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 smartcompany.com.au website and has published seven books.

Mar 232017
 

What happens when a vehicle manufacturer locks down their products’ software? John Deere’s customers are finding out as American farmers turn to Ukrainian software vendors for software to maintain their tractors.

John Deere’s behaviour is extreme as almost every component of a modern tractor has a software component which leaves farmers at the mercy of the company’s dealers and authorised mechanics.

So understandably the farmers are finding ways to hack their equipment to reduce downtime and costs, something permitted in the US after an exemption to the Digital Millennium Copyright Act (DCMA) was granted to vehicle software.

Vendor control over connected vehicles is a bigger problem for consumers than just maintaining the software, as the information collected from these devices becomes more valuable who controls that data becomes more important.

With global supply chains, increased regulatory requirements and demanding markets, the agricultural industries are probably leading the world in applying the Internet of Things and Big Data, so the challenges faced by farmers are things which will affect us all.

As everything from toasters to motor cars become connected and dependent upon code, the conflict between proprietary software, open markets and user rights is going to grow.

Consumers and the free market can only do so much to control the flows of data and who owns them. It’s hard to see how governments can’t become involved in how information is owned, traded and stored.

Mar 212017
 

Data collection agency Experian’s deal with Finicity to collect and process borrower information is an example of the how Big Data is being used by the financial services sector.

Recently I wrote a piece for Fairfax Media on the Science of Money which included some quotes from Experian’s Australian managers. They were quite explicit about their use of data.

That a company like Experian is adopting more advanced analytics isn’t surprising given the power of the tools available. What’s also driving the adoption is the proliferation of devices available to track people.

Notable among those devices are personal assistants, as David Pogue writes in Scientific American, household technologies like Amazon Alexa, Google Home and Apple Siri are vacuuming up huge amounts of data on our behaviour, likes and dislikes.

Increasingly all of this is being fed into machines that determine our suitability for marketing campaigns, credit and financial services.

For companies like Experian this is a massive opportunity although the focus on credit suitability betrays a mindset more suited to the 1980s finance boom than the more complex times of the early 21st century.

It’s hard though not to think that given a choice the finance sector will happily use these tools to take us into another subprime lending crisis which would be a shame as these technologies’ potential for allowing us to make better decisions is immense.

How we use these tools will define our businesses, economies and communities over the next thirty years. We need to be careful about some of the choices we make.

Mar 202017
 

Following the post on Building Digital Communities a few weeks ago, some friends forwarded me an excellent article from New Zealand tech evangelist Dan Khan on what he learned from from observing the development of Boulder’s tech community.

Khan’s view is values are at the root of building a startup community, an open and distributed network of people bringing their disparate but relevant skills to a region is what builds an industry cluster.

Equally it’s about values being aligned so the community reinforces its own strengths and advantages.

To many, the startup community is not a tangible thing. Instead, it’s an amorphous, ever-changing network of support, knowledge, resources, and relationships which gives those creating ventures, a boost up to the next level when they need it.

It’s simultaneously a safety net that eases founders down when their ideas fail; and a resounding cheerleader and network of scale for those flying high.

The New Zealand experience is informative as Wellington’s tech sector explodes on the back of special effects studio, WETA along with Xero and the vibrant startup community based around initiatives like Enspiral. So much so the city is offering free trips to prospective workers.

Enspiral itself is a good example of grass roots community initiative where a contractor’s collective has grown to 300 strong organisation building connections between Wellington’s creative, tech and businesses groups.

History is on the side of those building grass roots communities as almost every industrial hub has grown out of motivated individuals harnessing a local region’s advantages to dominate a sector.

As Steve Blank’s Secret History of Silicon Valley describes, the rise of today’s venture capital tech sector business model came out of a group of driven individuals leveraging the United States’ massive electronics research spending through the mid Twentieth Century along with a boost from tax changes in the late 1970s.

Silicon Valley’s startup culture owes a lot to government spending and policies but the development of today’s ecosystem took fifty years and many motivated individuals working together.

Which brings us to to the Victorian state government’s funding the establishment of a 500 Startups outpost in Melbourne. This is part of a sustained campaign to subsidise global tech companies’ setting up their regional offices in the city.

As part of that campaign the Victorian state government has promised to spend sixty million Australian dollars on building a startup ecosystem in Melbourne, it’s a classic example of top down planning.

History hasn’t been kind to Victoria in its tech industry subsidies, with the state government spending ten of millions at the beginning of the century to develop region’s gaming industry only to see the sector collapse as a high Australian dollar and soaring costs saw international studios leave and local producers close.

In 1998, then Victorian Premier Jeff Kennett, triumphantly proclaimed subsidising Netscape’s Australian office would lead to Melbourne becoming a global tech centre. Twenty years later, that game continues.

500 Startups founder Dave McClure hints at how the outpost will be limited, “Partnering with Melbourne and LaunchVic helps us bring a slice of Silicon Valley to Australia through our startup, investor, and corporate programs.”

So there’s a strong sense of deja-vu, dare one say even cargo cult thinking, in the weekend’s announcement.

While bringing a slice of Silicon Valley to Melbourne is nice, it doesn’t build an ecosystem which will take years of patient encouragement of local, motivated individuals. What’s worse, the government intervention threatens to distort the market and stifle the culture of grass roots development Khan identifies as being critical.

The question for Melbourne’s startup community is how much patience does the government have? The nation’s political culture of announceables, which the current state minister is an enthusiastic participant, doesn’t bode well.

For the moment, the priority for the Melbourne startup community is to decide if public sector funding should be a critical part of their ecosystem. If government subsidies for foreign businesses are the answer then ensuring bipartisan and long term political support for strategic initiatives should also be close to the top of the list.

Mar 182017
 
How are magazines and newspapers surviving in a digital world?

Could schools help combat the scourge of ‘fake news’? The OECD’s education director, Andreas Schleicher, believes so.

Schleicher runs the organisation’s PISA international comparison of educational standards that will introduce tests in 2018 on global competency alongside the existing measures of literacy and numeracy.

The questions of what fake news is and who it affects are relevant to the discussion of dealing with propaganda, slanted reporting and the internet’s echo chambers.

I’ll be discussing this shortly on BBC5’s Up All Night. It should be an interesting discussion.

Mar 162017
 

What has gone wrong with Australian innovation? For a nation so wealthy, it’s remarkable how poorly the country performs globally in terms of bringing new products or technologies to market.

At Ad:Tech Sydney yesterday, The Great Australian Innovation Fail panel discussed what has gone wrong and what can be done to get the nation back to a position more in line with its comparative affluence.

Boasting a range of digital media veterans and startup founders, the panel was far from a group of muttering naysayers. Although all but Fleet Systems’ Flavia Tata Nardini were distressed at the failure of Australia’s innovation agenda and the country’s general disdain for new businesses and technologies.

Michael Priddis, the CEO of research and development consultancy, Faethm,  pointed out that automation and artificial intelligence are not the future but the present and the job losses are happening now across industries.

Caitlin Iles, founder of XChange, added that she believes the estimates of nearly fifty percent of Australian jobs being lost to automation are actually understating the effects and it’s more like 90% – “a doomsday statistic” – which is something that Priddis endorsed in observing how the mining industry has automated in the past decade.

The employment shifts are being ignored by governments, says Beanstalk Factory’s Peter Bradd. “They have to get their heads out of the sand. We need to be supporting workers in threatened jobs to reskill. That’s just not happening at the moment.”

Australia’s underperformance is stunning when you consider tech startup exits, says the Information Industry Association’s Tony Surtees. Unsurprisingly Silicon Valley dominates the global statistics with over 47% of the global value with London, Los Angeles and Tel Aviv following. Sydney was at the bottom of the table with only .01% of value.

The value of exits is a problem, but that is more about the capitalisation of startups and may be changing. A bigger problem lies in how Australia’s corporate sector innovates and engages with new technologies.

Corporate Australia’s failure to engage is shown in the OECD ranking the country at 81st globally in ‘innovation efficiency’, while the nation is tenth in inputs it fails dismally in applying those inputs into outputs.

This is reflected in corporate Australia’s failure to compete globally outside the mining sector. Basically Australian executives have little desire in international markets and most have no interest in engaging with researchers, universities, innovators or entrepreneurs.

“People don’t like to collaborate,” says Peter. “They want to keep everything to themselves.”

“The CEOs of Australia’s top twenty companies need to get together with CSIRO and the universities and fix this problem. There’s money on the table.”

Whether Australia’s business leaders are prepared to pick up that money, or they’re happy and comfortable with their lot is probably the question of whether Australia can start to pull its weight in the innovation stakes.

“In ten or fifteen years we’ll be screwed if we don’t,” concludes Michael.

Mar 142017
 

One of the web’s promises was to eliminate the middleman – the retailer, the broker and the agent. During the heady days of the original dot com boom in the late 1990s many of us, including this writer, thought relationships between producers and consumers would become stronger without intermediaries.

As it turned out, things things didn’t quite work out that way with new middlemen like Uber and Amazon rising while some sectors, like real estate, just saw the industry evolve around new tools, distribution channels and advertising models.

Now it appears AirBnB is coming for the real estate industry with a plan to move into rental management, something that publicly bemuses the incumbents but no doubt privately worries them.

Like Uber, AirBnB is having to look at alternative revenue streams to justify its sky-high stock valuation. Particularly so given the company is looking at an IPO in the next few years.

Rental management is a pretty low margin, high maintenance business so it’s an odd choice for AirBnB and it’s not hard to think the real target is the real estate sales business which far more profitable and in many cases quite doable with algorithms.

No doubt real estate agents will retort with how they add value and how computers couldn’t do their sales job but in truth it’s like many other industries where automation can deliver cheaper and quicker results.

If AirBnB does successfully enter the real estate market the first victim won’t be the agents but the newspaper industry.

With local newspapers still dependent upon real estate display advertisements, particularly in Australia where the print media’s only real revenues come from property advertising, losing out to an app would be the industry’s killer blow.

As with many other things in the digital economy, it may be we underestimated how long it would take some industries to fall. We could be about to see two sectors fall to disruption now.

Mar 092017
 
what are the rules when asking for something for free

Last week I was asked to help a British events manager to help with their research for an Internet of Things conference in Singapore.

This is the sort of thing I would happily do for free or a cup of coffee if it were a friend or a worthy cause but this was a stranger working for a large multinational corporation who’d found me through a LinkedIn or Google search.

Knowing that tickets for their European and North American events are around two thousand dollars, I politely asked for a consulting fee.

What happened next is predictable and I discussed some of the issues on the Australian marketing and media site, Mumbrella.

 

In a content and context driven world it’s interesting how the business models of the middlemen increasingly rely on exploiting those delivering the product – be it Uber, Facebook or a big conference organiser.

How sustainable those models are remains to be seen. It’s hard to see how entire industries can survive on underpaid or unpaid workforces.