Paul Wallbank

Paul Wallbank is a speaker and writer charting how technology is changing society and business. Paul has four regular technology advice radio programs on ABC, a weekly column on the website and has published seven books.

Apr 182014

After four decades the smartphone comes of age,” proclaims Micheal Wolf in Forbes Magazine.

Wolf is right to a point but he misses the key reason why the smarthome, or the entire internet of things, has become accessible – the technology has simply become affordable.

It was possible to build a smarthome two decades ago, but it was fiendishly expensive and only a few rich people could afford the technology. Today that technology is cheap and easy to install.

This is the common factor with all aspect of the Internet of Things, connecting devices has been possible since before the internet became common but it was expensive and cumbersome so only the highest value equipment – such as oil rigs – was connected.

Now it’s inexpensive and simple to connect things, people are doing it more and that is why there’s a range of security and privacy issues which weren’t so pressing when it was only a few obscure industrial devices that were wired up.

We aren’t inventing the wheel with technologies like the internet of things or big data, they already existed – they are just more accessible and that’s what’s changing business.

Apr 172014

A 16 hour outage by hosting service Bluehost knocks the wind out of this site’s sails.

There’s much to say about customer engagement, engineering and management but it will have to wait for another day.

Apr 162014

Following Google’s acquisition of smarthome startup Nest in January, it was clear that 2014 was going to be the year that the Internet of Things dominated corporate takeovers.

This week has shown that with Blackberry announcing a stake in medical technology firm NantHealth, obstensibly as an Internet of Things play as CEO John Chen explains;

The NantHealth platform is installed at approximately 250 hospitals and connects more than 16,000 medical devices collecting more than 3 billion vital signs annually. Think about the possibilities when an enormous amount of data and computing power is accessible to doctors in the palm of their hands.

As Chen points out, the possibilities for this data are huge which raises questions about the privacy and security issues for patients along with the importance of having stable software and networks.

The other big Internet of Things acquisition yesterday was Zebra Technologies buying Motorola’s enterprise division for over three billion dollars, again the buyer cited the opportunities in connecting machines.

An interesting aspect is these acquisitions aren’t being made by the big players – Cisco, Google, Microsoft or Apple – but by smaller, but still substantial, players. It shows just how wide the Internet of Things’ applications are.

Blackberry and Zebra won’t be the only big acquisitions this year.

Apr 152014

Today has been a big day for Australian navel-gazing with a range of reports released on the country’s prospects on in the Twenty-First Century.

One of the reports was the Joined Up Innovation survey commissioned by Microsoft and written by PwC, I wrote a story for Business Spectator on the results.

While the Microsoft report focused on the small business sector, Startup Aus released their Crossroads report that warns Australia is falling behind the rest of the world. Smart Company’s Rose Powell has a more detailed summary of the report.

Alan Noble, head of Google’s Australian Engineering operations warns, “we still lag behind many other nations, with one of the lowest rates of startup formation in the world, and one of the lowest rates of venture capital investment.”

“If we fail to address this, we risk forfeiting over $100 billion in economic benefits from emerging tech companies, and an irreversible decline in Australia’s competitiveness.”

Looking in from the outside

Particularly notable from the two surveys is that the discussion about Australia’s tech competitiveness is the debate is being led by two local employees of US Multinationals.

For a local perspective, the Macrobusiness blog joins the day’s chorus with a long examination of the risks to Australia’s living standards by being too far down the global value chain.

In the Business Spectator piece, I compared some of PwC’s recommendations with the efforts of the UK and Singapore to rebuild their manufacturing industries.

Australia’s collective decision

For Australia, it’s probably way too late to worry about most of the manufacturing industry as in the 1980s the country made a collective – and almost unanimous – decision to shift the economy to being resources and high value added services.

The high value added services haven’t eventuated; mainly because the internet has shifted the global dynamics towards lower cost centres and partly because Australian business leaders decided it was easier to exploit their domestic market power rather than compete globally.

Mining proved to be a better bet, more by the accident of China’s turn of the century boom rather than any deliberate policy, however the industry employs less than ten percent of the workforce and the vast majority of Australians living in the South East corner of the country have little contact with the resources industry.

A consumerist utopia

For most Australians, employment and prosperity relies upon a growing population driving city GDP growth with domestic wealth supported by buoyant property prices. Australia truly is the consumerist utopia.

As a result of a booming, seemingly unstoppable, housing market and an expending resources sector, Australia’s exchange rate has soared while the nation’s productivity has slumped.

Making matters worse is that outside of mining and a few agricultural markets most of Australia’s industry is grossly expensive by global standards and suffering from chronic under-investment.

An unsustainable economic model

That model is not sustainable, it will take one shock to Australia’s housing market to see the good burghers of Brisbane, Sydney and Melbourne impoverished so the nation’s continued prosperity requires something to drive the economy beyond low interest rates and Chinese commodity purchases.

Whether Australia’s business and political leadership are capable of hearing and reacting to these reports remains to be seen, but they will have no excuse to say they weren’t warned.

Apr 142014
Singaporean telco SingTel Optus have launched a seed venture capital program

Business Insider has a wide ranging  interview with prominent New York VC Fred Wilson on investment, tech and business succession planning.

I can’t help but think reading it though that Wilson’s career was a product of the times and his successors might find the economic environment very different.

The current Silicon Valley business model, which Wilson successful applied to the New York business scene, may be just another transition effect that made plenty of money for those involved at the the time but is just an historical oddity in the long run.

Apr 132014

“You’re not wanted here” is the message from San Francisco residents protesting against tech workers and tycoon moving into the city.

Over the last year the protests against the ‘Google Buses’ that ferry tech company workers from San Francisco to Silicon Valley has steadily ratched up with protests against high profile individuals, people vomiting on the buses and Google Glass wearers getting their devices smashed.

Around the world, from London and Berlin to Auckland and Hong Kong, cities are worrying about the diversity of their cities as the global asset bubble inflates property prices beyond the reach of ordinary citizens.

In many respects San Francisco is probably unique in its relationship to Silicon Valley and its restricted geography, but it’s hard not to think if the current technology stock falls on the US stock markets became a Tech Wreck style bust then the city’s problems might solve themselves.

The challenge for all major cities around the world is to manage the current boom in property prices that threaten to drive out lower paid workers essential to vibrant economies – although ultimately anything that can’t be sustained won’t be sustained and it’s hard to see how housing can run too far ahead of wages before a reversal happens.

In the meantime though we can expect to see many cities struggle with the same issues that face San Francisco.

Apr 122014
steam train and inefficient business
A strange piece by author Jeremy Rivkin in The Guardian argues the internet of things will facilitate an economic shift from markets to collaborative commons which threatens capitalism as marginal costs fall to zero.

Rivkin argues that the rise of the ‘prosumer’, who contributes content and adds economic value for free, is undermining the basic tenants of capitalism.

A telling blow to capitalism in Rivkin’s eyes is the abundant data generated by the Internet of Things;

Siemens, IBM, Cisco and General Electric are among the firms erecting an internet-of-things infrastructure, connecting the world in a global neural network.

There are now 11 billion sensors connecting devices to the internet of things. By 2030, 100 trillion sensors will be attached to natural resources, production lines, warehouses, transportation networks, the electricity grid and recycling flows, and be implanted in homes, offices, stores, and vehicles – continually sending big data to the communications, energy and logistics internets.

Anyone will be able to access the internet of things and use big data and analytics to develop predictive algorithms that can speed efficiency, dramatically increase productivity and lower the marginal cost of producing and distributing physical things, including energy, products and services, to near zero, just as we now do with information goods.

That Rivkin mentions large corporations like Cisco, Siemens, IBM and General Electric illustrates the flaw in his idea — these companies are profiting from the Internet of Things and the data it’s generating.

Rather than being killed, capitalism is evolving to the new marketplaces.

Nowhere is this truer than in the sharing economy where the new lords of the digital manor are  profiting from the work and free content generated by unpaid ‘prosumers’.

How long the free business models can survive is open to question, in many respects the age of the digital sharecropper is a transition phase that isn’t sustainable and it’s more likely we’re seeing a move to an economy where information is far more abundant than it was previously.

Such a change is not unprecedented, far more basic human needs are food and energy. In Western economies, we have been living in a time of unimagined abundance of both for the last century.

In subsistence economies, food and the energy to grow or hunt it is scarce and its why living standards are low and life expectancies are short. Agricultural society start to solve the food scarcity problem and industrial societies automate farming and increase living standards through abundant energy.

During the pre-industrial era, the basic unit of energy was the horse – hence the term horsepower – and it was rare to have more than four horses driving a coach or piece of machinery.

Today, we have locomotive engines that provide 6,000 horsepower, a basic farm tractor delivers around 100 HP  and a typical family car around 200. We live in an age of abundant energy and our living standards reflect it.

We’re moving into an era of abundant information that will change our societies in a similar way to the age of abundant power has changed economies over the past 300 years.

Open source, the sharing economy and the internet of things will all change aspects of our economies and society but people will still be making a living one way or another so they can buy a meal and pay their rent.

The age of abundant information means massive change to the way we work, but it no more means the end of capitalism than the steam engine did.