALS 16-REGENERATE SITES(Mines,plants disposal)11-Use&source REGENERATIVE BIOMATERIALSMANUFACTURINGFIRSTTRANSFORMATIONMINESEXTRACTIONRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 42816 CBSCSOCMOCMOCMOCMOCTO,COO1.Avoid2.Reduce 3.Shared economy 4.Second life/resell5.Maintain/repair 6.Market place(sell/re-sell)Main CxO in chargeAS IS assessment,TO BE opportunities review(go insource,go outsource,no go,when)Make strategic decisions to minimize dependency on strategic resources with high social/environmental impact,divest and move from some businesses,product or technology families to others,or encourage clients to minimize the use of the productDevelop activities in sale of second life products and parts.Resold goods may come with minor repair and some components change-in that case spare parts may come from conventional linear new built economy,or from repurposed origin(#9),or from biomaterials origin(#11).Provide repair and maintenance services to keep a product in service as long as possible.Spare parts may come from conventional linear new built economy,or from repurposed origin(#9),or from biomaterials origin(#11).Develop sell or resell platforms to manage your looped products,components,materials,externally in B2B,B2C and internally within your group.Orienting the business model to a service provision model,like energy-as-a-service Substituting materials by others to relieve the pressure on critical resources,e.g.in kitchenware industry.Crop size of vehicles for a given mobility service Re-deploying professional solar panels becoming less performant by houses of individuals.Exploiting mobility batteries becoming less performant for stationary use.Offering spare parts and tutorials for the user to fix their device themselves,like we see in sporting equipment.Having repair corners at retailers,just as clothing brands now offer alterations Platforms for construction materials Platforms for power plants second life spare part Platforms for repurposed parts of airplanes.In the textile industry,optimizing cutting patterns to minimize fabric waste and energy consumption.Sufficient products Car sharing,co-working spaces,home rental,mobility as-a-service,tool and machinery rental,libraries of thingsReduce the quantity of resource needed and of waste in each unit of product and in the manufacturing process,through improved eco-conception and engineeringDevelop functional economy/shared services/product-as-a-service solutionsAnticipateLimit gross resource requirements,through avoiding(CSO)and reducing(CTO),are strategic steps to work with minimized efforts towards a circular model boosting resilience,decarbonization and conservation of ecosystemsMaintain valueCreate new profitable value propositions(CMO)based on products in good state seeing their lifespan and usage extended.ExamplesTHE METHODOLOGY CORNERThe 16 CBS explainedRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 429Retain valueManage onward production to yield new products(COO)that integrate looped components or materials procured internally and externally(CPO).Recover valueManage reverse operations to recover value form discarded objects,parts and materials and prepare them to re-integrate the production and the commercial cycles(COO).COOCOOCPOCPOCPOCOOCMO,COO7.Refurbish/retrofit8.Remanufacture9.Use repurposed components10.Use recycled Materials 11.Use regenerative Biomaterials 13.Disassemble-Sort12.Collect-SortRecondition and/or improve used products to extend their life,by changing significant components and/or upgrading software or hardware.Components may come from conventional linear new built economy,or from repurposed origin(#9),or from biomaterials origin(#11).Use repurposed components as part of your“Maintain”and“Retain”activities such as Second Life/resell(#4),Maintain/Repair(#5),Refurbish/Retrofit(#7),Remanufacture(#8),Market place(#6).The CPO may procure the repurposed components from insourced activities(12,13,14)or purchased from external suppliersUse recycled materials as part of your“Maintain”and“Retain”activities as well as conventional manufacturing(#2 reduce).The CPO may procure the recycled materials from insourced activities(#12,#13,#15)or purchased from external suppliers.Use biomaterials as part of your“Maintain”and“Retain”activities as well as conventional manufacturing(#2 reduce).The CPO may procure the biomaterials from external suppliersDevelop activities in disassembling and sorting used products,components and materials to feed the repurposing and recycling processes.Develop activities in collecting and sorting used products,components and materials to feed the disassembling,repurposing and recycling processRe-manufacture products-either similar or different from the initial ones-by integrating a mix of repurposed components(#9),new build components,recycled materials(#10)and/or regenerative biomaterials(#11).Refurbishing smartphones to prolong their lives.Retrofit buildings to make them more energy efficient.Repurposing newspaper or textile as insulation for building.Making paper sheets from industrial paper scraps or used paper.Making pens or jumpers from old water bottles Bioplastics in car interiors.Using bio-sourced solvents or catalysts in the pharmaceutical industry.Designing modular products so that they are easily dismantled Collect the empty containers when you come in for the next delivery,as some bulk grocery and bottled water brands already do Educating users to bring their used batteries or lightbulbs to collection points.Reuse the foundations,masts,and electromechanical elements of old wind turbines for the construction of new generation ones.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 430COOCOOCSR14.Repurpose components 15.Recycle Materials16.Regenerate sitesDevelop own activities in repurposing components to resell them or to support your“Maintain”and“Retain”activities.Regenerate sites where you cease activities-industrial,logistic,mining,or waste disposal.Develop activities to control and recycle the used materials to feed your internal uses or to resell materials.Planning the architecture of buildings so that they can be reversed between office use and housing use.Leaving no social/health or environmental impact behind,for instance through processes and solutions to regenerate soils,biodiversity,and local human activities.Shred and melt materials,e.g.glass or metal,into a new piece for assembly.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4312.2 Our practical approach to conduct As-is and To-be opportunity identificationThe 16 CBS matrix can be used as a support to a classic and robust strategic approach.Typically,a long list of 15-60 opportunities can be derived from the CBS matrix and the scan of the product lines,branches,and markets of the company.Second,the qualification of the opportunities can be based on tools such as Osterwalders Business Model Canvas9 slightly adapted for circular business.After their qualification,all opportunities will be prioritized in a shorter list of 10-20 opportunities and cross-examined as part of scenarios,which will be used for decision-making down the line.The 3-5 scenarios will showcase different levels of ambitions and investment,and possibly point to different visions on how to retain resource value and develop business.Third,the decision making is based on a business plan(activity,investment,ROI,break even.)and leverages the.criticality metric to measure criticality improvement across multiple strategic resources and departments of the company.The quantification methodology in.criticality is detailed in chapter 3.Last,outputs will provide both a short-term action plan to implement rapidly on favorable playfields,specific production sites or distribution perimeters.The output can also provide a roadmap with long-term initiatives to roll-out over several years,and which will challenge the way core-business is operated and help the large-scale shift towards circularity.9 Osterwalder,Alexander;Pigneur,Yves;Clark,Tim(2010).Business Model Generation:A Handbook For Visionaries,Game Changers,and Challengers.https:/I G U R E 1 6F I G U R E 1 7Phase 2 Circular Economy StrategyQualified the identified opportunities(example of tool)2.CIRCULAR ECONOMY STRATEGY Use Capgeminis 16 Circular Business Segments(CBS)Analyse AS IS situation Identify TO BE opportunities Qualify the TO BE circular business opportunities Build 3-5 scenarios steered towards business resilience,performance,robust resource management and positive impact Decision making Roadmap Action planBUSINESS MODEL CANVAS(ADAPTED)KEY PARTNERSKEY ACTIVITIESSOURCES AND AMOUNTS OF REVENUESCOSTSKEY RESOURCESVALUEPROPOSITION TCO2 TONNES,EUROS,.CRITICALITY OF RESOURCES AVOIDED,REUSED,RECYCLED IN CORPORATES NEEDS AND WASTESTAKEHOLDERSRELATIONSHIPSCHANNELS,DIGITAL&LOGISTICSCUSTOMER&SUBFLOWSSEGMENTSRACES:Resources Awareness and Circular Economy Strategy3203CRITICALITYQUANTIFICATIONCapgeminis criticality indicators allow companies to quantify resource criticality and assess their response.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4333.1 How to build and unlock triple-metrics analyticsComplementing the global impact score and the 16 CBS methodologies defined previously,Capgemini has defined a quantification methodology to assess your companys current vulnerability vis-a-vis resources,and to project future scenarios.The quantification is centered around a new and single metric for criticality,.Criticality,which can be compared along typical business KPIs.It results from the multiplication of volumes,price,and impact scores for each of the resources included.The Resource Criticality Factors(RCF),expressed in.Criticality,are the ultimate criticality indicators.They cover all underlying drivers&specificities of a given company and/or industrial activity.Applied to your existing situation,they will allow you to gauge your vulnerability.Applied to your future scenarios they will allow you to appreciate to what extent implementing more circularity will protect you from resource scarcity,and will help prioritizing CBS wisely in your future strategy.F I G U R E 1 8Criticality quantification for business1.RESOURCE AWARENESS Qualitative heatmap of your AS IS business2.CIRCULAR ECONOMY STRATEGY Identify 10-50 Circular Business Opportunities Organize opportunities in 2-4 Circular TO BE scenarios Establish Business as usual Scenario(Baseline)Decision making 1 scenario Implement opportunities Monitor3.TRIPLE METRIC QUANTIFICATIONCRITICALITY SCORES.CRITICALITY Scorings 1-5 per criteria and resource Translated in criticality impacts 1-100TCO2EUROS CEF Carbon Emissions Factors(TCO2)Top line business revenues,savings,ROI,investments(k)Resources tonnages(t)and prices(/t)RCF Resource Criticality Factors(.Criticality/t)Normative or per supplier Before/after circularity Resources-related risks exposure AS IS situation,Baseline scenario TO BE opportunities Merit orders 3-5 company scenarios for decision makingRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 434THE METHODOLOGY CORNER(3).RESOURCE CRITICALITY FACTORSBECAUSE TONNES MATTER:the addition of the tonnes of resources included in the goods provide a first view of their importance to the decision-maker.But total tonnes hide the importance of strategic resources that are used in small volumes(platinoids,rare earths,).BECAUSE EUROS MATTER:Euros reflect the cost of resources in the business plan of the company and in the trade balance of a country.Yet euros only partially reflect the criticality in the future(risks on access to resource,on dependency to resource,on social and environmental impacts).BECAUSE CRITICALITY MATTERS:That is why it is proposed to multiply each euro by the criticality impact of the associated resource.F I G U R E 1 9Resource Criticality Factors(RCF)versus Carbon Emissions Factor(CEF)WUWUWUBusinessWUWUWorking UnitsTONS/WUTONSAddition for the selected resourcesOn products,branches,geographiesFor business as usual,for circular scenariosEUROS.CRITICALITY.CRITICALITYTCO2TONS/WUTONS/WUEUROS/TONRESOURCE CRITICALITY FACTORS(RCF)EUROS.CRITICALITY/WUCARBON EMISSIONS FACTORS(CEF)TCO2/WU CRITICALITY IMPACT1-100EUROS/TONNEW Metric.CRITICALITYRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 435THE METHODOLOGY CORNER(3).RESOURCE CRITICALITY FACTORSIn practice:Volumes:estimate the number of working units and the quantity of resources generated by your key products and activities.For a first global resources and circular strategy,rough estimates are more than enough.Prices:use the moving average commodity price,typically ten years.Projecting the price in the future is not a necessity as 1.Such projections are uncertain and time-consuming 2.The impact multiplier(see next)includes the propensity for price increase through the criteria of access and dependency to resource.Impacts:In the resource awareness phase,you have scored(1-5)the criticality of resources based on you own strategic weightings of 6 key criteria(reserves,oligopolies,competition for resource,replaceability,recyclability,social and environmental).The 5-point scale is expanded to a hundred-point scale to emphasize the impact of high criticality scores and better reflect the amplitude of the real-world hazards caused by resources criticality.Derive the RCFs for your key resources.RCF can be global,or specific per supplier or per product line(social and environmental differences,technology dependency on resource)Use RCFs and criticality to quantify resources and circular opportunities(as you do with TCO2 for climate).Make wise strategic decisions by balancing EUROS,TCO2 and.CRITICALITY.Monitor the implementation and progress with the three KPIs.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 436RESOURCE PRICESkEuros/tonRESOURCE CRITICALITY FACTORSkEuros.criticality/tonResource Scores 1-5RESOURCE IMPACTS 1-100RESOURCE CRITICALITY FACTORSP22LI4,238,385741CO4,031,61 28945 863PTD3,721,5988 08187RARE3,826,12 2706,9CU3,517,81221,3GR3,314,7192,2SI2,88,3180,7AL2,88,35,814NI2,88,31160,2ST2,03,20,50,1CONCCONCRETESTEELNICKELALUMINIUMSILICONGRAPHITECOPPERRARE EARTHSPLATINOIDSCOBALTLITHIUM2,03,20,2IRCF=P*IF I G U R E 2 0Calculation of Resource Criticality Factors(RCF)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 437F I G U R E 2 1Rescaling 1-5 Scores into 1-100 Impacts10030103112453Exponential rescalingScoresImpactsRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4383.2 Key examples of utilization and findings.criticality and RCFs can be used in several manners for the decision making.This section provides examples published by Capgemini and the French National Institute for Circular Economy(INEC)for a selection of 15 low carbon technologies and 11 mineral resources.These examples can be extrapolated to any business,product line or geography.a.Merit orders in Energy,Automotive,Construction:does my technology portfolio make my company future proof?Merit orders in EnergyHydrogen and electrification are the most challenging.Their higher criticality per kWh clearly state that they will be a challenge in terms of procurement,technology and social and environmental impact.Biomass and biogas are a more resilient choice when applicable and respecting biodiversity.F I G U R E 2 2Merit orders in Energy(c.criticality per kWh)H2-via Solar PVMerit orders in Energy(c.criticality per kWh)Solar PVMethanation(GAS)H2-via Offshore WindOnshore WindOffshore WindH2-via NuclearCurrent French ELEC mixNuclearBiomethane(GAS)Biomass District HeatingPyrogasification(GAS)015050200100250300350400450500RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 439Merit orders in AutomotiveIs going 100%electric in mobility sensible?Net zero biogas with Internal Combustion Engines vehicles(ICE)are three times less critical per km than Battery Electric Vehicles(BEV).Biogas is limited by potentials and respect of biodiversity;nevertheless,they are obviously part of the mobility mix of solutions,combined with the downsizing and sufficient use of vehicles and circular levers.Research and development to change chemistry and make lithium recyclable is a must have.F I G U R E 2 3Merit orders in Automotive(c.criticality per km)Vehicle share in dark blue,energy share in light blueBEV Battery Electric VehicleFCEV Hydrogen Fuel Cell Electric VehicleICE Green Gas Vehicle-100rming methanisationICE Green Gas Vehicle-100%gaseous biomassICE Fossil Gasoline VehicleElectric bicycleMerit orders in Automotive(c.criticality per km)Vehicle share in dark blue,energy share in light blue012345678910RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 440Merit orders in Construction New build consumes resources but also artificializes natural spaces and hits biodiversity.High energy performance retrofit generate 40 to 70 times less criticality per m,and even less with improved circular economy operations.F I G U R E 2 4Merit orders in Construction(c.criticality per m)NEW BUILD-Individual HousingNEW BUILD-Collective HousingNEW BUILD-CommercialRETROFIT-Individual HousingRETROFIT-Collective HousingRETROFIT-CommercialConcreteSteelAluminiumOthersMerit orders in Construction(c.criticality per m)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 441b.Triple metrics:how do scenarios compare?New circular business requires additional investment compared to ruling Business As Usual.At short-term additional circular business partly cannibalize the conventional linear business.At long-term the growth of linear business is at risk because of the constraints and scarceness of resources.Circularity provides a greater business resiliency to the company.criticality are bound to rise due to the uptake of low carbon technologies and high-technology in the businesses of the company.Circular economy can shave this rise,as the Capgemini-INEC study has shown:the increase in.criticality shows up to a 75%difference between the Business As Usual scenario and the circular scenario.Regarding tCO2,corporates engage in decreasing their emissions.They start with direct fossil energy emissions for stationary and mobility uses.The next frontier is reducing the use of extracted and transformed resources thanks to circular business.These savings generate additional CO2 savings.They also drive reductions of the footprint on water,space usage,biodiversity,social impacts.F I G U R E 2 5Triple quantification of a corporate Circular Economy StrategyEuros(business)c.criticality(resources)Euros(resources)Tonnes(resources)WU Working UnitsActivity Today&3-5 future business scenarios(BAU baseline,alternative scenarios)tCO2Business as usual scenarioCircular scenarioRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 442c.Product lines and resources:what is the exposure to risk in my Business As Usual scenario?Economic activities span across a variety of resources and product lines.In Figure 26,the decision maker gets three different views,with rising stakes from left to right,applicable to resources in the upper line and to product domains in the lower line.The first view in tonnes per year show where the logistic challenges lie.The second view in euros per year of resources included in the goods can be compared to the turnover of the company.This“resource intensity”expressed in Euros is somewhat like the“Energy intensity”.It gives an appraisal of the exposure to economic risk.The third view in.criticality per year unveils where and with which magnitude the strategic,resiliency and environmental risks lie.Such complementary quantifications will help companies build accurate resource and circular strategies for their business.F I G U R E 2 6Triple metric resource requirement at the scale or an organization or a country-here Frances low carbon strategy in a BAU circular scenario i.e.if economy remains predominantly linearSteelCopperCopperElectricVehiclesElectricVehiclesElectricVehiclesBuildings-New buildBuildings-New buildBuildings-New buildSteelSteelNickelNickelAluminiumAluminiumCopperOthersCobaltCobaltLithiumLithiumGraphiteGraphiteOthersOthersOthersOthersOthersGaseous biomassSolar PVSolar PVSolar PVOffshorewindOffshorewindOnshorewindOnshorewindOnshorewindElectricGridsHeat PumpsHeat Pumps52 Mt/yr52 Mt/yr5 B/yr47 B.crit/yr47 B.crit/yr5 B/yrConcreteConcreteConcreteAluminiumNet needs per resource(annual average 2020-2050)Net needs per domain(annual average 2020-2050)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 443Important conclusions can be drawn from the quantification we conducted for INEC on the French Low Carbon Strategy.They are likely to translate to industries or companies.The qualitative analysis based only on 1-5 scores pinpointed the criticality of lithium,cobalt,platinoids,rare earths.But the triple metric analysis bear surprises:Volume effects on concrete&steel must be anticipated.Concrete and steel have a relatively low criticality scores but high overall.criticality impact because of the large quantities required,notably by the construction industry for efficient buildings.Criticality is located close to the urban areas(100 km radius),as a result of the high number of quarries to be operated,doubled by the need for waste disposals for the deconstruction materials.Recycling,reusing and retrofit instead of newbuild can drastically cut volumes,CO2 emissions and impact on environment.Value effects to be noted for minerals&metals.Used in small volumes compared to concrete&steel,mineral&metal resources stand out in the second chart because of their high unit value(/t).Criticality is amplified for most minerals&metals,in con-junction with underlying drivers.Copper emerges as a major concern(1/3)of total criticality of the low carbon transition.The immense pressure on resources like copper can be explained by small global reserves,low substitution potential and noticeable environmental impacts.Similarly,platinoids have a high criticality despite being used in small volumes.Lithium also stands out in the third chart despite the low volume&value effects due to the high demand coming from the booming electric vehicles industry and its low recyclability.Therefore,electric vehicles deemed very desirable are the major challenge,with 2/3 of the total criticality.It is nearly twice as much as the 15 other key low carbon sectors that it entails(hydrogen,renewables,grids,construction,biomass,etc.).RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 444d.Product lines and resources:what is the detailed breakdown of criticality in both scenarios?Cross-referencing the analysis between domains and resources helps identifying the hot points and making priorities.Looking only tonnes and euros may hide the critical points for resources used in small volumes but cumulating high price and high criticality.In the example,circular scenario B saves proportionally more Cobalt than Platinoids net needs compared to Business As Usual scenario A.F I G U R E 2 7Net needs per domain in scenarios A and B(French 15 low carbon businesses,M.criticality per year)05,00010,00015,00020,00025,00030,00035,000Electric VehiclesHydrogen VehiclesHydrogen ElectrolysisHeat PumpsNuclearOnshore WindOffshore WindSolar PVElectric gridsDistrict HeatingDeep Geothermal EnergySolid BiomassGaseous BiomassBuildings-New BuildBuildings-RetrofitElectric VehiclesHydrogen VehiclesHydrogen ElectrolysisHeat PumpsNuclearOnshore WindOffshore WindSolar PVElectric gridsDistrict HeatingDeep Geothermal EnergySolid BiomassGaseous BiomassBuildings-New BuildBuildings-RetrofitScnario AScnario BNet needs per domains(Million.criticality per year)LithiumCobaltPlatinoidsRare EarthsCopperGraphiteSiliconAluminiumNickelSteelConcreteElectric VehiclesElectric VehiclesLithiumGraphitePlatinoidsAluminiumCobaltSiliconRare EarthsNickelCopperSteelConcreteOnshore WindOnshore WindDeep Geothermal EnergyDeep Geothermal EnergyHydrogen VehiclesHydrogen VehiclesOffshore WindScenario AScenario BOffshore WindSolid BiomassSolid BiomassHydrogen ElectrolysisHydrogen ElectrolysisSolar PVSolar PVGaseous BiomassGaseous BiomassHeat PumpsHeat PumpsElectric GridsElectric GridsBuildings-New BuildBuildings-New BuildNuclearNuclearDistrict HeatingDistrict HeatingBuildings-RetrofitBuildings-RetrofitNet needs per domains(Million.criticality per year)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 445e.What new balance sheet to measure the progress of my business?Circular flows,gross and net needs,and waste.Gross material needs,required for production of goods,are provided by both circular flows(“Reuse”and“Recycle”),and net needs supplied by newly extracted resources from mines.Gross waste from products end-of-life,are partly reused in circular flows,while remaining incompressible waste(net end-of-life)will be disposed.Triple metrics applied to the 16 CBS opportunities can be synthetized in the global resource balance sheet of the company.The Figure 28 shows the gains of the activation of CBS opportunities(scenario B)versus the Business As Usual baseline(Scenario A)In BAU scenario A,the construction of equipment planned by the low-carbon strategy(vehicles,energy facilities,networks,new buildings and energy-efficient renovation,etc.)implies a 21%increase in gross materials needs by 2050.This might not seem shocking over 30 years,but over the same period costs of resources will triple,and their.criticality will be multiplied by 8.110.In circular scenario B,avoid and reduce CBS alone induce a 44crease in gross resource needs,and a 14crease in gross end-of-life deposits.This relieves by the same amplitude the pressure on ecosystems caused by extraction and waste respectively.10 And even by 20.7 for metals aloneIf the transition towards a circular economy is not undertaken promptly and vigorously,criticality will be multiplied by 6.1.The implementation of the BAU strategy would then be thwarted,not to say impossible.By contrast,by reinforcing circularity,France would be able to achieve its low-carbon strategy objectives,limiting the increase of net criticality to a factor of 1.5 relative to 2020,i.e.75%less in net needs and 73%less in net waste.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 446F I G U R E 2 8Global resource balance sheet BAU scenario A and circular scenario B combining all metals and minerals required by 15 sectors of the French low carbon transitionANTICIPATE&MAINTAINPROCUREMENT BREAKDOWNEND-OF-LIFE BREAKDOWNMATERIALS PHYSICALLY CYCLED THROUGH THE LOOPSMINESWASTE DISPOSALEND-OF-LIFEREUSE&RECYCLEGROSS WASTENET WASTENET RESOURCE NEEDSGROSS RESOURCE NEEDSScenario B vs A-44%kTMMC-35%-37%Scenario B vs A-440pt&%kTMMC-35%-37%Scenario B vs A 47%kTMMC 38% 59%Scenario B vs ATODAYAB-60%kTMMC-64%-75%Scenario B vs A-39%kTMMC-59%-73%Scenario B vs A-14%kTMMC-14%-14FTFT%TODAYABRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 447f.How will the CBS opportunities reduce my exposure?In the example provided,the avoid lever provides more savings than the reduce lever.Circular scenario B includes more shared vehicles.The vehicle mix is no longer 100%electric or hydrogen,as there is a share of internal combustion engine with biomethane.Some minor additional progress is made in the proportion of end of lives recycled.Reuse is doubled.The gross need in resources for the production of goods is cut by 25%,and the net need in resources coming from mines and extraction is cut by 45%.F I G U R E 2 9Savings enabled by Avoid,Reuse,Reduce,Recyle on Gross and net needs in Circular scenario B compared to BAU scenario A(French low carbon transition,focus on 9 electrification domains in hydrogen,low carbon electricity and transport.criticality/year020004000600080001000012000140001600018000Sc.A-Theoretical Gross NeedSc.A-Gross NeedSc.A-Net NeedSc.B-Theoretical Gross NeedSc.B-Gross NeedSc.B-Net NeedCircular Economy-Annual NEEDS-Comparison of scenarios A&B for:Total Electrification Theoretical Gross NeedGross need supplied by REUSEGross need supplied by RECYCLEREDUCEAVOID&MAINTAINRACES:Resources Awareness and Circular Economy Strategy4804IMPLEMENTATION AND TRANSFORMATIONThe transition is impending:inspiring examples.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4494.1 Major strategic stakes&tangible implementation examples for a few handpicked industriesEach company or industrial sector deserves to be gone over with a fine-tooth comb to extract precise and actionable insights for CxOs,based on their operational&supply environment,material resources,data and strategic objectives.We have inferred resource-criticality related stakes at a macro-level for four industrial sectors.Here are the main disruptions to expect,and inspirations to tackle them.a.Transports:resource-criticality is heightened by the massive move for electrification The automobile industry is subject to a strong electrification trend,which exacerbates the demand for critical resources contained in batteries,especially lithium,cobalt and nickel.The criticality of these resources will soar imminently,and so will their market prices.Eventually,other use cases with a lower willingness to pay on the end-consumer side will have to resort to alternative materials or reinvent themselves entirely to survive.Explosive growth&standardization exacerbate criticality on key resources.In the rush to conquer the gigantic emerging market of electric cars,brands converge towards the same Li-ion technologies.This is reinforced by the need for standardized solutions:e-car manufacturers are urged to build a cross-brand network of vehicles and infrastructure for optimized convenience and scalability potential.The rapidity of this convergence pulls the rug from under R&D efforts to find alternatives,like sand-based batteries.Substitution of critical resources,which feeds into the reduce CBS(#2),is however more necessary than ever.In a circular model,complementary players can team up to create new materials and components.For instance,Volvo Group and SSAB have signed a collaboration agreement on fossil-free steel,using hydrogen11.Automotive players are starting to implement circular initiatives.All loops of the circular model can be implemented in the automotive sector,and initiatives have already bloomed.Embracing the shared economy(CBS#3),Renault experiences a business model based on mobility-as-a-service rather than ownership with its initiative Mobilize12.Renault Flins factory,launched in 2020,is dedicated to car refurbishment.Furthermore,in line with CBS#12,collect,#15,recycle,and#8,remanufacture,Renault,Solvay and Veolia launched a combined initiative to collect used batteries and turn them into new ones13.Implementing several business segments of the circular economy is a chance for re-industrialization and relocation of industrial activities.Stellantis sees it also as an accretive business14.In October 2022 Stellantis announced a comprehensive plan for its Circular Economy Business Unit to achieve more than 2 billion in revenues by 2030.One of the brands of Stellantis,Citron,has developed a concept car named OLI all-15,as a nod to the AMI car,the small 11 https:/https:/https:/www.largus.fr/pros/actualite-automobile/renault-forme-un-consortium-pour-le-recyclage-de-batteries-10570404.html14 https:/https:/older sister developed with Capgemini Engineering.OLI explores end-to-end circular concepts with a rigorous,360-degree approach based on the 4R strategy reman,repair,reuse,and recycle.Within the product it includes simple,intuitive and joyful approaches experimented in AMI such as identical parts for left and right doors and for front and rear central bumpers,or lightweight roof flat bed panels made from recycled carboard and plastic formed in honeycomb structure;AMI also explores the manufacturing concept,with the possibility to remanufacture new cars with reused parts of end-of-life OLIs,leading to a full life duration of up to 50 years.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 450b.Construction:accelerating the penetration of circularity drivers requires large-scale design projects at all stages of the value chainCriticality in construction is driven by volumes.With its monumental demand of raw materials(concrete,sand,steel,aluminum,copper),energy(furnaces,transportation,.),and significant social&environmental impact,notably on biodiversity,the construction industry is both driver and victim of soaring resource-criticality.For France,our research evaluated the criticality score of the construction sector to 2.3 out of 5(2.8 aluminum and 2.0 on steel/concrete).Yet,the size of the tonnages involved in both construction and deconstruction,mainly in the periphery of large urban areas,make circularity a very urgent issue for all involved players.It also shows that about 20 million tons of resources16,i.e.half of the tonnages,could be avoided by making strong strategic choices in favor of renovation and circularity.The industry is already facing tensions from all sides:supply,regulation,Although aggregates are abundant,raw material demand keeps sustained,and lead to localized concrete shortages putting construction sites under pressure down the line.In addition,regulation is progressively governing building activities beyond GHGs emissions,for example framing land restoration and waste management.16 https:/CBS are relevant,but pose serious implementation challengesIn the building industry,regenerating sites(#16)is particularly important,since quarries,former building sites,etc.must be brought back to healthy states for biodiversity and human populations to thrive.In waste management,collect(#12)and disassemble(#13)show great improvement potential but also implementation challenges:Since constructions are not standardized and have a 40 year long life span,large-scale components reuse entails that easy dismantling will have to be part of the early-stage design process.Similarly,maintenance management solutions,usually BIM-based(Building Information Modeling)help optimize resource use in the construction phase.Distribution networks will need to intertwine points of sale&collection,ideally operated by different distributors to densify the grid.Whether existing or new entrants,players need to consider the service space,even if it means introduc-ing new business models:Les Ripeurs,is a successful circular-ity waste management service.Inspired by leasing services,some players might start selling lifespan or usage instead of material goods.All players involved in the construction value chain,from financing&commissioning to property,maintenance,and end-of-life,need to make resource-constrained eco-design a top priority and to work hand-in-hand with local partners.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 451c.Equipment&High-Tech:hardware producers and retailers(tech,appliances,machines,)players are facing a paradigm shift from mass-market and single-use to component circularityThe rise of reuse,refurbishing and remanufacturing platforms such as Backmarket or Asgoodasnew can be observed for electronic devices,as well as PAAS and sharing models in the household industry or circular reuse of plastics in the retailer industry.Like other CPRD industries,hardware providers aim to meet the ever-growing demand of consumers,juggling high volumes and optimized prices.This typical linear model is squeezed between their high dependence on raw materials on the one hand and a calamitous impact of waste on the other.Many workers are exploited in developing countries,natural environments are polluted,and transportation on international value chains causes incremental CO2 emissions besides production processes.Hardware retailers are an excellent example of the direct-reverse duality of the CBS.As they deliver(e.g.mattresses or home appliances),they collect the discarded ones(CBS#12).These first steps must be followed by additional circularity initiatives,more ambitious yet more challenging.In strong consumer-facing industries like food and beverage or cosmetics,circular solutions are often antagonistic towards convenience or accessibility and will automatically slow down consumer adoption,or even drive consumers away.As a consequence,it is crucial that hardware players find the right balance between the consumer behavior gap and education opportunities to push new habits forward and overcome consumer-adoption barriers.New sub-products are on the march.A slight relocation trend has started,which,on a large scale,will highly impact their costs and question the entire mass-market business model,thus their value proposition and market positioning.Symbiotic operational relationships with other up-and downstream players might provide opportunities to restrain price surges on raw materials.The trend of sufficient products(#2 reduce)is growing,driven by growing consumer awareness:ex-telephones without ancillary functionalities or that are restrained to essential functions.Finally,tackling less common CBS,some players are starting to experiment with component products(#5,#14),which will likely take off in the hardware segment,where components have a high potential of value retention given their technological complexity(compared to packaging)or the value of basic components.Philips has introduced a hairdryer compatible with replaceable parts,Fair Phones facilitate value retention CBS compared to traditional brands.As many consumers are increasingly questioning the impact of CPRD and demanding that brands take responsibility,tackling resource criticality by bringing circularity to the next level is urgent.Prices for major and small domestic appliances(SDA/MDA)may have to increase,while the high-end segments could lead others in their transition:having a greater financial leeway to experiment with new business models,they have the opportunity to make re-source-less consumer patterns desirable.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 452d.Mines and Waste:extraction and first transformation industries and waste managers seem about to be left on the sideline by the advent of large-scale circularity but have in fact a lot to gain in it.Mining&first transformation industries would see their business decline in a sustainable limited worldAs the starting point of linear supply chains,they will be at the forefront of resource depletion issues.In addition,governments of countries where reserves are located are likely to leverage their advantage to secure their national supply,and to impose their rules on foreign trade,for instance raising taxes on foreign firms exploiting their reserves.Conversely,countries that do not have resources buried in their territory also need to secure their supply.Relocating resource access is for them a paramount priority.This is where mining&first transformation players have a trump to play.Those who have progressively expanded their activities to other continents over the past decades have a major opportunity to impulse a re-industrialization trend.One option is to initiate new extraction projects locally,even though it will initially face opposition on the grounds of social and environmental impacts,as observed recently for lithium extraction projects in Europe17.With waste managers,they have an opportunity to capitalize on their experience of handling and transforming raw materials to enter the recycling business.With their valuable knowledge of materials&transformation processes,they could seize many opportunities in a global move towards circularity:17 https:/efficient&scalable recycling processes.Become the agnostic industry referencing materials,providing quality assessment services and defining new norms to help players choose the right material for their respective use cases.Indeed,second life and sell-resell CBS(#4)do not require the very best quality of material(though they demand it currently),opening up a space for sufficient materials for each application,and directing high-quality or even freshly extracted materials only to use cases that truly require it,thereby alleviating the stress on critical resources.An agnostic role to facilitate cross-industry collaborations,but a risk to become competitors.At the crossroads of many industries,their guidance&expertise is very valuable and could help them become builders of industrial symbiosis networks between supply chains in different industries working with similar resources.Their convergence to similar roles might require both industries to choose more specific value propositions,relying on differentiating assets.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4534.2 All CXOs and their departments have a role to play in circular business.Circular business drives changes in the companys economic and operational models,along with the coordinated mobilization of all its functions:strategic management,product and service marketing,design offices,process teams,logistics and customer marketing.A bottom-up approach is a start but is not enough to germinate a large-scale change.e.Eco-design,a transformative approach of products,services,as well as corporate strategy.Eco-design aims at designing a strategy,products,or services by anticipating the impacts and opportunities over their entire life cycle.Ecodesigning products and services requires the coordinated mobilization of customer marketing,product design,process engineering and service teams.It challenges the whole designing process to reduce the amount of critical resources(CBS#2 Reduce),to create products that can be easily repaired,refurbished,remanufactured(CBS#5,#7,#8)with higher shares of materials from circular origin or substituted with biomaterials(#CBS#9,#10,#11),sometimes specially designed for shared economy(CBS#3),and easily disassembled,repurposed,recycled(CBS#12,#13,#14,#15).This shift generates exciting challenges regarding early-stage functional,technical and aesthetic dimensions of design.A careful end-to-end eco-design leads to less resource needed for each unit of final usage by the customer.Eco designing the corporate strategy involves the strategy,the finance,and the marketing departments.It leverages the highly strategic#1 lever,“Avoiding”,which can be seen as an adaptation to resource of the statement of Sun Tzu in The Art of War:“He who excels in solving difficulties does so before they arise”.The eco-designed strategy considers the resiliency of business,the carbon challenge and the resource constraints in anticipating problems at different levels of corporate decisions:technology portfolios balancing high-tech and so-called low-tech,product portfolio from sufficient attractive products to high-end products,business model portfolios moving from product to service provision,corporate M&A,investing in resource resilient businesses and divesting from activities at risk.The financial profile,including investment,risk,ROE ratios may progressively change with the evolution of business models,and thus require explaining and validating the strategic moves with the shareholders and markets.Avoiding also includes deliberate communication and education activities targeting at large scale customers,employees,and partners.The objective will be to change their perception on resources and circular economy,to prefer long lasting products,to make more desirable the shift towards being served rather than bearing ownership,to parallel the reduction of the use and the size of the products with a deeper and improved sense of satisfaction.Eco-design transforms the way products and services are delivered,the way revenues and margin are generated and ultimately the company itself.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 454f.Operations:Onward and reverse circular operations in the field requires the COO to plan and run coordinated central,local and onsite activities.Building a circular economy means tying together a network of actors and physical flows,within sectoral value chains,and between different sectors operating in the same territory.The new“Maintain and Retain”onward circular businesses are somewhat close to the existing operations of the companies(Cf Figure 15,Circular Business Segments matrix).The change of scale nevertheless requires significant adaptations of the operating model of the company,for the activities spanning from onsite interventions to local facilities up to central industrial sites.The new operating model must carefully organize at each scale the repairing,retrofitting and remanufacturing operations.The industrial process itself evolves,with components and parts from more heterogeneous origins,wider tree of next operations in the plant floor and stronger need for traceability,as discussed in further section devoted to Digital.On the opposite,the new“Recover”reverse circular businesses shown in Figure 15 are more distant from the usual operations of the industry and closer to the activities of the waste operators.But for strategic reasons regarding brand value,business growth and adaptation to the future resource constraints,the company may decide to increase its control on collecting,sorting,and repurposing spare parts,and even recycling must-have materials.These activities may be controlled through direct insetting18,or through joint ventures and other forms of partnerships,under closer control from the parent brand.The COO and its teams will be in first line to organize,deliver and control these new operations.18 For instance,Schwarz Gruppe,the largest retailer in Europe(LIDL,Kaufland)has created a dedicated branch called PreZero in order to be“in the drivers seat”.PreZero hosts plastic recycling plants and handles recycled material passing through its 13,300 stores globally.In between onward and reverse operations,the logistic master plan will have to integrate the new flows at the central,local and end-point scales.The loops and flows of materials can take place between companies from different fields but requiring the same materials,or between companies when one can exploit the others by-product or waste,at large or even better at a territorial scale.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 455g.Procurement is deeply impacted as materials flows and services change in nature.The procurement department is directly involved in forecasts and purchases for at least three of the CBS:use&source repurposed components,use&source recycled materials,use&source regenerative biomaterials.F I G U R E 3 1Impact of the implementation of the global circular economy strategy of the procurement departmentFROM1.FORECASTING NEEDSEnd-of-Life waste1.What theoretical resources needs are derived from the business plan?3.What gross needs to be procured,whatever their origin?4.What share to be sourced from reused components and recycled materials?5.What net needs remain to be procured from extractive resources?What residual criticality?2.What part of needs will be avoided or reduced due to strategic mix(products vs services,shared economy)and technical levers(ecoconception,IR&D)?6.Sourcing:what is the end-of-life internal potential for Reused components and Recycled materials?7.How much recycled and reused goods to be internally sourced?To be externally procured from circular suppliers?Reuse&RecycleGross needsGross End-of-LifeNet End-of-LifeResource needs2.SOURCINGLINEAR EXTRACTIVESUPPLIERS3.PROCURINGLINEAR EXTRACTIVEGOODSTONet needs(imports)8.How much residual waste to be sold or to be disposed?The Figure 31 lists the new challenges for the CPO through the angle of the end of life and needs flows.Sourcing the new flows can be done internally across the entities of the group(operations,reverse logistics back from customers,geographies)or externally from partners inside the same industry or from other industries,with trade-offs to be done between cost,impacts and distance.For this reason.criticality becomes a new metric to be inserted in the procurement criteria and data,along with price and CO2.,and more qualitative criteria as supply resiliency.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 456h.Digital:CDOs shall catalyze traceability,insurability and cost competitiveness in complexified circular operationsDigital will be instrumental for circular business at 4 levels B2B platforms enable the large-scale circular trade of disassembled,repurposed and recycled goods,as well as second life products,connecting stakeholders and orchestrating physical flows along the same vertical sector and horizontally at the scale of local territories.B2C platforms support selling shared services,second life products,repairing services or collection of end-of-life products with creative value models.Computer-aided eco-design is strongly needed to better anticipate all the steps of product life,from#2 to#16 BCS,i.e.from cradle to cradle.Digital operations:circular operations are potentially more complex as they are less standard than linear manufacturing.Digital has a key role to improve their cost competitiveness and automate them,be it in central or local plant floors as well as in mobile operations on customer premises.Drones,3D scanning,state recognition and computer aided next operation,augmented operator tools(robots augmented reality,exoskeletons,robots)could help workers or technicians perform complex and arduous tasks seamlessly,for instance in(de)construction for onsite dismantling and sorting,or in electronic goods such as smart phones repurposing plants.Last not least:Traceability and insurability.An important barrier to circular economy adoption in automotive industry,in buildings,in B2B equipment is the uncertainty on the state and origin of the second life components incorporated in the product.Improved traceability along the whole value chain(NSP#2 to#15),individual information gathered in the Digital Product Passports,as well as statistical return of experience will also be key to improve the insurability of circular equipment,which is a barrier for wider adoption.This information is also useful for improving the maintenance and repairability and extend the life of such products.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 457F I G U R E 3 2Digital levers mapped against the 16 circular business segments(CBS)Digital forCircularResourcesB2C PlatformsComputer aided manufacturing processB2B PlatformsAI for scrap reductionComputer aided product designMobile operations digitalizationIOT,radio&optic tags,sensors&actuatorsBlockchain3D scanningAI for recognition,state diagnosis,next op recommendationAugmented operator,advanced robots,dronesExtended enterprise operations(out-sourced controlled activities)AI,satellite and aerial imagery forenvironmental assessment and monitoringTraceability/Product digital passport/Asset Digital twin/3D continuity1.AVOID2.REDUCE3.SHRED ECONOMY4.SECOND LIFE/RESELL5.MAINTAIN/REPAIR6.MARKET PLACE7.REFURBISH/RETROFIT8.REMANUFACTURE9.Use&source REPURPOSED COMPONENTS10.Use&source RECYCLED MATERIALS11.Use&source REGENERATIVE BIOMATERIALS12.COLLECT-SORT13.DISASSEMBLE-SORT14.REPURPOSE COMPONENTS15.RECYCLE MATERIALS16.REGENERATE SITES#1#2#2#2#2#2#2#3#3#4#4#4#4#4#4#4#5#5#5#5#5#5#5#5#5#5#6#6#6#7#8#9#10#11#9#10#11#7#8#7#8#7#8#7#7#8#9#10#11#7#8#7#8#9#10#11#7#8#7#8#9#10#11#6#5#12#12#12#12#12#12#12#12#12#13#13#13#13#14#15#14#15#13#14#15#14#15#13#14#15#14#15#13#14#15#14#15#13#14#15#13#14#15#13#14#15#13#14#15#16#3#3#3#3#3#3#1#1ANTICIPATERETAINMAINTAINRECOVERRACES:Resources Awareness and Circular Economy Strategy58Capgeminis value propositionSecure the future of your business,develop a resource and circular economy strategy at scaleWith our RACES approach,we help you assess your business vulnerability regarding resources,identify opportunities,de-sign a consistent global corporate strategy,strengthen your performance and resilience on the three business,climate and resource dimensions.Bring circular economy to life,implement your business opportunities in the field,transform the companyCapgemini Invent,with its specialized design entities such as Frog,Synapse,Cambridge,Possible Future,and Capgeminis branches Engineering,Applications,Technology,and Opera-tions deliver end-to-end service to implement five families of circular projects covering a world of possibilities.We help you transform and diversify activities and business models in the field,extend eco-design principles,engineer your products,build and run operations and develop local synergies and cooperation with other players.Quantify,assess the existing situation,monitor progressWe have a variety of tools and quantified methodologies to support your progress:RACES resource criticality factors,company maturity assessment tools checking the“what”and the“how”(AWS Capgemini partnership),detailed product portfolio vulnerability down to LCA,products circularity mea-sure through MCI(Material Circularity Indicator)of the Ellen MacArthur foundation,PCI(Product Circularity Indicator)by Bracquen,NCI(Nano Circularity Indicator)by Capgemini Engineering,and much more adapted to your specific needs.1.CIRCULAR SOURCING2.CIRCULAR PRODUCTDESIGN 3.PRODUCTAS-A-SERVICE4.PRODUCT LIFE EXTENSION5.WASTE REVALORISATIONBUSINESS MODELDESIGN&ENGINEERINGOPERATIONSPARTNERSHIPSRACES:Resources Awareness and Circular Economy Strategy59Connect with our industry&circularity experts now!New Sustainable Platforms,RACES Circular Economy,New Sustainable Offer group leader Intelligent Industry,Capgemini Invent Circular Economy,Capgemini Invent Capgemini ECapgemini brings together talents from every area of expertise to deliver end-to-end assistance to our clients.Our brands cover every industry and service line,from design to engineering.Capgemini Invent is the Groups digital innovation,consulting,and transformation brand that helps decision-makers design and build the future of their organizations.We provide services to corporate leaders that are dedicated to shaping the future,by developing strategies,products,services,experiences,and business models for sustainable growth.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4About CapgeminiAbout Capgemini Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology.The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future.It is a responsible and diverse organization of over 340,000 team members in more than 50 countries.With its strong 55-year heritage and deep industry expertise,Capgemini is trusted by its clients to address the entire breadth of their business needs,from strategy and design to operations,fueled by the fast evolving and innovative world of cloud,data,AI,connectivity,software,digital engineering and platforms.The Group reported in 2021 global revenues of 18 billion.Get the Future You Want|

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英敏特：2023经济衰退和生活成本危机分析报告-英国品牌面临的主要挑战和机遇（英文版）（16页）.pdf

Mintel experts discuss the differences and similarities between the current and previous recessions,with recommendations to help brands weather the storm.Recession and the cost of living crisis:Key challenges and opportunities for brands in the UK Experts in what consumers want and whyHow bad will the UK recession be?The latest GDP figures showed that the UK economy grew by 0.1%in November,boosted by the World Cup and spending on food and drink.But bad economic news continues to stack up.The Bank of England is predicting a“very challenging”two-year recession.The Office for Budget Responsibility(OBR)has forecast a 1.4ll in GDP(the standard measure of a countrys total economic activity)in 2023,a significant downgrade from its previous expectations.Most important for consumers is the fact that inflation is expected to stay high throughout 2023 and unemployment to start increasing.The British public is picking up on this pessimism.Research run by Mintel in November 2022 shows that 90%of consumers expect inflation to rise over the coming year,80%that interest rates will rise further,and 42%that the UKs economic output will fall.Consumers recognise that this will affect their financial well-being too,as 63%think that the level of inflation will harm their financial situation,and 50%that the UKs economic struggles will hurt their finances.Toby Clark,Director of Research,EMEAof UK consumers say they expect that the UKs economic output will fall in 2023.42%2What are the brand opportunities during a recession?It is easy to be so focussed on the threats that you ignore the opportunities that economic upheaval can provide.The 2008 financial crisis was painful for many brands,but those that got their communication and innovation strategies right emerged in a stronger position.The financial crisis also triggered a wave of disruptive innovation as a new generation of entrepreneurs grew frustrated with corporate life,reassessed their priorities and decided to step out on their own.At Mintel,we have been supporting our clients with market-leading data and insight for over 50 years.Our institutional knowledge and cross-category expertise mean that were uniquely positioned to look back at previous periods of economic disruption and understand what brands can learn from the past.What are the differences between the 2008 and 2023 recessions?In some ways,the coming recession will be very different from the post-financial crisis slowdown.On the downside,inflation is much higher than we saw last time around:were facing a period of dreaded stagflation where low economic growth combines with rising prices.But there are also upsides.The OBRs forecast of a 1.4ll in GDP is among the more negative forecasts out there,compared to a 2.2ll in the last three months of 2008.Also,while unemployment is likely to rise,it is currently extremely low.Whats crucial for the consumer economy is that Brits are going into this slowdown with a war chest of savings that they built up over the lockdown years.The Bank of England estimates that consumers saved almost 200 billion more over lockdown than they would otherwise have done,and Mintels Global COVID-19 Tracker data shows that saving intentions are still strong.Based on our latest consumer data,industry knowledge and experience in guiding brands through previous recessions,in the pages that follow,my colleagues and I examine key areas of consumer spending and offer analysis of how the coming recession will differ from the post-financial crisis slowdown.We discuss where the similarities begin and end,and offer our top recommendations for brands in Food and Drink,Online Retail,Travel,Financial Services and Beauty and Personal Care.The 2008 financial crisis was painful for many brands,but those that got their communication and innovation strategies right emerged in a stronger position.3Mintel ReportsThe smartest way to understand consumer markets.WHAT IT ISMintel Reports are a series of comprehensive reports rooted in robust data and market analysis to provide you with expert insights and strategic recommendations.WHAT IT COVERSEach report combines consumer research and drivers,product innovation and/or competitive analysis as well as market size to give you a complete view of your market.Identify future opportunities by understanding what your consumers want and why.See the trends and innovations impacting you on a local and global level.Make better decisions faster by keeping informed on whats happening across your market.010203HOW IT HELPS400 observations every month15 sectors14 demographic groupsFood and DrinkThe big difference between the 2023 recession and that of 2007-08 is that todays consumers place more value on their health.This means shoppers will consider health benefits more heavily when making their grocery purchase decisions and,where possible,will even pay more to protect this prized asset.The health trend was still emerging in 2008,with just one in four(24%)UK food and drink launches making a health claim*,according to Mintel Global New Products Database(GNPD).Yet in 2019a full year before the pandemicover a third(36%)of launches made a health claim.COVID-19 has made consumers more conscious of the link between diet,health and mood,but,ironically,health claims slipped back to 30%in 2022.This could be because companies have rowed back on their R&D plans.Jonny Forsyth,Director,Mintel Food&DrinkCompared to the previous recession,this time shoppers will consider health benefits more heavily when making their grocery purchase decisions and,where possible,will even pay more to protect this prized asset.*Based on the number of launches making a free-from,minus or added nutrition claim as a proportion of all food and non-alcoholic drinks launches.5Food and drink consumers prioritise health benefitsMintel Global Consumer research shows that among UK adults,45fine food and drink value as products with additional health benefits,making it the most prized quality that shoppers seek.A product with natural ingredients is the second most important(43%)with it is lower in price than other products in third place(42%).This emphasises that value is not just about cost,but the functional and psychological benefits consumers perceive they will receive in exchange for the price they pay.The fact that UK consumers value natural claims in food and drink indicates that consumers view natural as better quality and better for you.Making organic claims is one way for food and drink brands to dial up their naturalness.However,organic food and drink sales struggled in the UK during the 2007-08 recession because,at the time,consumers did not value the claim enough to pay extra for it.As a result,organic claims in UK food and drink launches fell from a high of 10%in 2010 to just 4%in 2012,according to Mintel GNPD.Despite there being more health-conscious consumers in 2022,history looks likely to repeat itself,with just 6%of UK launches making an organic claim year-to-date versus 10%in pre-pandemic 2019.While health may be more important to consumers now than in 2008,food and drink brands must avoid the error of prioritising healthier messaging to the detriment of taste.The vast majority of UK consumers choose food for taste.For example,68%of consumers look for taste when buying a snack,making it far more important than factors such as freshness,healthiness or convenience.Indeed,comfort eating has been on the rise since the start of the pandemic,with almost half(48%)of UK adults claiming it has been easier to justify eating indulgent food/drink since COVID-19,rising to 64%for 16-34-year-olds.Brands that will triumph in the forthcoming recession will be those that prove their value by delivering,and effectively communicating,taste,while also reassuring consumers that their product is compatible with,and will maybe even enhance,a healthy lifestyle.6Online RetailAccording to Mintel research on the UK retail sector,in 2008,the online channel accounted for 4.9%of retail sales.Fast-forward to 2022 and online is estimated to finish the year accounting for 25.9%of sales.This 21 percentage point difference equates to,in todays money,92.3 billion more moving through online than in the previous recession.This shift underpins much of the change the UK retail sector has undergone in the intervening period.Online first established itself with value,then range and,in the last decade,convenience.But it is that first point that has caused such disruption:in 2022,54%of shoppers say the best prices are found online,which means that many consumers will look online for value in the coming year as they did during the past recession.Price is important,but value judgements for most are not solely based on this.Convenience is an equally important factor.The convenience that the online channel has added over the past decade is not just about improved delivery speeds,but it is also that its become the dominant place for browsing,interaction and a host of other critical shopping behaviours.Indeed,there is little within shopping behaviour that online now doesnt touch.Thats why even those who have long eschewed online,such as Primark,are now engaging in the channel.When we look at the expected buying behaviours from the past recession,we see that online retail had a big role to play and expect to see the same resurface in 2023.Nick Carroll,Retail Category Director,Mintel Reports EMEA7In 2008,online accounted for 4.9%of UK retail sales.In 2022,online is estimated to finish the year with 25.9%of UK retail sales.Thats 92.3 billion more moving through online than in the previous recession.Factors helping to boost online retailCredit and alternative payment use lend themselves well to online given how easy they are to use/set-up compared to when in a physical store.Access to alternative payments is a strength of online,underlined by the fact that leading,new-wave credit/buy-now-pay-later providers are digital-first operations.Price comparison shopping,largely done on a home computer during the last recession,is now unleashed with the majority of consumers carrying their savvy buying decision-maker in their pocketa smartphone.Additionally,the shift to second-hand and pre-loved that we saw in the past recession has also resurfaced.However,rather than the revitalisation of the physical charity shop sector that we saw in the past recession,the trend is likely to create a significant boom for the new,peer-to-peer platforms,not simply in terms of purchasing but also selling.In fact,45%of those already selling online say financial concerns have caused them to sell more online in the past year.Greater use of the online channel over the past 15 years has created a savvier online shopper and,in turn,placed greater pressure on operators.From buy-try-return to minimum-spend workarounds,there are now a host of undesirable online consumer behaviours.With retailers today facing many of the same financial pressures as shoppers,such behaviours put added strain on the bottom line.Multi-channel players are best suited to clamp down on some of these behaviours.For example,charging for postal returns,while in-store returns remain free,is a move that multi-channel retailers can adopt without creating significant barriers to purchasing.According to 51%of online shoppers,it would encourage them to make more returns in-store.With unemployment likely to remain markedly lower than during the past recession,this will mean continued opportunities for multi-channels to create conveniences for consumers,including home delivery and in-store collection.If major anchor tenants can succeed in driving online demand into physical locations then this will be a net benefit for all high street tenants.of UK Amazon shoppers say they regularly check the prices of products they see in-store on Amazon.72%8TravelJennie Bryans,Travel and Leisure Analyst,Mintel Reports UKThe emergence of the COVID-19 pandemic nearly decimated the international travel market with various national lockdowns,vaccination restrictions and testing requirements in place for the better part of two years.As a result,many consumers remain eager to get away and focus on their revenge travel plans.This pent-up demand for travel has subsisted despite the rising cost of livinga key difference from previous recessions.In previous economic crunches,travellers were more likely to substitute an overseas trip for a UK break to avoid the associated costs.This time around,even though the domestic market provides an attractive option for those looking to save money on travelling abroad,there remains a large group of consumers who are keen to explore destinations outside of the UK,given that these locations were off limits for so long.One trend which remains similar to previous recessions is the number of holidays being taken by UK consumers.With increasing financial difficulties,64%of consumers are likely to cut back on additional short breaksrising to 81%of those who describe their financial situation as a struggleaccording to Mintel research on the UK travel industry.Throughout the current cost of living crisis,consumers are expected to prioritise their main summer holiday,with shorter city breaks moving to the back burner.9The re-emergence of package holidays with more payment flexibilityPackage holidays are also popular options amongst consumers during periods of economic downturn.In previous recessions,the package holiday market outperformed the independent sector(ie booking flights and accommodation separately)in terms of volume growth as cash-strapped holidaymakers sacrificed wider choice and flexibility in favour of low-cost,all-inclusive package deals.The trend was also fuelled by a resurgence of support for the traditional package attractions of convenience and financial protection.This remains the case within the current cost of living crisis,with many operators also offering flexible payment options.Brands such as Tui are,for example,offering zero/low deposits on package holidays,as well as the option to spread payments across multiple instalments.This enables consumers to have the confidence to book package holidays,but with the convenience and reassurance of a monthly payment plan,ensuring the overall cost of the holiday remains manageable.The travel market is expected to weather the recession fairly well compared to other sectors.However,operators value propositions will face heavy scrutiny as consumers strive to get the best deal possible.Consumers will increasingly expect brands to highlight budget-friendly options throughout the booking process;for example,through the use of booking calendars showing differing prices on a range of departure dates,as well as flexible payment options.Brands should also promote the cost benefits and other advantages available with lower-cost holidays,such as camping and caravanning breaks,all-inclusive options and domestic holidays.However,it is also important for brands to remember that there remain consumer groups,especially those with higher incomes,who are not expected to be as heavily impacted by rising inflation,and who have built up healthy saving pots during the pandemic.Such consumers remain eager to spend more on holiday upgrades to ensure a premium experience,while they are also more likely to travel further afield or even take the holiday of a lifetime.While the travel market is expected to weather the forthcoming recession fairly well,operators value propositions will face heavy scrutiny as consumers strive to get the best deal possible.10Financial ServicesWhen it comes to financial services,theres a glaring difference between this recession and the 2008 slowdown.The recession 15 years ago was triggered by the near collapse of the global financial services industry.Even though retail banks only played a minor role in triggering that crisis,their reputation and brand strength were hit hard.This time around the situation is very different,and banks are going into this slowdown in a much better state,both in terms of their balance sheets and their branding.During the pandemic years,the banks worked hard to support their customers,offering payment holidays and flexibility to borrowers.Mintel research on consumer attitudes towards debt and credit shows that 65%of consumers who have at least one type of credit product say that they trust banks to help and support them.The other major difference is that many consumers are going into this slowdown in a better financial state than they were back in 2008.Back then,a boom mentality had set in,the sub-prime lending market was in full swing and many people had taken on unsustainable levels of debt.In 2023,by contrast,many are still sitting on a sizeable amount of lockdown savingsmoney that they were able to tuck away because so many areas of discretionary spending were effectively off the table for two years.of UK consumers who have at least one type of credit product say that they trust banks to help and support them.65%Toby Clark,Director of Research,EMEA11Higher interest rates will help with the greater focus on savingRising interest rates are generally seen as a threat to consumers financial well-being,but after a decade and a half of rock-bottom rates,many savers will welcome the increase.Notably,Mintel research shows that 26%of UK consumers think theyll benefit from changes in interest rates over the next year.There are similarities to previous recessions,though.Whenever the economy starts to struggle,consumers focus more on savings in an attempt to give themselves a degree of financial security.Were already seeing that tendency in our research as,for example,49%of consumers were able to add to their savings in the last three months.The biggest similarity between this recession and the post-financial crisis slowdown in 2008 is that although most people will get through this downturn with a decent financial state,many will find it incredibly difficult.Whether the cause is a collapse in the global financial system,post-pandemic supply chain challenges or soaring prices caused by the conflict in Ukraine,a recession will mean that some consumers will fall into greater levels of debt.They could also experience their savings being run down and,in some cases,their homes being at risk.This presents the greatest opportunity for banks.They have a crucial role to play in supporting their customers through tough times,whether thats by helping them better manage their finances and maximise the returns of what savings they do have,or by dealing with severe financial distress sensitively and proportionately.Last time around,banks entered the recession as villains of the story.This time,just as in the pandemic,they are in a much stronger position to be seen as heroes.Banks have a crucial role to play in supporting consumers through tough times,whether thats by helping them better manage their finances and maximise their returns or by dealing with severe financial distress with sensitivity.12Beauty and Personal CareDuring the post-financial crisis slowdown,beauty and personal care proved its resilience against economic headwinds and the lipstick effect boosted sales of mood-lifting yet affordable makeup and fragrance products.This is a trend that is already resurfacing,with sales of lip colour products in the UK predicted to increase by 25%in 2022,while sales of fine fragrances are also predicted to increase by 9%.Although some of this growth can be attributed to post-COVID-19 recovery,it also reflects the joy that these products can incite when consumers are struggling.Further confirming this to be true,41%of beauty/personal care consumers who buy new products do so to treat themselves,rising to 62%of women aged 16-24.Although the lipstick effect persists,there have been some significant shifts in consumer behaviour in recent years,impacting what products consumers turn to for a feel-good boost.Makeup has historically been a staple outperformer during difficult times;Winston Churchill is even said to have refused to ration lipstick during WW2 because of its ability to buoy morale.However,makeup application habits shifted dramatically during the COVID-19 pandemic.Consumers embraced infrequent applications as they spent more time at home,and although a return to normality is well underway,working from home remains more commonplace.The adoption of digital lifestyles only exacerbates the issue,as it means consumers dont rely on physical products the way they did previously,with 23%of makeup buyers saying they often use digital filters and editing apps instead of applying makeup,rising to 40%of 16-24s.Similar trends are impacting fragrances,too.Samantha Dover,Beauty and Personal Care Category Director,Mintel Reports UK13Sustainability has become a bigger factor in purchase decisions Consumers are scrutinising not only what they buy,but how much they buy.This means product proliferation is falling out of favour,impacting everything from facial skincare(which outperformed during COVID-19)to traditional outperformers like makeup and fragrances.Meanwhile,although eco and ethical claims are yet to be a primary driver in beauty/grooming purchase decisions,they can sway consumers toward new brands and products,as the presence of these claims can support the feel-good boost consumers are craving.This means beauty and personal care brands need to pay attention to what motivates consumers to weather this storm,whilst also creating new usage occasions to fill the gaps left by COVID-19.As consumers embrace a less is more approach to beauty/grooming for the sake of their finances,convenience and the environment,creating products that spark enjoyment and provide multifaceted benefits will appeal.For example,in fragrances,this trend is coming to the fore via functional scents that evoke certain emotions or provide a sense of escapism.This approach,going beyond pricing to assert value,is particularly important during the current income squeeze,as another fundamental shift since the last slowdown has been the rise of masstige brands that offer claims and benefits that mirror those seen in prestige products,but at a slightly more affordable price point,meaning a high price alone no longer determines quality.of female beauty/personal care consumers aged 16-24 who buy new products do so to treat themselves.62%As consumers embrace a less is more approach to beauty/grooming for the sake of their finances,convenience and the environment,creating products that spark enjoyment and provide multifaceted benefits will appeal.14Navigate the recession and shape your future with Mintel ConsultingWere here to take the guesswork out of your process,solve your business challenges and help you move forward faster with confidence.Allow us to listen to the issues youre facing and well propose research solutions rooted in global expertise of consumer markets and data-science-led analytics.Bespoke insightOur analysts curate insights and provide tailored recommendations.Custom problem solvingMining syndicated data for Competitive analysis Landscape analysis Market assessment Portfolio evaluation Segmenting your consumer White space identificationConducting bespoke research for Business-to-business interviews Consumer research Field services Ideation workshops Strategic positioning techniques Tradeshow supportWeve been shaping futures for 50 years.Find out how we can shape yours too.CONTACT US USAbout MintelMintel is the expert in what consumers want and why.As the worlds leading market intelligence agency,our analysis of consumers,markets,product innovation and competitive landscapes provides a unique perspective on global and local economies.Since 1972,our predictive analytics and expert recommendations have enabled our clients to make better business decisions faster.Our purpose is to help businesses and people grow.2023 Mintel Group Ltd.All rights reserved.

0人已浏览 2023-02-06 16页 5星级

海斯特：提高钢材配送效率白皮书（英文版）（9页）.pdf

IMPROVING STEEL DISTRIBUTION EFFICIENCYTABLE OF CONTENTS3/MORE EFFICIENT STEEL DISTRIBUTION UNLOCKED BY VERSATILE REACH STACKERS4/RE-EVALUATING THE WORKFLOW FOR LOADING RAIL CARS6/COIL HANDLING GETS HUGE7/GETTING A HANDLE ON STEEL SLABS8/STRENGTH AND STABILITY FOR BILLET HANDLING9/KEEPING LONG-LOAD HANDLING STRAIGHTHyster and are registered trademarks in the United States and certain other jurisdictions.Hyster products are subject to change without notice.Trucks may be shown with optional equipment.2022 Hyster Company.All rights reserved.10017HGC5WP001_E_EN_US_V2R0_100422 3 ith automation,increased connectivity and evolving labor demographics reshaping industrial landscapes,change is constant,and the steel industry is no exception.Today,mills must serve demand for steel in a variety of shapes and sizes,and face expectations for greater speed and efficiency when moving steel from production to distribution and ultimately,to end users.Mills face significant financial commitments,with demand for larger and wider coils driving major investments to widen coil production lines and produce steel in larger depth and diameter coils.The material handling equipment and labor necessary to move steel products also accounts for significant costs.But steel mills cannot afford to cut corners doing so risks unsafe and ineffective coil and slab handling,which can cause extremely costly lost-time accidents and mill shutdowns.WSteel mills can lose an average$150,000 per hour when the mill is not operationalTo stay competitive in such a challenging market,steel producers must re-examine not only the equipment they use,but how they use it.Instead of using multi-step,multi-machine workflows,what if they could shift to a streamlined approach,unlocking greater performance and efficiency to thrive in todays market?Thanks to material handling equipment innovations that provide unprecedented flexibility,this streamlined approach is a growing reality for steel-handling operations.A single reach stacker can now handle tasks traditionally divided between equipment like gantry systems and coil-ram lift trucks.This enables a consolidated workflow that avoids non-value-added steps like dropping loads at mid-points and changing equipment,while reducing overall equipment inventory and associated training time.MORE EFFICIENT STEEL DISTRIBUTION UNLOCKED BY VERSATILE REACH STACKERS 4 RE-EVALUATING THE WORKFLOW FOR LOADING RAIL CARShe established process to move steel from production to rail cars is a lengthy one,involving multiple steps and pieces of equipment.Reach stackers have traditionally handled cargo containers and moved heavy loads around the yard.Often,other forklifts and slab carriers are dedicated to a single task,such as handling coils or slabs and bringing them to staging areas.Then,gantry systems use cranes to lift and load them into rail cars.With steel mills facing competitive pressure to become more efficient,this workflow falls short when it comes to speed and cost.Cranes travel slowly,yet they must traverse long rows of rail cars to pick and place each load,and waiting for rail cars to shuttle in and out of buildings extends the process further.From a financial standpoint,investing in so many different pieces of equipment means greater capital expenditure,while labor efficiency suffers with operators requiring adequate training and shuffling between equipment dedicated only to a single task.TBy using a reach stacker,steel handling operations can engage in a more efficient,simple loading process,using a single piece of equipment to pick up finished pieces of steel and move them to staging and storage areas or load them directly into rail cars.Reach stackers can optimize the process by:Reaching far enough to load two rail cars deep without having to drive to a new loading position Side-load rail cars and be equipped with gondola car lid lifters Driving and lifting up to four times faster than overhead cranes Enabling more precise load placement and thus avoiding time-consuming adjustments,due to an elevated cab that offers better visibility to get it right the first time Operating without the need for an outside spotter,freeing scarce labor for more valuable tasks Eliminating the need for extra rail spurs,opening up more yard spaceThe average fully burdened labor rate for a steel mill forklift operator is approaching$100/hour.What could your operation do with a reduction in labor costs?5 RE-EVALUATING THE WORKFLOW FOR LOADING RAIL CARSOVERHEAD/GANTRY CRANE:Located at end of production line;pick up finished coils,place on railcars or transfer cartsBut a reach stacker appropriately equipped for coil handling can safely and effectively execute all of the coil picking,transportation and loading functions handled by fixed or moving cranes,conventional counterbalance lift trucks and ram tractors in a traditional application.Reduced product touches Reduced labor and training requirements Fewer pieces of equipment to purchase and maintain Tool changing technology enables equipment to switch attachments to handle different tasks in simple,plug-and-play workflow See videoTERMINAL TRACTORS:Pull coils on transfer carts to storage and staging areas/A TRADITIONAL COIL HANDLING APPLICATION REQUIRES MULTIPLE,VERY COSTLY,DEDICATED-TASK MACHINES AND TRAINED OPERATORS.COIL-HANDLING LIFT TRUCK:Picks coil from storage yard and transfer to loading areaOVERHEAD/GANTRY CRANE:Pick and load coils for shipment 6 o keep production lines running longer and reduce coil change-out time,customers that manufacture products from steel are asking producers to provide larger coils.These new coils are as large as 96,000 pounds and 96 inches wide up to 16,000 pounds heavier and 16 inches wider than the previous standard.But for steel producers,creating much less distributing these larger coils is no small task.Mills are making significant investments to widen production lines,but they must also modify material handling and transportation infrastructure.This means higher capacity lift trucks and a transition to rail and barge travel instead of over-the-road semi-trucks./MAKE LIGHT WORK OF HEAVIER LOADSTo handle heavier,wider coils,a reach stacker offers the right combination of size,heavy duty features and most importantly,greater payload.In addition to heavier booms,larger tires and axles,and right-sized coil handling attachments,reach stackers can lift up to 120,000 pounds and offer an extended load center of up to 252 inches,not only accommodating wider coils,but providing the extended reach necessary to place them on a double deep rail car,or a widely staged semi-trailer flatbed.TCOIL HANDLING GETS HUGEOperations can also utilize attachments designed specifically for coil handling,like coil hooks and grabs.Coil hooks,similar to those used by overhead cranes,allow operators great flexibility when positioning coils on flat rail cars with coil cores placed perpendicular to the railroad tracks.They can even include an integrated rail lid lifter for quick,integrated access to loading targets.Coil grabs are an effective choice to load walled gondola cars.The grab arms need a minimal distance to release the coil,fitting inside the walls of the rail car for maximum precision.7 ith end users demanding steel coils and slabs alike,mills must be prepared to produce,handle and load both types.Flat slabs possess key differences from coils and lift trucks require different attachments to effectively handle them./SLAB HANDLING ATTACHMENTS Slab magnets are used for stacking ambient temperature slabs in a storage yard and dropping them into place.Unlike clamps,magnets are well-suited for loading rail cars with side walls,and they avoid the extra step of placing spacers between loads,expediting processes and enabling real productivity gains.Slab tongs,on the other hand,are typically used to grab and transport hot slabs around the yard and to load flat rail cars without walls.They enable more precise handling than forks.WGETTING A HANDLE ON STEEL SLABSQUICK AND EASY ATTACHMENT CHANGESIf a mill uses some lift trucks to handle coils and other equipment to handle slabs,they are most likely paying for a bloated fleet.The coil handling trucks will sit idle and take up yard space when slabs are handled and vice versa,simply due to an inability to easily switch between the proper tooling.A new tool changing technology eliminates the cumbersome,arduous process of manually changing attachments and the need for excess lift trucks.For non-powered attachments such as coil hooks or mechanical slab tongs,operators can change them without even leaving their seat!For items that require power,such as electricity for slab magnets or hydraulic power for clamping or rotating attachments,operators will need to briefly leave the cab,but the process is simple.A plug-and-play workflow means operators just need to use quick-connecting fittings to connect the power supply for the attachment.Ultimately,this ability to more easily and quickly switch between different attachments can enable a leaner,more productive fleet.8 T he round,cylindrical shape of billet steel pieces makes them susceptible to rolling on forks.When billets roll back toward the cab,they strike the forklift carriage,stressing components with great force.And if forks are tilted forward,billets can roll ahead and abruptly fall off,risking damage to the environment and other objects.Billets rolling in either direction creates scenarios where excessive forces are continually placed on the lift truck,causing machine and product damage.Successfully handling billet steel means reducing product damage and handling costs with equipment that is tough enough for the job and designed to prioritize load stability./LOAD STABILITY AND EQUIPMENT DURABILITYWhether billets roll forward or backward,product and equipment damage is a real possibility.Key enhancements to traditional lift truck forks and carriage components can promote load stability and equipment durability.Heavy-duty radius forks feature a curved fork shank designed to help disperse shock created when billets roll rearward and strike the lift truck carriage.The fork heel radius enables the billets to roll slightly upward,greatly reducing the shock force on the lift truck carriage and related components.Heavy-duty poly blocking is designed to stand up to the shock created by rolling billets.Roller bearings are the traditional means to enable the sideshifter and fork positioner to move along the carriage.When billets roll backward,roller bearings are commonly damaged leading to costly replacement.Hyster has replaced traditional carriage roller bearings with poly blocking installed behind the forks and remains intact even when the carriage is shocked by heavy rolling billets.In addition to radius forks and poly blocking,heavy-duty fork carriers,specially designed carriages with protection plates and increased under clearance are features billet mills should look for to keep equipment moving reliably and keep handling costs under control.EQUIPMENT DAMAGE FROM BILLETS CAN ADD UP FASTPreparing for billets rolling backward is essential because they can lead to costly equipment damage,specifically for roller bearings.Traditional forklift systems use bearings located behind the forks to enable the sideshift and fork positioner to move along the carriage.But not only are those bearings fragile and expensive theyre easy targets for billets rolling backward.Replacing broken bearings not only costs money,but the resulting equipment downtime disrupts normal work and costs productivity.For one billet mill operation,broken roller bearings had become an exceptionally common occurrence up to five incidents each day.With replacement bearings costing as much as$1,000 each,the costs added up quickly and the mill risked material handling costs spiraling out of control.But heavy-duty radius forks and poly blocking proved to be effective solutions.Once implemented,the mill no longer experienced any equipment damage or workflow disruptions.STRENGTH AND STABILITY FOR BILLET HANDLING 9/STRENGTHKey enhancements can equip lift trucks to stand up to the demanding duty cycle of steel operations and the stresses specific to handling long loads.H andling long steel loads,like beams and rebar,places unique stress on equipment.Effective long-load handling requires consideration of several variables,including road conditions,yard layout and equipment design.Long loads extend well beyond the sides of the lift truck acting as a huge lever that generates high amounts of torque that twists the mast and related components.This excess torque is especially powerful when the mast is elevated and operators travel through turns and over bumps and potholes,risking cracks and other damage to the mast,carriage and tilt cylinders.KEEPING LONG-LOAD HANDLING STRAIGHT Mast overlap:The more overlap between the inner and outer mast channels,the more surface area to disperse the shock and torsion created when handling elevated loads over rough terrain.Additional overlap can help counteract the mast twist and boost durability.Cross bracing:To further strengthen the mast for heavy-duty applications,cross bracing between the mast pillars along with oversized mast channel brackets can help further improve mast solidity and stability carrying wide loads.Super-duty mast mountings:Enhanced mast mounting brackets,mast mounting pins and bearings can also serve to counteract the stresses of long load handling.Carriage valve protection:The hydraulic control valve is the meeting point for all hydraulic lines that configure and control forks,masts and other elements of carriages.To protect this critical point from costly damage in harsh conditions,manufacturers can place heavy-duty steel plates over the carriage valve./VISIBILITYMoving long loads requires navigating steel yards with limited space and maneuvering around obstacles,often while the load is elevated.Not only does equipment need to be tough enough to withstand the stresses of such movements,but operators must have a clear view of their surroundings to properly position laden equipment.Camera systems are a useful tool to supplement operator views through and around the mast,to the side and behind the operator compartment.

0人已浏览 2023-02-06 9页 5星级

Dealroom：2022年线上风险投资及估值市场年度回顾报告（英文版）（20页）.pdf

Marketplace startups and venture capital 2022 ReviewFebruary 2023Marketplace startups and venture capital2022 ReviewFebruary 2023Page/2 Investing in the future of marketplaces.NN Group is an international financial services company,active in 11 countries,with a strong presence in a number of European countries and Japan.Our roots lie in the Netherlands,with a rich history that stretches back over 175 years.With our 14,000 employees,NN provides retirement services,pensions,insurance,banking and investments to approximately 18 million customers.NN Group includes Nationale-Nederlanden,NN,ABN AMRO Insurance,Movir,AZL,BeFrank,OHRA and Woonnu.Investing in the future of marketplaces.Adevinta Ventures is the VC arm of the Adevinta group,a global online classifieds specialist operating leading digital marketplaces in 14 countries.We invest in fast-growing European startups(Series A and B rounds)that can shape the future of mobility,real estate,work and fintech.We also foster collaboration opportunities between our portfolio companies and Adevinta brands.Global startup&venture capital intelligence platform.Dealroom.co is the foremost data provider on startup,early-stage and growth company ecosystems in Europe and around the globe.Founded in Amsterdam in 2013,we now work with many of the worlds most prominent investors,entrepreneurs and government organizations to provide transparency,analysis and insights on venture capital activity.VC Funding and Valuation Overview1Table of contents2Regional Comparison$226B“1Understanding Deep Tech2The state of European Deep Tech 3 Deep Tech segments to watch4Accelerating European Deep Tech1VC Funding and Valuation OverviewPage/5 VC funding for marketplaces in 2022 was down 50%year-over-year,returning to pre-pandemic numbers,with$74B raised.Source:Dealroom.co Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MDONE$150B$100B$50BGlobal VC Investment in Marketplaces view onlineH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022$149B2021202020112012201320142015201620172018201920102022$250m $100250m$40100m(series C)$1540m(series B)$415m(series A)$14m(seed)$01m(pre-seed)ScaleBreakoutStart$74B$69B$4B-50%$150B2022202120202019201820172016201520142013201220112010$100B$50B$250m $100250m$40100m(series C)$1540m(series B)$415m(series A)$14m(seed)$01m(pre-seed)ScaleBreakoutStart$4B$69B$149B$74B-50%Page/6 41 new marketplace unicorns were created in 2022,the lowest number since 2016.Source:Dealroom.co H1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Global cumulative number of Marketplace Unicorns20152016201720182019202020212022200400600599558390327256199154120 41 168 63 71 57 45 34See all new 2022 marketplace unicorns view onlinePage/7 28%of VC backed marketplaces startups have raised capital in 2022.Combined enterprise value adjustments mostly happened in public markets.Source:Dealroom.co Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MDONEH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Global combined marketplace enterprise value by ownership$2.0T$2.5T$8.4T$4.2T 25%YoY-50%YoY%of VC backed private marketplaces which raised a round in 202272%of private startups have not adjusted their valuations recently.28%of VC backed marketplaces startups have raised capital in 2022.72%of private startups have not adjusted their valuations recently.201720182019202020212022 Private EV Public EV$2.0T$8.4T$2.5T$4.2T$4T$8T$12T 25%YoY-50%YoY Page/8 After a drop in the second half of the year,B2B VC funding dropped 33%while B2C fell 57%YoY.Source:Dealroom.co Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MGlobal VC Investment in Marketplaces view onlineH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Marketplace VC Funding by YearB2C$33.5B$22.6B$86.8B$37.0BB2B-33%-57 21 2022Explore our B2B Marketplace Report view onlineMarketplace VC Funding by Year 2021 2022B2C$3.5B$3.8BB2B$86.8B$37.0B-57%-33%Explore our B2B Marketplaces reportPrevious editionPage/9 Marketplace median round sizes have fared worse than other business models.Source:Dealroom.co.Note:no rounds under$100k are considered for this analysis.Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MMedian round sizes by roundH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Marketplace&SaaSSeedSeries ASeries BSeries C SeedSeries ASeries BSeries C Marketplace&SaaS2016201820202022$2.0M$1.5M$1.0M$0.5M Marketplaces Rest of Market Marketplaces Rest of Market Marketplaces Rest of Market Marketplaces Rest of Market2016201820202022$12.5M$10.0M$7.5M$2.5M2016201820202022$40M$30M$20M$10M2016201820202022$100M$75M$50M$25M$5.0MPage/10 Fintech,Food and Health marketplaces received the most VC funding in 2022.Source:Dealroom.co.Overlap between industries may occur.Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022FintechFoodHealthTransportationReal EstateEducationFashionSports$17.8BVC Funding Amount by Marketplace Segment,2022GamingEnergy$9.5B$7.7B$6.8B$6.1B$3.5B$3.0B$3.0B$2.5B$2.5BLargest VC Funding Rounds in 2022Page/11 Food Delivery,Mortgages&Lending and Crypto&DeFi were the highest funded sub-industries.Source:Dealroom.co.*Fanatics has been removed from the Sporting Equipment category as an outlier.VC Funding by Sub-Industry,2022 vs 2021Food Logistics&DeliveryMortgages&LendingCrypto&DeFiHealth PlatformLogistics DeliverySearch,Buy&RentWealth ManagementInsuranceSporting$6.3B$5.3B$4.7B$4.7B$4.4B$4.3B$4.0B$2.4B$2.4BLearning Tools&Resources$2.2BInsuranceLearning Tools&ResourcesHealth PlatformCrypto&DeFiMortgages&LendingWealth ManagementSearch,Buy&RentLogistics DeliveryFood Logistics&DeliverySporting0%-20%-40%-60%VC Funding Growth by Sub-Industry,2022 vs 2021-37%-37%-41%-44%-48%-59%-61%-62%-62%-74%VC Funding Growth by Sub-Industry,2022 vs 2021InsuranceLearning Tools&ResourcesHealth PlatformCrypto&DeFiMortgages&LendingWealth ManagementSearch,Buy&RentLogistic DeliveryFood Logistic&Delivery Sporting-74%-62%-62%-61%-59%-48%-44%-41%-37%-37%Page/12 The number of IPOs,and amount of capital raised from going public,collapsed in 2022.Source:Dealroom.co Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MDONECombined IPO amount in 2022 view onlineH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Number of IPOs in 2022 view online2015201620172018201920202021202220152016201720182019202020212022$60B$40B$20B15010050$55.5B$5.9B14834-89%-77 22202120202019201820172016$60B$40B$40B2015$55.5B$5.9B-89 2220212020201920182017201615010050201514834-77%Page/13 Consolidation season.2022 was the most active year yet for marketplaces acquisitions,with 120%growth in number over 2021,while acquisition value dropped 51%.Source:Dealroom.co Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MDONECombined acquisition amount in 2022 view onlineH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Number of acquisitions in 2022 view online2015201620172018201920202021202220152016201720182019202020212022$60B$40B$20B1000500$80B$73.3B$35.6B-51% 120E41kCombined acquisition amounts in 2022 view onlineNumber of acquisitions in 2022 view online2022202120202019201820172016$80B$60B$20B2015$73.3B$35.6B-51 2220212020201920182017201610005002015454$40B1000 120%1Understanding Deep Tech2The state of European Deep Tech 3 Deep Tech segments to watch4Accelerating European Deep Tech2Regional comparisonPage/15 North American and European investors and startups have steadily increased their interest in marketplace startups.Source:Dealroom.co Wealth management platform$1.4BTrading market maker$1.2B Payments platform$1.0BBaaS$620MInstitutional crypto platform$550MSME finance486MEthereum app and infrastructure builder$450MEthereum scaling and infrastructure$450MCrypto exchange$400MDONEGlobal marketplace VC funding by investor location view onlineH1 2017H2 2017H1 2018H2 2018H1 2019H2 2019H1 2020H2 2020H1 2021H2 2021H1 2022Global marketplace VC funding,by company location view online20172018201920202021202220 00%Europe North America Asia Rest of World Europe North America China Rest of Asia Rest of World Undisclosed201720182019202020212022 200 1720182019202020212022 8(%38P people),grownups(500 people)and result in big companies,like Klarna or Coinbase.Only companies founded since 1990 are included in this report.Source:Dealroom.co.DoneDone

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毕马威：零售业微妙的平衡（2023）（英文版）（15页）.pdf

How to navigate the interplay between people,planet,and profit in the retail industry an outlook on the key themes shaping the retail sector following NRF Retails Big Show 2023Retails delicate balance February have proven their resilience time and again,and they are poised to do the same in 2023.However,understanding the interplay between a growing set of tensions shaping the industry can help retailers do more than merely survive strong headwinds.Economic and geopolitical challenges that began in 2022 have spilled over into the new year.Spreading global inflation means households have less buying power and business margins are under pressure.Tighter monetary policies from central banks have increased the cost of capital.And recession albeit softer than anticipated is on the horizon in many economies.1 To claim that the world needs retail to prevail against these latest headwinds is not hyperbole.In every country,the industry is among the largest private sector employers,the primary source of food and other necessary goods,and a major influence on natural and other resources all along the value chain.Nowhere was the size and breadth of the industry more visible than at the gathering of more than 35,000 professionals from 75-plus countries in January for NRF 2023,2 the National Retail Federations Big Show conference and largest global retail event.Despite the obvious challenges,retailers are just as excited as ever about the future of the industry.With ongoing margin compression and decreased access to affordable capital a topic often referenced during NRF 2023,retailers are considering how to afford and target investing for the future.At the same time,they spoke with passion from the conference stages about exploring new technologies and business models,smoothing the consumer experience,and acknowledging their sustainability and other environmental,social,and governance(ESG)responsibilities.For retailers to continue their growth trajectory,they must recognize the high-level forces at play in the industry,and the tensions between them.These tensions and harmonies include protecting margins and growing under harsh economic realities;the rising importance of people,from consumers to employees;and the new reality that sustainability cant be set aside when market conditions take a turn for the worse.People take precedence in 2023While the“three 3Ps”of people,planet,and profit were all widely addressed at NRF 2023,there was one clear theme at the top of the retailer executive agenda:people.True,the effort to win the consumers attention and loyalty continues to dominate conversations,especially as retailers try to grow market share in a more challenging market environment in 2023.But the spotlight that has shone on retail employees since the COVID-19 pandemic is still bright.What many thought were temporary conditions at the height of the pandemic now appear to be more structural,as labor shortages and the accompanying wage inflation continue,the expectations of the role of retailers in communities have increased.Retail leaders are having to adapt their thinking around talent management,recruitment,and corporate culture.To help combat attrition,more retailers have introduced policies and benefits to support employee health and well-being.Theyre also launching new training and upskilling programs that can both engage employees and help fill new roles with existing employees.New technologies in the hands of employees and direct automation,on the retail floor or within the supply chain,allow retailers to do more with less.Kiosks,self-checkout and returns,automated distributions centers and many more efficiencies will become commonplace.The divide remains between corporate and front-of-store employees which was exacerbated when the pandemic created a stark contrast between those who could and could not work from home.However,the unique value of the in-store employee continues to rise,with front-line workers becoming authentic key opinion leaders(KOLs)with ability to influence consumer buying behaviors.Paul MartinChair Global Retail Steering Group&Head of Retail UKKPMG in the UKIsabelle AllenGlobal Head of Consumer&RetailKPMG InternationalRetails delicate balance 2 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.To help address the many influences or“themes”creating tensions within the retail industry this year and beyond,we developed a framework to help guide retailer discussions and inform C-suite decisions.Board directors and executive teams can use the framework to assess their organizations tensions and harmonies and find their unique point of equilibrium between people,planet,profit.With the insights generated,retail leaders can better protect profitability,establish business priorities,and find opportunities for sustainable growth.Where is your companys point of equilibrium?3Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.People.Planet.Profit.The traditional“4 Ps”of product,price,place,and promotion that have underpinned the marketing mix driving retailers were very much alive in the NRF conversations.However,taking a more holistic view,we believe all of the influences shaping the retail industry today can be framed along three high-level forces:people,planet,and profit.Within the“three Ps”are nine themes pushing and pulling at each other to impact retailers:employees,consumers,other stakeholders(including shareholders),sustainability,society,regulation,profit protection,growth,and new business models and innovation.PeopleRetail is a powerful force,serving as one of the largest private sector employers globally and providing entire nations access to goods and individuals with their first job.Retail companies impact millions of lives in different ways and ideally,they leverage diverse talent while ensuring equity and inclusion across their workforce and delivering on their responsibilities to consumers.Likewise,these and other stakeholders influence retailers through purchasing power,investment,and regulation.Employees Attraction and retentionLiving wage,benefits,hybrid work,organized labor,upskilling and training,access to technology,physical and mental health,turnover,staffing shortages,immigrationConsumers Rapidly shifting demandsconsumer-centricity,generational preferences,data analytics,ESG focus,privacy and cybersecurity,unique experiences,brand loyaltyOther stakeholders,e.g.,shareholders,policymakers,influencersManaging relationshipsShareholders,activists,suppliers,government agencies,policymakers,financial institutions,traditional media,social media influencersPlanetPlanet and corporate health are intertwined.Climate-driven events have potential to impact everything from fixed assets and employee safety,to the ability to operate altogether.Retail companies are critical to preserving the environment and biodiversity by reducing the negative effects of their manufacturing,packaging,distribution,and other aspects of the value chain.Consumers increasingly reward those companies that commit to protecting the planet,and all stakeholders demand demonstration of promises kept.However,environmental efforts and regulations are increasingly local,challenging global retailers to adapt.SustainabilityAs the end point of distribution in the value chain Sustainable and recyclable materials,reduced waste,less packaging,carbon-neutral production and distribution,sourcing and supply chain visibility,meeting consumer demandsSocietyThe retailers roleCollaboration with communities,economic development,education and skills development,employment,cost and access of goods,disaster relief,public safety RegulationProof of commitmentIncreasing ESG reporting requirements,traceability and governance over vendors and partners,communications with stakeholders,brand and valuationProfitWhen consumer demand softens,retail companies have a growing menu of tools for preserving margin,most of them short-term.More often though longer-term projects especially those that will deliver structural benefits often connected to large-scale technology improvements are shelved sacrificing future benefits and the ability to gain market-share.In addition,balancing profitability and commitments to people and planet are critical.Margin ProtectionReliabilityEfficiencies,operational effectiveness,and loss prevention driven by technology,pass-through of inflationary costs,inventory and supply chain management,real estate footprint,cost synergiesGrowthConsistency M&A,portfolio optimization,price optimization,promotional elasticity,revenue synergies,partnershipsNew business models and innovationConstant evolutionChannel convergence,social commerce,metaverse,augmented reality,automation,artificial intelligence,cloud,shedding or reimagining retail space,alliances,eco-systems4Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Retail tension frameworkRetailers must perform a balancing act,addressing each individual theme across the nine topics,and understanding the interdependencies without creating a detrimental impact on others.Successful leadership teams distinguish themselves by taking a multidimensional rather than linear approach to the challenge,counterbalancing the tensions by actively seeking the related harmonies.Insights for better decision making come from gaining a deeper understanding of the countless connections and contradictions and their resulting impact on the industry.EmployeesConsumersOther stakeholders(e.g.shareholders,policymakers,influencers)SustainabilitySocietyRegulationMargin protectionGrowthNew business models and innovationPeoplePlanetProfitEach retailer has unique tensions and harmonies depending on how the organization addresses people,planet,and profit.As such,striking the balance between the“three Ps also is a unique proposition as the retailer stretches and pushes the framework in different and often-lopsided directions to find the point of equilibrium and ultimately,the companys purpose.5Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.As an example of how to use the framework in the planning and decision-making process,we have identified three of the most important combinations that many in the retail industry face this year and brought them to life with insights from guided conversations among our global retail professionals,observations from NRF 2023,and our work with retailers around the world.Three key tensions for retailers in 2023PeoplePlanetProfit6Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Profit&PlanetMargin Protection and SustainabilityThe retail industry continues to be one of the most powerful forces in the world,with the global reach to effect meaningful progress on the environment and society at large.At the same time,retail profitability has declined as much as 50 percent in many of the major markets over the last 10 years,2 and currently,margins are experiencing further increased pressures as costs associated with goods,labor,capital,operations,consumer acquisition,and other business expenses have skyrocketed.Retailers cant simply pass these costs along to consumers through higher prices for competitive reasons,but also because they feel a societal obligation to their consumers and communities.This situation is questioning the focus on sustainability as the transition to more sustainable practices is costly unless they are embedded in the whole value creation model.Retailers will need to constantly evolve,adopting new business models and strategies working across the entire“farm to fork”value chain that will allow them to deliver on the promises that they have made to ALL their stakeholders.More and more non-food retailers are introducing resale business models.The resale business model is moving from consumer-to-consumer online marketplaces and thrift shop to shop floor and retailer e-commerce sites.In the near term when wallets are shrinking,consumers are looking for bargains.But resale is a long-term trend driven in great part by the younger generations desire to support a circular economy.Even though a growing resale market has the potential to cannibalize new product sales,more than 100 retailers sell previously owned merchandise to capture some of this market,according to NRF.1 During her interview at the conference,Saks Off 5th President and CEO Paige Thomas discussed the retailers partnership with Rent the Runway and others to sell used fashion as one part of its strategy to add new capabilities and meet consumer demands.3 The company confirmed in a survey that resale would be welcomed by its consumers:80 percent said they are open to buying secondhand from a retailer that can authenticate and curate clothing in excellent condition.4 H&M-owned Cos brand has created a marketplace for consumers to buy and sell its used fashions,for which Cos takes a commission.5 Among furniture retailers,IKEAs Buy Back&Resell program gives store credit for used goods they resell on site already assembled by another consumer.6 Retailers cant simply pass higher costs along.Or can they?ESG is ubiquitous in the investment community,yet theres a limit to how much investors expect companies to commit to ESG at the expense of profitability.And theres a limit to how much consumers will pay,or expect to pay,for a retailers sustainable practices.One-third of consumers globally say they are willing to pay more for sustainable products,according to one survey.Yet the same percentage say sustainable alternatives are simply too expensive,and that inflation has negatively affected their buying power.7 62%of Gen Z and millennial consumers shop for secondhand items before purchasing new goods and46%consider resale value before buying.127%The global secondhand goods market is expected to grow by 2026 3x faster than the global apparel market.Source:thredUP 2022 Resale Report Still,a handful of companies including Patagonia built loyalty among environmentally focused consumers.Others can try to connect the sustainability agenda and profit protection agenda to deliver on both efforts,such as cost optimization opportunities like range resets and supply chain network reengineering measures to switch from far-shore to near-shore sourcing.Products may live a longer life.Another way retailers are addressing potential waste and reducing their carbon footprint is through services to rehab used goods for their owners.Nike opened pop-up stores to whiten consumer sneakers;Levi Strauss&Co.helps consumers understand how to extend the life of a pair of jeans through clear and sustainable“wash less”directions as well as offers in-store tailoring to repair or repurpose vintage denim.8 Meanwhile,in the UK,Sainsburys is tackling food waste through a London pop-up store demonstrating storage and other techniques to keep goods from going bad.9 Sustainability also is top of mind for the supermarket industry in Brazil,where 91 percent of grocery executives surveyed said they consider ESG when discussing business growth and continuity.10Risks and opportunities are local.While regulatory and market frameworks for sustainability disclosures are becoming more similar,requirements are changing all the time,and theres currently no overall global ESG standard.The importance consumers place on sustainability also varies greatly from one market to another,therefore companies willing to stand globally for a consistent purpose regardless of local differences could have an even greater impact on the planet consumer use and post-use represents up to 90 percent of Scope 3 emissions for consumer-facing companies.11 Retailers have to keep an ear to the ground in the markets in which they operate to anticipate government and regulatory change,and uncover the business opportunities driven by that change.By engaging the local community,retailers may be able to reduce some of the tensions that stand in the way of greater environmental impact and greater profitability.Actions are louder than words.Increasingly,consumers have taken to social media to punish companies for greenwashing or virtue-signaling.The North Face and Columbia were among the outdoor apparel retailers called out at NRF 2023 by the executive director of the Reverse Logistics Association as companies that have“sustainability in their ethos.”Their encouragement of building products for long life,donations of items they cant restock,and other practices are“more important than just saying youre sustainable.”12 At the same time,its important for retailers to be authentic about who they are and transparent about the actions that prove their authenticity.Consumers will still reward companies who are honest about their shortcomings but stay true to their mission.7Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.People&PlanetPeoplePlanetProfit8Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Employees and SocietyFor thousands of years and across many civilizations,retail has been an integral part of society.The marketplace today is not so different from that of ancient Greece or Rome;it continues to serve as the hub of the community.The industry also is often the largest public sector employer in many countries and an integral part of many local communities,providing entry-level jobs and flexible working arrangements that serve the needs of the people who live there.And,many retailers focus charitable activities on local needs.However,retailers can miss opportunities in that intersection between employees,consumers,and community.In fact,a strong corporate purpose can help drive consumers,attract and retain talent,and sustain business,especially during an economic downturn.Talent is scarce and expensive.Nearly all industries globally face a talent shortage following the onset of the pandemic,but retail headcount shortages are clear to everyone who has waited in long checkout lines,wandered a store looking for help,or tried to open a locked door as store hours shortened.The UK retail sector for example is claiming significant labor shortfalls.Some grocery retailers are on average missing 15 percent of frontline staff.13 Behind the scenes,retailers are trying to fill technology,warehouse,logistics,and other critical job functions.A sub-optimal consumer experience and engagement directly impacts sales.But at the same time,the need to offer higher wages to attract and retain employees and address inflationary driven pressures have eaten into already slim margins.Therefore,headcount reduction is often a natural cost optimization approach in the sector,although the longer-term implications are often under-estimated.Employees are one of retails most under-utilized assets.In the UK and United States,retail is the number-one and number-two employer,respectively.Those employees who also are consumers have the potential to be the most prominent marketing ambassadors and consumer insight agents for the organizations they represent.Utilizing retail employees to promote the company can have a positive impact on marketing expenditure while at same time enhance the authenticity of the brand.However,if employees are to be effective long-term assets,they have to be treated well paid fairly,engaged,and trained.Willingly or reluctantly,retailers have taken on the role of societal change agents.Companies recognize that to focus on all consumers,their employee base should understand and mirror their consumer base.More have implemented diversity,equity,and inclusion(DEI)programming for their consumer-facing employees in recent years.Some retailers also are wielding their buying power.In the US,Target committed to invest USD2 billion in black-owned businesses and place more of their products on its shelves.14 Others tackle current events,such as Chobani founder and CEO Hamdi Ulukaya who told NRF attendees that a simple but powerful way to help global refugees is to hire them.In return,Ulukaya said,his company benefits from their creativity,talent,and loyalty.15 Retailers are core members of the community.The retail industry touches the entire population and uses its breadth to make a difference in local communities.Lowes CEO Marvin Ellison was honored at NRF 2023 with The Visionary Award for Change,a recognition for the US home improvement retailers USD100 million community investment and other programs.16 The NRF Foundation also honored executives from Gap Inc.,Ministry of Supply,Steve Madden,The Home Depot,and Walmart on its People Shaping Retails Future 2023 list for their community work.17 Retailers also provide material goods and volunteer assistance in times of crisis,in addition to monetary investment.During the height of the pandemic,non-essential retailers and CPG companies diverted their raw materials and repurposed production lines to make essentials such as masks and antiseptic hand cleansers.18 Finally,many retailers including Walmart,Target,and Kroger reiterated at NRF 2023 the importance of their role as an employer,including the importance of the sector as a major provider of entry-level jobs and an onramp to successful careers.90%of grocery stores in Brazil hire from surrounding communities and81%implement initiative to collect donations of perishable food for vulnerable groupsSource:KPMG and Brazilian Association of Supermarkets,“ESG Diagnosis Survey of Brazils Supermarket Industry,”9Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.People&ProfitPeoplePlanetProfit10Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Employees;Margin Protection;and Business Models and InnovationEmployees are one of retails most important assets,but far too often they are considered first as a cost center.Attracting,retaining,and incentivizing talent is a considerable challenge with acute labor shortages across many countries.Retailers may view a smaller workforce as helpful for maintaining margins,especially while economic uncertainty continues but at what cost to consumer experience and growth?Here we see the culmination of three themes creating tension and harmony.Technology investment should remain a priority,releasing pressure on the bottom line by increasing efficiencies and productivity from a shrinking workforce.Just as importantly,technology can free employees from manual tasks and give them the time and information they need to enhance the consumer experience and generate loyalty.The COVID-19 pandemic accelerated the fact of showcasing the fact that retail employees were front-line“critical”workers for the smooth running of society and,ultimately,irreplaceable leaders on the consumer journey.At the height of the pandemic,the industry was focused on increasing automation to replace people and improving logistics to deliver goods from warehouse to home,skipping the storefront.But when stores reopened consumer,who clearly valued both the physical and digital channel returned with demands for more personalized and immersive experiences.Consumer-facing employees are needed more than ever but often lack the proper tools and incentives to give consumers what they crave.Automation and artificial intelligence(AI)represent more bang for the retailer investment buck.Ongoing labor shortages may require greater investment in these technologies to make up for permanently smaller workforces,although the potential benefits are much wider.Retailers can better leverage their data in real time to focus on the greatest revenue opportunities or make decisions about shedding businesses if conditions shift quickly.And intelligent technologies applied to supply chain management still a top pain point for most retailers can improve visibility and efficiency,including around the last mile of delivery.Omnichannel strategies require technology to empower employees in the storefront.When placed directly into the hands of retail employees,technology has tremendous positive impacts on profitability through improved consumer service.The same technology and training for all employees,whether they sit in an office or stand at the register,helps maintain a quality experience for consumers from web to store.A significant number of exhibitors(from over 1,000 at the event)hosted discussions about omnichannel at NRF2023.Technology investment has a spillover effect.When employees benefit from new technologies,the rest of the company can as well.Ideally,investment in technologies including automation increases efficiencies and frees employees from repetitive processes to better serve consumers.Higher conversion rates,increased units per transaction,and return visits measure the impact.Employees who are engaged in more interesting work also tend to stay.A Lowes technology executive said at NRF that an application the retailer deployed to the stores associates reduced mundane tasks 20 percentage points,allowing them to improve consumer service making their jobs not only more efficient,but“more exciting.”19 Technology improvements like these in turn can reduce recruitment needs and better position retailers to upskill employees,a virtuous cycle.Upskilling presents a strong reward-for-investment ratio.Recruiting,hiring,and training new employees can cost more than better leveraging the personnel on hand.Additionally,training that folds employees into the culture,gives them confidence and support,and aligns corporate and workforce goals can help prevent attrition.Some companies have introduced gamification into their training modules for an improved experience.Employee KPIs need realignment.If conversion and consumer retention become top KPIs,for example,compensation including commission and profiting share are motivating tools.Unfortunately,many retail employees sit in silos left over from when there was a much more solid line between brick-and-mortar and e-commerce businesses,as well as between retail floor and office employees.Performance goals and incentives vary from one team to another.Technology budgets also still reflect this past,with greater allocation given to online initiatives without thought.Change management programs can help develop one workforce with a unified and consumer-centric culture,and a common set of KPIs that roll up to high-level corporate initiatives.Updated trainings can help ensure the widest number of employees are comfortable with new technologies,fully leveraging the tech investment and allowing the company to provide the seamless,omnichannel presence consumers are yearning for.51%of US retailers equip store associates with mobile devices to assist consumers 11Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.but only 13n check them out.Just 10%have kiosks for self-checkoutSource:Omnichannel Retail Index 2022,OSF Digital In summaryRetailers can find equilibrium through a fourth“P”:Purpose12Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The original“four Ps”of retails mix product,price,place and promotion were introduced in the 1950s.Their relevance remains and may even gather increased attention in todays market.While still critical,we believe its more effective to see the interaction between them when rolled up to people,planet,and profit.The ability to identify and manage the tensions between these areas while embracing harmonies defines a business that is set up for future success.Finding the right equilibrium across these tensions,and ensuring the integrity of retail business is not distorted by these forces,will vary by organization.This effort to reconcile tensions and harmonies translates into the“purpose”of organizations.Corporate purpose the well-worn construct to prioritize goals by first defining a companys“reason to exist”once focused primarily on maximizing shareholder returns.Now that managements ability to drive long-term value increasingly involves addressing all stakeholder needs,people and planet have joined profit as considerations in establishing purpose.Likewise,a companys purpose helps it reconcile the tensions between the three Ps.Purpose gives retail companies permission to implement a business model that pulls in one direction or another.It allows retailers to make choices relevant to their unique cultures,markets,and industries,and to be evaluated on their consistency and adherence to the direction chosen.With the framework in hand and purpose as a guiding light,retail leaders can better determine the strategies,activities,technologies,and talent that will sustain profitability and lead to long-term success.How KPMG can help Our C&R professionals from across the globe work with consumer and retail companies to navigate the evolving market and identify opportunities for sustain-able growth.With client-centric,industry-focused advisory,tax and audit services,we work with clients to drive greater shareholder value,and embed and sustain positive change.Below is a select sampling of how KPMG can support client needs specifically centered around the 3Ps themes.For additional services,capabilities and insights,please visit Employee:Journey mapping,Voice of the Employee,People&change,People tax&employment Law Consumer:Insights,Marketing optimization,Retail loyalty programs,Single view of the consumer including CRM implementation Shareholders&Regulators:Capital markets advisory,Economics&regulatory Advisory Planet Sustainability:ESG Advisory including materiality assessments,Climate change impact Society:People&change Regulation:Economics&regulatory advisory Profit Protection:Range&assortment optimization,GNFR Procurement advisory,Operational advisory(including Supply chain),Technology transformation and Store footprint optimization Growth:M&A,International expansion,Technology advisory Business model&innovation:Operating model design13Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.End notes1 N RF,“Sustainability on the store shelf,”January 9,20232KPMG analysis3 R etail TouchPoints,”NRF 2023:Saks OFF 5TH CEO Foresees Smooth Sailing for Off-Price Despite Choppy Economic Waters,”January 16,20234 R etail Dive,“Saks Off 5th partners with Rent the Runway,”July 28,20225 V ogue,“Why H&M is jumping on resale at Cos,”September 3,20206 G reenmatters,“IKEA Makes Furniture Buy Back&Resell Program Permanent at 37 US Stores,”March 31,20227 S imon-Kucher Strategy&Marketing,“Environmental sustainability in business,”20228 L evi Strauss&Co.9 S ustainable Brands,Sainsburys Sainsfreeze Pop-Up Will Show Brits New Ways to Reduce Food Waste,Save Money,”September 23,202210 KPMG Brazil,”ESG Diagnosis Survey of Brazils Supermarket Industry,”December 202211 W orld Economic Forum,”Scope 3 Decarbonization:The Consumer Opportunity”12 Multichannel Merchant,“Looking at Ecommerce Returns in a New Light,”January 18,202313 B RC,“Retail Jobs Continue Downward Trend,”December 13,202214 Target,“Target Provides Update on Commitment to Spend USD2 Billion with Black-owned Businesses and Announces New Media Fund Initiative,”May 10,202215 NRF,For Chobani CEO Hamdi Ulukaya,hiring refugees is a no-brainer,”January 17,202316 N RF,“NRF Announces Lowes CEO Marvin Ellison as The Visionary 2023,”December 12,202317 R etail TouchPoints,“Walmart,Home Depot and Gap Execs Honored by NRF Foundation,”December 27,202218 W orld Economic Forum,”From perfume to hand sanitiser,TVs to face masks:how companies are changing track to fight COVID-19,”April 13,202019 Retail TouchPoints,“NRF 2023 Spotlights Profitability,Workforce Enhancements and Media Network Opportunities,”January 24,202314Retails delicate balance 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Contact usWhere does your organization see tensions and harmonies between people,planet,and profit?We look forward to sharing insights and ideas with you.AuthorsLisa Bora National Firmwide Lead Partner Raetail&Leisure KPMG Australia E:.auPuneet MansukhaniPartner,Digital AdvisoryKPMG in India E:Thomas FyenPartner,Lead Consumer&RetailKPMG in Norway E:thomas.foyenkpmg.noPaul MartinChair Global Retail Steering Group&Head of Retail UKKPMG in the UK E:paul.martinkpmg.co.ukFernando A.GamboaPartner Consumer&Retail Sector Leader,Brazil&SA KPMG in Brazil E:.brDuleep RodrigoAdvisory Industry Leader,Consumer&Retail KPMG in the USE:Global C&R LeadershipIsabelle AllenGlobal Head of Consumer&RetailKPMG InternationalE:Anson BaileyASPAC Head of Consumer&RetailKPMG ChinaE:Allan ColacoPartner,Audit KPMG in the US E:Linda EllettPartner,UK Head of Consumer Markets,Leisure&RetailKPMG in the UK E:linda.ellettkpmg.co.ukStephan FetschEMA Head of Retail&Consumer GoodsKPMG in GermanyE:Robert HessStrategic Alliances,AdvisoryKPMG International E:Matt KramerNational Sector Leader,Consumer&Retail,Advisory PartnerKPMG in the US E:Raymond LamCountry Sector Head,Consumer&RetailKPMG ChinaE:Nicola LongfieldPartner,Global Deal Advisory Consumer&Retail LeadKPMG in the UK E:nicola.longfieldkpmg.co.ukWilli SunHead of Advisory,Consumer&Retail,KPMG China E:Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.Although we endeavor to provide accurate and timely information,there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.KPMG International Limited is a private English company limited by guarantee and does not provide services to clients.For more detail about our structure please visit KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.Designed by Evalueserve.Publication name:Retails delicate balance|Publication number:138584-G|Publication date:February 2023

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埃森哲：2023年银行业十大趋势报告（英文版）（30页）.pdf

Top 10 Trends for 2023The gravity of rising ratesAccenture BankingBanking Top 10 Trends for 20232The five key forces of changeThese five key forces of change are manifest in the ten trends which we believe will have a profound influence on banking in 2023 and are likely to continue to shape and drive the industry for many years to come.ForewordTotal Enterprise ReinventionThe Metaverse ContinuumThe Ongoing Technology RevolutionTalentSustainabilityCompanies are making the strategic decision to continuously reinvent themselves by digitally transforming every part of their business with technology,data,automation and AI.They are breaking down internal silos and connecting functions and data across the value chaincreating new ways of operating and serving customers and their people,and discovering new business models and growth opportunities.With this strategy,banks can set a new performance frontier for themselvesand for the industry.Leading banks are creating stronger workforces with a three-pronged strategy:they access talent,inside and outside the organization;unlock the potential of existing talent with technology and by developing their skills;and create new talent by looking at peoples potential beyond their current skills.Sustainability spans environmental,social,and governance(ESG)issuesfrom transitioning to a zero-carbon economy to human rights,and beyond to inclusion and diversity.When companies and governments embed sustainability into their operations,they can create real value and make a difference.This is a fast-evolving spectrum of digitally-enhanced worlds,realities and business modelsstretching from a digital layer on reality to completely virtual environments that offers every enterprise opportunities for change and growth.Banks should start to create a strategy now to realize the business potential of the metaverse continuum tomorrow.New technologies and expanding IT are disrupting all aspects of business,driving the next waves of innovation that are bringing new approaches and solutions to businesses in every industry.Banks should prepare themselves to harness these new forms of technology and computing for competitive advantage.Low rates bankings Big BangForces of change are reshaping banking.The last time the banking industry experienced steeply rising rates off a very low base was back in 2005before the launch of the iPhone,which seems like an eon ago.Over the past 17 years low rates have had the effect of a Big Bang,shattering the fundamental equation of banking(deposits drive lending power),severing the connections between related offerings,and dramatically disrupting valuations and markets.3Introduction Banking Top 10 Trends for 2023Lenin said there are decades when nothing happens,and there are weeks when decades happen.This year is likely to be one of those weeks.Banks are having to manage not only macro-economic and geopolitical change,but also profound,longer-lasting shifts that are driven by technological innovation.At Accenture we believe these shifts are an opportunity for banks to reimagine and reposition themselves for the future.We call them the five key forces of change.They are reshaping industries,breaking down barriers to entry,and blurring industry lines.They also provide much of the energy behind the trends that are affecting banking in 2023.Banking returns to its regular orbitFor many years,low and even negative rates meant money was effectively freeand worth very little to banks.A deposit balance of$25,000 is worth$720 a year in income when the rate is 3.75%;when its 0.25%it earns only$29 a year.1 Until the financial crisis of 2008/9,interest rates were the gravitational force that kept bankings integrated deposit/lending model working dependably.Without this gravity,powerful distortions shook the industry.Banks were deprived of a major source of revenue,causing them to shift their focus from the totality of customers financial needs to isolated products that continued to generate fees.This in turn strengthened the product silos within most banks.At the same time,the fintech universe exploded.A multitude of brilliant innovators with sky-high valuations burst onto the scene,awash with cheap capital and prioritizing scale over financial returns.Ignoring time-honored business models,they targeted only particular parts of the value chain.The result was an eruption of innovation and competition.The customer experience was impacted profoundly.Consumers wanting to take advantage of the new value that was being created had to expand their portfolio of financial service providers and construct their financial journey using a mix-and-match of the best products drawn from the various silos.Most of the trends shaping banking in 2023 are affected,if not actually caused,by the return of positive interest ratesthe gravity that keeps the industry in a predictable orbit.”Michael Abbott Senior Managing Director Global Banking LeadThe gravity of rising ratesBanking Top 10 Trends for 20234Some players took things to the extreme,creating money from nothing:minting crypto coins and NFTs.The value was in the eye of the beholderuntil it wasnt.Most of the trends shaping banking in 2023 are affected,if not actually caused,by the return of positive interest rates.Gravity has been restored,and the constellation of banking products are drifting into a more familiar and predictable orbit.Deposit accounts are once again fueling the industry and balance sheets suddenly matter again.The year ahead wont be without its surprises and disruption;it definitely wont be boring.The revival of interest rates may not herald a return to business as usual,but it will certainly be welcomed by most banks.Harnessing changeLeading banks recognize they need to accelerate changenot only to compete but to find new paths to growth.The five key forces of change which Accenture has identified as having the greatest impact on the transformation of organizations and business as a whole are gaining momentum.For C-suites looking to forge ahead,these forces are showing the way.Banking Top 10 Trends for 202351Rising rates catalyze product innovationThe low,static interest rates that have dominated global macroeconomics for the past decade and a half may have been appreciated by businesses and homeowners,but the benefits for banks have been limited.Deposits generated little profit and depositors either received minimal interest or even had to pay to keep their money in the bank.Banking Top 10 Trends for 20236The absence of interest rate competition caused bankings drawbridge to come clattering down,allowing a flood of digital-only banks to rush in.It also caused banks to shift most of their attention to those products that were still generating revenue.In the process,however,they became less customer-centric,more siloed and less innovative.All of these made it more difficult for banks to drive total enterprise reinvention.For banks that have spent many years adapting to a zero-gravity environment in which many of the industrys natural laws seemed to have lost their influence,the return to earth will be welcomed.What,in practical terms,does it mean for banks in 2023?While most deposit-taking institutions will benefit from the increase in rates,all deposits are not created equal.The big prize in the current environment is sticky deposits with the lowest possible deposit beta*.Stickiness used to be easy to achieve,but in recent years many of the barriers to switching have been weakened by technology.Digital banking has eliminated the personal connection.Comparison sites like Bankrate in the US,MoneySuperMarket in the UK and BankBazaar in India make it easy for customers to move their money in pursuit of the best rates.Customer inertia is no longer enough to ensure retention.For these reasons,rising interest rates will be the rocket fuel that ignites banks product innovation.Banks will quickly scrap their product silos and redirect their focus to the totality of their customers financial needs.Innovation will come in the form of offerings similar to that of Amazon Prime:a personalized,integrated set of products and services that deliver a value proposition amplified by a multiplier effect.These innovative offerings are likely to erode silos and draw on both sides of the balance sheet.One example is Bank of America,which uses intelligence to wrap a tailored collection of deposit and credit products around the customer and then offers an integrated loyalty program that recognizes the total value of each customer.Both parties benefit,with the bank reporting close to a 99%retention rate.2 Discovery Bank in South Africa helps customers manage their finances,tracks their progress and rewards those who do well with a wide range of offers,from discounts on healthy food purchases to reductions on airfares and holiday accommodation.3 This is just the start.Like Amazon and other bigtechs,banks are likely to continually add features and new capabilities that scale as the customer relationship deepens:the more you use,the more you get.We expect the innovators to be more creativeperhaps,instead of a toaster for opening a new bank account,customers will get a discounted Netflix subscription.High rates will radically change competitive strategies in 2023.Expect the heat to be turned up on hot money deposits(the kind that are most likely to move in search of better returns).Certainly,the most dangerous place for a bank to be in 2023 will be at the top of Bankrates list of competing deposit-takers.Expect to see a surge of M&A in the months ahead,with the most innovative banks that enjoy the most stable deposits snapping up their hot-deposit counterparts.The banks that are likely to succeed over the next year and beyond will be those that bring their siloed products back into an integrated offering,fueled by deposits,that powers greater benefits by addressing the totality of each customers needs.”*Deposit beta is the portion of a change in the prevailing interest rate which a bank passes on to its customers.It is a measure of the sensitivity of deposit pricing to monetary policy benchmark rates.7Banking Top 10 Trends for 20232The renaissance of the branchPrior to the pandemic,few banks spent time wondering whether their branch network was a blessing or a curse it was simply an unavoidable part of doing business.Then the unthinkable happened and virtually all branches were shut.Today,most banks are asking:what is the future of the branch?Banking Top 10 Trends for 20238In 2019,banks worldwide spent more than$650 billion maintaining their branch network.4 By our analysis,in the markets that account for roughly three-quarters of global GDP,this translated to about 84 basis points of the average deposit held in 2019 by banks in these markets.Reducing the geographic footprint and encouraging customers to use only the banks digital channels had obvious cost benefits.However,it came at the expense of personal relationships and a deeper understanding of the customers needs and intent.In an environment where deposits have value to the bank and where some customers still believe their money resides in their local branch,these relationships matter.Treating customers holistically,individually and intimately can make a huge differencewe believe the value,in terms of creating loyalty and easing the need to compete on price,is significantly greater than the cost.The pandemic showed us that without face-to-face interaction,most banks struggle to maintain close,loyal relationships.Digitalization made customers more self-reliant,but at the same time it eroded banks differentiation,facilitated switching and generally made banking a lot less personalthe opposite of what is needed to succeed today.The year ahead will see a renewed focus on branches.Many banks will follow the lead of JPMorgan Chase,which 18 months ago reported it was more than halfway through its 2018 plan to open 400 branches in new markets across the US by the end of 2022.5 Banks will be inviting customers back and welcoming them home.More importantly,they will be shifting their emphasis from meeting specific needs and selling individual products to talking about improving customers general financial wellbeing.Banks will use their branches to learn more about their customers,show interest and empathy,offer advice and build loyalty.This wont be a pivot away from digitalization;rather,a horses-for-courses approach that recognizes the strengths of each channel.Customers today do most of their banking on their mobile devices,with only 3%of interactions happening face-to-face.However,an in-person meeting remains the preferred option when opening new products 27%of consumers said it was their first choice,ahead of mobile apps(22%)and websites(21%).6 The opportunity is to move beyond a marketplace where the value of a customer is equal to the sum of the products they use,to one where a multiplier effect is at work.This is where the branch comes into its own,but it will take a retrained and re-oriented workforce that is motivated,engaged and feels appreciated.It will also take a more tailored and purposeful customer journey than we saw before the pandemic.This journey will,in many cases,include non-financial products that help customers deal with challenges in areas like housing,mobility,e-commerce and more.Branches allow banks to offer lower deposit betas without seeing their customer bases taken over by comparison sites.However,achieving the right balance will demand a fresh look at where the branch fits into the banks overall customer experience.”9Banking Top 10 Trends for 20233The metaverse demystifiesIn 2023 the metaverse will not completely transform the banking industry.What will happen,however,is the metaverse will continue to mature.More banks will shift it higher up on their agenda,from a social and technological curiosity to a serious opportunity that warrants careful examination.Banking Top 10 Trends for 202310The metaverse is not new,but it is still obscure and difficult for many to get their heads around.While it is one of the five key forces driving change across all industries,banks have yet to come up with a definitive answer to the obvious question:how can we make money from it?Yet if the estimates are to be believedsome analysts have projected that the total addressable market will grow to$8 trillion in as little as the next eight yearsthen the opportunity is simply too big to ignore.7 Its significant that the natural evolution of the metaverse as a banking channel is following a similar playbook to banks move online and their adoption of mobile.However,its happening much faster.Many are still skeptical,but when mobile burst onto the scene,few thought it would be feasible to shrink banks online experiences into a space little bigger than the palm of their hand.Just as mobile did,so the metaverse is opening a new world of possibilities.We believe most banks will approach the opportunity with a four-step strategy:enable,engage,invent and imagine.At its most basic level,the metaverse enables banks to interact with their employees and customers in an infinitely richer environment.Just imagine a simulation where a branch team is totally immersed in responding to a bank robbery as it happensthere is no comparison between that and using conventional training media.The metaverse may be our best opportunity to put humanity back into banking.What if you could engage in a VR conversation with a customer in their living room,as Kookmin Bank does?Or show customers how they can adopt sustainability in all aspects of their lives,including their finances,as DBSs LiveBetter does?Or use gamified experiences to help young customers improve their financial literacy,as Ally Bank does with its Fintropolis?The potential is limitless.We cannot be certain how this new channel will evolve in the years to come or how it will reinvent banking,but few are disputing that the change will be rapid and far-reaching.This will be especially true for paymentsnot how we pay,but rather how we get paid.Trusted standards for acceptance will need to emerge and the form and method of payments will change:will we use a card to pay in the metaverse or will we AirDrop money to each other?These questions will receive a lot of attention from bankers in the next 12 months47%of them believe customers will use AR/VR as an alternative payments channel by 2030.8 Banking in the metaverse will deliver value.Its hard to imagine everything it will encompass and its still a way off,but the trajectory is emerging.The rapper Snoop Dogg bought land and built a virtual mansion on the Sandbox platform,after which a fan bought a neighboring plot for around$450,000.9 The question for bankers is:would you lend that$450,000?Would you insure the property?The revenue streams could be substantial,and with 400 million active monthly users10 and over 20 banks11 having already set up on the metaverse,someone is sure to grab the opportunity.The metaverse will be one of the biggest trends in banking for years to come.It wont be without riskthe legal and reputational pitfalls are certainly significant.But banks were invented to manage risk.So be curious,be bold and find out what this watershed technology has to offer.”11Banking Top 10 Trends for 20234Right culture,right talentBanks monolithic cultures have been shaken and exposed by recent events.The pandemic and the accompanying work-from-home upheaval did a lot more than dramatically accelerate banks technological transformation and eliminate employees commute.It also transformed how work is performed and managed,employees levels of autonomy,their expectations regarding flexibility and a work-life balance,and the sourcing of talent.Taken together,these pose an unprecedented challenge to leadership and the status quo.Banking Top 10 Trends for 202312Many of the positive changes that employees experienced as a result of the pandemic sit uneasily within banks current culture.Their rigid,siloed structures are straining as employees increasingly want to work within fluid,transient teams,acquiring new skills and making frequent changes to their career paths.Whats more,banks ambitions are being stunted by the difficulty of attracting and retaining the people they need.A global survey revealed in 2021 that more than 40%of employees were thinking of leaving their current jobs.12 Another found that financial services workers are more ambivalent(29%vs.12%)and less optimistic(24%vs 42%)than the global workforce as a whole.13 And a third study showed that only 10%of Gen Z and Millennials are interested in a career in financial services.14While these issues apply across the business,they are especially pertinent when it comes to priority workforces that make a difference to the banks performance.Revenue-generating roles such as wealth and corporate relationship management are obvious candidates for special attention,while sustainable finance is already experiencing red-hot demand.Many banks have responded by striving to do the familiar things better.This is unlikely to work.The ongoing digitalization of banks has shifted the balance of their skills profile by automating many routine clerical tasks and at the same time creating new roles requiring scarce specialist skills.While we are seeing many banks reducing the size of their workforce,they are also increasing the average cost of their employees.Their people are becoming more demanding,less acceptingand more likely to leave.This altered environment calls for a new mindset and a different approach.In the year ahead we expect to see more banks changing their talent strategy:acknowledging the realities of the employment market and taking a more deliberate approach to aligning talent with the demands of the business strategy.Successful employers will have a detailed workforce plan that changes the size,cost and skills of their workforce,and they will join up their strategies for sourcing,selection,mobility,development and retention.They will rethink their traditional vertical job hierarchies and experiment with cross-functional teams in which skills are pre-eminent.They will design fluid organizational models that support movement and progression,agile ways of working and seamless collaboration across silos.They will also take a fresh look at their talent costs,which are too high and too fixed.Addressing this within their existing work model has,over time,yielded diminishing returns;the alternative is to transform what work gets done and how.A growing number of banks,which in the past might have variabilized their manual-intensive functions by taking advantage of cost arbitrage,are now more likely to offload work that will simply go away over time.By acting now to get ahead of the inevitable,they can focus instead on strategic work.The banks technology strategy will,of course,be an increasingly important input to this plan.Banks would be a lot more effective at this if their leadership teams were more familiar with technology and the opportunities it bringsour 2021 survey found only 10%of banks directors had professional experience in technology.15 Banks would also benefit from appointing chief transformation officers and other business-oriented technologists who ask,about digitalization,not just how but why.Talentone of the five key forces of change which banks can harness to unlock their full potentialwill make ever-increasing demands on banks leadership in the months and years ahead.If it isnt given the priority it deserves,it will quickly assert itself as a burning platform.The pandemic has forever changed employees expectations.Bankings leadership and cultures need to catch up to the new demands of a more mobile,in-demand talent pool.”13Banking Top 10 Trends for 20235Risk everywhereWhen it became apparent that the pandemic was likely to hit their customers hard,banks globally set aside an estimated total of$834 billion in anticipation of a wave of credit losses.16 Toward the end of last year,despite having come through the pandemic relatively unscathed and in the midst of low global unemployment,they again made provision for an increase in delinquenciesby the end of September they had already set aside$318 billion,9%more than the same time the previous year.17 Clearly,banks believe risk is back.Banking Top 10 Trends for 202314The world has been confronted with geopolitical and climatic instability,energy shortages and a spike in inflation.Globalization is becoming increasingly unfashionable as governments shift their focus to protect national interests.The war in Ukraine is seeing many more people,across a wide front,gaining experience in the dark arts of cyber intrusion.Crypto has crashed.With rising rates and an impending recession,analysts are once again predicting that delinquencies will soar and put stress on banks balance sheets.Until now,banks relied on the truism that a rise in unemployment drives delinquencies and,ultimately,losses.Their response has been to turn to their collections departments,which are wired to dial for dollars.This time,with gravity returning to markets and the distortion of zero rates easing,things will be different.Homeowners in markets dominated by short-duration mortgages could face the prospect of their payments doubling.Political pressure will force many governments and central banks to look to their Covid playbooks to stabilize their markets.Banks will once again be expected to think differently and innovate quickly to prevent fire sales and perhaps even social unrest.In commercial real estate,Covid drove down utilization in many of the bigger markets from as much as 95%to below 50%.18 When the loans on these properties come due the risk assessment by banks and borrowers alike will be quite different than before,with opportunities like the conversion of unused business premises into residential units being considered.The drivers of auto financing are changing in similar ways,with affordability,embedded finance,subscription models and other trends combining to change both the level and nature of risk.As consumers tighten their budgets,expect them to arbitrage their options.The warnings that accompanied the launch of buy now,pay later at first seemed to be overstated.However,in 2022 it was reported that while the UK market had more than doubled in 12 months to 5.7 billion(US$6.7 billion),almost one in four BNPL users(and 35%of those aged 18-34)had failed to pay their installments on time.19 As inflation continues to choke household budgets,the collapse of these unsecured shadow lending markets cannot be dismissed.These new risks and challenges are forcing risk leaders to determineat high speedwhat the likely impact is on the banks strategy and operations.They need to take a more holistic,forward-looking scenario approach to identify which risks should be prioritized,what the appropriate responses are and what investments make sense right now.Banks,and the risk function in particular,will need to continue to evolve.In most cases today,the risk dimension is considered at the end of a process review.In the future,it will need to be an important input in the early stages when decisions are made about business and operating models,organizational structure,product design,data,talent and other critical issues.Looking specifically at the growing risk of loan defaults,banks that have honed their digital capabilities will be much better equipped to help their customers manage their financial obligations.This is when their investments in a superior customer experience,in behavioral economics and design-led thinking,and in digital collections will truly pay off.Banks that focus on helping customers solve their problems,rather than getting collections to dial for dollars,will significantly outperform their peersnot only by minimizing losses,but by strengthening their long-term relationships with valuable but distressed clients.”15Banking Top 10 Trends for 20236Data becomes a productThe abundance of data has led banks to imagine a glorious future where insight-driven decisions could be made in real-time,customers could be understood in unprecedented detail,and products and services could be personalized to game-changing effect.But so far,most banks have been unsuccessful in using data and core technologies like cloud and AI to drive innovations that would make them more relevant to their customers.Banking Top 10 Trends for 202316Data lakes and central data teams were created to facilitate insight-driven decisions,yet in many cases they have become bottlenecks choking the flow of insights to the business.The demands of maintaining the data and its repositories leave most data teams little bandwidth to respond to the businesss data requests.More importantly,banks data is often siloed by line of business,by function and by channel.This not only makes data management more complex and costly,it also causes redundancy and risk and inhibits sharing and collaboration.The first step to overcoming these problems in 2023 is a shift in mindset:data needs to be regarded as the oxygen that fuels the banks every action,rather than its CO2 that accumulates as an inevitable by-product of its actions.The value to the bank and its customers should be recognized and it should be treated the same as a product.There should be product owners whose job is to identify and define the use cases,clean the data,and set up the APIs and structures that allow different teams and systems from all parts of the bank to access it.These product owners should promote the data and help the business to use it as effectively as possible.Its not going too far to say they should be incentivized to help the bank meet data-usage targets.This is where the data mesh comes into its own.A data mesh is not a new tech productits a change in mindset,approach and structure.It has the potential to be,to data,what agile was to our ways of working.It starts with a business use case,which might be the identification of fraud or commercial loan underwriting.Based on the use case,a data product owner assembles the relevant data from all its disparate locations into an organized product,making it easily accessible by means of APIs.Just as any other bank product owner does,the data product owner then works with the business usersdata scientists,business analysts,operations,external partners and moreto help realize the business value.JPMorgan Chase created a data mesh to improve its fraud detection.It appointed a data product owner who pulled data from debit and credit card usage,check spending and other sources into a data product that allowed the bank to reduce fraud costs without compromising data governance.20In a true data mesh the data is all connected,even if it is located in silos across the bank.What it does is create a marketplace for producers and consumers that democratizes data and allows users to analyze cross-domain data on their own,rather than putting their analysis request into the queue for the central data team to process.This in turn helps them create business value while driving down costs.By providing a single view of all data it helps eliminate redundancies,simplifies data governance and promotes re-useability.In 2023 we will be hearing a lot more about this new approach.Although data mesh has become a buzzword whose definition is murky,the power of data as a product is clear.The real opportunity will be in finding the right data products to radically change business outcomes.Consider commercial banking.Today,commercial banks collect vast amounts of data from each customerincome statements,balance sheets,legal information,ownership data,ESG reports,to name a fewand store it in different places all over the organization.Whenever the customer applies for a new product,from a different division,the bank asks for this information all over again.The real opportunity,for banks that organize their data as a product,is to collect the information once and then use it repeatedly.New commercial loans could be offered in hours,rather than days or weeks.Customer insights could be unlocked to proactively sell new products and AI could help relationship managers in real time to dramatically improve customer interactions.Data mesh,together with data product owners,is not the solution to all data problems.Yet it could allow banks to unlock the value trapped in monolithic data lakes and data silosand to fundamentally change the way banking is done.Data,when treated as a product,has the potential to transform the foundations of banking.Banks dont lack data,they lack the means to unlock it,and simply and consistently turn it into actions.Having a data product manager and mindset could be the key to unlocking the value trapped in datavalue that every bank knows it has.”Banking Top 10 Trends for 2023177Fintechs:from disruptors to enablersThe golden era of fintechs and digital-only banks is losing much of its luster.After years of sky-high valuations and a seemingly limitless flow of capital investment,the tide has now turnedto the benefit of incumbent banks especially.Banking Top 10 Trends for 202318The market capitalization of public fintechs fell by 36tween the end of 2021 and October 2022.21 Klarnauntil July 2022 the highest-valued European fintech at$45.6 billion has lost 85%of its valuation,dropping to$6.7 billion.22The number and value of fintech deals has also declined.In Q3 2022,private company financings,IPOs and acquisitions worldwide fell 73%from their peak in Q3 2021.23 Venture capitalists in particular have cooled to fintechs:the number and value of mega rounds in Q3 2022 was the lowest since Q2 2018.24There are several reasons for this turn in the tide,one of the most important being the rise in the cost of money.Digital-only banks have survived until now on the very fringes of profitability,often kept in the game only by repeated rounds of VC investment.These are now harder to come by.This will not only dampen the disruptive impact of existing fintechs but also likely reduce the number of new start-ups making their appearance.Whats more,the volatility of this sector may make it less attractive to employees for whom job security has suddenly become a concern.All of this is significantly changing the competitive environment.The hunter is becoming the hunted as fintechs become ripe to be acquired by banks that are eager to take over a particular technology or group of innovators.Other interested parties will be the bigger banking technology providers looking for bargains,and bigtechs looking for a way over the barriers to entry that until now have protected traditional financial services companies.However,even bigtechs have become less aggressive.Some notable recent deals are Lloyds acquisition of the digital insurer Cavendish Online,25 HDFC Banks investment in the Indian payments fintech Mintoak,26 and BNP Paribas purchase of Kantox,a fintech that automates currency risk management.27While fintechs may become less of a direct threat,banks should not become complacent.The start-ups will continue to innovate,and as industry enablers will empower traditional competitors to enhance their offerings.These banks are likely to use their newly acquired experiences and capabilities to compete in the void left by the fintechs and to aggressively grow their market share and revenue.The trend weve seen towards co-opetition between banks and fintechs is likely to continue among well-established providers but may be very different for smaller players.Banks,if theyre smart and aggressive,will have the opportunity to retake share in markets like credit,offering unsecured lending to consumers and small businesses.As valuations come back into orbit and fintechs become enablers or the targets of acquisitions,banks should seize this opportunity to develop or acquire a competitive advantage at a reasonable price,and use it to enter new markets or expand their offerings.”Banks should also be able to reassert themselves as the rightful owners of banking by catching up with fintechs in the delivery of customer service,experiences and value.But to do this they will need to develop or acquire market advantages and new technologies at reasonable prices and use these to enter new markets or expand their offerings.19Banking Top 10 Trends for 20238Green gets real:the search for common groundAs the rhetoric around climate change intensifies,banks are under growing pressure by regulators as well as the gamut of their stakeholdersto play a constructive role in reducing greenhouse gas emissions.They are expected not only to become carbon neutral in their own right,but also to helpand if necessary,cajoletheir customers to transition to net zero.If these companies cannot or are reluctant to shrink their carbon footprint,banks will increasingly be expected to impose a risk premium or basically a higher cost of lending.Small wonder that sustainability is one of the five key forces of change driving transformation in banking and beyond.Banking Top 10 Trends for 202320Most banks have responded positively to their role in reducing greenhouse gas emissions.Many joined the Glasgow Financial Alliance for Net Zero after COP26 in 2021,and a recent Accenture survey found that nearly 60%of the worlds leading banks have committed to net zero and want to become stewards of the global transition to a net zero economy.28 The problem is that banks are not designed to take on the full spectrum of risk that such a global transition entails.Their fundamental job is to use customers deposits prudently,lending the capital that powers the economy.Yet the transition to a net zero economy is a profoundly uncertain undertaking that teems with the sort of risks they would normally be expected to avoid.A more realistic approach to financing a green economy would be to look beyond bankingto an ambitious public-private partnership.This would include venture capital and private equity firms,which have bigger risk appetites as well as the mandates and resources to take bets on relatively unproven technologies that will fuel a sustainable future.Governments and regulators would be included,facilitating and incentivizing their partners.Currently,only 12%of large banks are on track to meet their targets for their own as well as their financed emissions.29 Even if the biggest risks were to be taken on by the VC sector,banks that wanted to participate effectively would need to make significant changes to their culture,operating practices and incentive systems.They would need to educate and train their relationship managers to understand their customers carbon challenges a lot better and become adept at identifying their individual pathways to net zero.And they would need to source and analyze accurate,consistent data to measure the risk that each customer represents and to track its progress in reducing emissions.The war in Ukraine has made it even more difficult for banks to live up to their commitments.The energy crisis caused politicians around the world to reconsider their condemnation of fossil-based fuels.Many have resumed or ramped up exploration for gas reserves,coal is making a comeback and Europe is exploring new investments in gas infrastructure.The lack of clear leadership is also evident within banks themselves.Our research found that most leaders are committed to their banks climate goals but have not succeeded in embedding this across the organization.Many still incentivize the granting of loans to heavy carbon emitters,which leaves relationship managers asking how they are supposed to act.Employees notice the lack of investment in the required new skills and question the firmness of their employers commitment.We believe consensus will be a priority in 2023.Politicians,regulators,activists and everyone else involved will seek common ground and a realistic approach to achieving net zero.We expect transition finance to become the focus,with meaningful conversations being held around public/private partnerships.We also expect green hype to give way to a clearer,more realistic allocation of roles and actions.Sustainability is on the agenda of almost all banks board meetings and is mentioned in all their annual reports.But not enough is happening.Theres no doubt banks have a major role to play,but they cant do it on their own.Governments and regulators will play critical roles too.”21Banking Top 10 Trends for 20239Life centricity:from journeys to intentFor years now,service providers have focused their attention on the customer experience.The customer journey has been a big part of that,and some firms have gone so far as to organize themselves around these journeys.Digitalization has helped deliver speed,simplicity and convenience,while data and analytics have enabled companies to better understand their customers and to personalize their offerings.Banks,especially during the pandemic,have been at the forefront of this trend.Banking Top 10 Trends for 202322The benefits of digitalization have been huge,but they came with disadvantages.Banks perfected mobile and remote banking,but in the process the customer journey became functionally correct and emotionally devoid.With 97%of todays banking touchpoints occurring remotely,banks themselves have become more remote.30 The loss of a human connection has eroded trust,removed a vital barrier to switching and sharpened the competitive focus on price.Its no coincidence that so many banks want to get into wealth managementthey are eagerly seeking any emotional engagement that trumps price.For example Fifth Third Bank,a regional US bank,has launched an independent wealth advisory firm in the hope of recruiting users of its standard banking products as clients.31Bigtechs and super-apps are among those who seem to have got it right:they have moved beyond a journey mindset to understanding and addressing the customers intent.This is similar to the evolution of GPS route-planning systems.Early systems,when given a destination,considered only the obvious routes and directed all their users along these roads.Today,Google Maps(among others)has a lot more information and is a lot more thoughtful.It factors in weather conditions,traffic congestion and roadworks,which might send motorists on surprising detoursbecause it has a better idea of their intent and how best to satisfy it.By knowing what matters most to a customer at any particular time,and by combining technology with people skilled in nurturing holistic customer relationships,banks will be able to optimize the experience for that momentand achieve unique and productive connections.The year ahead will see the continued growth of bigtechs and super-apps,all of which are likely to continue to syphon off banks traditional revenues by embedding financial services within their platforms and offerings.Banks best defense will be to take a page from their competitors playbooks:widen their aperture and focus on their customers,not only as consumers of specific banking products but as complex,multifaceted human beings who are doing their best to adapt to circumstances beyond their control.We call this the shift from customer centricity to life centricity.In practice this starts with data,which needs to be organized around the customer rather than the banks products or channels(see Data becomes a product on page 16).Think of multiple data lakes of one,each unique to a particular customer.In many ways this emulates what great branch managers have always done:keep track of who their customers are,what they want,where they are going in life and what they are likely to need next.They listen,remember,learn and act on this knowledgeoften proactively.All this data,collected from a wide variety of sources,is mined in real time and analyzed by artificial intelligence to identify intent.Again,this is what great branch managers did in the past;now you can do it consistently,at scale,by buying a cognitive enginelike Googles Dialogue Flowwith a credit card.The growth to dominance of the bigtechs and super-apps,and the standards they set,pose difficult questions for banks.Few relish the prospect of becoming a utility or competing with the giants on their own terms.For these banks,the best option is to strengthen their franchise within their customer base.This means gaining a better understanding of their customers,delivering a constantly improving experience,and demonstrating authentic empathy and purpose.In 2023 banks will begin the move from thinking about customers journeys to their intents.We call this life centricity,and it will better equip banks to understand the different forces shaping customers lives and to deliver the most relevant solutions for their individual contexts.Banks that embrace this approach will be strongly positioned to thrive alongside their customers.”Banking Top 10 Trends for 20232310Core modernization:a change of heartBanks have long felt the pressure to modernize their core processing systemsand those that want to totally reinvent their enterprise need a strong digital core to thrive in a future where technology is a primary source of competitive advantage.This is critical to leverage the power of cloud,data and AI through an interconnected set of systems across the enterprise that allows for the rapid development of new capabilities.But for reasons that have been discussed over and over through the years,most banks have delayed the move.In 2023,a confluence of factors is driving many banks around the world to reconsider their core systems,which are often 30-40 years old.Our recent survey of almost 100 top banks shows 63%are either in the process of moving their core systems to the cloud or getting ready to do so.32 Banking Top 10 Trends for 202324Whats finally driving this change of heart?Rising rates that help solve the affordability challenge.Replacing a core is not cheap but in 2023,as interest rates restore one of bankings significant revenue streams,affordability will become less of an obstacle.Many banks will opt to invest this windfall in their future.The demand for product innovation at speed.We expect to see more cross-product innovation along the lines of Amazon Prime,with banks creating integrated product sets that offer greater rewards to customers who accept more of the products.Offerings like these put a strain on old systems designed for products rather than customers,and for batch processing rather than real-time payments.Fear of being left behind.There was safety in numbers as long as everyone held off.Yet,as Stephen Greer of Celent wrote after JPMorgan Chase announced it was moving its retail banking systems to Thought Machines Vault platform on the cloud:“No bank wants to wake up one day and realize its still running a COBOL platform on-prem while its biggest competitor is 100%cloud-native.”33 The aging of banks mainframe support teams.Over the years banks worked hard to customize their cores to support a plethora of new features and functionality.In the process,however,their core code looked increasingly like a bowl of spaghettiand the only people who know how to untangle it are rapidly retiring.For these banks the choice is stark:upgrade or invest in more COBOL training.Regulatory pressure.Over the years,banks bolted new regulations onto their legacy code,manually and repeatedly.As a consequence,their risk and regulatory compliance is only as strong as the weakest link in their core.Regulators have taken note and made it clear:fix the fundamentals in your core or we will eventually merge you into a bank that has done so.34 No need for a Big Bang.The likely disruption caused by a multi-year transformation was always a good excuse for sticking with your mainframe.However,todays cloud-native platforms not only dramatically reduce the timeline;they also allow migration and the launch of new products to be done progressively,which reduces the risk.The ROI has improved dramatically.Tech modernization is of course a forever process,but for the reasons above we believe 2023 will be the watershed for the start of core modernization.The balance of pros and cons has been shifting for years;this is when we reach the tipping point.Many will protest:“But we are modernizing our core systems!”The standard approach has been to incrementally improve them in bits and pieces by leveraging new middle-office and front-end platforms.Yet the benefits have been marginal as this effort has failed to address the heart of the problem.It has become clear now that the only acceptable approach will be one that enables not only efficiency,flexibility and security,but also hyper-personalization,transparency,product innovation and real-time processing.With the windfall from rising rates,many banks will use 2023 to start tackling their legacy environments and creating modern banking operating systems for the next decades.The ones that solve this challenge will be incredibly well positioned to grow,consolidate andmost importantlydeliver exceptional,innovative products more efficiently than their competitors.”The next 12 months will be a great opportunity for banks to invest in the future and become reinventors.This will be the year when they show they can be innovative and fleet of foot and are committed to delivering a competitive experience for their customers.25Banking Top 10 Trends for 2023The rise of interest rates in 2023 will restore the logic of banking and reimpose the gravity that has underpinned its normality since the dawn of the industry.Deposits will regain their value and deliver a windfall to virtually all banks.At the same time,higher rates will stress lending markets and expose distortions that for years have lain hidden in the industry.The year will certainly not be without its risks.Not all banks will use their increased profits in the same way.Many will simply pass it on to their shareholders in the form of dividends or stock buybacks.Others will see it as an opportunity to become reinventors by confronting the new emerging risks,building their digital core,creating stronger workforces,and laying the foundation for greater,more sustainable returns.By harnessing the five key forces of change,banks have an opportunity to combine the best of what we witnessed in the rise of neobanking with their traditional strengths to create a bright new future.There is no right or wrong answerevery bank faces a unique set of demands and pressures.But given the daunting challenges they face,the decisions made in the year ahead are likely to be critical.What all banks do have in common is a growing need to address change more rapidly than before,and where possible,simultaneously instead of sequentially.This compressed transformation will test the mettle of all organizations,their leaders and their workforces.Given the far-reaching import of the trends that weve described,each banks decisions will set it on a course that will shape its destiny for years to come.Careful contemplation,wisdom and decisive action will surely be the differentiators that allow the leaders of tomorrow to claim the future.A time for new hopeConclusionBanking Top 10 Trends for 202326References1.Accenture Research analysis based on FDIC.2.Bank of America newsroom,“Bank of Americas Unique Approach to Loyalty Rewards Translates into Record Client Satisfaction and Retention”,27 September,2019.3.Discovery Bank website,Discovery Bank and Vitality Money Rewards.4.Accenture Research analysis based on central banks data and project experience.5.Chase media center,“Chase Expands Retail Branches to All Lower 48 States”,4 August,2021.6.Accenture,Global Banking Consumer Study,2022.7.Citi GPS:Global Perspectives&Solutions,“Metaverse and Money:decrypting the future”,March,2022.8.The Financial Brand,“14 Surprising Predictions on the Future of Banking”,8 November,2021.9.Rolling Stone,“Someone Spent$450,000 for Land Next to Snoop Doggs NFT House”,7 December,2021.10.Metaversed,the Metaverse Consulting Company,“The Metaverse Universe and Radar chart”,Q4,2002.11.Accenture Research,October 2022.12.Microsoft Work Trend Index Annual Report,“The Next Great Disruption Is Hybrid Work Are We Ready?”,22 March,2021.13.Accenture,“Future of Work survey”,29 November,2022.14.CNBC,Make it your money,“Why todays most promising young people are choosing to work in tech instead of finance”,18 May,2017.15.Accenture,“Boosting the bank boards technology expertise”,11 March,2021.16.Accenture Research based on S&P Capital IQ.17.Ibid.18.NBER,“Work from Home and the Office Real Estate Apocalypse”,September,2022.19.Financial Times,“Buy now pay later boom fuels consumer debt concerns as transactions soar”,22 February,2022.20.AWS Big Data Blog,“How JPMorgan Chase built a data mesh architecture to drive significant value to enhance their enterprise data platform”,5 May,2022.21.Coatue,“Fintech and the Pursuit of the Prize:Who Stands to Win Over the Next Decade?”,24 October,2022.22.TechCrunch ,“Klarna confirms$800M raise as valuation drops 85%to$6.7B”,11 July,2022.23.FT Partners,“Q3 2022 Insights Report”,Q3,2022.24.CB Insights,“The State of Venture:Q3 2022 Global Report”,Q3,2022.25.Lloyds Banking Group,“Lloyds Banking Group has announced its intention to acquire Cavendish Online”,15 June,2022.26.Live Mint,“HDFC Bank to acquire 7.75%stake in fintech start-up Mintoak”,14 December,2022.27.BNP Paribas press release,“BNP Paribas signed an agreement for the acquisition of Kantox”,11 October,2022.28.Accenture,“Rising to the challenge of net zero banking”,8 November,2022.29.Ibid.30.Accenture,Global Banking Consumer Study,2022.31.Financial Planning,“Fifth Third plans$10 billion RIA with new advisors”,3 November,2022.32.Accenture,“Banks need a flight plan to navigate the cloud”,7 December,2022.33.Celent,“JPMC,Thought Machine,and the next 10 years of core modernization in the US”,22 September,2022.34.European Central Bank|Banking Supervision,ECB Supervisory Board meeting,22 July,2022.27Banking Top 10 Trends for 2023Connect with MichaelLinkedIn BlogRead Michaels blogsThis content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.This document refers to marks owned by third parties.All such third-party marks are the property of their respective owners.No sponsorship,endorsement or approval of this content by the owners of such marks is intended,expressed or implied.Copyright 2023 Accenture.All rights reserved.Accenture and its logo are registered trademarks of Accenture.About AccentureAccenture is a leading global professional services company that helps the worlds leading businesses,governments and other organizations build their digital core,optimize their operations,accelerate revenue growth and enhance citizen servicescreating tangible value at speed and scale.We are a talent and innovation led company with 738,000 people serving clients in more than 120 countries.Technology is at the core of change today,and we are one of the worlds leaders in helping drive that change,with strong ecosystem relationships.We combine our strength in technology with unmatched industry experience,functional expertise and global delivery capability.We are uniquely able to deliver tangible outcomes because of our broad range of services,solutions and assets across Strategy&Consulting,Technology,Operations,Industry X and Accenture Song.These capabilities,together with our culture of shared success and commitment to creating 360 value,enable us to help our clients succeed and build trusted,lasting relationships.We measure our success by the 360 value we create for our clients,each other,our shareholders,partners and communities.Visit us at Stay ConnectedAbout Accenture ResearchAccenture Research creates thought leadership about the most pressing business issues organizations face.Combining innovative research techniques,such as data science led analysis,with a deep understanding of industry and technology,our team of 300 researchers in 20 countries publish hundreds of reports,articles,and points of view every year.Our thought-provoking research developed with world leading organizations helps our clients embrace change,create value,and deliver on the power of technology and human ingenuity.For more information,visit AuthorMichael Abbott Senior Managing Director Global Banking LeadContributors Francesca Caminiti,Dariusz Orynek,Alejandro Luis Borgo,Corrine Vitolo,Stefan Bongardt,Tony Rattey

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