The insight: on the industrial strategy, COP and customer experience

Here at ‘The Insight’, we’re counting down the days to the holidays. We’re ready for a rest after what’s been quite some year. A UK election and a big majority for the first Labour Government in 14 years. The first formal industrial strategy for seven years. A US election, which saw possibly the greatest political comeback of all time by President Trump. Quite a year. 

Before we close our laptops and kick back with a mince pie and a glass of sherry, here are our thoughts on the Modern Industrial Strategy, climate change, the digital transformation of government and AI’s role in customer experience. 

A strategy for sustainable growth

We’re all for a Modern Industrial Strategy that drives sustainable growth in the UK. But it shouldn’t be about Government dictating the industries of the future, any more than it should be about Government leaving businesses to get on with it. It has to be a strategy that sees Government and business work together.

We were, of course, very happy to see professional and business services among the eight priority ‘growth-driving sectors’. And the focus on strengthening regional clusters chimes with what we’ve been hearing from our clients across different sectors.

There’s still a lot to digest before the final Modern Industrial Strategy is launched early next year. We’ll hear the views of Jordan Cummins from the CBI among others on our next ‘Insights for leaders’ event tomorrow at 12:30.

We’ll also be looking at the impact of the Budget on the prospects for growth in 2025. And Jens Larsen of Eurasia Group will join us to discuss the US election result and what a Trump administration could mean for the UK.

Register for Insights for leaders: Budget, Modern Industrial Strategy and Elections

COP29: Agreement on funding reached in the eleventh hour 

All the talk of the US election has rather overshadowed events in Azerbaijan, where world leaders have been meeting to discuss climate change.

A big topic of contention at COP29 was agreeing funding to support developing nations with the climate transition. (Although, we suspect much of the conversation has been about President Trump’s plans.)  An agreement on funding was finally reached in the eleventh hour. But while the £300 billion a year in climate finance was an increase on the current £100 billion, developing countries saw it as ‘paltry sum’.

This COP hasn’t attracted much in the way of positive press. But our experts on the ground in Azerbaijan took encouragement from progress on carbon markets and a focus on scaling and accelerating renewables. And it’s good to have had COP16 and COP29 in the same year, and we’re looking forward to COP30 bringing nature and climate discussions closer together.

The UK government’s commitment to climate leadership has also been positive. It took an important step with the launch of the Global Clean Power Alliance at the G20 Summit. Countries including Brazil, Australia, France and others signed up to pushing ahead with the clean energy transition. The Alliance’s Finance Mission will help unlock private finance for large-scale renewable energy projects in developing countries. 

Register for Insights for leaders: Budget, Modern Industrial Strategy and Elections 

Govt tech?

The UK Government doesn’t just face the challenges of driving growth and accelerating climate action. It also needs to maintain citizen services while managing public spending.

That’s no small ask. But what’s for certain is that emerging tech will play a big role.

In ‘Unlocking government’s technology future’, we look at the progress governments across the globe are making on digital transformation.

What did we find out?

•  Government and public sector respondents say they’re prioritising emerging tech over maintaining legacy systems.
• The top benefit of adopting Everything-as-a-Service is improved efficiency.
• Governments are experimenting with AI in controlled groups.
• They’re using customer feedback to inform investment decisions.
• Governments have great plans for tech, but they lack the skills to bring them to life.

Read Unlocking government’s technology future

You can deliver customer experience excellence with AI

We’ve been having a bit of fun with AI at KPMG HQ. Last week we had an AI photobooth in the office and transformed ourselves into AI superheroes.

Of course, AI can do a lot more than generate fun images. For a start, it’s helping organisations transform the way they interact with their customers.

We’ve published our latest Customer Experience Excellence report today – we’ve been running it for 15 years now! This year, we’re looking at how AI-X is emerging as the new frontier in customer experience.

Hang on, you ask, what’s with this ‘AI-X’ business? We’re using it as an umbrella term for the use of AI to automate and enhance customer interactions. A great example is the rise of ‘AI agents’, which can understand context and interact with users in a more human way, adjusting their responses as they learn in real time.

The big challenge with this tech is getting customers to trust it. Our research shows that early applications negatively impacted customer trust and damaged brand engagement. The answer? There are four areas you can look at to build trust and show the integrity of your systems:

• Data privacy and security: implement strong encryption protocols and strong access controls. And carry out regular audits.
• Bias in AI algorithms: train AI on diverse and presentative data sets, carry out bias testing and ensure there’s human oversight.
• Customer transparency: be clear on how AI is being used and offer an opt out.
• Quality of AI output: regularly update and refine AI models and create customer feedback loops.

Read our Customer Experience Excellence report

This is our last edition of ‘The Insight’ before the holidays kick in. But don’t worry, we’ll be back in December as we look ahead to the new year. In the meantime, we’ll leave you with the news that Japanese firm Thermalytica Inc. was crowned this year’s KPMG Private Enterprise Global Tech Innovator.