November 20238 Retail Trends to Watchin 2024Dive into the location intelligence data to find out which trends willshape the retail,dining,advertisement,entertainment,and realestate spaces in 2024.Introduction21.Star Power in Retail and Stadiums2Collateral Gains:Taylor Swift and Michaels3The Deion Sanders Effect42.Second Hand Apparel on the Rise53.Placemaking as the core of CRE6Placemaking through Tenant Diversity7Placemaking by Diversifying Consumer Offerings84.Experiences Drive Entertainment&Dining Visits9Experience-Driven Theater9Experiential Dining:Anyone Can Cook115.Return to the“The Old Normal”13Return to Office146.Retailers Suburban Shift157.Grocery M&A16Aldi Expands its Reach by Acquiring Southeastern Grocers16Consolidation Not Limited to Grocery Giants188.Optimizing Retail Media Networks Through Offline Data19Key Takeaways21 2023 Placer Labs,Inc.|More insights at placer.ai|1Introduction2023 was another tumultuous year as inflation,high interest rates,and general economicheadwinds continued constraining consumer behavior.Still,this year also revealed manybright spots across a variety of consumer-facing sectors,from retail to dining toadvertisement to entertainment.And many of these developments are likely to shape thewider consumer landscape in 2024.The retail lift from Taylor Swifts Eras Tour revealed the appetite for socializing-basedentertainment,while the pull of Coach Sanders showed that college football can also createmajor retail opportunities.The popularity of second-hand apparel highlighted the promiseof eco-and budget-friendly retail concepts.Placemaking in retail and real estate along withthe success of experiential dining and entertainment concepts emphasized the power ofinvesting in consumer engagement.Consolidation helped certain grocery companies reachnew audiences,while expansion helped dining brands solidify their standing in key growthmarkets.Retail media networks continued gaining momentum.And the impact of COVIDcontinued receding in certain critical areas.Read on to find out how these emerging trends will shape 2024.1.Star Power in Retail and StadiumsHappenings outside of the retail space have always impacted retail trends.In recent years,the rise of social media seems to be amplifying the potential for celebrities,culturalmoments,and popular entertainment events to direct consumer foot traffic in everythingfrom shopping to sports.Events create a powerful draw that produce significantopportunities in the surrounding areas and reveal the need to update the way we view theevent spaces themselves.The ability to generate urgency and excitement indicates the potential for a broader retail,food and advertising opportunity in the open spaces that support these very events.Leaning into this phenomenon will be a key trend to track in 2024.2023 Placer Labs,Inc.|More insights at placer.ai|2Collateral Gains:Taylor Swift and MichaelsMarketers have long used celebrity collaborations to boost traffic to fashion brands ordining chains,but stars or events can also drive collateral visit spikes to retailers notdirectly affiliated with the trend of the moment.The triumph of the Barbie movie led to aspike in Mattel doll sales,but also inspired consumers to purchase all things pink as theydecked themselves out in Barbiecore before heading to the cinema or to the myriad ofBarbie-themed events.Taylor Swifts immensely successful Eras Tour also caused retail shockwaves(in the mostpositive sense).Michaels,a chain specializing in arts supplies,was one of the majorbeneficiaries of the Eras Tour collateral uplift.Inspired by a Swift song,many fans chose tocreate friendship bracelets ahead of the concert.Visits to local Michaels stores skyrocketedin the weeks leading up to nearby concerts,correlating with massive increases in salesreported by the chain.And the retail lift did not just come from concert attendees someof Michaels traffic likely came from Swifties who did not get a ticket to the show but stillchose to tailgate and exchange friendship bracelets from nearby locations.2023 Placer Labs,Inc.|More insights at placer.ai|3The Deion Sanders EffectCelebrities impact on consumer foot traffic trends extends beyond retail to the world ofsports.Lionel Messis arrival in Miami spiked interest in the sport and led to visit surges atInter Miamis DRV PNK Stadium.And the potential for impact is not just limited to starplayers star coaches can have a sizable influence as well.Deion Sanders signed on to coach the Colorado Buffaloes University of Colorado,Boulders football team ahead of the 2023 football season and quickly generated asignificant buzz.The team sold out its entire season in mid-September for the first time inits history,and visits to Folsom Field soared during game days,reaching a high of 62.3%onOctober 13th,2023 compared to the 2019-2023 home game day average.The excitementaround Coach Sanders and his team is having an impact on the local economy as well each sold out game is estimated to be bringing up to$17 million to Boulder businesses.The huge audiences that these celebrity-driven sporting events attract are shifting theparadigm and inviting cities,event organizers,and local business owners to rethink thebest way to maximize the impact of the massive traffic spikes.With no end in sight to the potential of celebrities and entertainment events to dictate viraltrends the collateral gains from cultural moments for retailers,advertisers,diningoperators,and local civic stakeholders is only expected to grow in 2024.2023 Placer Labs,Inc.|More insights at placer.ai|42.Second Hand Apparel on the RiseA confluence of factors helped second-hand retailers gain in popularity in recent years,with consumers looking to purchase clothes that are unique,affordable,andplanet-friendly.Following a strong 2022,the category continues to grow in 2023 and islikely to strengthen further in 2024 as interest in sustainability and frugality intensifies.And not only are second-hand retailers seeing a sustained increase in visits,with foot trafficup significantly compared both to pre-pandemic 2019 and to last year the category isgaining ground among younger consumers.Between 2019 and 2023,the share of“Singles&Starters”defined by Experian:Mosaic as“young singles starting out and some starterfamilies living a city lifestyle”increased within the captured market trade area of sevenleading second-hand chains.This means that these chains are now attracting more of thissegment than they did in 2019 another indication that the thrift store revival is here tostay.2023 Placer Labs,Inc.|More insights at placer.ai|53.Placemaking as the core of CREThe move towards greater tenant diversity in malls shaped the shopping center space inrecent years,and the trend appears set to be taken to the next level in 2024.Placemaking crafting public spaces that go beyond utilitarian needs to foster social interaction andexchange is at the forefront of many urban development initiatives,and the trend isalready boosting retail performance in successful placemaking projects.2023 Placer Labs,Inc.|More insights at placer.ai|6Placemaking through Tenant DiversityFenton,a mixed-use district in Cary,N.C.,opened in June 2022.The project showcases thepotential of placemaking to transform an underutilized space into a vibrant“live-work-play”community with something for individuals and families of all ages.The retail andentertainment village includes shops,restaurants,seasonal attractions,entertainmentvenues,and other diverse offerings that are establishing Fenton as a community hub and aprime destination for residents.Since the projects unveiling in 2022,visits have grownmore than 100%,and median dwell time has increased from 56 to 87 minutes.Across the country,in Phoenix,AZ,Park Central Mall the states first open-air shoppingcenter was also redesigned as a mixed-use development Park Central.The complex firstreopened in 2019 and now includes restaurants,office space,medical facilities,andbioscience research labs,with more hospitality and housing under construction.Visit dataindicates that the revitalization of Park Central is continuing to bring more traffic to thearea between 2022 and 2023,visits to Park Central increased by 29.2%while mediandwell time grew from 69 to 75 minutes.2023 Placer Labs,Inc.|More insights at placer.ai|7Placemaking by Diversifying Consumer OfferingsOne form of placemaking is to group together diverse tenants in a single space orneighborhood to give different types of consumers a reason to visit the area.But individualretailers can also use placemaking tools to diversify their offerings and give consumersmultiple reasons to visit and spend time in their venues.In March 2023,7-Eleven launched its electric vehicle fast charging network andaccompanying app 7Charge.The companys charging stations are currently available atselect 7-Eleven locations in California,Colorado,Florida,and Texas,with plans to continueexpanding to additional states.Already,foot traffic data indicates that 7-Eleven venues with7Charge are seeing significantly more year-over-year visit growth than their charger-lesscounterparts.And the introduction of 7Charge is not the companys first foray intoplacemaking 7-Eleven has already added car wash services to some of its venues,andthese locations also appear to be growing faster than the chains nationwide average.Boththe charging stations and the car washes appear to give some consumers a reason to visitthe chain that they would not have otherwise.And many of these car wash or EV chargingconsumers likely end up visiting the convenience store to pick up food or other items alongthe way.2023 Placer Labs,Inc.|More insights at placer.ai|8Placemaking gives retailers and real estate developers tools to attract more traffic from awider range of consumers and give these consumers a reason to spend more time in thestore or space.Given the extensive benefits of placemaking,the practice is likely tocontinue to intensify as we move into 2024.4.Experiences Drive Entertainment&Dining VisitsExperiential retail has been on the rise over the past couple of years.And as consumerscontinue looking for opportunities to socialize and interact with others in a post-COVIDworld,experiential components are now being added to a variety of consumer-facingbusinesses,from movie theaters to restaurants.Experience-Driven TheaterThe Barbie movie was the biggest box office hit of 2023(so far),bringing many spectatorswho had not gone to the movies since COVID back to theaters.And the spike in movietheater visits wasnt just driven by the glowing reviews the movie gave the crowd a chance 2023 Placer Labs,Inc.|More insights at placer.ai|9to participate in Barbie world directly.Audiences throughout the country decked out inhead-to-toe Barbiecore viewed the film with groups of friends or family members,generating a sense of community among the pink-clad theater attendees.Oppenheimer,another highly-anticipated film released the same day as Barbie,also drovemasses to theaters nationwide,in part thanks to the movies experiential promise.Christopher Nolan,Oppenheimers director,promised movie-goers an“intense experience”merely from viewing the film especially for those who chose to watch the film in IMAX.The release of Oppenheimer on the same weekend as Barbie also created a uniqueexperience opportunity in the form of“Barbenheimer”a phenomenon that drove over200,000 people to watch both movies on the same day.And in the most recent example of the movie as events trend,fans who came out for therelease of Taylor Swift:The Eras Tour turned movie theaters into concert venues by singingand dancing along with the recorded on-stage Swift.Experience-driven theater requires more than just great films.The movies need to be ableto lend themselves to being experienced by viewers as more than just scenes on a screen,and movie theaters need to go along with the fans and create the space that allows groupsand individuals to fully engage with the content being presented.The success of Barbie andTaylor Swift:The Eras Tour likely means that many more movie studios and movietheaters will look to lean into this trend of experience-driven theater in 2024.2023 Placer Labs,Inc.|More insights at placer.ai|10Experiential Dining:Anyone Can CookExperiential offerings are also boosting dining visits.GEN Korean BBQ,which went public inJune 2023,offers patrons an interactive,family-style dining experience where customersgrill their own meat at the table.The DIY concept keeps prices low while offering diners anexperience beyond the basic restaurant outing.And foot traffic data indicates that theoffering is popular with the public Q3 2023 visits to the chain were up 17.7%relative to2022 and by 41.6%compared to 2019.And visits per venue are also growing,even as GENKorean BBQ continues to expand indicating that there is plenty of demand to support thechains growth and that new locations are not cannibalizing existing venues.2023 Placer Labs,Inc.|More insights at placer.ai|11Part of GEN Korean BBQs success lies in its affordability,which has helped the brandattract a growing share of mid-and low-income households over the years.Between Q32019 and Q3 2023,the share of Cultural Connections a segment defined as diverse,midor low income families in urban apartments and residences increased from 5.9%in Q32019 to 9.2%in Q3 2023.As cost continues to be a major consumer concern,budget-friendly experiences that combine sociability and fun such as dining,movies,fitness,or nature-based recreation are likely to continue thriving in 2024.2023 Placer Labs,Inc.|More insights at placer.ai|125.Return to the“The Old Normal”Some pandemic-era changes predicted as permanent such as the demise of the gym quickly receded as the infection risks waned.But other shifts have proven more resilient and although the CDC officially declared the end of the COVID Public Health Emergency inMay 2023,certain consumer behaviors such as grocery shopping habits are only nowreturning to their pre-COVID norms.Weekend grocery visits dropped at the height of the pandemic,as newly flexible schedulesenabled many consumers to do their grocery shopping in the midst of what had previouslybeen a busy workweek.Indeed,some shoppers even chose to visit supermarkets mid-dayand mid-week to avoid the crowds and reduce exposure.But now,with weekday schedulesfilling up once again,the practice of weekend grocery shopping trips has returned with avengeance.In fact,both Aldi and Trader Joes saw a larger share of weekend visits in Q32023 than they had in Q3 2019 indicating that some consumer behavior is still in flux,andthat additional pre-pandemic consumer habits may well make a comeback in 2024.2023 Placer Labs,Inc.|More insights at placer.ai|13Return to OfficeFull-time remote work is another COVID-era behavior that has been slowly phasing out.Although office occupancy numbers are still nowhere near pre-pandemic levels,office visitshave been slowly creeping back up since mid-2021.A Gallup poll from October 2023 findingthat a majority of hybrid workers now work onsite at least three days a week.So far,the return-to-office trendline has not been linear,with bursts of progress followedby months of relative stagnation.But since the return-to-office impacts everything fromdowntown dining and retail to the wider housing market,even a minor advance in return tooffice numbers in 2024 is likely to have a major impact on a variety of sectors.2023 Placer Labs,Inc.|More insights at placer.ai|146.Retailers Suburban ShiftWhile consumer behavior in some sectors appears to be returning to pre-COVID patterns,the pandemic has had a sustained impact on other areas,including suburban markets.Small but significant migration shifts since the start of the pandemic along with the shifttowards hybrid work have led to a suburban resurgence,impacting everything from retailto dining.Shake Shack,for example,has been focusing on suburban markets for the expansion of itsnew drive-thru format,including in the wider Dallas-Fort Worth CBSA.A look at the foottraffic reveals the benefits of this strategy.In Q3 2023,average visits per venue to ShakeShacks suburban locations in the CBSA increased by a whopping 42.5%,while averagevisits per venue in the brands urban locations declined by 3.8%.The suburban ShakeShacks in Dallas-Fort Worth also drew visitors from higher-income households compared tothe brands urban restaurants.2023 Placer Labs,Inc.|More insights at placer.ai|15Concepts like Shake Shack that are capitalizing on rising suburban markets are alreadythriving and are likely to see even more growth in 2024 as Americans continue relocatingto less dense,more affordable areas.7.Grocery M&AThe grocery sector in the United States is dominated by several large holding companiesthat operate a variety of banners catering to different regions and audiences.Now,thetrend towards consolidation appears to be accelerating.The potential Kroger-Albertsonsmerger was one of the biggest grocery stories of 2023,and while the fate of that dealremains uncertain,smaller companies have also gotten in on the M&A action indicatingthat grocery M&A is a key trend to watch in 2024.Aldi Expands its Reach by Acquiring Southeastern GrocersIn August 2023,Aldi announced its intention to acquire the Winn-Dixie and HarveysSupermarket Banners through the purchase of parent company Southeastern Grocers and 2023 Placer Labs,Inc.|More insights at placer.ai|16plans to convert some of the acquired stores into Aldi venues.The deal will allow Aldi tostrengthen its presence in Alabama,Florida,Georgia,Louisiana,and Mississippi and helpthe Germany-based grocery giant to continue expanding its footprint in the United States.In addition to helping Aldi penetrate new markets,the acquisition will give Aldi theopportunity to tap into new audience segments.Both Aldi and Winn-Dixie currently operatein Florida,where the two banners serve different audiences Aldi tends to be morepopular among urban consumers,while Winn-Dixie caters to a large share of ruralshoppers.Adding the Winn-Dixie banner to its portfolio will enable Aldi to reach additionalsegments that are currently underserved by the companys eponymous banner.Consolidation Not Limited to Grocery GiantsConsolidation in the grocery market is not just limited to large and mid-size companies specialty grocers are also making moves.Heritage Grocers Group is a grocery holding company that operates a number of specialtybanners,including Cardenas Market(based in California),Tonys Fresh Market(based inIllinois),and Los Altos Ranch Market(based in Arizona).The company acquired El Rancho 2023 Placer Labs,Inc.|More insights at placer.ai|17Supermercado(based in Texas,with one store in Kansas)in June 2023,which increasedHeritages total store count from 85 to 113 and enabled the group to penetrate the Texasand Kansas specialty grocery market.Analyzing the trade area segmentation for Heritages banners reveals that the acquisitionhas also helped Heritage increase its reach among“Singles&Starters”defined by Experian:Mosaic as“young singles starting out and some starter families living a city lifestyle.”Given its potential to increase a companys geographic and audience reach,grocery M&Aactivity is likely to continue shaping the space in 2024.2023 Placer Labs,Inc.|More insights at placer.ai|188.Optimizing Retail Media Networks Through OfflineDataAlthough the importance of retail media networks has continued to grow over the pastcouple of years,there is still a significant untapped potential in the space and theinnovative advertising platform is likely to take on even greater importance in 2024.Retailers are continuing to experiment with new ways of leveraging their digital andphysical assets for advertisement partnerships,as demonstrated by Best Buys recentlylaunched self-service campaign platform.The companys retail media network,known asBest Buy Ads,now allows brands and agencies to purchase,plan,view and managecampaigns while tracking results in near-real time.The self-service platform is the latestexample of the companys constantly evolving retail media capabilities.And while BestBuys retail media network is currently mostly online,brands and advertising agencieswishing to find the right audience for their campaigns can make use of offline data toidentify promising markets.Layering demographic or psychographic datasets such as the AGS:Behavior&Attitudesdataset onto Best Buys potential market trade area in different markets reveals keydifferences in the electronics preferences of Best Buys shoppers across regions.Forexample,Florida attracts a relatively large share of“Video Game System Owners”,“MacUsers”,and“iPhone Users”compared to the statewide Florida benchmark,so advertisingpartners looking to reach these segments may want to focus their campaigns on Florida.At the same time,the trade areas of Best Buys in the Sunshine State tend to include fewer“Android Users”compared to the statewide benchmark.Advertisers looking to reach thisdemographic may want to focus on California instead,where Best Buys potential tradearea is over-indexed for the“Android Users”segment relative to the California average.Best Buy and its advertising partners can leverage this type of data to further optimize theircampaigns across the companys retail media platforms.2023 Placer Labs,Inc.|More insights at placer.ai|19Key Takeaways1.Popular events and viral happenings will create massive opportunities forlocal retail,dining,and advertisement:Events create a powerful draw thatproduce significant opportunities in the surrounding areas and reveal the need toupdate the way we view the event spaces themselves.2.Second-hand apparel will deliver value and visits:Consumers are looking topurchase clothes that are unique,affordable,and environmentally friendly andsecond-hand apparel fits all those criteria,so the category is expected to continuegrowing in 2024.3.Placemaking will be at the core of developers and retailers brick-and-mortarstrategies:The art of placemaking is not just transforming large-scale real estateprojects individual retailers and companies are also leveraging placemaking tools 2023 Placer Labs,Inc.|More insights at placer.ai|20to create spaces that give consumers multiple reasons to visit and linger in theirstores and venues.4.Adding experiential components to traditional consumer-facing businesseswill boost demand:The Eras Tour invited movie-goers to engage directly with thecontent,generating an excitement within the auditorium that drove fans to chooseto watch the movie in theaters.GEN Korean BBQ also introduces a uniqueexperiential aspect to its restaurants by inviting patrons to grill their own means.Experience is a draw,and leaning into this reality can unlock success.5.Certain consumer habits will continue the shift back to the“old”normal:Some COVID-era patterns were already receding in early 2022,but some shifts havebeen longer-lasting,with the return to pre-pandemic habits still underway in severalareas.6.Dining and retail concepts that focus on serving suburban audiences will seegrowth:Concepts like Shake Shack that are capitalizing on rising suburban marketsare already thriving and are likely to see even more growth in 2024 as Americanscontinue relocating to less dense,more affordable areas.7.The grocery industry will continue to consolidate:Grocery consolidation canhelp companies penetrate new markets and reach new audiences,so grocery M&Aactivity is likely to continue shaping the industry in 2024.8.Retail media networks will gain momentum:Although the importance of retailmedia networks has continued to grow over the past couple of years,there is still asignificant untapped potential in the space and the innovative advertising platformis likely to take on even greater importance in the coming year.2023 Placer Labs,Inc.|More insights at placer.ai|21

0人已浏览 2023-12-13 22页 5星级

012024 Audio Trends Report2024 Audio Trends Report022024 Audio Trends ReportAt a Glance:Audio continues to be a priority in content creation 3AI will be a useful tool in the creative producers workflow 5Authenticity and quality wins over cost and convenience 7Methodology 9About Voices 92024 Audio Trends ReportEach year,we publish an Audio Trends Report,showcasing and analyzing the latest trends in content creation,audio,and voice over.After surveying hundreds of clients,and analyzing internal data,its clear that in 2024,audio and voice over continue to be a priority in content creation.2023 saw generative AI make leaps and bounds in the public space,with these tools becoming widely available and integrated into many platforms.But with AIs ability to replicate human creativity so closely,authenticity and the human element within content creation is now more important than ever.We connected with over 1,000 creative producers,freelancers,and in-house marketers to analyze the state of voice over today.In this years Audio Trends Report,well look at the state of audio content in 2023,how AI is helping us create more,and why authenticity in content creation is more important now than ever.032024 Audio Trends ReportOver 40%of marketers expect to increase their voice over and audio budget next year Last year,we predicted that 2023 would be a milestone year for audio advertising and audio content.And it was!From smart home devices like Alexa,voice activated applications like Siri,and the growth in consumption of audio-focused media like podcasts and audiobooks,we wanted to make our routines and content accessible and convenient,and we wanted to be able to take it on-the-go.This trend can even be seen in the performance of key players in the audio industry.For example,Spotify,the worlds number one audio streaming platform,clocked record high new subscriptions and active monthly users in 2023.Their third quarter in 2023 saw the number of monthly active users grow to 574 million,up 26%YoY,with their subscriber base growing 16%YoY.We can expect to see a similar upward trajectory in 2024,and producers and creators know this 41%of creative producers expect to increase their voice over budget in 2024.Audio Experiences Continue to Be a Priority in Content Creation042024 Audio Trends ReportVoice over needs in 2024With just under half of brands expecting to increase their voice over budget in 2024,what kinds of content are they planning for?According to our survey,video content is still the media format with the highest need for voice actors.When asked what forms of content respondents anticipated needing voice overs for in 2024,over half(52%)said short form videos,38%said long form videos,and 30%said social media posts.The most anticipated projects needing voice over were animation(36%),internet ads(31%),and eLearning videos(23%).Half(50%)of brands hired voice actors at least once per month or more often,while the other half hired voice actors approximately once per quarter or a handful of times a year.2024 PredictionAfter seeing continued growth in consumption of audio media,the strong performance of audio advertising,and ongoing favor towards video content,short form and long form,its no surprise to see many brands planning to increase their voice over budget in 2024.In 2024,we predict audio-focused content will continue to surge,and the ways we interact with audio and where we access this content will evolve.For example,notable developments in 2023 include the introduction of audiobooks on Spotify to new markets,with Spotify even granting complimentary titles to paid subscribers on their platform.And dont forget the launch of their AI DJ,who plays a list of songs curated to your taste,interspersed with commentary from the AI DJ whose voice is modeled after their own Head of Cultural Partnerships.While this DJ isnt voice activated,one day it might be.Overall,we can expect to see greater integration of voice assisted applications,pushing us deeper into a hands-free world.With audiobook sales seeing double digit growth each year,and with the growing number of users on audio streaming platforms,its clear that there is still significant untapped potential in the realm of audio content.052024 Audio Trends ReportIf we were to pick out one technological trend that defined 2023,its the rise of generative AI.What once was a new tool that was explored with caution,not even one full year later is now an integral part of many peoples day-to-day lives.And professionals in marketing,creative,and voice acting industries are no exception.AI Will Be a Useful Tool in Supporting Your Brand VoiceIn 2023,nearly half(46%)of creative producers said they use AI-based tools as part of their workflow.According to respondents,the most common uses for AI are:creating or editing written content(50%),voice overs or text-to-speech(38%),and the collection and analysis of data(35%).In the world of voice over,AI voices and text-to-speech generators have gained notoriety and are increasingly becoming more mainstream.In 2023,45%of companies said they have used an AI voice.This is up seven percent compared to 2022,where 38%said theyve used an AI voice.The survey found that companies have significant interest in AI voices:64%of companies said they would use an AI voice in the future.Those interested in experimenting with AI voices are either looking to try it out for the first time,or have used one in the past and would use one again.Just under one quarter of respondents(24%)have not experimented with AI voices in the past and arent interested in them in the future.062024 Audio Trends Report2024 PredictionIn 2024,we expect to see growing use of AI voices in the creative process.But the AI voice doesnt have to be in the final productmany respondents who have used AI voices have used it in the pre-production phase to determine timing.Despite our prediction for increased use,we dont anticipate AI voices to suit every voice over need anytime soon.Creatives are increasingly open to experimenting with AI voices,but the majority remain hesitant to make AI the final voice choice for their projects.Many will continue to prefer a balance between AI and human voices.2024 is gearing up to be a year where AI integration becomes the norm.Creatives are leaning on AI-powered tools to assist with content creation,helping them create more content at a faster pace,without sacrificing quality.And similar to how a writer might turn to ChatGPT in the brainstorming or editing stage,AI voices will help producers in the production process.”Tara Parachuk,Senior Manager,Brand CommunicationsAI Voices:Voice Clone vs Composite VoiceDid you know that there are different types of AI voices?One type is a voice clone,which is a copy of a single humans voice,created with their consent for a specific brand,project,or purpose.In contrast,a composite voice is a combination of multiple voices combined into one.A composite voice is unrecognizable as any distinct individual.When we refer to AI voices,were referring to a voice clone of a single individuals voice.072024 Audio Trends ReportAuthenticity and Quality Wins Over Cost and ConvenienceWe now know that AI voice adoption is growing,with more creative producers open to experimenting with AI voices than in the past.But even with the rise of AI,brands who hire voice actors will prioritize real,authentic,and good quality voice acting over cost and convenience.Our 2023 Audio Trends Report found that audio quality,vocal performance,and cost were the top considerations when hiring voice actors.In this years survey,we asked companies the same question.Audio quality still remains the most important consideration.But this year,more brands are considering cost,with over half(52%)saying cost is one of their top considerations,compared to last year when only 35%said cost was an important factor.Top considerations when hiring voice actors were audio quality(56%),cost(52%),and vocal performance(50%).But when looking at brands who hire voice actors very frequently,averaging hiring once a week or over 50 times a year,“authentic accent”was the second most popular consideration,just after audio quality but overtaking“cost”.Financially speaking,2023 threw everyone for a loophole.Industries slowed down and projects were paused,so its no surprise that across the board,cost is consistently an important consideration.But the bottom line is that production houses and agencies are looking for good voices to bring their projects to life,and paying for a skilled actor is worth the cost.082024 Audio Trends Report2024 PredictionThe value that real,human voices bring will only increase as AI-generated creations become more popular.AI voices have a time and a place where theyre best suited,and not every voice-related project will need outstanding voice acting.But when the novelty of AI voices dies down,quality vocal performance and strong acting skills will be sought after to stand out in the crowd.Beyond just a well-executed voice over,brands who work with voice actors value the experience of working with a real person.It allows the opportunity to give nuanced direction,observe how feedback is understood,and effectively communicate subtle variations in instructions.As AI becomes used more in creative works,we might discover a trend where art,writing,subjects,and even sounds become more similar.Human touches and the qualities that come with the performance of a good voice actor will benefit brands,agencies,and audiences alike.Were in an age where the tools for content creation are available to everyone,and there are many automated tools out there to speed up the content creation process.But if your end goal as a brand is to drive awareness and sales,there needs to be a human element that your audience can connect with.Relatability and authenticity will be a huge factor in building trust with the consumer,and thats something that we dont think AI will be able to take over anytime soon.Authenticity DefinedThe word“authentic”gets thrown around a lot.But what does authenticity mean in the context of content creation?Lets take the definition provided by Merriam-Webster:not false,not an imitation,but true to ones own personality,spirit,or character.With this definition in mind,authentic content is content that aligns with the person or brands core values and essence.No matter what format or type of content your company creates,being authentic means the content you put out is honest,transparent,and true to your values and core message.Authenticity in Content CreationEnsuring that your content consistently aligns with your brand values and feels authentic to your audience isnt just a nice-to-have,its a key factor in connecting with audiences and driving engagement.Strong brand trust will drive organic growth and brand awareness a 2021 study by Edelman found that 61%of consumers are willing to advocate for and promote a brand they trust,and brand trust is actually a top purchasing consideration among consumers.Wondering how brand trust comes to life?It all starts with authenticity.Whether its in your brand messaging,actions,campaigns,or content,people connect most when its relatable,true to your values,and,to put it simply,human.In an era where generative AI can almost mirror human outputs,the genuine human element becomes even more valuable.092024 Audio Trends ReportMethodologyVoices deployed a qualitative survey targeting registered client users of Voices,ranging in industries from advertising,broadcast media,entertainment,film,education,and training.The survey looked to understand current market trends and how the landscape of the voice over industry has changed over the last year.1083 survey respondents participated in the survey that consisted of 12 questions.The survey opened on October 10th and closed on October 18th.There was an incentive of the chance to win one of three$100 Amazon gift cards for the completion of the survey.About VoicesVoices is the worlds#1 voice marketplace with over 4 million registered users.Since 2005,the biggest and most beloved brands have entrusted Voices to help them find professionals to bring their projects to life.Voices has worked with major clients including Shopify,Microsoft,The History Channel,The Discovery Channel,Hulu,Cisco,the biggest ad agencies and thousands more small businesses.What does this mean for 2024?Throughout this report,weve learned a few things:Audio content and audio routines are not slowing down anytime soon.If anything,we can expect more consumers to turn to audio experiences(like podcasts or audiobooks),and see more emphasis from creators and producers on the audio elements of their projects.Generative AI is not a fast fadits here to stay,and we expect it to become deeper integrated into platforms and softwares.It will be a useful tool in building your brands voice,but its not the be-all end-all.Finally,as AI takes a larger role in content creation,authentic and relatable content will be needed for brands to stand out in the crowd.2024 Audio Trends Report

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1Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions#GetTheFutureYouWantHEIGHTENED SUSTAINABILITY AWARENESS YET LAGGING ACTIONSA World in Balance 2023At the core of this report lie the twin pillars of environmental and social sustainability,articulating the profound significance of these intertwined dimensions.This thematic route echoes the paramount importance of nurturing both aspects in unison,mirroring the symbiotic relationship that underpins sustainability.Through the visual imagery presented within,we aim to convey the notion of equilibrium and coexistence,highlighting the delicate balance that is essential for sustainable progress.The cover image depicts a cranberry harvest in North America.There is only one harvest season per year,from mid-September to early November,when cranberries reach their peak color.3Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsExecutive Summary Human activity is exerting an unprecedented destabilizing influence on Earths climate and ecosystems.Not only have six of the nine planetary boundaries been crossed,but we are edging ever closer to the remaining three,risking irreversible change and harm to our ecosystems.1,2 In last years first edition of our annual A World in Balance research series,we found that,while organizations across industries have set long-term targets for achieving environmental sustainability,limited implementation is visible on the ground.Our 2022 research revealed that many executives remained unclear as to the business case for sustainability,regarding it as an unwelcome cost driver rather than an investment opportunity.Around half of respondents believed sustainability is a non-viable option,with the costs involved in pursuing it outweighing the benefits.In 2023,likely driven by the increasing incidences of extreme weather around the world,coupled with more stringent regulation,this has begun to change.More executives today say the sustainability business case is clear;in fact,this percentage has tripled in the past year,from 21%in 2022 to 63%.More also say that the benefits of sustainability outweigh the costs and view sustainability more positively than as simply a financial obligation.Despite the improved sentiment on sustainability and clarity around the business case,investment in sustainability has not increased in 2023.Our research reveals that organizations continue to fall short in terms of reporting on environmental sustainability initiatives,especially in measuring and collecting Scope 3 emissions.Similarly,action around sustainable product design has been less than impressive since last years research.There are pockets of progress,however,in defining sustainability priorities and redesigning business models.In fact,57%of executives shared that their organization is in the process of redesigning its business/operating model to be more sustainable,up from 37%in 2022.Biodiversity is also becoming more of a focus for organizations.With such significant improvements this year in the sustainability sentiment,we expect investment and more sustained action to follow suit in the coming year or two.Importantly,social sustainability is moving up the corporate agenda,with over half of executives(56%)saying their organization is increasingly focused on the social dimension of environmental,social,and corporate governance(ESG),4Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsExecutive Summary with organizations own employees being the primary beneficiaries.Our research reveals that organizations can do more to support workers in the supply chain,as only 38%currently restrict global suppliers to those who pay a living wage.They can also expand their ranges of accessible products and services to be more inclusive to people with a disability,health condition,or impairment,and by making them more affordable to local communities.In this years research,we also explored the critical topic of greenwashing.We found a perception gap between executives and consumers:only 17%of executives are concerned by the risk of greenwashing,while 33%of consumers globally believe organizations and brands are greenwashing their sustainability initiatives,rising to 50%among Gen Z consumers.We also found that organizations are pinning their hopes on digital technology and,in particular,generative artificial intelligence(AI),to help them achieve their sustainability goals.Fifty-nine percent of executives believe that generative AI will play a key role in their organizations sustainability transformation efforts.Ensure sustainability is a boardroom priority Embed social sustainability in the sustainability strategy Focus on quantifying Scope 3 emissions accurately Embrace circular and inclusive design Close the intention-action gapExplore the potential of technology to achieve climate goals0Lastly,our report shares recommendations for sustainability leaders to accelerate environmental and social initiatives from positive perception to sustained action:5Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsWHO SHOULD READ THIS REPORT AND WHY?This report offers comprehensive insights into important sustainability trends,both environmental and social,for the global corporate sector.It also provides perspective on shifts in these trends over the past year.Large organizations across industries such as aerospace and defense,automotive,consumer products and retail,energy and utilities,healthcare and life sciences,industrial manufacturing,public/government,and telecom,and any others that have ambitions to make an impact in a climate or social sphere,will find this report valuable.This report offers recommendations for executives to assist them in accelerating their sustainability journeys.It provides practical steps that senior leaders can take to begin developing a sustainability strategy and/or to advance their current sustainability actions.Given the importance of sustainability to different areas of business,this report is useful to a wide audience.The report caters to leaders across corporate functions(e.g.,strategy,sustainability,corporate social responsibility,sales and marketing,finance and accounting,and human resources)and functional leaders within value chain departments(e.g.,R&D,product design,sourcing and procurement,logistics,and production).This report is based on original findings from a comprehensive industry survey of 2,151 senior executives(director level and above)from 718 leading organizations across 13 countries,with annual revenue above$1 billion.Around 50%of surveyed executives are employed within corporate functions,and the remaining 50%come from value chain functions.We also conducted a global survey of 6,500 consumers to complement the executive findings.Please see the research methodology at the end of the report for more details.6Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions7Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsIntroduction This report is the second in Capgeminis annual research series that examines evolving corporate sustainability trends.In the first report of this series,we explored whether organizations are taking sustainability seriously and assessed their progress in transforming towards sustainability across strategy,products and services,operations,IT,and data use.We also explored the relationship between the maturity of organizations sustainability transformations and their financial performance.In our 2022 research,we discovered that,while organizations across industries have set long-term targets for achieving environmental sustainability,limited action is visible on the ground.In this years report,we examine the shifts in the aforementioned trends over the past year,and also explore the most significant newly emerging themes.Critically,we examine the extent to which organizations are focusing on social topics as part of their sustainability ambitions.To address these questions and themes,we conducted a global research study covering large organizations across 13 countries:Australia,Canada,France,Germany,India,Italy,Japan,the Netherlands,Norway,Spain,Sweden,the UK,and the US.These organizations operate across key industries and sectors,including aerospace and defense,automotive,consumer products,energy,financial services,healthcare and life sciences,industrial manufacturing,retail,telecom,utilities,and the public sector/government.The research focuses on practices and initiatives within environmental and social sustainability.The research structure includes a survey of 2,151 respondents from 718 organizations with annual revenue in excess of$1 billion.They are divided into the following profile groups:50%are executives from corporate functions,including strategy,sustainability,sales and marketing,finance and accounting,IT,operations,and human resources 50%are executives from value-chain functions including innovation/R&D,product design and development,sourcing and procurement,supply chain and logistics,and manufacturing and productionWe surveyed three executives from every organization included in the research.We also surveyed 6,500 consumers across the 13 countries to complement the findings from executives.For more details on the survey samples,please refer to the research methodology.8Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsIntroduction This report comprises five sections:The sustainability business case comes into focusSocial sustainability is moving up the corporate agenda Improved perceptions of sustainability are driving action plans and prioritiesGenerative AI has promising use cases for sustainabilityRecommendations:How organizations can accelerate their sustainability transformations 123459Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsTHE SUSTAINABILITY BUSINESS CASE COMES INTO FOCUS 0110Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsMore executives see sustainability as a growth opportunity Organizations today understand the business case for environmental sustainability better than even a year ago.In 2022,only 21%of executives agreed that the business case for sustainability was clear.In 2023,this percentage has tripled to 63%.In addition,the percentage of executives that claim the cost of sustainability initiatives outweighs the benefits and that sustainability initiatives are a financial burden has declined by more than half in the past year(see Figure 1).“The only way IKEA can be successful in the future is to be in a hurry to get sustainable.We need to get smarter on how we use energy and materials across the whole value chain,”says Jesper Brodin,CEO of Ingka Group.3 Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=2,004 executives,668 organizations;AugustSeptember 2023,N=2,001 executives,668 organizations.FIGURE 1.Over 60%of executives now say that the business case for sustainability is clear%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW21cS$S%Sustainability initiatives are a financial burden we have to bear in order to do businessThe cost for sustainability initiatives outweighs the benefitsThe business case for sustainability is clearSeptember 2022 September 202311Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsThis years research witnessed a consistent decline across countries in the share of executives agreeing that sustainability initiatives are principally a financial burden.US executives are the least progressive in this regard,with 38%viewing sustainability as a financial burden they must bear to do business(see Figure 2).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=2,004 executives,668 organizations;AugustSeptember 2023,N=2,001 executives,668 organizations.FIGURE 2.The view of sustainability as a financial obligation has declined across all countries but remains most pronounced in the US%OF EXECUTIVES BY COUNTRY WHO AGREE WITH THE STATEMENT:SUSTAINABILITY INITIATIVES ARE A FINANCIAL BURDEN WE HAVE TO BEAR IN ORDER TO DO BUSINESSSeptember 2022 September 2023NetherlandsItalySpainIndiaJapanSwedenUKGermanyCanadaFranceAustraliaUSGlobal53daYTTTQPIGDD 48&Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsKey drivers of the sustainability business caseDrivers of this positive sentiment over the past 12 months include:Extreme weather affecting every continent:Catastrophic weather events have touched every continent in recent years.Summer 2023 was the most extreme ever,with historic temperature rises,wildfires,and storms.This is driving public discourse around climate change.For example,there were record high temperatures in China,Europe,North Africa,the US,and the Middle East;wildfires in Europe,Canada,and the US;flooding in the Middle East and the US;drought conditions in the Horn of Africa and Chile;as well as the warmest sea temperatures on record.4,5 Costs from climate disasters being consistently high:Extreme weather events lead to significant costs to society,including damage to infrastructure,property,agriculture,and human health.A recent study estimates that from 2000 to 2019,weather events such as hurricanes,floods,and heat waves cost$2.86 trillion globally,averaging$143 billion annually.The study also projects that the global cost of climate damage will be between$1.7 trillion and$3.1 trillion per year by 2050.6,7 To date in 2023,the US alone has experienced 24 weather/climate disaster events with losses exceeding$1 billion each according to the US National Centers for Environmental Information.8 More organizations motivated by regulation:Sixty-four percent of executives in our survey shared that a motivating factor for adopting environmental and/or social sustainability strategies and initiatives was to comply with current regulation,up from 51%in 2022.Increasing pressure from regulators:The EU Corporate Sustainability Reporting Directive(CSRD)came into effect in 2023.CSRD requires all large organizations and listed small-and medium-sized organizations to report regularly on their environmental and social impact and defines a standard reporting framework for non-financial data.Failure to comply with CSRD can attract significant sanctions,according to the European Commission.9 The Corporate Sustainability Due Diligence Directive(CSDDD)is set to take effect in 2025 or 2026,and will make it mandatory for organizations operating in the EU to address adverse impacts of their operations and supply chains on 64%of executives in our survey shared that a motivating factor for adopting sustainability was to comply with current regulation,up from 51%in 202213Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsenergy and cut carbon emissions.The IRA offers tax credits for organizations that manufacture in the US and provides subsidies for both domestic and international organizations.13 In the US,more than$21.7 billion has been committed to support early-stage clean tech in areas like carbon storage,electric vehicles,and clean energy.The EU lags with$8.7 billion in similar projects since the enforcement of IRA.14 The difference is most dramatic in clean hydrogen.EU venture capital investments in clean hydrogen reached a peak of 343 million in Q1 2022,nearly three times that of the US.However,in subsequent quarters,US investments in green hydrogen consistently surpassed EU investments,totaling 1.2 billion more over the entire period.15 Consumer protections for sustainability gain traction:In May 2023,the European Parliament adopted a new directive to restrict business practices that limit consumers sustainable choices.16 In June 2023,the UK Advertising Standards Authority released updated guidance on misleading environmental claims and social responsibility.17 More organizations setting net zero targets:As of June 2023,929 organizations from the Forbes 2000 list have set net zero targets,up 32%from 702 in June 2022.18human rights and the environment.In March 2022,the US Securities and Exchange Commission(SEC)proposed a climate-related disclosure rule that would require publicly traded organizations to report Scope 1,Scope 2,and Scope 3 carbon emissions in initial filings and annual financial reports.11 New standards coming into force:2023 saw groundbreaking sustainability agreements,including the adoption of the Kunming-Montreal Global Biodiversity Framework set at COP 15,the first science-based targets for nature,and the final recommendations from the Taskforce on Nature-related Financial Disclosures in September 2023,which will enable organizations to assess,disclose,and manage nature-related risks and impacts.12 More organizations motivated by revenue potential:Three-quarters(74%)of executives in our survey shared that a motivating factor for adopting environmental and/or social sustainability strategies and initiatives was to increase future revenue,up from 52%in 2022.The US Inflation Reduction Act(IRA)gains momentum:Signed into law in August 2022,the landmark climate legislation made investing in climate technologies in the US more attractive.The IRA includes funding,programs,and incentives to accelerate the transition to clean More organizations committing to/validating science-based targets:More organizations set targets in 2022 than in the entire preceding seven-year period,representing an 87%increase in targets validated by SBTi from 2021 to 2022.By the end of 2022,the 4,230 organizations with science-based targets or commitments represented 34%of the global economy by market capitalization.1974%of executives in our survey shared that a motivating factor for adopting sustainability was to increase future revenue,up from 52%in 202214Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsAT MOST ORGANIZATIONS,THE BOARD ENGAGES WITH SUSTAINABILITYMost executives in this years survey agreed that their board of directors is actively engaging with their organizations sustainability strategy,meaning they prioritize sustainability and are working in close collaboration with the CEO and management team on devising strategy.Board engagement is highest in India(77%)and lowest in Japan(39%)(see Figure 3).The high proportion of board engagement in India may be driven by the mandate requiring companies above a certain size to invest 2%of their net profits on corporate social responsibility(CSR)projects every year.Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=1,076 executives from corporate functions.FIGURE 3.Nearly 60%of executives globally say their board of directors is engaged with sustainability strategy%OF EXECUTIVES BY COUNTRY WHO AGREE WITH THE STATEMENT:OUR BOARD OF DIRECTORS PRIORITIZES SUSTAINABILITY AND IS ACTIVELY ENGAGED WITH OUR ORGANIZATIONS SUSTAINABILITY STRATEGY(SEPTEMBER 2023)59wsricbTTSHC9%JapanFranceSpainAustraliaItalySwedenGermanyUKNorwayNetherlandsUSCanadaIndiaGlobal15Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsIMPROVED PERCEPTIONS OF SUSTAINABILITY ARE DRIVING ACTION PLANS AND PRIORITIES 0216Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsThe positive shift in sentiment has not translated to increased sustainability investment yetIn our current 2023 research,average annual investment in environmental sustainability initiatives and practices across industries represents 0.92%of total revenue,up from 0.91%in 2022.This increase represents an additional$1.4 million investment per company on average,year on year.As was the case in 2022,total spending on sustainability trends upward with organization size,but larger organizations invest less as a percentage of total revenue:on average,only 0.42%of total revenue compared with 2.9%among smaller organizations(see Figure 4).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=668 organizations;AugustSeptember 2023,N=668 organizations.FIGURE 4.Sustainability investment stayed broadly unchanged in 2023 AVERAGE ANNUAL INVESTMENT IN SUSTAINABILITY AS A%OF TOTAL REVENUE,BY COMPANY SIZE 2022-Average sustainability investmentas a%of total revenue2023-Average sustainability investmentas a%of total revenue0.91%0.92%2.81%2.90%1.40%1.37%0.78%0.79%0.41%0.42%Annual revenue globally$20 bn $10 bn-$20 bn$5 bn-$10 bn$1 bn-$5 bnAll companies17Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsHowever,organizations have progressed in defining sustainability initiatives and redesigning business models The share of executives that say their organization has a defined priority list of sustainability initiatives to implement in the next three years is up to 61%,from 49%in 2022.In addition,more executives shared that their organization is in the process of redesigning its business/operating model to be more sustainable(37%in 2022,up to 57%in 2023)(see Figure 5).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=1,003 executives in corporate functions;AugustSeptember 2023,N=1,001 executives in corporate functions.FIGURE 5.More than half of executives say their organization has a 3-year priority list of initiatives and is redesigning its business/operating model to be more sustainable%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOWSeptember 2022 September 202349a7W%We are redesigning our business/operatingmodel,so it is more sustainableWe have a clearly defined prioritylist of sustainability initiatives to be implementedin the next three years18Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsExecutives at organizations with boards who are actively engaged in sustainability are even more optimistic on these measures:74%of executives with engaged boards say they have a clearly defined priority list of sustainability initiatives,compared with 61%on average57%of executives say that their organization is redesigning its business/operating model to be more sustainable 71%say they are redesigning their business or operating models to be more sustainable(versus 57%on average)Further,executives at organizations with engaged boards are more likely to agree that,by 2040,they will have more sustainable business models(88%versus 53%on average,globally).19Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsBiodiversity has become more of a focal pointIn our recent biodiversity research,63%of executives surveyed said biodiversity is important to their company,but only 24%of organizations have a biodiversity strategy.20 While most organizations lack a coherent strategy to protect biodiversity and combat biodiversity loss,they have progressed in actions taken since last year.In our current research,59%of executives say that their organization monitors the conversion of natural ecosystems(i.e.,changes owing to deforestation)on their owned or managed lands,up from 47%in 2022.In addition,56%say their organization invests in conserving natural habitats,up from 43%in 2022(see Figure 6).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=1,001 executives in value chain functions;AugustSeptember 2023,N=1,000 executives in value chain functions.FIGURE 6.Organizations have improved their actions to preserve biodiversity%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW47YCV%We invest in conserving natural habitats(such as rainforests)We monitor the conversion of naturalecosystems(i.e.,changes owing to deforestation)on our owned/managed landsSeptember 2022 September 202320Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsIn the sections that follow,we highlight three key challenges that organizations face today in their sustainability transformations relating to:Developing sustainable products and services Measuring Scope 3 emissions Reporting and disclosing environmental sustainability dataActions addressing these three topics have largely remained unchanged from last year or,in some cases,declined.60%of executives say their organization reports a carbon footprint for every product/service they sell,virtually unchanged from 2022 21Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsSustainable product design and development have seen only limited advancement There has been limited to no movement in key areas related to product design and development.For example,60%of executives say their organization reports a carbon footprint for every product/service they sell,virtually unchanged from 2022(59%).In the case of designing products to have longer life spans,the share of executives who say their organization does this declined from 57%in 2022 to 47%in 2023.When it comes to eliminating fossil fuels and moving away from product design using virgin timber,organizations have made headway,being up 15%in both areas(see Figure 7).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=1,001 executives in value chain functions;AugustSeptember 2023,N=1,000 executives in value chain functions.*AugustSeptember 2022,N=1,003 executives in corporate functions;AugustSeptember 2023,N=1,001 executives in corporate functions.FIGURE 7.Almost as many executives are acting on sustainable product design in 2023 as in 2022%OF EXECUTIVES WHO AGREE WITH THE STATEMENTSSeptember 2022 September 202359XWWGTURSGbDY%We are redesigning products to have a lower impact on forests(e.g.,usingless virgin timber so fewer trees are cut down)We are redesigning products to remove fossil-fuel feedstocksources(such as coal)We take back end-of-life products from customers to use them in theremanufacturing process/upcycleWe perform LCA(life-cycle assessment)on all of our products/servicesWe are designing products so they can serve their originally intendedfunctions for longer Circularity is a key component of our sustainability strategy*We communicate a carbon footprint for every product/service we sell*22Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsTracking Scope 3 emissions is proving challengingThe share of executives that say their organization has the ability to measure and collect data on Scope 1 and 2 emissions has remained unchanged,year on year.For Scope 3 emissions(emissions from indirect sources in the value or supply chain),the share has declined from 60%in 2022 to 51%in 2023(see Figure 8).Organizations in the EU are beginning to realize just how complex it is to fulfil the requirements of the now active CSRD(Corporate Sustainability Reporting Directive).According to recent research from Capgemini and CDP(the not-for-profit charity that runs the global environmental impact disclosure system),of emissions disclosed by European organizations in 2022,92%were Scope 3.Measures taken to reduce these customer-and supplier-related emissions only covered an average of 37%of total emissions from these categories.21 23Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsSource:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=1,001 executives in value chain functions;AugustSeptember 2023,N=1,000 executives in value chain functions.*Scope 1 emissions are direct emissions from buildings or assets owned or controlled by an organization,such as the emissions associated with fuel consumption and refrigerant gases.Scope 2 emissions relate to emissions associated with the consumption of electricity,heat,or steam.Scope 3 emissions are all other emissions generated within an organizations value chain,including upstream and downstream emissions.They occur as a result of the activities of an entity,but from sources not owned or controlled by that entitys business.FIGURE 8.Fewer executives say their organization can measure and collect Scope 3 emissions data in 2023 compared with 2022%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW*September 2022 September 202360aQ%We are able to measure and collect dataon our Scope 3 emissionsWe are able to measure and collect data onour Scope 1 and Scope 2 emissionsDaniel Schneiders,Director of Climate Program at pharmaceutical and biotechnology company Bayer,comments on the challenge:“To achieve significant reductions in the supply chain,we are intensifying our collaboration with suppliers.We are trying to understand how we could work together so that they can reduce their emissions,in particular through shifting to renewable energies.We have also updated our Supplier Code of Conduct However,accessing emissions data from suppliers is a challenge as,for instance,they do not necessarily have dedicated data-monitoring processes or IT infrastructures.Additionally,lacking standards,data is hard to compare.Currently,therefore,attaining a complete and precise assessment as a foundation for steering Scope 3 emissions remains complicated.”2224Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions54%of executives say that their organization has sustainability data audited by a third partyOrganizations are still challenged by reporting on environmental sustainability There has been some improvement in whether organizations have their sustainability data audited by an outside party and a decline in the use of third parties for disclosure and benchmarking(see Figure 9).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=1,003 executives in corporate functions;AugustSeptember 2023,N=1,001 executives in corporate functions.FIGURE 9.More executives are using third parties to audit sustainability data but fewer are using them to disclose and benchmark progress%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOWSeptember 2022 September 202350TTHPB%We use third-party sustainability indices(e.g.,Dow Jones Sustainability Index)to benchmark our progresson sustainabilityWe use an external third partyto help disclose our environmentalimpact(e.g.,CDP Worldwide)We have our sustainabilitydata audited by a third party 25Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsWHO ARE THE SUSTAINABILITY LEADERS?As seen in our research over the past three years,many organizations work on sustainability initiatives and discrete projects in silos,with no overarching strategy or governance mechanisms.Becoming a sustainable business is a long and complex process,demanding a transformation of operating models,technology,and attitudes.To gain a sense of where organizations are in their sustainability journeys and identify the leading organizations,we mapped their sustainability maturity across three dimensions:Value chain processes:We assessed the sustainability initiatives and activities of organizations across the value chain,including sourcing,R&D/product design/innovation,manufacturing,and logistics,as well as the use of technology for sustainability.Sustainability enablers:This dimension relates to organizations getting their people to buy into their sustainability cultures,supported by corporate functions such as IT,finance and accounting,and sales and marketing.Tech accelerators:This dimension refers to the adoption of digital technologies and pathways to accelerate sustainability transformation.These include investments in AI,automation,digital twins,Internet of Things(IOT),as well as hydrogen infrastructure,gigafactories,electrification,bioeconomy,industrial-scale carbon capture,utilization,and storage(CCUS),and the transformation of grids to enable decarbonization and integration of new clean energies.Source:Capgemini Research Institute analysis.FIGURE 10.The building blocks of sustainability transformationVALUE CHAINPROCESSESSUSTAINABILITYENABLERSTECHACCELERATORS Sourcing Innovation/R&D/product design Manufacturing Logistics Technology Vision and leadership Talent Culture IT Finance andaccounting Sales and marketing AI/machine learning Automation AR/VR Collaboration tools 3D printing Digital twins IoT/IIoT Robotics Hydrogen Gigafactories Electrification Smart grids Bioeconomy Carbon capture,utilization,and storage26Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsBased on these building blocks,we identified three cohorts by their sustainability maturity:1.Frontrunners:better progression along the three dimensions 2.Experimenters:low maturity in either one or two of the above three dimensions 3.Beginners:low maturity along the three dimensions.Our framework includes nearly 80 statements to assess the maturity of the organizations across the three building blocks.Please refer to the full list of statements in the appendix.Significant progress across all three dimensions makes these organizations frontrunners.In 2022,only about one in ten organizations(11%)in our survey is categorized as a sustainability frontrunner.In our current research,this has decreased to 8%(see Figure 11).Please note that overall,organizations have improved their scores across all metrics analyzed this year compared to last year;however,within the 2023 sample of organizations,the distribution has shifted.Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=2,004 executives,N=668 organizations;AugustSeptember 2023,N=2,001 executives,N=668 organizations.FIGURE 11.In 2023,beginners constitute a higher share of organizations DISTRIBUTION OF ORGANIZATIONS ALONG THE SUSTAINABILITY MATURITY FRAMEWORKSeptember 2022 September 202311%8cX&4ginnersExperimentersFrontrunners27Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsWe analyzed the financials of the organizations in our current research to divine whether a financial advantage can be said to accrue consistently from improved sustainable performance.As Figure 12 shows,frontrunners outperformed on total revenue per employee and EBIT margin.Frontrunners realized 12%higher revenue per employee compared with the average from 2021 to 2022 and 5%higher EBIT margin compared with the average from the same period.This analysis does not imply that sustainability equates directly to profitability.Rather,it highlights that sustainability need not lead to financial disadvantage.It also demonstrates that organizations who are more successful(i.e.,realize higher revenue growth,for example)have greater means to invest in sustainability.DIFFERENCE IN REVENUE PER EMPLOYEE FROM THE AVERAGE ORGANIZATION,BY SUSTAINABILITY MATURITY,202122DIFFERENCE IN EBIT MARGIN FROM THE AVERAGE ORGANIZATION,BY SUSTAINABILITY MATURITY,202122higher than average Frontrunners12%lower than average Beginners12%Experimentershigher than average 6%higher than average Frontrunners5%lower than average Beginners7%3%Experimentershigher than average Source:Capgemini Research Institute financial analysis of 660 organizations(N=52 frontrunners,384 experimenters,and 224 beginners)for FY 202122.Note:The percentages indicate the difference in performance for each particular cohort compared with the average for all organizations;eight organizations were removed from the financial analysis because they had outlier data.FIGURE 12.Frontrunners realized higher revenue per employee and EBIT margin28Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions29Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsA World in Balance 2023:Heightened sustainability awareness yet lagging actionsSOCIAL SUSTAINABILITY IS MOVING UP THE CORPORATE AGENDA0330Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsSocial sustainability is becoming a key priority for organizations In accordance with the UN Global Compact,we define social sustainability as the programs,initiatives,practices,and/or processes designed to identify and manage business impacts on employees,workers in the value or supply chains,customers,and local communities.Social issues are a significant aspect of the UNs Social Development Goals(SDGs),for whose achievement businesses have a critical role to play.The SDGs cover poverty,hunger,health and wellbeing,education,gender equality,decent work and dignity,inequality,and peace and justice.LAURENCE PESSEZ Global Head of CSR at BNP Paribas“The next wave of being responsible will entail broader action,not only in the health and environmental sectors,but also on employment,education,and other broader societal issues.”31Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsOver half(56%)of executives say that they are increasingly focusing on the social dimension of ESG(see Figure 13).A similar share(59%)say that their organizations sustainability projects address both environmental and social aspects.One recent study estimates that 96%of S&P 500 organizations publish ESG reports in some form today.23 Executives at organizations with boards who are engaged in sustainability are more likely to say they are increasingly focusing on the social dimension of ESG(96%versus 56%on average).Laurence Pessez,Global Head of CSR at BNP Paribas,says:“The next wave of being responsible will entail broader action,not only in the health and environmental sectors,but also on employment,education,and other broader societal issues.”24 Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=2,151 executives,717 organizations.FIGURE 13.Over half of executives globally say their organization is increasingly focused on social sustainability%OF EXECUTIVES BY COUNTRY WHO AGREE WITH THE STATEMENT:WE ARE INCREASINGLY FOCUSING ON THE SOCIAL DIMENSION OF ESG(SEPTEMBER 2023)56fdcbYWWWPPHGF%JapanSpainUKItalyGermanySwedenIndiaCanadaFranceAustraliaUSNetherlandsNorwayGlobal59%of executives say that their organizations sustainability projects address both environmental and social aspects32Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsOrganizations are putting the most effort into social sustainability initiatives for their own workforcesEssentially all executives(99%)say their organization is launching social sustainability initiatives/programs to benefit their workforce.Sixty-five percent are launching programs to benefit local communities.For example,60%of executives say that their organization is training and upskilling employees on diversity and inclusion,and 51%offer mental health programs to employees(see Figure 14).Aerospace and defense leads on occupational health and safety training(74%).Public sector/government leads on mental-health programs(65%)and recruiting and hiring diverse populations(70%),while industrial manufacturing leads in diversifying its executive committee(66%).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=1,076 executives in corporate functions.*N=990 executives in corporate functions for the statement.FIGURE 14.67%of executives say their organization trains employees on health and safety%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW(SEPTEMBER 2023)67cUQ%We offer mental-health programs to employeesWe have diversified our executive committee on genderidentity and/or sexual orientationWe train and upskill our employees on diversity and inclusion topics*We recruit and hire people of different gender identities,sexual orientations,races,ethnicities,socio-economic backgrounds,and/or abilitiesWe train our employees on occupational health and safety33Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsOrganizations are working to incorporate social sustainability initiatives benefiting their current and future employees.Telecom organization Verizon partners with organizations focused on underserved communities,such as the Society of Women Engineers and the National Society of Black Engineers,to recruit diverse talent.Verizon also fosters inclusion through ongoing diversity and inclusion(D&I)training and 10 employee resource groups(ERGs),which amplifies diverse voices and supports employee development.Consequently,their US workforce is now made up of nearly 60%women and people of color.25 Similarly,clothing retailer Gap partnered with labor advocacy groups to promote equality for women in the manufacturing sector.The partnership resulted in improved wages and worker conditions.In participating factories,the pay gap and incidence of sexual harassment decreased by almost 20%,while access to prenatal care and productivity rose by more than 20%.26 34Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsOrganizations are not supporting workers in the supply chain effectivelyThe UN Global Compact asserts that a living wage a wage that enables workers and their families to meet their basic needs is a driving force behind eliminating poverty.The UK-based Living Wage Foundation believes a living wage is crucial to achieving eight of the 17 SDGs;for example,those that focus on eradicating poverty,raising standards of health and wellbeing,striving for quality education and gender equality,and ensuring economic growth.27Organizations must do more to hold suppliers accountable for upholding the standards they promise.Over half(64%)of executives say their organization considers the ESG ratings and environmental pledges taken by suppliers during supplier selection.However,only 38%of executives across industries say they only work with suppliers who pay a living wage(see Figure 15).For organizations with tiered-supplier operations,it may be difficult to hold all suppliers accountable owing to the disparity of legal systems in different geographies.Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=1,076 executives in corporate functions.FIGURE 15.Only 38%of executives globally say their organization restricts suppliers to those that pay a living wage%OF EXECUTIVES BY INDUSTRY WHO AGREE WITH THE STATEMENT:WE ONLY WORK WITH SUPPLI-ERS WHO PAY A LIVING WAGE(SEPTEMBER 2023)38FCBA8554%rospaceand defenseRetailHealthcare and lifesciencesAutomotiveFinancialservicesConsumer productsmanufacturing Public/governmentUtilitiesEnergy TelecomIndustrial manufacturingGlobal35Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsThe living wage concept is gaining momentum globally.The EU has been actively discussing the issue of fair wages.Aligned to its“European Pillar of Social Rights”that establishes the principle that EU workers have the right to a fair wage that provides for a decent standard of living,the European Commissions directive on adequate minimum wages was approved and formally adopted in October 2022.Member states have until November 2024 to align their national wages with the new rules.28 Some US states and cities have implemented minimum wage laws that are higher than federal levels in an effort to establish a living wage,including San Francisco,Los Angles,and New York.29 In the UK,the Living Wage Foundation promotes the concept of a living wage and has accredited 14,000 employers who voluntarily pay their employees a living wage.30 However,more corporate efforts are needed.According to a 2022 survey of 1,000 global organizations,only 4%pay their own workers a living wage or have targets to pay them one.31 There are examples of organizations striving to provide a living wage.Unilever,upon reaching its target to pay all its employees a living wage by 2021,announced its commitment to do the same for all its suppliers by 2030.32 H&M implemented a fair living wage strategy for all its tier-1 suppliers,covering eight countries and 336 suppliers,by 2019.33 Similarly,cosmetic giant,LOral,having announced implementation of its living-wage policy for its employees in 2020,intends to extend the same to its strategic suppliers by 2030.34Globally,45%of consumers say they expect organizations to ensure they only work with suppliers who pay a living wage,with millennials most commonly having this expectation(63%)(see Figure 16).By country,the greatest share of consumers in Australia(56%)expects organizations/brands to work with suppliers who pay a living wage,followed by Canada and India(55ch).45%of consumers expect organizations/brands to work with suppliers who pay a living wage36Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsSource:Capgemini Research Institute,Consumer Survey,October 2023,N=6,500 consumers.FIGURE 16.Nearly half of consumers globally expect suppliers to pay a living wage45YcC%Boomers,aged57-73 Gen X,aged41-56Millennials,aged 25-40Gen Z,aged18-24Global%OF CONSUMERS WHO EXPECT ORGANIZATIONS TO ONLY WORK WITH SUPPLIERS WHO PAY A LIVING WAGE,BY COUNTRY45VUUQPFECA85%UKSwedenGermanyFranceItalyNorwayJapanSpainNetherlandsUSIndiaCanadaAustraliaGlobal%OF CONSUMERS WHO EXPECT ORGANIZATIONS TO ONLY WORK WITH SUPPLIERS WHO PAY A LIVING WAGE,BY AGE GROUP37Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsAccessibility and affordability require more attentionLess than half of executives say their organization is making products/services accessible to people with disabilities,health conditions,impairments,or neurodivergence as well as affordable to their local communities(see Figure 17).Our inclusive design research found that diverse and inclusive tech teams lead to more inclusive tech design.Organizations with advanced inclusive practices are four times more likely to create inclusive products.35Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=990 executives in corporate functions.FIGURE 17.Only 42%of executives say their organization makes products/services accessible to people with disabilities%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW(SEPTEMBER 2023)42%We make our products/services affordable toour local communitiesWe make our products/services accessible to peoplewith disabilities/health conditions/impairments38Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsAfter conducting an extensive survey of children aged 612,the Lego Group relaunched its Friends line of products with new characters representing diverse cultural backgrounds,physical and mental traits,and complex emotions,including characters with limb differences,anxiety,and neurodivergence.36 Beauty company Lancme recently unveiled an AI-powered make-up applicator called Hapta,which assists people with limited arm and hand mobility.Hapta is lightweight,uses sensors and motion-stabilizing technology,and can be used with a variety of make-up products,including lipstick and mascara.37 Based on our recent consumer research,in a difficult economic environment,67%of consumers expect organizations to accept lower prices for essential products such as food,medicine,fuel,apparel,and utilities.38 For key industries such as food and beverage,consumer goods,and energy,providing more affordable local pricing schemes will benefit local communities,generating goodwill and social impact.Other important industries could also follow this model.BookNook,a US-based educational software organization that develops reading and literacy instruction for secondary education,offers an equity-based pricing 67%of consumers expect organizations to accept lower prices for essential products such as food,medicine,fuel,apparel,and utilities in difficult economic timesscheme to make its licenses more equitable and affordable for schools and districts.The organization provides discounts to schools that serve a high proportion of children eligible for free or discounted meals,a disproportionate number of whom are from low-income families and communities of color.3939Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsEXECUTIVES DO NOT FULLY GRASP CONSUMER SKEPTICISM Consumers around the world are becoming more wary of greenwashing(the practice of overselling or overstating an environmental claim for a product or service).Recent Capgemini research found that this sentiment is more prevalent owing to consumers continual exposure to such messaging as people spend more time online.It also illustrates the potential disconnect between marketing objectives and impact.In other words,when“green”products do not live up to the hype,buyers feel let down and are more likely to be skeptical about similar products.40 Regulators,too,are becoming more stringent in setting rules and guidance for organizations advertising and marketing environmental claims.The EU and the UK have both implemented new or updated regulations to combat greenwashing and protect consumers in 2023.However,executives in our survey do not appear overly concerned with accusations of greenwashing.About half(51%)follow external guidelines on responsible communication and advertising to avoid such issues(up from only 49%in 2022).Only 17lieve their organizations top leaders are concerned about the possibility that the public perceives their sustainability initiatives with suspicion.51%of executives say that their organization follows external guidelines on responsible communication and advertising to avoid accusations of greenwashing40Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsWe also asked executives how consumers viewed their organizations sustainability initiatives.Less than one-fifth(17%)of executives say they believe consumers perceive their initiatives as greenwashing.This sentiment is most prevalent in the US(35%)and least in Japan(6%).In contrast,when we asked consumers directly how they felt,a third said they believe organizations/brands greenwash their initiatives(see Figure 18).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=2,151 executives,667 organizations.Consumer Survey,October 2023,N=6,500 consumers.FIGURE 18.There is a perception gap between executives and consumers on sustainability initiatives%OF EXECUTIVES AND CONSUMERS WHO BELIEVE THE STATEMENTS BELOW%of Gen Z consumers(aged 18-24)who believe that organizations/brandsare greenwashing theirsustainability initiatives%of all consumers who believethat organizations/brands aregreenwashing their sustainabilityinitiatives%of executives who believe thatconsumers consider theirorganizations sustainability initiativesas greenwashing173P%of executives say they believe consumers perceive their initiatives as greenwashing41Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsthat organizations/brands are greenwashing,followed by Canada(43%).Consumers in the UK are the least suspicious that organizations/brands Our research reveals that consumers skepticism trends downward with age.By country,India has the greatest share of consumers(45%)who believe%OF CONSUMERS WHO BELIEVE THAT ORGANIZATIONS/BRANDS ARE GREENWASHING THEIR SUSTAINABILITY INITIATIVES,BY AGE GROUP%OF CONSUMERS WHO BELIEVE THAT ORGANIZATIONS/BRANDS ARE GREENWASHING THEIR SUSTAINABILITY INITIATIVES,BY COUNTRY33PE%Boomers,aged57-73 Gen X,aged41-56Millennials,aged 25-40Gen Z,aged18-24Global33EC76665421($%UKSwedenItalyFranceNetherlandsGermanyUSAustraliaJapanNorwaySpainCanadaIndiaGlobal Source:Capgemini Research Institute,Consumer Survey,October 2023,N=6,500 consumers.FIGURE 19.Gen Z consumers are most likely to believe organizations/brands are greenwashing are engaging in greenwashing,perhaps owing to stringent regulations regarding green claims in those countries(see Figure 19).42Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsFurther,our research reveals that 49%of consumers never,rarely,or only sometimes trust an environmental claim about a purchase they are considering,rising to 65%among Gen Z consumers(see Figure 20).After recently facing accusations of“virtue signaling”in certain products marketing campaigns,Unilever signaled a change in its strategy by not“force-fitting”purpose to every brand.Instead,the company will focus on shorter-term impacts in four key pillars:climate,nature,plastics,and livelihoods,and will give brand managers more authority to set metrics and track progress.41,42 Source:Capgemini Research Institute,Consumer Survey,October 2023,N=6,500 consumers.FIGURE 20.65%of Gen Z consumers say they never,rarely,or only sometimes trust an environmental claim%OF CONSUMERS WHO TRUST AN ENVIRONMENTAL CLAIM ABOUT A PRODUCT THAT THEY WANT TO PURCHASE NEVER,RARELY,OR ONLY SOMETIMES,BY AGE GROUP49eQFA%Boomers,aged 5773 Gen X,aged 4156Millennials,aged 2540Gen Z,aged 1824Global43Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsGENERATIVE AI HAS PROMISING USE CASES FOR SUSTAINABILITY0444Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsDigital technologies are key to organizations achieving their climate and social ambitions.In our survey,54%of executives say that their organization uses technology such as AI,automation,or digital twins to achieve their sustainability agenda.According to a report from the International Telecommunications Union(ITU,a UN body),digital technology could help reduce global carbon emissions by 17%.43“Only digital technologies move at the speed and scale necessary to achieve the kind of dramatic reduction in emissions that we need to see in the next 10 years,”says Inger Andersen,UNEP Executive Director.44 While wide-ranging digital technologies can accelerate the transition to a green economy,from automation and IoT to blockchain and digital twins,AI in particular is rapidly gaining momentum in the fight against climate change.AI can make more precise weather predictions,track air quality,and measure the carbon footprint of products/services or even supply chains,while enabling smarter decision-making and real-time monitoring.45 AI can also be used to improve accessibility for people with disabilities or other impairments.For example,using speech or image recognition,AI technologies can enhance communication,navigation,and interaction for those with hearing,vision,mobility,and other disabilities.Ava,an AI-powered transcription app,provides deaf and hard-of hearing people live captions of any conversations in the periphery.46Further,the implications of utilizing generative AI to achieve sustainability targets will be far-reaching.For example,generative AI can create countless design prototypes in minutes,reducing waste during the process.Similarly,it can help analyze a buildings design,construction materials,and environmental conditions to generate a detailed energy analysis,identify potential energy savings,and suggest improvements to meet sustainability standards.47 INGER ANDERSEN UNEP Executive DirectorOnly digital technologies move at the speed and scale necessary to achieve the kind of dramatic reduction in emissions that we need to see in the next 10 years.45Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsGenerative AI is expected to be a core focus within sustainability strategies Our recent research on generative AI use cases across industries found that nearly all executives(96%)in our survey cited generative AI as a hot topic of discussion in their respective boardrooms,making it probably the fastest new technology to garner such high-level interest.48 In our current research,over half(59%)of executives believe that generative AI will play a key role in their organizations sustainability transformation efforts.This trend is consistent across industries,with financial services(67%)showing the highest share of executives saying so(see Figure 21).Our recent research also revealed that organizations have high sustainability expectations of the technology,including a projected 9%reduction in carbon footprints at organizational level within the next three years.49Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=2,151 executives,717 organizations.FIGURE 21.59%of executives globally believe generative AI will be central to their sustainability efforts%OF EXECUTIVES BY INDUSTRY WHO AGREE WITH THE STATEMENT:GENERATIVE AI WILL PLAY A KEY ROLE IN OUR ORGANIZATIONS SUSTAINABILITY TRANSFORMATION EFFORTS(SEPTEMBER 2023)59gbYYXXWVVR%RetailConsumer productsmanufacturing Aerospace anddefenseAutomotiveTelecomEnergy Healthcareand life sciencesUtilities Public/governmentIndustrialmanufacturingFinancial services Global46Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsOrganizations have already started incorporating generative AI into their sustainability strategies across operations,sales and marketing,logistics,design,and data.Forecast demand to reduce waste Generative AI models can analyze historical demand patterns,market trends,and external factors to generate demand forecasts,thereby reducing stockouts,waste,and carrying costs.This also helps in limiting the environmental impact of excess production.50 Optimize logistics to reduce emissions Generative AI algorithms can enable optimization of transportation routes by considering factors such as shipment volume,vessel capacities,product characteristics,and geographical constraints to determine the most efficient routes.This would lead to cost,time,and fuel savings and eventually reduce the carbon emissions associated with logistics.51Generate more sustainable design prototypes Airbus uses AI algorithms in its generative design process to develop lighter-weight parts for its aircraft,resulting in lower fuel consumption and,consequently,lessened environmental impact.The initial design was 45%lighter than the traditional part and is projected to reduce Airbuss annual CO2 emissions by nearly 500,000 metric tonnes(mt)if rolled out across its A320 fleet.52Automate sustainability reporting Generative AI tools can make corporate social responsibility(CSR)reporting easier for organizations,creating a draft report for teams to check and refine.C3 AI,a US start-up,uses generative AI to unify and store disparate ESG data and automate reporting.53Protect against biodiversity loss Researchers from the University of Valencia,the Instituto de Fsica Corpuscular in Spain,and the University of Sussex experimented with generative AI to analyze species coexistence patterns in vegetation patches.Species coexistence is important to biodiversity because it demonstrates“niche complementarity”(how two or more species persist and interact in an environment together).The researchers trained two generative AI systems to create simulated possible patch compositions and evaluate them under increasingly complex theoretical ecological conditions.54Improve accessibility Internet accessibility can be a major challenge for people with sight problems,especially if a website does not support screen readers(software that allows blind or visually impaired people to read text displayed on screens).Generative AI may be used to improve information access as it could help visually impaired people understand what they are looking at by verbalizing images on a website.In March,powered by OpenAIs GPT-4 language model,mobile app Be My Eyes launched Virtual Volunteer,a digital assistant for people who are blind or who have low vision.Users share images and the assistant answers questions about the image and provide instantaneous,conversational visual assistance for a wide variety of tasks.55 47Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsSource:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=1,075 executives from value chain functions.FIGURE 22.Over half(57%)of executives globally say their organization has started to mitigate the environmental impact of generative AI%OF EXECUTIVES BY INDUSTRY WHO AGREE WITH THE STATEMENT:WE HAVE TAKEN STEPS TO MITIGATE THE ENVIRONMENTAL IMPACT OF USING GENERATIVE AI MODELS(SEPTEMBER 2023)57peaaYWTSPPH%Consumer productsmanufacturingUtilitiesFinancialservices RetailAutomotiveHealthcare andlife sciencesIndustrialmanufacturingEnergy Public/governmentTelecomAerospace anddefenseGlobalMany organizations have taken action against the negative environmental impacts of generative AIThe carbon footprint of generative AI models is massive and extends beyond training.Our previous research reveals that most executives(78%)are aware that generative AI can have a larger carbon footprint than traditional IT programs.56 Currently,the net impact of generative AI on carbon emissions is unquantifiable but,even so,over half of executives(57%)in our current survey say their organization has started to take steps to mitigate the environmental impact of using generative AI models.Even though generative AI is still in its infancy,the rapid adoption of generative AI technologies by organizations has them moving at pace.Initial mitigation steps could include developing guidelines for responsible use of generative AI,limiting the use of generative AI tools to selected employees/teams,investing in renewable energy,or offsetting its impact through carbon credits,among other mitigation measures.Aerospace and defense takes the lead in this at 70%,closely followed by telecom(65%),while half of executives in financial services,utilities,and consumer products manufacturing say the same(Figure 22).48Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions49Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsRECOMMENDATIONS:HOW ORGANIZATIONS CAN ACCELERATE THEIR SUSTAINABILITY TRANSFORMATIONS 0550Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsTo transform effectively requires enterprise-level coordination,functional involvement,and an overhaul of the operating model and business processes.Last years report focused on specific recommendations and actions for eight C-suite executives in order to lay the groundwork for an enterprise-wide sustainability transformation.The recommendations we shared hold true today:The CEO must make sustainability a business priority The CFO must articulate the business case for sustainability and ensure it is understood throughout the organization The CMO must implement protocols to avoid greenwashing sustainability credentials The chief design/product officer needs to embed sustainability as a core design principle The chief procurement/supply chain officer needs to work with suppliers to ensure they achieve sustainability goals The CTO/CIO must strengthen sustainable IT initiatives The COO needs to build the foundation of the sustainable organization Source:Capgemini Research Institute analysis.FIGURE 23.Key actions for sustainable and inclusive transformation0Ensure sustainabilityis a boardroompriority Embed social sustainability in thebusiness strategy Focus on quantifyingScope 3 emissionsaccurately Embrace circular andinclusive design Close the intention-action gap Explore the potentialof technology toachieve climate goals And,of critical importance,the CHRO needs to staff for sustainability,which requires new skill sets and a new leadership model.Each leader must ensure a solid foundation within their departments and teams and ensure co-ordination between teams.The current research has led us to make some additional recommendations to last years list(see Figure 23).59%of executives say that their board of directors is actively engaged with sustainability strategy51Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsEnsure sustainability is a boardroom priority In the 2022 report,we emphasized the importance of boards according long-term priority to sustainability.The good news is that most executives in this years survey(59%)agree that their board of directors is actively engaged with sustainability strategy.Our current research reveals that these organizations are likely to have progressed further on their transformation journeys,with a focus on social sustainability.For example:71%of executives at organizations with engaged boards say they are redesigning their business or operating models to be more sustainable(compared with 57%on average)88%of executives at organizations with engaged boards say that,by 2040,they will have completely new business models that are more sustainable(versus 53%on average)96%of executives at organizations with engaged boards say they are focusing on the social dimension of ESG(compared with 56%on average)The change in perspective to accept sustainability as an investment opportunity should drive consensus between the board and the C-suite.Frontrunners have an edge when it comes to engaged boards and directors and in combining environmental and social sustainability objectives(see Figure 24).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=668 organizations,56 frontrunners,226 beginners.FIGURE 24.Eight in 10 frontrunners have engaged boards and projects addressing environmental and social sustainability%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW84FF%My organization takes on sustainability projects that address bothenvironmental and social aspectsOur board of directors prioritizes sustainability and isactively engaged with our organizations sustainability strategyFrontrunners Beginners52Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsIt is also important to ensure the sustainability business case is well articulated and understood by the board,management team,and employees as well as external audiences such as investors and customers.This research reveals that executives across functions have a greater appreciation for,and clarity in,the sustainability business case compared to last year.With more stringent regulations coming into effect(e.g.,EU CSRD)that are changing the operating environment,executives are realizing that their organizations license to operate will depend,in part,on their ability to report on sustainability data.A clear business case will also help in fulfilling regulators push for“double materiality,”a concept that considers how a companys actions impact society and the environment and how sustainability and climate affect its business.As part of CSRD requirements,organizations must conduct a double materiality assessment,which will help them determine which sustainability issues are material and should be included in their reporting.57Embed social sustainability in the business strategy As prioritization of the UN SDGs gains traction and climate and social objectives become intertwined,organizations must take care not to overlook the social sustainability agenda.Social objectives should be integrated into strategy with the same level of priority.Organizations must recognize the urgency of developing a social sustainability strategy.A recent study of 2,000 of the worlds most influential organizations found that only 1%are positioned to meet the UNs 2030 SDGs.58 53Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsTaking the UN Global Compact definition of social sustainability,there are four main audiences that organizations must consider:employees,customers,supply chain workers,and local communities.Our research reveals that organizations are acting most effectively to benefit their own workforces,but that they can do more to support workers in their supply chain and customers in their local communities.Organizations can work to update suppliers criteria to include a living wage dimension,and also strive to make products/services more accessible and inclusive to people with disabilities,health conditions,or impairments.Frontrunners are leading in engaging employees in learning and supporting local communities with education and policy(see Figure 25).Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=668 organizations,56 frontrunners,226 beginners.FIGURE 25.Frontrunners have advanced social sustainability actions%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW84UwsFH%We promote public policies that support social sustainability We support education and skills initiatives in ourlocal communitiesEngaging employees in learning and development is a toppriority for our leadershipFrontrunners Beginners54Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsFocus on quantifying Scope 3 emissions accurately To fully understand their Scope 3 emissions and identify levers for decarbonization,organizations must take a comprehensive view of their supply and value chain impacts.Catherine Bals,Sustainability Department Lead at Proximus,a telecom organization,says:“Our major challenge today is addressing our Scope 3 emissions First,we want to encourage external change and action from our suppliers and customers.For our suppliers,this means setting up a supplier-engagement program and integrating new requirements into our contracts and RFPs requests for proposals,such as the obligation to have SBTi-approved targets.We want to nudge our customers to repair more and reduce frequency of renewal.We want to make them aware of the impact of their equipment and lifestyle choices on the climate.”59 Frontrunners have an edge in terms of employees understanding the environmental impacts of their business and measuring Scope 3 emissions(see Figure 26).Organizations can take a data-centered approach and focus first on:Identifying Scope 3 hotspots focusing on critical data and measurements;Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2023,N=668 organizations,56 frontrunners,226 beginners.FIGURE 26.Seven in 10 frontrunners are tracking Scope 3 emissions%OF EXECUTIVES WHO AGREE WITH THE STATEMENTS BELOW96fq%We are able to measure and collect data on all ourScope 3 emissionsEmployees understand how our business impacts theenvironment along the value chainFrontrunners Beginners Establishing a shared,single source of emissions data that centralizes the storage and collection of Scope 3 data;and Equipping teams with skills and tools to understand and use Scope 3 emissions data in business decisions.55Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsEmbrace circular and inclusive design In the 2022 report,we stressed the importance of embedding sustainability as a core design principle.This years research reveals limited or declining movement on key parameters within product design.Certain measures have advanced since last year,such as removing fossil-fuel feedstock sources and reducing use of virgin timber.In the broader concepts of embedding circularity in strategy,performing life-cycle assessment,and designing products with longer life cycles,we have seen stagnation or even decline.Organizations must think beyond isolated design problems and consider their design processes as a whole,mitigating points of social and environmental impact through the entire product life cycle.Organizations must embrace circular principles in their business models to reduce waste,extend the lifespan of their products,and appeal to sustainability-conscious consumers.Dr.Caroline Cassignol,Senior Key Expert Research Scientist at Siemens Technology,emphasizes the need for a mindset shift in product design and development:“We grew up in a world dominated by the linear economy.Now,we need to shift to a circular economy mindset.We must question everything we do.”60 It is also critical that organizations embrace inclusive design within product development and ensure design teams have diverse representation,so they are well-positioned to build inclusive products.Close the intention-action gap In order to justify their environmental and social claims,organizations must close the gap between stated goals and concrete actions.There is a real risk of accusations of greenwashing.It can affect the bottom line,derail public confidence,and risk huge fines from regulators.In our current research,one third of consumers suspect that organizations/brands are greenwashing their sustainability initiatives and 48%never,rarely,or only sometimes trust environmental claims about potential purchases.A Harvard Business Review study found that perceptions of greenwashing not only damage an organizations reputation,but also negatively impact how customers experience its products or services.The research estimates that organizations which stakeholders perceive to be greenwashing suffer,on average,a 1.34%drop in their American Customer Satisfaction Index(ACSI)score,triggering accusations of corporate hypocrisy.61 56Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsExplore the potential of technology to achieve climate goals Our research reveals that the majority(59%)of executives believe that generative AI will play a key role in their organizations sustainability transformation efforts.While it is still too early to fully quantify its benefits some use cases already exist.For example,generative AI for sustainability can result in design and operational efficiencies,leading to reduced emissions.However,it will be important that organizations continue to mitigate the negative environmental impacts of training and deploying generative AI models as their use becomes more widespread.Organizations should also explore how generative AI can improve the accessibility and inclusivity of products and services.This requires that individuals with disabilities or other impairments play an active role in shaping the technologys role within the organization.In addition,climate technologies defined as technologies specifically designed to tackle environmental challenges including climate change,resource depletion,and biodiversity loss and mitigate their impact will be critical to achieving ambitions.Examples of climate tech include renewable energy,carbon storage,biofuels,low-carbon hydrogen,and synthetic biology,among others.These innovative technologies will drive a significant portion of organizations reduction in emissions,and investing in climate tech will be as essential to reaching net zero and other climate goals as investing in new business and operating models.59%of executives believe that generative AI will play a key role in their organizations sustainability transformation efforts57Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsOur research reveals that growing numbers of organizations across industries understand the importance of sustainability,are clear on the business case,and acknowledge the benefits of incorporating sustainable practices and processes into their businesses.This rapid improvement in sentiment in one years time is significant;however,in 2023,translation of this understanding into increased investment lags.While more organizations are setting goals and priorities,they must step up their actions on Scope 3 emissions,sustainable product design,and reporting and disclosing sustainability data while at the same time maintain their increasing focus on social sustainability.This is a pivotal time in the battle against climate change,the scarcity of vital resources,and the alarming loss Conclusionof biodiversity.It is also now critical to promote equity and social justice,health and wellbeing,and economic stability as pillars of social sustainability and sustainable development.The role of organizations in curbing the detrimental impacts of industrial and human activity on our planet is paramount.There is a pressing need for more daring and expansive sustainability implementation.Becoming a truly sustainable enterprise necessitates enterprise-wide transformation,with a keen focus on evaluating the entire value chain through a sustainability lens.Frontrunners have gained an advantage,but others can emulate them to expedite their journeys towards sustainability.58Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsResearch methodologyWe surveyed 2,151 executives employed at 718 organizations,each with more than$1 billion in annual revenue,across 13 countries in North America,Europe,and Asia-Pacific and in 11 industries.Executives surveyed were director level and above and 50%were from corporate functions,such as strategy,sustainability,sales,and marketing;50%were from value chain functions,such as product design,R&D,procurement,and logistics.We surveyed three executives from every organization.The global survey took place in August and September 2023.The distribution of executives and their organizations is provided in the following figures.We also conducted a global survey of 6,500 consumers over the age of 18 across the 13 countries.The study findings reflect the views of the respondents to our online questionnaire for this research and are aimed at providing directional guidance.Please contact one of the Capgemini experts listed at the end of the report to discuss specific implications.*Note that,for any chart that compares 2022 and 2023 data,the sample excludes respondents from Norway,as they did not partake in the 2022 survey;hence,in these analyses,N=2,001 respondents and 668 organizations.47H %September 2022 September 2023$20 bn $10 bn$20 bn$5 bn$10 bn$1 bn$5 bn%OF EXECUTIVES BY ORGANIZATION ENTERPRISE-LEVEL REVENUE,IN USD59Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions%OF EXECUTIVES BY JOB TITLE%OF EXECUTIVES BY LOCATION OF HEADQUARTERS OF CURRENT ORGANIZATION60a77%2%2%September 2022 September 2023ExecutiveVice PresidentDirectorSeptember 2022 September 20239%9%9%8%9%8%9%8%9%9%9%8%8%8%8%8%8%8%7%7%7%7%7%7%7%USUKSwedenSpainNorwayNetherlandsJapanItalyIndiaGermanyFranceCanadaAustralia60Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions%OF EXECUTIVES BY INDUSTRY OF CURRENT ORGANIZATION%OF EXECUTIVES BY DEPARTMENT/FUNCTIONSeptember 2023 September 20227%8%8%8%9%9%9%8%9%9%9%8%9%7%8rospace and defenseAutomotiveConsumer productsmanufacturingEnergy Financial servicesHealthcare and life sciencesIndustrial manufacturingPublic/governmentRetailTelecomUtilities September 2023 September 2022Corporate strategy/strategicplanningSustainabilityFinance and accountingSales and marketingITHuman resourcesInnovation/R&DProduct design/developmentOperationsSourcing and procurementSupply chain and logisticsManufacturing and production7%8%9%7%8%9%7%7%9%8%5%9%9%9%9%8%9%Source:Capgemini Research Institute,Sustainability Transformation Trends Survey,AugustSeptember 2022,N=2,004 executives,668 organizations;AugustSeptember 2023,N=2,151 executives,718 organizations.*Utilities includes electric utilities,gas utilities,water utilities,and waste management;Energy includes oil and gas,alternative/renewable energy,and energy services;Consumer products manufacturing includes apparel,footwear,household,and personal care;and Financial services includes retail banking and insurance.61Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actions%OF CONSUMERS BY AGE GROUP%OF CONSUMERS BY GENDER IDENTITY%OF CONSUMERS BY COUNTRY OF RESIDENCE15)0&%September 2023Boomers,aged 57-73 Gen X,aged 41-56Millennials,aged 25-40Gen Z,aged 18-2449Q%September 2023Man Woman8%8%8%8%8%8%8%8%8%8%8%8%8%September 2023USUKSwedenSpainNorwayNetherlandsJapanItalyIndiaGermanyFranceCanadaAustraliaSource:Capgemini Research Institute,Consumer Survey,October 2023,N=6,500 consumers.62Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsAppendixStatements used to evaluate the sustainability maturity of organizations in our survey.Top leadership shares a common vision of how the business needs to change to become sustainableThe sustainability vision is well integrated into the core strategy of the organizationWe have defined a corporate purpose that extends to the environment(i.e.,purpose meaning a reason for being beyond profit)Sustainability aspects are considered in corporate decisions across the companyWe have a clearly defined priority list of sustainability initiatives to be implemented in the next three yearsSustainability is part of each of our C-suite executives agendaWe are redesigning our business/operating model,so they are more sustainableWe have a strategy to transition to renewable energy for all sources(i.e.,a switch from conventional to renewable energy for electricity,fuel,heating)Circularity(i.e.,a product is created with its own end-of-life considered;once the user is finished with the product,it goes back into the supply chain instead of the landfill)is a key component of our sustainability strategyWe have internal governance policies and procedures relating to environmental sustainability Upskilling/reskilling on hard sustainability skills(e.g.,renewable energy,carbon accounting,environmental science/engineering,data analysis/visualization)is a top priority for our company Upskilling/reskilling on soft sustainability skills(e.g.,leadership,innovation,communications,design thinking)is a top priority for our company AXISPILLARSTATEMENTCorporate functions Vision and leadershipCorporate functions Talent63Capgemini Research Institute 2023A world in balance 2023:Heightened sustainability awareness yet lagging actionsA World in Balance 2023:Heightened sustainability awareness yet lagging actionsAXISPILLARSTATEMENTCorporate functions TalentWe actively recruit and hire new talent with strong sustainability skillsWe train our employees to adopt sustainable practices in-officeWe equip our employees with tools to support their low-carbon transition(e.g.,giving reusable water bottles to reduce single-use plastic,utilities tracker for carbon footprint)We train employees on the importance of sustaining the environment Employees have sustainability KPIs that they are evaluated against as part of performance management Leaders have sustainability KPIs that they are evaluated against as part of performance management We have employees with eco-design and sustainable design skills Corporate functions CultureWe encourage research and experimentation to develop new initiatives for sustainabilityWe provide autonomy to employees to develop new solutions to sustainability challengesWe actively collaborate with interested stakeholders,including customers,investors,academia,and governments,to develop and promote sustainable approachesOur leaders are focused on profit at the expense of our environmental footprintAll our sustainability reporting and claims are backed by robust audited dataCorporate functions ITWe use a green cloud architecture for our data centers(which reduces data center power consumption)We eco-design our IT applications(i.e.,designing for the lowest environmental impact,such as using sleep modes on laptops)We identify energy-intensive applications and take steps to improve their energy performanceWe have green policies for IT hardware and services procurement(e.g.,environmental disclosure for IT vendors)We include a carbon emissions assessment when allocating IT spendOur organization has a sustainable IT strategy and roadmapCorporate functions Finance and accountingWe include an assessment of environmental externalities when evaluating projects to fund(e.g.,pollution that might be caused by the project that diminishes property values or health of people in the surrounding area)64Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsAXISPILLARSTATEMENTCorporate functions Finance and accountingWe report our sustainability impacts(e.g.,water usage,GHG emissions,hazardous waste produced),along with our financial performance,on a quarterly/annual basisWe have assets invested in ESG portfolios(i.e.,funds that incorporate screening criteria for environmental,social,and governance issues,or invest in socially responsible companies)We have made fossil fuel divestment pledges(i.e.,accelerating the adoption of the renewable energy transition through the stigmatization of fossil fuel companies)We invest in carbon offsets(such as purchase of credits or increase in carbon storage through tree planting,land restoration etc.)to balance out our carbon emissionsCorporate functions Sales and marketingWe educate customers about the importance of adopting sustainable practicesWe offer competitive pricing to encourage more people to consume/purchase sustainable products/servicesWe communicate a carbon footprint for every product/service we sellWe consider environmental sustainability when designing our branding and marketing campaigns(e.g.,fewer physical events)Value chain functionsTechnologyWe measure the environmental impact of technologies before using themWe use technology to minimize landfill usage efficiently(e.g.,smart waste management for tracking/sorting,using robots for recycling,using AI/ML to reduce waste)We use technology such as AI,automation,or digital twins to achieve our sustainability agendaWe are using IoT/IIoT to monitor/reduce energy consumption We use 3D printing to produce less waste and save fuel required for transport We use digital technologies(e.g.,AR/VR,collaboration tools)to reduce travel needs of employees We use blockchain/smart contracts to make our supply chain more sustainableWe use tools such as supply chain control towers for monitoring and measuring our ESG metricsWe use AI/ML to optimize data center utilizationSustainability-related data is available and shared across the entire organization(e.g.,functions,business units,employees,managers)65Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsAXISPILLARSTATEMENTValue chain functionsTechnologySustainability-related data is available to interested stakeholders external to the organization(e.g.,investors,activists,governments,consumers)Value chain functionsSourcingWe consider the ESG ratings and environmental pledges taken by suppliers during supplier selectionWe are working with our tier-1 suppliers to identify measures for reducing their carbon emissionsWe are working with our tier-2 and tier-3 suppliers to identify measures for reducing their carbon emissionsWe use suppliers who have validated SBTI targets to procure raw materialsWe are working towards reducing deforestation in our supply chain Value chain functionsInnovation/R&D/product designWe are designing products so they can serve their originally intended functions longerWe use AI/data analytics to aid in the discovery of optimal raw materialsWe follow sustainable prototyping and testing processes(e.g.,use of additive manufacturing or 3D printing)We are redesigning products to remove fossil fuel feedstock sources(such as coal)We are redesigning products to have a lower impact on forests(e.g.,using less wood so fewer trees are cut down)We are building solutions to reduce the environmental footprint of our end users/customersWe perform LCA(life cycle assessment)on all of our products/services Value chain functionsManufacturingWe are minimizing over-production and wastage in production We are shifting our manufacturing footprint to places/locales with low carbon alternativesWe are redesigning processes,so they consume less energy(e.g.,improving process heating in the production process,powering down equipment at the end of the day)We measure the energy consumption of our industrial processesWe use responsible recyclers who do not export our e-waste to developing countries or improperly dispose of itWe are reducing food waste in our operations(e.g.,by improving accuracy of forecasting,providing clearer expiration dates)We have implemented a water stewardship program(i.e.,using water in a way that is socially equitable,environmentally sustainable,and economically beneficial)66Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsAXISPILLARSTATEMENTValue chain functionsManufacturingWe actively work to recover waste(i.e.,using waste as an input material to create useful products as new outputs)We take back end-of-life products from customers to use them in the remanufacturing process/upcycle Recycling products is a core aspect of our manufacturing strategyWe monitor the conversion of natural ecosystems(i.e.,changes owing to deforestation)on our owned/managed landsWe invest in conserving natural habitats(such as rainforests)We are adopting plant-based food in our operations(e.g.,offering only vegetarian meals/snacks in office,promoting plant-based diets to employees/customers)Value chain functionsLogistics-We use analytics for optimizing logistics to reduce travel and associated emissionsWe have adopted eco-friendly transportation strategies to reduce emissions(e.g.,use of low-carbon fuels,electric vehicles,replacing old fleets with more energy-efficient ones)We have dedicated reporting from our transportation suppliers on the carbon impact of their servicesTech acceleratorsThe extent to which organizations have implemented the following in their sustainability strategy and practices:AI/machine learningAutomationAR/VRCollaboration tools3D printingDigital twinsIoT/IIoTRoboticsHydrogenGigafactoriesElectrificationSmart gridsBioeconomyCarbon capture,utilization,and storageSource:Capgemini Research Institute analysis.67Capgemini Research Institute 2023A World in Balance 2023:Heightened sustainability awareness yet lagging actionsReferences7.Nature Communications,“The global costs of extreme weather that are attributable to climate change,”September 29,2023.8.National Oceanic and Atmosphere Administration(NOAA),National Centers for Environmental Information(NCEI),“US Billion-dollar weather and climate disasters,”2023.Accessed November 2023.9.Plan A,“The Corporate Sustainability Reporting Directive(CSRD),”July 2023.Accessed October 2023.10.Plan A,“EU Corporate Sustainability Due Diligence Directive(CSDDD),”July 2023.Accessed October 2023.11.Forbes,“The SEC may be overstepping its authority in ESG/climate-related disclosure standards,”August 2023.Accessed October 2023.12.UN Environment Programme,“The Taskforce on Nature-related Financial 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actionsCapgemini can help you consciously accelerate sustainability

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Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Quantum Computing Measurement&Control SystemJune 2023Market Research ReportCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Industry research:By conducting interviews with relevant companies,consumers,and industry experts,we aim to understand the demand,trends,and scale of the market.Data analysis:By collecting,organizing,and analyzing market data,including market size,growth rate,pricing trends,consumer preferences,and more,we aim to understand the current status and development trends of the market.Competitive analysis:By analyzing information such as competitors products,prices,and market share,we aim to understand the competitive landscape in the market and our own strengths and weaknesses.Technical analysis:By evaluating the technical requirements and development trends of the market,including the advantages and disadvantages of single photon detector technology characteristics,we aim to gain insights into the markets direction.Regional analysis:By understanding factors such as local consumer demands and policy environments,we aim to identify regional differences in markets and potential for development.MethodologyCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.IntroductionThe term quantum computing measurement and control system(QCMCS)refers to the hardware(and supporting software)system that connects a classical information system to a quantum bit(henceforth referred to as Qubit)system,it enables precise measurement and control of quantum states in quantum computer.Different qubits possess distinct physical properties,necessitating specific methods for manipulation and measurement,superconducting qubits are measured using RF microwaves,ion trap qubits rely on lasers,photonic qubits use lasers and photodetectors,neutral atom qubits utilize precise optics or microwaves,and spin qubits rely on electron spin resonance techniques.Given the advanced stage of superconducting quantum computing,its measurement and control system has emerged as a unique domain within the field of technology and equipment development.A typical Superconducting QCMCS generally includes:Signal generation devices,such as microwave signal generators.These are used to create the signals that operate the quantum bits.Signal processing devices,including Digital to Analog Converters(DACs)and Analog to Digital Converters(ADCs).These are responsible for handling measurement signals and readout signals.Signal amplifiers like low-noise amplifiers,which are tasked with amplifying the subtle readout signals.Control software,designed to command the hardware devices mentioned above and to process the resulting measurement data.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Categories of QCMCS For the sake of classification and understanding of key components in the measurement and control systems,we categorize them into two types based on shared characteristics:Superconducting and Semiconductor Quantum Computing Measurement&Control Systems(SQCMCS)and Optical Quantum Computing Measurement&Control Systems(OQCMCS).The main reason for classifying superconducting and semiconductor(silicon spin)as one category is that they both belong to quantum computing constructed by solid-state physical systems.Both systems use microwave pulses for operations and rely on radio frequency and microwave technology.The hardware equipment shares many common components.The other category is due to the commonalities of optical quantum computing,ion trap computing,and neutral atom computing,all of which are associated with optical devices.terQuantum Computing Measurement&Control SystemSuperconducting and Semiconductor Quantum Computing Measurement&Control SystemOptical Quantum Computing Measurement&Control SystemCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.IntroductionDifferent companies products may use different names for this system,but they serve the same purpose,such as:Rohde&SchwarzRohde&Schwarz(Zurich Instruments)(Zurich Instruments)Quantum Computing Control SystemsKeysight TechnologiesKeysight Technologies Quantum Control SystemsTektronixTektronixQubit Readout and MeasureQBLOXQBLOXQuantum Control StacksSource:Company website,ICV TAnKMenlo SystemMenlo SystemFC1500-QuantumComplete Solution for Quantum 2.0 ApplicationsTOPTICA PhotonicsTOPTICA PhotonicsDigital Laser Locking ModulePhoton TechnologyPhoton TechnologyMulti-Channel SNSPDCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.In a quantum computer,the measurement and control system serves a role similar to that of the input/output system and control unit in a classical computer.QCMCS is responsible for reading,controlling,and manipulating the qubits state.It orchestrates the timing and synchronization of quantum operations and manages the flow of information between the qubits and other components of the system.QCMCS generates precise signals,such as microwave or laser pulses,to manipulate the qubits according to the desired quantum operations.It ensures the proper execution of quantum algorithms by controlling the interactions between the qubits.QCMCS are vital for advancing quantum computing due to several key reasons.QCMCS enable precise manipulation and measurement of quantum states.QCMCS enable precise manipulation and measurement of quantum states.Quantum computing relies on the delicate control of qubits,which are highly sensitive to external factors.QCMCS provide the necessary tools and techniques to accurately initialize,manipulate,and measure qubits,ensuring the reliability and accuracy of quantum computations.QCMCS enable scalability in quantum computing.QCMCS enable scalability in quantum computing.As the field progresses towards building larger-scale quantum computers with a higher number of qubits,QCMCS provide the infrastructure and control mechanisms necessary for managing complex quantum systems.They contribute to the development of fault-tolerant quantum architectures and pave the way for achieving practical quantum computation on a large scale.The role of QCMCSCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.The workflow of SQCMCS involves transmitting instructions from the classical computer to the measurement and control system,which then interfaces with the quantum chip,and the results are read back to the measurement and control system before being transmitted back to the classical computer.Superconducting and semiconductor QC basically share a MCS because both their qubits rely on microwave signals for manipulating and reading out quantum states.These qubits are typically fabricated using similar microfabrication techniques and require similar control mechanisms to apply microwave pulses and measure their states accurately.Additionally,both superconducting and semiconductor qubits operate at extremely low temperatures to maintain their quantum properties.This necessitates the use of cryostats to provide the required cooling environment.The measurement and control systems for both types of qubits are designed to operate within these cryostats to ensure precise control and measurement of quantum states.Explanations of SQCMCSWorkflowWorkflow of the of the SQCMCSSQCMCS SQCMCSClassicalComputerQuantumChipCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.The workflow of the OQCMCS entails sending instructions from the classical computer to the measurement control system(AWG,Laser,SPD),which interfaces with the optical quantum system,and the results are read back to the measurement control system before being transmitted back to the classical computer for analysis and further processing.OQCMCS are suitable for trapped ion qubits,neutral atom qubits,and photonic qubits because these systems rely on the manipulation and measurement of light.This commonality allows for the development of a unified optical measurement and control system for multiple quantum architectures.These systems utilize laser pulses to perform precise quantum gate operations and readouts.OQCMCS rely on the generation and manipulation of laser pulses with specific characteristics,such as wavelength,intensity,and polarization,to effectively control the quantum states of the optical qubits.Explanations of OQCMCSWorkflowWorkflow of the of the OQCMCSOQCMCS OQCMCSClassicalComputerQuantumChipAWGLaserSPDNote:AWG:Arbitrary Waveform Generator；SPD:Single Photon Detector.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Typical Parameters of QC Measurement&Control SystemCompany NameCompany NameModelModelChannel NumberChannel NumberSampling RateSampling RateBandwidthBandwidthNoiseNoiseKeysight Keysight TechnologiesTechnologiesM3202A2 or 41.25 GSa/s or 625 MSa/s500 MHz or 250 MHz 1.5 mVrms(50)M3300A 2 or 4(AWG) 2 or 4(Digitizer)500 MSa/s(AWG) 500 MSa/s(Digitizer)100 MHz(AWG) 100 MHz(Digitizer)1.5 mVrms(50)(AWG) 0.6 mVrms(50)(Digitizer)Zurich Zurich InstrumentsInstrumentsHDAWG4 or 8 or16 or322.4 GSa/s750 MHz0.75 mVrms(0.5 mVrms typical)UHFQA101.8 GSa/s600 MHz0.75 mVrms(0.5 mVrms typical)ZWDXZWDXZW-QCS10008 or 122.4 GSa/s1GHz-QBLOXQBLOXCluster162.4 GSa/s1.2 GHz-Source：Company Website,ICV TAnKCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Global Market Overview 364.4 772.1 0 100 200 300 400 500 600 700 800 900 200222023E2024E2025EGlobal QCMCS Market Size(in Million USD)The future market growth of QCMCS is influenced by two key factors.First,advancements in quantum computing technology drive the demand for sophisticated measurement and control systems.As quantum computing capabilities improve,there is a need for more precise and efficient tools to manipulate and measure quantum states.Second,the increasing research and development activities in the field of quantum computing contribute to the growth of the QCMCS market.Ongoing R&D efforts focus on enhancing quantum computing performance,exploring new algorithms,and developing novel applications.These endeavors create a demand for advanced measurement and control systems that can support experimentation,testing,and characterization of quantum devices.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Segment Market by TypeSQCMCSOQCMCSSQCMCS 72.28%OQCMCS 27.72%The market share forecast can be attributed to:Superconductors and semiconductors exhibit greater compatibility with existing manufacturing and integration technologies.This compatibility factor has greatly promoted the market demand for it in the quantum computing industry.From the perspective of commercial promotion,superconducting quantum computing and other technical routes have a relatively high overall technological maturity.Their developments in quantum systems have been extensively studied and improved,resulting in more powerful and reliable measurement and control systems.The established technological base of superconducting quantum computing enhances their market appeal and boosts the confidence of potential users.Market Share by Type(2025E)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.148.9 310.4 0 50 100 150 200 250 300 350 200222023E2024E2025EMarket Size Forecast-Europe(in Million USD)Market Size Forecast-North America(in Million USD)64.7 97.2 0 20 40 60 80 100 120 200222023E2024E2025ESegment Market by RegionThe market of QC Measurement&Control System in Europe will worth$148.9 million in 2023,it is estimated to grow to$310.4 Million in 2025,resulting at a 4-year CAGR of 41.4%.The North America market will be the second largest segment,it will worth$64.7 million in 2023 and is estimated to increase to$97.2 Million in 2027,with a 4-year CAGR of 48.5%.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Timeline for the Establishment of QCMCS200213Menlo Systems,a spin-off from the Max-Planck-Institute for Quantum Optics,establishedZurich Instruments,as a spin-off by three employees of the,establishedKeysight Technologies,as a spin-off of Agilent Technologies,establishedQuantum Machines establishedLaunched first commercial QCMCSQblox,a spin-off from the Delft-based quantum technology institute,establishedZurich Instruments Was wholly acquired by Rohde&SchwarzLaunched a new generation of scalable ambient temperature QCCS-QCS1000Launched the third generation of the Origin Sky QCMCSSource：Company website,ICV TAnKReleased the Quantum Computing Measurement SystemReleased the first quantum computing measurement and control system(QuSoil)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Global Vendors for Complete QCMCSCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Supplier ProfileRohde&Schwarz,a renowned German electronic measurement instruments and network cryptography supplier.They offer advanced measurement and control systems tailored to specific quantum computing architectures,including superconducting quantum bits,semiconductor quantum bits,ion trap quantum bits,and photonic quantum bits.In collaboration with leading quantum computing companies and research institutions,Rohde&Schwarz has established partnerships with prominent players in the quantum computing industry.These collaborations include renowned quantum computing companies such as IBM,IQM,as well as prestigious research institutions(ETH Zurich,University of Basel).Quantum Machines,an Israeli company,provides a comprehensive quantum control platform for developing cutting-edge quantum computers.Their hardware includes control units,pulse generation systems,and data acquisition modules,enabling precise control over quantum systems.They also offer a powerful software framework with intuitive interfaces and optimization tools.Quantum Machines collaborates with industry leaders like IBM,NVIDIA and IONQ,as well as academic institutions,to drive innovation.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Supplier ProfileKeysight Technologies,a leading US-based electronic measurement instruments and software supplier,offers a wide range of test solutions specifically designed for the field of quantum computing.They provide advanced measurement instruments and software tools that enable researchers and developers to accurately characterize and validate the performance of quantum systems.Keysight collaborates with various quantum computing companies and research institutions,including industry leaders such as IBM,Quantum Benchmark,as well as renowned academic institutions(University of Waterloo).ZWDX Technology,a Chinese company excelling in the field of quantum computing,specializes in the development of measurement and control systems.They have successfully produced room temperature measurement and control systems for both medium scale superconducting qubits and silicon-based systems,providing efficient,stable,and scalable solutions within the realm of quantum computing.Leveraging advanced heterogeneous computing technology,ZWDXs systems facilitate high-speed,low-latency,and low-noise control and readout of quantum bits.They enable real-time quantum error correction and feedback.ZWDXs products have been utilized in Quantum Computer by Chinese universities,research institutes,and commercial companies engaged in quantum computer research.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Supplier ProfileQblox,a leading quantum computing company based in the Netherlands.They offer FPGA-based quantum controllers and low-noise amplifiers that are tailored to different types of qubits,including superconductors,ion traps,and neutral atoms.Qblox collaborates with prominent players in the quantum computing industry,including companies like QuTech,Quantum Delta NL,QphoX as well as prestigious research institutions.Menlo Systems,a German company,their QCMCS integrates cutting-edge optical frequency combs,ultra-stable lasers,and continuous wave lasers.This integration enables exceptional performance in terms of spectral purity,narrow linewidth,and high stability across the entire frequency comb spectrum.These features are crucial for coherent conversion to the radio frequency(RF)domain,a key requirement for precise manipulation and readout of quantum states.Their esteemed partners include companies such as IBM,as well as esteemed research institutions like ETH Zurich and University of Innsbruck.Tektronix,a US technology company,has developed the AWG5200 Series.The AWG5200 Series also offers a high sample rate and memory depth,which enable the generation of complex and precise signals for quantum computing experiments.The AWG5200 Series supports various quantum computing platforms and architectures,such as superconducting,spin and trapped ion qubits.Tektronix has established cooperative relationships with many leading quantum computing researchers and organizations,such as IBM and Cold Quanta.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Development of QCMCS The future of QCMCS is expected to witness significant advancements driven by several key factors.Firstly,there will be a continuous focus on achieving higher accuracy and lower error rates in measurement and control processes.This involves improving control over quantum states,minimizing measurement errors,and implementing effective quantum error correction techniques.Moreover,as the field progresses,researchers are exploring innovative designs and architectures for dedicated QCMCS chips.While microelectronics and nanotechnology have already reached advanced stages,the challenge lies in designing specialized chips that can effectively meet the requirements of quantum computing.This is an emerging area where researchers are actively working to develop optimized solutions.Additionally,automation and intelligence will play significant roles in QCMCS.The integration of machine learning and artificial intelligence techniques will optimize quantum manipulation and readout processes,leading to improved efficiency,reduced errors,and autonomous decision-making capabilities in measurement and control operations.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Determining Your Approach to Quantum Control System DevelopmentCurrent QCMCS for QC R&D teams are either developed by their own internal team members,or externally collaborated(or procured).High cost:independently developed requires significant resources and entails long and costly R&D cycles.Technical difficulty:Developing quantum computer measurement and control systems requires high technical expertise.High risk:Independent development carries the risk of failure,potentially resulting in significant investment losses.Customization:independently developed systems can be tailored to specific R&D needs,ensuring optimal design and performance.Technology accumulation:independently developed fosters the accumulation of core technology,enhancing long-term competitiveness.Confidentiality:Independent development provides greater control over project security and confidentiality.Time and effort savings:Purchasing dedicated systems reduces development time and allows the team to focus more on quantum computing research.Proven reliability:Procured systems are often developed by experienced teams,ensuring reliability and reducing risk.Lack of customization:Procured systems may not fully meet specific project needs,requiring additional customization.Cost considerations:While eliminating independently developed costs,dedicated systems may have higher purchase costs.Self-DevelopedSelf-DevelopedCo-developed or OutsourcedCo-developed or OutsourcedCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Advice for Quantum Computing R&D TeamsFor teams about to enter research in quantum computing science,teaching or commercial applications,the choice between independently developed and procured a dedicated QCMCS depends on several factors.Technical strength and resources:Technical strength and resources:If the team has sufficient technical expertise and resources,independently developed allows knowledge accumulation and customization.Otherwise,procured a dedicated QCMCS may be more appropriate.Project-specific needs:Project-specific needs:For projects with unique measurement and control requirements,independently developed enables better alignment.Generic needs may be better served by procured a dedicated QCMCS.Project timeline and risk tolerance:Project timeline and risk tolerance:Tight timelines or low risk tolerance favor procured a dedicated QCMCS to mitigate risks associated with measurement and control system development.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.The field of QCMCS is experiencing significant growth and innovation,driven by advancements in quantum computing technology and the increasing demand for precise manipulation and measurement of quantum states.These systems play a vital role in enabling efficient and accurate operations of quantum computing devices,contributing to the development of quantum algorithms,simulations,and applications.SummaryOne crucial aspect of QCMCS is their adaptability to different quantum computing architectures.These systems are specifically designed to meet the unique challenges and requirements presented by various technologies,such as superconductors,semiconductors,ion traps,and optical quantum systems.Each architecture has distinct characteristics that necessitate specialized measurement and control systems tailored to their specific needs.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Table of Contents1 Foreword2 Methodology3 Introduction of QC Measurement&Control Systems 3.1 An Overview of QCMCS3.2 QCMCS for Different Quantum Computing Routes4 Global QCMCS Market Overview4.1 QCMCS Market Size Prediction(20192027)4.2 QCMCS Market by Type4.3 QCMCS Market by Region5 Segment Market Forecast(NorthAmerica,AsiaPacific,Europe)5.1 QCMCS MarketSizeForecastbyCountry5.2 QCMCS MarketSizeForecastbyTypeCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Table of Contents6 6 QCMCS Market Forces6.1 Key Market Players Analysis 6.2 Market Divers6.3 Market Opportunities7 7 Selection of QCMCS for QC R&D Teams and related Recommendations7.1 Choosing the Right Path for QCMCS7.2 Advice for Quantum Computing R&D Teams8 8 Summery9 9 DisclaimerCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.List of ExhibitsExhibit:Classification of QCMCSExhibit:Workflow of SQCMCSExhibit:Workflow of OQCMCSExhibit:Information of QCMCS Scientific Research Institutes Exhibit:Introduction of Major CompaniesExhibit:Timeline for the Establishment of QCMCSExhibit:Major Companies Distribution of QCMCSExhibit:Comparison of the Key Performance Indictor of the Major QCMCS ProductExhibit:2019-2027 Global QCMCS Industry Market Scale and Growth RateExhibit:2019-2027 Global QCMCS Market by TypeExhibit:2019-2027 Global QCMCS Market by Regions Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.List of ExhibitsExhibit:2019-2027 China QCMCS Market Prediction and Growth RateExhibit:2019-2027 Europe QCMCS Market Prediction and Growth RateExhibit:2019-2027 North America QCMCS Market Prediction and Growth RateExhibit:2019-2027 Asia Pacific Excluding China QCMCS Market Prediction and Growth RateExhibit:2019-2027 Others QCMCS Market Prediction and Growth RateExhibit:2019-2027 China QCMCS Market Prediction by TypeExhibit:2019-2027 Europe QCMCS Market Prediction by Type Exhibit:2019-2027 North America QCMCS Market Prediction by TypeExhibit:2019-2027 Asia Pacific excluding China QCMCS Market Prediction by TypeExhibit:2019-2027 Others QCMCS Market Prediction by TypeExhibit:2019-2027 QCMCS Application Market Size by TypeCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Ordering InformationQuantum Computing Measurement&Control SystemMarket Research Report9,200.00 USDElectronic(6-10 users)6,500.00 USDElectronic and 1 Hardcopy(1-5 users)7,250.00 USDElectronic(1-5 users)9,950.00 USDElectronic and 1 Hardcopy(6-10 users)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.DisclaimerThe opinions expressed in this report strive to be independent and objective,and do not constitute any advertisement.The data in this report are mainly public information,as well as the collation of public data.The copyright of this report is owned by ICV TAnK.Any other form of use or dissemination,including but not limited to publications,websites,public accounts or personal use of the content of this report,needs to indicate the source.When using the content of this report,any quotation,deletion and tampering against the original intention of this report shall not be carried out.Without written permission,any institution or individual shall not reproduce,reproduce or publish in any form.If consent is obtained for quoting,reprinting,and publishing,it must be within the scope of permission.Those who use this report in violation of regulations shall bear corresponding legal responsibilities.The purpose of citing data,events and opinions in this report is to collect and summarize information,and it does not mean that we agree with all of their opinions,and we are not responsible for their authenticity.This report involves dynamic data,expresses the situation as of the time of publishing,and does not represent the future situation.The information or opinions expressed in this report do not constitute investment advice,please refer with caution.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Customized Research ReportOur research team is deeply rooted in the Quantum Information Technology industry,boasting a continually updated and extensive database.Leveraging our vast experience,we provide insightful consulting services tailored to industry-specific needs.We are committed to remaining at the forefront of technological innovation,staying informed about the latest trends,and delivering relevant and actionable solutions for our clients.Consulting ServicesLong Term Subscription Industry AnalysisExplore Our ServicesInvestment InsightsCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written 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The MobileEconomyEurope 2023 The GSMA is a global organisation unifying the mobile ecosystem to discover,develop and deliver innovation foundational to positive business environments and societal change.Our vision is to unlock the full power of connectivity so that people,industry and society thrive.Representing mobile operators and organisations across the mobile ecosystem and adjacent industries,the GSMA delivers for its members across three broad pillars:Connectivity for Good,Industry Services and Solutions,and Outreach.This activity includes advancing policy,tackling todays biggest societal challenges,underpinning the technology and interoperability that make mobile work,and providing the worlds largest platform to convene the mobile ecosystem at the MWC and M360 series of events.We invite you to find out more at Follow the GSMA on Twitter/X:GSMAGSMA Intelligence is the definitive source of global mobile operator data,analysis and forecasts,and publisher of authoritative industry reports and research.Our data covers every operator group,network and MVNO in every country worldwide from Afghanistan to Zimbabwe.It is the most accurate and complete set of industry metrics available,comprising tens of millions of individual data points,updated daily.GSMA Intelligence is relied on by leading operators,vendors,regulators,financial institutions and third-party industry players,to support strategic decision-making and long-term investment planning.The data is used as an industry reference point and is frequently cited by the media and by the industry itself.Our team of analysts and experts produce regular thought-leading research reports across a range of industry Copyright 2023 GSMAContentsExecutive summary21.The mobile industry in numbers92.Mobile industry trends242.1Unlocking the revenue potential of 5G252.2Transforming networks272.3Reigniting satellite connectivity282.4Exploring the role of generative AI302.5Shifting to circularity322.6Growing fintech opportunities343.Mobile industry impact363.1Operator progress with sustainability373.2Mobiles impact on the SDGs384.Mobile industry enablers404.1Grasping control of Europes digital future41Executive summaryDigital technologies are playing a crucial role in Europe as economies advance their efforts to embrace green and digital transformation.5G connectivity is serving as a catalyst for GDP growth and a powerful tool to help combat climate change.In the coming years,the mobile ecosystem will focus on improving 5G coverage in rural areas and increasing investment to support the growing adoption of use cases enabled by 5G standalone(SA)and 5G-Advanced technologies.The contribution from mobile technologies and services to social and economic progress in Europe continues to grow.5G connectivity and services are set to generate economic benefits of 153 billion in 2030.It is therefore imperative that stakeholders take steps to ensure continued investment and the long-term sustainability of the mobile industry.This means a reset of the policy framework governing the digital communications ecosystem,and effective spectrum policy to support the Digital Decade goals.5G connectivity and services are set to generate economic benefits of 153 billion in 20302/44Executive summaryKey trends shaping the mobile ecosystem Unlocking 5Gs revenue potentialIn Europe,attention is shifting to 5G monetisation,as operators seek returns on their significant capital outlays.Speed-based tariffs and bundles that package content and services with mobile subscriptions offer ways to grow average revenue per user(ARPU)in a fiercely competitive market.Operators can also look to early examples of success with 5G fixed wireless access(FWA)in Austria and Italy.The transition to 5G SA should add further impetus to 5G monetisation efforts by introducing new capabilities,including improved support for network slicing.While 5G SA deployments in Europe have been trailing other regions,recent launches by Orange Spain,Movistar and Vodafone UK point to growing momentum.Similarly,private 5G deployments are gaining traction in Europe,offering opportunities to create new revenue streams and serve additional enterprise customers.Transforming networksThere is a need to rethink the design of telecoms networks to meet evolving connectivity requirements and enable the rapid expansion of data-driven technologies(AI and web 3.0).As well as investments in infrastructure rollout,this network transformation entails the softwarisation and virtualisation of network functions,as well as cloud-native and disaggregated network architectures.To manage increasing complexity,operators need to invest heavily in network automation,including the use of AI and machine learning,as well as software skills.These allow customised connectivity solutions to be provided,as well as added services and functionality(such as edge cloud),which can be offered to customers using standardised interfaces(network as a service).Reigniting satellite connectivity Satellite broadband is being reinvented through the low Earth orbit(LEO)constellation model.This underpins a growing list of partnerships between mobile operators and satellite companies.In many cases,operators are partnering with satellite companies for wholesale satellite backhaul access.Direct-to-device(D2D)agreements are also growing in number,providing satellite connectivity directly to smartphones and IoT devices without the need for a dish or other receiving equipment.Much of this stems from the integration of non-terrestrial networks(NTNs)into the 3GPPs 5G new radio(NR)standard,meaning satellite connectivity can be accessed seamlessly on devices updated to Release 17 or later.3/44Executive summaryKey mobile industry milestones to 2030Over 85%mobile internet penetration87%mobile internet penetration 3G connections fall below 15 million574 million 5G connectionsOver 158 million 5G connections92%subscriber penetration5G adoption exceeds 60%smartphone adoption69%4G adoption2G adoption falls below 1%Over 500 million unique subscribers4G adoption falls to 203%5G adoption4G adoption falls below 50p%5G adoptionOver 90%smartphone adoption83%smartphone adoption5G adoption exceeds 50%smartphone adoption87%5G adoption3G adoption falls below 5%smartphone adoption3G adoption falls below 2%4G adoption falls to 12 242025202620272028202920302023Exploring the role of generative AIIt has been less than a year since ChatGPT launched,introducing much of the world to generative AI.Since then,competitors have emerged and businesses have begun to explore how to use the technology.For mobile operators,the range of generative AI applications is broad,covering areas including code development support,network management,customer care and customised proposition development.Despite the potential to reap significant benefits from the application of advanced AI,ethical concerns around the technology still need to be addressed.Mobile operators must also upskill staff and recruit external expertise to take full advantage of the AI opportunity.Shifting to circularity Circularity is a priority for policymakers and industry players.This involves considering the right use of materials,developing long-lasting devices and using recyclable materials.However,behavioural change among consumers is needed to extend the average three-year device usage period.Governments and ecosystem players are working together to raise awareness and incentivise consumers.In Europe,operators are at the forefront with plans to promote the recycling of mobile phones,other devices and network equipment.Growing fintech opportunities 4G/5G users in Europe are increasingly relying on their smartphones for financial services.The shift has driven enhancements in the fintech sector,including new solutions for customers and the modernisation of traditional banking systems.Operators in the region are making partnership moves to capitalise on the shift of financial services to digital channels.4/44Executive summaryPolicies for growth and innovation For Europe,achieving global leadership in the digital economy and environmental sustainability requires ambitious infrastructure targets,including full 5G coverage.However,significant disparities persist in 5G deployment,particularly in rural areas,with an estimated investment gap of at least 174 billion to meet the Digital Decade connectivity targets.To secure Europes digital future,the region should focus on the following key policy areas:a digital infrastructure framework and the simplification of regulation;building scale through in-market consolidation;and pro-investment spectrum policy.Effective spectrum policy can help spur strong and sustainable economic growth and ensure 5G for all European citizens and businesses by the end of the decade.The review of EU spectrum policy presents an opportunity for reform,allowing for further harmonisation in terms of spectrum licensing approach and alignment of spectrum policy with the Digital Decade objectives.To make spectrum policy a lever for investment and growth,regulators should consider measures such as ensuring long-term licence terms and alignment with investor timeframes,preventing inefficient spectrum awards,and increasing transparency in annual fees.5/44Executive summary496m507m714m734m2030202275 3020222030202220302022464m479mPenetration ratePercentage of populationPenetration ratePercentage of population90%Penetration ratePercentage of population8504 22-20300.3GR0.4 22-2030CAGR0.3 22-2030CAGRPercentage of connections(excluding licensed cellular IoT)203020222030202220302022Unique mobilesubscribersMobile internetusersSIM connections(excluding licensed cellular IoT)4GPercentage of connections(excluding licensed cellular IoT)5G203011 22The Mobile Economy Europe203020222030202220302022Licensed cellularIoT connections110bnPublic funding0.9 millionjobsEmploymentsupported indirectlyTotal connections206m1 trillionTotalrevenuesof GDP4.30bn501m2030202281%Operator capex156bn162bnMobile ecosystem contribution to public funding(before regulatory and spectrum fees)1.3 million jobsDirectly supported by the mobile ecosystem in 2022198bnOperator revenuesand investmentSIM connections(excluding licensed cellular IoT)4GPercentage of connections(excluding licensed cellular IoT)5GSmartphonesPercentage of connections(excluding licensed cellular IoT)Mobiles contributionto GDP2022203011 2220302023*Percentage of total connections(excluding licensed cellular IoT)Subscriber and technology trends for key marketsFrance3G2G4G5GSubscriber penetrationSmartphone adoption2022202220302030Technology mix*2 14 76 8 Q10 90 Q90%8%2v 222030Germany3G2G4G5GSubscriber penetrationSmartphone adoption2022202220302030Technology mix*2 81 17 Q6 94 Q17%2%6 222030UK3G2G4G5GSubscriber penetrationSmartphone adoption2022202220302030Technology mix*1 1 81 17 Q7 93 Q93%1%1%7 222030Italy3G2G4G5GSubscriber penetrationSmartphone adoption2022202220302030Technology mix*8 7 77 8 Q14 86 Q8%8%7w 22203093x%8/44Executive summary01The mobile industry in numbers 9/44The mobile industry in numbers10/44The mobile industry in numbersFigure 1Europe:mobile subscribers and penetrationMillion,percentage of populationSource:GSMA Intelligence2030Europe will have more than 500 million unique mobile subscribers by 2030 With growth of 11 million subscribers between 2022 and 2030,Europe will reach 507 million by 2030.Unique mobile subscriber penetration in Europe will reach 92%of the population by 2030 higher than North America and much higher than the global average(at 73%).Within Europe,penetration rates are above 90%in most countries,with France reaching 96%,Germany 94%and the UK 93%by 2030.600500400300200320242025202620272028202992/44The mobile industry in numbersMobile internet penetration in Europe reached 85%in 2022With more than 460 million people connected to the mobile internet in Europe,the mobile internet usage gap narrowed to 14%in 2022.Most countries in Europe had mobile internet penetration rates above 60%as of 2022.Some countries,including Denmark,Italy,Spain and Portugal,have rates of more than 90%.Figure 2Mobile internet penetration by region,2022Percentage of population*Excludes China Source:GSMA IntelligenceConnectedUsage gapCoverage gapGlobal ChinaLatin AmericaAsia Pacific*North AmericaEurope5W8%6b2%1%1%1y %4IG/44The mobile industry in numbersFigure 3Europe:mobile adoption by technologyPercentage of total connectionsSource:GSMA Intelligence5G will be the dominant mobile technology in Europe by 2026 With new network deployments,5G adoption(as a percentage of total connections)continues to grow in Europe,as 4G adoption begins to decline.5G is set to dominate by 2026,so legacy networks(2G and 3G)are being phased out.In the UK,all the mobile network operators have pledged to turn off 2G and 3G by 2033.3G is likely to be switched off before 2G in Europe.Operators from Denmark,Greece and Sweden plan to switch off 3G by the end of 2023.1The shutting down of 2G/3G networks removes the availability of circuit-switched emergency calling(circuit switched is typically used for emergency calling in markets where voice over LTE,or VoLTE,has been deployed).Following concerns regarding the availability and interoperability of VoLTE emergency calls in both Europe and the US,the GSMA and its members have come together to update and align technical specifications.22022100pP0 %0 2320242025202620272028202920305G4G3G2G0%1%1.2G and 3G Shutdowns Continue,Telegeography,February 20232.“How were addressing VoLTE emergency call issues”,GSMA,May 202313/44The mobile industry in numbersGermany and the UK are driving uptake of 5G in Europe 5G is expanding rapidly in Europe,with the number of connections estimated to have roughly doubled between the end of 2022 and 2023.Over the period to 2030,5G connections will increase to reach 638 million(an adoption rate of 87%).Most countries in the region will see 5G adoption rates for 2030 that are above the global average,with the leading markets of Germany and the UK forecast to exceed 90%.Figure 45G adoption in 2030Percentage of total connectionsSource:GSMA Intelligence5G connections(2030)Global average:54%Europe average:87bm115m71m41m84m1.6bn400m175mSouth Korea95%GermanyFranceCanadaUKChinaUSJapan14/44The mobile industry in numbersFigure 5Smartphone adoption Percentage of total connections(excluding licensed cellular IoT)20302022EuropeUKFranceGermanyGlobal average(2030):91%SpainItaly85yx%By 2030,smartphone connections will total more than 665 million in EuropeBy 2030,smartphone adoption will reach 91%in Europe,matching the global average.Growth in smartphone connections will be seen across all countries in the region.Germany is forecast to lead in terms of number of smartphone connections by 2030,adding 15 million between 2022 and 2030.The availability of affordable smartphones has played a key role in driving adoption.To help extend the lives of smartphones,the European Council in 2023 adopted regulation requiring all smartphones to have replaceable batteries by 2027.The regulation encourages right-to-repair for users,and aims to reduce e-waste.Top three smartphone markets in Europe(smartphone connections,2030)Germany113 millionUK82 millionFrance74 million15/44The mobile industry in numbersMobile data traffic in Europe will almost triple over the next five years Mobile data traffic across the region will rise considerably with migration to 4G(particularly in Central and Eastern Europe)and improved 5G network coverage and capacity.A GSMA Intelligence consumer survey showed that 5G subscribers are particularly interested in adding services and content to their mobile contracts,with potential implications for data use.Uptake of apps for gaming,extended reality and video are the primary drivers for the increase in data usage.Operators are evolving their mobile networks to meet this growing demand and ensure a consistent experience across locations.Figure 6Mobile data traffic per smartphoneGB per monthSource:GSMA Intelligence,based on Ericsson Mobility Report June 2023North America202220Increase2.9202858Latin America202211Increase3.7202841Western Europe202220Increase2.8202856Central and Eastern Europe202214Increase2.6202837Global average202216Increase2.9202847GCC States202226Increase2.3202859Northeast Asia202218Increase3.020285416/44The mobile industry in numbersFigure 7Europe:licensed cellular IoT connectionsMillionSource:GSMA IntelligenceLicensed cellular IoT connections in Europe will double by 2030Europe will have more than 500 million licensed cellular IoT connections3 by 2030,driven by growth in the automotive and utilities sectors.More than 70%of operators in Europe deem IoT to be a very or extremely important success factor for their enterprise portfolios,second only to 5G connectivity services.4 While the IoT market and ecosystem is growing,consolidation is taking place in certain areas,especially those adjacent to IoT connectivity (e.g.equipment and management).Operators are rethinking their IoT strategies accordingly.GSMA Intelligence research shows that many operators are maintaining an interest in being directly involved with IoT,while others are considering different plans,such as spinning off IoT units into separate entities or even divesting.5Rest of EuropeUKFranceItalyGermany600500400300200320242025202620272028202920303.Licensed cellular IoT connections use licensed spectrum from mobile operators,including 2G/3G/4G/5G NB-IoT and LTE-M.Unlicensed IoT connections use SigFox or LoRa.4.GSMA Intelligence Operators in Focus:Enterprise Opportunity Survey 20225.Operators in IoT:progress in the last decade and pathway to sustained success,GSMA Intelligence,202317/44The mobile industry in numbersFigure 8Europe:mobile operator revenue and year-on-year growthMobile revenue(billion)Source:GSMA IntelligenceEurope will see flat revenue growth over the coming yearsOperator revenue is forecast to grow marginally in Europe,as operators continue to diversify their services and look to generate new revenue streams.Consumer services are the largest contributor to operator revenues,while the enterprise segment is the main growth driver as operators increasingly target the digital transformation of vertical industries.Amid growing 5G connections and investments in network deployment,services beyond connectivity(such as cloud and security)and further service diversification have become strategic imperatives for operators.RevenueAnnual growth(%)004.0%3.5%3.0%2.5%2.0%1.5%1.0%0.5%0 22202320242025202620272028202920303.5%0.2%1.2%0.5/44The mobile industry in numbersFigure 9Europe:mobile operator capex BillionSource:GSMA IntelligenceCapex as a percentage of revenueCapexOperators will spend more than 195 billion on networks during 20232030 As in North America and China,operator capex levels in Europe are forecast to begin to trend downwards.Operators are focusing on generating a return on investment after extensive rollout of 5G networks.Over the coming years,operators attention will shift to extending 5G coverage in rural areas in particular,and investing to support use cases enabled by 5G SA and 5G-Advanced.3530252015105020%8%6%4%2%0 23202420252026202720282029203019/44The mobile industry in numbersMobile added 910 billion of economic value to the European economy in 2022In 2022,mobile technologies and services generated 4.3%of GDP across Europe a contribution that amounted to 910 billion of economic value added.The greatest contribution came from productivity effects(670 billion),followed by mobile operators(110 billion).Figure 10Europe:total economic contribution of mobile,2022Billion,percentage of GDPNote:Totals may not add up due to rounding Source:GSMA Intelligence4.3%3.2%0.4%0.2%0.5%Mobile operatorsRest of mobile ecosystemIndirectProductivityTotal10Mobile ecosystem20/44The mobile industry in numbersBy 2030,mobiles economic contribution in Europe will reach 1 trillionMobiles contribution will reach approximately 1 trillion in Europe by 2030,driven mostly by the continued expansion of the mobile ecosystem and verticals increasingly benefitting from the improvements in productivity and efficiency brought about by the take-up of mobile services.The mobile ecosystem in Europe supported more than 2 million jobs in 2022Mobile operators and the wider mobile ecosystem provided direct employment to around 1.3 million people in Europe in 2022.In addition,the economic activity in the ecosystem generated almost 1 million jobs in other sectors.Figure 11Europe:economic impact of mobile BillionSource:GSMA Intelligence203020229101,030Figure 12Europe:employment impact of the mobile ecosystem,2022Jobs(million)Note:Totals may not add up due to rounding Source:GSMA IntelligenceDirectIndirectTotal1.30.92.221/44The mobile industry in numbersIn 2022,the fiscal contribution of the mobile ecosystem in Europe reached 110 billionIn 2022,the mobile sector made a substantial contribution to the funding of the public sector,with around 110 billion raised through taxes on the sector.A large contribution was driven by employment taxes and social security(50 billion),followed by services VAT,sales taxes and excise duties(40 billion).Figure 13Europe:fiscal contribution of the mobile industry,2022BillionNote:Totals may not add up due to rounding Source:GSMA IntelligenceServices VAT,sales taxes and excise dutiesHandset VAT,sales taxes,excise and customs dutiesCorporate taxes on profitsEmployment taxes and social securityTotal22/44The mobile industry in numbers5G will add more than 150 billion to the European economy in 20305G is expected to benefit the European economy by 153 billion in 2030,accounting for approximately 15%of the overall economic impact of mobile.Much of the benefits will materialise over the next five years.Towards the end of the decade,growth in 5G economic benefits will stabilise as the technology reaches widespread adoption.Figure 14Europe:annual 5G contribution,by industryBillionSource:GSMA IntelligenceServices(public administration,finance,healthcare,education)Utilities management,construction,oil and gas,agricultureManufacturingICTRetail2030202920282027202620252024202320220806040200Other23/44The mobile industry in numbersFigure 15Europe:5G contribution,by industry,2030 Percentage of total benefitSource:GSMA IntelligenceThe benefits of 5G in Europe in 2030 will focus on the services and manufacturing industries5G is expected to benefit most sectors across the European economy,depending on their ability to incorporate 5G use cases into their business.Over the period to 2030,53%of the benefits is expected to originate from the services sector,while 29%is expected to come from the manufacturing sector,driven by applications including smart factories,smart cities and smart grids.153 billionUtilities management,construction,oil and gas,agricultureICTManufacturing8)S%Services(public administration,finance,healthcare,education)02Mobile industry trends24/44Mobile industry trends25/44Mobile industry trends2.1 Unlocking the revenue potential of 5G Across Europe and elsewhere,focus is shifting to 5G monetisation as operators seek returns on their significant capital outlays.Bundling non-connectivity offerings with mobile subscriptions is one route.GSMA Intelligence research shows 5G users are more interested than 4G users in adding content,services and devices to their mobile contracts.6 Video and music streaming are the bundling options with the greatest demand.Gaming,digital security and smart home services offer other routes to revenue diversification.Tariff structures that enable operators to move away from volume-based pricing can also help drive 5G monetisation.In Finland,Elisa offers 5G plans that are differentiated by mobile speed.The operator reported that 47%of its smartphone-based subscriptions were on speeds higher than 200 Mbps in Q2 2023.The pricing strategy has helped Elisa achieve an average billing uplift of 3 per month when customers upgrade to 5G.5G FWA represents a further incremental revenue opportunity for operators.Several European countries have a large installed base of legacy cable and xDSL connections that will need to be upgraded to keep up with growing consumer demand for data-rich applications.Operators can take note of early 5G FWA successes in Austria and Italy.GSMA Intelligence forecasts that four of the top 10 most penetrated 5G FWA markets will be in Europe by 2030.7 5G SA momentum builds5G SA deployments in Europe have been trailing other regions.At the end of 2022,only around 5%of live 5G networks in Europe were 5G SA,compared to 25%in Asia Pacific.This reflects the challenging operating environment facing operators in Europe,characterised by market fragmentation and low ARPU levels.However,5G SA activity has recently started to gather pace in the region.Many operators are promoting the network upgrade to their customers using new branding(e.g.5G or 5G Ultra).This serves as a valuable proxy for network quality and can help operators differentiate their 5G offerings versus competitors yet to launch 5G SA.5G SA brings new capabilities that will be crucial to monetising 5G investments,including improved support for network slicing.Successful trials of slicing include the broadcasting of major events(e.g.the coronation of King Charles III in the UK)and cloud gaming.6.Consumer 5G:user behaviour offers new opportunities,but monetisation at scale is still a work in progress,GSMA Intelligence,20237.5G FWA on the rise:state of the market,new developments and outlook through to 2030,GSMA Intelligence,202326/44Mobile industry trendsPrivate 5G gains tractionAs of Q2 2023,Europe was the leading region in terms of number of private wireless networks,accounting for around 40%of global deployments.8 Much of the activity in Europe is focused on private LTE deployments,reflecting the wider availability of the necessary equipment compared to private 5G.Nonetheless,private 5G activity is accelerating,with recent announcements including the following:August 2023:Deutsche Telekom announced it will build private 5G networks at port terminals in Hamburg,Bremerhaven and Wilhelmshaven in Germany on behalf of container terminal operator Eurogate Terminals.July 2023:Orange Business unveiled a hybrid private network using 5G SA at its premises in Arcueil,on the outskirts of Paris.The solution relies on network slicing to offer companies the benefits of a private network,while simultaneously connecting to public infrastructure.May 2023:Telia partnered with Ericsson to debut a private industrial 5G network in the Baltics,with the duo outlining use cases including digital twins and robotics to ramp up operational efficiency at the vendors Estonian facility.Private 5G network provision is a new business for operators in the 5G era,with opportunities to create new revenue streams and serve additional enterprise customers.Almost half of operators expect private wireless networks to account for more than 10%of their total enterprise revenues by 2025,according to a GSMA Intelligence survey.The contribution of private wireless networks to operator enterprise revenues should then rise in the second half of the decade as private 5G network equipment and devices become more readily available.Figure 16Operator revenue contribution of private wireless networksThinking about revenues for your company generated by private wireless networks,how do you expect such revenues to contribute to total enterprise revenues by 2025?Percentage of European respondentsSource:GSMA Intelligence Operators in Focus:Enterprise Opportunity 2022Up to 5%6-10-20!-301-50%More than 50%0 0P%8.Private Mobile Networks,GSA,2023.Based on a sample of 1,212 catalogued customers deploying private wireless networks with revenue greater than 100,000.27/44Mobile industry trends2.2 Transforming networks There is a need to rethink the design of telecoms networks to meet evolving connectivity requirements and enable the rapid expansion of data-driven technologies(AI,web 3.0).As well as investments in infrastructure rollout,this network transformation entails the softwarisation and virtualisation of network functions,as well as cloud-native and disaggregated network architectures.To manage increasing complexity,operators need to invest heavily in network automation,including the use of AI and machine learning,as well as software skills.These allow customised connectivity solutions to be provided,as well as added services and functionality(such as edge cloud),which can be offered to customers using standardised interfaces(network as a service).Network as a service:a new business model Operators are now focused on creating an open,network-as-a-service(NaaS)environment to integrate their service portfolios(connectivity,5G,IoT and cloud)and enable seamless connectivity for immersive technologies.This approach will deliver connectivity through application programming interfaces(APIs)for developers in various sectors,who are improving their business processes and building new digital services.This will help power the next wave of innovation.Whereas the existing operator business model is about selling connectivity for digital infrastructure,the new operator business model is about orchestrating highly responsive digital infrastructure for developers.Digital services will require more sophisticated networks,and new capabilities are needed for the developers interacting with the networks.28/44Mobile industry trendsThe direct-to-device opportunity Direct to device(D2D)is not new,but an important change came about from the 5G NR standard from 3GPP;this incorporates integration for NTNs.Where commercial partnerships are in place,standard smartphones and IoT devices can connect seamlessly with traditional cellular base stations and satellite systems(effectively satellite base stations).D2D is likely to offer 3G-like speeds(35 Mbps),though these could be slightly higher in scenarios where the economics and technology provide the right mix.D2D satellite offers mobile operators access to new customer segments and the ability to provide connectivity for existing customers when roaming out of range of a terrestrial signal.In most cases,the business model would be a wholesale partnership.For example,Vodafone and Orange are working with AST SpaceMobile to deliver a D2D smartphone service in Africa.T-Mobile US is working on a similar offering with Starlink.2.3 Reigniting satellite connectivity Efforts to extend connectivity in underserved areas have successfully reduced the size of the coverage gap in Europe in recent years.However,operators still face an unfavourable set of economics for expanding into areas of low population density.Backhaul costs are a major reason;these tend to rise 510 for the final 10%of households in a country.This highlights the need for operators to consider alternative backhaul solutions to fibre and microwave technologies in rural areas.In Europe,65%of populated rural areas are not currently covered by 5G,according to the State of the Digital Decade report.Satellite backhaul has been around for a while.However,recent developments offer the possibility of using the technology in more scenarios.The rising number of high-capacity and low-latency LEO constellations is a key reason,as is the arrival of high-throughput satellite(HTS)and a more powerful satellite ground segment.This is leading to new partnerships between mobile operators and satellite companies,such as the recent agreements between T-Mobile US and Starlink,Vodafone and Project Kuiper,and Orange and OneWeb.Deutsche Telekom and Orange back European satellite bid Major players in Europes telecoms and space sectors have formed a consortium to tender for a contract to supply the EUs forthcoming satellite constellation project,IRIS2.The group is being led by Airbus Defence and Space,Eutelsat,Hispasat,SES and Thales Alenia Space.It is built as an open consortium,which also comprises a core team of cross-sector players including Deutsche Telekom and Orange.The IRIS project carries an EU budget of 2.4 billion and aims to deliver satellite communication services by 2027 across Europe for use cases such as the protection of critical infrastructure,surveillance and crisis management.29/44Mobile industry trendsFigure 17 Examples of recent partnerships between mobile operators and satellite companies Source:GSMA Intelligence Deutsche TelekomIn February 2023,Deutsche Telekom announced a partnership with Intelsat and Skylo to add satellite connectivity to its existing terrestrial IoT networks,creating what it calls a global network of networks”.The companies highlighted several use cases,such as recording water levels and weather data in unsafe locations and offering broadband connectivity in the ocean.OrangeOrange and OneWeb announced a partnership in March 2023.As part of the agreement,OneWeb will provide LEO satellite backhaul for selected Orange sites in rural areas.Additionally,Orange will add OneWebs LEO broadband service to its enterprise portfolio.Telefnica In August 2023,Telefnica announced it had become an authorised worldwide partner of SpaceXs Starlink.With this agreement,Telefnica will be able to complement its existing offering by integrating Starlinks Enterprise solutions(fixed or mobile)into its global portfolio.These solutions include a broadband service capable of download speeds of up to 350 Mbps in remote locations and an IoT terminal adapted to work in vehicles.VodafoneVodafone and Project Kuiper,Amazons LEO satellite communications initiative,announced a strategic collaboration in September 2023.Vodafone will use Project Kuipers service to provide 4G/5G backhaul in areas where it is challenging and prohibitively expensive to use fibre or microwave backhaul solutions.The companies plan to participate in beta testing of the Project Kuiper service in 2024.Satellite makes in-roads in the enterprise segment Much of the attention from expanding satellite coverage has understandably been focused on coverage in-fill.The enterprise side has garnered relatively less attention.This is starting to change,in recognition of clear demand from SMEs and even larger enterprises for stable connectivity to service IoT installations in hard-to-reach areas or for transiting purposes(such as with logistics).GSMA Intelligence survey data indicates that 1520%of enterprises already use,or would be interested in using,satellite connectivity.9 This skews higher for industries with remote operations(oil&gas,and mining)and for logistics/haulage.The 1520%may at first seem high,but it may be reflective of businesses that have terrestrial coverage from a mobile operator on an intermittent basis,making satellite a desired back-up.Deutsche Telekom and Telefnica have both recently announced partnership agreements with satellite companies covering enterprise connectivity,highlighting the growing perceived importance of the technology among operators.9.Satellites and telcos:coming to a place above you,GSMA Intelligence,202330/44Mobile industry trendsFigure 18 Example AI use cases from the telecoms sectorSource:GSMA Intelligence Use caseExampleCode development supportIn August 2023,Vodafone provided information about its use of generative AI to help its software engineers generate code.Vodafone claims using generative AI led to a productivity gain of between 30%and 45%during trials conducted with about 250 developers.10Fighting spam calls and messagesIn September 2023,EE detailed its efforts in deploying AI to prevent call and SMS scams across its networks,using the technology to block potential threats by identifying spoof numbers and patterns in text messages.The operator stated the new prevention methods will also be deployed on the Plusnet and BT networks.The three brands combined have blocked 281 million spam texts and 105 million international scam calls with the security measures currently in place.11Improving energy efficiency In April 2023,Tele2 completed a three-year research project examining the use of AI to better predict mobile network traffic capacity requirements.12 The results demonstrate the potential for AI to help operators with power saving,ensuring network performance with fewer human interactions,increasing efficiency and reducing the number of human errors.2.4 Exploring the role of generative AI It has been less than a year since ChatGPT launched,introducing much of the world to the concept of generative AI.Since then,competitors have emerged and businesses around the world,including mobile operators,have begun to explore how to use the technology.Generative AI differs from other types of AI primarily in its ability to create new content.For mobile operators,generative AI offers various potential use cases.User-facing applications include improved customer care via enhanced chatbots,and customised proposition development.Operator-facing applications include marketing collateral development,knowledge base management,network management and code development support.Such applications build on existing uses of AI in the telecoms sector.These have focused on recognising patterns or making decisions based on existing data.Network use cases such as fault detection and resolution,network optimisation and network planning have been key areas.10.“Google and Microsoft loom large in Vodafones gen AI plans”,Light Reading,August 202311.“EE steps up AI use to battle scams”,Mobile World Live,September 202312.“New research project demonstrates AI reduces energy consumption in Tele2s 5G network”,Tele2,April 202331/44Mobile industry trendsSource:GSMA Intelligence AI skills and regulation move up the agenda Staff training and upskilling are among the top three investments operators expect will be needed to support the use of generative AI.15 For example,through a mix of external recruitment and internal retraining,Vodafone aims to add 7,000 software engineers to its workforce by 2025.This figure is almost double the total number of software engineers Vodafone had in 2021 when the plan was announced,highlighting the scale of the transformation needed to unlock new opportunities in areas such as generative AI.Despite the potential to reap significant benefits from the application of advanced AI in business and society,valid ethical concerns around the technology still need to be addressed.Leading officials in the European telecoms industry have warned about the existential threats associated with development of an out-of-control generative-AI model.16 Meanwhile,the European Data Protection Board(EDPB)announced the formation of a ChatGPT taskforce to foster cooperation and exchange information on possible moves by individual data protection authorities in the region.17 The EU is also in the process of finalising the AI act,which will regulate the use of AI in the EU.Use caseExampleSupporting call-centre staff Several mobile operators have explored the use of generative AI to enhance call-centre operations by automating routine tasks such as call routing,FAQs and data entry.For example,Virgin Media O2 has used large language models(LLMs)to build chatbots and virtual agents that can support call-centre agents.It is also exploring the use of LLMs to analyse customer interactions for sentiment and intent,offering real-time insights.13Supporting network expansionWhen planning and preparing to lay fibre-optic lines,Deutsche Telekom uses cars equipped with cameras and eye-safe laser scanners.14 In accordance with data protection,the relevant streets are recorded in 2D and 3D and analysed by AI.This recognises different surfaces such as asphalt or cobblestones,and checks whether trees or streetlamps cross the new fibre-optic routes.A planning tool then automatically determines the most efficient way to lay the new fibre-optic lines,and an experienced planner evaluates and optimises the result.Since 80%of the costs for fibre-optic expansion are incurred by underground construction work,AI can be used to achieve cost savings.13.“How Generative AI is Revolutionising the Telecom Industry Customer Care and Chatbots/Virtual Agents”,Medium,September 202314.See https:/www.telekom.de/netz/glasfaser-ausbauplanung-ki15.Generative AI in operator networks:is there life at the edge?,GSMA Intelligence,202316.“Telefonica chief latest to sound generative AI warning”,Mobile World Live,April 202317.“EU privacy body forms ChatGPT task force”,Mobile World Live,April 202332/44Mobile industry trendsFigure 19 The concept of the circular economySource:GSMAExtraction and raw materialProduct manufacturingProduct distributionCustomer usageDisposalLandfill and greenhouse gas emissionsReuseRefurbishRecycle2.5 Shifting to circularity Demand for telecoms equipment and services is on the rise due to the increasing adoption of 5G technologies.In Europe,there are more than 900 million active mobile connections,including feature phones and smartphones.With growing concerns around e-waste,circularity has become a priority for policymakers and the telecoms industry.As one of the largest consumer markets for new 5G devices,Europe is at the forefront of promoting sustainable 5G solutions,including green consumer options and enterprise use cases.The mobile ecosystem in the region is embracing circularity for both mobile devices and network equipment.This means considering factors such as materials used in mobile phone production,developing long-lasting devices and equipment,and using recyclable and recycled materials to reduce e-waste.The technical lifespan of a mobile device has improved,ranging from four to seven years on average.18 However,the average usage period of a mobile device remains around three years,19 indicating the need for initiatives that steer consumer behaviour toward reducing e-waste.Encouraging and incentivising consumers will play a critical role in achieving success,though it may be complicated by influencing factors such as affordability,information availability,social norms and personal preferences.Governments and ecosystem players can collaborate to raise awareness and incentivise consumers to prolong the lives of devices.For example,there is an opportunity to establish new channels to collect,refurbish and resell devices and network equipment.Moreover,educational campaigns on sustainability can be implemented to inform consumers.European manufacturers such as Nokia and Ericsson have committed to reducing the environmental impact of their products,operations,manufacturing and supply chains.The vendors are primarily focusing on asset recovery,refurbishment and the recycling of legacy equipment in the original country of deployment,or reusing across markets globally.The guiding principles of reuse,recycle and refurbish are central to extending the life of a product and,in turn,reducing or eliminating waste in the production and usage cycle.18.E-waste and raw materials:from environmental issues to business models,IVL Swedish Environmental Research Institute,201919.Statista33/44Mobile industry trendsCircularity:example operator initiativesTele2 commits to 100%circularity for network equipment by 2025Tele2 is the first telecoms company in Sweden to publicly commit to 100%of its network equipment being responsibly resold,reused,remanufactured or recycled,and non-recyclable materials being disposed of securely.As part of its vision to be a leader in sustainability,Tele2 is already climate-neutral in its operations and aims to reduce greenhouse gas emissions across its value chain by 60%per subscription by 2029.Tele2 has been an active participant in an industry-wide project led by the GSMA to identify opportunities for increased circularity.Vodafones circular economy initiativesVodafone aims to reach net zero for its UK operations by 2027 and to be fully net zero across the Group by 2040.Its main sources of e-waste are its network equipment and the devices provided to businesses and consumers.The group has been reusing,reselling or recycling 96%of its waste network equipment.In 2022,the initiative helped save around 1,500 tonnes of CO2 by reusing equipment across its UK sites.Vodafone also operates an International Asset Marketplace for sharing equipment between its businesses.This is used to reuse and resell excess stock or decommissioned equipment such as masts and antennas.The platform helped the group save more than 12.5 million of spend and over 1,100 tonnes of CO2 in the year ending March 2023.BT aims for net zero using the circular economyBT aims to reach net-zero emissions from its operations by the end of March 2031,and its supply chain and customer emissions by the end of March 2041.BT sources 99.9%of global electricity consumption from renewable sources.Additionally,the operators aim is to transition to electric or zero-carbon emission vehicles by 2030.Its subsidiary,EE,is exploring ways to reuse and recycle legacy 3G network equipment.The group has also created its Exchange Clearance Operation(ECO)programme,which involves recycling and reselling equipment from old telephony exchanges.OTE collects 730,000 pieces of equipment for recyclingOTE collected more than 730,000 pieces of equipment in 2022 for refurbishment or recycling,according to the groups Unified Sustainable Development Report for 2022.The company achieved the responsible management of 100%of its ICT waste,strengthening its positive environmental footprint.OTE also recycled more than 21 tonnes of mobile devices,saving approximately 4.2 tonnes of plastic and 2.8 tonnes of precious metals.34/44Mobile industry trends2.6 Growing fintech opportunities Europes fintech sector remains at the centre of the financial services industry,capturing around 25%of the$75.2 billion in global investment,second only to the US(37%)in 2022.20 Within the region,the UK accounted for the highest fintech investment value,with 67%of total regional investment in 2022.Germany and France followed at 16%and 15%respectively.21 These countries are driving the sector forward with progressive regulation,technology innovation and a willingness to embrace digital transformation.The strong fintech sector in the region has offered customers greater choice and convenience.It has also encouraged the modernisation of banking systems and grown the number of internet banking users,with rising adoption of mobile banking and online account opening.The neobanking22 market has grown substantially and expanded into new markets such as SME lending and investment services.User penetration of neobanking in Europe is expected to rise from 9.8%in 2023 to 14.7%by 2027,adding almost 124 million users.23 Examples of neobank developments include the following:Wise expands into new markets:Wise,a UK-based neobank,was founded with a goal to make international money transfers more affordable and accessible.Services include low-cost,transparent currency exchange and borderless banking capabilities for individuals and businesses.Wise has expanded its portfolio to include multi-currency accounts,debit cards and business accounts.Its partnerships with financial institutions and HR&payroll companies have expanded its reach.JP Morgans neobank in Germany:Following its success in the UK,in May 2023,JP Morgan announced the expansion of Chase,its digital-only bank,in Germany and other European countries.In the UK,Chase was the fastest-growing fintech app of 2022,reaching more than 1.6 million customers less than two years from launch.24 The bank is now looking to build a strong presence across Europe.Open banking is also boosting the sectors growth and is expected to foster the creation of new products and services.In 2022,open banking in the UK reached$50 billion in total purchase value.25 The regulators decision to roll out open banking as a payment method further boosted its growth in the UK.The government collaborated with Ecospend,the integrated open banking platform that enables consumers to conduct instant pay by bank account transactions.This option is integrated into payments,including PAYE,corporation tax and capital gains tax,making it widely accessible.26Figure 20 Fintech investment deal values for European countries in 2022Billion Source:StatistaUK$12.5$2.9$2.8$1.5$1.0$0.7$0.6GermanyFranceSwedenSwitzerlandLuxembourgItaly20.State of Fintech,CB Insights,202221.Statista Research Department,202322.A neobank is a challenger bank that operates digitally only.Neobanks do not have any physical branches and can provide their services via mobile or desktop devices.Examples of neobanks include Revolut,Chime,Nubank,N26 and Monzo.23.Statista24.JP Morgans Chase UK fastest growing fintech app in 2022,AltFi,January 202325.Reimagining the Future of Finance,BCG and QED Investors,202326.A2A payments made to HMRC using Ecospends Pay by Bank top 2.3bn,Open Banking Expo,February 202335/44Mobile industry trendsIncreasing use of mobile devices for financial services Use of mobile for financial services is increasing with the growth in 4G/5G users across the region.Consumers in countries such as the UK,Italy and France are the most frequent users of smartphones for financial services.In France,the share of 4G/5G subscribers using their devices daily for contactless payments grew by six percentage points between 2020 and 2022.27 The numbers signal growing momentum behind digital financial services.Operators have introduced new solutions to keep up with the expanding banking sector.They can continue to leverage their large,established customer bases to offer financial services and collaborate with players such as banks to capitalise on the shift to digital financial channels.Such moves are targeting new services for customers and digital capabilities for businesses.Examples of operators collaborating on digital financial servicesOrange Bank expands with new features Orange Bank has partnered with Mambu to launch offerings such as government-regulated savings accounts,with a faster time to market.In 2023,the bank announced its migration to Mambus cloud banking platform in France,to drive its European expansion.Orange Banks core banking solutions are built on Mambu and hosted with Amazon Web Services(AWS),which enables it to easily scale operations.The bank currently uses Mambu to manage its current account,loan and credit-card products,with the government-regulated savings account in development.The move is an extension of the companies existing partnership,following the launch of Orange Bank on Mambu in Spain in 2019.Orange Bank in Spain had 1.9 million customers as of October 2022 and is one of the highest-rated banking apps in the country.Telefnicas online loan services Since April 2023,Telefnica Consumer Finance(a joint venture between Telefnica and the CaixaBank Group)has enabled Movistar Money customers to apply for online loans.According to Telefnica Spain,the Movistar Money service is part of its strategy to provide new digital services to customers.Such strategic moves are helping the operator advance its diversification and revenue growth by taking advantage of its broad customer base.27.Banking on an opportunity,as consumers embrace mobile for financial services,GSMA Intelligence,202303Mobile industry impact 36/44Mobile industry impact37/44Mobile industry impact3.1 Operator progress with sustainability Nearly 85%of operators worldwide have made net-zero commitments,according to a GSMA Intelligence survey.28 Furthermore,as of 2022,two thirds of European operators had joined an initiative,the European Green Digital Coalition,and committed to reaching net zero by 2040.Operators are taking steps to improve the energy efficiency of their networks.As a result,use of renewable energy by operators has increased significantly in the region.In 2022,emissions per connection(Scope 1 and 2)dropped by 20%versus 2021.29 Operators are expanding their sustainability efforts throughout the value chain and encouraging suppliers to follow the net-zero standards.Recent initiatives include the following:Deutsche Telekoms climate targets:Deutsche Telekom has set a number of targets in line with scientific research and the Paris Agreement,including climate neutrality in operation(Scope 1&2)by 2025,and a reduction of all technically avoidable emissions by 2025.In addition,unavoidable residual emissions will be neutralised through high-quality offsetting measures.The purchase of 100%of electricity from renewable energy worldwide has been in place since 2021.Deutsche Telekom is also targeting climate neutrality along the entire value chain(Scope 3)by 2040 at the latest.30 BTs expanding commitment to net zero:BT Group tracks compliance through supplier assessments and encourages them to disclose to the CDP(Carbon Disclosure Project)to enhance transparency and accountability.In February 2023,BT launched a new supplier engagement campaign to encourage the setting of net-zero science-based targets.Telefnicas sustainable approach to digital solutions:Telefnica has developed an internal voluntary framework called Responsibility by Design to incorporate ethical and sustainability principles from the beginning of developing a new product or service through to its delivery to customers.It also helps Telefnica ensure that the product or service complies with the operators Responsible Business Principles.Operators are also developing collaborative efforts to deploy new technologies that help address the energy management issues faced by users.For example,working with housing cooperations in Sweden,Telia offered a heating optimisation solution to manage district heating during the winter of 2022/2023.Five buildings were connected through NB-IoT sensors in each apartment to measure temperature and humidity.A connected control unit for the building management systems was also installed.In this way,buildings were equipped with an automated solution to optimise the energy consumption of their district heating based on real-time,indoor temperature data.28.The next generation of operator sustainability:greener edge and open RAN,GSMA Intelligence,202329.Mobile Net Zero,GSMA,202330.See https:/ 85%of operators worldwide have made net-zero commitments,according to a GSMA Intelligence survey38/44Mobile industry impact3.2 Mobiles impact on the SDGsIn 2022,European operators made progress with their impact on the UN Sustainable Development Goals(SDGs).SDG 10:Reduced Inequalities,SDG 4:Quality Education and SDG 1:No Poverty were the most improved SDGs,reflecting improving mobile broadband coverage and the increased use of devices for services.Figure 21 Mobiles impact on the SDGs in Europe Source:GSMA IntelligenceMost improved SDGs39/44Mobile industry impactStrengthening digital inclusion and improving access to education The barriers to mobile internet adoption are particularly acute among certain segments of the population,including the poorest,those in rural areas,women,persons with disabilities and the elderly.Driving mobile internet adoption among these segments remains a focus for operators globally.Operators and their partners in Europe have been working to improve accessibility by developing inclusive products and services that meet the diverse needs of persons with disabilities.At the same time,operators have been partnering to provide quality education by building digitised content and improving reach.Examples of operator initiatives include the following:Go digitises Maltas first autism-sensitive resource:Operator Go in Malta has helped digitise the book Mase in Space,including the addition of interactive features,to make it accessible to as many families as possible.The interactive digital book is Maltas first autism-sensitive resource.It is designed with particular attention paid to the fonts used,colours selected,positioning of characters and rhythm and rhyme used in the storytelling.It supports children in the development of their social and communication skills.The online version of the book broadens its reach and increases its longevity.It also provides an alternative means of engagement between children and their carers/parents,teachers or therapists and helps enhance childrens digital skills.BT supports digital skills development:As part of its Skills for Tomorrow programme,BT in the UK is supporting older and vulnerable people to get online and make the most of the digital tools on which modern life is increasingly dependent.BT aims to help 25 million people make the most of life in the digital world by 2026.Operators in Europe are also partnering with charities and encouraging the public to donate devices they no longer use to support people living in digital poverty.In the UK,for example,around 1.5 million households do not have access to digital connectivity and roughly half of those affected are children.The problem could get worse due to the cost of living crisis.Operators are taking steps to address the challenge and help ensure digital inclusion for all.For example,Vodafone,under its everyone.connected campaign,donates free connectivity to UK charities and gives connectivity to someone in need each time a customer signs up for its Vodafone Together service plan,through a partnership with the Trussell Trust.Vodafone has also set up the Great British Tech Appeal,asking the public and businesses to donate devices they no longer use.It then provides six months worth of free connectivity,including data,calls and texts.With these initiatives,by July 2022,the operator had provided free connectivity to 500,000 people via charities working in communities nationwide and its partners.Operators and their partners in Europe have been working to improve accessibility by developing inclusive products and services that meet the diverse needs of persons with disabilities04Mobile industry enablers 40/44Mobile industry enablers 41/44Mobile industry enablers 4.1 Grasping control of Europes digital futureBy 2030,digital technologies will form the fabric of Europes economy and society,enabled by ultra-fast,low-latency networks.Global events over the last three years have reminded us that advanced telecoms networks are essential if Europe is to be successful in its pursuit of global leadership in the digital economy,remain secure and resilient in the face of unpredictable global threats,and achieve migration to net zero.The EU has set ambitious digital infrastructure targets for the Digital Decade,including full 5G coverage by 2030.Mobile broadband has been proven to be a catalyst for GDP growth,31,32 a basis for social inclusion and wellbeing,and a powerful tool in the fight against climate change.33 As Europe seeks to deliver on the digital and green transition,mobile has an important role to play in connecting everyone and everything.While most countries in Europe have deployed commercial 5G services,and nearly two thirds of operators in the region have launched 5G networks,large differences remain between Europe and other leading regions,as well as between urban and rural areas within the continent.According to the European Commissions recently published State of the Digital Decade report,65%of populated rural areas are not currently covered by 5G.34 It is estimated that the additional investment required to meet the Digital Decade connectivity targets is at least 174 billion.35 In addition,it is expected that increased data traffic,intensive use of connectivity for Industry 4.0 scenarios and growing security requirements are likely to push investment needs higher.The telecoms sector is currently not strong enough to meet that requirement,as it faces relatively flat revenues,returns that are below the cost of capital and weakened investor sentiment.To ensure Europe grasps control of its digital future,it is vital to create the right conditions for private infrastructure investment,network modernisation and digital innovation.A financially sustainable mobile sector is key to the delivery of innovative services and the deployment of new networks.Without the necessary investment,the European Digital Decade will fail.Future investments are under serious pressure;political action is needed to secure them.For the future of connectivity,Europe requires a broad reset of the policy framework governing the digital communications ecosystem,reforming todays outdated(and still largely national)regulatory approaches that have so far failed on the vision of a true telecoms single market.In this context,the following areas are key:Introducing a digital infrastructure framework that enables the huge effort required in rollout and network transformation to achieve the 2030 targets.The new framework should incentivise investments by tackling low returns for service providers and finding a new financing model in the digital value chain that allows for sustainable,secure and efficient use of Europes networks.Addressing barriers to the European telecoms single market by simplifying and removing regulation.Urgently building scale through in-market consolidation,as well as cooperation on innovative technologies,as a fundamental stepping stone for creating European telecoms operators that are globally competitive.Introducing a more pro-investment approach to EU spectrum policy.31.The Mobile Economy 2023,GSMA,202332.The Socio-Economic Benefits of Mid-Band 5G Services,GSMA,202233.Mobile Industry Impact Report:Sustainable Development Goals,GSMA,202234.State of the Digital Decade,European Commission,202335.Investment and funding needs for the Digital Decade connectivity targets,WIK Consult,202342/44Mobile industry enablers A digital infrastructure frameworkThe EU Digital Declaration36 calls for“adequate frameworks so that all market actors benefiting from the digital transformation assume their social responsibilities and make a fair and proportionate contribution to the costs of public goods,services and infrastructures,for the benefit of all Europeans”.The status quo for digital connectivity does not align with this principle.The introduction of such a framework would bring about significant improvements for European users,economies and society as a whole by ensuring more resources for a faster,more inclusive rollout of next-generation network infrastructure.Operators will be able to upgrade infrastructure and provide better coverage and higher quality connectivity,allowing consumers to enjoy faster,more content-rich and widespread connectivity.In addition,an economic incentive would be provided for large traffic generators to manage their traffic more effectively.This in turn would result in a reduction in the carbon footprint of data usage and improved network quality.A simplified European regulatory framework is needed,including the removal of regulation where appropriate,and fully harmonised implementation.Introducing further EU-wide best practices in areas such as telecoms regulation,consumer protection,taxation and other areas would make investment in telecoms markets more attractive.Market structure and scaleThe root cause of the underperformance of the telecoms sector and underinvestment in innovative network infrastructure in Europe is market fragmentation at the national and EU levels,leaving operators below the minimum viable scale to meet network investment targets,specifically for 5G deployment.With economies of scale in the sector being mostly local(e.g.efficient non-duplicated investment,optimised used of assets and spectrum efficiencies),the fragmentation of telecoms markets at the national level remains a key issue for the sector.While the telecoms sector has delivered improved connectivity,retail prices for telecoms services have generally been falling over the past 10 years as costs have increased.The combination of increasing costs for the rollout of 5G and gigabit networks and relatively flat revenues has left the sector with a massive investment challenge.The telecoms sector urgently needs more scale for sustainable investment in network infrastructure and innovative technologies.In-country consolidation allows for the scale needed for more efficient investment,which frees up resources for innovative technologies.It is an important contributor to the investment gap that EU operators face,as it would provide them with the ability to invest in infrastructure to achieve connectivity targets.Reducing financial constraints will also make operators less dependent on finding financial investors whose incentives may not be aligned with European policy goals.With this in mind,a re-evaluation is needed of EU merger policy,acknowledging the role of minimum viable scale in markets with high fixed costs,and based on evaluations that take longer time horizons and appropriately weigh quality and efficiency benefits.Prices are important but cannot be the sole measure of regulatory success for the telecoms sector.36.European Declaration on Digital Rights and Principles for the Digital Decade,European Commission,202243/44Mobile industry enablers Spectrum policy for the Digital DecadeA more pro-investment approach to EU spectrum policy can be an important driver of Europes connectivity goals.Effective spectrum policy can support strong and sustainable economic growth and ensure 5G for all European citizens and businesses by the end of the decade.There is also a need to clarify the spectrum provisions already present in the European Electronic Communications Code(EECC).To make spectrum policy a lever for investment and growth,regulators are encouraged to consider the following regulatory actions:Licence terms Ensure long-term business certainty and alignment with investor timeframes through licence duration,and establish a deadline for all Member States to assess renewals(in line with Art.50 EECC).Awards procedures Prevent distortive or inefficient awards for new spectrum through a strengthened review process for awards,with a stronger role for the Commission to foster compliance with the EECC.Annual fees Increase transparency through the collection of information from national regulatory authorities on spectrum fees.The creation of a public database would help make comparisons of the impact of spectrum prices more feasible.Spectrum availability Establish a clear roadmap for increased spectrum capacity and the expectation of additional supply of low-and mid-band spectrum to support ongoing network expansion.470694 MHz Set a deadline(e.g.2026)for the Commission to put forward proposals to reduce barriers to the introduction of mobile post-2030 in interested Member States.6 GHz Provide guidance to Member States on conducting a rigorous cost-benefit analysis of the different options for the band,ensuring that value to end users and opportunity costs are properly accounted for.3.84.2 GHz Recommend a policy that is neutral at the assignment stage and flexible from a forward-looking perspective;that is,one that maps incumbent users and defines the least restrictive technical conditions,as well as allowing for second-wave licences without power restrictions once demand for local use is determined.Minimum scale Recognise that 5G deployments require scale.Regulators should take this into account in the context of spectrum policy and when considering regulatory interventions such as preferential treatment for new entrants in spectrum awards or setting aside spectrum for use in private networks.Reservations and set-asides adversely affect the EU telecoms industry by creating scarcity,which leads to higher spectrum prices.This in turn reduces the investment capability of operators for public networks.There are also other approaches to service these needs.A recent report by the GSMA37 shows that caution should be taken when making long-term decisions on spectrum assignments and that market-driven approaches that foster cooperative solutions can bring the best outcomes for spectrum users and consumers.The review of EU spectrum policy is an opportunity to deliver wider adoption of best practices.Rules based on these principles will help achieve a more harmonised approach to licensing,encourage more ambitious investment outcomes across the Union and deliver the far-reaching goals of the Digital Decade to the ultimate benefit of EU citizens and businesses.37.The Impact of Spectrum Set-Asides on 5G,GSMA,2023Effective spectrum policy can support strong and sustainable economic growth and ensure 5G for all European citizens and businesses by the end of the decadeGSMA Head Office1 Angel LaneLondonEC4R 3AB United KingdomTel: 44(0)20 7356 0600Fax: 44(0)20 7356 0601

0人已浏览 2023-12-13 46页 5星级

Andrey ZvyagintsevWomens SS 23Fashion WeeksReportCourtesy of PradaCourtesy of PradaWomens Spring Summer 24Fashion Weeks Report INDEX123 45 City SpotlightThe top runway trends,divided by city,analyzed by our AIThematic Trend AnalysisStar TrendsSee how the most common trends were adapted in different waysPetar PetrovStandout colors,prints,fabrics,silhouettes,and accessories of the season and the evolution of previous themesThe SS24 to Streetstyle pipelineSee how trends from last season are being worn on the streetTrends Screening Reality or projection?Accurate behavioral analyses of the most visible trendsCitySpotlight1Courtesy of PradaHow are the main trends from fashion weeks distributed in the different fashion capitals?What stands out as the macro trends in Milan or Paris?Lets look at the bigger picture of what emerged from these collections.Cream6%Top trendsParisSee Through6%1.CARVEN2.CHRISTIAN DIOR3.GIVENCHYShare calculated among all runway images from Paris.1.AZ FACTORY2.ISSEY MIYAKE3.UNDERCOVERShare calculated among all runway images from Paris.1.AZ FACTORY2.BALENCIAGA3.Y/PROJECTShare calculated among all runway images from Pari with dresses.1.2.3.1.2.3.1.2.3.Paris Fashion Week combined retro elegance with avant-garde experimentation,showcasing an abundance of flou characterized by artful draping,ruching,and asymmetric shapes.In line with the call for ethereal sensuality,see-through fabrics like muslin and organza constituted 6%of all recognized fabrics.Those were predominantly with cream hues-6%of the recognized shades-were along duchess satin,and very feminine silhouettes,creating a delicate and sophisticated look.Patterned dresses made up 14%of recognized dress styles,adding a touch of maximalism to the collections.14%PatternedDressesSS24 TrendsStreetstyle Adoption 2Courtesy of Prada-3%In Spring 23 vs Spring 22Magnitude BIGSegmentation EDGY,TRENDY&MAINSTREAM 4%In Spring 24 vs Spring 23 Pastel hues,known for evoking softness and dreaminess,were featured in our previous report as a foundation for the Sleepover Chic theme,reflecting the gentle and naive atmosphere of the trend.This softness and childlike spirit found its way into the fashion scene,particularly in London,where enthusiasts paired pastels with tulle or textured popcorn fabrics,seemingly anticipating one of our upcoming themes.According to our data,these shades,which had experienced a slight decrease,are expected to grow by 4%for the upcoming Spring season.This increase extends to various pastel shades,except for Vanilla Yellow,signifying a resurgence of these soft and enchanting colors.2.3.1.Magnitude BIGSegmentation EDGY,TRENDY&MAINSTREAMPastelsStreet Style Penetration Rate 10%SS 23SS 24ThematicTrends Analysis3Courtesy of PradaBold BlendsWhere Delicacy Meets Daring4.2.35.1.1.SCHIAPARELLI2.Y/PROJECT3.ETRO4.PRADA5.ACNE STUDIOBold BlendsIn the realm of fashion,where the merging of femininity and masculinity has long been a captivating theme,this season showcased a fresh perspective on this established concept.Designers fearlessly ventured into uncharted territories,evolving the dynamic interplay between masculine and feminine aesthetics.This season,fashion visionaries pushed the boundaries by expertly combining rugged,utilitarian materials with ultra-feminine codes.Where Delicacy Meets DaringFor instance,tweed jackets mixed with oversized pants and visible menswear like underwear.Traditionally symbolic of rugged masculinity,underwent a radical transformation into extreme oversized silhouettes.Unexpectedly,they were paired with mini dresses,challenging conventional norms of proportion and seamlessly blending strength with sensuality.What ensued was a captivating collision of textures and shapesa sartorial landscape where the soft met the rough,and the delicate harmonized with the bold.1.4.2.2.1.PRADA2.Y/PROJECT3.ACNE STUDIO4.SCHIAPARELLI4.2.3.1.Key ColorsBlackTaupeKhaki-3%In Spring 24 vs.last yearMagnitude MASSIVE Segmentation EDGY,TRENDY&MAINSTREAMRunway Share:63% 2%In Spring 24 vs.last yearMagnitude BIG Segmentation EDGY,TRENDY&MAINSTREAMRunway Share:11% 1%In Spring 24 vs.last yearMagnitude BIGSegmentation EDGY,TRENDY&MAINSTREAMRunway Share:18%Bold BlendsScope:Europe,women.BoldBlendsKey Colors1.MSGM2.DAVID KOMA3.UNDERCOVER4.BURBERRY5.TIBIThis theme seamlessly integrates the robustness of masculine features with the delicacy of feminine subtleties,forming a captivating visual narrative that boldly questions and reshapes conventional viewpoints.At its core,the theme revolves around three pivotal hues:taupe,khaki,and black.Black infuses depth,lending an aura of timeless sophistication,while taupe and khaki evoke masculine simplicity.This fusion results in a harmonious balance where strength and grace meet,giving birth to a style that is simultaneously audacious and polished.It encapsulates a modern interpretation of gender fluidity and empowerment,embodying a refined and daring expression of identity.2.4.3.5.1.Bold BlendsKey FabricsRainproofLeatherDenim-4%In Spring 24 vs.last yearMagnitude BIG Segmentation MAINSTREAMRunway Share:1%-5%In Spring 24 vs.last yearMagnitude BIG Segmentation EDGY&TRENDYRunway Share:3%-4%In Spring 24 vs.last yearMagnitude MASSIVESegmentation EDGY,TRENDY&MAINSTREAMRunway Share:4%Scope:Europe,women.BoldBlendsKey Fabrics1.PRADA2.KNWLS3.SCHIAPARELLI4.FERRARI5.DION LEEThe key fabrics of the theme such as leather,denim,and nylon are curated in feminine clothing shapes,subtly speaking masculinity while also embodying elegance and femininity.Leather,with its enduring and rugged appeal,strikes a balance between masculine and feminine energies,exuding boldness and audacity.Denim,a symbol of robust masculinity,is seamlessly integrated into feminine silhouettes,celebrating both strength and grace.Meanwhile,nylon,lightweight and durable,adds a contemporary edge,reflecting empowerment and self-expression,while embracing modern masculinity.2.4.3.5.1.Oversized JacketsMidi SkirtsWide-leg PantsKeyShapesOversized JacketsIn the Spring/Summer 2024 shows,oversized jackets took center stage,combining a masculine edge with feminine elegance,paired with tight dresses featuring v-necks,bra tops,and mini bottoms,showcasing a seamless blend of traditional masculinity and modern femininity.In addition,oversized jackets featured details such as hanging and extra long sleeves as well as a variety of studs particularly on leather jackets.Exaggerated silhouettes1.ETRO2.PRADA3.ANIYE RECORDS4.TORY BURCH5.CHRISTIAN DIOR2.3.4.Consistent RiserFemale 11%3.4.5.In Spring 24 vs.last yearINCREASINGMagnitude BIGSegmentation EDGY,TRENDY&MAINSTREAM Scope:Europe,women.Midi SkirtsThis theme featured a diverse range of midi skirts,from sophisticated pencil styles to playful pleats and daring high-slits adorned with intricate details.These ensembles artfully highlighted the wearers femininity and sensuality,showcasing the themes dedication to celebrating diverse elegance.Additionally,the incorporation of masculine elements in the overall styling emphasized the themes nuanced approach,blending feminine grace with masculine grittiness.Multifaceted elegance 1.GUCCI2.DIOR3.PHILLIP LIM4.MAX MARA5.PRADA2.3.4.3.4.5.Consistent RiserFemale 5%In Spring 24 vs.last yearINCREASINGMagnitude BIGSegmentation EDGY,TRENDY&MAINSTREAM Scope:Europe,women.The theme boldly incorporates a diverse selection of wide-leg pants,emanating masculinity through designs like extra-large denim trousers,cargo pants,and tailored pants with generous proportions.These masculine bottoms are expertly paired with body-revealing tops and ultra-feminine blouses,creating a striking blend of styles that accentuate the themes distinctive character.Proportions play2.3.4.3.4.5.Wide-leg PantsConsistent RiserFemale 4%In Spring 24 vs.last yearINCREASINGMagnitude BIGSegmentation EDGY,TRENDY 1.Y-PROJECT2.ICEBERG3.TIBI4.JW ANDERSON5.UNDERCOVERScope:Europe,women.Chain BraceletTop Handle bagsSnip Toe MulesKeyAccessoriesSnip toesAligned with the central theme,the modern fusion of masculine and feminine silhouettes found exquisite expression in the footwear selection.Designers skillfully highlighted this concept by introducing snip toes in a refined and elegant form,excluding chunky designs.This thoughtful choice emphasized a sophisticated balance.Furthermore,these snip toes were characterized by low or no heels,adding to their understated yet chic appeal.Perfect Balance1.VERSACE2.ALTUZARRA3.STELLA MCCARTNEY4.ECKHAUS LATTA5.KNWLS2.3.4.3.4.5.Within this theme,a standout accessory was the top handle bag bag,a quintessentially feminine item that took on a distinctive persona.Top handle bags featured in this theme evoked a reminiscent aura of the iconic Hermes Birkin.These bags served to accentuate the inherent contrast in the overall blend of feminine-masculine aesthetics.In addition,they were mainly plain and in darker colors.Timeless grace1.RALPH LAUREN2.AIGNER3.DRIES VAN NOTEN4.ETRO5.VALENTINO2.3.4.3.4.5.Top Handle bagChain BraceletNumerous designers accentuated the contrast by integrating chain bracelets,primarily in chunky silver forms,imparting the looks with a distinct edge and once again emphasizing the interplay between feminine and masculine elements.Beyond the simple chunky chain bracelet,there were intricately designed variations featuring multiple chains and fringe-like elements.A Touch Of Roughness1.ACNE STUDIOS2.SACAI3.ANIYE RECORDS4.TOLU COKER5.ROKH2.3.4.3.4.5.ColorsMaterialsAccessoriesBrandsShapesBold Blends-Starter PackDesk To dateThe sensual shift in the office attire4.2.35.1.1.VALENTINO2.CHRISTIAN DIOR3.ZIMMERMANN4.SUPRIYA LELE5.THEORYColorsMaterialsAccessoriesBrandsShapesDesk To Date-Starter PackDollhouse DreamReclaiming Girlhood4.2.3.5.1.1.MIRROR PALAIS2.KIM SHUI3.PALOMO SPAIN4.ADEAM5.BORA AKSUColorsMaterialsAccessoriesBrandsShapesDollhouse Dreams-Starter PackMystique MuseThe Enigma of Feminine Opulence4.2.3.5.1.1.HARRIS REED2.SAINT LAURENT3.ALEXANDER McQUEEN4.RETROFTE5.RABANNEColorsMaterialsAccessoriesBrandsShapesMystique Muse-Starter PackStarTrends 4Courtesy of PradaSometimes trends transcend themes and aesthetics.In this section,we review trends so visible that they are expressed through the different themes that we have identified.It is important to understand the subtle differences to best adapt a theme to your brand DNA and own audience.Polo Shirts1.GIVENCHY2.GUCCI3.LOEWE1.2.3.Polo shirts,once a staple in mens collections,made a prominent transition into womens fashion this season.They underwent a glamorous transformation,embellishing themselves with crystals,intricate embroideries,and lustrous fabrics.According to our data,they are expected to register a 1%growth for summer,particularly in their short-sleeve format,showcasing their enduring appeal and versatility. 1%In Spring 24 vs.last yearMagnitude MEDIUMSegmentation:MAINSTREAMScope:Europe,women.Mystique MusePolo Shirts4.2.3.5.1.1.MIU MIU2.RALPH LAUREN3.MSGM4.DRIES VAN NOTEN5.CAROLINA HERRERADollhouse DreamBold BlendsFrom Desk To Date5Courtesy of PradaTrendScreening Fashion weeks and their shows are great moments of innovation and inspiration.However,the enthusiasm of creators for specific trends are not immediately met with the support of the general public.We thus offer you a new type of analysis to understand the real behavior of trends that are widely present on the catwalks.Metallic Tones1.BRANDON MAXWELL2.AVELLANO3.LAQUAN SMITH1.2.3.Metallic tones have been an ongoing trend in recent seasons and are now taking a prominent place on the runway.This has led us to delve deeper into their market potential,recognizing their growing significance in the fashion landscape.Breakdown by cluster of the 7 trends associated with Metallic Tones by Heuritechs modules:Rising Star:28%Consistent riser:28%Fluctuating:44%Scope:Europe,women.Trend behaviour Consistent RiserMetallic Tones Tops2.RABANNEFluctuatingMetallic Tones Skirts3.PALOMA WOOL 4%In Spring 24 vs.last yearMarket Share 0.3%Annual Growth 5% 1%In Spring 24 vs.last yearMarket Share 0.6%Annual Growth 1%Rising StarMetallic Pants1.TOM FORD 7%In Spring 24 vs.last yearMarket Share 0.1%Annual Growth 10%Scope:Europe,women.1.The City Spotlight outlines some of the most represented runway trends in Milan,and Paris,detected by our AI.2.The overarching theme that tied together the SS24 womenswear shows was the exploration of diverse manifestations of femininity.A common thread running through all the themes was a focus on sophistication and increased maturity.These concepts served as the foundation from which we derived four major themes:-Mystique Muse-Dollhouse-Bold blends-From Desk To date3.The runway trends remained similar to previous season but they showcased subtle refinements in details and styling,emphasizing a deliberate evolution in design4.Polo shirts,polka dots,micro shorts,and corsets emerged as prominent trends of the season,featuring in almost every runway show and across all our key themes.These styles are essential must-haves for the upcoming collection assortment in womens fashion.KeyTakeawaysSeaPradaPradaTo learn more about Heuritech,Request a demoyou can also request a demo:

0人已浏览 2023-12-13 36页 5星级

DIGITAL REVOLUTION The Worldwide Lockdown is rapidly affecting the fashion industry and leading to the acceleration and transformation of digital solutions.250 people8 PhDs in machine learning3 offices worldwideHEURITECHPREDICTIVE ANALYTICS ON TRENDSAI experts offering a platform dedicated toluxury,fashion&sports EditoDuring this period of crisis brands are forced to test new digital technologies.Fashion innovation agencies have received a tremendous amount of requests about how to create digital clothing,make digital catwalks and virtual showrooms.Matthew Drinkwater,Head of the Fashion Innovation Agency(FIA)said that his teams workload grew immensely during the crisis.Experts who deliver digital fashion solutions said there may be a big shift closer to virtual choices.The aim of this report is to share digital practises.The report is advantageous by virtue of methods shared which are not only used but also are working for other fashion players.The information given is practical and inspirational for smaller brands which can gather and adapt some practises internally.As an AI company Heuritech is very keen about new digitization processes and is following them closely.Besides sharing useful methods,the part of the report also provides the data related to trends presented at digital fashion weeks or digital collection presentations via Instagram.1.DIGITAL REVOLUTION CHANGING FASHION GAME2.ACCELERATION OF DIGITAL REVOLUTIONAgenda1.1.PHOTOSHOOTS:How Covid-19 is changing fashion photography1.2.DIGITAL CATWALKS1.3.DIGITAL LOOKBOOKS1.4.DIGITAL FASHION SHOWSninasandbech2.1.3D FASHION2.2.VIRTUAL MODELS2.3.DIGITAL CAMPAIGNS2.4.FASHION APPS3.HEURITECHS RESPONSE TO A NEW SITUATION1.How Covid 19 is changing the pace of the digital revolution?PHOTOSHOOTSHow Covid-19 is changing traditional photography?Consumers need for fashion goods dropped dramatically during the period of confinement.This forced fashion brands to look for more creative ways to do their campaigns.Not only brands are looking for creative ways to manage their work but also various digital solution agencies trying to adapt by providing useful tools for brands.Ubooker(online booking platform)is launching remote photoshoot capabilities.Smart modeling allows clients to keep creating creative campaigns for their businesses.Ubooker Clients have a possibility to choose between booking models to produce a professional photoshoot or make a simpler shot for influencer style.booker can also provide remote access to stylists,photographers,makeup and hair artists.Clients can send styles they want to or connect via video call to ensure they are getting what they need for the shoot.Ubooker also offers retouching and editing for clientsJacquemus used the FaceTime application for his Spring/Summer 2020 campaign called“Jacquemus at home”.The models of his campaign:Bella Hadid,Euphoaira Barbie Fereira and Steve Lancy changed their outfits without any help of a make-up artist,dressers only by using an iPhoneFree People has tapped employees and influencers such as Alyssa Coscarelli to model clothing,with many images created during a March campaign for people to share how they were wearing the brand at home.PHOTOSHOOTSHow Covid-19 is changing traditional photography?Zara asked models to photograph themselves at home.Models didnt wear any make up and used their creativity by posing on,sofas,in bedrooms,kitchens and staircases.Reformation recently uploaded new products to its e-commerce catalogue using shots from“friends of the brand”.The CEO Yael Aflalo said that moving from its in-house photo studio to photos taken remotely was a“natural pivot”and was a new way to interact with the brands community.PHOTOSHOOTSHow Covid-19 is changing traditional photography?DIGITAL LOOKBOOKSHow Covid-19 is changing traditional photography?Some designers during the pandemic have decided to do digital lookbooks:for instance,London-based fashion designer Steven Tai.He is experiencing his second lockdown since January as the first one was in China,where his garment production factory is located.At the time he had to produce samples for Paris Fashion week.Despite all the challenges he experienced,he created a virtual lookbook by incorporating 360-degree gifs of the collection so that buyers could see full looks.The result of this virtual lookbook was incredibly positive as half of the orders placed were generated from the virtual lookbook.It proved that the power of simple digital tools can easily support businesses during the period of confinement.DIGITAL CATWALKSHow Covid-19 is transforming traditional fashion shows?Another approach to fight current situation for brands was to present their collections on Instagram.For instance,Dutch denim brand made a“Stay-at-Home Catwalk”on Instagram Stories allowing people around the world to experience it from their own homes.25 models and influencers from different countries showcased the Spring 2020 collection straight from the corridors,kitchens and living rooms.The models recorded themselves and were walking to the beat of the same G-Star Raw track.It turned into a big catwalk show.2.How Covid-19 is accelerating digital revolution?Old technologyaccelerating3D FASHION3D fashion started to be used years ago.While the world is changing,the specialists of digital solutions believe that 3D clothing will soon become a mainstream tool for brands.Norway-based brand Carlings was one of the first brands to make 3D collections.In 2018.It made 120 million euros in revenue as the brand invested in 3D design and trained their employees to use digital solutions.The CEO of Carlings,Ronny Mikalsen said that he sees 3D collections as the future,and also a sustainable solution for the world,currently inundated with excess clothing trash.3D FASHIONThe prevention of physical contact pushed designers and manufacturers to look for different ways of working.According to CEO of the Fabricant(digital fashion house)“brands are already looking for radical ways of redefining their culture and operations to a more digital mindset.”The Fabricant recently launched a beta platform,Leela,that enables users to scan a picture of their face on to a 3D digital body and choose clothing for it to wear.The Fabricant also created digital clothing samples for lifestyle brand Napapijri,eliminating textile waste and creating stunning online content in the process.“Our work exists beyond the current concepts of catwalks,photographers,studios,and sample sizes.For The Fabricant,imagination is our only atelier,and our fashion stories are free from the constraints of the material world”Murphy,The owner of The Fabricant.Old technologyaccelerating3D FASHIONCo-founder of Abasi Rosborough-Abdul Abasi,produced a 2020 collection that was made through innovative 3D tailoring.“We make the suits for people who dont have to wear suits but choose to.We found that they are willing to wait a few weeks to get something custom and special.This month we will launch our new designs using 3D visualization.When a clients reaction is strong,we take orders and make the clothing.If not,we can now change colors,or delete the file and start over,without a wasted stitch being sewn,”Abasi said.Old technologyacceleratingCongolese designer Anifa Mvuembas brand Hanifa debuted her latest collection on an Instagram live in May,but with a catch:the entire collection was digital,even the models.Mvuembas models were entirely 3D-generated,and when asked for her reasoning behind this she said:“With a digital model youre determining the measurements and what would cause the model to look most realistic.The designer aims to represent all body types to best include her customers,and 3D technology allows her to showcase her designs this way.3D FASHIONOld technologyacceleratingFictional models started to be created a while ago using the same technology that goes into special movie effects.This technology was used by big brands and publishers a couple years ago.(Examples:Vogue Australia,campaigns by Balmain Calvin Klein).Due to social distancing more brands and publishers start to use digital tools to create virtual models by merging real and digital models or creating completely fictional ones.Picture on the left:Digital supermodel-Shunu,Created by James Wilson Australia,September 20183D:Virtual ModelsOld technologyacceleratingThe March 2020 cover photoshoot of Vogue Italia featured models never seen before.They were created by photographers Mert and Marcus,who digitally merged and manipulated the images of multiple participating human models.Yuki Okada,founder of Kyoto-based Datagrid,which automates virtual models for product photography,says that when he talked to a modelling agency last year,they werent interested.Now,those conversations have changed.Source:Vogue3D:Virtual ModelsOld technologyaccelerating3D:Virtual ModelsHarpers Bazar China earlier in March presented March 2020 digital cover featuring virtual idol Luo Tianyi.Chinese fashion magazines adopted this strategy of using animated models before(Example,Noonoouri on the cover of Vogue Mes February 2019 with Jackson Yee)Picture on the left:Harpers Bazaar Chinas March 2020 digital cover.Luo donned new collections from Gucci,Dior and M Essential and went on a virtual journey to the city of Wuhan to spread the message of hope due Covid-19 crisis.Old technologyacceleratingMagazine SuperElle(a subsidiary of Chinese Elle magazine)which is targeting young digital-savy people launched two of its own virtual models-Sam and Liz.The project was made partnering with Huaweis technology.EllePlus app gives a possibility for readers to interact with AR versions models with their phone camera.3D:Virtual ModelsOld technologyaccelerating3D:DIGITAL CAMPAIGNSRecently Selfridges published a new digital campaign which shows that brands and retailers are rethinking what they do.The campaign“explores the future of fashion and retail through the medium of digital art”.The campaign was created by 3D digital fashion designer Cat Taylor,who transformed the new seasons collections into otherworldly digital renders,which linked to the Selfridges eCommerce site.Cat Taylor was working with many big brands before but once again this example shows how the crisis accelerated the need of digital solutions.Old technologyacceleratingFashion gaming apps are not a new invention and theyve been working well before the crisis started.For instance,apps such as Covet or Drest,allow users style digital models with real clothes from brands like Jimmy Choo.Even though its not the most recent invention which was widely used before,Drest app has noticed a 50%month-over-month increase in users.In Italy it saw a 400%uplift during the first week in April,compared to the week before.FASHION APPSOld technologyacceleratingCovid-19 transformed fashion weeks around the world.The worlds first virtual fashion week was in Shanghai in April.More than 150 designers and brands showcased their collections from March 24-30 through Tmall,Alibaba Groups e-commerce platform.Fashion week was viewed by 11 million people and helped generate more t$2.82 million.Electric blueFluorescenceDIGITAL FASHION WEEKSSHANGHAI FASHION WEEKHow Covid-19 is transforming traditionalfashion shows?During Shanghai Fashion Week some designer took cameras and shared their inspirations with fans in real time in order to make viewing experience as engaging as possible.Designer Angel Chen,demonstrated the possibilities of the format with 5 minute presentation showcasing real models and computer-generated graphics.Models were directed and styled through video link.Some designers used the“See Now,Buy Now”format,which gave a possibility to consumers to purchase catwalk pieces with their phones.Consumers were also able to buy products from the current season or pre-order new looks from brands fall collections.DIGITAL FASHION WEEKSSHANGHAI FASHION WEEKHow Covid-19 is transforming traditionalfashion shows?Moscow fashion week was also shown virtually in April.830,000 people were streaming the show.It was streamed on Aizel.ru and M,appeared on 103 Russian and foreign websites and also on social media sites such as VKontakte,Facebook and TikTok.Mercedes-Benz Fashion Week Russia and TikTok engaged designers and fashion experts to create workshops for audience about how to create digital outfits,promote brand,buy second hand clothing online and moreover,how to stay trendy at home.Russias first virtual influencer,a digital model Aliona Pole,became the online fashion week ambassador.DIGITAL FASHION WEEKSMOSCOW FASHION WEEKHow Covid-19 is transforming traditionalfashion shows?The content that might be presented during London Fashion week in June which is going to be entirely digital was revealed.We are expecting to see digital lookbooks,brand videos,written-out designer Q&A and also podcasts.The LFW digital platform will also have virtual showrooms and it will be helpful to connect with retailers.London Fashion Weeks will be gender neutral,allowing womenswear,menswear,and genderless labels to participate.Even though LFW will be the third city to use digital tools for fashion week,it will be the first city which will completely adopt this digital model.DIGITAL FASHION WEEKSLONDON FASHION WEEKHow Covid-19 is transforming traditionalfashion shows?3.HeuritechsResponse to Current situationAll the given examples in the report have shown the importance of digital practices especially during the crisis period.The digital revolution examples are very linked to what Heuritech does.At Heuritech we predict what product trends are coming and how they will behave for next seasons.We analyze 3 million images each day and can recognize 2,000 attributes AI helps to optimize costs and reduce overall uncertainty.According to BCG latest Report,The rise of the AI-Powered Company in the Postcrisis World Heuritechs technologyHow do our clients use Heuritech during Covid19?OverstockTime to marketOnline marketingBuilding Long TermBy pushing forward the products with high demand at the right time,and by comparing your stock to demandTime to market is essential during Covid19,especially with the right seasonality of current and incoming collection and marked down.Tailor the right message based on social media behaviors,and be very reactive to product timing by highlighting the seasonal products reaching their momentum.Make sure to create the best collection for FW20 by identify leading trends and create best sellersStay tuned for moreSubscribe to our newsletterData on other geographiesConsumer behaviors from I

0人已浏览 2023-12-13 30页 5星级

Brightspot eBook Guide to CMS Security Best Practices&Protocols204 Intro:The surge in cyberattacks05 What that means for CMS 06 Types of cyberattacks07 What you can do07 Security hygiene 08 Assessment checklist09 What you and your partners can do09 Defense-in-depth approach10 Partner considerations11 Ensure CMS security with Brightspot support12 ConclusionContents23Your CMS connects you with your readers,your employees and your partners.Its the drumbeat of your organization.A compromised CMS,however,is a highly sought-after target for cyber criminalsand potentially a significant area of vulnerability for your business.This eBook details various CMS cybersecurity best practices to implement within your organization to keep it as secure and safe as possible.We explain why theres a surge in cyber criminal activity today and how this can impact your organizations content management system.Well then dive into the types of cyberattacks to watch for,what you can do to prevent them,and how to respond if youre under attack.And of course,well detail what you should look for in a partner to ensure their security best practices align with yours.Executive summary34Digital transformation efforts have been underway for decades,but over the last couple years,businesses had to expedite their digitization journeys as they shifted from survival mode at the beginning of the pandemic to our new remote and hybrid ways of working.McKinsey calls this expedition the“The Quickening”where some businesses took a years-long roadmap and reduced execution to a few months in order to navigate the pandemic effectively.While this record-breaking agility in developing and implementing new technologies and solutions to keep businesses afloat can and should be celebrated,it also has been met with new challenges,including the rise in frequency and sophistication of cyberattacks.One security firm that tracks ransomware attacksone increasingly popular type of cyberattackestimated that there were some 65,000 successful breaches in 2020 alone,according to New York Magazines Intelligencer.In short,organizations need to start planning for when theyll be attacked,not ifand a key part of that planning process is to ensure theyre in lock-step within their own organization and with their partners and providers who play an important role in ensuring the security,safety and privacy of a business and its data.Theres a surge in cyberattacksand you need to be prepared for“when”youll be attacked,not“if.”Your CMS is the heart of an important relationshipwith your readers,your employees and your partners.A compromised CMS,however,is a gold mine for cyber criminals and a source of risk for your business.5What does this mean for content management systems,specifically?Digital transformation used to focus solely on products,applications and solutions,but the pandemic has forced organizations to evolve how they communicate as wellinternally,with partners and vendors,and with customers.Having the right content management system is a crucial component in ensuring the right messages are shared at the right time and place.Its at the center of your operations and is the heart of the relationship that you have with your employees(via an intranet)and your readers and viewers if youre publishing news articles or other content.Your CMS represents your brand and is the vehicle youre using to communicate with your intended audience.Because CMSs are an important piece in every organizations tech stack and because of their potential reach with various large and engaged audiences,theyre also potential targets for attacks.Organizations with a media presence or those who deliver digital content across multiple channels are especially hot targets,as the implications and fallout of the attack can spread quicklytheyre not just compromising a single website,but potentially a platform hosting millions of users.According to TechNative,a CMS breach can threaten business continuity and bring even the largest corporations to their knees within hours,so building a strong and reliable underlying infrastructure on which to host your CMS has never been more important.Nearly 80%of senior IT and IT security leaders believe their organizations lack sufficient protection against cyberattacks.This is despite increased IT security investments made in 2020 to deal with distributed IT and work-from-home challengesaccording to a new IDG Research Services survey commissioned by Insight Enterprises.At Brightspot,we know that businesses have multiple systems,channels and processes in play as they try to digitally transform,and that adding one more challenge to those efforts can feel daunting.So,lets walk through some key considerations and security best pxzractices together,so that you feel confident in your approach and can adjust as needed to ensure ultimate security for your organization.6Types of cyber attacksFirst,its important to be aware of the most common types of cyberattacks.“Ransomware,”“phishing”and“malware”are part of our everyday vernacular now.These are a few popular types of cyberattacks,but the approaches cyber criminals deploy are evolving as businesses continue to expand and use different platforms and channels of communicating.This isnt only a concern over weak passwords;theres simply more opportunity for cyber criminals to attack.Completely prevents you from providing your service to clients or customers Denial of serviceChanges the appearance of your online properties and can be more difficult to identify quickly Defacement or corruptionAn attacker taking and using your data against you or negatively towards your clients/customersData exfiltration7Ensure that your CMS is in compliance with your companys policies and guidelines regarding password length,complexity,and expiration.Regularly maintain and monitor all users who have access to your CMS and audit levels of access and permissions via a centralized identity management database.Steps to Minimize the Risks of an IncidentApply two-factor authentication for all access points to your CMS to create an additional firewall in the case of password infiltration among existing CMS users.Maintain your CMS security as you would any other software application,ensuring frequent backups of data,upgrading to the latest versions,and monitoring your systems for unusual activities and usage patterns.What you can do:Security hygiene assessment checklist There are a few simple steps to take to ensure your CMS can and does comply with your companys security best practices.The critical component here,however,is that everyone needs to abide by them.Integration with your security toolsIntegration with central identity managementMulti-factor authenticationPassword complexity2 1 4 3 Even before an actual attack or assessment of a potential threat,its important to follow these five steps to ensure the security of your CMS as a matter of routine protection.Finally,keep your organization trained and aware of what the cyber threats are today and hold regular training sessions to discuss what to watch for so they understand how these threats are evolving.This includes making sure everybody knows how to report something if(or more realistically,when)they see something suspicious.Review your CMS users and eliminate unnecessary ones.Likewise,review all the roles and permissions for users of your CMS throughout your organization.Regularly review all of your publishing changes made within the CMS to ensure theyre legitimate and expected.Regularly monitor your websites and microsites to identify potential defacement.Establish a specific method for your employees to report issues they believe are suspicious;create a streamlined communication process for this.Have your security incident processes documented;this allows you to conduct a postmortem with your organization and vendors that helped you navigate the attack.Assessment Checklist1 2 3 4 5 89What you and your partners can do:Defense-in-depth approach“Defense in depth”is a time-tested strategy that ensures you dont have a single point of failure in your infrastructure by deploying distinct protocols at various layers.The more customization you can do within the platform to meet your organizations security protocols,the better.And the right partner will have the tools and technology to integrate with and abide by your rules at different layers and levels.Its key to partner with those that have their eye on multi-layered security to help protect against threatsand ensure they understand and agree to your approach to security as well.Asking key questions that drill down into their approach is an essential step here.Then,its important to make sure the best practices and approach that youve agreed to within your organizationand with your partnersis manageable.Oftentimes,businesses tend to make it too hard or prohibitive for their workforce to follow along and abide by security protocols and policies.Vendor Due Diligence:Security Questions for Your Partner Do you have a security program handbook or guide?How do you respond when a customer reports a security vulnerability?Whats your process during and after an attack?What are you doing from a prevention standpoint?Layer 1 What are you doing from a security standpoint at the code level?What operational security components are included in your platforms architecture?Layer 2 Are you partnering with major cloud providers?What services are included through them?What do your partners leverage in terms of security architecture and code?Do they have a due diligence process youre familiar with?Layer 3For example,if you write a policy or a practice in a vacuum and put together a workflow to support it,and if that process is too difficult for people to manage in their day-to-day,they will go around it or find a shortcut.When people start going around your policies,you start losing the ability to manage them,and you start introducing additional risk in your system.Its always important to not just make sure that youre checking all the security boxes,but also watching the behavior of people who are using those processes,tools and systems.If you find theyre creating alternate paths around certain controlsfix the control to make it more friendly and attainable so everyone can more easily stay in compliance.1011Our Brightspot experts are always here to support you and your team,and the Brightspot platform was built with security top of mind.To provide an additional layer of security and ever-present peace of mind,Brightspot has two-factor authentication for all access points to your CMS.The platform allows organizations to require two-factor authentication for users across a given site,of a specific role,or at the individual user levelmeaning your most valuable content and brand assets are always protected in case of password infiltration and other cyber malfeasance.The Brightspot CMS also allows you to easily monitor activity via the Recent Activity Widget,which provides a view into the publishing activities in your system,as well as a historical view into revisions to see who published what and when.Then,from a content perspective,the existence of robust workflows,internal approval processes and defined roles by user type or team are always a safe bet to guard against unwanted changes going up on your website from within the CMS.How Brightspot Supports Its CustomersEnsure CMS security with Brightspot support Reviews who has access to your systemsCentralizes communicationSolicits additional support as neededScales your tech 12At Brightspot we believe technology should enable content-focused teams to work smarter,faster and more seamlessly to move businesses forward.With decades of experience in publishing and media,we help companies transform their business content and digital experiences by creating enterprise applications at scale with astonishing speed.TeamBrightspotwww.BDemoBRequest a DemoOrganizations can and must be proactive in the face of a cyberattack.They also must be prepared well before a disruptive and potentially devastating incident occurs.To assist,modern CMSs like Brightspot ensure elasticity within your operations and allow you to be nimble and act swiftly during turbulent times,all backed by the support of Brightspot experts.Thats why we have strong security defenses baked into our solutions as well as a dedicated support team available to provide guidance todayand in times of crisis.3 Key Security RemindersContent management systems represent a unique and valuable target for hackers and cyber criminalsManaging threats that come from the inside require as much diligence as those from the outside Focus on your defense-in-depth strategy,and confer with your CMS partner for ideas and suggestions as needed

0人已浏览 2023-12-13 12页 5星级

Art&Finance Report 20238th editionMANTLE JONATHAN PRINCEReal or fake?Is your work of art authentic?Are you sure?The problem of forgeries is very common in the art world.As an owner,buyer or seller,forgeries can also affect you.We have the solution:we use artificial intelligence(AI)to assess the authenticity of your artwork.Heres how we check the authenticity of your artwork:1 Upload a photo of your artwork2 Have it analysed by our AI system3 After 7 days you receive the AI report and your certificateSafety and reliability Our digital solution is fast.One photo is enough,so you dont have to transport the artwork.The analysis is objective,without any human bias.The AI report and the encrypted certificate are a guarantee of security.For more information,please visit our websitewww.art-Fractionalize to Maximise Arkefi,the worlds premier platform democratizing the financing of art,cars,and unique collectibles.Powered by decentralized finance,we bridge collectors and investors on a groundbreaking platform for Real-World Assets.Dont be left behindA UNIQUE PRIVATE SALES PLATFORM FOR COLLECTORS:BUY,SELL AND FIND ARTAT YOUR FINGERTIPSart.private.appART.PRIVATE.FinanceArtUnlocking art as a financial asset by combining data,art and finance UK 44 20 8133 5955USA 1(786)442 3301ConsultancyArt Wealth Reporting and AnalyticsArt Backed Lending SolutionsDebt AdvisoryLUXURY ASSET VALUATIONS,WARRANTIED.WE PAY THE DIFFERENCE WHEN IT MATTERS MOST.Barker is not a financial guarantee,terms and conditions 2023 Deloitte Tax&Consulting1Wondeur and Deloitte cooperationA N N O U N C E M E N TD R A F TDeloitte is delighted to cooperate with Wondeur in building an innovative service for fine art insurance,which enables to:optimize insurance premium and claim valuation forge insightful reports for insurers and collectors scale up fine art insurance offer and profitability build,structure and maintain insurers databasesSTATE OF THE FINE ART INSURANCE MARKETThe fine art insurance industry faces internal and external risks due to climate change and increase damages,while competitionfrom non-specialist insurers is growing.To address these challenges,insurers need structured art asset data,as most rely on incomplete databases and manual processes.Less than 3%of asset values are checked,primarily focusing on assets valued above$250,000.Wondeurs AI technology performs 50 risk analyses on art asset values,enabling insurers to proactively manage risks and make informed strategic decisions for their businesses.2023 Deloitte Tax&Consulting,SARLwww.deloitte- Deloitte Private Art&Finance servicesFor your art and collectible assets and projectsFor family offices to financial institutions,artists to ArtTech,and collectors to cultural sectors,Art&Finance is uniquely positioned at the intersection of it all.Our global transversal team has the expertise you need to make the most of thedynamic art and collectibles industryfrom collection to succession,investment to impact,and everything in between.In the art and finance industry,knowing who youre workingwith can require time-intensive investigation.Keep compliant with our web-based platform,DKYC.In justa couple of clicks,you can delegate the details of your KYC/AML/CTF*operations to us.And you?You can relax.Do you know your customers and business partners?Get peace of mind with DKYC*KYC:Know Your Customer-AML/CTF:Anti-Money Laundering and Counter-Terrorism F 2023 Deloitte Tax&Consulting,SARL12ART&FINANCE REPORT 2023Section 00_ Introduction01_ Wealth and the global art market05_ Art-secured lending06_ Art and investment 00_ IntroductionJONATHAN PRINCE STUDIO JONATHAN PRINCEForeword 17Introduction 20Artist acknowledgment 302023 Key report findings 32The big picture 44Priorities38Part 1:Art and collectible wealth overview57Part 2:Global art market review 66Part 3:Regional breakdown96Highlights265Introduction 267Part 1:Size and structure of the art-lending market 269Part 2:2023 Survey findings288Highlights307Introduction 309Part 1:Performance of art as an asset class 310Part 2:2023 Survey findings322Part 3:New developments in Art Investment Funds and fractionalization 333Highlights53Introduction 5602_ Art&Wealth Management Survey03_ Art wealth protection,estate planning and philanthropy04_ Culture&social impact investment and sustainability08_ Risk management and regulation 07_ Art and technology 09_ Conclusion13Highlights221Introduction 223Part 1:Global shifts in sustainable investment trends 226Part 2:Cultural&creative sectors and sustainable impact investment 237Part 3:Reinventing smart cities through culture 257Highlights347Introduction 348Part 1:2023 Survey findings351Part 2:Blockchain and tokenization 361Part 3:Data and technology ecosystem focus on AI 372Highlights389Introduction 391Part 1:2023 Survey findings393Part 2:Regulation an update on AML efforts 409Part 3:Risk management,legal and regulatory developments 424Conclusion437Highlights119Introduction 122Part 1:Wealth management trends 125Part 2:2023 Survey findings136Part 3:Family offices,collectors and art professionals:wealth management trends 154Highlights181Introduction 183Part 1:Art and wealth protection 184Part 2:Art and estate planning and philanthropy 191Part 3:2023 Survey findings199Section 08_ Risk management and regulation0908070605040302010014Introduction00_ART&FINANCE REPORT 2023Section 00_ IntroductionTUMBLE I JONATHAN PRINCEIntroduction20Artist acknowledgment302023 Key report findings32Priorities38The big picture4415Section 08_ Risk management and regulation0908070605040302010016ART&FINANCE REPORT 2023Section 00_ IntroductionCIRCULAR CLIFF JONATHAN PRINCE17Over the years,Deloitte Private has become a go-to advisor to affluentindividuals and their family offices looking to manage their art and othercollectibles,including fine art,fine wine,aircraft,jewelry,and classic cars.As of late,we are seeing these clients invest a growing portion of their wealth inthese assets.This trend is underscored by findings in this eighth edition of the Deloitte Private Art&Finance report,which show a 13.4mily office wealth allocation to art and collectibles,almost five percentage points higher than that of private banks.A key reason for this difference is the passion that families have for theinvestments in their family office portfolios.Their motivation is very differentthan that of an asset manager investing in equities and bonds,for example.While art and collectibles provide portfolio diversification and potential valueappreciation,they often are a more personal investment with emotional tiesto the familys interests and preferences.At the same time,like other investable family office assets,these collectionsrequire a focus on governance,multigenerational planning,education,philanthropy,social impact,estate planning,legal agreements and assetdiversification to help preserve and expand their wealth and impact.This biennial publication,developed in collaboration with market researchfirm ArtTactic,aims to introduce you to some of the most importanttrends and developments emerging at the intersection of art and wealthmanagement.Over the past 12 years,we have monitored variousstakeholders in the Art&Finance industry,including private banks,familyoffices,independent wealth managers,and collectors and art professionalsand have reported on the changing role and growing importance of art andcollectible assets within a wealth management service offering.This editionfocuses more closely on family offices and the unique issues and prioritiesthey face when investing in art and collectibles.I hope you enjoy reading this eighth edition of the Deloitte Private Art&Finance report.Wolfe Foreword_Wolfe Tone Global Deloitte Private LeaderWolfe Tone is the Global Leaderof Deloitte Private with offices inmore than 80 countries.Deloitte Private professionalsfocus on the needs of privatelyheld companies,private equityfirms,family offices,and highnet worth individuals.Ourpeople draw upon Deloittesvast global resources,deepindustry insights,and breadthof services to createpersonalized solutions anddeliver value for our clients.Section 08_ Risk management and regulation0908070605040302010018ART&FINANCE REPORT 2023Section 00_ IntroductionThe 2023 edition of the biennial Art&Finance Report arrives at a time of economic and geopolitical uncertainty.Rising inflation,higher interest rates,climate change,military conflict and slower growth provides a challenging backdrop for both the wealth management sector and the global art and collectibles We are delighted to present the 8th edition of the Deloitte Private Art&Finance Report.market.However,being able to adapt and innovate under these circumstances is more important than ever,and the search for purpose and asset diversification is even more acute.As with the seven previous editions of the Art&Finance Report,our goal for this edition has been to highlight the continued evolution of the art and finance industry during both good and difficult periods,addressing both challenges and opportunities and opening our readers eyes to possible pathways that can benefit all stakeholders across the art,culture and finance ecosystem.The Deloitte Private Art&Finance initiative aims to encourage more collaboration between stakeholder groups at the intersection of art business,culture and finance.We believe that by providing more transparency and awareness around motivations,obstacles,needs and drivers in the art and finance industry,we can catalyze and improve dialogue between these stakeholders,inspire new models and solutions,and amplify the role and importance of culture in improving our lives and society.The G20 in India1,which took place 9-10 September 2023,reassessed the economic significance and societal value of the cultural and creative sector to support inclusive growth,sustainable development and decent work.The transformative power of culture in achieving Sustainable LIQUID STATE JONATHAN PRINCEAdriano Picinati di Torcello Director Global Art&Finance CoordinatorDeloitte LuxembourgAnders Petterson CEO and Founder ArtTacticLondonDevelopment Goals(SDGs),and addressing todays multifaceted development challenges such as climate change,rising inequities and digital transformation.This G20 called for the inclusion of culture as a standalone goal in future discussions on a possible post-2030 development agenda.Wealth managers dealing with art and collectible assets have an opportunity to strategically engage with art and cultural heritage assets and in new conversations with clients about how they can leverage their art and cultural wealth to achieve both financial and societal value.Since the Deloitte Private Art&Finance initiative was established in 2008,the journey has been marked by many significant moments and encounters.In 2011,we presented the first Art&Finance Report during the fourth Deloitte Private Art&Finance Conference in Miami,Florida.After publishing seven editions of the report in collaboration with ArtTactic,our understanding of the art and finance ecosystem and its developments have greatly evolved.We want to thank all the experts for their invaluable contributions over the years and all the survey participants and art market stakeholders(wealth managers,collectors and art professionals)that continue to share their views and opinions on the industry.What started 12 years ago as an initial investigation into the role art could play in wealth management has gained significant momentum.We have reached a stage where the question is no longer why art and finance is important for both the wealth management and art and cultural sectors,but rather how we can best implement and build a well-functioning and sustainable service offering addressing the needs of the market.In this report,we take a unique 12-year retrospective look at our findings.It is clear that,despite continued challenges concerning transparency,regulations and the need for modernization of existing art business practices,the art and finance industry continues to innovate and evolve.It is well-positioned to reap the benefits of the global wealth transfer over the coming decades and a finance industry increasingly oriented to holistic wealth management.We hope this report will give you a richer understanding of the complex nature of the art and finance ecosystem,the key drivers of change and the role you can play in shaping its future.Adriano Picinati di Torcello Director Global Art&Finance CoordinatorDeloitte LuxembourgAnders Petterson CEO and Founder ArtTacticLondon19Section 08_ Risk management and regulation0908070605040302010020ART&FINANCE REPORT 2023Section 00_ IntroductionSince 2011,Deloitte Private and ArtTactic have published eight editions of the Art&Finance Report,affording us a unique perspective and insight into how the art and finance market has evolved and continues to adapt to internal and external factors.With more than a decade of data and research to look back on,we see what has changed and priorities going forward.The first major sign of change took place around 2016,when we noticed a significant shift in wealth managers perception of the role and value of art and collectibles in wealth management strategy and service offerings.In 2014,only 53%of wealth managers believed art should be included as part of wealth management services.However,this jumped to 78%in 2016,aligning the wealth management industrys opinion with those of collectors and art professionals for the first time in our analysis.This consensus has swelled today to its highest reading with around 90%of stakeholders believing art and collectible wealth should be part of a wealth management offering,up 10%since 2021.In recent years,the Introduction_conversation has shifted from whether art should be part of a wealth management offering to how it can be implemented effectively.We are also starting to see positive implementation momentum among wealth managers with an existing offering as 74%of them intend to offer specific art wealth management services,a leap from 26%in 2011.Technological progress will likely further fuel this development,with more than 80%of wealth managers stating that they believe technology will increase market transparency and address provenance and traceability,important challenges in todays art market.The recent technological and regulatory developments around blockchain and tokenization are likely to accelerate and enhance the importance of art and collectibles in a wealth management service offering,as we see with other alternative illiquid assets.Another important element introduced in this years report is the growth and focus on the market for luxury collectibles.In recent years,we have seen an increasing interest in the financial and asset attributes of luxury collectibles(watches,jewelry,classic cars,wine,etc.),which could potentially expand the domain of art and finance beyond fine art.This broadens opportunities for the art and finance industry to a new client base and valuable luxury collectible market.Additional support for the art and finance industry can also come from developments at the national level.In this years report,we have two contributions on Japan,showing that the worlds third largest economy is increasing its activities around culture and creative industries.Finally,we believe that the art and finance industry cannot grow unless it also helps address some of the inequities that we see in the art market today.A very small percentage of artists account for a disproportionate share of market value(see opinion piece on page 41),which creates an imbalance in the art ecosystem that could seriously impact the broader art Twelve years of analysis in the review21market and cultural sector in the future.Our focus on social impact investment in art and culture in the Reports last three editions aims to highlight the growing interest in purpose-led investment models(particularly among younger generations)and demonstrate opportunity to develop alternative finance models to ensure a more sustainable future for art and culture.The structure of this years report will be familiar to past readers:Section 1_ Wealth and the global art market Section 2_ Art&Wealth Management Survey Section 3_ Art wealth protection,estate planning and philanthropy Section 4_ Culture&social impact investment and sustainability Section 5_ Art-secured lending Section 6_ Art and investment Section 7_ Art and technology Section 8_ Risk management and regulation Section 9_ ConclusionHowever,this years report features an increased focus on family offices an important stakeholder group for art and collectible wealth management.We have increased the sample of family offices from 21 in 2001 to 32 this year,and several contributions address family offices needs and challenges.We will continue to focus on this segment in future reports.We surveyed 63 private banks(up from 59 in 2021)out of which 2 are software banking providers and 13 wealth management companies.All previous reports can be found at www.deloitte-.This years edition is digital,aligned with our environment and energy policy to minimizing environmental impact.We hope this 8th edition can inspire,encourage and act as a useful guide for those wishing to explore or help build a solid foundation between the art market and the wealth management industry.GALLERY JONATHAN PRINCESection 08_ Risk management and regulation0908070605040302010022ART&FINANCE REPORT 2023Section 00_ IntroductionMethodologySample2000212023Private banks45963Family offices002Art collectors488115123Art professionals67Art-secured lenders-1120Sample total2072232688435Table 1:Art&Finance report Survey participants by categoryDeloitte Private and ArtTactic conducted the reports research between February 2023 and May 2023.As in previous editions,we also surveyed important stakeholders in the art and finance industry,such as art collectors and art professionals(i.e.,galleries,auction houses,art advisors,art lawyers,art insurers,art logistics specialists,etc.).A total of 197 art professionals(up from 182 in 2021)and 123 art collectors(up from 115 in 2021)participated in the survey.These stakeholders,representing Europe,the United States,the Middle East,Latin America and Asia,were surveyed on a variety of themes and topics related to art as an asset class,the role of art in a wealth management context,the impact of technology,new art investment models,and current and future challenges and opportunities.Throughout the report,we use NextGen collectors and younger generations of collectors interchangeably to refer to art collectors 35 years and younger.Sample differences:Each years results may be affected by variations in the sample size and the geographic location of the wealth managers that responded to the survey.We also expanded our survey among 20 art-secured lenders this year(up from 11 in 2021),which included eight private banks and twelve asset-based lenders.We would like to express our gratitude to all survey participants;without their support and enthusiasm,this report would not have been possible.We would also like to thank Livia Li,Director at Prestige Arts Club,for her support in surveying and interviewing four Chinese private banks and two family offices for this years edition of the report.GALLERY JONATHAN PRINCEDeloitte Private and ArtTactic recognize that the findings are indicative and understand their limitations.However,we believe the results broadly reflect the current perceptions and attitudes of the global wealth management community,as well as art professionals and collectors.External data and analysisSection 1 of the report also includes a 12-month outlook across various geographic art markets.These findings were based on a qualitative ArtTactic Art Market Confidence Survey conducted among 117 art experts in July 2023.Section 1 also features auction data analysis of various modern and contemporary art markets.This data is predominantly from Sothebys,Christies and Phillips,but regional art market profiles also include other auction houses that represent major market shares in regions such as China,India and Africa.This year,we have also included data and market analysis of the nascent non-fungible token(NFT)market;this is based on data and analysis provided by Meta4 Capital.In the art investment section of the report(Section 6),we examine the performance,risk and correlation between art and other asset classes,drawing on data analysis from Artnet.For more information on the methodology used,please refer to page 320.23Section 08_ Risk management and regulation0908070605040302010024ART&FINANCE REPORT 2023Section 00_ IntroductionExternal contributions In this years edition,we are delighted to feature 55 leading experts who contributed 31 articles.These provide our readers with new insights on a wide range of initiatives and models that tackle the opportunities and challenges facing the art market and the wealth management industry over the next decade.We are delighted to have collaborated with night Deloitte offices that contributed 13 out of the 31 articles:Deloitte Luxembourg,Deloitte US,Deloitte UK,Deloitte Germany,Deloitte Japan,Deloitte Italy,Deloitte CIS,Deloitte Netherlands and Deloitte Switzerland.Deloitte Switzerland also supported for the part 1 of the section 1 on the Wealth management trends.The broad range and geographic diversity of these contributions align with our vision and goal to be an independent and neutral voice of the market.It also reflects our ambition to be as international as the global art market itself is.Where art,science,space and tech meetMariam Brian,CEO and Founder of Holo ArtJapanese art scene trends 2023Kiyohiko Nagai,Managing Director,New Business Development,FSI Competency,Risk Advisory,Deloitte Japan;Ayari Mima,Senior Staff,Deloitte JapanDemystifying the Japanese art marketJosephine Ayako Yamada,Head of Innovation&Governance,CEO Office,Corporate Planning,Startbahn;Katsunori Takahashi,Head of Private Banking,Sumitomo Mitsui,Banking CorporationImpact of import VAT on art circulation within Europe and implementation of new Directive(EU)No.2022/542 Andrea Sirio Ortolani,Member of the Board of Apollo Group;Matteo Rumor,Custom duty expert,Deloitte Italy;Davide Bleve,Tax Partner,Deloitte ItalySECTION 01Why art collections need the same strategic risk management as other family assets Maria de Peverelli Partner,Executive Chairman,Art Management,Stonehage Fleming Financial Services limited;Anna Smith Senior Collection Manager,Art Management,Stonehage Fleming Financial Services limitedWhat family offices and principals need to know about the art marketHannes Hofmann CFA,Managing Director Global Head,Global Family Office,Citi Private BankWealth management trendsJean-Francois Lagasse Partner,Financial Services Industry Switzerland and Global Wealth Management Leader,Deloitte Switzerland;Dr.Christoph Knzle,CFA Director,Monitor Deloitte,Wealth and Asset Management Industry Switzerland,Deloitte SwitzerlandThe advancements of art investment in the Middle EastArif Amiri,Chief Executive Officer,DIFC AuthorityFive takeaways from five years of reflection on art&collectibles Monica Heslington,Head of Goldman Sachs Family Office Art&Collectibles StrategySECTION 02GALLERY JONATHAN PRINCE25Section 08_ Risk management and regulation0908070605040302010026ART&FINANCE REPORT 2023Section 00_ IntroductionThe Great Art Mismatch by Morgan Stanley Addressing pitfalls in art collectors estate planning:A family office approach Dr.Sara Adami-Johnson,VP,HNW Planning Services specializing in international estate,art and digital legacy planning for RBC Family Office Services A glimpse into the world of art foundations today Helena Stork,Co-Founder-World Art Foundations Mapping cultural and creative impact funds around the globe Florencia Giulio,Co-founder of Pulso;Luis Berruete,Partner&Co-founder of Creas;Patricia Gabeiras,Partner&Co-founder of Gabeiras&AsociadosThe art of investing:How social impact investment drives cultural change Chase Mayo,Senior Consultant,Finance&Enterprise Performance,Deloitte Consulting LLPMeasuring and reporting the impacts of culture-Proposal for a new methodological approach Roberta Ghilardi,Sustainability Manager,Deloitte ItalyArt assets and cultural initiatives as a driver for social sustainability-Preliminary resultsRoberta Ghilardi,Sustainability Manager,Deloitte Italy;Italo Carli Head of ARTE Generali Italy SECTION 04SECTION 05SECTION 03Exploring the full power of your art as a financial assetSam Cook,EMEA Head of Specialty Lending Solutions,J.P.Morgan Private Bank;Levi De Feyter,Wealth Advisor Benelux,J.P.Morgan Private Bank(Brussels)Painting a picture of the art-lending landscape-A leading non-bank lenders perspectiveRebecca Fine,Managing Director,Art Finance,Athena-Art CorpBridging Industries and the road to optimizing art as a financial assetHarco van den Oever,CEO,Overstone;Mia Bouriss,CEO,Overstone Finance;Chen Chowers,Head of Operations,OverstoneArtworks on tour:Is security interest also along for the journey?Dr.Marcell Baumann,LL.M.,Rechtsanwalt,Deloitte Legal Rechtsanwaltsgesellschaft mbHSECTION 06SECTION 07A look at the performance of art as an asset classRobert Cacharani Director,Business Intelligence,Artnet;Mia Fernandez Data Analyst,Business Intelligence,ArtnetCase study:ARTEX MTF AG-Understanding art IPOs:Risks and rewards of investing in iconic art stocks Yassir Benjelloun-Touimi Co-Founder&Chief Executive Officer,ARTEXThe art of creating a legacy-How technology takes family art collections to the next levelCindy van de Luijtgaarden-Braat,Partner&Lead Private Client Services,Deloitte Netherlands;Frank de Vries,Director Private Client Services,Deloitte NetherlandsArts&Culture on and off the blockchain-History and use cases for collectors&family officesValrie C.Whitacre,Trilitech,a London adoption hub of the Tezos blockchain ecosystemFrom storerooms to blockchains:How Web3 and NFTs can unleash your art collections untapped potentialPaul De Blasi,Partner,Head of Deloitte Legal&Private Romandie;Fabien Lopez,Innovation Director,Deloitte SwitzerlandAlberto Lenzi,Innovation and Web3,Deloitte SwitzerlandVisual art in the age of AIIgor Rodin,AI Expert,Art collector,Ex-partner,DeloitteNavigating art investment:Enhancing family offices decision-making through risk analyticsChloris Yu,Manager,Risk Advisory,Deloitte LLPSECTION 08Anti-money laundering regulations forart market participants:A state-of-the-art analysis Nicolas Marinier Partner,Forensic&Financial Crime,Deloitte LuxembourgMaxime Heckel Partner,Forensic&Financial Crime,Deloitte Luxembourg Astrid Brandy,Senior Manager,Advisory&Consulting,Deloitte LuxembourgAndrea Marchetto Manager,Forensic&Financial Crime,Deloitte LuxembourgMarkets in Crypto-Assets Regulation(MiCA)and the art market Arnaud Duchesne,Managing Director,Risk Advisory,Deloitte Luxembourg;Maria Josefin Johansson Juup,Senior Manager,Risk Advisory,Deloitte Luxembourg;rica Ventura,Senior Consultant,Risk Advisory,Deloitte LuxembourgThe time to act is now:How to increase accountability in the art market-Redefining dispute resolution to grow customer confidenceAshley Gallant Managing Director of the British Antique Dealers Association(BADA);Fred Clark Senior Associate at law firm Boodle Hatfield LLPManaging financial risk at public auctions from a sellers perspectiveChristine Bourron CEO Pi-eX Ltd27Section 08_ Risk management and regulation0908070605040302010028ART&FINANCE REPORT 2023Section 00_ IntroductionGALLERY JONATHAN PRINCE29Section 08_ Risk management and regulation0908070605040302010030ART&FINANCE REPORT 2023Section 00_ IntroductionFrom a young age Jonathan Prince knew he was an artist.Prince is now known for his monumental steel sculptures,often seen in-situ in public environments and prestigious private collections.But,Princes path towards a large-scale practice was a journey of risk,luck and realization.When Prince was a teen,he found himself spending weekends in the studio with Jacques Lipschitz where he learned the language of sculpture in bronze and stone.Just as the mind and hand can impress upon elemental materials to mold newforms,Prince,too,was forever shaped by Saturdays with Jacques.But life had other plans for Princeat least for the first few decades.Prince initially pursued the family trademaxillofacial surgerya mismatched fit,with the reaction leading to producing films in Hollywood.Through his time in the movies,Prince was connected to the then-budding digital sphere.Soon he was directing companies into the internet revolution,developing media and digital technologies that have helped to shape our digital world today.Artist acknowledgment_Jonathan PrinceLife was fun and exciting;but Prince knew there had to be something else.That something was art,and Prince could no longer deny the artist inside of him.About twenty years ago,he relented by leaving the corporate carousel for the full-time pursuit of his art practice.Its essential to Prince that his inquiry of monumental sculpture goes beyond just form.Princes practice is a commitment to scientific study,spiritual exploration,and a profound reverence for the human condition.Prince has developed his own language that arrived from the many thousands of hours hes devoted to fabricating these works at his studio in the Berkshires,Massachusetts.Prince remains one of the only sculptors to fabricate each piece by hand with his dedicated team in his own studio.He runs his eponymous 20,000 sq.ft.studio from inside an early 20th-century barn in the Berkshires,filled with state of the art,operating machinery allowing Prince to make at the heightened scale that his inquiries demand.His studio is a part of the universe hes built as Berkshire House,the artistic compound,home and intimate exhibition space for creative collaborations.In fractured geometries and material improbabilities,there is balance and resolvea life-lesson and artistic motivation that inspires Prince everyday.Princes work has been exhibited at Chesterwood Museum,Christies Sculpture Garden and the Eli and Edythe Broad Museum,at MSU.Prince has had works publicly on view in New York at 590 Madison Sculpture Garden,Pier 64 Hudson River Park,and Dag Hammarskjold Plaza;and sits in the collections of the Joseph M.Cohen Family Collection;Julie Prince remains one of the only sculptors to fabricate each piece by hand with his dedicated team in his own studio.and Edward J.Minskoff Collection;The Brigham and Womens Hospital,Boston,MA;and PricewaterhouseCoopers.Currently,the 24-foot Tumbler is on view in the permanent collection of David and Jennifer Feldman at the Long Meadow Art Residency in New Marlborough,MA.31Section 08_ Risk management and regulation0908070605040302010032ART&FINANCE REPORT 2023Section 00_ Introduction2023 Key report findings_(Summarized version)Section 1_ Wealth and the global art marketGlobal UHNWIs art and collectible wealth estimated to exceed US$2 trillion:We estimate that UHNWIs wealth associated with art and collectibles was US$2.174 trillion in 2022 and predict this figure could grow to an estimated US$2.861 trillion in 2026,due to the increased number of UHNWIs across the world and their increased allocation of wealth to art and collectibles.Art and collectible wealth in 2023 is anticipated to increase due to an average 3.8%2 increase in art values between July 2022 and July 2023.3 Growth is also boosted by an increase in overall wealth as world stocks rallied 12%4 in the first six months of 2023.Art market fails to capture growth in overall wealth:The anemic 14-year annual growth rate5 of 0.6%in the art market has failed to outpace inflation,with global art market sales shrinking in real terms since 2008.This signals that the overall art market is struggling to attract the attention of the larger high-net-worth(HNW)population and their wealth,compared to industries such as the global luxury goods market.Luxury collectible sales reach new heights in 2022 and could signal new opportunities for the art and finance industry:The growth potential of the luxury collectibles market is evident in last two years auction sales surge,which reached a record high in 2022.We expect to see growing interest in the financialization of luxury collectibles and potential to tap into the much broader and larger luxury goods industry(valued at US$1.5 trillion6).Luxury market stakeholders should start integrating this financialization into their business strategy.consumer oriented,a trend that should have a positive impact on the evolution of art and wealth management services.Convergence between stakeholders reaches new high:Our 12-year survey analyses of different art and finance stakeholders within the wealth management community(private banks,family offices and independent wealth managers),plus collectors and art professionals show encouraging and positive trends for the role of art and its importance in wealth management.Stakeholders narratives and motivations for including and developing art wealth management services are unifying.Across these stakeholders,an average of 89lieve art and collectible wealth should be part of a wealth management offering verses 65%who said the same in our first survey in 2011.This is the highest percentage in the Art&Finance Reports history.A shift toward the underlying economics of art ownership:Emotional value remains the key driver for buying art(according to 60%of collectors),but for the first time in 12 years,41%of collectors said financial value is their primary motivation overthrowing social value(at 36%)as the second highest motivation.The sector is shifting toward more financially driven considerations,such as looking at art from a perspective that centers portfolio diversification,protection against inflation and return on investment.With similar trends seen in luxury collectiblesblurring the lines between fine art,collectibles and luxury assetsour Art&Finance approach(that up to now has predominantly focused on fine art)now also applies to collectibles and luxury assets.Financial gain and social impact are priorities to younger generation of collectors:Younger collectors seem even more motivated by financial benefits Section 2_ Art&Wealth Management SurveyA 12-year retrospectiveBetween December 2011 and November 2023,Deloitte Private and ArtTactic have published eight Art&Finance Reports.Our 12-year analysis from art and finance stakeholders(wealth managers,collectors and art professionals)shows encouraging,upward trends regarding arts role and importance in wealth management.We see a growing consensus among stakeholders narratives and motivations for including and developing art wealth management services.Client demand for art and wealth management services has also grown over the last 12 years.Significant share of wealth associated with art and collectibles:On average,client allocation to art and collectibles was 10.9sed on our 2023 survey of wealth managers.(Private banks reported an average of 8.6%allocation,and family offices report an average allocation of 13.4%to art and collectibles).Among wealth managers surveyed,63%have integrated art into their wealth management offering(67%of private banks and 60%of family offices).The push toward holistic wealth management offering is likely to benefit the art and finance industry:Client continue to demand new products and services,such as private markets,personalized advice and seamless omnichannel experiences.This year,90%of wealth managers(94%private banks and 81mily offices)surveyed said that the need to develop a holistic advisory relationship with their clients was one of the primary reasons for including art and collectibles in a wealth management service offering.The role of“advice”in wealth management will continue to become more holistic,experiential and surrounding art ownership compared with collectors from previous generations.This year,83%of younger collectors said that investment returns were a key motivation(up from 50%in 2021);61%said that portfolio diversification was important(up from 51%in 2021);and just over half(51%)said that they saw art as a safe haven in times of uncertainty(up from 34%in 2021).This tells us about how the new generation of collectors may relate to art as an alternative capital asset class,both now and in the future.We also see a stronger motivation(41%)for social impact investment among younger generations that are seeking purpose-driven investment strategies(up from 31%in 2021).Interest for pure art investment increasing among family offices but remains a niche service:Over the next 12 months,family offices(22%)show a stronger appetite for expanding art investment services(art funds,managed accounts,impact investment,fractional investment,etc.)than private banks(14%).This could mean that family offices are taking a more proactive interest in new art investment models,compared to the more conservative private banking industry.Section 3_ Art wealth protection,estate planning and philanthropyGenerational wealth transfer already feeding the art market:With a conservative average of 10.9%of wealth allocated to art and collectible assets,wealth transfer increasingly involves art and collectible wealth.Much of todays wealth is controlled by men from the baby-boomer generation,but this is likely to change as they pass their wealth to spouses and children.733Section 08_ Risk management and regulation0908070605040302010034ART&FINANCE REPORT 2023Section 00_ IntroductionEvidence of this art wealth transfer is apparent,with 2022 emerging as the record year for single-owner collections entering the auction market,with sales in 2022 up 64%from 2021.Although fewer single owner collections have come to the market in the first half of 2023,major private collections have entered the market in the second half of this year,such as the prominent collection of Emily Fisher Landau.Connecting with the next generation:This years survey shows that younger collectors differ from previous generations when it comes to motivations and needs when buying and investing in art.They are focused on art investment returns(83%young collectors vs 44%older collectors)and also emphasize social impact investment(41%young collectors vs 30%older collectors).They also perceive risk management as a more relevant service(70%young collectors vs 45%older collectors).Building relationships with different generations within a family will become a critical part of understanding eachs needs and is an opportunity for wealth managers to engage the next generation on their plans and preferences regarding art and collectible wealth.Collection management is the basis for protecting art-related wealth:A fundamental part of art and wealth protection rests with how clients manage their collections,with 52%of collectors saying this was the most relevant service this year.Strong client collection inventories allow wealth managers to better understand their clients art-related wealth,not to mention enables them to proactively protect historical,cultural and financial value.Record-keeping is a manual process ripe for automation:The large majority(76%)of collectors have yet to adopt art collection software as part of collection management,with 49%keeping records and information in spreadsheets and 27%in paper documents.Only 24%of collectors are using dedicated collection management software;the subset of younger collectors report a slightly higher percentage(29%)of software use.Art-focused estate planning is urgently needed:Only 24%of the collectors surveyed have a long-term plan for their collections,indicating an urgent need for wealth managers to have conversations with their clients about art and estate planning.Section 4_ Culture&social impactinvestment and sustainabilityG20 reaffirmed that cultural and creative sectors(CCS)are a major engine for sustainable socioeconomic recovery:While often perceived to be of little relevance to the overall economy,economic data shows that CCS are a key A shift toward the underlying economics of art ownership:Emotional value remains the key driver for buying art,but for the first time in 12 years,financial value is the second highest motivation.growth driver in many countries and represent some of the fastest-growing sectors in the world economy.The G20 in India,which took place 9-10 September 2023,reaffirmed culture as a major engine for sustainable socioeconomic recovery.8Sustainable impact investment in art and culture could become an attractive investment model,especially for the younger generation:In this years survey,we see a slight increase in interest in art and culture-related sustainable impact investment among art professionals,wealth managers and NextGen collectors.24%of collectors(28%in 2021),30%of art professionals(23%in 2021)and 30%of wealth managers(21%in 2021)identified sustainable impact investment in the arts as the most attractive investment model.This was significantly higher among the younger demographic(below age 35),where 66%(50%in 2021)said socially responsible investment products in culture would appeal the most to them.Wealth managers who expand their sustainable investment offerings may be better positioned to attract and engage the younger client segment.Broader investment trends,such as increasing focus on ESG-compliant investments,could also be filtering down to the cultural space.Nearly a third of family offices are interested in social impact investment in art and culture:31%of the family offices surveyed express strong interest in investment products focusing on social impact investment in culture(down from 36%in 2021,but up from 16%in 2019).In addition to outright investment in artworks,social impact investment products were the most popular alternative art investment model this year,demonstrating that impact investments are becoming more appealing to family offices.Investors continue to see social impact investments as an opportunity:In parallel with a downward trend in government arts and culture spending,there is greater appreciation for the positive impact culture and creativity can have on economic development.As a result,new financial ecosystems are emerging around investment into culture,including public,private and philanthropy funding and investment.In this years survey,41%young collectors and 30%of older collectors said social impact investment in art and culture was among the primary motivations for their involvement in the art and collectibles market,with 50%of young collectors and 45%of older collectors seeing art philanthropy as one of the most important services offered by the wealth management industry.It is essential,therefore,to have a better understanding of the relationship between responsible finance and culture.Section 5_ Art-secured lendingThe art-secured lending market could reach US$29 billion by the end of 2023:Despite higher interest rates,we conservatively estimate that the overall size of outstanding loans against art could reach a market size between US$29.2 billion and US$34.1 billion in 2023,up 11%from 2022.Since our last survey in 2021,the overall art-secured lending market has grown 10.3%annually.9 However,growth is anticipated to slow down in 2023 to 7.5%and increase slightly in 2024 to 8%.We estimate that US$2.2 billion in revenue could be generated from the art-secured lending market in 2023.We also estimate art-secured loans to private collectors between US$26.3 and US$30.7 billion in 2023,with the art trade(galleries and dealers)accounting for an estimated US$2.9 billion to US$3.4 billion.In a more uncertain and volatile economic environment,liquidity could support the growth of the art-secured lending market over the next two years.35Section 08_ Risk management and regulation0908070605040302010036ART&FINANCE REPORT 2023Section 00_ IntroductionFor private banks,providing liquidity for business operations has been the primary driver of growth:80%of the private banks surveyed said that the need for liquidity for business operations was a key driver for art-secured loans,and 83%of asset-based lenders said the same.For family offices,however,buying more artworks is the strongest motivation for using art leverage:41%of family offices say they would consider using art-secured loans to fund the acquisition of more artworks(up from 8%in 2021).Globalization of the art-secured lending market:Asia and Europe are becoming strategic markets for art-secured lending,as the US market reaches maturity.39%of art-secured lenders said that Asia(and Hong Kong,in particular)will be a strategic market for growth over the next two years,compared to 10%in 2021.Europe is also seen as an untapped market,with 78%of art-secured lenders viewing it as an opportunity,compared to 70%in 2021.However,lenders,see less opportunity in the mature art-secured lending market in the United States,with 56lieving this would be the most important market over the next two years,compared to 70%in 2021.These findings might also reflect greater awareness among collectors outside of the United States about the possibility to leverage their art collections.Section 6_ Art and investmentArt acts partially as a hedge in times of uncertainty:According to Artnets Index for Fine Art,the fine art market exceeded the S&P 500s performance between January 2022 and July 2023,where fine art returns grew a nominal 4.2%against a 6.6%loss for the S&P 500 during the same period.Despite a spike in inflation and higher interest rates,art prices suffered less than other asset classes during this period of economic stress and demonstrate the asset class ability to serve partially as an effective hedge,especially with regards to the blue chip,high-end fine art category.Art shows mixed long-term performance:The financial performance reported by Artnets indices show modest or negative returns across all categories over the medium to long-term(15 years),underperforming other traditional assets classes such as equity,real estate and gold.Artnets index for top 100 fine art produced a 2.5%compound annual growth rate(CAGR)between 2008 and first half of 2023,compared to 8.5%for S&P 500,3.8%for real estate and 4.9%for gold.More regulated fractional art ownership initiatives emerge:In the last three years,worldwide interest in fractional art and collectibles investment has exploded,particularly among the younger generation of collectors(50%of young collectors vs.14%of older collectors)expressing a strong interest in these products.With an estimated AUM of more than US$1 billion in 2023,and with multiple initiatives being regulated by financial regulators for the first time,we may have entered a new era of fractional ownership in art and collectibles which could have a greater chance of gaining mass adoption this time.Younger collectors more open to new art investment models:The interest in fractional ownership among younger collectors surveyed is significantly higher this year than that of older collectors,with 50%(up from 43%in 2021)saying that they are interested in these types of investment.Young collectors also express a stronger interest in art investment funds(50%this year,up from 29%in 2021).Wealth managers and older generations of collectors have more conservative approach to fractional ownership and tokenization:Possibly due to the emerging nature of the fractional ownership industry,only 23%of wealth managers(18%private banks and 34mily offices)said they believed fractional ownership and tokenization of art and collectibles would be interesting investment products for their clients(down from 29%in 2021),with 34%of art professionals stating the same(up from 26%in 2021).Collectors remain slightly more cautious,with 21%saying this would be an investment product of interest(no change from 2021).Section 7_ Art and technologyTechnological innovation drives the art and finance sectors closer together:Advancements seen in the intersection between art and technology will benefit the future development of the art and finance industry.64%of wealth managers surveyed this year said that technology could be a catalyst for incorporating art and collectible assets into their existing wealth management services.While only 18%of wealth managers in 2019 said that blockchain technology could have a significant impact on the development of art and wealth management services,a significantly higher proportion(58%)of wealth managers said the same this year.Technological innovation will drive more transparency in the art market:This year,81%of wealth managers,79%of collectors and 83%of art professionals said that technology could be a catalyst for greater transparency in the art market.Transparency is one of the key challenges to consider when incorporating art into wealth management service offerings.NextGen collectors drive digital transformation:80%of young collectors believe in blockchain as an asset register for art and collectibles,and 79%see the rapid developments around artwork identification technologies as instruments to address many of the current inefficiencies in todays art market.Section 8_ Risk management and regulationUrgent need for modernization:Over the last seven years,there has been a strong consensus among stakeholders that the art market needs to modernize its business practices.76%of wealth managers(up from 69%in 2021),82%of art professionals,and 70%of collectors agree.Among the key challenges are lack of transparency(74%of wealth managers said so),issues related to authenticity,lack of provenance,forgery and attribution(80%of wealth managers said this was a key hurdle),and 63%of wealth managers said the lack of international standards around professional qualifications in the art market was a key hurdle.The perception that the art market has failed to update and modernize business practices is a clear challenge for the markets future growth and development and evolution of art as an asset class.Self-governance vs.more regulationopinions are divided:44%of wealth managers(same in 2021)believe government regulation is the appropriate response to establish trust and credibility in the art market.70%of family offices surveyed said they believed self-regulation would be the most appropriate way to tackle the issues facing the art market,while only 30lieve government regulation would be the appropriate answer.However,50%of art professionals this year said they believe regulation could play a role in restoring trust(up from 36%in 2021).This is the highest percentage ever recorded,which could suggest that art industry stakeholders see government intervention as a remedy for restoring trust and credibility.Adoption of more transparency and regulation not happening fast enough:Despite the emergence of improved technology,more data and increased AML regulation,the general view across stakeholder groups is that improved transparency and regulation will take longer than envisaged in 2021.Only Younger collectors more open to newart investment models:The interestin fractional ownership among younger collectors surveyed is significantly higher this year than that of older collectors,with 50%(up from 43%in 2021).13%of wealth managers said increasing transparency and regulation will take place within the next two years(down from 27%in 2021).37%of wealth managers said it will take more than five years(up from 28%),and 8%said it will never happen(up from 5%in 2021).37Section 08_ Risk management and regulation0908070605040302010038ART&FINANCE REPORT 2023Section 00_ IntroductionRegarding Fine Art&Collectible assetsThe next frontier for art and wealth management includes Luxury collectibles.Since the COVID-19 pandemic in 2020,the market and value of luxury collectibles have risen significantly,with auction sales at Christies,Sothebys and Phillips almost doubling( 92%)between 2020 and 2022 and with H1 2023 showing no signs of a market slowdown.Although the luxury collectibles market only accounted for 14.8%of the total auction sales in 2022,in the first half of 2023,the share of the overall market has increased to 19.6%.With the personal luxury goods market significantly outpacing the growth of the art market since 2008,and representing US$353 billion in sales in 2022 compared to US$68 billion in art sales,it is clear that one of the avenues for potential future growth of the art and finance industry is the incorporation of luxury collectibles in an art and wealth management offering.Wealth managers have the opportunity to broaden their art-related service offering beyond fine art to also include a broader range of new and vintage luxury collectibles,such as jewelry,watches,cars,luxury handbags,furniture and homewares,and other designer goods.As the definition of the art and collectible asset class widens,revealing the potential value in luxury Priorities_collectibles,there will also be a greater need to understand potential opportunity and impact for companies in the luxury sector.The fine art market could also draw inspiration and learn from the much larger luxury goods market(i.e.,how it builds trust with its consumers through professional business practices,price transparency and standardization,and via multiple access points for consumers and effective mass communication about both financial and social value).Regarding wealth managersFinancial and non-financial benefits of art-related service offering can be better understood and communicated.While large US private banks have offered art-related services for decades(Citibank started in 1974),more awareness and education around both the financial and non-financial benefits of catering to art and collectible assets is needed among wealth managers in Europe and Asia.Wealth managers must not only support long-term financial stability and prosperity,but also the long term purpose of the collections,from both a financial asset perspective(collection management,leverage,estate planning,etc.)and a more human and emotional perspective,as 84%of collectors say“emotional value”is the most important driver when buying art.In an industry where providing a holistic wealth management service offering is becoming a competitive edge,wealth managers need to better understand,analyze and communicate the benefits of engaging with their clients art and collectibles-related wealth.The global wealth transfer requires a change in mindset among wealth managers.With an estimated US$2.17 trillion in art and collectibles wealth held by ultra-high net worth individuals(UHNWIs),a significant portion of this wealth will be passed to new generations in the next two decades.There is an opportunity,but also a responsibility,for wealth managers to develop closer dialogue with older and younger generations to ensure a smooth and strategic transition when it comes to art and collectible wealth.For example,wealth managers and their clients need to ensure proper inventory,collection governance,and philanthropic and tax planning.Per our survey of wealth managers this year,there is relatively low awareness and engagement with clients around art and estate planning issues,with 18%of wealth managers saying their clients estate plans do not sufficiently address their art collections and a further 24%saying they dont know.Another important aspect in the intergenerational transfer of art-related wealth is alignment on a collections future purpose,which could focus on social impact,philanthropic and purpose-led initiatives.The combination of financial factors driving art and collectible10 wealth combined with the strong emotional and social component of art ownership creates an unique opportunity and responsibility for wealth managers to fulfil their fiduciary responsibilities to their clients overall wealth.Regarding sustainability and impact investmentSocial impact investment in art and culture could become a new opportunity for the wealth management sector.Social impact investment in art and culture is in its infancy with nascent understanding among wealth managers.Only 30%of wealth managers thought this would be of interest to their clients,but 66%of young collectors said they were interested or very interested in social impact investment products in culture.Wealth managers can still pave the way for a new type of purpose-led investment product in the art and cultural sector,specifically aimed at the next generation of wealth.This could provide the culture and creative sectors with an alternative source of financing to tap into but would require better evaluation of and reporting and communication on the investment impact of art and cultural projects.GALLERY JONATHAN PRINCE39Section 08_ Risk management and regulation0908070605040302010040ART&FINANCE REPORT 2023Section 00_ IntroductionRegarding technologyTechnology is a catalyst to support the development of art and finance wealth management services.The art and finance industry needs to explore blockchain technology and fractional ownership as a potential new means to better protect,transfer,monetize and invest in art and collectible assets.This year,58%of wealth managers said they believed that blockchain technology used to improve the traceability of art and collectibles would have the most impact on the development of art and wealth management services going forward(up from 52%in 2021).Another 43%said the impact of blockchain technology,as a decentralized finance(DeFi)tool,would allow them to more efficiently incorporate art and collectible assets in wealth management.This development is now also supported by regulations like MiCA and MiFID II(see article on MiCA in the art market page 415),which are creating a new regulatory framework for the integration of illiquid alternative assets(including art and collectibles assets)in wealth management.Rgarding regulationRegulation and trust remain key issue to address.This year,76%of wealth managers said that the art market and the art industry need to modernize their business practices(up from 69%in 2021),with 70%of collectors and 82%of art professionals agreeing.How to best go about this is not clear,with 56%of wealth managers saying that“self-regulation”would be the best approach,while 44%prefer government regulation.Collectors,on the other hand,are less inclined to see more government intervention,with only 28%saying they favor this route,as opposed to 72%who said that the art market should internally address these challenges.The challenges facing the art market remain relatively unchanged over the last decade and could be a reason for stagnated sales growth over the last 14 years.While the art market often shrouds itself in confidentiality,there is a fine balance between confidentiality and mistrust.Lack of price and transaction transparency often leads to asymmetric information availability between actors in the art market and can undermine trust.Can the art world continue to resist consumers demands for more transparency through reliable and instantly accessible information?In a world where misinformation is an ever-increasing problem,it is critical for confidentiality and transparency to coexist in the art industry.This requires a new framework;new technologies(like blockchain)and new data ownership and access models could support both confidentiality where it is required while providing the right level of transparency to create a more efficient and trusted marketplace.ProvocationWith the working hypothesis that an inclusive,efficient and growing art market will benefit all art market stakeholders and will support the development of the art and finance wealth management industry,we would like to trigger a broader reflection on the current status of the global art market and the implication for the art and finance industry with a very high-level introduction to the following question:Is a top-heavy art market hindering growth and wider impact on the art market ecosystem and the development of the art and finance wealth management industry?Our analysis shows that just over 1%of artists control more than three-quarters of art sales generated at auction.We can assume that only a small percent of art buyers are behind these transactions,which leaves us with a heavy concentration around a small number of artists and buyers plus a small number of art professionals(galleries,auction houses,etc.).Could this be one of the main reasons for the art markets overall lackluster growth in the last decade?Figure 1:Top 100 artist vs overall artist population-Auction sales distributionBased on data for Impressionist,Modern,Contemporary art at Sothebys,Christies and PhillipsSource:ArtTactic,Data between 2015 and H1 2023Number of artistsAuction salesBuyers/ConsumersTop 100 artistsRepresents alimited number of buyersRest of artists76.9%Represents the rest of the buyers24%1.1ASection 08_ Risk management and regulation0908070605040302010042ART&FINANCE REPORT 2023Section 00_ IntroductionBased on the The Art Basel and UBS Global Art Market Reports,the global art market has faced stagnant growth over the last 14-15 years,and at the same time,prices in the auction market have reached record high,with 18 of the top 20 highest auction prices achieved between 2008 and 1H 2023(see analysis on page 75).The top 100 artists by auction sales between 2015 and 1H 2023 accounted for 75%of total sales value of all impressionist,modern and contemporary artists at auction,despite only accounting for just over 1%of the artist population represented in the auction market.It is evident that the art market is becoming increasingly weighted toward a relatively small number of artists and movements,which in turn has generated increasing interest in the investable characteristics and financial aspects of art ownership.The concentration around a small pool of artists is also mirrored in the art and finance industry,where certain products and services,such as art investment products and art-secured lending are predominantly targeting the same groups of artists,for which price transparency and liquidity is the highest.The inherent risk is that those services could influence not only what is happening at the top end of the art market,but also potentially contribute to and fuel further inequities in the broader art market,rather than support an inclusive agenda of more diversity and growth that could benefit the wider art ecosystem.But is a growing and more equitable art market desirable?Or should we be content with the status quo?Should we let market forces decide?Classic economic theory states that economic efficiency allows higher levels of productivity,costs reduction,economic growth.So,we would argue that growth is necessary,and only through a broader and diverse growth strategy will we be able to support and maintain creative talents and achieve the wider societal impact that art and culture can offer.The main problem with the current model is that it promotes a discourse of exclusivity,which impacts consumers and artists(and other art market stakeholders).For consumers,it means that the large majority of art buyers and collectors are priced out from participation in the market;meanwhile for artists,it means that very few have a realistic chance of making a decent living out of their profession and creative output,as a disproportionally large amount of resources and investment goes into maintaining the value of the few.Another issue is the trickling effect.One could argue that the increase in prices of a small number of artists has led to increasing consumer awareness and interest in art and collectibles and also created a more fertile commercial environment for predominant galleries,auctions houses and dealers and a general expansion of the art ecosystem.However,over the last decade,we have seen a decline in galleries11 and less public funding for public and not-for-profit art institutions12;at the same time,we have seen more private museums13 being set up and increasing recognition of the benefits culture plays to society.The art market is increasingly becoming dominated by an exclusive elite,which raises the question of how much actually trickles down to the broader art ecosystem.Another challenge is the structure of the art industry.The art market remains fragmented with a few large players and many small players.This imbalance in the ecosystem also seems to perpetuate the support of a smaller number of artists who are promoted by major auction houses and a few major dealers and galleries.Could we use some of the tools and services developed by the art and finance industry to create a less elitist and top-heavy industry dynamic with a more inclusive art industry?If it is the way forward,new models are required for the art market to grow and become more diverse.But what could these new models look like and how might we achieve a fairer and more equitable future art market?We believe there are already a number of broader trends that could catalyze this change.Top-down and bottom-up approaches amplify social impact investment models for art and culture.Our data analysis clearly shows that the current art market does not provide a fair and equitable distribution of wealth across the broader art ecosystem.However,there as signs that consumers and investors mindsets are changing.The broader shift in the financial market toward ESG-driven investments is apparent,with global ESG fund assets reaching about US$2.5 trillion at the end of 2022,up from US$2.24 trillion at the end of the third quarter 2022,according to Morningstar.14 The nearly 12%jump in assets was almost double the growth of the broader global fund market.This suggests a broader shift in investment behavior,a trend we believe also will filter down to the art market in coming years.The question becomes,how do we change investors mindset about investment in art and culture from self-gratification or financial motivation to a more purpose-led and social impact driven mentality?Part of the long-time challenge faced by the art and cultural industry is measurement and articulation of the societal value of art and culture.However,emerging evaluation models,such as Deloittes new methodology on measuring and reporting the impacts of cultureplus increasing academic interest in this fieldposition us to better measure the economic and social impact of art and culture for our society.With these new models and frameworks in place,we have the opportunity to shift the current investment paradigm in the art and cultural industries and to redirect wealth towards building a larger and more sustainable art and cultural sector.On a grassroots level,these changes have been happening for some time.New micro-philanthropic models,such as Kickstarter and Patreon,founded in 2009 and 2013,respectively,have succeeded in bringing in much-needed support for artists and creatives.These companies have built platforms that allow artists to tap into a fan-based,purpose-led consumer culture,using technology as the catalyst to reach new audiences.We also see the next phase of the fractional ownership market,moving from an economic incentivization model toward a more purpose-led model.In this scenario,fractional ownership in the art market could lead to more than just investment returns;it could also be a vehicle for patronage and support of the broader art ecosystem,facilitated by the increasing adoption of blockchain technology discussed further below.Technology as a catalyst to reduce art market inequitiesWhile awareness around blockchain was initially linked to the explosion of public interest in cryptocurrencies,fueled by rocketing prices of Bitcoin and Ethereum,the frenzy obscured the fact that blockchain is a much more general-purpose technology.The real potential of blockchain lies in its ability to securely track,sub-divide and transfer wealth over the internetcreating the possibility of a true sharing economy.The 2021 boom in the NFT market gave us a potential glimpse of blockchains impact on the art and creative industries,for good and bad.Although the art market cautiously entered the NFT market in 2021,in the intervening years,the true potential of blockchain technology and how it could address weaknesses in the art market is becoming clearer.Blockchain,as the digital vehicle of the sharing economy,has the potential of redistributing wealth created in the art market in ways that were previously inconceivable or impractical.Part of the technologys attractiveness is around ownership and how blockchain can ensure that different stakeholders have a share in any future benefit that derives from the creation of an art object or cultural project.Artworks created by artists rely on different stakeholders to create value(the artists themselves,the galleries that support them,the curators that include them in exhibitions,the collectors that buy them,etc.).At the moment,the benefits are heavily skewed toward the buyer,and although Artist Resale Rights legislation exists to ensure artists get their share of future resales,the model is currently more theoretical which limits applicable benefits.Therefore,mutually beneficial models,in which artists get a percentage of every future transaction,are needed.However,these models should also apply to galleries,patrons and others that have been critical to their artistic development.Using models facilitated by existing blockchain technology could disrupt current wealth distribution to focus on pre-distribution rather than the current model of post-distribution through taxes and benefits,which often insufficiently compensates the creators or the art ecosystem itself.Blockchain could continue to foster innovation and investment while giving everyone a stake in the future something that is increasingly lacking in todays art market.Making this work is another matter.The entrenched vested interests in the art market to maintain the status quo will be challenging to address.Also,a weaker NFT market and increasing competition among NFT platforms have lead several NFT platforms to make artist royalties optional rather than compulsory for collectors.15 However,we also see initiatives aiming to counter this trend.The 2022 launch of Artcual,a partnership with MCH Group,Art Basel,BCG X and Luma Foundation,is a technology-based startup created by the art community,for the art community.16 The company aims to address existing challenges for artists in terms of royalty collection and payment and to provide a more transparent transaction process for galleries and collectors to increase collector confidence.The key feature of this initiative is the collaborative nature of the stakeholders involved,which has the possibility to change the perception and existing practices in the art market from within and address existing inequities.With blockchain,other new patronage models or social impact models could emerge.However,it is important that more of the larger players support such initiatives to make them sustainable and drive the desired impact.Increasing public support to promote dynamic,vibrant economic art and cultural sectors The increasing recognition of the importance of the Culture and Creative industries(CCIs)by governments around the world is a positive sign.Initiatives at the level of the G20,the Organization for Economic Co-operation and Development(OECD)and the European Union to name a few are very good signs to support the development of CCIs.Cultural policies,around funding,education,employment,professional development,intellectual property protection,promotion and connection,new technologies,leadership,etc.,are areas where governments can grow CCIs for a more inclusive,sustainable and ambitious approach to arts and culture.Recent economic crises have put noticeable pressure on public funding for arts and culture,which triggers the search for alternative funding models to fund and promote CCIs.For a few years,we have expanded on the topic of social impact investment,sustainability and culture,as this area lacks attention from both the public and private sector.It would be interesting to further explore public-private partnerships and initiatives around new funding mechanisms,such as the issuance of cultural bonds akin to green bonds(see section 4,page 244).43Section 08_ Risk management and regulation09080706050403020100The transformation of the wealth management sector,the global art market and the cultural and creative sectors(CCS)is rapidly creating new needs and opportunities at the intersection of art and finance:High-net-worth individuals seek holistic wealth management offerings.Wealth management offerings adapt to new realities,trends and technologies.Art and collectible assets represent a sizeable portion of HNWIs wealth,requiring the same attention as other assets.Luxury collectible assets follow the same patterns as the fine art assets.A global wealth transfer is impending.And a new generation introduces new values.The need for new sustainable and innovative financial mechanisms for CCS.The big picture_Growth of an innovative art and finance industry Social impact investment is developing and can apply to CCS.Purpose-led investment and innovation is increasingly demanded in the cultural sector.The art sector should improve its efficiency.Trust,transparency and regulations climb the agenda.Technology matures and offers new ways to do business.KYC-AML and fractional ownership regulation is in place.Culture is recognized as a major engine for sustainable socioeconomic growth.NextGen collectors have different needs and preferences.All of this is part of a global phenomenon one with solid,supportive elements to support the growth of an innovative art and finance industry in the years to come.ART&FINANCE REPORT 2023Section 00_ Introduction44Source:Deloitte Private&ArtTactic Art&Finance Report 7th EditionThe big picture:a unique set of macro trends to a new art worldGlobalization,NextGen,democratization and cultural diplomacyTrust,transparency,regulation,professionalismArt and technology,digitalization,virtualization and tokenizationNew economic reality for public cultural institutions,soft power of culture,economic driver,world cultural heritageCreative sectors,cultural citizenship,culture and smart citiesART TRENDSExpanding class of ultra-high-net-worth(UHNWI)buyers,new generation and holistic offeringFinancialization:art as a capital assetRisk management,collection management and assetTax and estate assistance,philanthropy and sustainabilityArt-secured lending,social impact investment and fractional ownership modelsFINANCE TRENDSART&FINANCE45Section 08_ Risk management and regulation0908070605040302010046ART&FINANCE REPORT 2023Section 00_ IntroductionCULTURE Large public museums Private museums Corporate collectors Private collectors Public authorities (country,region,city,etc.)FINANCE Private bankers Wealth managers Family offices Private investors/collectors Art/collectible fund promoters Art insurance companies Art traiding companiesDeloitte Private Wealth UHNWIs&Family OfficesDeloitte already works with many Art&Finance stakeholders across the world and envisions opportunities for further collaboration.VISUAL ART SECTOR Artists Companies selling art Digital art companies Art logistics companies Art fairs Art and media companies ArtTech companies Creative industriesDeloitte Private Private companies&PEThe art and finance industry is uniquely positioned at the intersection of three interconnected sectors.The Deloitte Private Art&Finance initiative aims to coordinate a transversal multidisciplinary global Deloitte service offering to art and finance stakeholders around the world to facilitate their:1.Art and collectible assets,2.Art and collectible-related projects and business,and3.Cultural initiativesDeloittes Art&Finance practice brings together professionals across disciplines,spanning strategy,regulations,technology,tax,legal,audit,risk advisory and more-to provide comprehensive client solutions.For the past 12 years,we have monitored the development and evolution of the art and finance industry,particularly the role of art and collectibles within wealth management services.Not includedClient entertainment-Internal education-Art sponsoring-Corporate collectionIllustration of art and wealth management servicesACCUMULATING WEALTH growing assets Museums endowments Art investment Art funds Stock of art business Private Equity in start-ups Financing of art business Social impact investments Fractional investments/STOsPROTECTING WEALTH managing risks Art advisory Valuation Assets consolidation Reporting Art insurance Passive portfolio management Art collection management Tokenisation Family governanceTRANSFERING WEALTH creating legacy Philanthropy advice Art related&estate planning SecurizationCONVERTING WEALTH TO INCOME creating an income stream Art-secured lendingWealth manager47Section 08_ Risk management and regulation0908070605040302010048ART&FINANCE REPORT 2023Section 00_ IntroductionEndnotes_1 Microsoft Word-New Delhi Leaders Declaration Final Adoption(g20.org)2 Artnets Index for Fine Art(100).3 Artnets Index for Fine Art(100)between July 2022 and July 2023.4 Marc Jones,“Global markets in the first half of 2023:Banks vs the machines,”Reuters,June 30,2023.5 Art Basel and UBS,The Art Market 2023,2023;Art Basel and UBS,The Art Market 2016,2016.The annual growth rate in global art market sales from 2008 to 2022 is based on data from the 2016 and 2023 report.6 21st edition of the Bain&CompanyAltagamma Luxury Study,November 2022.The report stated The global luxury market is projected to grow by 21%in 2022,reaching 1.4 trillion7 https:/ UNESCO webpage,G20 agrees first declaration on culture(unesco.org).Last consulted 3 August 2021.9 This is the two-year compounded growth rate between 2021 and 2023.10 This includes new and vintage luxury collectibles.11 https:/ https:/ https:/ https:/ OpenSea,the biggest NFT marketplace announced in August 2023 that it plans to stop the mandatory collection of resale fees for artists.Starting March 2024,those fees will essentially be tips an optional percentage of a sale price that sellers can choose to give the original artist.16 https:/www.arcual.art/about-usGALLERY JONATHAN PRINCE49Section 08_ Risk management and regulation09080706050403020100Wealth and the global art market01_BORE BLOCK I JONATHAN PRINCE50ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketPart 3:Regional breakdown96Part 2:Global art market review 66Part 1:Art and collectible wealth overview 57Introduction56Highlights5350403020100VESTIGAL BLOCK JONATHAN PRINCE52ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketHighlights_ Decline in global wealth in 2022:According to the Credit Suisse and UBS Global Wealth Report 2023,2022 recorded the first fall in net global household wealth since the global financial crisis of 2008.Measured in current nominal US$,total net private wealth fell by 2.4%or US$11.3 trillion.17 The global ultra-high-net-worth(UHNW)population also fell by 6%and their combined net worth was 11%lower than in 2021,according to a report18 by Altrata examining the UHNW market.Art market fails to outpace inflation:The anemic 14-year annual growth rate19 of 0.6%in the art market has failed to outpace inflation,with global art market sales shrinking in real terms since 2008.This signals the overall art market has been unable to attract the attention of the larger high-net-worth(HNW)population and their wealth compared to the global luxury goods industry.Global art and collectible wealth:We estimate that UHNWIs wealth associated with art and collectibles was US$2.174 trillion in 2022 and predict this figure could grow to an estimated US$2.861 trillion in 2026,due to the increased number of UHNWIs across the world and their increased allocation of wealth to art and collectibles.A small increase in art and collectible wealth in 2023 is anticipated due to an average 3.8 increase in art values between July 2022 and July 2023.21 The growth is also boosted by an increase in overall wealth as world stocks rallied 12 in the first six months of 2023.Art and portfolio allocation:Knight Franks The Wealth Report 2023 found a global average of 5%allocated to art and other collectibles.According to this years survey of wealth managers and family offices,an estimated average of 10.9%of their clients wealth is associated with art and collectibles(8.6%for private banks and 13.4%for family offices).23 Art buyers are looking to diversify in times of uncertainty:The very top end of the art market has been less affected by the economic turmoil,according to a recent report24 by Sothebys and ArtTactic.The US$1 million-plus auction market saw 20.8%growth in 2022,accounting for 74%of total fine art sales(by value)based on sales at Sothebys,Christies and Phillips.While the higher end(US$1 million-plus artworks)of the impressionist,modern and contemporary auction market saw a 9%year-on-year decline in sales in the first six months of the year,it is significantly lower than the 31cline in the overall art market.This shows wealthy buyers have continued to focus on the most established artists and high-value works,which they perceive to have a greater store of value in times of uncertainty.The art market slowed down in the first half of 2023 as high-end supply dried up:Overall auction sales at Christies,Sothebys and Phillips were down 18.2%year-on-year in the first half of 2023,with fine art sales plummeting by 31%.The drop in fine art auction sales has been largely driven by a much lower supply of trophy lots;only 40 lots sold above US$10 million in the first six months of 2023,generating a combined total of US$932 million,compared to 75 lots in the first half of 2022,with a total sales value of US$2.06 billion.5309080706050403020100 Luxury collectible sales reach new heights in 2022 and could signal new opportunities for the art and finance industry:The growth potential of the luxury collectibles market is evident by its auction sales surge over the last two years,reaching a record high in 2022.While the fine art market slowed in 2023,the global auction market for luxury collectibles25 continues to track last years performance,with first-half 2023 sales 1%higher than the first half of 2022.Auction sales are on target to match or exceed 2022s record levels if this growth continues over the second half of 2023.We expect to see a growing interest in the financialization of luxury collectibles and the potential to tap into the much broader and larger US$1.4 trillion luxury goods industry.Asia drives growth in luxury collectibles market in 2022:Over the last few years,primary growth in the luxury collectibles market has come from Asia,with Hong Kong luxury collectible auction sales26 up 33tween 2021 and 2022.These account for 40%of total luxury collectibles sales in 2022,up from 25%in 2021.However,Hong Kongs market share in the first half of 2023 fell back to 25%,compared to other locations such as Geneva and New York,which gained market share.The rise of the ultra-high price segment:Evidence of how UHNWIs and billionaires influence the global art market can be seen clearly by the number of works sold in the US$10 million-plus segment over the last eight years,with a particular surge in interest following the 2020 COVID-19 pandemic.The US$10 million-plus price segment accounted for 50%of the share of impressionist,modern and contemporary auction sales27 in 2022,up from 32%in 2020.In the first half of 2023,the share of the US$10 million-plus market fell to 33%,due to the economic uncertainty and fewer trophy lots on the public auction market.More than 1,500 artists were selling above US$500,000:Although 1,538 artists were represented at the top end of the auction market(artworks selling over US$500,000)between 2015 and the first half of 2023,there have been only 155 artists in the trophy segment(US$10 million-plus price segment)and 33 artists selling above US$50 million since 2015.The average price28 of the 10 most expensive lots sold at public auction between 2000 and 2015 was US$103.5 million,compared to US$147.2 million for the 10 most expensive lots sold between 2015 and the first half of 2023an indication of price inflation at the very peak of the market.Top 100 artists accounted for more than three-quarters of the total auction value:The top 100 artists generated a total of US$36.2 billion,accounting for 76%of total sales between 2015 and the first half of 2023.This illustrates the importance of this group of artistsaccounting for just over 1%of the total artist populationin driving the overall market sentiment and auction sales One percent of artists control more than three-quarters of art wealth generated:In the past eight and a half years,1%of artists have controlled more than three-quarters of total auction sales.This may explain the art markets anemic growth over the last 10 years.We are currently facing a scenario where a few artists markets are accumulating disproportionately large amounts of todays art market wealth,with relatively little trickling down to the broader art ecosystem.If we want the art market to grow and direct more wealth toward supporting artists,we need to look at the inherent inequality of the art market today,and examine how wealth could be more evenly distributed to build a stronger and more sustainable art sector.Post-pandemic price inflation at the ultra-high end of the art market:Evidence of how UHNWIs and billionaires influence the global art market can be seen clearly by the number of works sold in the US$10 million-plus segment over the last eight years,with a particular surge in interest following the 2020 COVID-19 pandemic.The US$10 million-plus price segment accounted for 50%of the share of impressionist,modern and contemporary auction sales in If we want the art market to grow and direct more wealth toward supporting artists,we need to look at the inherent inequality of the art market today,and examine how wealth could be more evenly distributed to build a stronger and more sustainable art sector.54ART&FINANCE REPORT 2023Section 01_ Wealth and the global art market2022,up from 32%in 2020.In the first half of 2023,the share of the US$10 million-plus market fell to 33%,due to the economic uncertainty and fewer trophy lots on the public auction market.Top three auction houses account for more than half of the global auction market:Since the pandemic,Christies,Sothebys and Phillips have increased their dominance in the global auction market,accounting for 52%of public auction sales in 2022,up from 45%in 2021 and 40%in 2020.We saw further consolidation and concentration in the auction industry,with Bonhams embarking on an acquisition spree29 in 2022,and reporting in excess of US$1 billion in sales in 2022.Bought-in rates remain historically low:Since the pandemic,bought-in rates(percentage of unsold lots)have been at an all-time low,with an average of 13.1%of lots unsold versus 20.2tween 2015 and 2020.While the first half of 2023 showed that bought-in rates are on the rise(15.2%),they remain below pre-pandemic levels.Auction guarantees reach new heights in 2022,but are investors getting more cautious?Auction guarantee levels reached a new high in 2022,with US$3.65 billion in guaranteed value(based on hammer value)of lots in the impressionist,modern and contemporary segment sold during evening sales at Christies,Sothebys and Phillips.This was 18.9%higher than in 2021 and 128%higher than the pandemic year of 2020.Auction guarantees accounted for a record 64.6%of total evening sales value in 2022.In the first half of 2023,auction guarantees accounted for US$1.34 billion,down 29.3%from US$1.89 billion for the same period last year but still accounting for 65%of total auction sales.This shows auction guarantees continue to play a pivotal role in managing the current market uncertainty.Auction houses passing risks to third-party guarantors:Between 2016 and the first half of 2023,the majority(71%)of lots sold with guarantees were offered with a third-party guarantee,as opposed to 29%of lots with in-house auction guarantees.VESTIGAL BLOCK JONATHAN PRINCE5509080706050403020100Introduction_This section takes a closer look at how current and future trends in global wealth and the global art market are reshaping the landscape and context of the art and finance industry.Over the last 12 years,we have monitored how the art market has adapted to global crises,such as the 20072008 financial crisis and,more recently,the impact of the COVID-19 pandemic.Higher inflation,rising interest rates and slowing economic growth will provide a new and challenging backdrop for the art and finance industry in the coming years.Section 1 is divided into three parts:Part 1_Art and collectible wealth review Part 2_Global art market review We highlight some of the key trends and developments in the art market over recent years and feature global expert contributions providing valuable insights:INDUSTRY INSIGHTS_Where art,science,space and tech meetby Mariam BrianCEO and Founder of Holo ArtPart 3_Regional breakdown In Part 3 we have included a specific focus on the art market in Japan thanks to the following two contributions:INDUSTRY INSIGHTS_Japanese art scene trends 2023by Kiyohiko NagaiManaging Director,New Business Development FSI Competency,Risk Advisory,Deloitte Japanby Ayari MimaSenior Staff,Deloitte JapanDemystifying the Japanese art marketby Josephine Ayako YamadaHead of Innovation&Governance,CEO Office,Corporate PlanningStartbahnby Katsunori TakahashiHead of Private Banking,Sumitomo Mitsui Banking CorporationImpact of import VAT on art circulation within Europe and implementation of new Directive(EU)No.2022/542by Andrea Sirio OrtolaniMember of the Board of Apollo Groupby Matteo RumorCustom duty expert,Deloitte Italyby Davide BleveTax Partner Deloitte and member of the Art&Finance Italian Team56ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketTORUS 340 JONATHAN PRINCEArt and collectible wealth overview_Part 1_After the decline in wealth in 2022,the outlook for 2023 looks more positive as equity markets recoverMacroeconomic and geopolitical headwinds in 2022 resulted in lower returns on financial investment that,combined with currency depreciation against the US dollar,were the main factors in 2022s decline in global wealth,according to the Credit Suisse and UBS Global Wealth Report 2023.Last years 3.4%household wealth growth was the lowest rate since the global financial crisis of 2008,while total net private wealth tumbled by 2.4%,or US$11.3 trillion.30 Another report by Altrata underlines the decline in the number of UHNWIs in 2022,noting there was a global population of 392,410 UHNWIs in the first half of the yeara fall of 6%.While the net worths of HNWIs and UHNWIs were historically high in recent years,2022 saw a drop in overall wealth to US$41.8 trilliona decline of 11%.31 Even among the worlds wealthiest,the impact of the geopolitical and economic environment has been felt,with the number of billionaires according to Forbes falling from 2,668 in March 2022 to 2,640 in March 2023,and their total worth now at US$12.2 trillion,compared to US$12.7 trillion in March 2022.The United States still has the highest number of billionaires,with 735 individuals worth a collective US$4.5 trillion.China(including Hong Kong and Macau)has the second-highest number of billionaires,with 562 controlling around US$2 trillion in wealth.India follows in third place,with 169 billionaires worth a collective US$675 billion.32 A recent report by Boston Consulting Group(BCG)estimates that the value of global financial wealth shrank for the first time in 15 years in 2022,declining by 4%to US$255 trillion.While 2022 saw a relatively significant drop in financial wealth figures,its expected that the decrease will be relatively brief,with 2023 seeing a potential 5%rebound in total global net worth to US$267 trillion.While financial wealth shrank in 2022,the value of real assets,including art and real estate,was US$261 trillionan increase of 5.5%.33 The positive trend in real asset value can also be seen in the global art market,with overall auction sales at Christies,Sothebys and Phillips increasing by 12.94 in 2022,including a particularly strong performance at the very top end of the market.According to a recent report by Sothebys and ArtTactic,35 the US$1 million-plus auction market saw 20.8%growth in sales in 2022,accounting for 74%of total fine art sales(by value)based on sales at Sothebys,Christies and Phillips.This shows that wealthy buyers have continued to focus on the most established artists and high-value works,which they perceive to have greater stores of value in times of uncertainty.5709080706050403020100This finding is supported by a recent Art Basel and UBS survey,36 which found HNW collector respondents were spending more in 2022 than they had before the COVID-19 pandemic,with the proportion spending in the US$1 million-plus range increasing from 18%to 31%.The art market slowed in the first half of 2023,with overall auction sales 18.2%lower than in the first half of 2022.Even the higher end(US$1 million-plus artworks)of the impressionist,modern and contemporary auction market saw a year-on-year decline in sales of 9%in the first six months of 2023.It is important not to conflate a fall in auction sales value with a fall in prices.The fall in auction sales has been largely driven by a lower supply of top-end lots,with only 40 lots selling above US$10 million in the first six months of this year,generating a combined total of US$932 million.This was significantly lower than the 75 lots that sold above US$10 million in the first half of last year,with a total sales value of US$2.06 billion.This could indicate that sellers are more hesitant to sell their trophy pieces in a softer market,which is currently impacting total auction sales directly,particularly at the top end of the market.However,other art market segments have continued to grow this year.Sothebys,Christies and Phillips have seen a 4%year-on-year increase in lots sold in the first half of 2023,and segments such as jewelry and watches were up 21.4%from the same period last year.Other auction houses(e.g.,Bonhams)that cover a much broader segment of art and collectibles saw sales grow 32%in the first six months of this year.We estimate a slight increase in art and collectible wealth in 2023,as a result of an average 3.87 increase in art values between July 2022 and July 2023.38 The growth is also supported by a rise in overall wealth,as world stocks have rallied 129 in the first six months of this year.Art features more prominently in a defensive wealth management strategyBased on our surveys and findings from external reports on global wealth trends,there seems to be a clear change in how HNWIs are currently thinking about investments,particularly leaning toward value as opposed to growth.Their focus has shifted to preserving wealth through diversified investment strategies,which is also one of the main motivations expressed by wealth managers in this years Art&Finance survey.This is why it is logical that the art and collectibles market is part of a wealth management service offering,with diversification and store of value as the main motivations(see Section 2).The increasing interest in the financial aspect of art ownership implies an evolving relationship between traditional forms of art collecting toward a more sophisticated,financial approach to ownership of art.Art,collectibles and portfolio allocations The UBS Global Family Office Report 2023 found that family offices allocated 2%to arts and antiques,on a par with gold and precious metals.40 Knight Franks The Wealth Report 2023 noted a global average of 5%allocated to art and other collectibles.According to this years survey of wealth managers and family offices,a significant share of clients wealth is associated with art and collectibles.41 We estimate a conservative average of 10.9%for wealth managers(8.6%for private banks and 13.4%for family offices).This higher allocation of wealth to art and collectibles was also echoed by The Art Basel and UBS Global Art Market Report 2021,42 where HNW collectors were reported to have a relatively high proportion of their overall portfolios of wealth invested in art,with 64%reporting an allocation of over 10%.The report also highlighted that Generation Z collectors had the highest average share of wealth dedicated to art,with over a third having an allocation of more than 30%,higher than both their millennial(27%)and Generation X(24%)peers.average share of wealth dedicated to art,with over a third having an allocation of more than 30%,higher than both their millennial(27%)and Generation X(24%)peers.Art and collectible wealth 20202025In this table,we have assumed that UHNWIs wealth(in US dollars)will grow at the same rate as the expected increase in the UHNWI population according to Knight Franks The Wealth Report 2022.43 We have used an average global allocation to art and collectibles of 5.2%of financial(or investable)wealth(not including non-financial assets)in 2022 to estimate the average allocation we could expect in five years time.Based on our own findings from wealth managers,as well as findings from other reports,this is likely to be a conservative estimate of global art and collectible wealth.58ART&FINANCE REPORT 2023Section 01_ Wealth and the global art marketTable 2:Global art and collectible wealth 2022-2026Source:Altrata and Knight Frank All figures are in US$billionNorth AmericaLatin AmericaAfricaEuropeMiddle EastAsiaPacificOverallTotal UHNWI wealth in 2022 14,545 1,287 355 10,561 2,656 11,854 567 41,825 Total UHNWI wealth in 202618,632 1,619 394 13,191 3,288 15,730 755 53,609 Regional allocations to art and collectibles6.0%6.0%3.0%5.0%3.0%5.0%7.0%5.2%Total UHNWI collectible wealth in 2022873 77 11 528 53 593 40 2,174 Total UHNWI collectible wealth in 20261,104 97 13 652 67 874 54 2,861 Total art and collectible wealth US$2.174 trillion allocated to art and collectibles(based on a 5.2%allocation)in 2022$1,104North AmericaMiddle EastAfrica$11bn2022$13 bn2026AsiaEuropePacific$873 bn2022 bn2026$528 bn bn2022$652 bn bn2026$402022$542026$53 bn2022$67 bn2026Latin America$77 bn2022$97 bn2026$874 bn2026$593 bn202240.1%marketshare 202224.3%marketshare 20221.8%marketshare 20223.5%market share 20220.5%market share 20222.4%market share 202227.3%market share 20225909080706050403020100Based on these calculations,we estimate that UHNWIs wealth associated with art and collectibles was US$2.174 trillion in 2022.We project that,in 2026,this figure could grow to an estimated US$2.861 trillion.This projection assumes that the growth of art and collectible wealth will track the estimated regional growth in the global wealth population.However,as previously mentioned,the growth in annual art market sales over the last 10 years has failed to keep pace with increases in global wealth.We may see a small increase in art and collectible wealth in 2023,on the back of a 3.8D increase in art values between July 2022 and July 2023.45 Nonetheless,this could be offset by an increase in overall wealth,as world stocks rallied 12F in the first six months of this year.Therefore,our growth estimate may be overly optimistichowever,increased access to new types of art investment products could signal a closer alignment between wealth and art market growth in the future.When we look at the wealth associated with art and collectibles from UHNWIs,it is important to consider how it relates to other financial assets.Compared with the total assets under management(AUM)of the asset management industry,art and c

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Research Report AP-R668-22 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Prepared by Prasannah Prabhakharan,Julius R.Secadiningrat,Michael A.Regan,Joanne Bennett,Mitchell Cunningham,Aleksa Zlojutro,Vinayak Dixit Publisher Austroads Ltd.Level 9,570 George Street Sydney NSW 2000 Australia Phone: 61 2 8265 3300 .au .au Project Manager Geoff McKernan Abstract This report evaluates selected low-cost perceptual countermeasure(PCM)treatments in tunnel environments.PCM treatments are used to reduce crash risk by improving driver speed behaviour,alertness and lane discipline within tunnels.Two key research activities were undertaken in the project:a systematic literature review and stakeholder consultation an experimental study conducted in a virtual reality driving simulator.Based on the outputs of the literature review and stakeholder consultations,three PCM treatments were selected for evaluation in the virtual reality driving simulator:striped wall pattern;rumble strips(edgeline and centreline);and pacemaker lighting.In the simulated tunnel environment,the three PCM treatments evaluated had little or no positive effect in either maintaining drivers speed or lane position.Nevertheless,in subjective feedback from study,participants indicated that none of the PCMs compromised their safety,and that the tunnels treated with PCMs were perceived to be significantly more appealing than untreated tunnels.Further research is needed to determine the impact of the virtual environment on the study outcomes.About Austroads Austroads is the peak organisation of Australasian road transport and traffic agencies.Austroads purpose is to support its member organisations to deliver an improved Australasian road transport network.To succeed in this task,we undertake leading-edge road and transport research which underpins our input to policy development and published guidance on the design,construction and management of the road network and its associated infrastructure.Austroads provides a collective approach that delivers value for money,encourages shared knowledge and drives consistency for road users.Austroads is governed by a Board consisting of senior executive representatives from each of its eleven member organisations:Transport for New South Wales Department of Transport Victoria Queensland Department of Transport and Main Roads Main Roads Western Australia Department for Infrastructure and Transport South Australia Department of State Growth Tasmania Department of Infrastructure,Planning and Logistics Northern Territory Transport Canberra and City Services Directorate,Australian Capital Territory Commonwealth Department of Infrastructure,Transport,Regional Development and Communications Australian Local Government Association Waka Kotahi NZ Transport Agency Keywords perceptual countermeasures,tunnel,design,psychology,human factors,evaluation,road safety,safe roads,driving simulator ISBN 978-1-922700-31-5 Austroads Project No.ART6137 Austroads Publication No.AP-R668-22 Publication date February 2022 Pages 147 Austroads 2022|This work is copyright.Apart from any use as permitted under the Copyright Act 1968,no part may be reproduced by any process without the prior written permission of Austroads.This report has been prepared for Austroads as part of its work to promote improved Australian and New Zealand transport outcomes by providing expert technical input on road and road transport issues.Individual road agencies will determine their response to this report following consideration of their legislative or administrative arrangements,available funding,as well as local circumstances and priorities.Austroads believes this publication to be correct at the time of printing and does not accept responsibility for any consequences arising from the use of information herein.Readers should rely on their own skill and judgement to apply information to particular issues.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page i Summary The purpose of the study was to investigate and evaluate the application of low-cost perceptual countermeasure(PCM)treatments in tunnel environments as a means of improving driver speed behaviour and lane discipline within tunnels,thereby reducing crash risk.The project involved two key research activities:Research Activity 1 a systematic literature review and stakeholder consultation;and Research Activity 2 an experimental study conducted in a virtual reality driving simulator.The literature review identified 33 PCM treatments that had been demonstrated as having a behavioural effect on driver speed behaviour and/or lane discipline.The stakeholder consultation complemented the literature review in outlining the advantages/disadvantages of these PCMs,particularly in terms of ease of implementation,cost,maintenance,and applicability to a tunnel environment.The stakeholder group consisted of members of the Australian Tunnel Operators Group,members of the Austroads Tunnel Task Force and various industry stakeholders.Based on the outputs of the literature review and stakeholder consultations,three PCM treatments were selected for evaluation in the virtual reality driving simulator:1.Striped Wall Pattern 2.Rumble Strips(Edgeline and Centreline)3.Pacemaker Lighting Research Activity 2 was an experimental study,involving 102 participants,conducted in a virtual reality driving simulator located at the Research Centre for Integrated Transport Innovation,UNSW,Sydney.The study was designed to investigate whether the application of PCM treatments had any impact on drivers speed or lateral control in road tunnels and to determine what drivers opinions were of the proposed PCM treatments.Each participant was exposed to only one PCM type and drove in two tunnel drives one baseline tunnel(untreated)and one treated tunnel(with the PCM)in a counterbalanced order.The findings from Research Activity 2 revealed that,as implemented in the simulated tunnel environment,the three PCM treatments evaluated had little or no positive effect in either maintaining drivers speed or lane position in the simulated tunnel environment.This does not mean,however,that they were ineffective as treatments,given that there is previous evidence which demonstrates that one of the treatments(Pacemaker Lighting)has been found to be effective in a real tunnel environment,and that Rumble Strips are effective on real open roads.Further research is recommended to determine whether certain critical proposed modifications to the experimental design utilised in this study would make these PCMs more effective in inducing positive changes in driving behaviour in the virtual tunnel environment.Nevertheless,subjective feedback from study participants indicated that none of the PCMs evaluated were perceived to compromise their safety.On the contrary,evidence from this study indicates that the tunnels treated with PCMs were rated as being significantly more visually interesting,more attractive,induced less boredom and less sleepiness(Striped Wall Patterns),and were significantly more memorable(Pacemaker Lighting),compared to the untreated tunnels.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page ii Contents Summary.i 1.Introduction.1 1.1 Background.1 1.2 Project Purpose.1 1.3 Project Objectives.1 1.4 Research Activities.2 1.5 Structure of this Report.2 2.Research Activity 1:Literature Review and Stakeholder Consultation.3 2.1 Aims and Research Questions.3 2.2 Method.3 2.2.1 Method for Literature Review.3 2.2.2 Method for Stakeholder Consultation.4 2.3 Summary of Key Findings.4 2.3.1 Results of Literature Review and Stakeholder Consultation.4 2.3.2 Candidate PCM Treatment Options for Research Activity 2.6 2.3.3 Speed.6 2.3.4 Lane Position.11 2.3.5 Recommended PCM Treatments for Research Activity 2.15 3.Research Activity 2:Experimental Study.16 3.1 Aims and Research Questions.16 3.2 Method.16 3.2.1 Participants.16 3.3 Design.17 3.4 Material&Apparatus.18 3.4.1 Hardware.18 3.4.2 Software.19 3.4.3 Questionnaires.27 3.4.4 Procedure.27 3.5 Results.29 3.5.1 Participant Demographics.29 3.5.2 Analysis of Drive Data.30 3.5.3 Methods of Analysis.34 3.5.4 PCM Impact on Drivers Speed.34 3.5.5 PCM Impact on Drivers Lateral Control.42 3.6 Other PCM Benefits Identified.46 3.6.1 Self-Reported Driving Performance.47 3.6.2 Self-Reported Perceptions.47 3.6.3 Self-Reported Driver States.49 3.6.4 Self-Reported Thoughts on Intended Purpose.50 3.6.5 Self-Reported Changes in Driving Behaviour.51 3.7 Summary of Findings from Research Activity 2.52 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page iii 4.Discussion and Conclusion.55 4.1 Key Findings of Research Activity 1:Literature Review and Stakeholder Consultation.55 4.2 Key Findings of Research Activity 2:Experimental Study.56 4.2.1 Does the application of perceptual countermeasure(PCM)treatments have any impact on drivers speed in road tunnels?.56 4.2.2 Does the application of perceptual countermeasure(PCM)treatments have any impact on drivers lateral control in road tunnels?.56 4.2.3 What are drivers opinions of the proposed PCM treatments?.56 4.3 Impact of the Striped Wall Pattern.58 4.4 Impact of the Pacemaker Lighting.59 4.5 Impact of the Rumble Strips.60 4.6 Study Limitations.61 4.7 Future Research.61 4.8 Recommendation for a Follow-Up Study.62 4.8.1 Condition 1.63 4.8.2 Condition 2.63 4.9 Conclusion.64 References.65 Appendix A Painted Road Markings.67 A.1 Definition.67 A.2 Speed.67 Transverse lines.67 Peripheral transverse lines.68 Herringbone peripheral transverse lines(forward and backwards).68 Half Wundt transverse lines.69 Optical speed bars.69 Optical circles.69 Perceptual lane narrowing.69 Peripheral hatching.70 Chequered edge lines.70 Inside lane hatching.70 Centreline widening hatching.70 Centreline widening white gravel.70 Combs.70 Dragons teeth.71 A.3 Lane Position.71 Transverse lines.71 Peripheral transverse lines.71 Herringbone peripheral transverse lines(forward and backwards).71 Half Wundt transverse lines.71 Optical speed bars.71 Optical circles.71 Perceptual lane narrowing.71 Peripheral hatching.72 Chequered edge lines.72 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page iv Inside lane hatching.72 Centreline widening hatching.72 Centreline widening white gravel.72 Combs.72 Dragons teeth.72 A.4 Miscellaneous Driving Behaviours.72 A.5 Advantages and Disadvantages.73 Efficacy.73 Ease of Implementation.73 Cost of Implementation.74 Maintenance.75 Applicability to Tunnel Environments.75 Other Comments from Stakeholders.76 Appendix B Wall Markings.88 B.1 Definition.88 B.2 Speed.88 Tunnel art.88 Sidewall colour.88 Sidewall arrow markings by different colour.88 Sidewall arrow markings by different temporal frequencies.89 Sidewall striped patterns.89 Sidewall texture.89 B.3 Lane Position.89 Tunnel art.89 Sidewall colour.89 Sidewall arrow markings by different colour.89 Sidewall arrow markings by different temporal frequencies.89 Sidewall striped patterns.90 Sidewall texture.90 B.4 Miscellaneous Driving Behaviours.90 B.5 Advantages and Disadvantages.90 Efficacy.90 Ease of Implementation.90 Cost of Implementation.91 Maintenance.91 Applicability to Tunnel Environments.91 Other Comments from Stakeholders.92 Appendix C Rumble Strips.99 C.1 Definition.99 C.2 Speed.99 Edgeline Profile Lane Marking(audio-visual lane-marking).99 Centreline Rumble Strips.99 Transverse Rumble Strips.99 C.3 Lane Position.100 Edgeline Profile Lane Marking(audio-visual lane-marking).100 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page v Centreline Rumble Strips.100 Transverse Rumble Strips.100 C.4 Miscellaneous Driving Behaviours.100 Crashes.100 C.5 Advantages and Disadvantages.101 Efficacy.101 Ease of Implementation.101 Cost of Implementation.101 Maintenance.102 Applicability to Tunnel Environments.102 Other Comments from Stakeholders.102 Appendix D Delineation Markers.106 D.1 Definition.106 D.2 Speed.106 Guideposts with ascending heights.106 Hazard marker posts.106 Post delineators.106 Chevrons.107 D.3 Lane Position.107 Guideposts with ascending heights.107 Hazard marker posts.107 Post delineators.107 Chevrons.107 D.4 Miscellaneous Driving Behaviours.107 D.5 Advantages and Disadvantages.108 Efficacy.108 Ease of Implementation.108 Cost of Implementation.108 Maintenance.109 Applicability to Tunnel Environments.109 Other Comments from Stakeholders.109 Appendix E Lighting.113 E.1 Definition.113 E.2 Speed.113 LED lighting.113 Luminance.113 E.3 Lane Position.113 LED lighting.113 Luminance.114 E.4 Miscellaneous Driving Behaviours.114 Crashes.114 E.5 Advantages and Disadvantages.114 Efficacy.114 Ease of Implementation.114 Cost of Implementation.114 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page vi Maintenance.115 Applicability to Tunnel Environments.115 Other Comments from Stakeholders.115 Appendix F Physical Markers.119 F.1 Definition.119 F.2 Speed.119 Sealed Shoulder.119 Build outs.119 Traffic Cones.119 F.3 Lane Position.120 Sealed Shoulder.120 Build outs.120 Traffic Cones.120 F.4 Miscellaneous Driving Behaviours.120 F.5 Advantages and Disadvantages.120 Efficacy.120 Ease of Implementation.120 Cost of Implementation.121 Maintenance.121 Applicability to Tunnel Environments.121 Other Comments from Stakeholders.121 Appendix G Combined Treatments.125 G.1 Definition.125 G.2 Speed.125 Rumble strips plus peripheral transverse bars.125 Rumble strips plus dragons teeth.125 Rumble strips plus coloured intersection.125 Rumble strips plus painted median.126 Rumble strips plus raised median.126 Drenthe province treatment.126 Combs plus chevrons.126 G.3 Lane Position.126 Rumble strips plus peripheral transverse bars.126 Rumble strips plus dragons teeth.126 Rumble strips plus coloured intersection.126 Rumble strips plus painted median.126 Rumble strips plus raised median.127 Drenthe province treatment.127 Combs plus chevrons.127 G.4 Miscellaneous Driving Behaviours.127 G.5 Advantages and Disadvantages.127 Efficacy.127 Ease of Implementation.127 Cost of Implementation.128 Maintenance.128 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page vii Applicability to Tunnel Environments.129 Other Comments from Stakeholders.129 Appendix H Simulator Sickness Questionnaire.135 Appendix I Drive Questionnaire.136 Appendix J Post Experiment Questionnaire.137 Appendix K Self-Reported Thoughts on Intended Purpose.140 Appendix L Self-Reported Changes in Driving Behaviour.144 Tables Table 2.1:39 PCMs identified through the literature review research activity.5 Table 2.2:PCM options for speed maintenance evaluation in a simulator.6 Table 2.3:Sidewall striped patterns summary table.9 Table 2.4:Sidewall red arrows at a frequency of between 4.45 and 7.01 Hz summary table.9 Table 2.5:Optical speed circles summary table.10 Table 2.6:Peripheral transverse lines summary table.10 Table 2.7:Rumble strips plus dragons teeth summary table.10 Table 2.8:Perceptual lane narrowing summary table.11 Table 2.9:PCM options for lane position evaluation in a simulator.11 Table 2.10:Perceptual lane narrowing summary table.14 Table 2.11:Centreline Rumble Strips summary table.14 Table 2.12:Rumble Strips plus dragons teeth summary table.14 Table 2.13:LED Lighting summary table.15 Table 2.14:Edgeline Rumble Strips summary table.15 Table 3.1:Participant demographics.16 Table 3.2:Self-reported driving behaviour.17 Table 3.3:Study design for Research Activity 2.17 Table 3.4:Simulator CPU specification.19 Table 3.5:Questionnaire laptop specification.19 Table 3.6:Simulator drives.20 Table 3.7:Self-reported tunnel driving behaviour.29 Table 3.8:Factors that may have affected performance.30 Table 3.9:Analysis zones in the simulated tunnels.31 Table 3.10:Mean speed in Northbound tunnel,by analysis zone.35 Table 3.11:Mean speed in Southbound tunnel,by analysis zone.36 Table 3.12:Standard deviation of speed in Northbound tunnel,by analysis zone.37 Table 3.13:Standard deviation of speed in Southbound tunnel,by analysis zone.38 Table 3.14:Mean acceleration in Northbound tunnel,by analysis zone.39 Table 3.15:Mean acceleration in Southbound tunnel,by analysis zone.40 Table 3.16:Standard deviation of acceleration in Northbound tunnel,by analysis zone.41 Table 3.17:Standard deviation of acceleration in Southbound tunnel,by analysis zone.42 Table 3.18:Mean lane position in Northbound tunnel,by analysis zone.43 Table 3.19:Mean lane position in Southbound tunnel,by analysis zone.44 Table 3.20:Standard deviation of lane position in Northbound tunnel,by analysis zone.45 Table 3.21:Standard deviation of lane position in Southbound tunnel,by analysis zone.46 Table 3.22:Self-reported driver behaviour for driving safe by treatment factor.47 Table 3.23:Self-reported driver behaviour for being mentally demanding by treatment factor.47 Table 3.24:Self-reported driver perceptions for comfortable by treatment factor.47 Table 3.25:Self-reported driver perceptions for visually interesting by treatment factor.48 Table 3.26:Self-reported driver perceptions for attractive by treatment factor.48 Table 3.27:Self-reported driver perceptions for memorable by treatment factor.48 Table 3.28:Self-reported driver perceptions for monotonous by treatment factor.48 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page viii Table 3.29:Self-reported driver perceptions for risky by treatment factor.48 Table 3.30:Self-reported driver state for being bored by treatment factor.49 Table 3.31:Self-reported driver state for being irritated by treatment factor.49 Table 3.32:Self-reported driver state for being sleepy by treatment factor.49 Table 3.33:Self-reported driver state for being anxious by treatment factor.49 Table 3.34:Self-reported driver state for being alert by treatment factor.50 Table 3.35:Self-reported driver state for being distracted by treatment factor.50 Table 3.36:Self-reported driver state for being calm by treatment factor.50 Table 3.37:Self-reported driver state for being relaxed by treatment factor.50 Table A.1:Stakeholder consultation results ease of implementation.74 Table A.2:Stakeholder consultation results cost of Implementation.74 Table A.3:Stakeholder consultation results maintenance.75 Table A.4:Stakeholder consultation results applicability to tunnel environments.75 Table A.5:Twelve painted road markings PCMs description,images and efficacy.79 Table B.1:Stakeholder consultation results ease of implementation.90 Table B.2:Stakeholder consultation results cost of implementation.91 Table B.3:Stakeholder consultation results maintenance.91 Table B.4:Stakeholder consultation results applicability to tunnel environments.91 Table B.5:Six wall marking PCMs description,images and efficacy.94 Table C.1:Stakeholder consultation results ease of implementation.101 Table C.2:Stakeholder consultation results cost of implementation.101 Table C.3:Stakeholder consultation results maintenance.102 Table C.4:Stakeholder consultation results applicability to tunnel environments.102 Table C.5:Three Rumble Strip PCMs description,images and efficacy.104 Table D.1:Stakeholder consultation results ease of implementation.108 Table D.2:Stakeholder consultation results cost of implementation.108 Table D.3:Stakeholder consultation results maintenance.109 Table D.4:Stakeholder consultation results applicability to tunnel environments.109 Table D.5:Four delineation marker PCMs description,images and efficacy.111 Table E.1:Stakeholder consultation results ease of implementation.114 Table E.2:Stakeholder consultation results cost of implementation.115 Table E.3 Stakeholder consultation results maintenance.115 Table E.4 Stakeholder consultation results applicability to tunnel environments.115 Table E.5:Two lighting PCMs description,images and efficacy.117 Table F.1:Stakeholder consultation results ease of implementation.120 Table F.2:Stakeholder consultation results cost of implementation.121 Table F.3:Stakeholder consultation results maintenance.121 Table F.4:Stakeholder consultation results applicability to tunnel environments.121 Table F.5:Three physical marker PCMs description,images and efficacy.123 Table G.1:Stakeholder consultation results ease of implementation.128 Table G.2:Stakeholder consultation results cost of implementation.128 Table G.3:Stakeholder consultation results maintenance.128 Table G.4:Stakeholder consultation results applicability to tunnel environments.129 Table G.5:Nine combined treatment PCMs description,images and efficacy.131 Table K.1:List of self-reported thoughts on intended purpose of painted striped wall patterns.140 Table K.2:List of self-reported thoughts on intended purpose of pacemaker lighting.141 Table K.3:List of self-reported thoughts on intended rumble strips.142 Table L.1:List of self-reported changes in driving behaviour in painted striped wall patterns treatment tunnel.144 Table L.2:List of self-reported changes in driving behaviour in Pacemaker Lighting treatment tunnel.145 Table L.3:List of self-reported changes in driving behaviour in Rumble Strips treatment tunnel.146 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page ix Figures Figure 3.1:Vive Pro Eye with eye tracker.18 Figure 3.2:Drive scenario layout(birds eye view).21 Figure 3.3:Example of the Maser and Hancock(2007)Striped Wall Pattern treatment.22 Figure 3.4.Pacemaker Lighting PCM as seen in Kato et al.(2015).23 Figure 3.5.Rumble Strips(audio tactile edge lines)specifications from Technical Direction TETD 2019/01 RMS.19.1204).24 Figure 3.6:Locations of PCM 1 and PCM 2(base layout map of SHT tunnel provided by the Sydney Harbour Tunnel Company).25 Figure 3.7:Exterior and interior views of the vehicle model used in the TRACSLab driving simulator.26 Figure 3.8:Analysis zones.33 Figure 4.1 Experimental design.63 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 1 1.Introduction1.1 Background Perceptual Countermeasures(PCM)is a term given to a class of road treatments which are intended to influence driver behaviour by altering speed perception,mental workload,risk perception and/or driver comfort(Godley,Fildes,Triggs,&Brown,1999).They are generally low-cost treatments which rely on painted markings and other forms of delineation(Gunatillake,Tziotis,Macaulay,Fildes,&Godley,2000).More recently,the impact of lighting for safety has also been investigated to assess its use as a PCM countermeasure(Kircher&Ahlstrom,2012;Wan,Du,Ran,&Wang,2015).Research has suggested that the use of these countermeasures can have significant safety benefits.Numerous studies have demonstrated that PCM treatments can be effective in reducing travel speed(Fildes&Lee,1993)in driving simulators(Godley et al.,1999)and in real world driving(Fildes et al.,2005)as well as encouraging safer decelerating manoeuvres,and safer negotiation of curves and lane-keeping behaviours(Godley et al.,1999).The use of PCM treatments,such as peripheral transverse lines and ascending guideposts treatments,have also been demonstrated to result in significant reductions in net travel speeds and safer lane positioning by motorcyclists when negotiating curves(Mulvihill,Candappa&Corben,2008).Several studies have specifically investigated the efficacy of PCM treatments in increasing safety behaviours in tunnels.Elvik,Vaa,Hoye,and Sorensen(2009)suggested that changes to lighting as a PCM treatment as well as increasing carriageway width and increasing the radius of horizontal curves could significantly reduce crashes in tunnels.Manser and Hancock(2007)also found that the use of vertical black and white lines on the walls inside a simulated tunnel significantly affected drivers choice of travel speed,and this effect was mediated by the width and spacing of the lines.Whilst there has been substantial research into the efficacy of PCM treatments in reducing speed and improving lane keeping behaviours on roadways,there has been limited research and evaluation of this treatment type to enhance safety in tunnels specifically.1.2 Project Purpose The purpose of the study is to investigate and evaluate the application of low-cost PCM treatments in tunnel environments as a means of improving driver speed behaviour and lane discipline within tunnels,thereby reducing crash risk.1.3 Project Objectives The outcomes of this project aim to enable the application of PCM treatments within tunnels that will assist to reduce the risk of crashes and the severity of crashes within tunnels.Reducing the incidence of crashes will also prevent traffic congestion and delays,and the migration of crash risk associated with traffic diversions should a crash occur within a tunnel.In addition,to better understand how the application of low-cost PCM treatments can improve driver speed behaviour and lane discipline.The project will also address a key recommendation from a previous Austroads study AP-R557-18 Measures to Reduce Crashes Adjacent to and within Tunnels(Austroads,2018)aimed at reducing crash risk and severity within tunnels.The recommendation stated:Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 2“As a means of affecting safe driver speed behaviour,improving lane discipline and safe driver headways,investigate the application of low-cost perceptual countermeasures treatments(PCT).In order to determine the potential benefits,while also detecting possible adverse unintended consequences of such treatments,it is recommended that the PCT be trialled and evaluated within a driver simulator.”1.4 Research Activities The current project involved two key research activities designed to meet its purpose and objectives.Research Activity 1 involved a systematic literature review to uncover available literature related to PCMs.The aims of Research Activity 1 were to:1.1 Understand what PCM treatments have been designed previously for use in general traffic environments and specifically in tunnels and their intended purposes(s).1.2 Determine whether these PCM treatments have been trialled/evaluated and whether they had been effective in achieving their intended purpose.1.3 Determine the advantages/disadvantages of these treatments in terms of effectiveness,ease of implementation,cost,maintenance,and applicability to tunnel environments.1.4 Recommend PCM treatments to the trialled in Research Activity 2.Research Activity 2 was an experimental study conducted in a Virtual Reality Driving Simulator which was designed to answer the following research questions:2.1 Does the application of PCM treatments have any impact on drivers speed in road tunnels?2.2 Does the application of PCM treatments have any impact on drivers lateral control in road tunnels?2.3 What are drivers opinions of the proposed PCM treatments?1.5 Structure of this Report This report documents the outcomes of Research Activities 1 and 2.The report is divided into four Chapters:Chapter 1:Introduction Chapter 2:Research Activity 1:Literature Review and Stakeholder Consultation Chapter 3:Research Activity 2:Experimental Study Chapter 4:Discussion&Conclusion.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 3 2.Research Activity 1:Literature Review and Stakeholder Consultation 2.1 Aims and Research Questions As previously outlined,Research Activity 1 was designed to:1.1 Understand what PCM treatments have been designed previously for use in general traffic environments and specifically in tunnels and their intended purposes(s).1.2 Determine whether these PCM treatments have been trialled/evaluated and whether they had been effective in achieving their intended purpose.1.3 Determine the advantages/disadvantages of these treatments in terms of effectiveness,ease of implementation,cost,maintenance,and applicability to tunnel environments.1.4 Recommend PCM treatments to the trialled in Research Activity 2.2.2 Method 2.2.1 Method for Literature Review The literature review was undertaken to examine possible suitable PCMs for use in tunnels and outline the efficacy of these PCMs(Research Aims 1.1 and 1.2).To achieve these aims the following methods were used to identify relevant literature for review:1.A search of the peer-reviewed literature using a variety of academic reference databases(primarily those related to psychology and/or engineering)available through the University of New South Wales,including Scopus,Web of Science,Knovel and Compendex.2.There were no date restrictions placed on the search.However,the search was restricted to include only English-language literature.This strategy identified both local and international peer-reviewed research from journals,as well as non-peer-reviewed research reports,conferences,theses,and government reports.3.The following search terms were used individually and in combination:“perceptual countermeasures”,“tunnel”,“design”,“psychology”,“human factors”,“evaluation”.4.A general search of Google and Google Scholar was completed utilising combinations of the above terms to acquire articles not contained within the databases.5.An ancestry approach was used whereby the reference lists of relevant documents were searched in order to obtain any missing literature not obtained through the searches.6.In order for the literature to be deemed suitable for inclusion in this review,they had to meet the following criteria:a.The treatment needed to be a perceptual countermeasure,which could be either visual,auditory,or tactile in nature.b.The study needed to examine the effects of the PCM on a measure of driving behaviour.Papers which examined the cognitive or visual effects(only)of the PCMs were not included.7.Any relevant literature that was deemed as within scope was then selected for review.All included literature was reviewed to extract key information relevant to addressing the aims of this report.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 4 2.2.2 Method for Stakeholder Consultation The stakeholder consultation was undertaken to complement the literature review activity to expose the advantages/disadvantages of these PCMs,particularly in terms of ease of implementation,cost,maintenance,and applicability to a tunnel environment(Research Aims 1.3).An online survey was created,through the Qualtrics survey platform,to enable the online assessment,on four dimensions(see below),of each of the 33 PCMs exposed by the literature review.For each PCM,participants were given:The title of the PCM.A written description of the PCM.An image of the PCM(where possible).Participants were asked to rate the PCM treatment on each of the following four dimensions,on a 7-point unipolar Likert scale,with a“Dont know”option also presented.Cost of Implementation(including product,labour,and associated costs)Low to High.Degree of Maintenance Required Low to High.Applicability to road tunnel environment Low to High.Ease of Implementation Easy to Hard.Lastly,for each PCM treatment,participants were asked“Do you have any other comments on this type of PCM treatment(e.g.,any possible adverse unintended consequences of such treatments you are aware of?)”.Responses were recorded in a free textbox.The survey was sent by the Austroads Project Manager to members of the Australian Tunnel Operators Group,members of the Austroads Tunnel Task force and various industry stakeholders(e.g.,Transurban).A total of 12 participants completed the survey in its entirety,with two participants partially completing the survey.The partially completed information was included as part of the analysis.The outputs of the stakeholder consultations were scored and documented in a series of tables for each of the dimensions explored in Section 2.3.2.2.3 Summary of Key Findings 2.3.1 Results of Literature Review and Stakeholder Consultation A total of 46 documents was identified which were then title and abstract-screened for suitability.23 out of the 46 documents were excluded through this process a total of 23 documents were reviewed in their entirety.Thirty-nine possible PCMs were identified through the literature review(See Table 2.1 below),with 33 identified as having a behavioural effect on driver speed behaviour and/or improving lane discipline.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 5 Table 2.1:39 PCMs identified through the literature review research activity#PCM Treatment Category 1 Transverse lines Painted Road Markings(Appendix A)2 Peripheral transverse lines 3 Herringbone peripheral transverse lines(forward and backwards)4 Half Wundt transverse lines 5 Optical Speed Bars 6 Optical Circles 7 Perceptual lane narrowing 8 Peripheral hatching 9 Chequered edge lines 10 Inside lane hatching 11 Central median hatching 12 Perceptual centreline widening white gravel 13 Combs 14 Dragons teeth 15 Tunnel art Wall Markings(Appendix B)16 Sidewall colour 17 Sidewall arrow markings by different colour 18 Sidewall arrow markings by different temporal frequencies 19 Sidewall striped patterns 20 Sidewall texture 21 Edgeline Profile Lane Marking(audio-visual lane-marking)Rumble Strips(Appendix C)22 Centreline Rumble Strips 23 Transverse Rumble strips 24 Guideposts with ascending heights Delineation Markers(Appendix D)25 Hazard marker posts 26 Post delineators 27 Chevrons 28 Light Emitting Diode(LED)Lighting Lighting(Appendix E)29 Luminance Levels 30 Sealed shoulder Physical Markers(Appendix F)31 Build outs 32 Traffic Cones 33 Rumble strips plus peripheral transverse bars Combined Treatments(Appendix G)34 Rumble strips plus dragons teeth 35 Rumble strips plus coloured intersection 36 Rumble strips plus painted median 37 Rumble strips plus raised median 38 Drenthe province treatment 39 Combs plus chevrons The full results of the literature review and findings of the stakeholder consultations are documented in Appendices A through G of this report.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 6 2.3.2 Candidate PCM Treatment Options for Research Activity 2 Based on all the information obtained from both the Literature Review and the Stakeholder Consultation,several options for potential PCM treatments to be trialled in a tunnel environment were identified.These candidate PCM treatments were chosen based on a combination of their evidence-based efficacy in managing driver speed and improving lane positioning,and their suitability and applicability in a tunnel environment based on information obtained from stakeholders.Very few studies reviewed as part of this study investigated and/or demonstrated the actual safety benefits of PCMs in reducing crashes in tunnel environments.Therefore,the candidate PCM treatments were chosen based on improvements in speed and lane position,and crashes where possible.Some of the PCM treatments,whilst being found to be effective in the literature,were not recommended as candidate treatments due to lack of suitability within a tunnel.These include PCMs such as intersection colour and raised medians,which are designed for intersections and not translatable to a tunnel environment;as well as guideposts,which could not be implemented in a tunnel due to a lack of space.Several PCM treatments for improving speed and lane discipline considered potentially suitable to be evaluated in the simulator study are presented below.The three PCM treatments finally chosen for evaluation are identified in Section 2.3.5 below.Images and pictures of all the PCMs are contained in Appendices A to G of this report.2.3.3 Speed In a review of the PCMs that were evaluated to improve speed,the following seven treatments were identified as potential options for evaluation in a simulator:Table 2.2:PCM options for speed maintenance evaluation in a simulator#PCM Image/Figure of the PCM Provided by Study 1 Sidewall striped patterns.(Manser&Hancock 2007)Source:Manser&Hancock(2007).Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 7#PCM Image/Figure of the PCM Provided by Study 2 Sidewall red arrows at a frequency of between 4.45 and 7.01Hz.(Wan et al.2016)Source:Wan et al.(2016).3 Optical speed circles.(Hussain et al.2018)Source:Hussain et al.(2018).4 Peripheral transverse lines.(Fidles et al.2005,Godley et al.1999,Mulvihill et al.2008,Macaulay et al.2002,Calvi 2018)Source:Godley et al.(1999).Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 8#PCM Image/Figure of the PCM Provided by Study 5 Rumble Strips plus dragons teeth.(Montella et al.2011)Source:Montella et al.(2011).6 Perceptual lane narrowing.(Godley et al.2004 Rosey et al.2009)Source:Godley et al.(2004).7 Pacemaker lighting.(Kato et al.2015)Source:Kato et al.(2015).Pacemaker Light Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 9 Sidewall striped patterns A single simulator study by Manser and Hancock(2007)found that when drivers were exposed to wide to thin stripes on a tunnel wall,they reduced their travelling speed.This effect was further attenuated when the stripes on the wall had texture added to them.This finding provides preliminary evidence of the efficacy of installing wide to thin stripes along a tunnel wall in reducing speed.This finding has yet to be replicated.The ratings from the stakeholders for this PCM are provided below in Table 2.3,for each of the dimensions probed in the survey.Across the ratings,the stakeholders indicated that this was a mid-range treatment with respect to modifying speed.The cost and maintenance associated with this treatment might be high depending on how it is implemented.It was deemed suitable for a tunnel environment.Additional comments from the stakeholders suggested that considerations would need to be made regarding the painting and cleaning of the tunnel walls with this treatment.Table 2.3:Sidewall striped patterns summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 3 0 2.4 2.8 3.6 2.9 Sidewall red arrows at a frequency of between 4.45 and 7.01 Hz A single simulator study by Wan et al.(2016)found that red arrows presented at a temporal frequency of between 4.45 and 7.01Hz were effective at causing drivers to overestimate their speed whilst travelling through a tunnel.This has yet to be tested to determine whether it modifies driver behaviour or simply their perception.Further research is therefore required to determine whether this combination of arrow features results in drivers travelling at slower speeds in a tunnel environment.The ratings from the stakeholders for this PCM are provided below in Table 2.4.Across the ratings,the stakeholders indicated that this form of treatment is a mid-range treatment but would be highly suitable for a tunnel environment.The cost and maintenance of this treatment,according to the stakeholders,could be high due to issues with painting and the cleaning of tunnel walls.Furthermore,stakeholders raised potential issues around the impact this sort of treatment would have on tunnel luminance due to reducing the reflective surface of the tunnel walls by adding in colour.Therefore,this sort of treatment would need to be investigated in conjunction with luminance to ensure it does not impact on overall visibility in a tunnel.Table 2.4:Sidewall red arrows at a frequency of between 4.45 and 7.01 Hz summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 2 0 2.8 2.8 4.3 3.1 Optical speed circles A simulator study by Hussain et al.(2018)found that optical speed circles were effective at reducing speed on the approach to an intersection.This finding has yet to be tested on a road without an intersection and has not yet been trialled in a tunnel environment.The ratings from the stakeholders for this PCM are provided below in Table 2.5.Across the ratings,the stakeholders indicated that this would be a mid-range treatment,overall.The efficacy of this PCM in modifying speed was unclear for stakeholders with some questions raised over applicability to a tunnel environment;therefore,the most suitable display would need to be investigated.The maintenance and cost of implementation of this treatment were rated average on the rating scale,but comments suggested that the paint associated with this form of roadway marking and constant maintenance to ensure the visibility of the circles would be an important factor to consider.The stakeholders suggested investigating the impact these circles would have on drivers in terms of confusion and sensory overload.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 10 Table 2.5:Optical speed circles summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 2-3.7 3.4 2.7 3.4 Peripheral transverse lines Peripheral transverse lines have consistently been demonstrated to result in small but significant reductions in speed in both simulator and on-road studies.The efficacy of this treatment in improving speed in a tunnel environment has not yet been tested.The ratings from the stakeholders for this PCM are provided below in Table 2.6.Across the ratings,the stakeholders indicated that this would be a suitable treatment for tunnels,receiving the second highest overall rating.The cost,maintenance and ease of implementation ratings are above average however their efficacy at reducing speed and improving lane position was less certain.The comments from the stakeholders suggested that they could introduce confusion to drivers and interfere with other lane markings.The effect on drivers would therefore need to be investigated.Table 2.6:Peripheral transverse lines summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 3 2 4.1 4.1 3.9 4.1 Rumble strips plus dragons teeth A simulator study by Montella et al.(2011)tested a variety of combined PCM treatments for their efficacy at reducing speed and lateral position deviation on approach to an intersection.They found the combination of Rumble Strips and dragons teeth resulted in a significant decrease in speed on approach to an intersection and recommended this treatment as one of the most effective they trialled.This combined treatment has not yet been tested in a tunnel environment.It is important to note that this treatment also has demonstrated efficacy in improving lane position.The ratings from the stakeholders for this PCM are provided below in Table 2.7.Across the ratings,the stakeholders indicated that this was a suitable treatment with average effectiveness ratings for both speed and lane position.The cost and maintenance required were rated as average.The ease of implementation of this treatment was rated as high but applicability to a tunnel was more uncertain.There were some concerns raised over maintenance costs due to high wear of the paint markings for the Dragons teeth component of the treatment.Table 2.7:Rumble strips plus dragons teeth summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 3 3 3.2 3.5 2.3 3.9 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 11 Perceptual lane narrowing There were mixed findings about the efficacy of narrowing the lane widths at reducing speeds.There were key methodological differences between the studies with one study(Rosey et al.2009)finding that it was not effective at a lane width of 3m,but another(Godley et al.2004)finding that when lane width was reduced to 2.5m,there were reductions in speed.The recommendation by Godley et al.was that lanes of less than 3m wide were effective at reducing speed.This suggests that a width of less than 3m might be effective at reducing speeds but is yet to be tested in a tunnel environment.It is important to note that this treatment also has demonstrated efficacy at improving lane position.The ratings from the stakeholders for this PCM are provided below in Table 2.8.Across the ratings,the stakeholders indicated that this was the best of the proposed PCM options.Concerns were raised over the initial costs involved in order to remove ghost markings;but once implemented the maintenance and costs were rated as reasonable.Some concerns were raised over the effect the space reduction might have on feelings of comfort and anxiety by drivers which have been suggested to investigate.Table 2.8:Perceptual lane narrowing summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 2 3 4.3 4.8 3.1 4.1 Pacemaker lighting The Pacemaker Lighting treatment was identified by a member of the Austroads Tunnel Task Force as an emerging and innovative PCM treatment type.Pacemaker Lighting involve the use of LED lights installed on the side walls of tunnels that flash in a sequence in the direction of travel of vehicles.They operate on the principle of“phototaxis(the movement with directionality toward the photic stimulation)”and were implemented in a tunnel in Tokyo,Japan,as a method to support recovery of speed during congestion(Kato,Nakagawa,Hashimoto,&Inaba,2015).In a 5-month evaluation,Kato et al.(2015)found that the Pacemaker Lightings were able to reduce congestion at the treatment sites by 60%,and the congestion of the whole route reduced by 20%.The reductions in congestion were attributed to the Pacemaker Lights facilitating better speed maintenance within the tunnels.2.3.4 Lane Position In a review of the PCMs that were evaluated to improve lane keeping,the following five treatments were identified as potential options for trial in a simulator:Table 2.9:PCM options for lane position evaluation in a simulator#PCM Image/Figure of the PCM Provided by Study 1 Perceptual lane narrowing.(Godley et al.2004 Rosey et al.2009)Source:Godley et al.(2004).Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 12#PCM Image/Figure of the PCM Provided by Study 2 Centreline Rumble Strips.(Auberlet et at.2010,Rosey et al.2008,Auberlet et al.2012)Source:Auberlet et at.(2010).3 Rumble strips plus dragons teeth.(Montella et al.2011)Source:Montella et al.(2011).Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 13#PCM Image/Figure of the PCM Provided by Study 4 LED Lighting (Domenichini et al.2017)Source:Domenichini et al.(2017).5 Edgeline Rumble Strips (Hatfield et al.2008)Source:Hatfield et al.(2008)Perceptual Lane Narrowing Both the simulator study by Godley et al.(2004)and simulator and on-road studies by Rosey et al.(2009)found significant improvements in lateral positioning when the width of the lane was narrowed.Drivers were found to position themselves better in the centre of their lane.This improvement in lateral position was found for lanes of 3m wide and 2.5m wide.The efficacy of this treatment has been tested both in simulators and on-road but not in a tunnel environment.This treatment also has demonstrated efficacy at improving speed.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 14 The ratings from the stakeholders for this PCM are provided below in Table 2.10.As mentioned above,across the ratings,the stakeholders indicated that this was the best of the proposed PCM options.Concerns were raised over the initial costs involved in order to remove ghost markings;but once implemented the maintenance and costs were rated as reasonable.Some concerns were raised over the effect the space reduction might have on feelings of comfort and anxiety by drivers which have been suggested to be investigated.Table 2.10:Perceptual lane narrowing summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 2 3 4.3 4.8 3.1 4.1 Centreline Rumble Strips Three studies have found that Centreline Rumble Strips improve the positioning of drivers forcing them to drive closer to the middle of their lane(Rosey et al.2008;Auberlet et al.2010;Auberlet et al.2012).This improvement has been demonstrated to be equivalent to a tyre width.A review by Hatfield et al.(2008)found that Centreline Rumble Strips reduced crashes by 25%,with the inference being that Centreline Rumble Strips reduce crashes by improving lane keeping.This improvement in lane position has been found in both simulators and on-road but has not been tested in a tunnel environment.The ratings from the stakeholders for this PCM are provided below in Table 2.11.Across the ratings,the stakeholders indicated that this treatment would be effective at modifying lane position,but concerns were raised over applicability to a tunnel environment.The most common recurring concern was associated with the noise the Rumble Strips would make and the potential for this to have an echo effect in a tunnel and confuse drivers.There were also concerns raised over the impact centreline strips would have on motorcyclists when changing lanes and for stopping distances.These effects would need to be investigated.Table 2.11:Centreline Rumble Strips summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 0 3 2.8 3.2 3.4 3.1 Rumble Strips Plus Dragons Teeth The combination of Rumble Strips and Dragons teeth was found to improve both speed and lane keeping.Montella et al.(2011)found slightly better lateral position of a vehicle on approach to an intersection with this combined treatment.This treatment has not yet been trialled in a tunnel environment.This treatment also has demonstrated efficacy at improving speed.The ratings from the stakeholders for this PCM are provided below in Table 2.12.As mentioned above,across the ratings,the stakeholders indicated that this was a suitable treatment with average effectiveness ratings for both speed and lane position.The cost and maintenance required were rated as average.The ease of implementation of this treatment was rated as high but applicability to a tunnel was more uncertain.There were some concerns raised over maintenance costs due to high wear of the paint markings for the Dragons teeth component of the treatment.Table 2.12:Rumble Strips plus dragons teeth summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 3 3 3.2 3.5 2.3 3.9 Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 15 LED Lighting LED lighting was found to have small benefits at improving lane keeping and speed on approach to,and exits from,tunnels.A simulator study by Domenichini et al.(2017)found that when in a tunnel with LED lighting drivers responded earlier to hazards and acted in a more efficient way.This suggests that LED lighting has demonstrated small but significant safety benefits across the board.The ratings from the stakeholders for this PCM are provided below in Table 2.13.Across the ratings,the stakeholders indicated that,whilst LED lighting is highly applicable to a tunnel environment,the implementation will be difficult,and the costs associated with this are high.Stakeholders noted that in some tunnels it is not possible to retrofit LED lighting systems but that they should be considered for all new tunnels.Table 2.13:LED Lighting summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 3 2 1.8 3.5 5.6 2.1 Edgeline Rumble Strips Edgeline Rumble Strips have not been examined in relation to lane positioning but a review by Hatfield et al.(2008)found that they reduce off-road crashes by approximately 22%.They were also found to not result in an increase in head-on crashes in on-road trials.The inference from this review and on-road trial is that the reduction in crashes is due to the Edgeline Rumble Strips is a result of improved lane keeping.The efficacy of this treatment in improving lane positioning and crashes has not been tested in a tunnel environment.The ratings from the stakeholders for this PCM are provided below in Table 2.14.Across the ratings,the stakeholders indicated that this was applicable to a tunnel environment but there was uncertainty over its efficacy in improving driver behaviours of speed and lane position.Again,concerns were raised over noise in a tunnel environment of the Rumble Strips and the potential implications from a driver hitting the strip and then overcorrecting.These factors would therefore need to be investigated.Table 2.14:Edgeline Rumble Strips summary table Efficacy at Modifying Speed Efficacy at Modifying Lane Position Cost Maintenance Applicability to Tunnel Ease of Implementation 0 0 2.8 3.3 4.7 3.6 2.3.5 Recommended PCM Treatments for Research Activity 2.Based on the outputs of the literature review and stakeholder consultations outlined above,the research team recommended that the following three PCM treatments be selected for Research Activity 2.1.Sidewall Striped Pattern(or Striped Wall Patterns):This treatment,whilst being rated a mid-range in the rating system,has demonstrated efficacy in improving speed within a tunnel environment.2.Rumble Strips(Edgeline and Centreline):This combination of treatment was considered to have high applicability to tunnel environments and had been demonstrated to result in improvements for lane keeping.3.Pacemaker Lighting:It was recommended that by the Austroads Tunnel Task force,based on emerging evidence of the efficacy of this treatment,that Pacemaker Lighting be trialled to further gather empirical data about its efficacy in tunnel environments.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 16 3.Research Activity 2:Experimental Study 3.1 Aims and Research Questions As outlined previously,Research Activity 2 aimed to answer the following research questions:2.1 Does the application of PCM treatments have any impact on drivers speed in road tunnels?2.2 Does the application of PCM treatments have any impact on drivers lateral control in road tunnels?2.3 What are drivers opinions of the proposed PCM treatments?3.2 Method 3.2.1 Participants One hundred and two participants took part in the research.Most were aged 18-24 years old,with 64%male.As seen in Table 3.1,the average participant had completed or was currently completing an undergraduate degree(59%combined),was studying full time(40%)and had a full drivers licence(63%).Amongst the working participants,most were employed as a Professional(25%).As seen in Table 3.2,on average,participants had been driving for 9.18 years and drove for 6.84 hours per week.Research ethics approval to conduct the study was obtained from UNSW Human Research Ethics Advisory Panel H:Science/Engineering(HREAP)in April 2020(HC200153).Furthermore,a COVID-19 mitigation strategy was developed and implemented to mitigate any risk to participants and researchers during testing.This strategy was also approved by the Ethics Panel in November 2020.The study took approximately 1.5 hours to complete,and each participant was paid$60 as reimbursement for their time.Table 3.1:Participant demographics Demographic Characteristic n%of Sample Age Bracket 18-24 years old 58 57%-29 years old 10 100-44 years old 24 23E-70 years old 9 9%Unspecified 1 1%Gender Female 37 36%Male 65 64ucation Doctoral degree 8 8%High school certificate 10 10%Masters degree 16 16%TAFE certificate,diploma or equivalent 7 7%Undergraduate degree 28 27%Completing undergraduate studies 33 32%Licence Class Full Licence/Gold Licence 64 63%Provisional 1 Licence/Red Ps 8 8%Provisional 2 Licence/Green Ps 16 16%International driving permit 13 13%Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 17 Demographic Characteristic n%of Sample Employment Status*STUDENT:Full time 56 40%STUDENT:Part time 8 6%WORK:Casual contract 33 23%WORK:Part time contract 15 11%WORK:Full time contract 27 19%Not currently working or studying 2 1%Usual Occupation Managers 3 3%Professionals 25 25%Technicians and trades workers 1 1%Clerical and administrative workers 10 10%Machinery operators and drivers 2 2%Labourer 2 2%Student 59 58%Postcode Region Central&Northern Sydney 61 60%New England 1 1%Southern&South Western Sydney 32 31%Western Sydney&Blue Mountains 8 8%*NB:Some participants gave more than 1 responses.Table 3.2:Self-reported driving behaviour Questions Mean SD Approximately how long since you have been driving unaccompanied(years)?9.18 9.96 How many hours do you drive/ride each week(hours)?6.84 5.14 3.3 Design The study was designed as a within-subjects study,with each of the three treatment conditions being assessed independently:PCM Treatment 1(Striped Wall Pattern),PCM Treatment 2(Pacemaker Lighting)and PCM Treatment 3(Rumble Strips aka Audio-Tactile Lane Markings).The within-subjects variable was Treatment(with two levels:Treated Tunnel vs Baseline Tunnel).That is,the participant was exposed to only one PCM type,and drove in two tunnel drives one baseline tunnel drive and one treated tunnel drive(counterbalanced)See Table 3.3.Table 3.3:Study design for Research Activity 2 Group Drive A Drive B PCM Treatment 1(Striped Wall Pattern)Baseline tunnel Treated tunnel PCM Treatment 2(Pacemaker Lighting)Baseline tunnel Treated tunnel PCM Treatment 3(Rumble Strips)Baseline tunnel Treated tunnel Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 18 3.4 Material&Apparatus 3.4.1 Hardware TRACSLab Driving Simulator Hardware Data collection was conducted in a Virtual Reality(VR)Driving Simulator located at the UNSW Travel Choice Simulation Laboratory(TRACSLab).The TRACSLab driving simulator used in this study consisted of the following hardware components:A steering wheelbase system with force-feedback brushless motor and 16-bit rotation sensor.A real 380mm car steering wheel is fitted to improve fidelity.A pressure-sensitive pedal set(accelerator,brake,and optional clutch)with adjustable hydraulic damper and load cell brake sensor.Accelerator input is captured by a 12-bit resolution magnetic Hall sensor.A full-size car seat with adjustable recline and forward/backward slide.A gearbox shifter with selectable automatic(used in this study)and manual modes.A vibration motor mounted on the simulator frame for simulation of Rumble Strips vibration.Virtual reality(VR)headset TRACSLabs Vive Pro Eye is a state-of-the-art set of virtual reality goggles with eye tracking capability.It has dual high resolution(2880 x 1600 pixels)OLED screens operating at 90 Hz with a 3-dimensional(stereoscopic)view and equipped with gyroscope,proximity,3-D position,and accelerometer sensors.Additionally,it has a precision eye tracker which can track participants eye movements at 120 Hz with high accuracy(1.10-degree resolution)and can also be fitted to track subjects gaze and area of interest for analysis.The virtual reality display fit well with the objective of this study as it provided a more immersive driving experience with an all-encompassing(360-degree horizontally and 360-degree vertically)display compared to traditional curved screen projections used in most driving simulators.In this set-up,participants were able to view 360-degree around them by rotating their head.Figure 3.1:Vive Pro Eye with eye tracker Laptop and Desktop Computers A high-performance desktop CPU was utilised to run the simulator study.The specifications of this machine is described below:Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 19 Table 3.4:Simulator CPU specification Component Description Processor Quad-core Intel i7 4GHz 8 MB cache Graphics accelerator NVIDIA GeForce RTX2080 Super 8GB GDDR6 Memory 2 x 16GB DDR4-2132(1066MHz)Storage 1 TB M.2 NVMe SSD Operating system Windows 10 Pro 64-bit Display Vive Pro Eye VR display connected through Display Port connection Full-HD 60Hz monitor connected through HDMI connection In addition,a laptop,equipped with an external 23-inch-widescreen monitor,was used for completing participant questionnaires.The laptop specification is listed in the following table.Table 3.5:Questionnaire laptop specification Component Description Processor Quad-core Intel i5 1.6GHz 6 MB cache Graphics accelerator Intel UHD Graphics 620 Memory 16GB DDR4 2400MHz Storage 512 GB SSD Operating system Windows 10 Pro 64-bit Display Full-HD 60Hz monitor connected through HDMI connection 3.4.2 Software TRACSLab Driving Simulator Software A custom-made simulator platform,developed in-house by UNSW researchers,was utilised in this project.The open-source nature of the platform allowed for new functions to be programmed and added to suit the project requirements.The platform also allowed for high frequency and accurate data logging of participants driving data,including speed,position,acceleration and deceleration rate,steering,distance from other traffic vehicles,and other variables.3D Tunnel Model and Scenario Development Four simulated tunnel drives were developed:Baseline drive,PCM Treatment 1 drive(Painted Striped Wall Pattern),PCM Treatment 2 drive(Pacemaker Lighting),and PCM Treatment 3 drive(Rumble Strips).The Baseline Drive was modelled after the Sydney Harbour Tunnel and the remaining three drives were treated versions of the Baseline Drive.The simulated tunnel sections of the driving routes were modelled with a high degree of precision,particularly at the entrance portals,interior tunnel,and exit portals.Vertical and horizontal alignments were replicated based on technical drawings and specifications provided by the Sydney Harbour Tunnel operator.The speed limit in the lead up to and within the tunnel environments was 80km/h and was signposted with standard regulatory signage,overhead LED signs,and painted road speed signs.Generic NSW highway environments were used for the open road sections(before the tunnel entrance portal,between northbound and southbound SHT tunnel models,and after the tunnel exit portal),as the main objectives of this study focus on the interior tunnel environment.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 20 Tunnel features were 3D-modelled in accordance with the project brief.Lane width and panel dimensions were modelled from technical specifications and from photographs taken in the real SHT tunnel.Textures were developed from a combination of site photos of tunnel elements in addition to computer aided design based on design specifications provided by the SHT operator.On 30th January 2021,the UNSW team invited Austroads representatives to engage in a hands-on demonstration of the simulator model.During the demonstration,Sydney Harbour Tunnel Manager,Bob Allen,one of the Austroads representatives,had first-hand driving experience in the TRACSLab VR simulator.Following the demonstration,Bob gave his evaluation of the drive.He agreed that the virtual SHT environment was a good representation of the real SHT environment.Table 3.6:Simulator drives Simulator Drives Image of Features Baseline Tunnel:Model of the Sydney Harbour Tunnel(with breakdown bays removed)PCM Treatment 1:Painted Striped Wall Patterns(at two specific treatment locations within each tunnel)Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 21 Simulator Drives Image of Features PCM Treatment 2:Pacemaker Lighting(at two specific treatment locations within each tunnel)PCM Treatment 3:Rumble Strips(edge lines and lane lines)throughout the entire length of the tunnels.To streamline the study,a composite driving route,combining northbound and southbound SHT tunnels with an open road section in the middle,was developed;the driving route layout is illustrated in Figure 3.2.Figure 3.2:Drive scenario layout(birds eye view)The reasons for having this route arrangement are as follows:Each direction of the SHT tunnel was relatively short(2.5 km long),being able to be driven in under 2 minutes at 80 km/h.Given that participants would need some adaptation time to adjust their driving behaviour in response to the PCM treatments,the decision was made to combine the northbound and southbound SHT tunnels and including a short section of highway in between the two tunnels.The same PCM treatments were applied to both the northbound and southbound tunnels.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 22 Given the objective of this study was not to investigate the directional effect of the Sydney Harbour Tunnel,no counterbalancing was implemented;all participants completed the Northbound and then the Southbound tunnel.PCM 1:Striped Wall Pattern The Painted Striped Wall Pattern was trialled as a PCM treatment in this project.The pattern was modelled after Manser and Hancocks(2007)study,in which a painted Striped Wall PCM was applied in the form of vertical black and white segments(illustrated in).Model specifications are described below:Vertical stripes from floor to ceiling.Minimum width of 7.62 m increasing linearly to 30.48 m.Thin-stripes increasing gradually to wide-stripes,giving drivers the impression that they are driving slower and thus encouraging them to drive faster.Alternate darker(e.g.,dark grey)and light colour(e.g.,white).Treatments were applied at critical points.Figure 3.3:Example of the Maser and Hancock(2007)Striped Wall Pattern treatment PCM 2:Pacemaker Lighting(PML)The Pacemaker Lighting was modelled to replicate the specifications cited in Kato et al.(2015)study(see example in Figure 3-4):Blue lights.Installed on both sides of the tunnel walls.Installed at intervals of 10 m at around 1.0 m height from the road surface.LED lights up interval of 40 m(3 deactivated lights between 2 activated lights).The Pacemaker Lighting was applied over several critical segments in the simulated tunnel rather than through the entire tunnel.This was agreed to by the UNSW and Austroads research teams in the planning stage of this project in view of the main objective of this project which was to test low-cost perceptual counter measure(PCM)treatments for rapid deployment to treat specific critical zones in the tunnel.Direction of travel Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 23 Figure 3.4.Pacemaker Lighting PCM as seen in Kato et al.(2015).Source:Kato et al.(2015).PCM 2:Rumble Strips Rumble Strips(also known as Audio-Tactile Lane Markings;ATLM)were used as the third PCM treatment in this study.Rumble Strips consist of raised ribs at regular intervals which provides a noise(audio)and vibratory(tactile)warning to road users who stray from their driving lane.The Rumble Strips were created based on the standard specification in Roads and Maritime Services(RMS)Technical Direction TETD 2019/01 RMS.19.1204(for edge lines)and RMS Delineation guide Part 5 Section 5.2.6(for lane lines).Detailed specifications for the edge lines and lane lines are as follows:Installed on edge lines and lane lines along the whole tunnel length.ATML dimensions:10 mm thickness,60 mm length,25 mm separation distance,150 mm width.The audio-tactile raised ribs were installed on top of edge and lane lines with white colour.This follows the specification in the RMS document which permits the installation of raised ribs on top of an edge line(without any offset).The dimensions are illustrated in.Pacemaker Light Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 24 Figure 3.5.Rumble Strips(audio tactile edge lines)specifications from Technical Direction TETD 2019/01 RMS.19.1204).Source:TETD 2019/01 RMS.19.1204 Locations of PCM Treatments Treatment locations for PCM 1(Striped Wall Pattern)and PCM 2(Pacemaker Lighting)were discussed and agreed with the Austroads PM were as follows:Zone 1:500 m length.Beginning just before the significant downgrade section near the northbound tunnel entrance(approximately 100 m after northbound tunnel entrance).Zone 3:500 m length.Beginning around 150 m before the northbound tunnel breakdown bay.Zone 7:500 m length.Beginning around 300 m before the first right bend of the southbound tunnel.The pattern continued at the bend.Zone 9:Around 400 m length.Beginning just after the southbound breakdown bay until the end of the southbound tunnel.PCM 3(Rumble Strips)was installed along the whole tunnel length.NB:remainder of the zones used for the analysis are described in Table 3.9.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 25 Figure 3.6:Locations of PCM 1 and PCM 2(base layout map of SHT tunnel provided by the Sydney Harbour Tunnel Company).Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 26 Simulator Vehicle Model The vehicle model used as the participants vehicle was an interior and exterior 3D model based on an automatic,right-hand drive,2018 Toyota RAV4.A digital speedometer was programmed into the vehicle instrument cluster.This vehicle model was chosen because it is a common vehicle used in NSW and has a sufficiently large enough windscreen and side windows to allow participants to fully view and appreciate the design features in the simulated tunnel.Figure 3.7:Exterior and interior views of the vehicle model used in the TRACSLab driving simulator Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 27 Traffic Composition and Volume Light traffic,composed of a randomised selection of sedan and SUV models commonly found in NSW,were programmed in all simulator scenarios in this study.Light traffic was implemented so that participants could choose their own(free)driving speed without being impeded by any vehicle ahead;but whilst adhering to the posted speed limit.A truck was also programmed to drive at a sufficient distance behind the subject vehicle to avoid obstructing the participants field of view while still reflecting the heavy vehicle presence in traffic composition of the real SHT traffic environment.3.4.3 Questionnaires Participants completed several questionnaires throughout the study.All the questionnaires were developed and administered through the Qualtrics online survey platform.Simulator Sickness Questionnaire Participants completed a simulator sickness questionnaire following the practice drive and all test drives;to identify the occurrence of any simulator sickness symptoms.Simulator sickness is important to identify and mitigate,not only from a research ethics perspective,but because it can cause behavioural changes in participant performance and compromise the validity of driving performance data.Data from participants who experience significant simulator sickness during testing were excluded from data analysis.Appropriate risk mitigation strategies to minimise the occurrence and severity of simulator sickness were implemented,including giving participants plenty of breaks between drives and offering them water and dry biscuits.See Appendix H for the complete simulator sickness questionnaire.Drive Questionnaire The Drive Questionnaire was administered via the Qualtrics platform following each drive and contained a series of self-report subjective questions about the simulated tunnel drive that they completed.The questionnaire consisted of three sections:Driver Perceptions,Feelings/States and Driving Performance.Each question was answered on a 7-point Likert scale from Not at all(1)to Very(7).See Appendix I for the complete drive questionnaire.Post Study Questionnaire At the conclusion of the tunnel drive,participants completed a Post Study Questionnaire.The questionnaire captured several dimensions including participants interpretation of the design intent of the design treatments and whether participants felt the treatment changed their behaviour.Participants also provided relevant demographic details,including age range,gender,education,occupation,and licence type etc.See Appendix J for the complete questionnaire.3.4.4 Procedure The procedure for the study was as follows:Arrival and Participant Consent forms Upon arrival at the TRACSLab simulation facility,participants were briefed on the study,read a Participant Information Statement(PIS),and completed a Consent Form to participate in the study.Once they completed this,they were given a brief overview of the study procedure.The participant was then randomly allocated to one of the three counterbalancing groups.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 28 Calibration in Driving Simulator and of Eye Tracker Participants were then directed to the TRACSLab driving simulator and introduced to the basic operation and features of the simulator.The car was configured as an automatic transmission vehicle with an accelerator and brake pedal,and a steering wheel.There were no other inputs,including no indicators.The hardware set-up(seat position,steering wheel,camera,display,etc)was then adjusted and calibrated to suit each individual participants attributes.Following this,the participants were fitted with the virtual reality headset and an eye tracking calibration was performed to ensure the system could accurately detect the participants eye gaze and movements.Practice Drive Participants then took part in a short practice drive in a generic road environment.The purpose of the practice drive was to let participants have hands-on driving experience and adapt to the vehicular control of the simulator.The practice scenario was not conducted in a tunnel environment,but instead on an open roadway with no traffic.The researchers gave each participant a series of tasks to completed(e.g.,accelerate up to 60km/h and maintain that speed),to enable them to get a feel for the simulators dynamics.The secondary purpose of the practice drive was to determine whether participants felt any simulator sickness in the VR simulator.Upon completion of the practice drive,participants completed the Simulator Sickness Questionnaire on a computer to ensure that they were not exhibiting any significant symptoms of simulator sickness.Real Test Drives Once participants were sufficiently familiar with the simulator and were assessed as not experiencing any significant symptoms of simulator sickness,they took part in a series of two 10-minute drives in the simulated tunnel environment.Participants were specifically instructed to:Drive as they normally would in the real world.Drive in a safe manner and maintain a safe distance from vehicle ahead.Follow NSW traffic rules including adhering to the posted speed limits.Keep to the leftmost lane,except when overtaking other vehicles.Return to the leftmost lane at the earliest safe opportunity after overtaking.Participants then proceeded to complete the first Tunnel drive(either baseline or treated tunnel scenario depending on the counterbalancing schedule to which they had been randomly assigned)and their data were recorded by the simulator software.On completion of the first simulator drive,participants were asked to exit the simulator and complete the Simulator Sickness Questionnaire followed by the Drive Questionnaire,responding based on the tunnel drive they had just completed.Subsequently,participants continued with the second test drive and had their drive data recorded.This is followed by a Simulator Sickness Questionnaire and a Drive Questionnaire.Post Study Questionnaire and Debrief At the end of the Drive Questionnaire for the last drive,participants completed the Post Study Questionnaire.On completion of the study,participants were de-briefed about the project and its aims,thanked and reimbursed for their participation with a cash payment;and signed an acknowledgement receipt of payment received.In addition,all participants signed an acknowledgement of wellness,declaring that they did not have any significant symptoms of simulator sickness and were feeling well enough to leave the study.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 29 3.5 Results 3.5.1 Participant Demographics As previously mentioned,a total of 102 participants took part in the study.As seen in Table 3.7,the typical participant predominantly held a Car licence.Fifteen percent held a motorcycle licence as well,1%were licenced to drive car and truck,and 2%had a car,motorcycle,and truck licence.Almost all participants(97%)reported spending most time driving in tunnel environments in a car and mainly for private purposes(83%).The tunnels which were most often driven through by participants were the Sydney Harbour Tunnel,the Eastern Distributor Tunnel,and Airport Tunnel on General Holmes Drive,and the M5 East Tunnel;with participants driving through these tunnels around 1-2 times a month.A small number(5%)of participants had been involved in an incident(including breakdowns)in a tunnel but none of them had a crash with another vehicle in a tunnel in which they were the driver.In terms of factors that may have affected participants driving performance,most of them(93%)did not consume any stimulant(e.g.,coffee)that is greater than their usual intake in the last 24 hours prior to the experiment.On average the participants had 7 hours(SD=1.08)of sleep the night before their experiment which was slightly less than their typical rest duration of 7.2 hours(SD=0.74).Table 3.7:Self-reported tunnel driving behaviour Questions and Responses Count Percent Vehicle type(s)are you currently licenced to drive Car 84 82r and motorcycle 15 15r and truck 1 1r,motorcycle,and truck 2 2%Which of the following types of vehicles do you spend the most time driving/riding in a tunnel Car/SUV 99 97%Motorcycle/scooter 3 3%Which of the following tunnels do you drive through most often?Times/month?Airport Tunnel on General Holmes Drive(Sydney)44 2.3 Cross City Tunnel(Sydney)42 1.0 Eastern Distributor Tunnel(Sydney)49 2.0 Lane Cove Tunnel(Sydney)36 1.5 M5 East Tunnel(Sydney)44 1.5 Sydney Harbour Tunnel(Sydney)60 2.3 NorthConnex Tunnel(Sydney)15 0.2 WestConnex(Sydney)27 0.7 Other 4 0.3 Drive through tunnels mainly for business or private purposes?Mainly Business purposes 6 6%Equally for Private and Business purposes 11 11%Mainly Private purposes 85 83%Have you ever been involved in an incident(including breakdowns)in a tunnel No 97 95%Yes 5 5%Have you ever had a crash in a tunnel with another vehicle in which you were the driver?No 102 100%Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 30 Table 3.8:Factors that may have affected performance.Questions and Responses Count Percent Have you had an amount of any stimulant(e.g.,coffee)that is greater than your usual intake in the last 24 hours No 95 93%Yes 7 7%Approximately how many hours do you sleep on average?How many hours did you sleep for last night?Standard deviation On Average 7.20 0.74 Last Night 7.00 1.08 3.5.2 Analysis of Drive Data Behavioural data from the driving simulator were analysed to determine to what extent the presence of Perceptual Counter Measures in the simulated tunnel impacted drivers behaviour compared to the baseline tunnel without any PCM treatments.Six key driver behaviour variables were assessed:Mean speed.Standard Deviation(SD)of speed.Mean acceleration.Standard Deviation(SD)of acceleration.Mean lane position.Standard Deviation(SD)of lane position.For analysis purposes,the simulated tunnels were sectioned into 10 zones as defined in Table 3.9 and illustrated in,and as agreed with the Austroads PM.The zones were defined to provide a consistent comparison between drive data from the baseline and the treatment tunnels.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 31 Table 3.9:Analysis zones in the simulated tunnels Zone Description Treatment Zone 1:NB First Treated Area(Entrance)Zone 1 was a 500m length on the entrance to the Northbound tunnel.This treated section started 100m after the entrance portal.There was also an 8%vertical grade in this zone.Baseline tunnel:no treatment.PCM1 tunnel:Striped Wall Pattern(500m long)was applied beginning from 100m after the tunnel entrance.PCM2 tunnel:Pacemaker Lighting(500m long)was applied beginning from 100m after the tunnel entrance.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 2:NB Control Straight Zone 2 was a 200m length in the middle of the Northbound tunnel.This location was used as a pseudo control length to compare an untreated section of the tunnel to see if any effects of the PCMs were carrying over.Baseline tunnel:no treatment.PCM1 tunnel:no treatment.PCM2 tunnel:no treatment.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 3:NB Second Treated Area(Breakdown Bay)Zone 3 was a 500m length in the second half of the Northbound tunnel.This location had a left curve.In the real Sydney Harbour Tunnel,a breakdown bay existed which was removed to not confound the results of this study.Treatment started 150m before the breakdown bay location and ended 350m after the breakdown bay location.Baseline tunnel:no treatment.PCM1 tunnel:Striped Wall Pattern(500m long)was applied beginning from 150m before the tunnel breakdown bay location.PCM2 tunnel:Pacemaker Lighting(500m long)was applied beginning from 150m before the tunnel breakdown bay location.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 4:NB Exit Zone 4 was the Northbound exit length and was directly after Zone 3 until the exit portal.Baseline tunnel:no treatment.PCM1 tunnel:no treatment.PCM2 tunnel:no treatment.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 5:NB Overall Zone 5 was the entire length of the Northbound Tunnel.Baseline tunnel:no treatment.PCM1 tunnel:Striped Wall Patterns were applied at treatment locations shown in Figure 3.8 PCM2 tunnel:Pacemaker Lightings were applied at treatment locations shown in Figure 3.8 PCM3 tunnel:Rumble Strip was applied throughout the whole tunnel length.Zone 6:SB Entrance Zone 6 was the Southbound entrance to the tunnel and was treated from the entrance portal Baseline tunnel:no treatment.PCM1 tunnel:no treatment.PCM2 tunnel:no treatment.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 7:SB First Treated Area Zone 7 was the complementary right curve in the Southbound tunnel to Zone 3.This location was treated 300m before and 200m after the apex of the curve.Baseline tunnel:no treatment.PCM1 tunnel:Striped Wall Pattern(500m long)was applied beginning from 300m before the apex of the road curvature.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 32 Zone Description Treatment PCM2 tunnel:Pacemaker Lighting(500m long)was applied beginning from 300m before the apex of the road curvature.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 8:SB Control Straight Zone 8 was a 200m length in the middle of the Southbound tunnel.This location was used as a pseudo control length to compare an untreated section of the tunnel to see if any effects of the PCMs were carrying over.Baseline tunnel:no treatment.PCM1 tunnel:no treatment.PCM2 tunnel:no treatment.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 9:SB Second Treated Area(Breakdown Bay)Zone 9 was in the second half of the Southbound tunnel.In the real Sydney Harbour Tunnel,a breakdown bay existed which was removed so as not to confound the results of this study.Treatment after breakdown bay location until the exit portal of the Southbound tunnel.Baseline tunnel:no treatment.PCM1 tunnel:Striped Wall Pattern was applied after the tunnel breakdown bay location until the tunnel exit portal.PCM2 tunnel:Pacemaker Lighting was applied beginning from after the tunnel breakdown bay location until the tunnel exit portal.PCM3 tunnel:Rumble Strip was applied throughout the zone length.Zone 10:SB Overall Zone 10 was the entire length of the Southbound Tunnel.Baseline tunnel:no treatment.PCM1 tunnel:Striped Wall Patterns were applied at treatment locations shown in Figure 3.8 PCM2 tunnel:Pacemaker Lightings were applied at treatment locations shown in Figure 3.8 PCM3 tunnel:Rumble Strip was applied throughout the whole tunnel length.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 33 Figure 3.8:Analysis zones Source:base layout map of SHT tunnel provided by the Sydney Harbour Tunnel Company.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 34 3.5.3 Methods of Analysis In analysing the data collected in this project,the research team considered several candidate analytical techniques in order to decide on the most appropriate method to evaluate the effects of the PCMs on drivers speed and lateral control.The data analysis protocol employed was as follows:The data were initially analysed using a three-way analysis of variance(ANOVA)test.This test was used to detect any indication of interaction effects between the three PCMs(i.e.,to investigate whether the impact of a PCM on driving metrics differed significantly across different PCMs).The findings from this analysis were documented and presented in the first draft of the Research Report for this project.Upon further discussion with the Austroads PM and Working Group,the research team decided to re-evaluate the data with a more parsimonious analysis technique that is more directly aligned with the core research questions for the project,which were not about looking at PCM differences.Subsequently,a non-parametric analysis was conducted to compensate for certain violations in the distribution of the data(skewness,presence of outliers,etc)which may have influenced the results of the original parametric tests.As a result,a small number of findings were different in this follow-up analysis.Despite this,the research team decided to conduct another parametric test,a paired sample t-test,justified by keeping in mind the following critical considerations:To include the outliers in the data as they represent interesting and informative deviations from mean data(e.g.,a driver slowing down or speeding up considerably)of key relevance to the overarching objectives of the study.Drivers in the real world do not all drive at mean levels performance,but can instead experience considerable deviations,so the inclusion of instances of considerably deviated data ostensibly confers greater ecological validity.To include all collected data in order to maximise statistical power,which is especially important in this instance given the modest sample size of the study.Parametric tests generally confer greater statistical power than their non-parametric counterparts(again,this is critical to maximise the ability of the study to reliably detect the changes in driving performance we hypothesised about).In light of these considerations,the research team believes that the paired sample t-test approach is the scientifically appropriate method for the objectives of this project.The analysis results presented in the following sections are based on the results from this paired sample t-test.3.5.4 PCM Impact on Drivers Speed Drive data from the driving simulator was analysed to determine to what extent the presence of the PCM treatments in the simulated tunnels impacted drivers speed compared to the baseline untreated tunnel.Four variables were assessed:Mean speed Standard Deviation(SD)of speed Mean acceleration Standard Deviation(SD)of acceleration.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 35 Mean Speed Mean speed measured the average speed of participants(in km/h)in particular zones of treated tunnels as well the same zones in the baseline tunnels.As seen in Table 3.10 and Table 3.11,there was no significant difference between the mean speeds in the baseline tunnel compared to the treatment tunnel in most of the zones,with an exception for Zone 4(northbound Exit Area),Zone 9(southbound Second Treated Area near Breakdown Bay),and Zone 10(southbound Overall)of the Rumble Strip PCM treatment where mean speeds in the Rumble Strips treatment drive in those zones were lower compared to the same location in the baseline tunnel.On the other hand,mean speed in Zone 6(southbound Entrance untreated area)of the Striped Wall was found to be higher compared to the same location in the baseline tunnel.In summary:PCM 1 Striped Wall Pattern had a statistically significant impacts in increasing mean speed in 1 analysis zone(Zone 6 southbound Entrance untreated area).PCM 2 Pacemaker Lighting had no significant impact on mean speed.PCM 3 Rumble Strips had statistically significant impacts in lowering mean speeds in 3 analysis zones(Zone 4 northbound tunnel Exit Area,Zone 9 southbound tunnel breakdown bay treatment area,and Zone 10 southbound tunnel overall).Table 3.10:Mean speed in Northbound tunnel,by analysis zone Zone Treatment Condition Baseline:Mean Speed(SD)Treatment:Mean Speed(SD)Significant Difference?Zone 1:NB First Treated Area(Entrance)PCM 1:Striped Wall Pattern(treated zone)79.17(3.88)77.22(7.15)n.s PCM 2:Pacemaker Lighting(treated zone)80.61(4.16)80.56(4.3)n.s PCM 3:Rumble Strips(treated zone)79.79(2.59)80.23(5.32)n.s Zone 2:NB Control Straight PCM 1:Striped Wall Pattern(untreated zone)77.18(3.2)75.96(8.15)n.s PCM 2:Pacemaker Lighting(untreated zone)77.94(2.13)77.46(1.95)n.s PCM 3:Rumble Strips(treated zone)78.22(2.41)77.61(2.59)n.s Zone 3:NB Second Treated Area(Breakdown Bay)PCM 1:Striped Wall Pattern(treated zone)75.88(5.44)73.85(9.79)n.s PCM 2:Pacemaker Lighting(treated zone)76.7(3.1)76.43(3.65)n.s PCM 3:Rumble Strips(treated zone)77.63(2.36)77.10(2.66)n.s Zone 4:NB Exit PCM 1:Striped Wall Pattern(untreated zone)76.69(4.99)76.61(7.59)n.s PCM 2:Pacemaker Lighting(untreated zone)78.35(1.91)78.22(2.1)n.s PCM 3:Rumble Strips(treated zone)78.5(2.11)77.53(2.78)t(29)=2.469,p=0.02,d=0.451 Zone 5:NB Overall PCM 1:Striped Wall Pattern(mixed zone)76.67(4.16)75.62(7.72)n.s PCM 2:Pacemaker Lighting(mixed zone)78.08(2.01)77.68(2.55)n.s PCM 3:Rumble Strips(treated zones)78.12(1.84)77.73(2.24)n.s Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 36 Table 3.11:Mean speed in Southbound tunnel,by analysis zone Zone Treatment Condition Baseline:Mean Speed(SD)Treatment:Mean Speed(SD)Significant Difference?Zone 6:SB Entrance PCM 1:Striped Wall Pattern(untreated zone)78.26(5.89)78.95(5.62)t(31)=-2.207,p=0.035,d=-0.39 PCM 2:Pacemaker Lighting(untreated zone)80.39(3.19)80.86(3.46)n.s PCM 3:Rumble Strips(treated zone)80.5(2.66)80.44(2.12)n.s Zone 7:SB First Treated Area PCM 1:Striped Wall Pattern(treated zone)78.17(5.03)78.83(5.91)n.s PCM 2:Pacemaker Lighting(treated zone)79.41(2.42)79.8(2.41)n.s PCM 3:Rumble Strips(treated zone)79.7(1.99)79.38(1.88)n.s Zone 8:SB Control Straight PCM 1:Striped Wall Pattern(untreated zone)77.25(4.29)77.53(6.92)n.s PCM 2:Pacemaker Lighting(untreated zone)77.32(2.26)77.5(1.33)n.s PCM 3:Rumble Strips(treated zone)77.93(1.61)76.97(2.82)n.s Zone 9:SB Second Treated Area(Breakdown Bay)PCM 1:Striped Wall Pattern(treated zone)75.86(6.15)75.84(7.17)n.s PCM 2:Pacemaker Lighting(treated zone)77.38(3.64)77.01(2.44)n.s PCM 3:Rumble Strips(treated zone)77.35(1.74)75.93(3.65)t(29)=2.16,p=0.039,d=0.394 Zone 10:SB Overall PCM 1:Striped Wall Pattern(mixed zone)77.35(4.99)77.86(6.39)n.s PCM 2:Pacemaker Lighting(mixed zone)78.55(2.46)78.68(1.7)n.s PCM 3:Rumble Strips(treated zones)78.77(1.5)78.24(1.75)t(29)=2.123,p=0.042,d=0.388 Standard Deviation of Speed The standard deviation(SD)of speed is a measure of the variability of a drivers speed.This variable can be used as a measure of speed maintenance.Specifically,a larger SD of speed is associated with a greater fluctuation in vehicle speed,which is indicative of poorer speed maintenance.As seen in Table 3.12,the analysis of drive data shows that there were statistically significant differences in the SD of speed in the treated northbound tunnel,particularly in Zone 3(second treated area breakdown bay)of the Striped Wall Pattern PCM and Zone 5(northbound overall)of the Pacemaker Lighting PCM.In these cases,the SDs of speed in the treatment tunnels were higher than those in the baseline tunnel.There were no statistically significant differences in the SD of speed in any of the zones in the southbound tunnel as shown by the results in Table 3.13.In summary:PCM 1 Striped Wall Pattern had statistically significant impacts in increasing SD of speed in 1 analysis zone(Zone 3 northbound tunnel breakdown bay treatment area).Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 37 PCM 2 Pacemaker Lighting had statistically significant impact in increasing SD of speed in 1 analysis zone(Zone 5 northbound tunnel overall).PCM 3 Rumble Strips had no significant impact on standard deviation of speed.Table 3.12:Standard deviation of speed in Northbound tunnel,by analysis zone Zone Treatment Condition Baseline:SD Speed(SD)Treatment:SD Speed(SD)Significant Difference?Zone 1:NB First Treated Area(Entrance)PCM 1:Striped Wall Pattern(treated zone)3.62(2.64)3.62(2.52)n.s PCM 2:Pacemaker Lighting(treated zone)3.41(2.34)3.71(2.56)n.s PCM 3:Rumble Strips(treated zone)3.31(1.89)3.42(1.65)n.s Zone 2:NB Control Straight PCM 1:Striped Wall Pattern(untreated zone)1(0.54)1.12(0.6)n.s PCM 2:Pacemaker Lighting(untreated zone)0.95(0.44)1.15(0.72)n.s PCM 3:Rumble Strips(treated zone)1.05(0.6)1.03(0.63)n.s Zone 3:NB Second Treated Area(Breakdown Bay)PCM 1:Striped Wall Pattern(treated zone)1.89(1.43)2.54(2.01)t(31)=-2.083,p=0.046,d=-0.368 PCM 2:Pacemaker Lighting(treated zone)2.05(1.25)1.89(1.21)n.s PCM 3:Rumble Strips(treated zone)1.62(1.51)1.87(1.23)n.s Zone 4:NB Exit PCM 1:Striped Wall Pattern(untreated zone)1.55(0.92)1.44(0.92)n.s PCM 2:Pacemaker Lighting(untreated zone)1.52(0.78)1.79(1.19)n.s PCM 3:Rumble Strips(treated zone)1.52(0.81)1.93(1.62)n.s Zone 5:NB Overall PCM 1:Striped Wall Pattern(mixed zone)3.74(2.43)4.05(2.56)n.s PCM 2:Pacemaker Lighting(mixed zone)3.41(1.87)3.9(2.45)t(33)=-2.114,p=0.042,d=-0.362 PCM 3:Rumble Strips(treated zones)3.42(1.58)3.96(2.03)n.s Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 38 Table 3.13:Standard deviation of speed in Southbound tunnel,by analysis zone Zone Treatment Condition Baseline:SD Speed(SD)Treatment:SD Speed(SD)Significant Difference?Zone 6:SB Entrance PCM 1:Striped Wall Pattern(untreated zone)1.74(0.94)1.76(1)n.s PCM 2:Pacemaker Lighting(untreated zone)1.6(0.78)1.78(1.16)n.s PCM 3:Rumble Strips(treated zone)1.38(0.86)1.4(0.66)n.s Zone 7:SB First Treated Area PCM 1:Striped Wall Pattern(treated zone)0.86(0.46)0.95(0.47)n.s PCM 2:Pacemaker Lighting(treated zone)0.97(0.52)0.92(0.48)n.s PCM 3:Rumble Strips(treated zone)0.87(0.44)0.89(0.38)n.s Zone 8:SB Control Straight PCM 1:Striped Wall Pattern(untreated zone)1.07(0.71)1.19(0.7)n.s PCM 2:Pacemaker Lighting(untreated zone)1.07(0.36)1.06(0.5)n.s PCM 3:Rumble Strips(treated zone)1.02(0.56)1.06(0.6)n.s Zone 9:SB Second Treated Area(Breakdown Bay)PCM 1:Striped Wall Pattern(treated zone)1.86(1.34)2.05(1.23)n.s PCM 2:Pacemaker Lighting(treated zone)1.93(1.11)1.94(0.97)n.s PCM 3:Rumble Strips(treated zone)2.12(1.9)2.27(1.92)n.s Zone 10:SB Overall PCM 1:Striped Wall Pattern(mixed zone)2.26(1.21)2.48(1.39)n.s PCM 2:Pacemaker Lighting(mixed zone)2.26(0.97)2.47(1.32)n.s PCM 3:Rumble Strips(treated zones)2.14(1.19)2.46(1.66)n.s Mean Acceleration Mean acceleration is a measure of the average vehicle acceleration in each analysis zone.A positive value indicates that,on average,drivers speed up in a particular tunnel section.Conversely,a negative value indicates that the driver slows down.By comparing the mean acceleration value between the baseline tunnel drive and treatment tunnel drive,the impact of the PCM treatments on acceleration behaviour can be assessed.As shown in Table 3.14 and Table 3.15,there were no statistically significant differences in mean acceleration between the baseline and treatment tunnels.In summary:PCM 1 Striped Wall Pattern had no significant impact on mean acceleration.PCM 2 Pacemaker Lighting had no significant impact on mean acceleration.PCM 3 Rumble Strips had no significant impact on mean acceleration.Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 39 Table 3.14:Mean acceleration in Northbound tunnel,by analysis zone Zone Treatment Condition Baseline:Mean Acceleration(SD)Treatment:Mean Acceleration(SD)Significant Difference?Zone 1:NB First Treated Area(Entrance)PCM 1:Striped Wall Pattern(treated zone)0.21(0.42)0.18(0.49)n.s PCM 2:Pacemaker Lighting(treated zone)0.1(0.4)0.12(0.47)n.s PCM 3:Rumble Strips(treated zone)0.19(0.39)0.18(0.36)n.s Zone 2:NB Control Straight PCM 1:Striped Wall Pattern(untreated zone)-0.11(0.18)-0.12(0.2)n.s PCM 2:Pacemaker Lighting(untreated zone)-0.1(0.19)-0.09(0.24)n.s PCM 3:Rumble Strips(treated zone)-0.1(0.22)-0.22(0.27)n.s Zone 3:NB Second Treated Area(Breakdown Bay)PCM 1:Striped Wall Pattern(treated zone)0.07(0.13)0.06(0.14)n.s PCM 2:Pacemaker Lighting(treated zone)0.02(0.14)0.05(0.12)n.s PCM 3:Rumble Strips(treated zone)0.06(0.12)0.04(0.2)n.s Zone 4:NB Exit PCM 1:Striped Wall Pattern(untreated zone)-0.02(0.11)0.01(0.09)n.s PCM 2:Pacemaker Lighting(untreated zone)0.03(0.12)-0.02(0.12)n.s PCM 3:Rumble Strips(treated zone)-0.03(0.1)-0.02(0.12)n.s Zone 5:NB Overall PCM 1:Striped Wall Pattern(mixed zone)0.11(0.1)0.12(0.12)n.s PCM 2:Pacemaker Lighting(mixed zone)0.11(0.08)0.09(0.11)n.s PCM 3:Rumble Strips(treated zones)0.11(0.09)0.11(0.09)n.s Use of Perceptual Countermeasure Treatments to Reduce Crash Risks in Tunnels Austroads 2022|page 40 Table 3.15:Mean acceleration in Southbound tunnel,by analysis zone Zone Treatment Condition Baseline:Mean Acceleration(SD)Treatment:Mean Acceleration(SD)Significant Difference?Zone 6:SB Entrance PCM 1:Striped Wall Pattern(untreated zone)0.12(0.23)0.12(0.28)n.s PCM 2:Pacemaker Lighting(untreated zone)0.08(0.2)0.07(0.21)n.s PCM 3:Rumble Strips(treated zone)0.04(0.17)0.07(0.18)n.s Zone 7:SB First Treated Area PCM 1:Striped Wall Pattern(treated zone)-0.01(0.09)0.02(0.1)n.s PCM 2:Pacemaker Lighting(treated zone)-0.02(0.14)-0.03(0.09)n.s PCM 3:Rumble Strips(treated zone)-0.01(0.1)-0.02(0.08)n.s Zone 8:SB Control Straight PCM 1:Striped Wall Pattern(untreated zone)0(0.22)0(0.23)n.s PCM 2:Pacemaker Lighting(untreated zone)0.03(0.16)0.02(0.19)n.s PCM 3:Rumble Strips(treated zone)-0.03(0.18)0.02(0.15)n.s Zone 9:SB Second Treated Area(Breakdown Bay)PCM 1:Striped Wall Pattern(treated zone)-0.04(0.18)-0.07(0.23)n.s PCM 2:Pacemaker Lighting(treated zone)-0.08(0.17)-0.1(0.22)n.s PCM 3:Rumble Strips(treated zone)-0.05(0.25)-0.08(0.18)n.s Zone 10:SB Overall PCM 1:Striped Wall Pattern(mixed zone)0(0.05)-0.01(0.04)n.s PCM 2:Pacemaker Li

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Gold Outlook 2024 Where do we land from here?Gold Outlook 2024|Where do we land from here?01 About the World Gold Council We are a membership organisation that champions the role gold plays as a strategic asset,shaping the future of a responsible and accessible gold supply chain.Our team of experts builds understanding of the use case and possibilities of gold through trusted research,analysis,commentary and insights.We drive industry progress,shaping policy and setting the standards for a perpetual and sustainable gold market.For more information Research Jeremy De Pessemier,CFA jeremy.depessemiergold.org 44 20 7826 4789Johan Palmberg johan.palmberggold.org 44 20 7826 4786Kavita Chacko kavita.chackogold.org 91 22 6157 9135Krishan Gopaul krishan.gopaulgold.org 44 20 7826 4704Louise Street louise.streetgold.org 44 20 7826 4765Ray Jia ray.jiagold.org 86 21 2226 1107Taylor Burnette taylor.burnettegold.org 1 212 317 3825Juan Carlos Artigas Global Head of Research juancarlos.artigasgold.org 1 212 317 3826Strategy John Reade Market Strategist,Europe and Asia john.readegold.org 44 20 7826 4760Joseph Cavatoni Market Strategist,North America joseph.cavatonigold.org 1 212 317 3844Contents Where do we land from here?2 All eyes on the Fed 3 A recession is not off the table yet 3 A(less likely)third option 4 Can gold break away?5 Sidewinding in a soft landing 5 Consistent recessionary outperformer 5 Higher rates may spook 6 History may not have the last word 6 Gold Outlook 2024|Where do we land from here?02 1 The LBMA Gold Price PM was nearly 13%higher y-t-d as of 1 December,performing better than the Bloomberg Commodity Index,Bloomberg Global Bond Aggregate,and the MSCI All Country Index excluding the US.Where do we land from here?Gold had a strong 2023,defying expectations amid a high interest rate environment,and outperforming commodities,bonds and most stock markets.1 As we look forward to 2024 investors will likely see one of three scenarios(Table 1).Market consensus anticipates a soft landing in the US,which should also positively affect the global economy.Historically,soft landing environments have not been particularly attractive for gold,resulting in flat to slightly negative average returns.That said,every cycle is different.This time around,heightened geopolitical tensions in a key election year for many major economies,combined with continued central bank buying could provide additional support for gold.Further,the likelihood of the Fed steering the US economy to a safe landing with interest rates above five percent is by no means certain.And a global recession is still on the cards.This should encourage many investors to hold effective hedges,such as gold,in their portfolios.Table 1:The global economy faces three likely scenarios in 2024 Economic scenarios,probability of occurrence and key gold drivers*Based on market consensus and other indicators.Size of gold drivers represents relative importance within each scenario.Impact on gold performance based onaverage annual prices as implied by the Gold Valuation Framework.For more details on variables used as proxies for each driver,see Table 2,p.6.Source:World Gold Council Economic scenarioSoft landing Hard landingNo landingProbability45e%U%5onomic expansionEconomic expansionEconomic expansionImplied gold performanceFlat with upside potentialNotably higher(above record)Flat with initial downside pressureDrivers of goldOpportunity costOpportunity costOpportunity costRisk and uncertaintyRisk and uncertaintyRisk and uncertaintyMomentumMomentumMomentumColour key(effect on gold):PositiveNeutralNegative Gold Outlook 2024|Where do we land from here?03 All eyes on the Fed Despite some bumps along the way,the global economy proved remarkably resilient in 2023 and talks of an impending recession diminished as the year progressed.Now,market consensus for 2024 points to a soft landing given the expectation of positive,albeit subpar,growth ahead(Chart 1).Alongside an economic deceleration,market participants also expect inflation to cool sufficiently for central banks to begin cutting rates.2 Such a soft-landing scenario would be a welcome outcome for many investors.But its execution requires razor-sharp precision by policy makers and also relies on many factors outside of their direct control falling into place.Chart 1:Positive yet subpar growth is expected in 2024 Consensus forecasts for real GDP growth,%y/y*Data as of 23 November 2023.Forecasts are from Bloomberg contributor composite.Trend growth based on economists consensus potential GDP growth in 2024.Source:Bloomberg,World Gold Council Composite PMIs remain in expansion,and manufacturing PMIs are higher than they were mid-2023.3 Real earnings have been rising for the last six months,4 resulting in healthy balance sheets.Household excess savings are not yet depleted5 and unemployment remains historically low.Fiscal stimulus plans for 2024,should they materialise,will also offer support.2 Bond derivatives markets are pricing around 75bps of cuts by the Fed and European Central Bank starting in June,with other central banks such as the Bank of England to follow.In addition,the Feds dot plot indicates that most FOMC members expect the fund rate to be down from current levels by the end of 2024.Although these factors will not prevent a slowdown in growth,when combined with adequate monetary policy they could help to avert a contraction in the economy.A recession is not off the table yet While the market odds favour the Fed pulling off a soft landing,this would be no mean feat.Historically,the Fed has managed a soft landing only twice following nine tightening cycles over the past five decades.The other seven ended in a recession(Chart 2).This is not all that surprising:when interest rates stay higher for longer,pressure on financial markets and the real economy generally builds.Chart 2:A soft landing is a rarity Seven out of the past nine hiking cycles resulted in a recession*Data from 29 January 1971 to 31 October 2023.Source:Bloomberg,Federal Reserve,NBER,World Gold Council A key determinant of whether economic conditions will shift from a soft to a hard landing is the labour market.While unemployment in the US remains low,some of the factors that kept it resilient in 2023 such as a dearth of labour supply and solid corporate balance sheets aided by a healthy consumer wallet have not only faded but have a historical tendency to turn quite quickly.3 ISM economy-weighted composite PMI at 51.3.Manufacturing PMI at 46.7.As of October 2023.Source:Bloomberg 4 Real average hourly earnings at 0.8%as of October 2023.Source:Bloomberg 5 Data Revisions and Pandemic-Era Excess Savings|San Francisco Fed(frbsf.org)-1012345678UKEurozoneJapanUSChinaIndia 23 GDP forecast2024 GDP forecastTrend growth0%5 %q768111621RateRecession datesFederal funds target ratePeak-recessionPeak-soft landing Gold Outlook 2024|Where do we land from here?04 To put things into context,previous recessions in the US started on average between five and 13 months after growth in payrolls reached the same level as today.6 In addition,the so-called Sahm rule,an unemployment indicator developed at the St Louis Fed,is hinting that we are mere months away from a recession.7 Various commonly followed indicators still point to a moderate to significant chance of a recession(Chart 3).On average,these indicators suggest a recession probability of 45%over the next 12 months.Chart 3:Estimates of recession probability moderate to significant over the next 12 months Probability of a recession over the next 12 months based on commonly used indicators*As of November 2023.These include Bloomberg Economics,Bloomberg 10y-2y curve-based measure,Cleveland Fed 18m-3m curve-based measure and Morgan Stanley all-variables measure estimates over the next 12 months.Source:Bloomberg,Morgan Stanley,World Gold Council A(less likely)third option A soft landing or a recession are not the only outcomes investors could face next year.A no landing is also on the cards.8 This scenario is characterised by a reacceleration of inflation and growth.The rebound in US manufacturing and recovery in real wages are two potential drivers of such a scenario.9 6 At the time of writing,US payroll growth was 200,000 per month based on a seasonally smoothed three-month average.7 Sahm Rule Recession Indicator,St.Louis Fed(stlouisfed.org).It is worth noting,however,that Claudia Sahm,author of this indicator,has recently said that the Sahm Rule may break without a recession due to pandemic and post-pandemic economic distortions.Claudia Sahm:We do not need a recession,but we may get one,FT.com,November 2023 8 Some investors are taking an alternative view that Fed funds futures are pricing no landing rather than a soft landing.See:Fed Funds Futures Pricing in No Landing-Apollo Academy Arguments for this outcome focus on the fact that the US economy has become less capital intensive and thus less interest rate sensitive than in the past.To boot,households have benefited from sizable pandemic refinancing at low rates(Chart 4).10 And US corporates have somewhat inoculated themselves against the tide of higher rates with a doubling of their duration over the last 30 years.11 Chart 4:US economy and households insulated against rate rises Rate-sensitive GDP/rate-insensitive GDP and mortgage refinance applications*Monthly data from 31 December 1971 to 31 December 2022.Source:Bloomberg,Bureau of Economic Analysis,World Gold Council Add the prospect of strikes,12 the fact that budget cuts are unlikely in an election year,and spikes in energy prices from a possible continuation of the Israel-Hamas conflict,and the concept of inflation resurgence becomes a real threat.We nonetheless believe a no-landing scenario is an unlikely path:less of an outcome but rather more of an interim state.As Morgan Stanley put it:“A no landing is just a soft or a hard landing waiting to happen”.13 And should the Fed be compelled to hike further,putting more pressure on households and corporations,this would increase the likelihood of a deeper recession down the line,as it did in the late 1960s(Chart 5).9 Prospects for a global rebound|TS Lombard 10 The Great Pandemic Mortgage Refinance Boom-Liberty Street Economics(newyorkfed.org)11 The notorious wall of maturities revisited()12 From UAW to WGA,heres why so many workers are on strike this year()13 Soft,Hard or No Landings,Ukraine-Time to Have Your Say-Bloomberg 007080Oct/2022Jan/2023Apr/2023Jul/2023Oct/2023%probabilityBloomberg EconomicsBloomberg,curve-basedCleveland Fed,curve-basedMorgan Stanley,all variables05003003504004500.30.40.50.60.770106111621CountSensitivityRate-sensitive GDP/rate-insensitive GDPMortgage refinance applications(rhs)Homeowners more insulated from rates:refinance boom during pandemicGDP more insulated from rates:less capital intensive Gold Outlook 2024|Where do we land from here?05 Chart 5:Interest rate hikes following the 1966 soft landing led to a hard landing three years later US GDP and CPI,y/y during the late 60s and early 70s*Quarterly data from Q4 1965 to Q1 1973.Source:Bloomberg,World Gold Council Can gold break away?Golds performance responds to the interaction of its roles as a consumer good and as an investment asset.It draws not only from investment flows but also from fabrication and central bank demand.14 In this context,we focus on four key drivers to understand its behaviour:15 Economic expansion positive for consumptionRisk and uncertainty positive for investmentOpportunity cost negative for investmentMomentum contingent on price and positioning.In practice,these factors are captured by economic variables such as GDP,inflation,interest rates,the US dollar,event risk,and the behaviour of competing financial assets,which,in turn,determine a macroeconomic environment(Table 2,p.6).Sidewinding in a soft landing A soft-landing scenario could benefit bonds and risky assets.Consensus earnings expectations appear optimistic16 and high interest rates would keep bonds attractive.This is consistent with historical evidence,with both bonds and stocks performing well in the two previous soft landings.Gold,however,has not fared as well increasing slightly in one and decreasing in the other (Chart 6).14 Gold also responds to supply-side factors:primarily recycling in the medium term,and mine production as the longer-term determinant,based on its scarcity.15 It is common for investors to look at golds performance through two factors:real interest rates and the US dollar.While useful in the very short Chart 6:On average,the past two soft landings have resulted in flat returns for gold Average returns for the past two soft-landing scenarios*Average computed using monthly data from August 1984 to August 1985 and May 1995 to May 1996.Gold is LBMA PM price;US Treasuries:ICE BoFA Treasury&Agency Index;US equities:MSCI USA Total Return Index.Source:Bloomberg,World Gold Council This is likely the result of two competing forces:lower nominal rateslower inflation.Lower nominal interest rates should bring a respite for gold:75100bps of policy rate cuts are likely to translate into no more than about c.4050bps of longer maturity yield drops.We estimate this response given the bull steepening that has occurred during past soft landings and we also factor in continued term premium pressure,quantitative tightening and high issuance supply in 2024.That drop in longer maturity yields,all else being equal,suggests a gain of about 4%for gold.Alas,all else is likely not equal.If inflation cools more quickly than rates as it is largely expected to do real interest rates will stay elevated.In addition,subpar growth could constrain gold consumer demand.In summary,expected policy rate easing may be less sanguine for gold than it appears on the surface.Consistent recessionary outperformer If a recession becomes a reality,weaker growth will help push inflation back towards central bank targets.Interest rates would eventually be cut in response.Such an environment has historically created a positive environment for high-quality government bonds and gold(Chart 7).term,these factors alone are not sufficient to explain its behaviour and can lead to inaccurate perspectives.16 S&P 500 2024 consensus earnings growth forecast of 12%y/y.01234567-6-4-20246896692CPI,%GDP,%US GDP,y/y,%US CPI,y/y,%(rhs)Soft landingHard landing-505540Gold,US$/ozUS TreasuriesUS equitiesReturn,%Gold Outlook 2024|Where do we land from here?06 Chart 7:Gold has historically performed well during recessionary periods Gold and US Treasuries during recessions*As of 30 November 2023.Based on LBMA Gold Price PM and Bloomberg US Treasury index.Source:Bloomberg,NBER,World Gold Council Higher rates may spook If the no-landing scenario does occur,it could prove initially challenging for gold.While positive economic growth would support consumer demand and higher inflation would increase the need for hedges,it is likely that the combination of higher rates and a stronger US dollar would create a drag,as they did in September 2023.But if inflation surged again it could elicit an even stronger monetary response leading us back to the spectre of a hard(er)landing further down the line and a strong case for strategic gold allocations.17“In 2024,countries making up over 50%of global GDP will undergo decisive elections.”Eight Key Elections to Watch in 2024,Brunswick Geopolitical,September 2023 History may not have the last word From a historical perspective,a soft-landing or a no-landing scenario could result in a flat to slightly weaker average gold performance next year.However,this time around there are two additional factors in golds favour:Geopolitical risks abound.In 2023 there were twosignificant event risks the SVB failure and the Israel-Hamas conflict.Geopolitics added between 3%and 6%to golds performance.And in a year with major electionstaking place globally,including in the US,the EU,India,and Taiwan,17 investors need for portfolio hedges willlikely be higher than normal.Central bank demand.Purchases by official institutionshave helped gold defy expectations over the past twoyears.In 2023 we estimate that excess central bankdemand added 10%or more to golds performance.Andthey will likely continue buying.18 Even if 2024 does notreach the same highs as the previous two years,weanticipate that any above-trend buying(i.e.more than450500t)should provide an extra boost.19Furthermore,the probability of a recession is not insignificant.From a risk-management perspective,this would provide strong support to the case of maintaining a strategic allocation to gold in the portfolio.18 2023 Central Bank Gold Reserves Survey,May 2023 19 Conversely,slower than expected demand would likely create a drag on gold.-5%5%5%Oct/73-Mar/75Dec/79-Jul/80Jun/81-Nov/82Jun/90-Mar/91Feb/01-Nov/01Nov/07-Jun/09Jan/20-Apr/20NBER RecessionsReturnUS TreasuriesGoldTable 2:Golds performance in a given economic scenario is driven by the interaction of its four key drivers Economic scenarios and factors that impact on gold based on key drivers*Based on market consensus and other indicators.Size of gold drivers represents relative importance within each scenario.Impact on gold performance based on average annual prices as implied by the Gold Valuation Framework.For relative importance of the various drivers,see Table 1,p.2.Source:World Gold Council Economic scenarioSoft landing Hard landingNo landingExpected Fed funds rateCurrent 5.25%5.5%;4.50%by year endMax 5.5%significantly lower by year end5.5%6.5%by year end10yr:stable,marginally down10yr:lower10yr slightly higherDollar:flat to slightly down(normalization)Dollar:up on safe havenDollar:up on US exceptionalismEconomic expansionBelow trend growthSevere downturnGrowth continues to surprise Inflation comes down,near targetInflation drops below 2%Inflation reacceleratesRisk-on positioningRisk-off positioning Market volatilityGeopolitical risksGeopolitical risksGeopolitical risksCentral banks purchases continue at or above trendCentral banks purchases continue but below trendCentral banks purchases continue but at or slightly below trendCommodities down marginally Commodities sell offCommodities reboundGold net positioning reboundsGold net positioning reboundsGold net positioning reboundsImplied gold performanceFlat with upside potentialNotably higher(above record)Flat with initial downside pressureOpportunity costRisk and uncertaintyMomentumColour key(effect on gold):PositiveNeutralNegative Gold Outlook 2024|Where do we land from here?07 Important information and disclosures 2023 World Gold Council.All rights reserved.World Gold Council and the Circle device are trademarks of the World Gold Council or its affiliates.All references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only.ICE Benchmark Administration Limited accepts no liability or responsibility for the accuracy of the prices or the underlying product to which the prices may be referenced.Other content is the intellectual property of the respective third party and all rights are reserved to them.Reproduction or redistribution of any of this information is expressly prohibited without the prior written consent of World Gold Council or the appropriate copyright owners,except as specifically provided below.Information and statistics are copyright and/or other intellectual property of the World Gold Council or its affiliates or third-party providers identified herein.All rights of the respective owners are reserved.The use of the statistics in this information is permitted for the purposes of review and commentary(including media commentary)in line with fair industry practice,subject to the following two pre-conditions:(i)only limited extracts of data or analysis be used;and(ii)any and all use of these statistics is accompanied by a citation to World Gold Council and,where appropriate,to Metals Focus or other identified copyright owners as their source.World Gold Council is affiliated with Metals Focus.The World Gold Council and its affiliates do not guarantee the accuracy or completeness of any information nor accepts responsibility for any losses or damages arising directly or indirectly from the use of this information.This information is for educational purposes only and by receiving this information,you agree with its intended purpose.Nothing contained herein is intended to constitute a recommendation,investment advice,or offer for the purchase or sale of gold,any gold-related products or services or any other products,services,securities or financial instruments(collectively,“Services”).This information does not take into account any investment objectives,financial situation or particular needs of any particular person.Diversification does not guarantee any investment returns and does not eliminate the risk of loss.Past performance is not necessarily indicative of future results.The resulting performance of any investment outcomes that can be generated through allocation to gold are hypothetical in nature,may not reflect actual investment results and are not guarantees of future results.The World Gold Council and its affiliates do not guarantee or warranty any calculations and models used in any hypothetical portfolios or any outcomes resulting from any such use.Investors should discuss their individual circumstances with their appropriate investment professionals before making any decision regarding any Services or investments.This information may contain forward-looking statements,such as statements which use the words“believes”,“expects”,“may”,or“suggests”,or similar terminology,which are based on current expectations and are subject to change.Forward-looking statements involve a number of risks and uncertainties.There can be no assurance that any forward-looking statements will be achieved.World Gold Council and its affiliates assume no responsibility for updating any forward-looking statements.Information regarding QaurumSM and the Gold Valuation Framework Note that the resulting performance of various investment outcomes that can generated through use of Qaurum,the Gold Valuation Framework and other information are hypothetical in nature,may not reflect actual investment results and are not guarantees of future results.Neither World Gold Council(including its affiliates)nor Oxford Economics provides any warranty or guarantee regarding the functionality of the tool,including without limitation any projections,estimates or calculations.World Gold Council 15 Fetter Lane,London EC4A 1BW United Kingdom T 44 20 7826 4700 F 44 20 7826 4799 W www.gold.org Published:December 2023

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A set of principles outlining the steel industrys approach to safety and healthSafety and health principles and definitions Guidance bookGerdauContents“Nothing is more important than the safety and health of the people who work in the steel industry.”worldsteel Board of MembersOur commitmentThe principlesAreas of focusSix safety and health principlesDefinitions and calculations356820The industry is committed to maintaining a safe and healthy workplace and acting on safety and health incidents,risks,and opportunities.We consider safety and health to be an integral component of doing business,and it starts with each one of our people.The safety and health of our people is our core value and must not be compromised in the face of other business challenges.This applies to everyone involved in the industry,including business leaders,employees,contractors and other third parties such as suppliers,customers and visitors.worldsteel has developed this guidance book to encourage member companies to apply the principles and the metrics for their organisation and set the standard for the industry.This booklet provides guidance to worldsteel members on the meaning of the principles.Definitions and calculations have been included to ensure a common standard.Individual companies have different goals and procedures.The principles should be adapted to meet specific contexts(internal and external)and corporate environments.Our commitment23Six safety and health principles for the steel industryworldsteels Board of Members believes that clearly defined principles will result in an enhanced safety and health culture,as well as improved business results across the industry.Through the adoption of the principles by the leaders of the member organisations,worldsteel and its members demonstrate their commitment to an injury-free and healthy workplace.The principles are based on the experience,knowledge,company policies and values of worldsteel members.All injuries and work-related illness can and must be prevented.Managers are responsible and accountable for safety and health performance.Employee engagement and training is essential.Working safely is a condition of employment.Excellence in safety and health drives excellent business results.Safety and health must be integrated into all business management processes.0Is safety and health a core value and integral component in your organisation?Is this reflected in your safety policy and organisational mission and objective?Outokumpu54Companies need to apply the six principles to the following four focus areas to ensure comprehensive safety and health management.Four areas of focusThe safety culture of an organisation is the product of individual and group values,attitudes,competencies,and patterns of behaviour that determine how people and systems act and respond in relation to risks and opportunities.Safety culture and leadership evolve gradually over time as people go through Occupational safety management promotes the safety of employees,contractors and visitors by preventing personal injuries in the workplace,and has a strong focus on primary prevention of exposure to hazards.In its widest definition,occupational health management encompasses the physical,mental and social well-being of the people working in the company.The focus is placed on long-term effects of exposure to hazards.The health of workers has several determinants,including risk factors at the workplace leading to cancers,musculoskeletal diseases,respiratory diseases,hearing loss,circulatory diseases,stress-related disorders and others.Process safety is a blend of engineering,operations and management skills focused on preventing catastrophic accidents,particularly structural collapse,explosions,fires and toxic releases associated with loss of containment of energy or dangerous substances such as toxic gases,molten metal,chemicals and petroleum products.Safety culture and leadershipOccupational safety managementOccupational health managementProcess safety managementvarious changes,adapt to environmental conditions and solve problems.To create a truly robust safety culture,organisations need to proactively position safety as an integrated value for all workers.To attain this level of safety culture,significant commitment and a drive towards continuous improvement are required.The manufacturing of steel involves processes with intrinsic hazards that need careful management.The measures needed to control these hazards are often complex.The focus of process safety management is not limited to protecting the people within the company but also includes the environment,assets and surrounding community.POSCO67All injuries and work-related illness can and must be prevented.An essential framework to prevent work-related injuries and illness(especially serious events)should consider the following:1.Risk Management is an essential component to identify hazards,assess risk and determine appropriate controls(applying the hierarchy of controls).2.Integrated safety and health management systems are there to keep everybody safe and healthy:our people,our contractors,suppliers,customers,and the community.Systems bring order,standardisation and operational discipline to safety.3.Ensuring the reliability of every piece of machinery and process is an important component of the strategy used to help companies avoid adverse events and incidents that impact people,environment,communities and business continuity.4.Human and organisational performance are the cornerstone for safety and health excellence.5.Accident investigation should strive to find systemic root causes.Six safety and and health principlesPrincipleHigh Number of incidentsLowCombination of components over timeHuman and organisational factorsTechnical reliabilitySafety management system01We are committed to a workplace where all people are protected;because everyone deserves to feel safe and valued.thyssenkrupp89Leaders should ensure a safe and healthy workplace by empowering and supporting people to identify and freely report potential risks and develop effective controls to keep them safe.It is expected that every person who works for the steel industry should be aware of potential risks,and to fully comply with health and safety standards and procedures,whilst contributing to their continual improvement.It is essential that managers lead the safety and health agenda and initiatives in a consistent way.It lends credibility and thoughtfulness to every task,big or small.By leading the initiatives consistently,managers demonstrate their leadership and commitment.Managers should set priorities and objectives based on risk.They should also provide resources for safety and health functioning and maintenance.This active involvement shows that there is a genuine desire to succeed.Managers are responsible and accountable for safety and health performance.Managers are responsible and accountable for safety and health performance.Ensure effective safety and health competence for managers in your organisationInclude safety and health objectives in performance assessments and other career advancement decisions.Principle02Ternium1110Everyone must be involved in a meaningful way,daily,to support injury and occupational illness prevention.Through constant exposure to safe practices,people will develop behaviour that ensures each task is performed safely.Engaged and empowered employees will choose to work safely themselves and ensure others do as well.They will also feel comfortable contributing their ideas for safety and health improvement and act on safety incident risks and opportunities.Involvement and recognition of the employee will promote good safety and health results.Training is an essential part of an effective safety and health system.Employees should know how to keep themselves and those around them safe and healthy.All employees must undertake the necessary training and acquire the skills and tools to do their job safely.Employees need to show a willingness to be trained and must apply their acquired knowledge and skills.With the right training,each person can perform independent job risk assessments.Consult your employees and contractors every day about safe and healthy ways of working.Are they aware of the inherent hazards and risk associated with their taks?Provide your employees with adequate training and competence to protect themselves and their colleagues.Employee engagement and training is essential.Engaged,empowered,and competent employees will choose to work safely for themselves as well as for others.Principle03Baotou1312By making adherence to safe work practices a condition of employment,we foster the importance of safety and health in the workplace.It is important that everybody is psychologically and physically fit to work.This includes fatigue,illness,physical restriction,or emotional distraction(mental health issues included).Employees,and anyone undertaking work,must not be impaired by illegal or legal drugs,including alcohol.It is the responsibility of every employee to understand and comply with all relevant safety and health rules and safe work practices.Each individual employee must take personal responsibility for the safety and health of themselves and others.Every employee is empowered to stop any work or process if they believe it to be unsafe or unhealthy.For many companies,there could be a substantial cultural barrier to encourage such actions.It is a management responsibility to make sure that employees feel empowered and confident to take such a step.Human error is normal,therefore,blame shouldnt be attributed to individuals.All factors essential and contributing to incidents should be identified and consequences for deliberate disregarding of the rules clearly articulated and transparent.Does everyone on your site work safely?What are the actions taken to ensure safety and health performance?Every employee is empowered to act on safety and health incidents,risks,and opportunitiesWorking safely is a condition of employment.Principle04Tata Steel1514Caring about the well-being of our people is the essence of successful leadership.Good safety and health is good business and has a positive impact on employees.Engaging people in safety and health discipline also contributes to improved business results.Prevention of injuries and occupational illnesses creates a competitive advantage by having our most valuable resource our people at work.All resources are jeopardised by workplace incidents,which result in production losses and downtime for investigations.The costs of incidents(with or without injuries)and occupational illnesses undermine competitiveness.A robust safety management system will help managers to reduce loss through incident prevention.Harm events can include:Harm to people The environment The company assets The company reputation The company business objectivesTo invest in safety and health is to improve productivity and performance.Excellence in occupational safety and health and process safety contributes to the zero-harm objective and prevents catastrophes that can lead to business disruptions.Do you strive for excellence?Is your organisation a high reliability organisation?Excellence in safety and health drives excellent business results.Excellent safety systems form part of excellent management systems.Principle05Tenaris1716Safety and health should be included in all new and existing business processes,for example,managing assets,production,projects and administration.Risk should be reassessed before any changes are applied.When safety and health are consistently brought to the forefront of business decisions and processes,people develop an appreciation for the importance of the topic.People understand what is expected of them and have the knowledge to work safely.Safety and health is integrated into all business management processes.Before decisions are made,make an assessment of the safety and health implications.Involve different levels of people to ensure a thorough appraisal.Bring safety and health to the forefront of all your business decisions and processes.Principle06HBIS1918Employees and contractorsCompany employee(employee)A person who is on the payroll of the member company,e.g.has an employee number that identifies that person as a company employee.Employees are directly supervised by a company representative.Temporary or agency workers hired directly by the company are to be considered as employees if the company has primary responsibility for supervising their activities.Contract employee(contractor)An individual supplied by an external company(contractor,sub-contractor,consultant,or vendor)on a full or part-time basis and who is providing a service(production,maintenance,or administrative support)to the member.The contractors safety,health and well-being are primarily supervised by the external contractors supervisor or manager.He is paid by the external company directly.The external company presents an invoice for the contract for service to the member companyVisitorAnyone on the company premises other than a company employee or contractor.Injuries to a visitor will be included as a company employee since the company has the duty of care and direct safety supervision.If hours visited can be added to the calculation for frequency purposes,then please include them.Types of incidentsFatality(F)Death from a work-related injury,certified by a medical professional.Fatality Frequency Rate(FFR)is calculated on the number of fatalities per million man hours.Lost Time Injury(LTI)Any work-related injury resulting in the employee or contractor not being able to return to work for their next scheduled work period.Returning to work with work restrictions does not constitute a lost time injury status,no matter how minimal or severe the restrictions,provided it is at the employees next scheduled shift.However,if an injury deteriorates and time is later lost,an LTI should be recorded.Lost Time Injury Frequency Rate(LTIFR)is calculated as number of Lost Time Injuries per million man hours.Restricted Work Case(RWC)Any work-related injury other than a fatality or a Lost Time Injury where the injured person cannot fulfil his normal work the day following the injury but is able to undertake a temporary job,work at his normal job but not full-time,or work at a permanently assigned job but unable to perform all duties normally assigned to it.If the injury has led to lower productivity or slower work from the worker,but the worker is still capable of undertaking all of their routine tasks,then this would not be classified as restricted work.Medical Treatment Injury(MTI)Any work-related injury other than a fatality,a Lost Time Injury,or a restricted work case,that resulted in a certain level of treatment(not first aid treatment)given by a physician or other medical personnel under standing orders of a physician(e.g.medical treatments:using prescription medications,or use of a non-prescription drug at prescription strength,Using wound closing devices such as surgical glue,sutures,and staples,Using any devices with rigid stays or other systems designed to immobilise parts of the body,Administration of oxygen to treat injury or illness).Definitions and calculationsClear definitions and calculation methods ensure the industry is applying common standards and metrics.Alacero2021Potential Serious Injury or Fatality(PSIF)Any incident regardless of actual severity that has the potential to lead to a life-threatening,life-altering,or fatal injury.Serious Injuries generally refers to long term or permanent incapacity and fatalities.A PSIF precursor is any unmitigated high-risk situation that will result in serious injuries if not controlled because management controls are absent,ineffective,or not complied with.PSIF events can be identified using predetermined criteria based on the hazards and risk related to steelmaking operations e.g.molten metal contact,confined spaces,electrical hazards,fire hazards,etc.An event can also be considered as having high potential for serious injury or fatality if it ranks high for severity in a risk matrix.This is the reason why some steel companies describe these events as Severity 4(S4),Potential 4(P4).Minor Injury(MI)Any work-related injury other than a fatality,a Lost Time Injury,a restricted work case,or a Medical Treatment Injury which is treated by first aid or minor manipulation to provide relief for a strain or bruise.A minor injury does not require treatment by a professionally trained paramedic or physician and does not incur loss of work time other than time of the shift on which it occurred.The injured person continues with his normal scheduled work(e.g.using a non-prescription medication at non-prescription strength,administering tetanus immunisations,cleaning,flushing or soaking wounds on the surface of the skin,using wound coverings such as bandages,Band-Aids,gauze pads,etc.;or using butterfly bandages or Steri-Strips,using hot or cold therapy,drilling of a fingernail or toenail,using eye patches).Near miss incidentAn incident that physically occurred but there was no personal injury to the employee,contractor or visitor but which could have resulted in a serious injury and needs to be followed up in the same way as a Lost Time Injury but recorded as a near miss.Example:Operator finds a heavy bolt on the floor next to his operating station,likely coming from an overhead crane or roof structure.Unsafe act,unsafe situations(they can be called Precursors)Any action that may endanger a person or people working around him/her.Examples:When working at heights(on a roof for instance)without using a safety harness or not clipped on;not wearing a seatbelt when driving a vehicle.Or any situation judged as being such that,sooner or later,it may lead to a risk of an incident inflicting harm to one or more persons.Example:Missing or broken handrail leading to risk of falling from height.Alacero2223Occupational pyramid including PSIF concept:Typically,precursors of fatalities and serious injuries account for approximately 20%of the total events in each level of the occupational pyramid.Expressed by increasing consequence pyramid levels are:PSIF Precursors,near misses,minor injuries,medical treatment,restricted work cases and lost time injuries with the potential to cause fatality and serious injuries.Unsafe act,unsafe situationNear miss incidentMinor Injury(MI)Medical Treatment Injury(MTI)Lost Time Injury(LTI)Fatality(F)Restricted Work Case(RWC)Causes of incidentsFall from heightDepending on the country,companies may define a height level where a fall prevention or restraint must be worn and used.The level is usually anywhere there is a risk of falling off 1.8 metres or 6 feet,but proper preventive fall practices should also be used as the fall from a lower distance can lead to serious injuries.Examples:Fall from a ladder,fall from a platform,fall from a roof,fall into a shaft,a pit or a hole in the ground.Falling objectObject falling on a person for any reason,also objects that can be released sideways or upwards are considered.Examples:Tool falling from a scaffold,load falling from a crane,product falling due to the collapse of a pile of products,something stored vertically falling or sliding down,building components broken during a storm,or broken by snow,ice,or even hail,snow or ice blocks.Moving machineryIncident caused by any component of machinery or equipment that is able to move by any energy source(electrical,steam,hydraulic,pneumatic,heat,wind,product such as strip being pulled by other equipment),by remote control or by gravity.Examples:Crushed by the movement of a shaft rotated by an operator in a remote cabin,unexpected start of an un-isolated motor or engine,unexpected start of a conveyor,trapped between the belt and the roll of a conveyor,crushed by the movement of a cover or table of a machine operated by hydraulic or pneumatic cylinders.Overhead craneAny incident whose main cause is the operation or condition of an overhead crane or its product holding component such as C hook or coil grab,chains or slings.Examples:Collision between two overhead cranes running on the same tracks or overlapping track;people injured due to the swing of the load lifted by an overhead crane,components dropping from a crane,loss of load.PSIF PrecursorsPotential Serious Injuries and Fatalities(PSIF)2425ForkliftAny incident resulting from the use of or contact with a forklift truck,a powered industrial truck used to lift and move materials.Incidents with forklifts can occur due to the load handled,the environment in which the forklift is moving,the state of the vehicle or the skills of the driver.Examples:Collision between a forklift and any other vehicle,person hurt by a forklift,reversal of the forklift,forklifts tend to swing around in a large radius and can run over pedestrians.RailIncident with any rail vehicle inside the site or while handling railcars.Examples:Collision by anything with a train,pedestrians crushed between the bumpers of railcars while hooking up railcars,person falling from or struck by a locomotive or railway cars.On-site road/vehicleIncident with a vehicle inside the site including private cars and industrial vehicles except forklifts.Examples:A pedestrian hurt by a truck,collision between a car and a truck.Off-site Road/VehicleIncident on the public road with any type of vehicle or on foot to and from the workplace.Includes business travel.Examples:Sales or marketing people injured on the road during working time,employees driving to an externally organised training session.Other mobile equipmentIncidents whose main cause is the use of equipment other than moving machinery,overhead crane,vehicle and train.Examples:Hurt by a stepladder on wheels pushed by an operator,hurt while using an aerial work platform(cherry picker,boom lift,man lift,basket crane).ExplosionA release of energy that causes a pressure discontinuity or blast wave(e.g.,detonations,deflagrations,and rapid releases of high pressure caused by rupture of equipment or piping).Examples:Water in liquid steel,leak of oxygen,generation and leak of hydrogen or leak of CO or blast furnace gas can drive to an explosion picker,boom lift,man lift,basket crane).FireAny incident resulting from the combustion of materials and propagation of the flames causing damage to people,installation and the environment.Gassing/AsphyxiationIncident in any area where gas can accumulate or be trapped,and the air does not sustain or support life.gassing when the breathing air contents a toxic gas;Example:gassing due to a rate of carbon monoxide(CO)in the breathing air above the threshold limit depending on the duration of the exposition to the CO.asphyxiation occurs when the oxygen rate in the breathing air decreases below 19.5%;Example:asphyxiation due to the presence of carbon dioxide(CO2),nitrogen(N2),argon(Ar)or any other gas taking the place of the oxygen in the breathing air.Exposure to chemicalsIncident caused by contact or exposure to hazardous chemical substance.If the injury is caused by breathing toxic gas,the injury is categorized into cause gassing/asphyxiation.Examples:Acid burn,chemical spill,allergic reaction.Hot metalIncidents caused by hot or liquid metal.Main risks are heat radiation,splashing,scalding from hot metal.Examples:Projection of hot metal on a person;burn by radiation of hot metal.Hot substancesIncident caused by exposure to any type of hot material,equipment,surface,steam or water.If the injury is caused by hot metal,the injury is categorized into that cause.Example:Burns caused by hot equipment in contact with skin.2627Slip,trip,fall same levelIncident caused by falling on the same level,not from elevation.Slips happen when there is too little friction or traction between the footwear and the walking surface.A trip is the result of a foot striking or colliding with an object,which causes a loss in balance.Examples:Winter slipperiness fall,twisted ankle while walking,stumbling on uneven surface.Structural failureAny incident resulting from a failure of the structure of a building,machinery or equipment.Examples:Deficient scaffolding,roof or wall panels or structural frames,weather conditions or lack of maintenance may deteriorate surface,constructive defect of machinery.Object in the eyeIncident caused by something that enters the eye from outside the body.Examples:Steel sliver in the eye,dust in the eyeOtherIncident is caused by a reason which is not listed.In case there are several reasons behind the incident,the most suitable is chosen.UnknownThe cause of the incident is not known by the reporter at that time.Note:root causes of every fatality or lost-time injury must always be investigated and the true cause found and reported.ElectricalIncident caused by exposure to electrical energy directly or indirectly.Examples:Part of the body of a person in direct contact with bare wires,live busbars providing energy to an overhead crane,part of the body of a person in indirect contact with electrical energy by touching the switch gear or high voltage cabling or wires.Product handling/StorageIncident involving the handling,movement and storage of products,machinery or equipment.Steel products can be sharp-edged or move when cooling or being stored by crane.Examples:Operator hurt by a product being handled,hands crushed between a sling and the product when the crane driver begin to lift the product,hand cut by sharp edges of a product.Product loadingAny incident resulting from the process of loading and unloading products,semi-products,raw materials or any equipment to or from a truck trailer,a rail trailer or a ship.Example:An operator standing on the trailer is hurt by the product during the loading of this product on the trailer,squeezed between the load and the wall of the trailer while retaining the load.Manual tasks and toolsIncident caused when performing tasks manually or using hand tools or power tools.If the injury is caused by e.g.,sharp edges of steel while handling the product,the injury is categorized into cause product handling/storage.Example:Carrying or lifting heavy objects,using a screwdriver as a chisel causing the tip of the screwdriver to break and fly.2829Preventive actionsPreventive actions are activities planned with the intention of preventing the occurrence of safety incidents.They include:Health and safety audits Walks Safety inspections Reviews Innovations Positive safety observationsCalculation of frequency ratesHours workedFor company employees,the total number of hours worked including overtime and training during the period.For contractor employees,the total number of hours worked for the company during the period.Work-related and non-work-related injuriesWork-related injuryA workplace injury is the direct result of work-related activities for which management controls are,or should have been in place,or those occurring during business travel.Examples:Work-related injuries:Exposure(contact with,contacted by,falls,etc.)to workplace conditions that directly result in injury,i.e.,slippery floors,falling objects,protruding objects,molten metal,dust,gases Strains and sprains while performing work-related activities such as strenuous lifting and pulling.In summary,those injuries in which corrective action(s)can be identified and can be taken to improve upon the work being done at the time of the injury(This point is the key determining factor.)Work-related includes attending company-sponsored courses,conferences,business travel,or any other activity where presence is expected by the company.For contractor personnel,work-related normally includes only the time spent on company premises Injuries occurring in member company car parking lots,walkways,or any other portion of company propertyNon-work-related injuries:Symptoms arising on member company property or business travel that are the result of other factors,i.e.,cold or flu,heart attack Voluntary participation in wellness programmes/sports Personal grooming,self-medication,self-infliction Vehicle incidents/on foot travel to and from work,other than during business travelCommuting accidentAny accident on the public road during trip from home to the workplace or from the workplace back home with any type of vehicle or on foot.Accidents inside the site or during business travel are excluded as they are considered workplace accidents.worldsteel recognises that not all companies record commuting accidents because of local legislation and also that not all commuting accidents are the result of measures the company has or has not taken.Sickness absenceSickness absenceAbsence from work on the grounds of incapacity to work due to any sickness,work-related or not,and which could qualify for disability income.All other cases of absence such as pregnancy,childbirth,leave,training and seminars are not included in the definition of sickness absence.Sickness absence rateSickness absence rate is calculated as total number of hours of sickness.Absence per scheduled hours.Sickness absence is calculated for a year,and for a defined perimeter(department,plant,country,region.).3031The World Steel Association(worldsteel)is one of the largest and most dynamic industry associations in the world,with members in every major steel-producing country.worldsteel represents steel producers,national and regional steel industry associations,and steel research institutes.Members represent around 85%of global steel production.World Steel Association,2023|Design:Calculation methods of frequency ratesLost Time Injury Frequency Rate:Number of(F LTI)*1,000,000/hours worked Total Recorded Injury Frequency Rate:Number of(F LTI RWC MTI)*1,000,000/hours worked All Injury Frequency Rate:Number of(F LTI RWC MIT MI)*1,000,000/hours worked Fatality Frequency Rate:Number of F*1,000,000/hours worked Preventive Actions Frequency Rate:Number of individual preventive actions*1,000,000/hours worked Percentage of Potential Serious Injuries and Fatalities:Number of PSIF events/Number of total events*1003233World Steel AssociationAvenue de Tervueren 2701150 BrusselsBelgiumT: 32(0)2 702 89 00F: 32(0)2 702 88 99E:steelworldsteel.orgC413 Office BuildingBeijing Lufthansa Center50 Liangmaqiao RoadChaoyang DistrictBeijing 100125 ChinaT: 86 10 6464 6733 F: 86 10 6468 0728E:chinaworldsteel.orgworldsteel.orgPrinted on FSC certified paper

0人已浏览 2023-12-13 18页 5星级

TACKLING THE CYBER SKILLS GAPGlobal Cyber Security Report 2023Experts in Technology03 Introduction James Milligan,Global Head of Technology Solutions04 About the survey05 Organisation Reporting structure,attack experiences and strategy06 Investment Share of budget and changes to spend for 202307 Hiring In-demand skills and recruiting talent08 Retention and skills Retaining and upskilling existing talent09 The Hays view10 Cyber in the Spotlight video series11 Next stepsCONTENTS2|Global Cyber Security Report 20233|Global Cyber Security Report 2023While it was already becoming a necessity for the vast majority of organisations,recent events have meant that the rate of digital transformation has accelerated over the last three years.That means an increase in data management,while hybrid and remote working means that workers need secure access to their employers servers.These changes have afforded threat actors greater opportunities to exploit organisations and infrastructure than ever before,as well as provided added motive.All of this has meant that the demand for people with cyber security skills has increased.At Hays,we placed over 750 people into roles in 2022 as organisations sought the talent needed to implement their defence strategies.However,as this demand outweighs the supply of people with experience or accreditations in cyber security,its not always straightforward to fill those roles.Is this skills shortage affecting organisations significantly?And,if so,how?This is why weve decided that its the right time to create our first global report.Our study,carried out in the final months of 2022,aimed to explore how organisations around the world have adapted their cyber security strategy to tackle todays threats,as well as the challenges theyve faced in doing so.By surveying security leaders from across several industries and seniority levels,we wanted to discover which factors were impacting their ability to hire and retain talent,and whether the level of investment from their organisation is meeting their needs.The most revealing finding was the extent to which organisations have been impacted by the lack of qualified candidates in cyber security.Overall,90 per cent of leaders said the skills gap had affected their ability to implement their cyber security strategy.Its not been easy to address,either.Hiring talent is an issue,with roughly two thirds of leaders admitting that they do not rate their organisations ability to recruit people working in cyber security highly.Finding incentives to retain and train your existing talent becomes even more important,especially as they receive offers from organisations facing the same problem.Providing learning resources is attractive to employees and,given the benefits it brings to an organisations cyber security strategy,the investment is worth it.Despite this,many of our respondents were concerned about the funds being allocated to cyber security within their organisation.Although companies have reacted to global events by putting more money into security,almost half of leaders expect minimal change to their budget in 2023.Our study has shown that finding and hiring the right talent is a significant challenge for businesses globally,and that the lack of skills is affecting security.Whats the solution?At Hays,we like to talk about undiscovered talent.On one hand,these might be people out there who dont have the exact experience that organisations are seeking,but would be a huge asset if theyre open to training.On the other hand,undiscovered talent may also refer to those who arent given the same opportunities as their peers in either education or the world of work,but can bring plenty to your organisation.In addition to people coming from a low socio-economic background,there are also those we aim to help through our Focusing On Employment Inequity report,such as those living with a disability or young people struggling to start on the career ladder.In this report,youll find insights on all of the challenges that cyber security leaders are facing in 2023,from protecting their organisation to retaining trained employees.If you are having similar experiences to our respondents,weve also suggested some steps that you can take to ensure sustainable cyber security success.Lastly,Id like to thank all of the respondents who took the time to complete our survey.Without your help,we would not be able to provide these insights.James Milligan Global Head of Technology Solutions,HaysINTRODUCTIONTHE DEMAND FOR CYBER SKILLS90%of leaders said the skills gap had affected their ability to implement their cyber security strategy.4|Global Cyber Security Report 2023ABOUT THE SURVEYUKI and EMEA Austria Belgium Czech Republic France Germany Hungary Ireland Italy Luxembourg Poland Portugal Saudi Arabia Spain Sweden Switzerland UK UAEAmericas Brazil Canada Chile Colombia Mexico USAAsia and ANZ Australia China Japan Malaysia New Zealand SingaporeWe carried out our research across 29 countries,surveying over 1,000 cyber security leaders.The study explored how organisations are responding to recent global events,their investment in cyber security,their challenges in hiring and retaining staff,as well as the skills our respondents sought and how these were developed among the workforce.When examining the data,we investigated whether there were any discrepancies from region to region,in order to provide local insights.However,our analysis revealed little to no variation-the findings in this report reflect what is happening around the globe,as leaders face the same challenges and turn to the same solutions.Employees at our respondents organisationsSeniority level of our respondents0-100C-suite5,000 VP101-1,000Director1,001-5,000Manager177%$!P%5|Global Cyber Security Report 2023ORGANISATIONIn order to gain insights into how organisations are responding to cyber threats,we needed to understand how they are being affected and where their security team fits in the reporting line.The pandemic and geo-political climate have affected organisations securityCyber security teams are not always positioned strategicallyWhat type of attacks have you experienced?PhishingRansomwareMalware/VirusData Loss/TheftExternal461H0%of leaders do not believe that their cyber security team reports into the right part of their organisationof leaders feel that recent global events have had a Major or Moderate impact on their organisations cyber risk profile of leaders state that security awareness in their organisation is greater than in 2019 34rw%Many leaders report that recent global events,such as geo-political conflicts and the pandemic,have affected the cyber risk profile at their organisation.The pandemic in particular has accelerated the need for digital transformation,which has given greater opportunities to cyber criminals-84 per cent of leaders reporting that their organisation experienced a phishing attack in 2022.Employees have had to become savvier as a result,with 77 per cent of leaders reporting that cyber security awareness is greater than it was three years ago.Organisations have had to respond swiftly to combat potential threats,but incorporating cyber security into their strategy has not been a natural process for everyone.A third of leaders do not agree that cyber security sits in the correct reporting line within their business.6|Global Cyber Security Report 2023INVESTMENTWe wanted to explore how organisations are investing in cyber security,and whether their budget has increased as a result of global events and trends.Investment is not necessarily aligned with security leaders needsObtaining investment in cyber security has been easier since the pandemicStrongly agreeDisagreeAgreeStrongly disagreeN/ANeutral374%3%1%of leaders expect“Minimal change”to their budget in 2023of leaders are“Extremely”,“Very”,or“Moderately”concerned about their budget in 202347h%With security a concern across the globe,leaders are looking for a financial commitment from their organisation.Over a fifth of our respondents report that at least ten per cent of their organisations IT spend is allocated to security.However,while only 17 per cent of leaders disagree with the statement that investment in cyber security has been easier to receive since the pandemic,almost half expect minimal change to their budget in 2023.As a result,there is a concern over whether investment in cyber security will be sufficient for tackling todays threats.What is your organisations annual spend in cyber security in proportion to IT budget?0-2%7-8%3-4%9-10% 5-6!%7|Global Cyber Security Report 2023HIRINGWith the skills gap posing problems in tech,we wanted to understand the challenges that organisations face in recruiting talent.Employers are turning to unexplored talentOrganisations struggle to recruit cyber security talentOrganisations seek front-line skillsTop five challenges in hiring talent1 Salary expectation2 Missing skills3 Competition4 Length of working experience5 Lack of experience at a similar organisation Top five skills/implementations that would enhance security capability1 Cloud security2 Governance,Risk and Compliance3 Security Architecture4 Security Engineering5 SIEM/SOCof leaders do not rate their organisations ability to attract cyber security talent highlyof leaders are likely to recruit somebody without formal IT security accreditations66V%When asked what would improve the security capability at their organisation,leaders mostly named skills that would reinforce the front line of defence,such as cloud security and architecture.This aligns with our own insights,as globally were seeing highest demand for engineers and architects.However,the challenge is to find workers with the knowledge and experience required to fill roles within their organisation.Meanwhile,leaders face competition in hiring those with the right credentials,who,in turn,are able to demand a higher salary.In fact,two thirds of leaders do not rate their ability to attract cyber security talent highly.This means that organisations must look for unexplored or untrained talent,an approach that they are open to.Over half of the leaders surveyed state that they are likely to hire workers who dont hold formal accreditations.“Two-thirds of leaders do not rate their ability to attract cyber security talent highly.”8|Global Cyber Security Report 2023RETENTION&SKILLSIts necessary to equip the workforce with new skillsSkills shortages are affecting securityof leaders believe a skills shortage has impacted their ability to implement their cyber security strategyof leaders say that their organisation invests in upskilling its cyber security workforce90q%The shortage in skills is having an impact across the board,with 90 per cent of leaders revealing that it has affected their security implementation.If the experienced talent isnt readily available,organisations must find new ways to fill these roles.In order to close the skills gap,leaders believe upskilling and cross-training their team members(i.e.teaching them how to perform in new roles)are the best routes to success.Indeed,many leaders report that their organisation invests in training employees;however,this investment does not stretch to retaining their existing talent,as employers instead offer work-life balance perks over monetary reward.“Many leaders report that their organisation invests in training employees;however,this investment does not stretch to retaining their existing talent”Skills development is used for the benefit of organisations and workers alikeTop five strategies to close the cyber security skills gap1 Upskilling2 Cross-training3 Recruitment partner4 Hire,train and deploy5 University outreach Top five strategies for cyber security talent retention1 Remote and hybrid working arrangements2 Work-life balance/Wellness offering3 Flexible hours4 Professional development opportunities5 Career growth&progressionIn addition to hiring,how are organisations retaining existing talent and equipping them with the skills they need?9|Global Cyber Security Report 2023THE HAYS VIEWEdmond Pang Director,Cyber Security,APAC Similar to the global landscape,there is no surprise that cyber threats have increased in the APAC region given COVID lockdowns being the perfect storm,with some high-profile breaches highlighted in the media.As a result,were seeing countries stepping up with their policies and investment into cyber.For example,Australia has increased penalties for businesses that do not sufficiently protect customer data,while the Security Of Critical Infrastructure Act(SOCI)has been amended to strengthen the security and resilience of critical infrastructure.New Zealand has updated and finalised the New Zealand Information Security Manual(NZISM)with four policy changes in September 2022.Japan has stepped up on regulatory requirements in industries such as Banking and Insurance,and the Malaysian government has announced increased fundings into the Tech&Cyber security space.Overall,the APAC cyber market will continue to be hot but there are extreme challenges related to the constant war for talents.Apart from the typical security roles,we have seen an increased need for talents within GRC,CTi,IAM and Security Forensics across the region,but again a lack of suitable talents within the market.James WalshDirector,Cyber Security,UK&IrelandAs across the rest of the globe,the cyber threat to UK&I organisations has been growing exponentially.There is a battle to combat a variety of threat actors across all sectors and,ever increasingly,a war for talent too.As an industry,we have to look more at bringing in diverse talent pools that offer different skills and approaches to tackle the problems.A positive from the report is that over 70 per cent of organisations invest in upskilling their cyber professionals.Through our Permanent,Contract,Statement of Work and Hire Train Deploy offering,we are helping organisations to improve their security posture and diversity.Miguel DuranDirector,Cyber Security,North America I am very excited for this inaugural release of the Hays Global Cyber Security Report.With the ever-growing demand in the market,we at Hays wanted to provide a comprehensive deep dive into the global andregional challenges security leaders face and how key global events haveaffected the threat landscape,along with how to adapt and overcome ina heightened skill-shortage economy.This,along with our annual salary guide,will be a great tool for cyberleaders to use,and help overcome internal conversations around how to pivot in this fluid state we are currently in.Michael BeaupreHead of Cyber Security Solutions,EMEA&DACHCyber crime tears through our lives like a raging storm and does notdiscriminate.It can devastate any company anywhere.From small localbusinesses to large global enterprises and everything in between.Are we collectively prepared to weather these cyber storms?The majority of employers are struggling to hire top talent and see this gap as a significant risk to their cyber security strategies.We must partner as a community and develop new and innovative ways to attract,train,and retain cyber security talent.Over two-thirds of security leaders polled around the world are worriedabout their budget,and we must jointly optimise our investments incyber security technology and capability.This means working togetherwith cyber security providers and talent providers on a broad scale andengaging board level leaders to identify the most critical assets in eachcompany.We cant afford to protect everything,and we must prioritisebased on risk,resiliency,and operational relevance.Understanding that we are all in this fight together and the challengeswe face are not unique to our countries or our industries helps us sharesolutions and capabilities across boundaries.Cyber criminals know noboundaries,and our responses should harmonise across borders.Hays experts give their thoughts on the findings in our report and what they mean for leaders in 2023.As an industry,we have to look more at bringing in diverse talent pools that offer different skills and approaches to tackle the problems.10|Global Cyber Security Report 2023CYBER IN THE SPOTLIGHT VIDEO SERIESDeepayan Chanda Principal Cybersecurity Architect,Lab49 With this constant skills shortage challenge,IT certifications or any kind of education in cyber security do play a valuable role.However,in order to get the most value out of certifications,people should align these with the career path theyre choosing.I believe that most certifications are not dependent on location.There are multiple things we can do to hire and retain talent.Let the candidate or employee know what the role is all about there should be no ambiguity in the role definition.Keep an eye on market trends,as compensation does play a huge part in retaining talent on a case-by-case basis.Lastly,and possibly the most important:empower the role itself.People want to see the impact of the work they are doing and,if that is not visible,then its really a challenge to keep talent.Watch the full interview here Niamh MuldoonCISO,FenergoAttracting talent is one thing,retaining talent is something different.Its up to a CISO to retain top talent.Its about understanding where people want to go in their career and fuelling them with the skillset,expertise and experience to get there.People need to know the big picture and understand what they can get in terms of opportunities from their organisation.Were very focused on technology.If you take a step back and look at what information is all about,its confidentiality,integrity and availability of data.The opportunity there is to think about security in a wider context,and not just focus on technology.Watch the full interview here Ron BusharSenior VP and Global Government CTO,MandiantIn the same way that theres a global arms race in cyber,theres a global talent race in the same dimension.Weve recognised that you cant continue to take the approach of,“I only want the best person in cyber intelligence,I only want the best incident response guy in the world etc.”Theres only a few of those,so we have to shift our thinking around how to train and equip the next generation.Dont just look at somebodys resume and say,“they dont have 20 years of experience and a degree in cyber security,so theyre no good”.It is so important to embrace diversity,expand your aperture of who youre attracting to come to the organisation and then take the time to train them.I cant tell you how many candidates come through that you would say dont have the traditional experience,but have been able to come into a role,train with experts in the field and quickly become extremely capable.Watch the full interview here In our YouTube mini-series,we spoke to cyber security leaders worldwide to gain insightsinto the way they work,the changes theyre seeing and the challenges they navigate.It is so important to embrace diversity,expand your aperture of who youre attracting to come to the organisation and then take the time to train them.11|Global Cyber Security Report 2023NEXT STEPSConsider unexplored talentAlthough they may not have the experience or complete skillset,there are people out there with the learning mindset to help your business.Broaden your search and think about the relevant skills any recruits would need and which they could build upon with the right training.Similarly,theres talent with the skills youre looking for,but who have so far found it difficult to get on in the world of work.Hays is partnered with neurodiversity experts Genius Within,who assist organisations in bringing in neurodivergent talent.We also focus on developing and training those who face barriers in getting into the workplace,such as people from lower socio-economic backgrounds or those living with a disability.Upskill your current talentIts vital that your organisation stays ahead of cyber criminals through continuous learning.Ensure that senior leadership are aware of its importance and that your cyber security team are familiar with the latest practices and technologies.At Hays,we provide solutions and resources for upskilling in this area.If youre seeking help around training your workforce,contact us at Find experienced talentAs a lifelong partner to businesses around the world,Hays are well placed to find the right solutions to your staffing needs.From identifying existing talent to training those with potential,were working for your tomorrow to help your organisation succeed in the short and long term.If youd like to speak with one of our expert cyber security consultants about your team and its strategy,get in touch today.This report has highlighted that the skills shortage in cyber security is having an impact on organisations defence strategies.With this skills gap posing a problem for many cyber security leaders who are hiring,its important that organisations find an effective solution.Here are some recommendations we have for next steps:ABOUT USAt Hays,we invest in lifelong partnerships that empower people and businesses to succeed.We know that in a fast-moving market like tech,its even more important to provide organisations with quick access to top talent who will make a real difference.Weve spent years nurturing an ecosystem of highly engaged and unique candidates,and will work with you to grow or scale your business using our unique expertise aligned to sectors and technologies.Our insights are powered by experience,intelligence and data,made possible by our investment in new technologies and systems.A trusted partner to organisations across the globe,whether you need a professional or a whole new team,we can help you plan for tomorrow.Find out more at Copyright Hays plc 2023.The HAYS word,the H devices,HAYS WORKING FOR YOUR TOMORROW and Powering the world of work and associated logos and artwork are trademarks of Hays plc.The H devices are original designs protected by registration in many countries.All rights are reserved.

0人已浏览 2023-12-13 11页 5星级

1 Copyright 2023 The Nielsen Company(US),LLC.State ofData-driven personalization:The future of streaming content discoveryData-driven personalization:The future of streaming content discovery2 Copyright 2023 The Nielsen Company(US),LLC.In just three short years,the amount of content available to TV viewers has grown by more than 1.1 million individual programs1.Combined with an explosion of streaming services,the video landscape has become vast in a very short amount of time.Source:Nielsen Streaming Content Consumer Survey,June 202320%say they dont know what to watch beforehand and couldnt find something to watchso they did something else insteadOverwhelmed by choice:1 Gracenote Global Video Data;1.6 million unique titles available February 2020;2.7 million available in June 2023.The abundance of choice has put the audience in control like never before.But the expanding streaming landscape has become overwhelming for viewers.Its taking longer for viewers to find content theyre interested in,and audiences know that if they dont see something they like,a different option is just a click away.This reality highlights the importance of the user experience within individual services,especially amid the trend away from content exclusivity.2 Copyright 2023 The Nielsen Company(US),LLC.3 Copyright 2023 The Nielsen Company(US),LLC.For context about the breadth of choice available today,audiences across the U.S.,U.K.,Canada,Mexico and Germany now have more than 2.7 million individual video titles2 to choose from across broadcast,cable and streaming.Thats almost 1 million more than they had just two years ago.While the number has increased across both linear programming and streaming services,86.7%of the total now reside on streaming services.Audiences now have more than 2.7 million individual video titles to choose fromDistinct video titles across linear and streaming servicesNote:Numbers reflect availability over a 14-day period.Source:Gracenote Global Video Data;July 2021 and June 20232 Gracenote Global Video Data;numbers reflect availability over a 14-day period.20223202120230500K1M1.5M2.0M2.5M3MStreaming257,665516,841Total uniqueLinear1,682,4012,346,1711,884,5872,706,322U.S.U.K.CanadaGermanyMexico4 Copyright 2023 The Nielsen Company(US),LLC.To tap into the bounty of streaming content,adoption of connected television(CTV)3 devices,including smart TVs4,continues to rise.Earlier this year,Digital TV Europe published a prediction that global smart TV penetration will reach 50%by 2026.In the U.S.,where audiences streamed more than 19 million years worth of content last year,85.8%5 of TV households have at least one TV-connected device(smart TV,internet-connected device,game console).Traditional broadcast and cable programming remains the primary option for TV content outside of the U.S.,but streaming is gaining ground.3 CTV refers to any television that is connected to the internet.The most common use case is to stream video content.4 A smart TV is an internet-enabled television 5 Nielsen National TV Panel,May 2023 6 Australia Consumer and Media View,Q4 2022 7 Thailand Cross Platform Ratings 8 The Gauge,June 2023 In Australia,for example,70%of audiences6 say they watch streaming video,with the average viewer watching 1.7 hours per day.In Mexico,streaming had grown to account for 21.4%of TV usage in June 2023,up from 15.2%in December 2022.In Thailand,streaming had a reach of 50.7%7 during the second half of 2022,and audiences spent just under an hour per day watching streaming content.In the U.S.,streaming has been the dominant TV option since November 2022,growing to account for 37.7%of TV usage8 in June of this year.5 Copyright 2023 The Nielsen Company(US),LLC.Compared with traditional cable packages and schedules,digital media has few,if any,confines.There is seemingly infinite space for new services,channels,content creators and business strategies.The flipside,however,is that the audience is finite,and it fragments across every new platform and channel that debuts.This dispersal of engagement presents a significant challenge for an industry that has historically relied on monetizing content by attracting large audiences to a single place with aggregated,provider-chosen options.The growing abundance of content and content sources has become overwhelming for audiences,who say they now spend an average of 10-and-a-half minutes searching for something to watch,which is up from nearly seven-and-a-half minutes back in early 2019.Compared with strategies focused on adding more content to engage audiences,focusing on personalization and user experience can help audiences find what theyre looking for more quickly.Average time to find something to watchAudiences now spend an average of 10-and-a-half minutes searching for something to watchSource:Nielsen U.S.streaming content consumer surveysIn minutes and secondsWithout traditional boundaries,content sources have explodedMarch 2019October 20227:2411:1610:30June 20236 Copyright 2023 The Nielsen Company(US),LLC.To compound the complexity of audience engagement,Gracenote Global Video Data had a record of more than 39,500 distinct channels for audiences in the U.S.,U.K.,Canada,Mexico and Germany as of June 2023,with the U.S.accounting for nearly 80%of them.Each channel represents a unique source of linear programming,such as ABC and Flicks of Fury,an original channel on Pluto TV.Separately,there are more than 167 unique streaming video sources,with each representing an individual provider,such as Netflix and Disney .This view of where video engagement is taking place is much different than a consolidated list of channels within a single cable package.Distinct video channels and catalogs across linear and streaming servicesAudiences have nearly 40,000 different channels and streaming sources to find content on05K10K15K20K25K30K35K40K05022336,09639,555118167ChannelsCatalogsU.S.U.K.CanadaGermanyMexicoSource:Gracenote Global Video Data;July 2021 and June 20237 Copyright 2023 The Nielsen Company(US),LLC.From a monetization standpoint,streaming content distribution has evolved from its ad-free,subscription-focused roots.Today,platforms and services are increasingly including advertising.In more recent cases,advertising has become the primary go-to-market strategy.Traditional media companies have also joined in by distributing their linear content through digital channels(MVPD9 apps and vMVPDs10).As ad-supported options become more prevalent,audiencesmany of whom are scaling back on their paid subscriptionsare rallying.In the U.S.,for example,subscription video-on-demand(SVOD)viewing had fallen to account for 49%of all streaming11 at the end of May 2023,while ad-supported VOD(AVOD)had grown to account for 26%,and MVPD/vMVPD streaming had grown to account for 15%.Percent of streaming minutes watched in the U.S.9 Multichannel video programming distributor(e.g.,Xfinity,DISH Network,DirecTV,Spectrum,and Time Warner Cable).10 Virtual MVPDs deliver video content through an internet connection(e.g.,DirecTV Stream,FuboTV,YouTube TV).11 Streaming Platform RatingsNotes:“Other”categories are not included Source:Nielsen Streaming Platform RatingsThe rise of ad-supported streaming2H 202125S%May 202326I%Total AVODTotal SVODTotal MVPD/vMVPD8 Copyright 2023 The Nielsen Company(US),LLC.Now,the playing field is shifting again,especially in the U.S.,as audiences are gravitating to the latest iteration in the streaming space:free ad-supported television(FAST)channels.Unlike VOD services like Netflix and Hulu,FAST services,like Pluto TV,Tubi TV and XUMO,offer programming that is presented very much like traditional cable or satellite services dolive and on a schedule.Many complement their scheduled programming with on-demand content,providing the best of both worlds.In addition to presenting audiences with a familiar,cable-like experience,FAST channels are built to be adjusted very quicklybased on shifting demand.Said differently,new channels can be developed and added very rapidly,especially when media companies and other creators seek to add new channels to existing services.In late June,for example,NBCUniversal announced plans to launch 48 FAST channels to Amazon Freevee and Xumo Play.In addition to genre-specific programming,the lineup will include dedicated channels for Saturday Night Live,Top Chef and The Real Housewives franchises.Given the speed in which FAST channels can be developed and launched,industry stats about how many actual FAST channels exist are varied.As of June 2023,Gracenote Video Data had a record of 1,400 individual FAST channels in its database,with 1,050 of them available in the U.S.Available to audiences via internet connection without a paid subscription,FAST channels are ad-supported,and they lean into a trend that isnt discussed much in the industry press:the appeal of classic TV.Compared with traditional SVOD services,which typically offer a mix of high-profile originals and titles acquired from other sources,FAST channels are predominantly set up to showcase library contentprogramming that originally aired somewhere else(usually on traditional TV).Unique FAST channel distribution by countryU.S.1,073U.K.206Germany108Other371,434Source:Gracenote Video Data,June 20239 Copyright 2023 The Nielsen Company(US),LLC.Importantly,the rise of FAST channels isnt an experiment in streaming audience engagement.While Netflixs House of Cards was groundbreaking in bringing original content to SVOD in early 2013,time spent with acquired content is steadily rising.In the U.S.,for example,60%of time spent streaming in May 202312 was dedicated to programming that first aired on linear channels.Thats up 5.2%from October 2022.12,13 Streaming Content RatingsFor additional context,18 of the 25 most-watched streaming programs by U.S.women 18-34 in 2022 were classic TV titles13,with Greys Anatomy and Gilmore Girls beating out Stranger Things for the top spots.In total,this audience watched just under 77 billion minutes of these shows,which is 73%of the total for all 25 titles.Comparatively,17 of the 25 most-watched streaming titles by U.S.men 18-34 in 2022 were acquired titles,and this audience watched nearly 43 billion minutes of these titles64%of the total time spent with all 25 titles.The appeal of library content bodes well for FAST services,and the three FAST services that are independently reported in The Gauge(Roku Channel,PlutoTV,Tubi)already account for more viewing per month than all but the two top cable networks.In June of this year,these three services accounted for 3.3%of total TV use in the U.S.Streaming audiences spend more time with classic TV than original programs73%of the time U.S.women 18-34 spent watching the top 25 streaming programs in 2022 was dedicated to classic TV10 Copyright 2023 The Nielsen Company(US),LLC.The streaming industrys wealth of choice now puts the fate of any platform,service or program in the hands of the audience.And with the rise of FAST services,creators,distributors and advertisers have a new consideration with respect to audience engagement:channels.As individual FAST services increase their channelsmany of which include several hundredsuccess will hinge on their ability to quickly connect viewers with content theyre looking for.That point,which is critical across all streaming services,becomes even more critical when you consider that many channels and programs are not exclusive to individual services.Just a few years ago,Netflix paid to be the exclusive streaming home of Seinfeld for a period of five years that started in 2021.Fast forward to this year and we see Warner Bros.Discovery(WBD)and MGM cement a deal to bring 23 FAST channels to Amazon Freevee,including Cake Boss and Say Yes to the Dress,which are also available on the Roku Channel and Tubi.FAST services offer an array of experiences,but very little personalization.“Filiz Bahmanpour,VP of Product,GracenotePersonalization will attract audiences at the channel level11 Copyright 2023 The Nielsen Company(US),LLC.The proliferation of FAST services that offer non-exclusive content puts the onus of audience engagement in the hands of individual services.Said differently,any service that offers the same content as a competing service will need to lean on something other than content to attract and keep audiences engaged.While this is largely unique to FAST services,HBO(via WBD)recently broke character by licensing the distribution rights to several of its high-profile original titles to Netflixa move that followed WBDs announced FAST partnership with Roku and Tubi involving a handful of titles that were previously exclusive to HBO.This trend away from exclusivity highlights the immense importance of a platforms user experience.“Right now,there are tons of experiences,but very little personalization,”says Filiz Bahmanpour,VP of product at Gracenote,a Nielsen company.“Many say that FAST services will need exclusive content,original programming and marketing to succeed,but I think user experience and personalization will be the real differentiators.FAST services need to get the right piece of content and ads to the right user through merchandising,curation and algorithms.”Personalizing the FAST experienceWhich experience would drive the most engagement with the same program?8:30Home Live TV TV Shows Movies Networks9:009:3010:3011:00Queen of TartsQueen of TartsQueen of TartsBillys Backyard BBQBillys Backyard BBQFinger LickinQueen of TartsQueen of TartsFamily TriesFamily TriesFamily TriesTools of the TradeOpen HouseHouse&HomeHouse&HomeAround the YardIn the GreenSearchFamily TriesFamily Tries*Related&HomeownerTheHandygardeningchannelTHEPITTexasBrothers&Featured Global News National News Local News Sports Comedy Action Drama Horror Sci-fi Entertainment Kids Weather Browse Live TV CategoriesTexas BBQ BrothersThe Drill DownHammer TimeTHE DRILL DOWNHouse&HomeHouse&HomeTodays Modern GardenerTexas BBQ BrothersAround the Yardgardeningchannel9:45TV-PGEllen takes on the quirkiest customers yet.20 min leftTV-PGQueen of TartsTatsofQueenTHEPITLive TV Free with Ads CategoriesEllen takes on the quirkiest customers yet.15 min leftTV PGQueen of Tarts8:309:009:3010:3011:00HomeownerHandyTHEPITBillys Backyard BBQQueen of TartsThe Drill DownThe Drill DownThe Drill DownOpen HouseBillys Backyard BBQQueen of TartsTasty Treats with Trisha TapeokaQueen of TartsFinger LickinTexas BBQ Brothers STREAMRWatch nowDragon Heart12 Copyright 2023 The Nielsen Company(US),LLC.The growing range of content that audiences have access to presents a challenge yesterdays TV and film production wasnt built to address:personalized content discovery.Thats why its taking audiences longer to find something to watch.To catalog a TV show or movie,individual titles are encoded with information that provides the essential details of the content.Basic information includes program title,program summary,genre,production date,country of origin,run time,primary actors,etc.Now think about whether that information will help audiences determine if a program is something they want to watch when they log into Google TVs live TV service,which has more than 800 free channels to choose from(following the addition of Plex,Tubi and Haystack in April).Traditional program information isnt capable of helping audiences zero in on the programs that interest them at a personal leveland the challenge will only grow as the options multiply.To put the concept into perspective,consider the Showtime drama series The L Word,which aired on traditional TV from 2004-2009.As of April,Google TVs live TV service touted more than 800 free channelsThe reason its taking audiences longer to find something to watchThe reason its taking audiences longer to find something to watch13 Copyright 2023 The Nielsen Company(US),LLC.When The L Word debuted,content distribution was different,and learning about the program or where to watch it wasnt contingent on traditional program metadata.To watch the show,audiences simply checked a schedule and turned to the right network.Today,however,the 73 programs in the series are available across an array of streaming catalogs globally,and viewership has experienced a second wind in recent years due to a sequel that just completed its three-season run in January of this year.Viewed as groundbreaking at the time for featuring televisions first ensemble cast of lesbian and bisexual female characters,the show is now among the more than 3,190 video titles14 that include some dimension of LGBTQ inclusivity.So how can distributors and platforms help audiences who might be interested in this program find it?We know they cant rely on the shows original program information.This is where content metadata enrichment is critical.There are 31 individual Gracenote Video Descriptors for The L Word that platforms and services can use to deliver desired audience experiences.In total,Gracenote has approximately 15,000 Gracenote Video Descriptors that can help facilitate content discovery.Video descriptor metadata is critical in delivering personalized content experiencesGracenote has approximately 15,000 video descriptors that can improve content discovery 14 Gracenote Global Video Data,April 2023LovePersonal RelationshipsOriginal ConceptFriendsLesbiansWritersHomesLGBTQ IssuesFeelings Of LoveFalling In LovePassionateSensualStylishBetrayalFriendshipSelf-DiscoveryLove StoryPersonality ClashBisexualsFamily MembersLovers2000s DecadeBig CitiesCafsLesbian BarsRomantic RelationshipsHomophobiaHeartbreakComing OutWest HollywoodOriginal metadataDescription:A group of friends lives in Los Angeles.Genres:LGBTQ,DramaCountry:U.S.Language:EnglishOriginal Network:ShowtimeOriginal series airing: Copyright 2023 The Nielsen Company(US),LLC.But media is no longer defined by specific channels.Audiences no longer need to leave their homes to see a movie,for example,and podcasts are no longer just audio experiences.The proliferation of technology and device capability has broken down the walls between once-unique media types.The same needs to happen with content discovery,and tools like Gracenote IDs(unique content IDs),when paired with granular metadata,will be critical in aiding content discovery across the entire media landscape.“The power of metadata isnt limited to the content or the platform,”says Nielsen Gracenotes Bahmanpour.“When you do an internet search,it becomes a tool that looks at deeper metadata that helps identify why an audience member might want to watch something.And with metadata today,descriptors even involve things like mood,theme and scenario.”The other shortcoming of basic metadata is that it lacks the depth to facilitate modern content discovery across the entire media landscape.In essence,traditional metadata was one-dimensionalmeant for a specific media type,like television.Basic metadata cant aid content discovery across media types14 Copyright 2023 The Nielsen Company(US),LLC.Content discovery happens everywhere15 Copyright 2023 The Nielsen Company(US),LLC.Fans of the English indie band Florence The Machine,for example,might be aware of the groups music catalog,touring schedule and social media activity,but a view into those specific channels doesnt always provide everything a fan might want to knowespecially things that have already happened.But when both the band and the BBCs Graham Norton Show have a Gracenote ID,a fan can do a quick search on the internet(well outside of a search within a specific platform or service)and find out that their favorite act appeared on the popular British talk show back in June of 2018 just before releasing their fourth studio album.These IDs can also tell audiences who else was on the show at the same time,and what each guest is famous for.Content discovery now spans the entire media landscapeThe Graham Norton ShowSeries(TMS)ID:SH0Series(Studio)ID:4780271Jennifer SaundersCelebrity(TMS)ID:71045Celebrity(Studio)ID:4013415Channing TatumCelebrity(TMS)ID:321547Celebrity(Studio)ID:4290864Usain BoltAthlete ID:485385Celebrity(TMS)ID:609024Celebrity(Studio)ID:3626198Florence the MachineMusic Artist ID:GN87RPCB4ZR2YJ9 Celebrity(TMS)ID:556923Celebrity(Studio)ID:5234642Absolutely FabulousProgram(Studio)ID:4754704Program(TMS)ID:SH0Kingsman:The Golden CircleMovie(TMS)ID:MV0Movie(Studio)ID:5496674Rio Summer Olympic Games-Mens 100MOlympic Event ID:898618Program(TMS)ID:EP024344400503What kind of manRecording ID:GNCAFJVRRXGMVEPHow Big,How Blue,How BeautifulAlbum ID:GND1M09XGCGPCEXSeason 23 Episode 10June 8,2018Jennifer Saunders,Channing Tatum,Usain Bolt,Florence the MachineEpisode(TMS)ID:EP0Episode(Studio)ID:807932016 Copyright 2023 The Nielsen Company(US),LLC.Audiences today expect seamless discovery and search across media types.Platforms and content owners can deliver on this expectation across digital channels by leveraging linked content IDs.For example,if someone watches A Star is Born starring Lady Gaga and Bradley Cooper,they can easily navigate to the music featured in the film,jump to the video for“Shallow,”watch clips of Lady Gagas appearances on late night TV,or search for which podcasts she has appeared on.When combined with viewership data,the“scenario”video descriptors within Nielsen Gracenotes Advanced Discovery suite can also help inform creators and distributors about which scenarios are trending from a viewer engagement perspectiveand which ones arentwhich can help identify whitespace development opportunities.Video MoodTone of the work,as expressed through the combination of story,characters,setting,dialog,art direction,cinematography,music,effects,etc.ThemeAn abstract concept of human experience that the work addressesScenarioA specific situation,often personal or interpersonal,that sets the plot into movement,or moves it forwardConcept SourceThe type of original source material that provided the inspiration or story for the workCharacterActual or fictional person/being/group relevant to the workSettingWhen and where all,or a portion,of the plot is set:-Time-Place-OccasionSubjectA specific topic that the work addresses:-Issue-Personal Issue-Activity-Practice-Event-Location-Milieu-Being/GroupVideo descriptor classifications17 Copyright 2023 The Nielsen Company(US),LLC.While engaging audiences is paramount,the latest evolution in the streaming industry brings us back to very familiar go-to-market territory:ad-supported programming.And knowing that audiences continue to migrate to streaming services,brands and agencies are following suit with significant ad spend.Much like in traditional media,audience measurement will be critical for advertisers and agencies as streaming continues expanding.But as video content becomes increasingly digital and unified through standardized IDs,metadata can help advertisers as well.Media research house Digital TV Research recently forecasted global AVOD revenue to hit$91 billion by 2028,up from$41 billion last year.It then forecasted FAST ad revenue to hit$18 billion in the same year,triple the$6 billion it attracted in 2022.These forecasts align with the sentiment from the global marketers surveyed for Nielsens 2023 Annual Marketing Report,which cited that 45%of ad budgets are shifting to CTV.Additionally,84%of marketers say their marketing mixes now include streaming services.Ad revenue from AVOD and FAST is expected to hit$109 billion by 2028Advertisers are seeking their audiences:metadata can help1.Improve transparency.Proper metadata to describe content helps ensure buy and sell side parties speak the same language.As buys are efficiently and transparently served against the content and services expected,increased advertiser trust can translate to higher spend.2.Get contextual.Access to and distribution of content-level metadata,such as network,genre and parental rating,can add context to decision making process,improving overall targeting and monetization.18 Copyright 2023 The Nielsen Company(US),LLC.A clear shift is underway within the streaming industry.Media companies are no longer solely focused on subscriber acquisition to fuel growth.Theyre also thinking about financial efficiency amid the growing pains of the latest phase of the streaming wars.Audiences still have a bounty of choice;that wont change.And that fact,complemented by a developing shift away from content exclusivity,puts the burden of audience engagement on each individual platform and service.In the burgeoning FAST space,two factors will be critical for success and enabled by advanced content metadata:Personalization of channels and guides to keep the viewers on a specific platform.Advertising precision that matches the brand premise to the content that is being watched.The user experience becomes critical to streaming success 19 Copyright 2023 The Nielsen Company(US),LLC.Outside of advertising,media descriptors and personalization are just as beneficial for VOD platforms,especially if popular titles become more widely available across services.Personalization has always been the promise of a data-rich digital environment.Recommendations and“other people who watched”options are table stakes across platforms,but platforms have just barely scratched the surface of what a truly audience-centric experience could be.In the FAST space,some providers dont even feature recommendation capabilities,while others purposefully showcase the content they have paid to license instead of leveraging data about audience preferences.And every experience is currently a grid.To truly deliver on the promise of the Spotifyization of televisionand not just within the FAST spacecreators and distributors will need to lean into the personalization power that descriptive metadata can facilitate.Channel programming,personalized recommendations and user experience can be as customized as any platform chooses.Within such an expansive environment,its clear that user experience will become the most important ingredient for success in the years ahead.Browse Movies Live TV For youHi Ethan.Whats your mood?Be frightenedBreak my heartFeel tenseAmuse meLet looseFeel romanceDark Comedy20 Copyright 2023 The Nielsen Company(US),LLC.

0人已浏览 2023-12-13 20页 5星级

01Audiobook Listening TrendsAudiobook Listening Trends02Audiobook Listening TrendsAt a glance:Audiobooks are a fast growing type of audio content 367%of listeners say they“read”more with audiobooks 6Narrators can make or break the audiobook experience 8IntroIn recent years,the audiobook industry has experienced an era of remarkable growth,with audiobook publishers reporting double digit growth in revenue over the past ten years.According to WordsRated,a research organization conducting data-driven analysis on the publishing industry,the audiobook industry will continue to grow,and is expected to be worth about$35.05 billion in 2030.We surveyed hundreds of American audiobook listeners to gain an understanding of their listening habits and preferences when it comes to audiobooks,and get a sense of what trends we can expect to see in the future.03Audiobook Listening TrendsAudiobooks are a fast growing type of content:Half of American audiobook listeners spend 1-4 hours a week listening to audiobooks Audiobooks have consistently been growing their share of the audio landscape.The overall share of time spent listening to audiobooks has increased 106%since 2017.When we asked respondents to rank a number of audio experiencesmusic,audiobooks,podcasts,AM or FM radio,and the newsin order of personal preference,we found that audiobooks ranked second in terms of overall preference,ranking higher than podcasts and coming second after music.Our survey found that half of audiobook listeners(50%)spend between 1-4 hours per week listening to audiobooks and one-third(33%)spend 5-10 hours a week listening to audiobooks.When asked in which scenarios theyre most likely to hit play on an audiobook,commute or travel was the most popular choice,with 63%saying they listen to audiobooks while on the go.It comes as no surprise that audiobook listeners are avid fans of the audio medium overall.According to the Audio Publishers Association,individuals who listen to audiobooks daily spend at least 2 hours more per day engaging with audio content compared to the general public.In our 2023 Trends Report,we found that audio routines have become a mainstay in peoples daily lives.Unlike traditional content,audio-based experiences offer a hands-free and eyes-free experience,allowing individuals to stay entertained or absorb information outside the confines of a screen or paper book.Audiobook Listening Per Week04Audiobook Listening TrendsOther findings on listening habits include:Listeners said they listen to audiobooks during a commute(63%),while completing household chores(54%)and while relaxing,such as when taking a bath or falling asleep(44%)When asked how listeners land on their next book,half said they seek out specific titles,while the other half said they are more likely to browse for new titles.Women are more likely to browse for new titles than men:58%of women said theyre likely to browse titles while 42%of men prefer to browse.58%of men said they will seek out a specific book.Over half of listeners generally prefer to listen to fiction books over non-fiction books(56%)Audiobook Listening Takes Place:56%of Audiobook Listeners Prefer Fiction to Non-Fiction05Audiobook Listening TrendsPress Play:How to Get StartedFor those considering making the shift from reading to listening,there are plenty of websites and platforms to get you started.All thats needed is a device capable of playing audiobooks(your phone or tablet works!),a media application or platform to play them on,internet connection,and a book youd like to listen to.Though most of the major audiobook providers operate on a paid subscription model,many platforms,such as Audible or A,offer free trial periods,letting potential customers access a selection of free audiobooks and explore the platforms library.These trials are a great way to determine if the audio format of books works well with your needs.For those looking for a more cost-effective alternative,with a bit of research,youll also be able to find a selection of free audiobooks online.Lastly,if youre not sure of which book to start with,browse the web for inspiration!The major streaming platforms will have bestseller lists ranking the best audiobooks from the past year.When in doubt,you can always choose a book youve previously read,and enjoy it in a completely new way.Its clear that audiobooks are inching towards taking their place in the limelight,even overtaking podcasts in popularity.One of the driving factors behind its growth is the emergence of digital platforms and specialized streaming services dedicated to this medium.Major players such as Audible,Scribd,Apple Books,Kobo,and more have made downloading or streaming audiobooks much more convenient.After much demand,audiobooks were added to Spotify,furthering their efforts in becoming the all-in-one destination for listening needs.06Audiobook Listening TrendsKeep the pages turning:67%of listeners say they“read”more with audiobooksThe audiobook format remains the fastest growing format in publishing in the United States.If growth continues at this pace,we expect to see readers gravitate to this format over others,such as the e-book or traditional print books.67%of audiobook listeners say they“read”more with audiobooks compared to if they were to only read books in traditional text format.When integrated into daily routines,audiobooks serve as a channel for more people to enjoy literature,accommodating those even with the busiest of schedules.For audiobook listeners,when asked about preference in book format,audiobooks are on par with traditional reading.When considering a new book to read,one-third of respondents said they generally prefer to listen to the title as an audiobook,another third said they would generally prefer to read,one third said it depends on the book.Preferred Audiobook GenresWhen it comes to genres of books,listeners generally tend to enjoy fiction over non-fiction genres.The genres that were most popular for audiobooks are Mystery and Thriller(55%)and Science Fiction and Fantasy(48%).Business and Personal Finance was the least popular genre to listen to,with just over a fifth(21%)of respondents saying they enjoy listening to this genre.07Audiobook Listening TrendsWhy the audio format?Predictably,the listeners said the most popular reason for choosing the audio format is for its convenience and portability.Two thirds of audiobook listeners enjoy the format because its convenient for multitasking,allowing them to experience literature while having their hands free to complete other tasks.Just under one third(31%)said they find it easier to stay focused on the content in audio form.The audiobook format also offers an accessible format for digesting books.It enables a diverse population,including individuals with physical,mental,or neurological limitations that may make traditional reading difficult,to have access to literature.This includes individuals with vision impairments,or those who struggle with extended periods of sitting or holding a book.Moreover,it serves as a valuable resource for individuals with attention span difficulties,allowing them to engage with books despite the challenges of sitting down and maintaining a focus on reading.In a constantly evolving media landscape,writers looking to publish literature should consider leveraging the audiobook format as a valuable addition to their repertoire.The audio format presents an opportunity to reach a wider range of readers and provide an alternative reading experience thats inclusive of those who find it difficult to participate in books in the traditional way.08Audiobook Listening TrendsNarrators can make or break the audiobook experience:Nearly 60%of listeners ditched an audiobook because they didnt enjoy the narratorThe voice that brings the story to life has the power to elevate the experience,or let it fall flat.When it comes to media and our entertainment,everything needs to be just right,and we wont settle for mediocre.Just like how a poorly written script can ruin a good podcast,or a movie with a good story can be ruined by poor acting,in a similar vein,a well written book will disappoint with a poor audiobook narrator.When asked about their thoughts on the story experience,audiobook listeners said:Having a high quality narrator is essential to a good audiobook experience(64%)The audiobook experience is more immersive than actually reading(30%)They stopped listening to an audiobook part way through because they didnt enjoy the narrator(59%)One of the benefits of experiencing literature through audio is that it often requires less mental effort to listen to an audiobook than to read.With the addition of audio,a significant aspect of the story is presented to the listener,including the voices of the characters,the tone of the dialogue,and the pronunciation of names.With much of this mental exertion removed from the listeners responsibilities,there is more capacity to fully immerse themselves in the depicted scenes.When paired with a skilled narrator,storytelling can come to life in new ways in a completely different way.By transforming written words into captivating audio narratives,authors can engage listeners through the power of voice,infusing their stories with emotion,authenticity,and an immersive storytelling experience that goes beyond whats on the printed page.64%of Listeners Believe High-Quality Narration is Essential59%Have Stopped Listening Because They Didnt Enjoy the Narrator09Audiobook Listening TrendsAudiobook listeners on the fence about AI narrationWe all know that AI is slowly extending its reach,and the audiobook industry is not immune.Some platforms,such as Apple Books and Google Play Books already offer AI narration,allowing publishers to create digitally narrated books from text-to-speech technology.But are listeners interested in AI narrated books?Over half of audiobook listeners havent listened to an AI narrated book yet(55%),while 21%said they werent sure if they had.Only 24%of listeners were sure they had listened to an audiobook narrated by an AI before.As technology improves,we might see more listeners embrace the AI experience.For the time being,many are skeptical about the quality of narration AI can provide,and still desire the nuances and details that come with human storytelling.Listeners appear to be split on their openness to AI-narration 53%of listeners are skeptical about the quality of the AI-narrated experience,while 47%are fairly open or very open:20%said they would not consider listening to an AI narrated audiobook at all.33%said they would consider an AI-narrated book,but would much prefer a human narrator.Only a small percentage(13%)said they were very open,and expect an AI-narration to provide a similar listening experience to that of a human narrator.When Asked Whether They Have Read an Audiobook Voiced by AI,Listeners Responded:Are Audiobook Listeners Interested in AI Narration?10Audiobook Listening TrendsFinal TakeawaysSimilar to what was discovered in our 2023 Trends Report,the audio quality of the book is essential to keeping a listener engaged,and many of us wont think twice about ditching a book with subpar quality.As audio routines expand,we can expect the audiobook industry to grow,and might see more publishers and independent authors turn to audio to have their stories told.Lastly,until AI-narration can breathe life into stories in the way that humans can,will continue to approach robot storytellers with caution.MethodologyThe survey was conducted by Momentive for Voices,from May 2,2023 to May 4,2023.It consisted of a representative sample of 439 Americans 18 years of age or older.The survey looked at listening habits and preferences of audiobook listeners.About VoicesVoices is the worlds#1 voice marketplace with over 4 million registered users.Since 2005,the biggest and most beloved brands have entrusted Voices to help them find professionals to bring their projects to life.Voices has worked with major clients including Shopify,Microsoft,The History Channel,The Discovery Channel,Hulu,Cisco,the biggest ad agencies and thousands more small businesses.

0人已浏览 2023-12-13 10页 5星级

Cost and growth in Asset ManagementBenchmarking analysis and implications for German and Swiss Asset ManagersOctober 2023Strategy&VanguardFidelityState StreetJ.P.Morgan AMAllianzCapital GroupAmundiGoldman Sachs AMBNY MellonLegal&GeneralInvescoPrudential FinancialT.RoweNorthern TrustNatixis AMUBS AMAxaDWSSchrodersBNP Paribas AMUnion InvestmentCredit Suisse AM2)DekaBankSwiss Life AMAviva InvestorsPictet Asset ManagementPartners GroupTalanxVontobelGAM38,058(65%)7,594(110%)3,656(81%)3,264(39%)2,593(54%)2,141(14%)2,064(55%)1,904(76%)1,721(87%)1,721(10%)1,348(29%)1,322(71%)1,291(7%)1,195(55%)1,171(33%)BlackRock998(63%)845(18%)821(16%)695(54%)501(20%)413(41%)408(36%)1,079(30%)254(33%)251(-38%)222(46%)138(173%)129(20%)109(26%)76(-32%)372(54%)US Asset Managers outperform their European peers over the long term only a few others are able to keep paceGrowth for largest and selected other AMs1)(2016 to 2019 to 2022 in bn)1)Sample of 31 Asset Managers;2)In the meantime UBS has completed its takeover of Credit Suisse,now managing more than 1.4tn in combined global AuM;3)GAM to be taken over by Liontrust in Q3 2023;4)Additional AuM from 2016 to 2019;5)Additional AuM from 2019 to 2022Source:Annual reports 2022;Strategy&analysis October 20232( /-Growth)Insurance AMAs market leaders,BlackRock and Vanguard are in a class of their own in terms of both size and growthEuropean AMs achieved an average AuM growth rate of 36%,vs.56hieved by their US peers Swiss Partners Group is leading in Europe with 173%AuM growth over the last six yearsOverall,US Asset Managers grow significantly faster on average than their European counterpartsInsightsAuM 2016 in bnAuM 20194)in bnAuM 20225)in bn2023 Asset Management StudyStrategy&The AM industry took a big hit in 2022 AuM,revenues and profits declined,with alternative AMs bucking the trend Financial Performance comparison 2021-20221)1)Sample of 29 leading European and US Asset Managers,using 2021/2022 figuresSource:Annual reports 2022;Strategy&analysisOctober 2023316%88%-11%-15%-16%AuMRevenueProfit before tax20212022Financial Performance of Traditional Asset Managers1)2023 Asset Management Study In comparison to our 2021 sample study of Asset Managers,AuM are down on average by-10.6ter a strong performance in 2021( 15.8%)Both revenues and pre-tax profits experienced a substantial decline in 2022 Almost all Asset Managers in our sample had lower AuM compared to 2021,except for alternative Asset Managers In a high inflationary environment,alternative Asset Managers have grown their AuM,presenting a sweet spot for the Asset Management industryInsightsStrategy&The downturn in AuM for Asset Managers in 2022 is in line with declining markets and muted net flowsFinancial Performance comparison 2021-20221)1)Sample of 29 leading European and US Asset Managers,using 2021/2022 figuresSource:Annual reports 2022;Strategy&analysis October 202342023 Asset Management Study(Annual performance in%)(Avg.AuM growth in%)(Avg.flows as%of avg.AuM)22%-18%-11%4%2 22220212022MSCI WorldAuM growthNet flowsInsights Markets experienced the worst year since 2008,with the MSCI World Index down by 18%in 2022 due to a rising level of uncertainty,inflation,fears of recession,and central bank rate hikes Asset Managers experienced muted net new money(NNM)flows,with slightly positive inflows but an overall decline from 4%in 2021 to 2%in 2022 However,positive NNM only compensated in part for negative markets,and in some cases FX effects further impacted AuM negativelyStrategy&Highly profitableAverage profitableBelow average profitable2.83.23.43.68.23.0-2.00.0-1.50.2-1.00.4-0.50.60.00.50.81.01.01.51.22.01.41.61.83.02.03.52.24.02.410.52.62.5Total AuM(in bn)Profit per bn AuM(in mn)2022 was adverse for AMs,with significant declines in AuM and profits;small-scale AMs were more profitable than peersOutside-in competitive profit benchmarking1)2023 Asset Management Study1)Sample of 29 leading European and US Asset Managers,using 2022 figures;2)AMs are labeled as Passive&Active offering if at least 25%of AuM are managed in index funds and/or ETF investment productsSource:Annual reports 2022;Strategy&analysisOctober 20235Mid-scaleLarge-scaleInvestment focus:2)Small-scaleAvg.profitability 2021 and 2022Predominantly active offeringPassive&Active offeringInsights Average profit per bn AuM declined by 16tween 2021 and 2022 The majority of AMs in the sample experienced decreasing profits,except for Deka Bank,Swiss Life and UBS The most profitable AMs are largely small and active Asset Managers with business models similar to Private Equity firms,along with some selected US pure-play alternative AMsAvg.AuM 2021 and 2022Strategy&Declining revenues and rising expenses are putting Asset Managers under pressure2022 Outside-in competitive cost benchmarking1)2023 Asset Management Study1)Sample of 28 leading European and US Asset Managers,using 2022 figures;2)AMs are labeled as Passive&Active offering if at least 25%of AuM are managed in index funds and/or ETF investment products Source:Annual reports 2022;Strategy&analysisOctober 20236Investment focus:Size of bubble:small(AuM 250bn),mid(250bn AuM 1,000bn),large(AuM 1,000bn)Increase efficiency or maintain positionMaintain positionAvg.OpEx to AuM2021 and 2022Avg.CIR 2021 and 202210 0Pp0054005505251353045Cost-income ratio(CIR)(in%)Operating Expenses to AuM(in bps)Increase incomePassive&Active offeringPredominantly Active offeringIncrease income and efficiency Overall,the significant decline in AuM and consequent revenue decreases,together with marginally rising costs,led to increases in CIR and OpEx per AuM Almost 80%of selected Asset Managers experienced an increase in CIR Successful players with high income and/or efficiency manage a broad asset base i.e.,own ETF/index fund product range or focus on alternatives Consequently,it will be crucial for Asset Managers to manage costs effectively to tackle cost and profitability pressureInsightsStrategy&Average OpEx/AuM and CIRs are rising in AM effective cost management will be crucial going forwardOutside-in competitive cost benchmarking1)1)Sample of 28 leading European and US Asset Managers,using 2022 figures Source:Annual reports 2022;Strategy&analysisOctober 202372023 Asset Management Study20023033Average OpEx/AuM(bps)Average Cost-Income Ratio(CIR)(%)20021202265eebf%The Asset Management industry has experienced a notable increase in avg.OpEx/AuM and CIRs This is driven by rising cost levels and AuM declines,which in turn has led to decreased revenues While the top-line effect will likely normalize with increasing market performance and rebounding AuM,cost management will be key Specifically,costs have increased due to a variety of factors,including wage inflation/talent acquisition,technology investments,and regulatory/compliance costs(including others)InsightsStrategy&Despite recovery in AuM and revenue growth in 2023,profitability is struggling to keep pace with market recovery Comparison Q4 2022 and Q1 20231)Sample of 11 leading European and US Asset Managers with available data for above-stated metrics between Q4 2022 and Q1 2023 Source:Annual reports;MSCI World Index;Strategy&analysis October 202382023 Asset Management StudyDespite improving AuM levels and revenue growth,profits are declining in a recovering market environment Asset Managers will need to exercise cost control in their business portfolio,org.model and operationsMSCI World AuMRevenueProfit(Avg.profit before tax in bn)(Revenue in bn)(Avg.AuM in tn)(Index points)Q4 22Q1 231.81.9 4.5%Q4 22Q1 230.430.42-2.6%Q4 22Q1 231.01.1 8.2%Q4 22Q1 232,6072,791 7.1%Strategy&To counteract the profitability pressure,AMs have different options for optimizing their cost structuresStrategic cost considerations for Asset ManagersOctober 20239Source:Strategy&analysisWhat?Where?How?Optimization potentialBusiness portfolio and capabilitiesProduct and service portfolioSupport functionsOrganizational modelGeographic client coverageLocationmodelSourcing strategyOperational excellenceOrg.structureOperating Model DesignProcess excellenceReal estate and officeIT Streamlining of product and service portfolio incl.optimization of front office and marketing and sales Identification and elimination of hidden costs(e.g.,for under-utilized/unnecessary services)Identification of differentiating capabilities to enable profitable growth Evaluation of geographic client coverage and divesting the client portfolio in unprofitable geographies Optimization of the location model for mid-and back-office functions Identification of outsourcing potential,and revised sourcing strategy Streamlining of org.structure and operating model(e.g.,eliminating overlapping functions,reducing spans of control and mgmt.layers,etc.)Simplification and streamlining of the IT landscape Increasing process automation in mid-and back-office functions and leveraging advanced technologies(e.g.,GenAI)Reduction of real estate and office expenses by capitalizing on trend towards hybrid-working settings and remote client meetingsHypotheses on potential anchor pointsDifferentiatingcapabilities 2023 Asset Management StudyStrategy&In the light of recent pressure on financial performance,some Asset Managers have taken measures to reduce costsRecent examples of cost measuresOctober 202310Source:Strategy&analysis2023 Asset Management Study Headcount reductions remain likely at global AMs in the short-term,given it is often the greatest share of expenditure Revamping mgmt.boards is a long-term lever to reduce costs and optimize leadership/strategic decision-making Sale of non-core operations is likely to remain a quick and efficient approach to reduce expenses and refocus on/invest in core business units What next?Strategy&9January 2023Strategy&2023 Asset Management StudySeptember 202311GenAI inAsset ManagementStrategy&The vast potential of GenAI in Asset Management can be attributed to a small number of well-defined application fieldsOverview of GenAI application fields2023 Asset Management StudySource:Strategy&analysisOctober 202312Generative AIImproving and generating written contentAssisting in generating and summarizing coherent and grammatically correct written content such as reports,memos,emails,etc.Summarizing and researchCo-piloting for developersAutomatic completion and generation of codes,together with code optimization,error correction,and testing of codes.Programming and testingAnalyzing large amounts of dataProcessing and visualization of large amounts of data to support decision-making and detect anomalies.Data analysisProtecting data,using synthetic dataUsing automatically-generated synthetic data to anonymize personal data and improve data encryption by training models on encrypted synthetic data.Data protectionUnderstanding human dialogsCompleting tasks such as answering questions,real-time translation and understanding context.ConversationsStrategy&GenAI allows for multiple application fields in AM with the potential to increase efficiency,quality and revenueGenAI use cases in Asset Management2023 Asset Management StudySource:Strategy&analysisGen-AI application potential(small -high )Asset Mgmt.functionQualityRevenueCost efficiencyIT Service/Help Desk(Chat)ITTranslation of legacy codeGeneration,testing and documentation of new codeIncident analysisOperationsAutomated performance reportingAutomated trade reconciliationAutomated post-trade documentationCreation of client contractsPortfolio mgmt.and tradingAutomated market screening and tactical asset allocation and portfolio rebalancingMarket researchOptimization of trading strategiesInvestment strategy optimizationOctober 202313Optimization of Finance and Accounting processesBusinessmgmt.and supportInterpretation and document-ation of risk analysesCustomer onboarding/KYCReal-time detection of fraud and money-launderingCreation of financial reportingScreening of candidate profilesOnboarding/training of employeesOptimization of knowledge managementContract creationFinancial simulationsRisk monitoringAutomated verification of compliance with guidelines/regulationsSales and marketingVirtual assistants/chatbots for customerinquiriesPersonalized marketing and content to facilitate customer acquisitionCustomized product recommendationsAutomated screening for client opportunitiesPreparation of advisory protocolCreation of personalized client correspondenceIdentification of cross-and up-selling potentialVirtual assistants for client relationship managementPersonalized product recommendationsIndicative non-exhaustiveStrategy&GenAI is expected to cut total costs along the AM value chain by 5-15%Overview of GenAI cost efficiency potentials in Asset Management2023 Asset Management StudyNote:Mainly affects functions in boldSource:Strategy&analysisOctober 202314Cost efficiency potentiallowhighAggregated eff.pot.in%Functional potentials%of total costsRel.eff.potential in%Portfolio mgmt.and tradingPortfolio management and asset allocationResearch and analyticsTrading and structuring20-35%5-10%OperationsBusiness servicesAsset servicingFund servicing15-30-15%Sales and marketingSales and relationship mgmt.MarketingProduct specialistsClient servicesOther10-20-15%Business mgmt.and support functionsFinanceHRLegalRisk mgmt.ComplianceOther15-20%5-10%Front OfficeMiddle and Back OfficeITIT/application developmentIT/application maintenanceOther10-25%5-15%Management and strategyOtherIT support and end-user technologyOtherPost-trade services5-15%/1-6 bpsIndicative non-exhaustiveStrategy&Some initial applications of GenAI can already be observed in the marketSelected examples of GenAI in Asset Management 2023 Asset Management StudySource:Strategy&analysisOctober 202315Summarizing and ResearchData analysisConversationsIndicative non-exhaustiveApplication areaFunctionFront officeMiddle and back officeSales and marketingPortfolio mgmt.and tradingOperationsITBusiness mgmt.and support functionsMarket example of GenAIPortfolio and asset allocation optimization:GenAI is used to optimize the portfolio of asset allocation strategies by performing automated market screening of historical market data and risk factors.In addition,it simulates various market scenarios to support Asset Managers in deriving and adapting portfolio and asset allocation strategiesResearch:GenAI is leveraged to analyze large volumes of news articles,social media data and other unstructured data sources to provide insights into market trends,sentiment analysis and investor behavior,which ultimately help to identify emerging patterns and support Asset Managers to stay informed about market dynamicsCustomer profiling and personalized recommendations:GenAI is used to analyze customer data,including transaction history,preferences and behavioral patterns,to create detailed customer profiles that can be used for personalized investment recommendationsVirtual assistants/chatbots:GenAI is used to power intelligent chatbots that support clients with inquiries,provide investment advice and address common client services queriesRisk assessment and fraud detection:GenAI is used to analyze transaction data,market data,and other risk-relevant information to identify potential risks,such as fraudulent activities and compliance breaches,by flagging suspicious transactions or patterns,thereby enabling Asset Managers to take preventative measures to mitigate risksSupport in code writing and legacy code translations:GenAI is used to assist with code writing/translating legacy codes between different programming languagesCustomer onboarding:GenAI is leveraged to assist in reviewing necessary documents and KYC activities,i.e.,document-gathering and check for completeness,reading and system input of key data,error/inconsistency checking,account opening and preparation of related documentation Strategy&When vision meets reality,six organizational and technical requirements need to be met in order to bring GenAI to lifeOrganizational and technical requirements for GenAI in Asset Management2023 Asset Management StudySource.Strategy&analysisOctober 202316Risk,regulation&compliance“Sandbox”approachAI org.and operating modelGenAIrequirementsSkills,mindset&changeCloud transfor-mationData,infra-structure&securityEnsure technical and end-user skills and capabilities(upskilling)Achieve“data-driven”mindset change and effective change managementRealize quick wins via GenAI pilots in secure cloud environmentsEnsure data availability,quality and transparency,having regard to data privacy policies6.Skills,mindset and change4.“Sandbox”approach5.Data,infrastructure and securityEmbed GenAI in the AM organization(decentralized vs.central org.)Integrate GenAI into the Asset Management operating model 1.AI org.and operating modelLeverage GenAI as a driver of cloud transformation,due to the high data volumes and computing power3.Cloud transformationAdhere to relevant regulations(e.g.,EU AI Act)Consider AI-relevant risks(e.g.,reasoning behind and traceability of AI-enabled investment decisions)2.Risk,regulation and complianceStrategy&17Your Strategy&contacts2023 Asset Management StudyOctober 2023Dr.Philipp WackerbeckPartner Global Head of Financial Services 49 170 2238 Dr.Utz HelmuthManaging Director Head Asset Management GSA 41 77 409 4571utz.helmuthpwc.chKatrin WagnerSenior AssociateFinancial Services 41 58 792 3126katrin.c.wagnerpwc.ch Julia BurgerSenior AssociateFinancial Services 43 664 5152 Sandro KanzianManagerFinancial Services 43 664 5152 Martin RietzelSenior ManagerFinancial Services 49 160 2254 Thank 2023 PwC.All rights reserved.PwC refers to the PwC network and/or one or more of its member firms,each of which is a separate legal entity.Please see for further details.Disclaimer:This content is general information purposes only,and should not be used as a substitute for consultation with professional advisors.

0人已浏览 2023-12-13 18页 5星级

Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.May.2023Intelligent Cockpit SoCIntelligent Cockpit SoCMarket Research Report(2022)Market Research Report(2022)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Industry research:By conducting interviews with relevant companies,consumers,and industry experts,we aim to understand the demand,trends,and scale of the market.Data analysis:By collecting,organizing,and analyzing market data,including market size,growth rate,pricing trends,consumer preferences,and more,we aim to understand the current status and development trends of the market.Competitive analysis:By analyzing information such as competitors products,prices,and market share,we aim to understand thecompetitive landscape in the market and our own strengths and weaknesses.Technical analysis:By evaluating the technical requirements and development trends of the market,including the advantages and disadvantages of single photon detector technology characteristics,we aim to gain insights into the markets direction.Regional analysis:By understanding factors such as local consumer demands and policy environments,we aim to identify regional differences in markets and potential for development.MethodologyCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.IntroductionIntelligent Cockpit SoC refers to a highly integrated semiconductor device that serves as the central processing unit for the intelligent cockpit system in modern vehicles.It combines various functions and features,such as infotainment,connectivity,and vehicle management,into a single chip,enabling seamless and intelligent operation of the vehicles cockpit.The applications of Intelligent Cockpit SoCs are diverse and encompass a wide range of functionalities.They enable advanced infotainment systems with high-resolution touchscreens,voice recognition,augmented reality displays,and connectivity features that integrate with smartphones and other devices.The current market for Intelligent Cockpit SoCs is experiencing significant growth and is poised for further expansion in the coming years.The increasing consumer demand for enhanced in-vehicle experiences,connectivity,and safety features is a primary driving force.Moreover,the rise of electric and autonomous vehicles is propelling the need for advanced cockpit systems,further fueling market growth.The Intelligent Cockpit SoC market is highly competitive,with both traditional automotive semiconductor vendors and consumer electronic chip vendors playing crucial roles.Established players in the automotive semiconductor industry,such as Renesas,Texas Instruments,NXP Semiconductors,and Infineon Technologies,have a strong presence in this market.Simultaneously,consumer electronic chip vendors like Qualcomm,Intel,NVIDIA,and Huawei are leveraging their expertise in mobile and computing technologies to make significant inroads into the automotive sector.In this market research report,we delve into the current state of the Intelligent Cockpit SoC market,its growth prospects,key trends,and challenges.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Assumptions:Number of Intelligent Cockpit SoC per Vehicle LuxuryStandardEntry10.80.6L0111L1221L2/L2 322L3333L4/L5Based on the analysis of the current configurations and level of intelligence in passenger vehicles,ICV has developed reasonable assumptions regarding the quantity of Intelligent Cockpit SoCs used in vehicles of different automation levels.These assumptions form the basis for ICVs estimation of the market size for Intelligent Cockpit SoCs.Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.$3,492$7,70301,0002,0003,0004,0005,0006,0007,0008,0009,0002020202120222023E2024E2025E2026E2027EGlobal Market Size Forecast(in Million USD)Market Share by Autonomous Level(2022)Global Market OverviewL0L1L2/L2 L3L017.4%L133.6%L246.8%Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.$1,486$3,52305001,0001,5002,0002,5003,0003,5004,0002020202120222023E2024E2025E2026E2027EMarket Size Forecast-China（in Million USD）Market Size Forecast-Europe（in Million USD）$803$1,78002004006008001,0001,2001,4001,6001,8002,0002020202120222023E2024E2025E2026E2027EThe market of Intelligent Cockpit SoC in China was worth$1.486 billion in 2022,it was estimated to grow to$3.523 billion in 2027,resulting at a 6-year CAGR of 15.48%.The European market was the second largest segment,it was worth$803 million in 2022 and is estimated to increase to$1.78 billion in 2027,with a 6-year CAGR of 14.18%.Segment Market(by region)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.$400$888005006007008009001,0002020202120222023E2024E2025E2026E2027EMarket Size Forecast-America（in Million USD）Market Size Forecast-APAC（in Million USD）$686$1,33802004006008001,0001,2001,4001,6002020202120222023E2024E2025E2026E2027EThe market size of Intelligent Cockpit SoC in America was$400 million in 2022,it was estimated to grow to$8.88 billion in 2027,resulting at a 6-year CAGR of 14.22%.The third largest segment is Asia-Pacific region(excluding China),it was worth$686 million in 2022 and is estimated to increase to$1.338 billion in 2027,with a 6-year CAGR of 11.77%.Segment Market(by region)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.QualcommRenesasIntelNXPTIOthersQualcomm31.47%Renesas21.04%Intel17.07%QualcommRenesasIntelNXPTIOthersCompetitive LandscapeIntelligent Cockpit SoC Revenue Share by Vendor(2022)Intelligent Cockpit SoC Revenue Share by Vendor(2023E)Qualcomm29.47%Renesas19.7%Intel18.16%Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Executive SummaryResearch Objectives,Scope,and Methodology1.Introduction1.1 An overview of Intelligent Cockpit SoC market1.2 Assumptions2.Market Trends and Forecasts2.1 Global market overview2.2 China2.3 Europe2.4 AmericaTable of Contents(1/2)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.2.5 Asia Pacific(excluding China)2.6 Middle East and Africa3.Competitive Landscape3.1 Key players in the market of Intelligent Cockpit SoC3.2 Company profile:Qualcomm3.3 Company profile:Renesas3.4 Company profile:Intel3.5 Company profile:NXP Semiconductor3.6 Company profile:Texas Instruments3.7 Company profile:AutoChips3.8 Company profile:MediaTekTable of Contents(2/2)Copyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.Exhibit:Assumptions TableExhibit:2020-2027E Global Intelligent Cockpit SoC Market Size ForecastExhibit:2022 Intelligent Cockpit SoC Market Share by Autonomous LevelExhibit:2020-2027E China Intelligent Cockpit SoC Market Size ForecastExhibit:2020-2027E Europe Intelligent Cockpit SoC Market Size ForecastExhibit:2020-2027E America Intelligent Cockpit SoC Market Size ForecastExhibit:2020-2027E Asia Pacific(excluding China)Intelligent Cockpit SoC Market Size ForecastExhibit:2020-2027E Middle East and Africa Intelligent Cockpit SoC Market Size ForecastExhibit:2022 Revenue Share by VendorList of ExhibitsCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.9,200.00 USDElectronic(6-10 users)6,500.00 USDElectronic and 1 Hardcopy(1-5 users)7,250.00 USDElectronic(1-5 users)9,950.00 USDElectronic and 1 Hardcopy(6-10 users)Global Intelligent Cockpit SoCMarket Research Report(2022)Ordering InformationCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.The opinions expressed in this report strive to be independent and objective,and do not constitute any advertisement.The data in this report are mainly public information,as well as the collation of public data.The copyright of this report is owned by ICV TAnK.Any other form of use or dissemination,including but not limited to publications,websites,public accounts or personal use of the content of this report,needs to indicate the source.When using the content of this report,any quotation,deletion and tampering against the original intention of this report shall not be carried out.Without written permission,any institution or individual shall not reproduce,reproduce or publish in any form.If consent is obtained for quoting,reprinting,and publishing,it must be within the scope of permission.Those who use this report in violation of regulations shall bear corresponding legal responsibilities.The purpose of citing data,events and opinions in this report is to collect and summarize information,and it does not mean that we agree with all of their opinions,and we are not responsible for their authenticity.This report involves dynamic data,expresses the situation as of the time of publishing,and does not represent the future situation.The information or opinions expressed in this report do not constitute investment advice,please refer with caution.DisclaimerCopyright 2023 by ICV TAnK.This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher.At ICV,we are passionately curious about new technologies and strive to deliver the most robust market data and insights to help our customers make informed strategic decisions.We bring together deep intelligence across a wide range of capital-intensive industries and markets.By connecting data across variables,our analysts and industry specialists present our customers with a comprehensive view of their world.This is the benefit of the new intelligence.We are able to isolate cause and effect,risk and opportunity in new ways that empower our customers to make well-informed decisions with greater confidence.5250 Fairwind Dr.Mississauga,Ontario,L5R 3H4,Canada( 1)929 530 Contact Us

0人已浏览 2023-12-13 14页 5星级

01The Power of PodcastsThe Power of PodcastsUnderstanding listener habits in the podcast medium02The Power of PodcastsThe results of the survey reveal three main trends:Podcasts Have Become a Mainstream Piece of Media and Entertainment.3Podcasts are a Driver of Online Communities .6High Engagement Creates the Perfect Platform for Building Brand Awareness .8Methodology .11About Voices .11IntroPodcasts as a medium have completely exploded in popularity,joining the ranks of television,movies,and music as a medium for entertainment.But with so many podcasts out there to choose from,what makes a podcast stand out,enjoyable to listen to,and what makes listeners continue to tune in?We surveyed over 1,000 American podcast listeners to understand the who,what,when,where,and whys of podcast consumption and get a sense of what about podcasting makes this style of content unique.03The Power of Podcasts73%of Americans have listened to a podcast in the last 12 months.Remember when podcasts felt like a niche piece of content that only a select few people listened to?There were a handful of people within your inner circle that were avid listeners.They would drop the“I was listening to a podcast”and it made them seem interesting and ahead of the curve.Podcasts Have Become a Mainstream Piece of Media and Entertainment.Today,Spotify alone has over 5 million podcast titles.The number of listeners in America is estimated to be 82 million as of 2022,and nowadays you can assume that just about anyone has or continues to listen to podcasts.04The Power of PodcastsFun Listening StatsDifferent genders and ages have different content interests.Do any of these surprise you?Women are more likely to enjoy True Crimewomen make up 66%of True Crime fans.Men overwhelmingly enjoy sports podcasts more than women72%of sports and fitness fans are male.Those over 60 are more likely to use podcasts as a means to stay informed on the latest news:news and politics was the most popular genre for this demographic of listeners(44%).Podcast listening habits:a closer look at our audio engagement48%of American podcast fans spend between one and three hours listening to podcasts per week,and just over half(52%)spend at least 4 hours a week listening to podcasts.Some podcast enthusiasts(15%)spend over 10 hours per week listening to podcasts.Thats 40 hours or more in one month!05The Power of PodcastsYou might wonder:if someone listens to over 7 podcasts,how do they keep track of all that theyre listening to?We expect that there are two different ways people go about deciding which podcasts to listen to.On one hand,you have the binge-style listener.They have a small number of podcasts theyre currently interested in,and when a new episode drops they hit play,just like you would with your favorite tv show.On the other hand,there are those that decide on what they want to listen after scrolling through a feed.This type of listener subscribes to a number of podcasts,where new releases and suggested shows are recommended.They might not know exactly what they want to listen to at that moment,and much like browsing a TV guide or new releases on Netflix,this listener will decide on what they want to listen to based on shows presented to them at that moment.Someone with this style of decision making might listen to a large number of different shows each month.In any given month,just over half(51%)of podcast fans have between one to three different podcasts in their listening rotation.This makes sense considering we know that 48%of listeners spend about one to three hours a week listening to podcasts.But what about those that dedicate a bit more time?30%of fans listen to four to six different podcasts in a month,and 19%listen to more than seven different podcasts in a month.Podcasting perks:what do people come to podcasts for?We asked respondents why they enjoy this medium,and what they try to gain out of it.The most popular reason people listen to podcasts is for their entertainment.In the same way that we turn to movies,television,and or social media,62%of listeners said they turn to podcasts to stay entertained.Moreover,people seek out this medium to stay up-to-date on industries and topics they want to keep up with(54%),and they also want to have something in the background to pass the time while they complete other tasks(48%).When comparing these findings to the most popular podcast genres,it all lines up.Comedy is the most popular genre,with 42%of fans saying they enjoy comedy podcasts.True Crime and Arts and Entertainment tied for the second most popular genres(34%),and Lifestyle and Health for third(31%).The least popular genres were Personal Finance(16%)and Sports and Fitness(15%)which,given our findings on what listeners gain from podcasts,makes sense.Podcast fans are most likely to hit play while taking on another task.The most common scenarios to listen to a podcast are while completing household chores(55%),during a commute(50%),or while doing a hobby or leisurely activity(36%).06The Power of PodcastsPodcasts are an interesting piece of content.They straddle the line of being a piece of media but also carry community building elements that social media platforms have.They possess a unique charm that sets them apart from other forms of entertainment such as TV shows and movies.With an interesting topic,skilled hosts,and entertaining banter,podcasts are able to establish a special sense of closeness and connection with their listeners.Podcasts are a Driver of Online CommunitiesAuthentic voices and personal connections The uniqueness of podcasts lies in how the medium forces hosts to present a real,authentic version of themselves online.Unlike other forms of media that heavily rely on a visual component to bear the weight of being engaging,podcasters are forced to hold an audience using their voice,personality,and words.They dont have appearances,mannerisms,lighting,angles,or catchy imagery to support the content.To stand out,podcasters have to really bring their own flair,and when done well,the audience can see that.Sharing personal stories and anecdotes adds a layer of vulnerability when showing up online,and all audiences love a good story.The combination of storytelling and personality that shines through on podcasts is key to developing a strong relationship and trust with listeners.By showcasing personal traits online,listeners develop a parasocial relationship with the podcaster;the audience experiences a one-sided connection with the podcast host,feeling like they know the host well,even though the host lacks reciprocal knowledge of them.Podcasts excel in fostering these relationships,with approximately 54%of podcast listeners reporting that they genuinely feel well acquainted with the personalities of their favorite podcast hosts.07The Power of PodcastsSocial network,or media,or both?Personal networks,whether that be in-person or digital,play a central role for podcast discovery and promotion.Almost half(48%)of listeners have discovered new podcasts through word of mouth recommendations from friends,family,or colleagues.Media is a big driver of podcast discovery as well.31%of listeners have discovered podcasts through social media and similarly,29%have discovered a podcast through listening to other podcasts.Many respondents said they discovered new podcasts through platforms like Reddit,YouTube,and TikTok.Did you knowPodcasts are most enjoyed in a conversation or interview style format:77%of podcast fans prefer podcasts with two or more participants in the conversation.Only 23%prefer monologue style podcasts with one host.Some podcasts really enjoy engagement from listeners,and lean into incorporating an interactive component to their show.This was done by the extremely popular Joe Rogan Experience podcast,which,in the past,included a live chat function for episodes that were live streamed.We can see that podcasts foster a sense of community among listeners with similar interests.Online forums,social media groups,and discussions surrounding podcasts enable listeners to engage with each other listeners and creators,further enhancing the overall listening experience.Nearly two-thirds(62%)of listeners said they follow their favorite podcasts or podcast hosts on at least one social media platform.And through repeated themes and stories across the podcast episodes and other forms of media,a community with familiar characters,stories,and jokes forms.To sum it up,the podcast medium is very efficient at creating opportunities for listeners to connect,interact,and build relationships with hosts and other listeners of shared interests.08The Power of PodcastsHigh Engagement Creates the Perfect Platform for Building Brand AwarenessSo what does this mean for creators and brands?We now know that podcast fans are highly engaged with the podcasts they listen to.What does this mean for creators and organizations?It means that podcasting is an effective tool for growing brand awareness.When a product is endorsed by a trusted figure with whom the audience feels a connection with (the podcast host),listeners will be more inclined to perceive that product or brand favorably,and even take action based on the recommendation of the host.Keep in mind that podcast enthusiasts actively search for entertaining content,and exciting genres with engaging hosts tend to be the most favored.Advertisements read by these hosts,especially ones that resonate with us,not only boost brand recall but can also become a source of entertainment themselves.Podcast advertising is projected to account for$3.53 billion of ad spend in 2026,up from$2.25 billion this year.The engaged audience that comes with podcasts means that podcasts are a powerful platform for advertising.Advertisers using podcasts for brand placements can benefit from better audience targeting,strong brand recall,higher conversion rates,and more.09The Power of PodcastsDid you know that many organizations have their own branded podcast?Some might come as a surprise.Would you expect Trader Joes,the beloved American grocery chain,to have a podcast about the back end of their grocery business?If it piques your interest,check out Inside Trader Joes.Other major organizations with branded podcasts include Morgan Stanley,Duolingo,and even Netflix.In 2023,the podcast landscape is booming.If youre starting a podcast from scratch,gaining immediate traction on trending charts will be challenging.Based on the discovery trends above,using your social network and other marketing channels to get the word out on your show will be the strongest asset.As weve seen,podcast fans are very engaged and feel connected to the hosts of the podcasts they listen to.If youre looking for another way to market your own brand,given how engaged podcast listeners are,your podcast itself could be the ad.They can serve as a way to build the credibility of your company,your spokespeople,and deep dive into topics in a way that will engage your audience longer than other forms of media might.Majority of listeners dont have a preference for who reads the ad in a podcast whether it be or a host read ad.Of those that do have a preference,nearly two thirds(62%)would prefer an ad read by the podcast host.Considering starting a podcast?Paid placements and sponsorships arent the only way to use podcasting to your advantage.Creating a podcast and bringing it into your owned content strategy can bring the same benefits that podcasting does for advertisers,and even more.With an interesting topic and enjoyable host,listeners will be interested in hearing what you have to say.Furthermore,having your own podcast will add a longform content channel to share your perspective.By sharing your point of view and expert insights,you will increase your brand awareness and build your authority.10The Power of PodcastsGrab the mic:start your own podcast 58%of podcast listeners prefer the audio-only podcast format.If youre starting a podcast and thinking of incorporating video,thats great,but focus on your audio content and quality first.77%of listeners prefer podcasts with two or more participants in the conversation.Keep this in mind when deciding if you want to do an interview style or monologue style podcast.Invest in your social presence.62%of listeners follow their favorite host or shows on social media,and 31%discover new podcasts through social media.This is an area that youll want to dedicate efforts to.Make it yours!37%of podcast listeners continue listening to their favorite podcast because they enjoy the host of the show.Dont be afraid to let loose,add your personal touch,and have fun!11The Power of PodcastsMethodologyThe survey was conducted by Momentive for Voices,from July 12 to July 14,2023.It consisted of a representative sample of 1183 Americans 18 years of age or older.The survey looked at listening habits and preferences of podcast listeners.About VoicesVoices is the worlds#1 voice marketplace with over 4 million registered users.Since 2005,the biggest and most beloved brands have entrusted Voices to help them find professionals to bring their projects to life.Voices has worked with major clients including Shopify,Microsoft,The History Channel,The Discovery Channel,Hulu,Cisco,the biggest ad agencies and thousands more small businesses.

0人已浏览 2023-12-13 11页 5星级

Redefining Observability:The Experience-Centric Approach2E X P E R I E N C E-C E N T R I C O P E R A T I O N SPerformanceComplete DisconnectUser ExperienceYour business needs Experience-Centric OperationsWhile Observability and Application Performance Monitoring(APM)tools have transformed how engineering and operations teams function over the last ten years,there are several challenges that every VP of Ops and CTO still face with no clear solution in sight:Being surprised by customer issues on social media,from customer support calls,or through the CEO,even when their tools say everything is fine.Needing an army of expert engineers to debug whenever a major incident happens.Exploding costs of observability tools to monitor their growing infrastructure.These challenges are all rooted in the same underlying problem.Existing Observability tools and the teams that use them are disconnected from what really matters to the business:user experience and engagement.FIGUR E 1Operations need to evolve from focusing on low-level system performance to higher-level user experience.Experience-Centric Operations is a new paradigm that will transform operations and engineering teams to be more efficient,more connected to the business,and more cost effective.Disconnect Between Operational Tools and Customer Experience3E X P E R I E N C E-C E N T R I C O P E R A T I O N SWhat is Experience-Centric Operations?Experience-Centric Operations is a shift in methodology where user experience is at the core of operations.System level monitoring is,of course,needed but is not always kept in context of user experience in real time.By user experience,we are not talking about page load times and crashes on a small sample of users.We are talking about monitoring every user flow across every user in the application in a quantified manner in real-time.If a user is not able to login,sign up,or find content within an expected period of time,we should be alerted to the issue.If the percentage of successful sign ups suddenly dropped from 98%to 94%for whatever reason,we should know about it immediatelyand not because we read complaints on social media.Experience-Centric Operations circumvents these problems by intrinsically connecting a comprehensive measurement of user experience with system and application performance,removing surprise escalations,democratizing diagnostics by natively connecting the dots,and reducing cost by focusing on the data that matters.Here is a simple real-world example.In the picture below,we are looking at the Conviva UI for a live sports app,specifically tracking an experience metric called Login Processing Time in the lead up to a big event.This metric measures the time taken to complete the login process after the user has entered their credentials and clicked login.It would include any SSO integration,third party authentication checks,and other activities to complete the login process and bring up a working application.Its important to note that this is not as simple as measuring the response of a single API call.While monitoring the metric,we see a sudden spike just before the event is about to start.Because we are directly measuring Login Processing Time,we immediately know that users are impacted and how many are impacted.4E X P E R I E N C E-C E N T R I C O P E R A T I O N SWith just two clicks,in the picture next page,we determine that only users on a specific iPhone 15 version and on two specific device models are experiencing the login problem.If not addressed immediately this would cause a major disruption for users attempting to watch the event causing churn and brand damage.Because we are directly measuring Login Processing Time,we immediately know that users are impacted and how many are impacted.With just two clicks,in the picture above,we determine that only users on a specific iPhone 15 version and on two specific device models are experiencing the login problem.With two more clicks,in the picture below,we pinpoint a slow call to a third party authentication service.In this case,no amount of meticulous backend monitoring would have helped us locate root-cause,as it is a third-party issue.With user-centric operational monitoring,however,we easily connected the dots from Login Processing Time to the specific device models to the specific network call,leaving us with a clear understanding of the issue and its impact,and a concrete action to resolve the issue.A new operational methodologyExperience-Centric Operations is a new way of thinking and does take some getting used to.As with all paradigm shifts,there must be a significant benefit.Figure 3 illustrates this difference and the massive benefit.On the left is the current paradigm with an infrastructure-centric approach.Monitoring is primarily from backend systems through logs,metrics,and traces.Ops teams monitor these regularly,but surprises still happen and many experience issues still go Total143 K2.09 M00.345 sec7.32 K93.8 K00.625 sec2.39 K5.67 K01.06 sec3.81 K60.6 K00.425 sec5.01 K20.7 K00.183 sec7.26 K95.9 K00.432 sec4.35 K143 K00.286 sec36.6 sec43.5 sec87.8 sec13.1 sec39.1 sec26.7 sec33.3 sec5.62sec30.2 sec18.3 sec1.13 sec0.0691 sec0.592 sec0.517 secNetwork Request CountTotal EventsApp CrashesAvg.Network Request DurationLogin ProcessingTimeFull Login TimeiPhone 11iPhone 13 Mini iPhone 13 ProiPhone 8 PlusiPhone 12iPhone 13Device Operating System VersionTotal143 K2.09 M00.345 sec2.27 K27.4 K01.02 sec121 K1.7 M00.318 sec1.97 K35.9 K00.711 sec1.84 K22.3 K00.611 sec5119.29 K00.357 sec36.6 sec51.6 sec37.8 sec28.4 sec6.27 sec29.7 sec5.62 sec18.3 sec3.2 sec0.412 sec0.407 sec0.358 secNetwork Request CountTotal EventsApp CrashesAvg.Network Request DurationFull Login TimeLogin ProcessingTimeiOs 15.6.1iOS 16.6iOS 15.7.8iOS 16.5.1iOS 16.0Network Request Url PathTotal3661NA20.3 sec1414NA48.4 sec37NA5.02 sec11NA4.49 sec12NA3.33 sec1113NA2.21 secNetwork Request CountTotal EventsApp CrashesAvg.Network Request Duration/reggie/v1/acme/regcode/adobe-services/usermetad./adobe-services/sessionDev./adobe-services/authorizeD./adobe-services/deviceShor.Network Request Url HostTotal2.05 K5.35 KNA1.19 sec4473NA16.6 sec1619NA3.61 sec2444NA3.56 sec1938NA3.41 sec810NA3.41 secNetwork Request CountTotal EventsApp CrashesAvg.Network Request Dcatalog-service-cdn.api.reg.image-resizer-cloud-5E X P E R I E N C E-C E N T R I C O P E R A T I O N Sunder the radar.When an escalation comes from customers or social media,it triggers a frantic search for potential issues.There is no understanding of the magnitude or impact of the issue,nor clear guidance on priority.This means that in many cases the ops team and an army of expert engineers across multiple areas of the system are brought in to diagnose the issue.Eventually,when an issue is found and fixed,the team is not sure if the customer problem is resolved or not since there is no direct monitoring of customer experience.This approach leads to more customer impact and higher cost.The right side of the figure is how things work in an Experience-Centric approach.There is an equal emphasis on measurement of user experience and system performance.When user experience is impacted,the issue is immediately and automatically detected and then diagnosed by correlating with system performance,pinpointing the component or components causing the issue.This means the issue can be resolved quickly and with just a few team members.The team only has to look at the data that matters,which reduces cost.As the monitoring system learns patterns of system performance that impact user experience,it can start to predict experience-impacting issues before they happen and classify system performance issues as customer-impacting or non-customer-impacting to aid prioritization and investment.FIGUR E 3Fix CPU IssueFix App Version IssueFix Player Version IssueFast|Proactive|Low CostExperience-CentricSlow|Reactive|ExpensiveInfrastructure-Centric58%longer38%longerTime to first play 10.2 minutesExperience issues escalated from cus-tomers and social mediaMetricsLogsTracesDont know the magnitude or severity of the issue!6E X P E R I E N C E-C E N T R I C O P E R A T I O N SA new paradigm of technologyUnfortunately,existing observability tools are not capable of solving the disconnect between experience and performance or enabling an experience-centric approach to operations.They cannot measure experience metrics like Login Processing Time continuously in real-time and cannot connect them to performance causes.A new paradigm of technology is needed to unlock Experience-Centric Operations.This technology must support a flexible and easy way to compute experience metrics across all users in real-time,automatically alert on these metrics based on anomalies,then connect them to performance in the client and in the backend to quickly diagnose them.Each of these actions is individually very valuable,but together they enable a transformation that dramatically improves user experience and reduces operational cost.Observability Tools Cannot Bridge theExperience DisconnectTodays monitoring tools focus almost exclusively on backend servers and applications.Unfortunately,this means ops teams are completely disconnected from the user experience,leaving them guessing in the dark and with no context on how to prioritize.When an escalation comes in because users cant sign up,an army of expert engineers must be brought in to find the issue,interrupting their high value work.Since there is no clear path through the data to the root cause,even the engineers are reduced to guesswork and scouring all the systems in the path of sign up for some solution.This is slow,expensive,and disruptive.Once they do find a probable cause,make some time,and fix it,they still dont know for sure if they addressed the real problem since there is no direct validation of user experience.The disconnect from user experience and the need to find a way to measure it directly is a known problem for companies,and observability tools have been trying to address it with two approaches.1.By ingesting more data from backend servers and applications,observability solutions hope to capture a higher percent of user-impacting issues.This means capturing more logs,more metrics,and introducing traces or capturing more traces.This bloat has led to higher costs for companies,without ultimately solving their problem:it is simply not possible to understand experience from backend sources alone.7E X P E R I E N C E-C E N T R I C O P E R A T I O N S2.Observability solutions introduced Real User Monitoring(RUM)tools to try to capture user experience.RUM unfortunately falls noticeably short in solving the problem,as the tools are built on severely limited technology,which is expensive to use,lacking in functionality,and only capable of running on a small sample of users.Read more about the limitations of RUM tools here.Neither of these costly approaches is capable of solving the performance-experience disconnect.It continues to be a major stress point for companies because,despite the human,technological,and financial resources being thrown at the problem,surprise escalations are still happening every day,stealing expert engineers away from innovation for the business.Whats the problem with legacy observability tools?The biggest drawback is fundamental:todays solutions cannot compute true experience metrics in real-time because they simply do not have the foundational technology needed for the task.All these tools are built merely to count events,such as crashes,errors,page loads,etc.and even this they struggle to accomplish at scale.Experience,however,cannot be computed as a simple count of events.Understanding the complexities of the user journey requires us to compute complex metrics based on timing,time intervals,sequences,and state.We refer to this entire process as stateful analytics or a metric based on this as stateful metric.Lets look at this more in-depth:A count of errors is a stateless metric.It does not depend on understanding sequences,time intervals,or state.Time to Sign Up is a stateful metric(granted,a fairly simple one,but RUM tools cannot even compute this).It can be considered stateful because the monitoring system must identify the start and successful completion of sign-up for a particular session(a process we call sessionization),then compute the time difference between the two for each session,then aggregate them across sessionsall in real-time.We can introduce a new level of complexity to the Time to Sign Up metric by excluding any time spent outside the app.Lets say the user received a text while signing up,so they spent a minute in their messaging app responding to it in the middle of the sign-up process.This minute should be excluded from the Time to Sign Up metric.You can see how the user session rapidly becomes much more complex than simply calculating time between two events.8E X P E R I E N C E-C E N T R I C O P E R A T I O N SMaybe youre asking why you couldnt simply compute the Sign Up metric in the client and send it as an event.While this may sound feasible at first,it does not work in practice,because computing all the relevant stateful metrics in the client across all device types and variations of user flows and versions and maintaining this over time creates too high an overhead,leading to inaccurate metrics and lack of trust while deteriorating client performance.Even when companies commit to this approach with all seriousness,they are quickly forced to abandon it,leaving the ops team where it beganstuck with low-level performance visibility and no understanding of the user experience.Figure 4 shows what we mean by experience metrics for a video streaming app.On the left are low-level performance metrics(the focus of RUM tools).In the middle are critical experience metrics,categorized by each part of the user flow.On the right are engagement metrics(the focus of product analytics).A comprehensive understanding of user experience requires measuring all three in real-time in a connected manner:Engagement reflects outcomes that matter for the business.It helps us understand the impact of experience and define what a good experience is.Performance helps to diagnose why we have an experience issue.Experience is the connection between performance and engagement.It is the most important missing piece in every business today and it cannot be supplied by todays observability tools.F IG UR E 4Transform critical experiences,performance,and engagement into real-time operational metrics9E X P E R I E N C E-C E N T R I C O P E R A T I O N SConvivas Approach to Experience-Centric Operations&Stateful AnalyticsConvivas approach to building a platform for Experience-Centric Operations involves two key technologies:1)A thin SDK(we call Sensor),which is a new approach to collecting data from application endpoint,and 2)Time-State Technology,which is a new abstraction and system for efficient,real-time,and stateful data processing at scale.Thin SDK Strategy Enables Light-Weight and AccurateMonitoring of ExperienceThe first challenge on the way to connecting user experience to system performance is the need to deploy an SDK,which is the last thing any app development team wants to do.We get this.Weve lived this reality for 15 years as we currently manage about 7 billion SDK instances across thousands of apps and device models,web browsers,phones,tablets,smart TVs,set-top boxes,game consoles,and even cars.From this experience,we can say with confidence that its not possible to avoid collecting data from the app when youre trying to measure true user experience.What we also know,however,is that we can do much better than all the RUM and product analytics SDKs out there.The number one lesson weve learned regarding SDKs is that they have to be extremely simple and do as little work as possible.This means we must resist doing any computation or manipulation of data in the SDK.This is counterintuitive because at first glance,it seems like the cheaper option,since were using the devices CPU cycles instead of our backend,and the easier option,since the metrics are directly applied to the data.In reality,though,this make the SDK heavier,which slows down the app,and more prone to obsolescence,since the metric implementation will fall out of date and become inaccurate for weeks or months at a time,before an update can be applied.If youre computing 20 metrics across a dozen device types,thats 240 metric implementations that could be outdated and even erroneous.1 0E X P E R I E N C E-C E N T R I C O P E R A T I O N SConviva Sensor (Thin SDK)Moves Complexity to the BackendTo solve this,our SDK only collects events without enforcing any semantic schema.We ingest the events exactly as they are exposed by the device OS and your app.This means developers dont have to instrument each event like they would if they wanted to process the data in Adobe or Google Analytics or if they were sending custom events to a RUM tool.Instead,they can simply connect their app to the Conviva platform through our SDK,and we can pull in all event data without sampling.The magic here is that the developers can then control which events they want to pull in,map and rename events,and create any stateful(or stateless)metric from these eventsall in the backend.This approach does mean we are taking on a lot more processing load on our backend than other systems.Dynamic event mapping and stateful metric computation were not actions existing tools could do in real-time at the scale of millions of endpoints,but they were the actions we needed to accomplish to solve Experience-Centric Operations.It turns out no big-data technology(open source or proprietary)could handle what we needed,so we had to create it completely from scratch.F IG UR E 5 1 1E X P E R I E N C E-C E N T R I C O P E R A T I O N STime-State Technology Enables Experience-Centric OperationsLets restate the problem facing businesses in the digital environment:they need the ability to do stateful metric computation in the big-data backend in real-time at the scale of millions of endpoints,and it must be cost-effective enough to be a practical solution for operations.We tried to solve this problem with every major big-data platformSpark,Flink,Kafka,Druid,Clickhouse,etc.None of them can address the entire issue on their own.They offer good components for a solution,but they are not capable of being the core engine to compute stateful metrics from raw event streams in real-time with high scale and efficiency.This realization led us to dive in and really understand why this is the case,which led us to a key insight:the problem is not the systems themselves;the problem is the abstraction that every one of them is built onthe tabular abstraction dating back decades,which is at the core of every database and big-data system.The tabular abstraction represents every point of data as rows and columns in a table,with operators for manipulating the data.We found that the tabular abstraction is not good for stateful analytics.This realization gave us the freedom to innovate at a foundational level,which ultimately led us to create a new abstraction,called Timeline,and our Time-State Technology,which represents all event stream data as timelines with a set of timeline operators to compute stateful metrics.Timelines offer a more efficient way to write queries compared to the conventional approaches which we tried and found lacking,including streaming systems,time-series databases,and time-based extensions to SQL.As a result,Timelines can model dynamic processes more directly than any of those pre-existing approaches and express the requirements of time-state analytics easily and intuitively.To support this new abstraction,weve also codified the concept of Timeline Algebra,which defines operations over three basic Timeline Types:state transitions,discrete events,and numerical values.If youre interested in the details of Time-State Technology,read more here.1 2E X P E R I E N C E-C E N T R I C O P E R A T I O N SOur results speak for themselvesTo give you a taste of the performance gains we are getting with our Time-State Technology,Figure 4 shows a benchmark of our performance compared to the state-of-the-art big-data platforms.This is our first iteration of the Time-State model,and we have many ideas to further optimize,but we have already seen approximately 10 x better performance compared to the SQL-based solutions,which is a key enabler for making Experience-Centric Operations a reality.FIGUR E 6Ready to discover the transformative impact of Experience-Centric Operations?Talk to Conviva.

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Fabrication demand drivers for silver FABRICATION DEMAND DRIVERS FOR SILVER IN THE INDUSTRIAL,JEWELRY,AND SILVERWARE SECTORS THROUGH 2033 NOVEMBER 2023 Fabrication demand drivers for silver ABOUT OXFORD ECONOMICS Oxford Economics was founded in 1981 as a commercial venture with Oxford Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost independent global advisory firms,providing reports,forecasts and analytical tools on more than 200 countries,100 industries,and 8,000 cities and regions.Our best-in-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic,social and business impact.Headquartered in Oxford,England,with regional centres in New York,London,Frankfurt,and Singapore,Oxford Economics has offices across the globe in Belfast,Boston,Cape Town,Chicago,Dubai,Dublin,Hong Kong,Los Angeles,Mexico City,Milan,Paris,Philadelphia,Stockholm,Sydney,Tokyo,and Toronto.We employ 600 staff,including more than 350 professional economists,industry experts,and business editorsone of the largest teams of macroeconomists and thought leadership specialists.Our global team is highly skilled in a full range of research techniques and thought leadership capabilities from econometric modelling,scenario framing,and economic impact analysis to market surveys,case studies,expert panels,and web analytics.Oxford Economics is a key adviser to corporate,financial and government decision-makers and thought leaders.Our worldwide client base now comprises over 2,000 international organisations,including leading multinational companies and financial institutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.Disclaimer and Copyright This report is not to be construed as a solicitation or an offer to buy or sell silver or related products,securities,or related investments,and nor does it constitute advice in relation to the buying or selling of the same.You must obtain professional or specialist investment advice before taking,or refraining from,any action related to the content of this press release.This report may contain forward-looking statements that are subject to risks and uncertainties.Forward-looking statements are based on information and assumptions that the Silver Institute and Oxford Economics had when those statements were made or their good faith belief as of that time with respect to future events.Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those in or suggested by the forward-looking statements.Except as required by law,the Silver Institute and Oxford Economics undertake no obligation to update publicly any forward-looking statements after the date of this report or to conform these statements to actual results.While consideration has been taken in preparing the information published in this report,the content is provided without any guarantees,conditions,or warranties as to its accuracy,completeness,or reliability.This report is published by and remains the joint copyright of the Silver Institute and Oxford Economics.It is published only for informational purposes.Fabrication demand drivers for silver 2 All data shown in tables and charts are Oxford Economics own data,except where otherwise stated and cited in footnotes,and are copyright Oxford Economics Ltd.The modelling and results presented here are based on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projections shown.To discuss the report further please contact:Andrew Logan: Oxford Economics 4 Millbank,London SW1P 3JA,UK Tel: 44 203 910 8061 Fabrication demand drivers for silver 3 TABLE OF CONTENTS Executive summary.4 1.Introduction.5 2.Why is long term demand forecasting important?.6 2.1 Our forecasting methodology.6 2.2 Challenges with the methodology.8 3.Industrial silver.10 3.1 Electrical and electronics demand.10 3.2 Brazing alloys demand.12 3.3 Other industrial demand.14 3.4 Total demand for industrial silver.15 4.Jewelry.16 5.Silverware.18 6.Conclusion.19 Fabrication demand drivers for silver 4 EXECUTIVE SUMMARY The industries that use silver as an intermediate input are forecast to experience strong output growth over the next decade(2023 to 2033).Much of that output growth is likely to occur in Asia,and in particular in China.This report investigates the forecasts of the output growth of different end user industries of silver to gain insight about how demand for the metal may change over the next 10 years.It also looks at where in the globe the strength in demand for silver inputs is predicted to arise.The main points are:Between 2023 and 2033,we forecast the global output of end users of industrial silver will increase by 46%in real terms.This reflects predictions of particularly rapid growth in the output of the electrical and electronics applications industry,which is forecast to grow by 55%over the decade.Jewelry fabricators output is forecast to increase by 34%in real terms between 2023 and 2033.At the country level,the output forecasts suggest that India may lose some of its dominance of silver jewelry manufacturing to China over the decade.Silverware fabricators output is forecast to increase by 30%over the next decade.Some 43%of the growth in output between 2023 and 2033 is forecast to occur in India,although this is less than the countrys 73%share of the market in 2022.Combined,the output of industrial,jewelry and silverware fabricators is forecast to increase by 42tween 2023 and 2033.This is roughly double the rate of growth of their demand for silver over the previous decade.Fabrication demand drivers for silver 5 1.INTRODUCTION This paper looks at how demand for silver as a manufacturing input is likely to evolve over the next decade(2023 to 2033).It does so by looking at how the output of the industries that use silver as an input into their production process is forecast to grow around the globe.The forecasts are presented for the key consuming sectors of silver(industrial,jewelry,and silverware).The paper also investigates where demand for silver as an intermediate input is forecast to grow most rapidly around the globe over the next decade.Using predictions of the output growth of key consuming sectors by country,we analyze the extent to which demand for silver as an input into production is shifting east towards China and the rest of the Asia Pacific region.The paper also details why demand forecasting for silver as an input into industrial processes is important.Additionally,we explain our methodology and its drawbacks.Lastly,we review how silver consuming industries output is forecast to change over the next decade,both by geography and end using industry.Lastly,the paper concludes with the main points.Fabrication demand drivers for silver 6 2.WHY IS LONG TERM DEMAND FORECASTING IMPORTANT?Long-term demand forecasting helps any industry make better informed supply decisions and resource allocation decisions.It is particularly important for an extraction industry like silver due to the time lags and expense incurred between prospecting and receiving revenue for any refined silver produced.Undertaking the initial geological surveys to establish the existence of deposits,applying for planning permission and meeting environmental regulations,building the mine and associated infrastructure to transport the ore for crushing and smelting,and refinement all take time and incur major investment costs.Any investment decision or entry into the market is made more complex as the price of silver is volatile.In the last decade(2013 to 2022)the London Bullion Market Association daily price of silver has ranged from$12.01 to$32.23(troy/oz),around a mean average of$19.19.The profitability of any long-term investment will vary markedly depending on the price of silver when the facility is operational.The complexity and uncertainty surrounding investment decisions about silver projects is increased as most silver is produced as a by-product of mines targeting other metals.In 2022,72%of mined silver production came from mines which produced lead,zinc,copper,and gold.1 The geographical location of demand is also important as it shapes investment decisions about shipping and logistics.Most of the major producing countries are located in North,Central,and South America,whilst increasingly most of the end user manufacturers are based in Asia.This creates a requirement for the secure transportation and warehousing of the silver for delivery to end use customers.Geographical forecasts of where demand is likely to grow most rapidly also offers insight for decisions about the location of marketing and sales offices,so they are in close proximity to existing and prospective customers.2.1 OUR FORECASTING METHODOLOGY To construct the global forecasts of the indicator of demand for silver as an intermediate input in aggregate and for its different end user industries,we use weighted forecasts of customer industries output in each country.The weights we use are the consumption of silver for each end use by the different countries in 2022 in million ounces sourced from the World Silver Survey 2023.2 The forecasts of the different end user industries output are sourced from Oxford Economics Global Industry Model.3 This identifies and maps the supply chain linkages between economic sectors within countries and across regions and 1 The Silver Institute.2023.World Silver Survey 2023.Page 31.2 The Silver Institute.2023.World Silver Survey 2023.Pages 45,46,47,55,and 61.3 Oxford Economics Global Industry Service Fabrication demand drivers for silver 7 connects them to the macroeconomic drivers of demand(consumer spending,investment,and government expenditures,etc).The model runs off Oxford Economics latest macroeconomic forecasts to generate projections by industry.The Global Industry Model forecasts gross output,gross value added,investment,and profits on both a nominal and real basis for over 100 industrial sectors across 77 countries.4 We use the forecasts of gross output in real terms in the belief this has the strongest relationship with the volume of inputs purchased,in particular,the quantity of silver used.Our analysis is underpinned by the assumption that the ratio of inputs to output is constant over the decade(2023-33).This means that the amount of silver input per unit of output remains unchanged.The industries selected as the key consuming industries of silver are those that discussed in the World Silver Survey 2023,and the Silver Institutes other publications such as individual market reports.5 The industries(with their NACE codes)we have matched to each type of silver use are detailed in Table 1.6 Table 1:End user industries of silver and the industries output forecasts we have used Use of silver Industries output used to forecast NACE code Electrical and electronics demand Manufacture of electronic components and boards 26.1 Manufacture of computers and peripheral equipment 26.2 Manufacture of communication equipment 26.3 Manufacture of consumer electronics 26.4 Manufacture of electrical equipment 27 Manufacture of other general-purpose machinery 28.2 Brazing alloys demand Manufacture of basic iron and steel and of ferro-alloys 24.1 Manufacture of tubes,pipes,hollow profiles and related fittings,of steel 24.2 Manufacture of other products of first processing of steel 24.3 Manufacture of fabricated metal products,except machinery and equipment 25 Manufacture of electronic components and boards 26.1 Manufacture of general-purpose machinery 28.1 Manufacture of other general-purpose machinery 28.2 Manufacture of motor vehicles 29.1 Other industrial Manufacturing minus all sectors listed above for electrical and electronics and brazing alloys demand Silverware Manufacture of fabricated metal products,except machinery and equipment 25 Jewelry Other manufacturing 32 4 On a nominal basis includes the impact of price changes on the indicator concerned.Real excludes the impact of price changes,so is a better measure of volume changes.5 For example,Precious Metals Commodities Management LLC.2022.Silver in Brazing and Solder Alloy Materials.The Silver Institute Market Trend Report.and Metals Focus.2021.Silvers Growing Role in the Automotive Industry.The Silver Institute Market Trend Report.6 Nomenclature of Economic Activities(or NACE)codes are a standard classification system of industries used by national statistical offices to classify business activities.Fabrication demand drivers for silver 8 2.2 CHALLENGES WITH THE METHODOLOGY Our methodology is not without its challenges.To be informative about the demand for silver,it assumes that the existing customer industries output is made with fixed technology.Put more simply,the ratio of silver input in each unit of customer industries output is held constant.This may not hold true if customer industries substitute in another material instead of silver,or alternatively change their technology requiring other inputs instead of silver.Box 1 discusses the practice of thrifting,when manufacturers try to reduce the silver content included in their products to reduce costs.It is limited in the extent to which it can capture the emergence of new industries that require silver as an input,or existing customer industries to find different uses for silver as they develop their product range.This reflects its reliance on existing statistical definitions of industries.More pragmatically,our choice of customer industry to match to each use type of silver may be too broad.Oxford Economics Global Industrial Model forecasts 100 sectors,but the ones chosen maybe too aggregated to fully reflect the segment of the industry that uses silver.If so,the forecast for output may be inaccurate.Our forecast of end user demand for silver based on output growth are likely to be more accurate the less structural change occurs at silver fabricators.This depends on the maturity of the technology they use(and hence the extent of thrifting)and any innovation that leads to new uses of silver.The two will have offsetting impacts,which are likely to vary over time.If thrifting dominates,our forecasts are best regarded as upper bounds.BOX 1:THRIFTING Silver is an expensive commodity to purchase(like other precious metals).Manufacturers that use silver as an input typically try to reduce the amount they use in their products in order to reduce costs and raise profitability.This process is called“thrifting”.It is typically achieved through a variety of innovations,such as using thinner layers,substituting cheaper commodities for silver,or the miniaturization of components and subcomponents.The rate at which thrifting occurs in manufacturing production processes typically changes as they mature.When a product is first introduced into the market,manufacturers typically want to make sure it works,so are prepared to use the best materials available.But over time,the firm that invented the product,or its competitors who seek to replicate it and undercut the first firms prices,seek to lower their costs by reducing the amount of silver inputs they use.This typically occurs relatively rapidly after a product has been introduced to the market.As time progresses,the process slows as the easier or larger cost saving opportunities have Fabrication demand drivers for silver 9 already been taken and there are progressively lower amounts of silver left to reduce or substitute with alternative cheaper commodities.The opportunity for thrifting also depends on which product is being made and the industrial processes manufacturers use to make it.So the extent of thrifting,or the pace at which it is undertaken is not uniform across the different industrial uses of silver.Manufacturers have an incentive to keep their production processes confidential.This is to prevent their competitors imitating them or stealing any innovations they make resulting from expenditure on R&D.This is likely to be particularly true when a product is new,or is young and evolving as different firms try to improve it.As a result,there arent that many estimates of the extent of the thrifting of silver in industrial processes in the public domain.However,we have been able to find some estimates.CRU(2020)investigated the amount of silver used in photovoltaic cells used in solar panels.7 They find the amount of silver used fell significantly between 2009 and 2019.The focus of this paper is forecasting fabricators demand for silver over the next decade.As discussed above,the rate of thrifting is likely to vary according to the maturity of the production process and a host of other factors.As we have insufficient information to forecast thrifting rates over the next decade,we have chosen to suggest our forecasts are regarded as upper bounds for demand growth for silver based on forecasts of end user output growth.7 CRU Consulting.2020 Silvers important role in solar power.The Silver Institute Market Trend Report Fabrication demand drivers for silver 10 3.INDUSTRIAL SILVER To investigate how the total demand for industrial silver may evolve over the next decade(2023 to 2033),we have split usage into the three industrial uses published in the World Silver Survey 2023.This publication disaggregates industrial demand for silver into that used by the electrical or electronics industry,used as brazing alloys to join two pieces of metal,and other(as a catchall category).This is useful for two reasons.First,the disaggregation makes it is easier to align the first two categories to the end user industries for which we have output forecasts.Second,by detailing the weight of silver used(in million ounces)by the major countries where the different types of end users are located,we can select the relevant countries industrys output growth forecasts.3.1 ELECTRICAL AND ELECTRONICS DEMAND Manufacturers of electronics and electrical applications are the major purchasers of industrial silver.In 2022,these industries consumed 371.5 million ounces.8 This equates to 67%of the silver used for industrial purposes in that year.We can get some insight into how the electronics and electrical application manufacturers demand for silver will develop by weighting together our forecasts of the three major constituent industries output in each country by that nations share of silver used in 2022.The three industries output which we use as a proxy for electrical and electronics demand for silver are manufacture of computers and peripheral equipment,electrical engineering;and other general-purpose machinery.The electrical engineering sector produces many of switches,relays,connectors,breakers and fuses used by electric vehicles.The same sector produces photovoltaic panels used in solar power generation.The recent growth in both have stimulated the demand for silver as discussed in greater detail in other reports by The Silver Institute.9,10 Over the next decade,we forecast the global output of the electronics and electrical applications industry will grow by 55%.This is an annual average growth rate of 4.5%.The pace of growth is expected to be faster in the first five years(2023-28)compared to the second(2028-33),at an average of 5.4%versus 3.5%a year.The majority of the output growth of the three industries over the next decade is forecast to occur in China.The country is forecast to have a 65%share of the growth in global electronics and electronic applications output between 2023 and 2033.It is followed by South Korea(5%),and the United States and Japan both at 3%(Fig.1).8 Silver Institute.2023.World Silver Survey 2023.Page 45.9 Metals Focus.2021.Silvers growing role in the automotive industry.The Silver Institute Market Trend Report.10 CRU Consulting.2020.Silvers important role in solar power.The Silver Institute Market Trend Report.Fabrication demand drivers for silver 11 By 2033,we forecast 60%of the three end user industries production will be located in China.South Korea and Japan are both predicted to have a 5%share each.Fig.1:Forecasts of selected countries market share of electronics and electrical applications output in 2023 and 2033 The output of the three end user customer industries are forecast to grow at different speeds.The most rapid growth in output is predicted to occur in the production of computers and office equipment.The output of the manufacturers of these products is forecast to increase by 62tween 2023 and 2033,an annual average growth rate of 4.5%.The output of electrical engineering products(including light and heavy-duty switchers,mobile phones,computers,and other products in which silver is an input)is forecast to increase by 51%over the decade,or an average annual growth rate of 3.8%.The output of the other general-purpose machinery industry which produces photovoltaic panels is expected to grow the slowest by 45%over the decade.6553333ChinaSouthKoreaUnitedStatesJapanIndiaGermanyOthercountries0070Share of consuming industries output growth between 2023-33Market share of consuming industries output in 2023Source:Oxford Economicsbrication demand drivers for silver 12 Fig.2.Forecast growth in manufacturers of electronics&electrical applications output,2023-2033 3.2 BRAZING ALLOYS DEMAND The World Silver Survey 2023 estimates that 49 million ounces of silver were used as brazing alloys in 2022.This constitutes 9%of global industrial demand for silver.The major end using countries for silver as a brazing alloy in 2022 were China,which used 39.8%of total,the United States at 13.9%,and Germany at 10.2%.11 To investigate how demand for silver as a brazing alloy is likely to evolve over the next decade,we use forecasts of the output of five major end user industries.These are the manufacturing of motor vehicles,electronic components and boards,general purpose machinery,iron and steel,and structural metal products.As before,the different industries combined output is weighted together using each countrys share of silver used as a brazing alloy or solder in 2022.Total output of all the major industries that use silver brazing and solder alloys is forecast to increase by 34tween 2023 and 2033.This equates to an annual average growth rate of 3.0%.The pace of growth is forecast to be faster in the first five years between 2023 and 2028(3.6%)than in those that follow between 2028 and 2033(2.3%).Between 2023 and 2033,41%of the growth in the five consuming industries output is forecast to occur in China(Fig.3).India and South Korea are predicted to have the second and third largest share of the five industries output growth over the decade at 10%and 7%,respectively.This in part reflects the growth in the production of semiconductors,which are primarily located in China,but also in some Asian countries in general.11 Silver Institute.2023.World Silver Survey 2023.Page 47.62514555Computers&officeequipmentElectricalengineeringManufacture of othergeneral-purposemachineryTotal0070Source:Oxford Economicsbrication demand drivers for silver 13 Fig.3:Forecast share of growth in output between 2023 and 2033 of industries using silver as a brazing alloy or solder By 2033,the forecasts suggest China will produce 40%of all the output of the five industries that use silver as a brazing alloy or solder.The US is forecast to have the second largest share at 8%,followed by South Korea at 6%and India at 5%.Between 2023 and 2033,the output of electronic components and boards manufacturers is forecast to make the largest contribution to the five end user industries output growth.This industry,which uses silver as a brazing alloy to produce printed circuit boards and some semiconductors,is expected to contribute 55%of the growth in output of the five sectors.Much of that output growth is predicted to occur in China and South Korea.Fig.4:Share in global output growth of industries using silver as a brazing alloy between 2023-33 468437ChinaIndiaSouth Korea United StatesGermanyOthercountries0554045Share of consuming industries output growth between 2023-33Market share of consuming industries output in 2033Source:Oxford EconomicsU241084Electroniccomponents&boardsGeneralpurposemachineryStructural metalproductsMotor vehiclesIron and steel00Source:Oxford Economicsbrication demand drivers for silver 14 3.3 OTHER INDUSTRIAL DEMAND World Silver Survey 2023 suggests that 24%of the industrial demand for silver as an input(or 136 million ounces)was used for other purposes in 2022.12 Given this is likely to cover a wide range of different industrial activities not classified as electrical/electronics or brazing alloys,we have used forecasts of the gross output of all manufacturing industry excluding those that purchase silver for electrical/electronics and brazing alloys.We have weighted these forecasts by each end user countrys consumption of silver(in tons)used for industrial purposes excluding the two other sectors that have been identified separately.13 The forecasts suggest end user industries output will increase by 26tween 2023 and 2033.Growth is predicted to be more rapid in the first five years at an annual average of 2.5%than the second five years at an average of 2.1%a year.Between 2023 and 2033,just under half(48%)of the output growth of other industrial users of silver is forecast to occur in China(Fig.5).Their counterparts in the United States are forecast to generate 6%of the additional output,with end user firms in Japan,South Korea and France each having a 1%share of the output growth.This suggests that demand for silver for other industrial purposes will expand in these countries.To put that into context,31%of the forecast growth in real global GDP between 2023 and 2033 is predicted to occur in China.14 Fig.5:Forecast share of the expansion in output of other industrial end users of silver between 2023 and 2033 12 The Silver Institute.2023.World Silver Survey 2023.Page 45.13 The Silver Institute.2023.World Silver Survey 2023.Page 67.14 The global GDP forecasts used assume the exchange rate is constant at its 2022 level.48611142ChinaUSAJapanSouth KoreaFranceOther01020304050Source:Oxford Economicsbrication demand drivers for silver 15 3.4 TOTAL DEMAND FOR INDUSTRIAL SILVER Weighting the output growth forecasts of the three end-user segments by the volume of silver they used in 2022 gives us some insight into how demand for industrial silver may evolve over the next decade.Between 2023 and 2033,we forecast the output of end users of industrial silver will increase by 46%in real terms.This partly reflects two thirds of the usage in 2022 was by the electrical and electronics applications industry,which is forecast to exhibit the fastest growth in output at 55%,rather than the slower growing smaller segments.The forecasts suggest the growth in demand for industrial silver will be faster in the first five years compared to the second.Between 2023 to 2028,the output of user industries is predicted to grow by an annual average of 4.6%,compared to 3.1tween 2028 and 2033.Of the forecast growth in the output of sectors that use silver for industrial purposes over the next decade,51%is predicted to occur in China(Fig.6).The United States is forecast to have a 5%share in the additional output.Three Asian countries are expected to have a 2-3%share of the output growth.Overall,76%of the additional output growth of industries that use silver as an intermediate input is predicted to occur in Asia.Fig.6:Share of global output growth of industries using silver as an input between 2023 and 2033 51533236ChinaUnited StatesTaiwanSouth KoreaJapanOther00Source:Oxford Economicsbrication demand drivers for silver 16 4.JEWELRY The World Silver Survey 2023 contains data on the quantity of silver used by jewelry fabricators around the world.In 2022,71%of the silver used to manufacture jewelry was used in Asia.15 Within this region,manufacturers in India used just under half(or 48%)of the silver used by jewelry fabricators around the globe.According to NACE statistical breakdown of industries,the manufacture of jewelry is classified within the“other manufacturing”sector.We have weighted together the forecasts of the output of other manufacturing in each of the countries explicitly identified by the share of the million ounces of silver jewelry manufacturers used in 2022.The unidentified countries are assumed to grow in line with forecasts of world output of other manufacturing.Our forecasts suggest that the demand for silver for jewelry manufacturing will increase by 34tween 2023 and 2033.Judged by the speed at which the other manufacturing sectors output is forecast to increase,growth is predicted to be most rapid in the first five years(2023 to 2028)at an annual average of 3.4%,compared to 2.5%in the second five years.Fig.8:Selected countries share of the other manufacturing sectors output growth between 2023 and 2033 Just over half of the growth in the global output of the other manufacturing sector between 2023 and 2033 is forecast to occur in China.The United States is forecast to have an 8%share of the additional other manufacturing output.Three countries including India are expected to generate 2%of the additional output.15 The Silver Institute.2023.World Silver Survey 2023.Page 55.51822235ChinaUnited StatesGermanyMexicoIndiaRest of theworld00Source:Oxford Economicsbrication demand drivers for silver 17 This suggests there will be some move in production from India to China over the next decade.Fabrication demand drivers for silver 18 5.SILVERWARE According to World Silver Survey 2023,73%of the 2022 silverware market was due to India.16 A further 8%and 3%was used by silverware fabricators in Nepal and China,respectively.In the NACE code statistical definition of industries silverware fabrication lies within the structural metal manufacturing industry.We forecast the output of the structural metal manufacturing industry(weighted by each countries silverware fabricators usage)will increase by a total of 29tween 2023 and 2033.This is an average of 2.6%a year over the period.The rate of output growth is forecast to be more rapid in the first half of the period between 2023 and 2028 at 2.9%,than the later period between 2028 and 2033 at 2.4%.Our forecasts suggest that most of the growth in the future demand for the metal by silverware fabricators between 2023 and 2033 is likely to come from Asian countries.We expect demand from India will contribute 43%of the growth in the demand for silver to be turned into silverware.This is less than their existing share of consumption at 73%.Fig.7:Forecast of the share of structural metal industry output growth between 2023 and 2033 16 The Silver Institute.2023.World Silver Survey 2023.Page 61.4352150IndiaChinaUnited StatesItalyOther00Source:Oxford Economics%shareFabrication demand drivers for silver 19 6.CONCLUSION In 2022,nearly three quarters of the worlds demand for silver was as an intermediate input into various industries production.This paper uses Oxford Economics Global Industry Services forecasts of how the output of end using industries around the globe are predicted to change between 2023 and 2033.It investigates these forecasts to see where in the globe that output is predicted to grow most rapidly.Assuming that the quantities of inputs required to produce that output remain broadly constant over time,this should have implications for the strength of demand for silver as an intermediate input,and where in the globe it will be used up in the manufacturing process.This type of long term forecasting is useful as a guide to firms within the silver production industry as to how demand is likely to develop over the next decade.It should help them decide how best to target growing industries and where to locate their logistics,marketing and sales efforts.There may however be unforeseen challenges to these forecasts.This may occur if the different fabricator industries undergo structural change(such as thrifting)or there are unforeseen economic shocks.Fabrication demand drivers for silver

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