Report: Dematerialization is the path to profitability and sustainability

By 2030, almost 60% of white-collar work is expected to happen outside company premises, according to Ericsson's future of work report.

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Almost 60% of white-collar work is expected to happen outside company premises, resulting in significantly lower CO2 levels, a new report finds. The workplace of the future will be one where most white-collar tasks are automated, company premises are smaller due to remote work, and CO2 levels have declined exponentially thanks to dematerialization efforts, according to Ericsson's Future of Enterprises report.

The report examines white-collar work, and the role information and communications technology (ICT) will play in the next 10 years. It predicts more dematerialized enterprises that will leverage cloud and mobile technology to become more adaptable, profitable, and sustainable.

Dematerialization refers to decreasing material usage and achieving more with less, said Patrik Hedlund, a senior researcher at Ericsson, and one of the report's authors.

"We can't continue to exploit the earth...we have to find new, smart ways to have more jobs" and grow the global economy while consuming fewer physical resources, Hedlund said. "It's a very urgent topic for the whole world."

Dematerialization will enable enterprises to set up new offices, contract with personnel overseas, or run a worldwide cloud-based ecommerce business with cloud technology, the Ericsson report claims. These practices will further support companies on their journey to becoming a net-zero carbon emissions enterprise, the report said.

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Already, the report finds that seven in 10 enterprises have reached halfway or beyond in their dematerialization journey, and that almost three in four enterprises expect their electricity to come from renewable sources by 2030.

Less physical products, more digital services/products

The enterprise remote workplace will be further enabled by usage of extended reality (XR) and 5G, both of which are predicted to grow by more than 50% in the next decade.

Among white-collar decision-makers, six in 10 believe use of temporary workers will increase significantly in their companies by 2030, the report said.

Despite worldwide trade conflicts, enterprises will continue to grow internationally, with 70% of decision makers stating they believe cloud will drive internationalization, Hedlund said.

The report also suggests that ICT systems have the potential to lessen the need for material by substituting physical products with services and digital products. To achieve a net-zero carbon operation, more than half of the surveyed enterprises already use renewable energy for most of their energy needs, the report said.

Additionally, eight in 10 decision maker respondents said they expect to realize significant energy savings through the move toward cloud offerings, according to the report.

With more people working remotely, the Ericsson report envisions that "we're going to probably use less natural resources,'' Hedlund said. It also predicts companies that previously were limited to a certain geographic area will now be competing globally by 2030, he said.

There are already dematerialization front runners that "have reached farther in their journeys, and we think these companies are better prepared for crisis situations like the pandemic,'' Hedlund noted. "They are more agile and can shift focus quicker and be more responsive.''

These front runners, which were identified in a wide range of vertical industries, are also "listening to data in the sense that they do analytics,'' he added.

The report also examined small- and medium-sized businesses to determine if there were differences between them and larger companies. Not surprisingly, there were.

"We saw that small companies were less front runners; they were more in service businesses and people there were of higher ages and had been with their company a long time,'' Hedlund said. These companies are also less mature when it comes to cloud usage and IT investments, he said.

The impact on data centers

As organizations dematerialize, 27% of respondents expect to use 100% renewable energy, while 46% expect to use mainly renewable energy, Hedlund said. Only 2% said they wouldn't use renewable energy at all.

This push toward dematerialization begs the question of what the implications will be for data centers in terms of heat, water supply, the impact of physical infrastructure and other environmental issues, he noted.

"So that effect has to be weighted toward the benefit of cradle to grave" and what more data centers and more ICT services will mean, Hedlund said. "We must assess the impact. But data centers are more efficient."

Ericsson IndustryLab asked white-collar workers and ICT decision makers online about the future of their enterprises. The report is based on 5,000 responses from 11 markets, representing about 175 million employees globally, the company said.

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