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Digital DiversityA Microsoft TechSpark Initiative
Jerram Lindsay | Sophie Carran | Brianna O’Regan | Nigel Turay
The Team
Jerram Lindsay | Sophie Carran | Brianna O’Regan | Nigel Turay
Defining the concepts and problems
What is CSR?
What is strategic CSR?
What is artificial intelligence?
What are the concerns surrounding AI?
“The more closely tied a social issue is to a company’s business, the greater the opportunity to leverage the firm’s resources, and benefit society”
Strategic overview
Microsoft TechSpark
Digital Transformation
Rural Broadband
Digital Skills Development
Career Pathways
Non-profit Support
TechSpark is an initiative by Microsoft aimed at fostering greater economic opportunity and job creation
TechSpark aims to engage in local challenges and to implement and learn from digital initiatives that help accelerate growth
Strategic overview
Microsoft TechSpark
Diversity is crucial to achieve the goals and objectives of TechSpark and democratize AI
Diversity
Diversity & inclusion –what’s the big deal?
Diversity + Inclusion = Success
Gender diversity increases ROA in high-tech and knowledge-intensive industries
Racially diverse teams compete more intensively and perform better
Age diversity positively impacts on corporate performance and decision making
Diversity in artificial intelligence
“We need diversity of thought in the world to face new challenges.”
Tim Berners-Lee Founder of the World Wide Web
Technology should be developed by a population as diverse as its users
88% of all I.T. patents have male-only invention teams
Failures of AI due to lack of diversity
Trends in computer science
Gender
Computer Science College Graduates 1991-2015
Male Female
37%Computer science graduates
were female in 1984
57%College graduates are
female
18%Computer science graduates
were female in 2015
0% 20% 40% 60% 80% 100%
Science
Engineering
Technology
Women who leave STEM related jobs
Quit Stay
41%Women quit their jobs in
STEM fields
17%Men quit their jobs in STEM
fields
20%Leave the workforce
Trends in computer science
Race & age
53.4
%
13.8
%
7.5%
4.1%
3.7%
2.7%7.
4%
4.0%
1.1%
0.6% 1.1%
0.6%
White Asian Hispanic Other Black Multiracial
Computer Science Graduates by Race & Gender (2015)
Male Female
12%AP computer science exam-
takers of colored descent
26%U.S. Workforce comprised of
Black and Hispanic
13%Computer science workforce
Black and Hispanic
-0.1%Decline in computer science
median age per annum
40.8Median age of the computer
science workforce
42.2Median age of the U.S.
workforce
Trends in computer science
Job market
500kUnfilled computing jobs in the
U.S. in 2016
43kU.S. computer science
graduates in 2016
1mUnfilled computing
jobs by 2020
0200400600800
1000120014001600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Unfilled Computer Science Jobs vs Computer Science Graduates 2010-2020
Unfilled computing jobs Computer science graduates
14.9mJobs created by AI
by 2027
30%U.S. workforce will need to switch occupation by 2040
24.7mJobs displaced by AI
by 2027
Introducing LEAH
Learning.Education.Aspiration.Hope.
LEAH connects
Available on multiple platforms to scale across individuals, communities and geographies
=
Identifies opportunities for older generations to acquire skills for
a changing economy
Connects with reskill/on-the-job
programs and formal education
Provides job assistance services
and support
Connects youth with activities and programs related to future career opportunities
Guidance on tertiary education
pathways and personalized career
outcomes
Supports and mentors youth throughout the
process
Strategic alignment to the other TechSpark focus areas
Digital Skills Development
Non-profit Support
DiversityRural
Broadband
Digital Transformation
Career Pathways
Benefits to Microsoft
Investing in the under-represented population grows the economy, Microsoft’s total addressable market and Microsoft’s bottom-line
Talent
Builds future resilient skills
Market share increased
Releases full potential of AI
Stronger brand reputation and goodwill Community
engagement
Positive media perception of
Microsoft and AI
Greater diversity drives innovation
EmployeesImproved job satisfaction
CustomersImproved customer satisfaction
ShareholdersIncreased shareholder returns
CommunityIncreased community prosperity
Under-represented groupsMore opportunity and representation
GovernmentStronger economic growth
Impact on stakeholders
Is this realistic?
Potential strategic partnerships
Potential roadblocks & barriers
Lack of adoptionSolution: strategic partnerships
Low perceived impactSolution: target high-need areas
Resistance to changeSolution: educating potential users
Concerns about privacySolution: publicize and strictly follow ethical AI protocol
Loss of autonomySolution: promote the message the AI is a microphone, not a voice
Quantifying the problem
43%US Middle skill workers
without employment
87%Adult population who recognize the need for
continual learning
30%Talent
gap
10%China’s prediction regarding
growth in GDP due to AI
$72mIncrease in FTE
employment worldwide by 2025 due to AI
41%Women
Leave jobs in STEM
Quantifying the impact
5%Middle skill workerswithout employment
95%Adult population who recognize the need for
continual learning
5%Talent gap
+10%Growth to
Microsoft’s bottom line
+$3mIncrease FTE
employment in US by 2025 due to AI
20:20Bring female
exit rate in line with male exit rate by 2030
The bottom line LEAH will positively effect the lives of people around the world, and help overcome the threat of disruptions from AI
LEAH will consider the future in a way that humans cannot
LEAH is AI that prepares people for the AI future
Learning.Education.Aspiration.Hope.
Appendix directory
Appendix 1 – LEAH alternativesAppendix 2 – Types of CSRAppendix 3 – McKinsey value driver treeAppendix 4 – Strategic alignment of internal factorsAppendix 5 – Internal and external considerationsAppendix 6 – Extended benefits to MicrosoftAppendix 7 – Selecting partners Appendix 8 – Triage of problem solving methodologiesAppendix 9 – Stakeholder considerationsAppendix 10 – SWOT analysisAppendix 11 – Porter ’s 5 forcesAppendix 12 – Pareto analysisAppendix 13 – Stakeholder hierarchyAppendix 14 – AI expanded Appendix 15 – Implementation timelineAppendix 16 – Cost comparisonsAppendix 17 – Further financial analysisAppendix 18 – Microsoft business overviewAppendix 19 – Strategic Alignment with TechSpark
Appendix 1LEAH Alternatives AI Product Long-term
support Suggests career pathways Draws on future macro trends
Scalability to a range of users
Educational planning
LEAH
VMock
CareerGuide
Aleks
CampusNexusCRM
1
2
3
4
5
Appendix 2Types of CSR
Value creation (strategic CSR)• Promotes sustainable business model• Integrates business into the community• Long-term value created
Risk management• Medium strategic & operational impact• Mitigates operational risk• Supports external relationships
Philanthropic• Low Hanging Fruit• Minimal Impact• Above Legal Duty
03
Philanthropic Corporate Social Responsibility
Corporate social responsibility as risk mitigation
Both shareholder interests & wider community interests transformed
02
01
Appendix 3 McKinsey Value Driver Tree
Financial Value Drivers
Short Term Value Drivers
Medium Term Value Drivers
Organizational Health
Long Term Value Drivers
Micr
osof
t’sVa
lue
Long Term Growth Sales Productivity Commercial Health
Return on Invested Capital
Operating Cost Productivity Cost Structure Health
Capital Productivity Asset Health
Cost of Capital
Strategic Health
Core business growth
Growth opportunities
Growth in Industries &
Talent & Labor Market
Supply
Appendix 4Strategic alignment
Sharedvalues
Style
StrategySystems
StructureSkills
Staff
LEAH adds diversity to Microsoft‘s values
+
Through strategic alignment of internal factors
Microsoft LEAHsustains their impact &competitive advantage
Appendix 5Considerations
Improved Algorithms
Digital Disruption
Negative stigma
surrounding AI Technology
Unleashing potential
ShareholdersDistribution Channels
Customers & End Markets
GeographicalPresence &
Scale
Comparative Position
Current CSR Applications
Developmental in all we do
Brand equity & Reputation
Microsoft CSRConsiderations
Increased Availability of Cloud
Data
Growing cloud
Computing Power
Legal & Regulatory
Environment
Growing broad-band
access
Growing skills & Wage gap
Diversity breakdown in
Computer Science professionals
Partnerships
External Factors
• Diversity challenges in tech related fields• Improvements in AI capabilities and
unleashed potential for the future• Changing labor-market needs with the
growth of AI• Negative stigma surrounding AI adoption• Possibility for communities to be left behind
in a changing world
Internal Factors
• Retain brand strength and positive reputation among communities
• Market leader in AI R&D• Improved employee morale• Maintain and grow a diverse and talented
workforce
Appendix 6Benefits to Microsoft (cont’d)
Value Creation Revenue Growth Improving Return on Invested
Capital (ROIC)
Growth Options Organic Revenue Growth Un-organic Revenue Growth
ROIC Levers
Capital Efficient Business Model
Economies of Scale Reputation enhancement Customer Lock-in Highly Scalable Product Innovation
Revenue Growth
Organic Growth Options
Grow Market Share Grow the Entire Market
We’re open to un-organic growth options× Transformational Merger Bolt-on pre-existing software/AI business Strategic Partnerships
Further Benefits to Microsoft
Partner with early leaders in AI market Provide brand recognition & business improvement
opportunities Provide market access and leverage Microsoft’s
scale Acquire pre-existing talent, patents and technology Leverages Microsoft’s position as leader in AI R&D Breakdowns negative stigma about AI Reduces the cost & complexity of starting from
scratch
Talent
Builds future resilient skills
Market share increased
Releases full potential of AI
Stronger brand reputation and goodwill Community
engagement
Positive media perception of
Microsoft and AI
Greater diversity drives innovation
Investing in the under-represented population grows the economy, Microsoft’s total addressable market and Microsoft’s bottom-line
Microsoft’s commitment to non-profits
Potential partners have been selected based on alignment with Microsoft’s goals and values
Appendix 7Non-profit support
PartnershipsWe believe technology can be a powerful force for social good, but we know technology alone won’t solve the world's challenges. That’s why we partner closely with governments, non-profits, and the private sector to foster collective action.
SupportWe work with non-profits such as TechSoup and their global network of worldwide partners to deliver services that help non-profits get the most out of technology.
SolutionsWe're committed to delivering technology solutions that are accessible and affordable for non-profits everywhere. Donations and discounts are available for cloud solutions including Microsoft Office 365, Power BI, Azure, and more.
Triage of problem solving methodologies• Internal – External• SWOT Analysis • Stakeholder Analysis • Pareto Analysis
Appendix 8Problem triage
Analysis of CurrentCSR Initiatives
Reconciliation of Stakeholder Interests
Consideration of Micro & Macro Factors
1
2
Appendix 9Stakeholder considerations
STAKEHOLDERS Impact Underlying Interests Long Term Outcomes (Post LEAH)In
tern
al
Management &Employees
Increased talent pool Increased employee morale A more diverse work-place
Shareholder value Stakeholder value & CSR Discharging fiduciary obligations Brand equity & reputation Meaningful work for employees Job-security
Resilient & flexible labor force Increased talent pool Reduced market share, as new players
enter market Undisputed leader in AI Labor force vulnerability
Shareholders Increased Shareholders Returns Increased free-cash flow Increased growth profile
Increased Return on Equity Ethical investment considerations Transparent Governance Sustainable returns
Sustainable returns Access to new growth opportunities
Customers Increased customer satisfaction Capitalize on first mover advantage Better quality AI experience
Using quality vendors Paying a reasonable price Using ethical vendors
Greater optionality in products and services
Exte
rnal
Under-represented Communities
Improved economic advantage Improved career decision making through
Microsoft LEAH
Economic progression Meaningful work Being informed & trusting AI
Increased participation in AI design & development
Greater economic welfare relative to GDP/capita
Government
Accelerate legal policy development throughproactive engagement with Microsoft
Reduced fiscal and social security burden Potential for anonymized data to inform
about future job markets
Economic welfare & anti-trust concerns Fiscal sustainability Reduced social welfare burden Improved resource allocation Advancement of AI law
Advancement of current labor, privacy, data, and cyber security laws
Decreased unemployment rate Increased economic welfare in rural, and
low-socio economic communities
Competitors
Likely to engage to regain market share First mover advantage Sustainable competitive advantage due to
patent and strategic alignment
Increasing Shareholder Value Market share Longevity & going concern
Increased talent pool A more diverse workplace Greater market position
Appendix 10 SWOT analysis
StrengthsLargest global user base of any computing platformHigh switching costsStrong financial performanceBrand reputation and loyaltyGlobal leader in the cloud sectorStrategic collaboration with numerous firms in the IT sectorVast distribution network
WeaknessesOverexposure to the PC market
Lack of exposure to the global smartphone marketLack of dominant hardware products
Counterfeit issues in developing countriesDependence on hardware manufacturers
Consumer and corporate shift to cloud-based servicesIndustry leader in AI technologyEnhancing security against cybercrime through Office365Engagement in mergers and acquisitionsShift to SaaS/subscription service model High demand in the budget smartphone market
Opportunities
Emergence of Chrome OS taking market shareOpen-source projects
Competing cloud services of Amazon, IBM and GoogleChanging consumer needs and habits
Shift to mobile devicesAnti-monopoly legal environment
Threats
SWOT
Appendix 11Porter’s 5 forces
Competitive rivalry
Low/Medium
Medium• High R&D intensity – expensive
for new players to enter• Technology protected by
patents • Requires specialized skills and
large resources• Existing innovators in AI have
resources to create similar products
Low• Microsoft is a market leader in
technology• Many suppliers and few buyers
of AI inputs• Value creation through R&D
and product development which is conducted internally
Low• No cost for personal use • Provides benefits to users
without obligation• Cost to enterprise users is low
when considered against potential benefits
• No strong full-functionality substitutes for customers to consider as an alternative
Low• Existing products with similar
concepts only provide single offerings – no competitor offers a suite of solutions
• Competitive offerings by companies with smaller market position
• AI solution more efficient and cost effective than human services alone
Drivers
Diversity of Ideas
Other Factors
Impact
Other Factors
Diversity
Encouraging diversity has positive spill-over effects
Examples of positive externalities• Diversity encourages more
diversity• Diversity encourages more
productive work forces• Diversity encourages more
harmonious and collegial teams• Diversity drives innovation and
new ideas• Diversity drives company and
economic growth• Concentrating on diversity
encourages more areas of CSR activism
Appendix 12 Pareto Analysis
Stakeholders
Internal
Employees
External
Sufficiently Represented Under-represented
Majority Minorities
Female Age Ethnicity Low Socio-economic Disability LGBITQ
Appendix 13Stakeholders cont’d
Appendix 18AI Expanded
Speech
Language
ArtificialIntelligence
Human Decision Making
“AI is the Microphone not
your voice”
Search
23k Views on YouTube Currently
Vision
Knowledge“AI will create jobs we cannot yet imagine”
“To develop AI in order to augment
human abilities, especially humankinds’
innate ingenuity. “
1bn Views Target 2023
Process identifcation and refinement
Identify processes, analyze problems and target groups, improve and document findings(estimated 3-5 months)
Pilot project LEAH refinement National rollout
Continual improvments
and enhancment
LEAH Pilot Projecct in low socio-economic schools in Techspark five focus states(estimated 6-8 months)
Refinement of LEAH after pilot project, debug, take in feedback from pilot project users(estimated 2-3 months)
Roll out of LEAH nation wide, buliding on strategic partnerships and marketing(estimated 8-10 months)
Enhancment of LEAH through user feedback, continual strengthening & creating new strategic partnerships(ongoing)
Appendix 15Implementation Timeline
Appendix 16Cost comparison
0.1 3.5 6 24
1900
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Cost of basic AI chatbot Cost of Nadia Cost of Aadrvark Cost of Siri Unemployment benefitspaid per month
USDm
Cost of AI Implementation vs Cost of Unemployment to the U.S. Government
Appendix 17Financial Analysis
0
200
400
600
800
1000
1200
USDm
AI Acquisition Pre-Deal Funding vs Deal Price
Raised before deal Deal size
Appendix 18Microsoft business analysis
Operating Segments General
Productivity & Business Processes Intelligent Cloud Personal Computing
• Revenue increased, primarily due to Office &
Dynamics Revenue;
• Office 365 Commercial Rev. increased by $135
• PC & Office Consumer Rev. Decreased down
$69m & 4% Rev growth in office subscribers
• Segment revenue increased $1.3b, 6%, due
to higher server products and cloud
services revenue.
• High Growth in R&D expenditure; 12%,
$567.
• Increased marketing exp. & strategic bolt-
on acquisitions.
• Personal computing revenue decreased
by $3.0b
• Slightly offset by search advertising $1.7b;
46%. Driven by growth in Bing.
• Reduction in Xbox, phone and Surface
Revenue.
Financial Profile
Size Profitability Capital Expenditure
• Productivity and Business Processes
operating income down by $856
• R&D 3rd party development &
programming costs, localization &
get to market costs and purchase of
software code.
• Increased expenditure on sales,
marketing and strategic
acquisitions forecasted.
• Prioritize investments that
capture expanding markets
Company Overview
Top Growth Drivers
1. Data & AI
2. Bing
3. Cortana
4. LinkedIn
5. Azure DB, best in class for
Bot framework and
cognitive services. 42
global regions
2.xGrowth in Azure Usage
from 2016
500m users on LinkedIn
500m Devices have office 365
• Potential access to High-School market via
increased growth in Gaming Mkt. Share;
$75m
• R&D as a percent of revenue; stable at 14%
• Sales & Marketing as a % of revenue, stable at
17%
• $90 in revenue in 2017, $22.3b in op income.
Appendix 19Strategic alignment with TechSpark
References
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Campbell, K., & Mínguez-Vera, A. (2008). Gender Diversity in the Boardroom and Firm Financial Performance. Journal of Business Ethics, 435-451.
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References
National Center for Education Statistics. (2012). Degrees in computer and information sciences conferred by degree-granting institutions, by level of degree and sex of student: 1970-71 through 2010-11. Retrieved from Digest of Education Statistics: https://nces.ed.gov/programs/digest/d12/tables/dt12_349.asp
National Center for Education Statistics. (2017). Bachelor's, master's, and doctor's degrees conferred by postsecondary institutions, by sex of student and discipline division: 2014-15. Retrieved from Digest of Education Statistics: https://nces.ed.gov/programs/digest/d16/tables/dt16_318.30.asp?current=yes
National Center for Women & Information Technology. (2014). NCWIT Scorecard. Retrieved from National Center for Women & Information Technology: https://www.ncwit.org/sites/default/files/resources/ncwitscorecard_05152015_lowres.pdf
Porter, M., & Kramer, M. (2006). Strategy and society: the link between competitive advantage and corporate social responsibility. Harvard Business Review, 78-92.
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Roberson, Q. M., & Park, H. J. (2007). Examining the Link Between Diversity and Firm Performance: The Effects of Diversity Reputation and Leader Racial Diversity. Group & Organization Management, 164–177.
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