For Hans Vestberg, President and CEO of Ericsson, a truly networked society with more connections, more communication, more functions and new behaviours will create a positive legacy for generations to come.

asut: Let's begin by taking a look back: What have been, in your view, the most important changes brought on by technology in the past few decades?

Hans Vestberg: One of the biggest changes has to do with mobility. We tend to forget that no other technology has ever been so widespread throughout the world as ICT technology – and that is because we have agreed on global standards: The same broadband infrastructure, permitting the same cell phone to work in every country of the world. That is unique for our industry and it is the reason why billions can have mobile phones today: because of the scale, the prices go down and communication becomes affordable for huge numbers of persons. The second thing is the innovation that happened with the advent of smart phones which completely changed the way we connect to the network and what we use the network for. I think those two are the fundamental changes and everything else derives from that: completely new platforms and entire industries being changed because of mobile broadband and cloud. And all this, of course, will also profoundly impact our societies and the way we live and do business.

Why has it been possible to achieve here what the railway system, for example, has never been able to agree on: global standards?

The driving force have been a few leading companies who – although competitors –
realized early on that it would otherwise not be possible for a great number of people to be able to afford this technology and therefore jointly pushed interoperability and next generation mobile networks.

You have talked about the role played by the industry in the deployment of the mobile technologies. What about the role of governments?

We are coming to the second phase of deployment and I think now is the time for governments to widely adopt ICT technologies and push for digital inclusion. If they do not do so, we will not have a sustainable planet. I have spent a lot of time with the United Nations in the last five years, trying to explain that if we want to fight poverty, if we want to have basic health care throughout the world and raise the level of education, if we aim to reduce CO2 emissions and manage our growing cities in a smarter and more efficient way, then we must use mobility broadband and cloud. It will not be possible to achieve all this in any other way.

What makes you so sure that ubiquitous connectivity would transform the world to the better?

It would drive down costs and ensure that people everywhere, irrespective of their background or social standing, could afford a better life: Better education, more democracy, decent jobs, the possibility to compete with everyone in the world and a platform for innovative solutions and new business models. In a truly networked society, better connections, more communication and functions as well as new life styles will create a positive legacy for generations to come.  Of course there are challenges as well: We will have to think about privacy issues, security and the resilience of data. And because country borders do not exist for data, this revolution – like all technological revolutions before it – will need a whole framework of new regulations and policies.

Who will have to put this framework in place?

It's not one country, it's not one company, not one civil society, no one can do it on their own. What we need is a public-private dialogue to develop a new understanding of the opportunities and challenges ahead. I think that more and more governments are becoming aware of this: From just a handful a few years back, we have 140 countries with a digital agenda today. The big challenge for them remains to possess the necessary digital competence to tackle these issues.
What about the negative impact: Can there be too much connectivity, too much of a good thing?
Although it sometimes does not feel this way, we are really still at the very beginning of this digital revolution. It's just one generation that has grown up with the internet so far. So of course we will have a different view on the internet 15 years from now. Today we are in a world where you need to opt out from giving away your data, but the internet will be of such critical importance that the next generation will not accept this any longer. There will have to be a system where you get to decide, where you only opt in to services you consider useful. You might, for example, agree to give your data for better traffic planning in your city or to get a better social network, but not if you consider that some website is just looking  to monetize your data. Today all this is still very rudimentary.

You are in the midst of it all: Does it sometimes frighten you what this technological revolution is unleashing?

In my seven years as CEO there has been an enormous change in the way we are working. The speed of the digital transformation is unprecedented and we realize that in the future things will develop even faster – in comparison things have been going super slow up to now. It took 25 years to connect 2 billion people to the Internet. Now we're foreseeing roughly 50 billion connected devices in the next ten years. In 2021 two and a half times as many people on the earth will have access to internet, mobile broadband will go to 8 billion subscriptions and the worldwide mobile coverage, with the exception of 300 million people, will be almost complete. And of course Ericsson is in the midst of it all, working with all the carriers in the world, with all the top players and industries. Of course all this is impressive, but I think we are actually doing great for the planet. At the same time we also understand that we have a big responsibility.

How is the digital transformation impacting Ericsson’s own business model?

In the last two years 34 000 employees left the company and 32 000 others were hired. That is the – sometimes painful – pace of change needed to stay competitive in a global context, to be present in the right market with the right competences. We have gone in ten years from 75 percent of all our revenues in hardware to two thirds in software and services. And just as it is the case with our industry, the networked society will impact everyone else: anything that benefits from being connected, will be connected in the future.

Many industries are disrupted by digitalisation, Ericsson thrived. What did you do better than others?
One reason certainly is that we have never compromised on research and development, not even in the toughest times.

What is the next big technological leap we can expect?

Most certainly 5G. And again, this will be an enabler of a huge number of new services and completely transform our industries. 5G, to put it in layman's terms, simply means that we will have network slices specifically supporting the requirements – high speed or low latency, better throughput, longer battery life – of different use cases and network demands, be it sensors, smart vehicles, the dynamic allocation of resources or the critical control of remote devices. Virtual reality and artificial intelligence will also play a vital role. The first 5G networks will be commercialized in 2020 by the latest. And again: Ericsson will be in the midst of it all. And it has partnered with Swisscom to launch a program to test 5G applications in Switzerland.

Interview: Christine D'Anna-Huber

Hans Vestberg: Digital Transformation Impacting People, Business and Society / asut-Seminar 2016