by Karen Webster
Two weeks ago, Ferrari named its third CEO in as many years. That wasn’t the big news. This new CEO, Benedetto Vigna, isn’t a car guy but a tech guy, and not just any tech guy. He hails from Europe’s largest semiconductor chipmaker, STMicroelectronics. There he ran what is described as STM’s most profitable business unit: the one that builds and sells micro-electromechanical systems and sensors: the stuff that powers self-driving cars and in-car software innovations.
At the end of 2020, FedEx closed on the acquisition of ShopRunner, a subscription-based pureplay eCommerce shipping provider. This acquisition wasn’t material if measured by what FedEx paid to buy it (they even said so). It will be, they say, once measured by the insights and business model innovations that integrating logistics into the online order flow of merchants can provide them and the commerce ecosystem, writ large.
Verizon bought videoconferencing platform BlueJeans in 2020, with the goal of using video as an enabling platform for new B2C and B2B use cases turbocharged by 5G. One of the first applications is in healthcare, where telemedicine services will be made possible securely and privately to anyone with a mobile device. Those patient/doctor interactions will also automatically synch to the patient’s electronic medical record. The head of BlueJeans said that convenience and efficiency are two of its most obvious benefits, but the one he’s most excited about is the ability to make doctors more accessible to patients who lack good healthcare options today.
Other sectors are shifting as well. Automobile OEMs are shifting to technology first. Logistics players are shifting commerce-first. Telcos are leveraging new networks to power healthcare’s next frontier. Three data points of many that the connected economy is front and center in the Board rooms and War rooms of every single enterprise in the world.
Today marks the official launch of the PYMNTS ConnectedEconomy Platform. It’s something we’ve been working on and innovating for nearly two years, well before the pandemic accelerated the march to digital for everyone.
More than just a different way to talk about innovation, the ConnectedEconomy is a framework for understanding how people and businesses will engage over the years to come and a body of research and insights to help executives size and seize their connected economy opportunities.
Defining And Measuring The ConnectedEconomy
The ConnectedEconomy consists of the businesses that rely on the Internet as a fundamental aspect of how they provide goods and services. To organize and keep track of the developments of the Connected Economy, PYMNTS has divided it into 10 pillars. Each represents a building block of the globally connected economy that is rapidly taking shape. Together, they represent the segments that will define its future.
Pillars go well beyond the classic way that businesses are categorized and measured today. Each pillar represents a set of broad-based activities in which people and businesses engage to accomplish a discrete goal. More importantly, pillars are where digital is redefining the activities and the outcome.
And these pillars aren’t standalone verticals but intertwined with each other in ways that often complement one or more other pillars.
Take grocery — a vertical defined by the set of stores that people visit to buy their food.
Take restaurants — a vertical representing the set of establishments that prepare food and serve it to consumers on or off-premises.
Take eat. It’s a pillar that reflects the blurring of the lines between the verticals that people use to buy, prepare, and consume their food. Eat is a new ecosystem that reflects businesses’ and people’s use of connected devices, apps, payments and other technologies to satisfy the consumer’s very basic need to eat.
PYMNTS has identified 10 pillars of the ConnectedEconomy.
Four of the pillars provide essential services that people rely on to get much of their daily lives done. People have to pay (and be paid), bank, communicate and travel.
People use another five pillars to operate a household, sustain and enjoy themselves. How they live is about managing their homes and daily lives and how they have fun is how they spend their leisure time. Then there’s how (and where) they eat and shop. Work is what most people need to do to do everything else.
Finally, people want to stay well and live longer, healthier lives.
How People Live In The Connected Economy
More than just defining the ConnectedEconomy, PYMNTS wanted to understand how people live in it and value it.
The PYMNTS ConnectedEconomy Platform debuts the results of our first population-based study of 15,000 U.S. consumers conducted in April 2021. We fielded this study to better understand how digitally connected the U.S. consumer is today and where she sees the natural points of synergies across the ten pillars of our connected economy and why. We plan to update this study annually, expand it to other geographies and launch specific pillar-centric studies to better understand the consumer and provider dynamics within each.
The study produced more than five million data points which our analytics team distilled into seven key insights. These insights provide a framework for how business executives should be thinking about the role they plan in enabling the connected economy reality — one that two-thirds of the U.S. population distinctly views as valuable and important.
The ConnectedEconomy Businesses
We wanted to put the ConnectedEconomy framework to the test by identifying a set of companies we believe to be predictive of the connected economy’s future. Today debuts the PYMNTS CE100 Index, a patent-pending financial index of that basket of 100 companies.
Getting to that 100 was a journey. Initially, PYMNTS selected a basket of 140 companies and asked eight highly respected payments investors and innovators to contribute to this list. The criteria are straightforward: publicly traded companies trading across all exchanges globally are either enabling or driving the future of the connected economy within and across the 10 pillars.
The final cut reflects a quantitative assessment of more than 100 variables and a qualitative assessment based on our experience, history and a fundamental understanding of what determines long-term success in highly complex ecosystems. We plan to rebalance this basket of companies on a quarterly basis as more companies IPO and become possible contenders.
We will share a daily update of the performance of our CE100 Index against other popular indexes. The CE100 Index doesn’t weight stocks proportionately by market cap — it is a broad assessment of the growth of the connected economy players that limits the bias of few strong Big Tech performers that are part of the basket. Importantly, even with that adjustment, the CE 100 index has outperformed the other major financial market indices both backward-facing — back to 2015, and at least to date.
Bookmark this link to check on the progress of the CE100 Index every day.
The Captains Of The ConnectedEconomy
Over the last six months, we’ve also spoken with 50 CEOs and C-Suite executives of some of the biggest, most innovative companies in the world to get their views on the connected economy and their place in it. A consistent theme across all of those conversations is how much they have been thinking about the notion of a connected economy, even without using those words. They and their teams are using software, new tech and connected devices to not only improve the activities within each of these pillars but to blur the lines between them to create methods of engagement.
We’ll keep talking to those in the know and let you in on what we hear as a regular feature of the platform.
Since day one, PYMNTS’ guiding principle has been about “what’s next” — using a set of proven frameworks, based on cutting edge economics, about how innovation ignites and scales in dynamic markets to identify and analyze relevant trends well before they become mainstream.
Now, “what’s next” includes an expanded focus on the connected economy. The PYMNTS ConnectedEconomy Platform is the only place on the web where data, news and insights about the innovations powering the connected economy can be found — and the voices of those who are delivering it — can be consistently heard.
We are thrilled to bring you a ringside seat to watch the future of our global economy unfold.