Irish economist David McWilliam points out how the middle class are the next in line to be disrupted.
This is where things get interesting.
Author: Paul Wallbank
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The rise of the business digital native
‘Digital natives’ has been the term to describe people born after 1990 who’ve had computers throughout their entire lives.
The theory is these folk have an innate understanding of digital technologies from being immersed in them from an early age.
It’s doubful how true that theory is; the generation born after 1960 were born into the television generation yet the vast majority of GenXers would have little idea on how to produce a sitcom or fix a TV set and the same could be said for the war generation and motor cars.
Digitally native businesses
For businesses, it may be the digital native concept is far more valid. Ventures being founded today are far more likely to be using productivity enhancing tools like social media, collaboration platforms and cloud computing services than their older competitors.
What’s striking about older businesses, particularly in the Small to Medium Enterprise (SME) sectors, is just how poorly they have adopted technology. The Australian Bureau of Statistics report into IT use by the nation’s businesses illustrates the sectors’ weak use of tech.
The most telling statistic is the number of businesses with a web presence; the SME sector lags way behind the corporate sector that has almost 100% penetration.
Many of the zero to four business can be disregarded as most of them are sole trader consultants who’ve had to register a businesses for professional reason, although there is an argument even they would benefit from a cheap or free web presence to advertise their skills.
The ABS statistics show small business is lagging behind the corporates in social media and e-commerce adoption as well so the argument that local businesses are ignoring the web and using services like Facebook, LinkedIn or Google Places to advertise their services doesn’t hold water.
Old man’s business
Part of this reluctance to use digital tools is age; many SMEs were born either in the era when faxes were a novelty or when Windows computers were first appearing on small businesses desktops. They are creatures of another era.
In the current era cloud, social media and collaborative services are running business. The idea of buying a workstation for a new employee and waiting for the IT guy to set them up on the network is an antiquated memory; today’s workers have their own laptops, tablets and smartphones to do the work – all they need is a password.
Those services offer a different way of organising a business and this is the most worrying part of the statistics – large organisations are slowly, and not always successfully, adopting modern management practices while many small businesses are locked into a 1970s and 80s way of working.
For businesses being founded today, this isn’t a worry – they are the true digital natives and are reaping the benefits of more efficient ways of working. Something emphasised by Google’s updates to its Drive productivity services announced overnight.
That’s something that should focus the plans of established businesses of all sizes as they adapt to working in a connected society.
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Jailbreaking the Internet of Things
The news that hackers have turned their attention to Nest thermostats raises some delicious possibilities for the Internet of Things.
Jailbreaking smartphones has been normal for years as people circumvent restrictions to add features or software and there’s no reason that this can’t be done to smart thermostats, light bulbs or kettles.
Almost all the smart devices being deployed have processors and capabilities far greater than what’s needed to carry out their designed purpose, so an imaginative hacker can do some interesting things with a jailbroken home automation system.
Using your kettle to control your lights or fridge to open your garage door is a bit of gimmick but there’s plenty of potential for doing some cool, and mischievous, things.
While hacking the smart home for kicks might be relatively harmless, tinkering with industrial devices could have unintended and disastrous consequences. It’s another example why security is one of the top concerns as the Internet of Things is rolled out.
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Knocking at Silicon Valley’s door
In opening Salesforce’s new London office yesterday, former BT CEO Lord Livingston described the city as “knocking at the door of Silicon Valley.”
Judging from the Computing UK article that description hasn’t impressed the rest of the British tech community as it confirms in their minds there is, as usual, too much focus on the capital and Livingston’s view also raises the question of whether London really wants to be another Silicon Valley.
Like all global industrial hubs Silicon Valley the result of a series of happy coincidences; massive defense spending, determined educators, clever inventors and savvy entrepreneurs all finding themselves in the same place at the same time.
Trying to replicate the factors that turned the region into the late Twentieth Century’s centre of technology is almost impossible – even the United States couldn’t afford the massive defense spending over the fifty years from 1941 that underpinned the Valley’s development.
Apart from the spending; the culture, economy, geography, markets and workforce of Silicon Valley are very different to that of London’s.
This not to say London doesn’t have advantages over Silicon Valley; access to Europe and relatively easy immigration policies make Britain a very attractive location for tech businesses. If the local startup community can tap The City’s banking resources then London could well be the next global hub.
If London is the next global tech centre – history will tell – it will almost certainly be very different to Silicon Valley.
Strangely, the event Lord Livingston was speaking at reflects how the Californian tech sector is evolving; Salesforce is a San Francisco company and represents a shift in the last five years from the suburbia of San Jose and Palo Alto to the quirky city life of SoMa and the Tenderloin.
At the same time Silicon Valley itself is evolving into something different, just as it did in the 1990s with the switch from microprocessor manufacturing to software development.
That shift illustrates the risks of trying to imitate one industrial hub; by the time you’ve build your replica, the original has moved on.
If you spent your life trying to knock on the door of heroes you want to imitate, it would be shame to finally make it only to find they’ve moved.
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Reinventing venture capital
James Temple writing in on tech website Re/Code has an excellent profile of Google Ventures founder Bill Maris and his quest to re-invent the venture capital industry.
Certainly the Silicon Valley venture capital industry is ripe for disruption; Maris is not alone in pointing out that most investors in the sector and focused on short term incremental gains like shopping apps and online stores.
Probably the biggest thing that Temple points out in the story is the importance of Big Data to the Google Ventures model, although Maris seems to be acutely conscious of the limitations of relying on algorithms to make decisions;
Because you can 100 percent use data and statistics in exactly the wrong way. That’s a trap some fall into, one that we really try hard to avoid. But I think it’s important to use that as a tool.
The data is a support. It’s just like having your other partners there.
Being skeptical about the infallibility of Big Data and algorithms seems a very un-Google thing, but it may work well for Bill Maris and his team.
Whether Maris and Google Ventures can upend the Silicon Valley investment culture remains to be seen; the real message though is that the venture capital industry is just as vulnerable to disruption as any other.
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