Issue 03 Spring 2015
Disrupt or be Disrupted General Electric 120 years of innovation Inspiring stories of innovation and creativity
CONTENTS ISSUE 03 SPRING 2015
WHAT IS INNOVATION?
FOREWORD BY AMBASSADOR BERRY
REFLECTIONS ON INNOVATION
DISRUPT OR BE DISRUPTED
BIG DATA PROBLEM
DO THE MATHS
WHAT IS INNOVATION? To some, it’s probably an easy answer: it’s a great idea, a new way to do something. To others, it’s something more tangible: a new app on their phone, for instance. For many of us at AmCham, we see innovation every day at our respective companies. I know when I see one of Boeing’s 787 Dreamliners fly, or I visit our manufacturing facility in Port Melbourne, I get really excited. That’s because I can see innovation happening right in front of me, and I know that teams of passionate people made it happen. In this high-tech world we live in, real innovation still has the ability to make us take notice and think of the world not as it was, but as it will be. Perhaps that is how great innovators – people with surnames like Wright, Edison, Bell, and Jobs – thought as they pushed technological boundaries. That human element of innovation is something that cannot be ignored. Take a moment to think of an innovation that you particularly care about – all of its intricacies and why it matters to you and to others. The difference it makes in your life. Now think about the people behind the innovation: the ones who had an idea and were brave enough to ask “what if?” who were then joined by others who said “let’s try.” While innovators can still innovate on their own, it generally takes a team to take that innovation from idea to reality. In November, AmCham members are going to see some of industry’s most innovative teams first-hand during our Innovation Mission to Silicon Valley and San Diego. You can read more about that in an article from GE’s Geoff Culbert in this edition. It promises to be a great educational experience as we bring American and Australian companies together to talk about and demonstrate innovation. Innovation doesn’t just happen. It requires an ecosystem for it to be truly successful. Look no further than what US Ambassador to Australia John Berry has been doing since arriving in Australia in terms of building an innovation ecosystem that brings US and Australian companies together. It also requires all of us as leaders to inspire our next generation of innovators so that there is always someone who will ask “what if?”
THE POWER OF CREATIVITY
AMCHAM EVENTS & NEWS
American Chamber of Commerce Suite 9, Ground Level 88 Cumberland Street Sydney NSW 2000 Published by AmCham www.amcham.com.au email@example.com
Maureen Dougherty AmCham Chairman Boeing Australia and South Pacific, President
Ambassador Berry AmCham Patron
hen President Obama visited Australia in 2014 he noted the parallels in our national origins – the legacy of immigration; settlement of the frontier; democratic ideals; equal opportunity for all. Another trait Americans and Australians share is an innovative spirit. A tendency to question the status quo and to search for the new and novel rather than the tried and true.
My Ambassador’s Innovation Roundtables are designed to put students, business leaders, academics, scientists, researchers, government officials, venture capitalists, and entrepreneurs in the same room to highlight the progress we are making on innovation collaboration, address emerging challenges and brainstorm future opportunities.
In my two years as U.S. Ambassador to Australia, I’ve made innovation a major theme of our engagement with the Australian Government, private sector, and research community. I have visited places as varied as the Queensland Brain Institute, 3M’s Innovation Center, the South Australia Health and Medical Research Institute, and have learned about the game changing work U.S. energy companies are doing in Western Australia. I was amazed by the scope and breadth of innovation collaboration between our two countries.
It is important to think of rebalance as an innovation in U.S. foreign policy. It is about the United States deepening extensive diplomatic, economic, developmental, people-to-people, and security ties with the region. It is about developing and enhancing regional institutions. It is about engaging with new and emerging partners. Most of all, it is about strengthening our existing alliances.
Innovation is part of everything the United States and Australia do together. U.S.-Australia cooperation in research and development spans universities and government, think tanks and corporations. These partnerships help our economies expand, develop, and compete in the world market.
Australia is on track to become an innovation center of excellence in the Asia Pacific region.
How do we create the jobs of the future? How do we capitalize on the latest technologies? How do we grow our advanced manufacturing capabilities? How do we invest smarter? No one has all the answers. I do know we need to consider how to formalize partnerships, engage young people and improve STEM education. We need to share our experiences with entrepreneurship, venture capital and crowd-funding. Most of all, as Pacific powers, we need to encourage regional integration and collaboration. It is not enough for the United States to be Australia’s largest foreign investor and Australia’s largest destination for investment, or Australia’s most prolific education and research partner. The United States is Australia’s ally in innovating for the 21st century. We look forward to a century of discovery together. John Berry U.S. Ambassador AmCham Patron
Innovation collaboration between the United States and Australia will help us answer some big questions.
www.amcham.com.au Access Spring 2015
Innovation is in the air in Australia. The “i-word” has become noticeably more pervasive in conversation, journalism, political declarations, speeches, conferences – virtually everywhere you look and listen.
f necessity is the mother of invention, let’s credit the end of the commodities boom with this welcome new focus on innovation. With the recognition that coal, iron ore and gas can no longer be counted on, we are all looking to what will come next to keep the Aussie economy bouyant, growing, and relevant. The answer seems to be innovation — coupled with a much greater reliance on the brilliant people of Australia — rather than on the resources found below the ground. This has been a key message of the new Australian government, and it seems to be resonating across the land. While some people may despair at the falling volumes and values of mineral and resource exports from Australia; there also seems to be a growing realization that a bright future awaits Australia if the ingenuity of its human resources can be promoted more effectively. That is certainly our view at AmCham. We are delighted to provide thought leadership on this topic and to help unpack the innovation phenomenon so that it can be developed more fully across Australia.
We are gratified by the enthusiastic response from members and friends who are joining us on our inaugural Innovation Mission to California November 8-13. Our aim is to expose participants on the trip to the ingredients of the “secret sauce of American innovation” -- as AmCham Director Geoff Culbert likes to call it. Geoff chairs our new Innovation Committee and, along with AmCham Chairman Maureen Dougherty and former US Ambassador to Australia Jeff Bleich, he is one of the leaders of our upcoming mission. The response has been so strong – with participants coming from all over Australia – that we already plan to make this Mission an annual event at AmCham, perhaps visiting other innovative destinations like Boston, Austin, or the Research Triangle in North Carolina. But for our first version of the trip, we are targeting San Diego and Silicon Valley. San Diego happens to be my home town, but our reason for going there is the explosion of biotech, medical devices, and other innovative companies that have grown up in the shadow of the University of California at San Diego (UCSD).
We look forward at our first meeting to seeing ResMed CEO Michael Farrell and asking him why an Australian entrepreneur/ innovator like ResMed has chosen to put its headquarters in San Diego. We will finish the day at UCSD’s Jacobs School of Engineering, seeking to understand the amazing success of UCSD – like other leading American universities – in partnering with industry and leveraging government R&D funding to develop commercial products that consistently succeed in the global marketplace. We will also visit Qualcomm to understand better how mobile phone technology continues to evolve; and also Illumina, where the sequencing of the human genome is conquering killer diseases and changing the face of medicine. For those like me who take public transport in Sydney and have seen our lives improved by the advent of the Opal card, we will also visit Cubic Corporation to discuss their innovation process and what is coming next in that space.
Chevron – the largest foreign investor in the history of Australia – their CEO for technology will help us understand the future transition away from fossil fuels to more reliance on renewables—and how a traditional “oil company” will not only survive that disruption but lead the process. We will also visit Intel in San Jose literally where Silicon Valley started. Ambassador Bleich will be the keynote speaker at dinner there, and we will also hear from a panel of typical California start-up entrepreneurs sharing their experiences. We will also visit Microsoft; have lunch at Box with a group of “Boxers”; and spend an hour with LinkedIn founder Allen Blue finding out how he managed to change our lives so much with his concept of virtual networking. We finish that day at Zebra Technologies watching a Buffalo Bills – New York Jets AFL “gridiron” game which will demonstrate how Zebra’s technology can track every player on the field simultaneously and generate and analyze valuable data about everything happening there.
Then on to Silicon Valley! I have yet to meet an Australian businessperson who has visited Silicon Valley without coming back significantly changed and inspired by the trip. AmCham wants to make that experience accessible to all our members; and we are very pleased with the many doors that have opened to us around the Bay Area. Out in San Ramon, we will spend half a day with the GE software designers who underpin the growing emphasis in business on data analytics. At nearby
Our final day – Friday the 13th – will be divided between Stanford University and Hewlett Packard, or HP. No other university in the world has had a more phenomenally successful experience in refining that critical interface joining students and faculty, industry and government R&D funding than Stanford – and our visit will seek to unlock it, at least a bit, for our participants. Indeed, we have a number of Australian university representatives among our participants seeking to do just that. No one expects to
replicate Silicon Valley in Australia – the factors supporting it are simply too unique – but we do think there will be many lessons to be learnt and brought back to Australia. Finally, the visit to HP promises to be exceptional. We will be there just days after the largest corporate split in world history – creating out of HP two separate new companies, each still ranking among the Fortune 500. HP CEO Meg Whitman will meet with us, as will other members of the HP Board, to explore possibilities for more business and even closer relations with Australia. That’s the plan anyway. There will undoubtedly be some changes as we work through our itinerary, but this mission promises to be a winner. Once back in Australia, we all look forward to sharing what we learned with our friends throughout the AmCham community. See you then! Niels Marquardt AmCham CEO
www.amcham.com.au Access Spring 2015
Transformative change is at the heart of our culture. If you don’t like change GE is a terrible place to work.
DISRUPT OR BE DISRUPTED In 1896 the original Dow Jones Industrial Average was formed. Since then the world has seen two World Wars, the Great Depression, the Global Financial Crisis and the emergence of the Internet. Many great companies have emerged and many other companies have disappeared. Of the original 12 companies listed on the Dow only one has survived the passage of 120 years: General Electric.
he reason GE has not only survived, but thrived for 120 years is because we are constantly changing and evolving. We are never satisfied and we are always looking for a better or different way of doing things and serving our customers. Transformative change is at the heart of our culture. If you don’t like change GE is a terrible place to work. If you like change it can be a lot of fun. Take the past 10 years as a snapshot. Over that time we have sold our media business (NBC Universal), our insurance business (Genworth) and our plastics business (now owned by SABIC). Over the same period we have acquired over $100B in new assets in areas as diverse as Oil & Gas, Healthcare, Power and Water. We are in the middle of one of our biggest portfolio shifts in history, with the sale of GE Capital and our Appliances business, and we just completed the over AU$19 billion acquisition of Alstom, the global power generation and grid company. Any one of these moves would be considered significant in their own right. Collectively they are enormous. However, the biggest change the company has ever experienced is happening right now. It’s additional to any of the these acquisitions and dispositions and it’s been five years in the making. It’s GE’s transformation to become a global Top 10 software company. Why software? Global markets are changing at a pace never before seen and technology is driving that change. Technology is disrupting every industry and every company. Technology is collapsing distance and redefining boundaries. It is providing access to markets and information. It has removed the arbitrage of knowledge. The world has become more competitive as a consequence and the increase in competition will only accelerate from here. Companies have a choice – be a disruptor or be disrupted.
In a world that is changing exponentially, linear companies will become uncompetitive. Take our aircraft engines business as an example. These are big, complicated pieces of industrial equipment that are the product of years of R&D, sweat and investment. In a linear world we don’t need to worry about two people in a garage building an aircraft engine that will compete with our engines. However, in an exponential world we worry about those same two people building software solutions that make our engines fly more efficiently, reducing fuel burn and saving the airlines significant money. Manufacturing software that makes our engines fly more efficiently is now just as critical to our customers as the engines themselves. The same is true in all the industries in which we operate. We call it the Power of 1%. If we can use software to reduce unplanned downtime in the Oil &Gas industry by 1% it is worth over $5B to our customers annually. If we can use software to increase velocity of long-haul locomotives by 1% it is worth over $3B to our customers annually. Nurses in Australia spend upwards of 30 minutes each shift just looking for equipment. If we can use sensors to do a better job of tracking and locating equipment we can
save the healthcare industry over AU$5.5 billion in annual productivity impact globally. GE has invested over $1B in software manufacturing capability over the past 5 years. We now have over 12,000 software engineers in the company. We have built an operating system for the Industrial Internet called Predix, which enables companies to build software applications that will collect and analyse data that will enable them to run their business more efficiently. We are redefining our culture so that we operate more like a software company – lean, fast and agile – and we are taking our lessons from Silicon Valley. If you have not spent any time there, I highly recommend a visit. It will change the way you think. For that reason, in my capacity as a Board member of AmCham I am leading AmCham’s first Innovation Mission to San Diego and Silicon Valley in November this year. We will visit great innovative companies, large and small, including Microsoft, LinkedIn, Qualcomm, HP, ResMed, Chevron, Cubic, Zebra Technologies, amongst others. We will even make a visit to GE’s global software headquarters. I guarantee that anyone who makes the trip will come back with
new ideas and a different way of thinking about their business. This Innovation Mission comes out of the work done by AmCham’s newest working group, the Innovation Committee. Earlier this year the Board made the decision to establish the Innovation Committee because we saw a unique opportunity to provide members with access to the world’s most innovative market – the United States. Our goal is to connect members to ideas, people and opportunities, that will help them compete in a world that is becoming increasingly competitive. The Innovation Mission will be the first of many activities to come out of the Innovation Committee. This is an important new initiative for AmCham, which is no different than any other organisation. AmCham too has to continually evolve and reinvent itself, and find new ways to provide value to its members. We look forward to engaging with all our members on this exciting new initiative. Geoff Culbert President and Chief Executive Officer General Electric Australia & New Zealand
www.amcham.com.au Access Winter 2015
Innovation delivering ATO’s reinvention The Australian Taxation Office (ATO) is undertaking an enterprise-wide program of reinvention, transforming the way Australians experience their taxation and superannuation systems. Driving this reinvention program is Commissioner Chris Jordan’s desire to build community trust and confidence by shifting the way we interact with clients and stakeholders; to be easier, more collaborative, more relationship-oriented, and more outcome and future-focused.
myTax: Available via myGov – the Government’s single entry point for its digital services – this is the quick, simple way to lodge a tax return online. myTax is web-based, so you don’t need to download anything and you can lodge on multiple devices – computer, phone or tablet.
Commissioner Jordan said “Reinvention is about challenging and stretching ourselves, experimenting with different ways of working and trying new things that will work for the community and help us realise our vision. At its simplest, reinvention is best described as the [client-service] attitude we bring to work each day.”
Data is prefilled to myTax and the service is available to people with income tax offsets or deductions from superannuation pensions, lump sum payments, managed investment funds and foreign pensions.
When working in a government environment, especially in an agency as large as the ATO (approximately 20,000 staff), people can easily lose sight of their client’s needs. With this in mind we adopted a user centred approach to design the future experience that is contemporary and service oriented. Through this consultative process we’ve developed a blueprint for the future that provides a clear line of sight to what the community wants from a reinvented ATO. We now understand the type of experience our clients want when they interact with us, and we also know the kind of culture and staff experience we need in place to support those outcomes. As we create this new experience, here are just a few examples of the innovative products, services and initiatives introduced so far:
The ATO app: The latest version of the ATO app includes the myDeductions tool for individuals. The myDeductions tool allows individual clients to capture and classify: • work-related expenses - including an easy travel calculations feature linked to Google maps • gifts and donations • the costs of managing tax affairs. Taxpayers can store photographs of receipts and record car trips using the tool. Come Tax Time 2016, taxpayers can upload their completed deductions to the ATO, and their individual tax return will be prefilled with this data. Users can also share their recorded deductions with their tax agent directly from the app.
prove their identity. Voice authentication is a faster and easier way of proving identity. More than 1.2 million people have enrolled their voiceprints with the ATO so far and we are now looking to make this service available from smart devices. Technology that supports our staff: We have rolled out mobile devices to executive level staff; improved our video conferencing capability through telepresence and expanded collaboration tools both internally and across government. Change Network: We have introduced a voluntary staff Change Network that is kept up-to-date on all the change that is occurring across the organisation. The Change Network plays a key role in suggesting, progressing and/or testing new services, products, processes and policies and sharing information about the exciting changes in the ATO at both a local and national level. For more on our reinvention program or to see a copy of our blueprint for the future, visit reinventing.ato.gov.au. Brad Chapman Assistant Commissioner Reinventing the ATO Program Australian Taxation Office
Voice authentication: Last year the ATO introduced its award-winning voice authentication service in its contact centres for those who needed to call the ATO and
Through this consultative process we’ve developed a blueprint for the future
AWARD-WINNING INNOVATIVE RESEARCH TO SOLVE THE
BIG DATA PROBLEM
As data grows in size and complexity, the quest for greater storage capacity intensifies.
n optical data storage breakthrough at Swinburne University of Technology’s Centre for Micro-Photonics has delivered the cornerstone of a patented technique that could provide the ultimate solution in the big data era.
This technique lays the groundwork for big data storage with longevity and sustainability. In 2013, Swinburne researchers Professor Min Gu, Dr Zongsong Gan, Dr Yaoyu Cao, and Dr Xiangping Li announced a leap forward in data storage technology, dramatically increasing the capacity of a compact disc from 4.7 gigabytes to 1,000 terabytes. This is the equivalent of storing 50,000 high-definition movies. The technique uses lasers to write the binary code’s zeros and ones onto the discs, but instead of the conventional single beam it uses two laser beams with different colours for recording onto the disc. One beam, referred to as the ‘writing beam’ records the information, while the second beam inhibits the writing beam.
This produces a focal spot that is one ten thousandth of a human hair, enabling petabyte storage on a single disc.
with data management systems and were deemed most likely to commercially develop the Swinburne discovery.
As only conventional optical and laser elements are used, the technology is both cost-effective and portable.
As energy consumption and physical space allocations could potentially be dramatically reduced, the technology provides an ideal platform for the next-generation of scaled-back exabyte data centres.
Professor Gu says storage devices currently used in big data centres underpinning cloud computing and social media are based on magnetic recording technology, which is reaching its limits amid an explosion in the amount of data generated each year. “The impact of this new technology goes beyond storage capacity and has significant implications for energy consumption,” Professor Gu said. “Optical discs are what we call ‘cool technology’; they don’t require cooling systems, and they also have long lifetimes of around 20-30 years.” In 2014, start-up company Optical Archive Inc (OAI) licensed this technology. The following year Sony Corporation of America purchased the start-up.
The new technology and the future development plans have laid the groundwork for big data storage with longevity and sustainability. The wide public appeal of this data storage technology breakthrough was recognised by the 2015 Knowledge Commercialisation Australasia (KCA) Research Commercialisation Awards, through the team’s recent win of The People’s Choice Award in the best commercial deal category. Article by Swinburne University Media and Communications Science, Engineering and Technology Corporate and Government Affairs | Swinburne University of Technology
The team at OAI consisted of some of the founders that had built a business dealing
www.amcham.com.au Access Spring 2015
DO THE MATHS Look around your office and take special note of the 30 year olds. In 2003 they were undertaking their Year 12 studies. Of that group, just a little more than 11% studied advanced-level mathematics. With innovation and growth dependent upon strong STEM skills, you would be worried if the number of mathematically capable professionals was dwindling wouldn’t you? Well - it is time to start worrying. Every child starts school with mathematical potential. If we think of mathematics as a pipeline through school, tertiary education and into the workplace; then at points along the pipeline, different factors choke the outputs. The result is that Australia is experiencing a period of fewer maths graduates and fewer STEM capable citizens. According to data gathered by the Australian Mathematical Sciences Institute (AMSI), only 10.0% of Australian Year 12 students participated in advanced mathematics in 2014 and 19.3% in intermediate mathematics. Participation rates for girls are particularly poor with only 6.8% enrolled in advanced maths and 18.2% in intermediate, compared with 13.4% and 20.6% for boys. The full AMSI Year 12 mathematics participation report is available here. Year 12 Mathematics students in Australia - participation rates Advanced maths students
Intermediate maths students
Elementary maths students (estimated)
percentage of Year 12
Is the removal of pre-requisites for tertiary study the cause for the decline? Or could it be that students, their parents and teachers just don’t see a clear career path for the mathematically capable? And why do girls participate at a much lower rate than boys? We should also be asking where the maths teachers are. Australia does not have a full complement of qualified secondary mathematics teachers.1 Of the students in Years 7 to 10 in Australian schools, 40% are being taught by teachers who are ‘teaching out of field’.2 Innovation-active businesses are around twice as likely to use engineering skills, twice as likely to use science and research skills, and three times more likely to use ICT skills
than non-innovation-active businesses.3 In 2013 the Australian Industry Group survey showed that 41% of business indicated that they had difficulty recruiting technicians and trade workers with STEM skills, 27% in the case of professionals and 26% for managers with STEM skills.4 In 2010 Australia was ranked 25th in regard to percentage of science and engineering degrees at 17.5% of total degrees.5 It is estimated that 75% of the fastest growing occupations require STEM skills.6 If no action is taken, demand for tertiary graduates with STEM skills will outpace supply. STEM skills are critical for Australia’s national productivity and global competitiveness. Australia has reached a critical point where capitalising on economic opportunities for future generations requires intervention to ensure they have the right skills for fulfilling careers and a healthy, sustainable economy. Let’s start talking about the impact of the mathematics shortage. Will your business grow without maths? AMSI has secured funding from the BHP Billiton Foundation to address just these issues, with strategies across the mathematics pipeline to be implemented over the next five years. The program designed to entice more girls and young women into mathematics.
Teacher Professional Development will be delivered on-the-ground in 120 Australian schools. Based on a cluster arrangement, where a secondary school and up to three of its feeder primary schools are formed into a professional development group, teachers will work with an AMSI Specialist to focus on enhancing content knowledge in mathematics. Women in Mathematics Career Awareness Campaign A national public-awareness campaign will help students, their teachers, parents and the public see that rewarding and interesting careers exist for people who ‘stick with maths’. Inspiring Women in Mathematics Initiative Drawing on the community of mathematical high achieving women and men currently working in industry and business, Choose Maths will introduce young women to role models who have achieved in STEM and also possess the ability to translate their experience for the audience. The BHP Billiton Awards for Excellence In the Teaching and Learning of Mathematics Teachers are very good celebrating their students’ achievements, but are seldom celebrated for their own. The Choose Maths program will recognise teachers of maths by initiating the Annual BHP Billiton Foundation Awards for Excellence in the Teaching of Mathematics.
AMSI is the Australian Mathematical Sciences Institute. We are the collaborative enterprise of Australia’s mathematical sciences and exist to give independence to our disciplines and provide infrastructure so that we can take initiatives on the national and international stage. These measures fall largely into three classes – research and higher education, school education and engagement with the industrial and commercial world. The common aim we share with our partners is the radical improvement of levels of mathematical capacity and facility in the Australian community. It is AMSI’s ability to pull together skills and experience at the highest levels across the spectrum of the mathematical sciences that underlies our impact. AMSI’s Schools program delivers a range of initiatives that support mathematics education in schools, including the development of resources for teachers of mathematics, the provision of professional development, and the dissemination of careers information to promote the importance of mathematics for career choices. Janine McIntosh Schools Program Manager and Choose Maths Program Director Australian Mathematical Sciences Institute
1. Edwards, Daniel and Smith, T Fred, (2008) Supply, demand and approaches to employment by people with postgraduate research qualifications in science and mathematics: Final Report [Available: http://research.acer.edu.au/higher_education/9] 2. Discipline profile of the mathematical sciences 2013, Australian Mathematical Sciences Institute (AMSI), 2014 [Available: amsi.org.au/disciplineprofile2015 3 Australian Government (2012) Australian Innovation System Report – 2012 DIISRTE, Canberra, p36 4 Australian Industry Group, Lifting our Science, technology, Engineering and Maths Skills, Australian Industry Group, Sydney p.p.3-7. 5 OECD ( 2012) OECD Economic Surveys: Australia 2012, OEDC Publishing 6 Becker K & Park K (2011) Effects of integrative approaches among science, technology, engineering and mathematics (STEM) subjects on students’ learning. A preliminary meta-analysis. Journal of STEM Education, 12(5/6), p23.
www.amcham.com.au Access Spring 2015
US-EU Safe Harbor Data Transfer Framework ruled invalid, and TPP data flows proposal
In a big week for data privacy, the US-EU Safe Harbor Framework was declared invalid following a Facebook privacy challenge; and Australia, the US and 10 other Pacific Rim nations reached consensus on the Trans-Pacific Partnership (TPP) which includes a ban on hindering data flows across borders.
What are the implications of these changes for business and how do they affect and operate under Australian privacy laws? US-EU Safe Harbor Framework declared invalid Austrian student and privacy campaigner Max Schrems challenged Facebook’s transfer of personal data collected in Europe to its servers in the US, under the US-EU Safe Harbor Framework. The Framework has allowed EU personal data to be transferred to US companies that self-certify that they meet certain privacy standards. Thousands of US companies rely on the Framework. In a groundbreaking decision, the EU Court of Justice declared that the Framework does not provide an appropriate level of protection for personal data transferred from the EU to the US.
The Court is critical of the Framework’s national security exception, which permits personal data to be disclosed to US law enforcement agencies. It declared that such broad access to EU personal data - without an independent control mechanism to prevent privacy breaches - interferes with EU citizens’ right to private life. What is Australia’s overseas data transfer framework? Australia’s privacy regime has always maintained that no overseas regime is inherently safe; organisations must be aware of the risks of transferring personal information to any overseas jurisdiction, including the US. Under the Privacy Act 1988 (Cth), an Australian organisation that discloses personal information to an overseas recipient must take reasonable steps to ensure the recipient does not breach the Australian Privacy Principles (APPs), and will be accountable for any such breach. However, this doesn’t apply if the Australian organisation reasonably believes the recipient is subject to a law or binding scheme imposing privacy protections that are substantially similar to the APPs. It also doesn’t apply where the individual gives informed consent to the disclosure and to the Australian organisation not being accountable for the acts of the overseas recipient. Information transfers from Australia to the US Being a signatory to the US-EU Safe Harbor Framework does not, of itself, satisfy the requirements of APP 8. Accordingly, the Court’s decision does not have an immediate impact on Australian organisations, or on Australia-US data transfers by US companies operating in Australia.
Data surveillance laws in the US that triggered the Schrems Facebook case do not (yet) impact an Australian organisation’s ability to disclose personal information to the US.
Australia’s privacy regime has always maintained that no overseas regime is inherently safe
Where an overseas recipient does something with personal information that is required by an applicable foreign law – such as the US Government’s information access powers under the PATRIOT Act – this will not breach the APPs. Trans-Pacific Partnership and Data Flows Cross-border data flows are a key element of global commerce: think Internet-based communications such as email and peer-to-peer platforms such as Uber and Airbnb which bring “sellers” and “buyers” together online. Publicly released material indicates the TPP includes a ban on hindering the free flow of data across borders. The TPP will prevent signatories from blocking cross-border transfers of data over the internet, and further nullifies requirements that servers be located in a country in order to conduct business in that country. Until the text of the TPP is released however, it is not clear to what extent, if at all, the TPP data flow provisions will sit within Australia’s current overseas data transfers framework. Watch this space. Helen Clarke Partner and Viva Paxton Graduate Lawyer Corrs Chambers Westgarth 1. Unless the overseas recipient is also itself subject to the Privacy Act because it has an ‘Australian link’ by conducting business in Australia – see section 5B of the Privacy Act. See APP 8 – Cross-border disclosure of personal information. 2. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA). 3. Section 6A(4) of the Privacy Act.
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www.amcham.com.au Access Spring 2015
A HISTORY OF
id you know that the founding fathers of the United States of America were prolific inventors? Benjamin Franklin is credited with the invention of bifocal eye glasses as well as the lightning rod. George Washington developed a 16 sided threshing barn which made the threshing process more efficient, hygienic and resulted in a better quality grain and Thomas Jefferson, amongst other things invented a multiwheel encryption device. Reportedly, between them, the founding fathers were also responsible for the telegraph, the first revolver, the American sewing machine, the mechanical reaper, a machine for the mass production of horseshoes, vulcanization and the rotary press. So passionate were they about inventing that the very first US Constitution in 1787 enshrined the rights of inventors in article one, section 8, clause 8 which states: ‘The Congress shall have power ... To promote the progress of science and useful arts, by securing for limited times to
authors and inventors the exclusive right to their respective writings and discoveries’. The passion of Americans for innovation and its manifestation as intellectual property continues to this day. As technology has marched inexorably forward since the latter part of last century, for the most part, the US has led the world in granting patents for leading edge technologies. In the case of Diamond v. Chakrabarty, protection for a bacterium engineered to break down crude oil for use in mopping up oil spills was upheld by the Supreme Court. In 1998 in the case of State Street Bank and Trust Company v Signature Financial Group the US Court of Appeals for the Federal Circuit upheld the patentability of a business method directed to a data processing system handling the distribution of profits from a centralised pool of mutual fund assets. Today, US organisations are the most prolific users of global patent systems. Applicants from the
United States are the single largest source of patent filings in Australia. Australia is a friendly market for Americans with low barriers to market entry and a history of providing considerable success for American businesses. Australians are renowned for being prolific inventors too: the refrigerator (1856); the torpedo (1874); the electric drill (1889); the notepad (1902); the military tank (1912); the electronic pacemaker (1928); the ultrasound (1961); the black box flight recorder (1958); Wi-Fi (1992); the atomic absorption spectrophotometer (1952) and many more world beating technologies. As in the US, Australian courts when asked, have taken a liberal approach to what constitutes patentable subject matter. Most notable recently has been the divergence of opinion (at the time of publication) between the full bench of the Federal Court of Australia and the US Supreme Court
over the patentability of gene sequences. In Australia, the existing legal framework enabled the Court to take a view that mutant gene sequences used to test for certain types of breast cancer could be patented in certain ways, whereas in the US, the protection afforded these sequences was determined as being more restricted. Despite our inventing prowess and our liberal legal framework however, Australians file only about ten percent of all patent applications in Australia, and are bit-part players in IP filings offshore, despite our very high rate of per capita scientific publication. It is well documented that Australians are not so successful in translating this prowess into commercial return. There is much we can learn here from our US peers. Watermark has a passionate history in innovation dating back over 150 years. Edward Waters, the founder of the firm was a Melbourne-based shipping merchant who saw an opportunity to help inventors in the young colony achieve commercial success.
Our embracing approach of being ‘up close and personal’ with our clients, and our knowledge accumulated over this long period means that we know what it takes for an Australian innovator to succeed in the US, and on the other hand, the unique drivers of the Australian market.
R & D tax and IP finance advisors are passionate about helping Australians and Americans tap their respective innovation cultures. To tap into this passion, contact us: Melbourne +613 9819 1664 Sydney +612 9888 6600 Perth +618 9325 1900 watermark.com.au www.intellectualassetmanagement.com.au. Karen Sinclair Watermark
Starting in Melbourne, and later expanding to Sydney and Perth, we’ve helped some of Australia’s most successful businesses such as Cochlear take their technology to the US; and also assisted some of the biggest American companies such as ExxonMobil grow their interests in Australia. To this day, Watermark’s attorneys, IP lawyers and
access to opportunity
The Company You Will Keep
www.amcham.com.au Access Spring 2015
THE POWER OF CREATIVITY
4 ways to embed design thinking in your business What’s the last remaining competitive advantage companies have today? According to Leo Burnett CEO Todd Sampson, it’s creativity. And to harness the power of creativity, businesses are increasingly turning to design thinking to solve complex problems, come up with new products and services or discover unvoiced needs. From thinking to action
How does design thinking work?
‘Design thinking’ is a bit of a misnomer, because it’s not just for designers, and it doesn’t involve sitting around thinking. According to Tim Brown of IDEO, the world’s best known design thinking agency, “design thinking is a system that uses the designer’s sensibility to match peoples’ needs with what is technologically feasible and what a viable business can convert into consumer value and market opportunity.”
If you think about design thinking as an iterative process, it involves four key steps:
Thinking like a designer is a mindset shift. It’s human-centric, based on no preconceptions or assumptions, and dedicated to making things better. “Design thinking is a discipline that has a bias towards action,” explains Kerryn Ross, facilitator with design thinking experts Phuel. “It combines both creativity and innovation – which are different but not mutually exclusive.” Ross defines creativity as “having multiple perspectives on something”, while innovation is all about doing something differently. Both elements can help you solve problems in an increasingly complex world.
DEFINE what is the challenge, problem or opportunity?
EMPATHISE observe customers, understand their unmet needs
IDEATE drawing on multiple perspectives (the creative element) generate new ways to address that issue TEST prototype, run experiments, see if your idea has legs
Ross says she sees this as a discipline that can be developed, but it helps to have experience across multiple products and categories, “because you become really good at design thinking by trial and error, and it helps to learn the discipline without having an emotional attachment.” IDEO can carry out this process in about 16 weeks, according to Ross, because they draw on that diverse expertise. “Creativity is all about having more perspectives and getting out of your own head – while the more specialised you are, the more fixed you’ll be in your views.”
She says it’s also helpful to see the outcomes of design thinking as the sweet spot that connects three elements: desirability, feasibility and viability.
The solutions that emerge at the end of the Design Thinking innovation process should hit the overlap of these three lenses; they need to be Desirable, Feasible, and Viable. START HERE
“It’s essential to start with desirability – what’s the need? Next, can you possibly build something to meet that need? Only then work out if you can make money from it. If you start with viability you won’t know if you’re creating something people actually want – and you’ll potentially shut down innovation.” Design thinking is not just for big businesses with UX labs and innovation departments. Smaller firms are naturally agile and close to their customers – so here are 4 ways to embed design thinking into your workplace. TIP 1
“People still need to know how to do human things,” says Ross. “We need to stop viewing innovation through the lens of technology, and start seeing technology through the lens of basic human needs and wants. Instead of artificial intelligence, what if we talked about beneficial intelligence? It might not be so scary.”
Ross believes the ‘empathy’ component of design thinking is crucial. “I think these days marketers are getting further removed from the actual customer, they’re relying on big data. That’s also important, but you need to actually see where people are spending their time, how they live, how they use things.”
Design thinking is not the responsibility of marketing, IT or innovation. If you limit it to one function, ideas will be slowed down during feasibility and implementation. So leaders need to encourage everyone in the team to challenge the status quo, or think about alternative ways of doing something.
She gives the example of a Chinese smartphone manufacturer who watched how people took photos, and discovered that people liked the selfies that were most natural looking. “That insight led them to talk with a cosmetic company; work out that lighting was the most important factor; and develop an inbuilt app that allowed people to change the lighting on their photos to make them look more natural.”
“I think that’s why smaller businesses often do this better, because they don’t have layers of bureaucracy or a ‘command and control’ hierarchical structure,” says Ross.
And in today’s market, this really will give you a competitive advantage.
Ross suggests looking at customers at either end of the bell curve, rather than your average users.
Kerry Ross Phuel
See technology through the lens of human needs
Deloitte is one company that has used design thinking to transform the professional services experience. It even won the 2014 International Design award… for an audit. “Despite our research we’ve failed to find any regulation stipulating that audits should be a boring or negative experience – so we’ve used design thinking to improve how our clients experience it while honouring their stakeholders’ interests,” Deloitte’s CMO, David Redhill, told Marketing Magazine. Unsurprisingly, they’ve also increased their audit win rate.
Big data cannot replace observing customers
Look at extreme users
Empower design thinking across the business
Design thinking is now an essential skill in a world where the customer is in control. It can help you make sense of complex problems, foster game-changing start-ups or products, and create meaningful new experiences.
“Who are your heavy users or early adopters? How do they use your products or services? And then look at those that struggle, the laggards. Work out what motivates both ends of the spectrum and you’ll get some magnificent insights you can really use.”
www.amcham.com.au Access Spring 2015
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Upcoming Events New South Wales Friday 27 November The Hon Chris Bowen Shadow Treasurer of Australia Bank of Merrill Lynch Chris Bowen is the Shadow Treasurer in the Federal Opposition and was the Treasurer of Australia in the final term of the former Federal Government. Join AmCham at this Exclusive Boardroom event with The Hon. Chris Bowen MP, Shadow Treasurer of Australia who will discuss Labor’s Financial and Business Policies in the Lead up to the 2016 Federal Election.
Victoria Tuesday 8 December Andrew Géczy, CEO, International & Institutional Banking at ANZ Crown, Southbank
in the Pacific as well as Europe, America and the Middle East. Mr. Géczy is a senior international banker with 25 years experience in wholesale banking and markets as well as asset management.
Western Australia Thursday 3 December Kevin Gallagher Clough Limited, Chief Executive Officer The oil and gas market downturn has presented significant challenges for companies operating across the entire oil and gas value chain. Kevin Gallagher, Chief Executive Officer of Clough Limited will address AmCham members on how driving innovation and applying lean principles can provide organisations with a competitive advantage in declining market conditions. Kevin joined Clough as CEO and Managing Director on 3 November 2011. Kevin is a senior executive with more than 22 years experience in managing oil and gas operations in Australia, the USA and North and West Africa.
Million $ Challenge AmCham and Big Brother Big Sister will be teaming up in 2016 in an exciting entrepreneurial initiative designed to raise money for the Australian Youth Mentoring Network.
The program will be piloted in Victoria with 12 mentor/mentee pairings. We will be looking for member with less than five years’ work experience to be paired with members with over twenty years’ experience. Guidelines for discussions will include social media, generational expectations, career advice and networking. The program will kick off with a networking function in early December.
Hon Jay Weatherill MP Premier of South Australia
Between 2009 and 2013, Andrew was a senior executive at Lloyds Banking Group where he was CEO Wholesale Banking and Markets.
Andrew Géczy is the CEO of ANZ’s International & Institutional Banking division. He is responsible for the bank’s global Institutional business as well as the Retail and Commercial businesses across 14 Asian markets and 12 countries
Mentoring Scheme The AmCham Human Capital Committee will be introducing a mentoring program designed to create a learning environment where experience, business knowledge, career advice and social media skills are exchanged in a non-competitive environment.
South Australia Thursday 26 November
The challenge invites AmCham members to form teams that will come together to conceive and implement enterprising initiatives which professionally develop staff and raise money for charity. Teams compete against other corporations in an entrepreneurial battle of wits and skills; they receive $1,500 seed capital and try to grow this to $10,000 through a business initiative. We plan to recruit teams over the Dec-Jan period.
AmCham iiNet Business Luncheon Adelaide Convention Centre Jay Weatherill is South Australia’s 45th Premier. Jay was born and educated in Adelaide’s western suburbs, completing his secondary education at Henley High School. He is a lawyer with an economics degree. He established his own law firm in 1995 and practised until he was elected as the Member for Cheltenham in 2002. Jay was subsequently re-elected as Member for Cheltenham in 2006, 2010 and 2014.
Queensland Friday 13 November AmCham iiNet Business Luncheon Pullman Brisbane
Stimulating Queensland’s Economy John Nesbitt CEO, Suncorp Bank Hon Peter Beattie AC Richard Wankmuller CEO & MD, Cardno
Trade Mission To increase your exposure both in Australia and overseas, your company must participate in the annual American Chamber of Commerce Trade Mission to the Offshore Technology Conference (OTC) in Houston, Texas. Join us for the 18th successive year, as we depart for OTC Houston in May 2016. OTC is one of the top ten largest trade events in the USA. OTC has in excess of 100,000 delegates and 2,700 exhibitors representing 43 countries, with international companies making up 44% of exhibitors.
If you would like more information please contact Penelope Williamson, General Manager WA & NT on 08 9325 9540 or email firstname.lastname@example.org
www.amcham.com.au Access Spring 2015
Get connected to the next generation of innovators. Students and researchers with gamechanging ideas are finding a better way to turn them into reality at the new Michael Crouch Innovation Centre. Housed within UNSW Australia, a globally-ranked STEM leader with more than 50,000 students, the Centre is designed to nurture innovation, foster cross-disciplinary collaboration and make strong two-way connections with business. Our state-of-the-art facility hosts innovation challenges, maker workshops, seminars, pitch and ideation events, facilitated by experts from campus and our network of corporate partners. The Michael Crouch Innovation Centre is a gateway to opportunities for your business. Please join us. Brad Furber Chief Operating Officer e: email@example.com p: +61 (2) 9385 6525 w: mcic.unsw.edu.au
Never Stand Still
Michael Crouch Innovation Centre