Tag: innovation

Google goes alphabetical

Google completes its transformation into Alphabet, soon we’ll see how effective it is.

As announced two months ago, Google quietly morphed into Alphabet after stock trading closed on Friday. The Wall Street Journal describes the new structure and the rationale behind it.

It’s hoped putting the smaller, more speculative operations into a separate business units from the company’s core search and advertising businesses will allow managers to be more focused on the business while giving more flexibility to the newer divisions.

One of the major reasons for Google’s reorganisation is the company had become too unwieldy with the WSJ story quoting one former employee who illustrates the problem.

Many entrepreneurs believe “it’s easier to do their business outside Google rather than inside,” said Max Ventilla, who left Google in 2013 to found an education startup. “There’s a lot of red tape for head count and money to get through at Google.”

At the moment it’s not clear that headcount is going to fall under the new structure and certainly some more revisions to the core business are going to be needed to get focus back for products like Google Docs and the local business search operations which have been drifting for some time.

Over the next two years we’ll see how successful the new structure is. If it works, then Alphabet could be showing the new model for corporate conglomerations.

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Does broadband really create an innovative economy?

Building a competitive nation is more than just rolling out broadband connections

How much does broadband really matter in developing a competitive and innovative modern economy? A corporate lunch with US software company NetApp last week illustrated that there’s more to creating a successful digital society than just rolling out fibre connections.

Rich Scurfield, NetApp’s Senior Vice President responsible for the Asia-Pacific was outlining the firm’s plans for the Australian market and how it fits into the broader jigsaw puzzle of economies across the region.

Like many companies in the China market NetApp is finding it hard with Scurfield describing the market as “chaotic”. This isn’t unusual for western technology companies and Apple is one of the few to have had substantial success.

Across the rest of East Asia, Scurfield sees them ranging as being mature, stable and settled in the cases of Japan, Singapore, Australia and New Zealand through to India where the opportunities and the challenges of connecting a billion people are immense.

Digital outliers

The interesting outlier is South Korea, one of the most connected nations in the world, where the promise of ubiquitous broadband isn’t delivering the expected economic benefits to the entire community.

In theory, South Korea should be seeing a boom in connected small businesses. As Scurfield says, “from a technology providers’ view this connectivity means you could do more things very differently because of the infrastructure that’s available.”

Global Innovation Rankings

Korea’s underperformance is illustrated by last year’s Global Innovation Index that saw South Korea coming in at 16th, just ahead of both Australia and New Zealand whose broadband rollouts are nowhere near as advanced as the ROK’s.

Making a close comparison of Australia and the Republic of Korea’s strengths in the WIPO innovation index, it’s clear the technology and engineering aspects are just part of a far more complex set of factors such as confidence in institutions, the ease of doing business and even freedom of the press.

Putting those factors together makes a country far more likely to encourage its population to start new innovative businesses that can compete globally. When you have a small group of chaebol dominating the private sector then it’s much harder for new entrants to enter the market – interestingly a private sector dominated by big conglomerates is a problem Australia shares.

Small business laggards

NetApp’s Scurfield flagged exactly this problem, “Korea is an interesting market in there’s about six companies that matter and from a competitive view those companies are extremely advanced, they have great technology and great people.”

“However what’s not happening across the rest of the country is this adoption isn’t bleeding into the broader community,” said Scurfield “Because of that I don’t see broadband connectivity as having a wide impact.”

That Korean small and medium businesses aren’t using broadband technologies to develop innovative new products and service in one of the most connected economies on earth raises a question about just how effective investment in infrastructure is when it’s faced with cultural barriers.

Certainly we should be keeping in mind that economic development, global competitiveness and the creation of industry hubs is as much a matter of people, national institutions and culture as it is of technology.

We shouldn’t lose sight of the importance of our people and institutions when evaluating the strengths and weaknesses of a nation in today’s connected world.

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Winning the global fintech race

Winning the global fintech race – why history and focus matter

One of the things that strikes you when wandering around London’s Docklands district is the sheer amount of advertising for financial technology companies.

That London has established this position should surprise no-one, its civic and national leaders have been aggressive in maintaining the city’s position as technology has swept through the banking sector.

One of the notable things when interviewing the Chief Executive of London and Partners, Gordon Innes, two years ago was how engaged both the city’s business and political leaders were in the development of the town’s technology sector and the financial industry was a natural focus.

An example Innes gave of that engagement was the co-operation between the offices of the Prime Minister and the London Mayor where staffers meet on a monthly basis to agree on business and technology policy, which is then put into action by Westminster and the UK Parliament.

Poaching the Aussies

The benefits of that co-ordination and focus are global, with the London fintech sector attracting startups from as far as Australia.

Australia’s experience, or lack of it, in the fintech sector is notable. As the story linked above mentions, the UK Trade and Investment agency actively scouts out promising businesses while the local state and Federal equivalents sit on the sidelines (disclaimer: I worked for the New South Wales government on its digital economy strategy).

For Australia, the late entry into fintech doesn’t bode well. The country’s financial sector is overwhelmingly weighted towards domestic property speculation – a structural weakness seen as a strength by most Australians – and the country’s high costs make it tough for startups.

Defining a competitive advantage

High costs in themselves aren’t a barrier to a city’s success – London, New York and San Francisco themselves would be among the highest cost places to do business on the planet.

To justify those costs a city needs a competitive advantage and there’s little to suggest Sydney or Melbourne have anything compelling as a financial centre beyond a bloated domestic banking industry fixated on residential property.

Two of the arguments used to support Australia’s claims are it is on the doorstep of Asia and it is in the same timezone as the growing East Asian powerhouses.

Timezone myths

If timezones do matter in modern business, the sad truth for the Aussies is the powerhouses themselves – specifically Shanghai, Hong Kong and Singapore – are in roughly the same longitudes so any time differentials aren’t great.

Being on the doorstep of Asia is probably one of the greatest Australian myths of all – it’s actually quicker to fly from Beijing to London than it is to Sydney. London might be on the edge of Europe – one US entrepreneur once told me how they can get Spanish developers into the UK in an afternoon – and New York is the gateway to the United States however there’s little reason to go Down Under for any other reason than to visit Australia.

The power of history and focus

Comparing London to Sydney is useful though as it shows the power of history and trade routes. London became a global financial centre because it was the financial centre of a global empire just as New York is today and possibly Shanghai in the not too distant future.

For the Aussies, the trade routes aren’t so encouraging in indicating the country has a future as a financial sector. Even ignoring history, the commitments of governments and local corporations are at best half-hearted compared to their global competitors – as we see with London poaching Australian businesses.

One of the strengths in those global centres is a constant re-invention and the ability to adapt to changing circumstances – how China adapts to a rebalanced economy will define whether it remains a global economic power – and in the UK the government is looking at the next big things in biotech and the Internet of Things, two areas where it has strengths and can attract global investment and skills.

For countries and regions aspiring to be global players, they need not just to be playing to their own strengths but also to where the future lies and not be late entrants into the current investment fad.

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Cisco expands its innovation centre network to Australia

Cisco opens its latest innovation centre in Perth to focus on the oil and gas industries

Today Cisco launched their latest Internet of Everything Innovation Centre in Perth, Western Australia. The facility joins the seven existing centres around the globe which includes Rio de Janeiro, Toronto, Songdo, Berlin, Barcelona, Tokyo and London.

As a joint venture with resources company Woodside and Curtin University, the centre will initially focus on the gas industry and will include a state-of-the-art laboratory, a technological collaboration area, and a dedicated space to show the Internet of Things in action.

Oil and Gas is one of the key sectors for targeted by Cisco in their Internet of Everything push with Brad Bechtold, the company’s Energy Lead, telling Decoding the New Economy earlier this year how the IoT is expected to deliver an eleven percent reduction of costs for the $1.5 trillion dollar a year industry.

Bechtold believes remote sensing and operations will be the driver of many of the cost reductions along with detailed analytics enabling more efficient operations.

Many of these technologies will be tested as part of Woodside’s Plant of the Future gas project with CEO Peter Coleman saying the scheme will link company’s knowledge base with artificial intelligence, data analytics, and advanced sensors and control systems.

“We are taking a collaborative approach to enhancing our operations as part of our digital transformation journey. This partnership will create a globally competitive centre for excellence that could be leveraged in our LNG operations, as we progress our remote operations capabilities,” Coleman said.

 

The Perth centre intends to bring together start-up companies, industry experts, developers, researchers and academics in an open collaboration environment to create a “connected community” focused on cloud, analytics, cyber security and IoT network platforms.

The Australian Commonwealth Science, Innovation and Research Organisation (CSIRO) has also flagged it intend to join the hub as part of its Square Kilometer Array deep space mapping project.

Another branch of the Australian hub is expected to open in Sydney later this year.

 

 

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Looking outwards to beat change

Outwards looking businesses are better suited to dealing with change a report claims.

Only one in four Australian businesses are prepared for change says a report released today by telco Optus.

The Future of Business report is based upon interviews with over 500 business leaders across twelve industries and exposes a disconnect between managers’ beliefs of how ready their businesses are to confront change and the reality.

Over four hundred of the respondents felt ‘confident or highly confident’ in their organisation’s readiness for change while the survey found only 23% of these organisations are actually ‘highly ready’.

Organisations that appeared to be highly ready tended to be outward focused with almost all of them citing the desire to meet customer needs as the top trigger for transformation while less change ready businesses are primarily driven to change in order to reduce costs.

“Change ready businesses are not only prepared for, but also anticipate and predict change. Disruption is happening everywhere and businesses of every size and in every industry need to be prepared to deal with rapid technological change and shifting consumer expectations,” says John Paitaridis, Optus Business’ Managing Director.

While the Optus survey doesn’t produce any great surprises it does emphasise how the dynamics of change work, organisations that are outward focused are more likely to identify and understand change than those looking inwards.

Listening to the marketplace and society almost always beats those counting paperclips.

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Niches and needs: necessity and the mother of invention

How one person’s problem becomes an invention

An old saying is necessity is the mother of invention and nowhere is this shown better than walking the exhibition floor of the Internet of Things World conference in San Francisco today.

The Wallflower is a good example of this, thought up of after the founder had to rush home when his partner thought she’d left the stove on (she hadn’t), he thought there had to be something that could monitor this on the market and when he discovered there wasn’t, he invented it.

Snowboarding needs

Probably the sexiest device on the floor is the Hexo+, an autonomous drone designed for video shots. Use the app to tell you what shot you want and it the drone will take off and video you.

Hexo+ was founded by Xavier de Le Rue, a French professional snowboarder who wanted to get shots of his maneuvers but couldn’t afford a crew or a helicopter to do so. The preprogrammed flight patterns represent the most common camera sequences optimised for the GoPro camera.

Probably the most trivial is the MySwitchMate, a mechanical device that fits over a wall light switch. Set it up and you can use its app to flick your lights on and off.

The device was born out of the founder wanting to remotely control his college dorm lights from his bed. While the market seems to be those who don’t want to get out of bed, its main market are those who would like remotely controlled lights but can’t install a smart lighting system.

A niche from a need

What all three of these devices show is how a need by an inventor spurred a  product’s development, in that respect the Internet of Things is no different from any other wave of innovation.

So if you wonder “why doesn’t someone sell this?” it might be an opportunity to set up your own business or invent an IoT device to meet that need.

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Stemming the Innovation drought 

Science, Technology, Engineering and Mathematics studies are essential to the future economy a PwC study shows.

When discussing how industries are changing, the constant question is ‘what will happen to today’s jobs?’

Even in the Future Proofing Your Business webinar earlier this week this question was asked by a number of the small business owning listeners.

That concern forms the basis of the “A smart move: Future-proofing Australia’s workforce by growing skills in science, technology, engineering and maths” report released by accounting firm PwC yesterday in Sydney.

PwC’s report warns 44 per cent of current Australian jobs are at high risk of being affected by computerisation and technology over the next 20 years.

The report highlights that Science, Technology, Engineering and Maths (STEM) subjects are critical in the jobs that are going to benefit, or be created, by that technological change.

Finding the right courses

Sadly for Australia, and most of the western world, STEM courses are deeply out of fashion with students preferring to study in business related courses such as accounting, commerce and law.

As PwC flag, those industries are at risk with accounting at the top of the list for job losses.

Australian-industries-expected-to-be-disrupted-pwc

On the other hand, PwC forecasts professions in health, education, personal care and – worryingly – public relations will be in increased demand. Something that may underestimate the effects of technology on those industries.

Competing with STEM

PwC’s main contention is that economies which want to compete in the new economy are going to need more STEM graduates.

The shift to STEM education is something the OECD highlighted in its recent report, OECD report How is the Global Talent Pool Changing?

In their report the organisation forecast that the number of students studying around the world would increase from 130 million today to 300 million by  2030 with all of that growth being in Chinese and Indian STEM courses.

Already that science and engineering emphasis is clear in today’s numbers.

OECD-graduates-by-field-of-education

To counter the drift away from STEM courses among students, PwC suggests a campaign to engage young people while they are still at junior school.

The Australian conundrum

Sadly, that’s unlikely to work in Australia given the nation’s economy is built upon property speculation driven by the wealth effect of rising real estate prices.

Two nights before the PwC report one of the highest rating shows on Australian television came to its 2015 finale. The Block, which features couples renovating and flipping properties, finished its season the apartments being sold at auction at record prices and the contestants pocketing between 600 and 800,000 dollars for a few month’s work.

For young Australians the message from their parents and society is clear; don’t innovate, don’t create, just buy as much property as you can afford.

In the US on the other hand, the business heroes are the builders of new enterprises; people like Steve Jobs, Elon Musk, Bill Gates, Mark Zuckerberg and the founders of Google.

Other countries like Israel, India and China, are aspiring to be the next generation of tech leaders. That’s what’s necessary to build a dynamic economy.

Creating enduring jobs

As the PwC report claims, “the jobs most likely to endure over the next couple of decades are ones that require high levels of social intelligence, technical ability and creative intelligence”

Harnessing that combination of social, creative and technical intelligence is going to be one of the challenges for all economies in a decade of change.

Getting the supply of STEM skills right will be essential for success for all countries at a time when digital technologies will drive most industries.

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