We might not have a crystal ball, but we do have a very good idea of where the worlds of manufacturing and product development are heading in the months and years ahead.
The pace of change – and the regulatory, market and stakeholder demands that accompany it – has, and will continue to be, rapid. For all of these predictions it is not a case of ‘if’, but ‘when’.
For businesses looking to capitalize on this momentum, the time is now. Being ahead of the curve is much easier than catching up.
Below, we offer some insights of our own alongside contributions from a couple of our closest collaborators.
Predictions from Makersite:
Supply chain disruptions will subside
Contrary to the fearmongering that we’ve seen in the news lately, we believe that disruptions will continue to subside in 2024, bringing immense relief to manufacturers and customers. Most of the supply chains have recovered from pandemic era disruptions, both in terms of production and logistics. While recent challenges in the Red Sea have caused concern, logistics have largely adapted with marginal increases in delivery times and costs thanks to the overcapacity that was created after the pandemic.
Generative AI will not take our jobs, yet
This topic isn’t quite our wheelhouse, but as there is so much hype about GenAI we felt we had to say something. While a quarter of CEO’s anticipate significant AI-related job losses this year (Source: PwC, Global CEO Survey), we feel this is massively overblown. The truth is that these things take time in most functions where its applications are still immature.
Companies will remain carbon neutral , experimenting with the use of generative AI to create marketing content, summarize customer service calls, unlock domain-specific knowledge via chatbots and generate workflows and apps. Jobs in supply chains are not going anywhere. In fact, it’s never been cooler to be in this space.
It’s also worth keeping a close eye on how some of our biggest and most innovative companies are embracing the possibilities of generative AI. Look to Autodesk and PTC’s use of generative design – “a form of AI that produces myriad solutions to defined engineering problems” – and its ability to boost innovation, reduce waste, and accelerate time-to-market. Both showcase a potential future where engineers and AI work in tandem to create something demonstrably better. As PTC puts it: “[With generative AI] engineers can interact with the technology to create superior designs and drive product innovation more quickly.”
Budgets will continue to tighten
While there is a lot more optimism amongst business leaders (PwC Global CEO Survey) and consumers (Source: Ipsos, Global Advisor Predictions 2024) than in 2023, Makersite CEO Neil D’Souza predicts that for the most part, 2024 will be a year when companies have to “do even more with even less.” There is still a lot of ambiguity in the EU,” he notes.
“The economy is growing in the US, but in the EU it’s stagnating. Across manufacturing, budgets are still getting cut and I don’t think that’s going to change any time soon.” Unfortunately, most of the primary levers of efficiency have been exhausted, so companies will need to make investments to drive the next level of savings.
The “S” in ESG will become more important
When it comes to an increasing onus on rules, regulations and political optics, Sophie Kieselbach, Makersite’s Experts Team Lead, believes that the ‘S’ in ‘ESG’ is going to increase in prominence. “Driven by the Corporate Sustainability Reporting Directive (CSRD), 2024 will be the year when social indicators really begin to permeate business decisions along the supply chain. Businesses will need to start implementing more concrete methodologies that allow them to track human rights issues such as slavery or child labour or gender inequality more accurately.”
Predictions from friends of Makersite:
We also reached out to a few close friends of Makersite for their input on what the future holds. Here are their predictions:
Leaders in sustainability will finally get to shine
Capgemini’s Lukas Birn, VP of Sustainability believes that as we navigate through 2024, the disparity between sustainability leaders and laggards will become starkly evident. Those lagging behind will find themselves grappling with increasingly stringent legislation designed to curtail unsustainable practices.
In contrast, sustainability frontrunners will intensify their investment in innovative products and services that bolster their commitment to a Net Zero future. With the likelihood of an economic downturn, there will be a heightened emphasis on cost-efficiency and the maximization of impact. Budget constraints will prompt a more judicious allocation of resources, ensuring that only the most effective sustainability initiatives are pursued.
Customers and regulators will amplify calls for transparency
67% of chief supply chain officers now oversee environmental and social sustainability KPIs, with many setting ambitious targets for carbon neutrality within five to 10 years. To achieve green and circular supply chains, companies are building ecosystems that extend beyond their internal operations and Tier 1 suppliers, driving change across the entire value chain. This will require a greater level and quality of transparency internally – to drive better decision making – but also externally, due to regulations
As Microsoft’s Kelly Stumbaugh, Director Devices, Ecodesign, Ecolabels, and Carbon Emissions,says:“Something that is top of mind for me is growing demand for transparency around sustainability metrics, especially GHG emissions and circularity (at least for my industry, electronics). To accomplish this in an ethical manner, companies will need to continue to increase rigor around how these metrics are calculated and the input data that they are collecting, and to include these details and explanations of methodology along with the metrics themselves. Regulations and initiatives in Europe such as SPI, CSRD, and CBAM will drive much of this, but so will customer demand.”
“The most important values to me are honesty and modesty. I think that’s something we all need in this context as well. The clock is ticking. We need to show modesty towards the people who actually have to do this stuff – we need to help them and not judge them for creating dirty products. It’s about guiding them along the right path.”
Berlin-based Lukas Birn is VP of Sustainability at the French company Capgemini, a global leader in consulting, technology services and digital transformation.
Lukas’ personal journey towards sustainability commenced as a teenager, at a time when individuals were first encouraged to sort their plastic waste by hand. Today, his understanding has evolved, fueled in large part by the profound impact of witnessing the world through his children’s eyes. This transformative change in perspective led him to transition his deeply held personal convictions into a fulfilling career dedicated to the advancement of sustainability.
We recently sat down with Lukas to talk through what sustainability means to him, his career path, and his thoughts on what the future holds.
Below, we discuss:
The perils of taking shortcuts and looking for easy solutions
The importance of not judging others for their decisions, and the need to follow your own path
Putting the power of change into the hands of everyday people rather than just a few specialists
To remember that the loudest voices in the room don’t necessarily belong to the most important people
The emergence of generative AI, and the impact it can have on our approach to sustainability challenges
Makersite: The first question I have is very open-ended. What does sustainability mean to you?
Lukas Birn: Obviously, sustainability in general is super broad. So I tend to think of it more for the planetary part. There’s always the ‘grandchildren perspective’ – what do we do for the upcoming generations? And I think if you have your own children, then it’s very clear and obvious. The question is simple: How can we ensure that the upcoming generations have a planet they want to live on as well?
M: In terms of your career path and your role now [as a VP of Sustainability] – what does that involve?
LB: ‘VP’ is just a title. It can be anything and nothing. It can mean different things to different people in different companies. In terms of my work at Capgemini, an IT consultancy, it’s of course not about the sustainability of our company, but what we offer to our clients. Both us and our clients are generally large and complex organizations. I see myself as a facilitator, walking around with my grease can and lubricating the wheels. Minimizing friction. Bringing together all the expertise that’s already there.
There are some people who have worked in sustainability for many years – for decades – but often they’ve been operating in silos. Now, it’s really about scaling and connecting. This is where I can help.
M: To that point – weaving things together, minimizing friction – what skills do you need to succeed in a role like yours?
LB: Sustainability is a complex project. One of the main challenges is about systematic thinking. It’s not just a simple trick here and there and then you’re done. If you use a trick in one place, you can easily be doing more harm than good elsewhere. And as an engineer by profession, I’m always wary of shortcuts and easy solutions. I think having a scientific approach – really looking at the numbers and avoiding wishful thinking – are core capabilities. It’s not only about what is technically feasible but what is viable, and having a holistic view on that. To me, that’s key.
M: What motivated you to work in sustainability? What put you on this path in the first place?
LB: For a long time, I was always only sustainable in my life outside of work. My father was actually my first touch point. He was a publisher of laws and he was already active in the circular economy 40 years ago. It has long been an old issue in the industry. It was more about chemicals and harmful materials that ended up in nature, but the topic was present.
And then having children, and also now being 50, I asked myself ‘what career change would be interesting for me?’ I saw some colleagues at Capgemini struggling with organizational complexity, so I thought ‘why not combine my private motivations with my ambition to master complex organizations?’ And that’s how the two things came together.
M: Was it always your intention to pivot your career in that direction at some point, or was it more that you just saw the opportunity and took it?
LB: It was not long-term career planning. Some people do that, but not me. It just happened. Maybe it was the Buddhist inside me – enlightenment. I just said ‘let’s do it.’ In your career there are always some motivations and some voids. So I filled the voids.
M: Going back to the personal/private side of things, how do you make your own life more sustainable?
LB: One thing I want to point out here is that people tend to overemphasize things they are already doing anyway. For instance, I’ve been a vegetarian for 35 years. But it just happened by chance when I was a child and now I stick to it. It’s not like I go around telling everyone ‘oh yeah, I’m a vegetarian.’ I’ve never had a car because I live in the center of Berlin. Under the given conditions, it’s easy.
I’m not a big traveler, so I don’t take the plane. It’s really about minimizing, but I’m also reluctant to preach about what is easy for me and not consider the other side. For people who love to travel and see different cultures, it’s much harder to say ‘I’m not going to take flights anymore.’
M: What about something new you learned in the last year? It could be around sustainability, but it can be broader. It can be positive or negative.
LB: Obviously anyone involved with sustainability has heard about the Greenhouse Gas Protocol, but as with many things in life it’s not as simple as it looks. The more you get into it, the more complexity there is. And then what if you’re shifting it from Scope 1 to Scope 3 or vice versa? So for me, I learnt a lot more not just about the simplicity of this protocol but also the challenges. It’s a common denominator for all of us, and it’s really helpful to close at least some gaps in the system.
M: Where do you think companies are lacking at the moment in their approach to sustainability? What can they do better and how can they do it?
LB: I always say, in the end, it’s simple. It’s all about getting to [Net] Zero. First of all, you need to know your baseline. And this can be quite complex, because most mid-sized companies are now global players. They have hundreds of legal entities, and are spread all over the world. The first step is always a challenge. They will say ‘oh, I wasn’t aware that it is part of my scope as well.’
Once you’ve had those discussions and established that transparency, it’s about going from ambition to action. I’m not talking about reporting and ESG and CSRD, but looking ahead to 2030. That’s what’s important. How do you get there? How do you really measure? You can do a sustainability report, and that’s great, but you need to really measure the impact correctly in order to tackle the challenges.
I had a discussion with a colleague from Volvo once, and he said his most challenging part is to look at the things they do already through the lens of sustainability. How do you get rid of what is really hurting companies? That’s something we need to think more about.
M: When you’re having those conversations with companies around sustainability, what resonates the most? What makes them realize that they really need to take action?
LB: Being an engineer, I’m a little biased. I think the products themselves are the decisive factor, and therefore I’m always shifting the scope away from minor impacts that for many customers are part of operating the supply chains. I want people to ask themselves: ‘How do we design the product of the future?’ ‘What is a sustainable product?’ ‘Which product contributes to the idea of a circular economy?’ They need to understand that these are long-term investments.
Above all, I think it’s important to take sustainability out of the hands of the dedicated sustainability professionals and give it to the ordinary people. They are the ones who need to make it happen. Maybe it’s all tiny steps, but eventually it adds up to making better, greener products. That’s where we need to be.
Capgemini has had the same seven core values for the last 50 years. The most important values to me are honesty and modesty. I think that’s something we all need in this context as well. The clock is ticking. We need to show modesty towards the people who actually have to do this stuff – we need to help them and not judge them for creating dirty products. It’s about guiding them along the right path.
M: In terms of today’s evolving regulatory environment, both in Europe and in the US, do you think we’re heading in the right direction? Are there areas that are neglected? What legislation would you like to see?
LB: I think there’s never a customer complaining about regulation. All of them realize that we need it. However, since sustainability or climate change is by definition a global problem, we need a level playing field globally. There’s no value in bankrupting an industry in one country and then importing dirty products from another. I think it’s important that we avoid going back to a protectionist approach. It’s a balancing act.
Especially with the EU, they’re really driving forward all the initiatives, which is a challenge for companies, but it’s manageable and it’s a real opportunity for change. When we had GDPR, many smart technologies emerged as a result and I think it will be the same here.
AI, for example, can help you streamline and cope with the bureaucracy and the paperwork. At their core, all regulations have a good purpose and a good intention.
M: Do you ever worry that the conversation around sustainability has become too politicized? Do you think it dilutes its importance?
LB: Yeah, but I think sometimes the loudest voices don’t necessarily belong to the most important people. You see it in every company. ‘We can’t afford sustainability, it will ruin our business.’ But maybe some businesses are doomed for good reasons. There’s always that free capitalism, too. On the one hand there are negative effects, but on the other hand it’s really transformative.
Today you see people leaving companies because they’re not doing what they promised to do. It’s important that we have that freedom. If companies are receiving government contracts, will they really feel the need to change things? Is the imperative still there? They are incentivizing the wrong behavior. That could be a challenge.
M: When it comes to promoting a long-term approach to sustainability, how would you do it?
LB: I think I kind of answered that before when I said it’s about thinking of zero. That’s it essentially. It’s about having a goal at the very end and working towards that. What it comes down to, when you’re thinking about 2030 or 2050, is to think of the strategy. It’s not just something for the end of the month or the end of the year. How do you really make it last?
The planet and its people are finite. We have to use the peoples’ creativity to focus. Directing them to the big problems and asking them to put their brain power towards the right spot. That’s what I’m doing internally, too. There are many motivated people, but they don’t know where to put their energy. It’s important to guide them towards the most impactful areas.
M: Where do you hope the world will be from a sustainability perspective in 2050, and where do you think it’ll be?
LB: I’m an optimistic person. You have to be optimistic, especially if you have children. There’s no point in just saying that we’re all doomed. There are many things that should motivate us. There are different opinions, but it feels like a tsunami is piling up and I think there is movement. Did something like COP28 make a difference? I don’t know. But I’m positive that there will be massive changes and that a transformation is underway, and it will also change how the world functions.
We are going towards a more decentralized system. Both solar and wind are decentralized by design. It’s about taking something off the big energy producers, about reshuffling the cards to create a broader perspective. Let’s look at Africa and what’s at stake there. It is their right to do what’s best for themselves. That is critical. It’s not about telling them what they should do regarding climate, but we must support them.
M: Ok, last question. AI is everywhere. How do think generative AI and sustainability might align in the future? Is it good thing or a bad thing? Do you think about it much?
LB: I think it’s unavoidable. You can’t just say ‘let’s leave generative AI alone because it’s too energy intensive.’ We have to find a solution. It’s not having a hammer and everything being a nail. It’s about working out where it fits. I think it’s a really beautiful technology and there’s a lot of value to it. It blows my mind. I write something in my lousy English and then the AI transforms it and it’s so simple and easy. Someone else can grasp it.
Climate tech is important, too. Carbon capture and storage, for example. It’s about striking a balance, even if it’s only a few percent we can rescue. Even if we can only solve a small part of the problem or change the situation a little for the better, it is already important.
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