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Making sense of a changing world

MAY 2017

Artificial intelligence Why making machines that are smarter than us could be humanity’s best ever decision‌ or its worst

Economics/

Does product-as-a-service have the power to stop us buying things we don’t need?

Innovation/

The most interesting chatbot apps, the power of human hive minds and a genuine cyborg

Talent/

What makes AI startups so appealing to venture capitalists?

Technology/

In a voice-controlled future dominated by Siri and Alexa, where will all the adverts go?


5th September 155 Bishopsgate, London

The leading Digital Transformation event for the Enterprise

Two conferences in one: Technology: 3D Printing Advanced Robotics Artificial Intelligence Big Data Internet of Things Virtual Reality

Transformation: Digital Evolution Open Innovation Boardroom of the Future Investing in Disruption Breaking the Mould Exponential Adoption Curves

Industry sectors:

Retail & Consumer

Travel & Hospitality

Education

Financial Services

Healthcare

Insurance

Media

Manufacturing


50 + Speakers:

Paul Clarke CTO

Andy Stamford-Clark Master Inventor

Plus other speakers from

Priya Lakhani OBE CEO

Ben Luckett Managing Director

More information at disruption-summit.com


/welcome

Outsmarted by the machines Artificial intelligence has become a red-hot topic for the board room as it has the capacity to quickly solve complex problems while still offering huge cost saving efficiencies. Like many, I’m hugely excited about its potential but also acutely aware of the overblown media hype that surrounds it. While AI certainly has the potential to help identify a cure for cancer and end global food shortages, it’s not likely to do either any time soon. Instead, AI is invisibly becoming an integral part of our daily lives. It already powers Google’s search, serves up personalised suggestions on Amazon and Netflix, detects faces in photos and makes sense of the verbal commands we give our smartphones. AI techniques are playing major roles in science and medicine, helping physicians understand which patients are at the highest

risk of complications and finding important needles in the massive data haystacks. AI has the potential to create deep structural shifts in business models yet as these take place, the very nature of the workplace and employment will change. We’re seeing glimpses of this with the development of chatbots to replace human call centre operators and self-driving vehicles that are predicted to decimate haulage jobs. As AI improves, a much broader set of ‘thinking’ rather than ‘doing’ jobs is likely to be affected and maybe even replaced by AI. As we consider all of this, it is worth remembering Amara’s law that “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” It’s exciting to imagine the possibilities of AI but what happens when this technology surpasses human abilities and knowledge? While this isn’t a pressing issue in 2017, now is certainly the time to safeguard against a future where we will no longer be the smartest species on the planet. /Rob Prevett Managing director, D/SRUPTION

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/may_2017

Artificial intelligence

Regulars 08 Signing in

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Home power generation and its effects on the energy industry

White collar AI How at risk are office jobs from advances in AI?

Features

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The human hive mind Pushing back the threat of AI domination by pulling together

10 In brief A selection of this month’s news from disruptionhub.com

16 Are we done with owning stuff? IoT powered rental using the ‘product-as-a-service’ model

12 Day in the life Scott Cohen on his path towards being a direction-sensing cyborg

22 Managing change Best practice for companies facing digital transformation

36 10 chatbots to try A selection of the latest AIpowered apps to hit the market

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Technology 48 Chirp Using sound to connect devices when Wi-Fi and Bluetooth simply can’t do the job

52 The future of VR The industrial applications of virtual reality that are redefining planning, design and training

May 2017 D/SRUPTION magazine Editor/Cam Winstanley Editor-in-chief/John Straw Publisher/Rob Prevett Head of Marketing/Tania Duarte Design/Dylan Channon disruptionhub.com Managing Editor/Kev Cooke Staff Writer/Laura Cox

42 Where do the ads go? How the likes of Amazon Echo have created an existential angst for advertisers

Contributing editors/ Scott Cohen, Tanya Laird, Moran Lerner, Maggie Lonergan, Phil Reeves, Louis Rosenberg, Mike Zeto

56 3D printing From metal casting to medical prosthetics, 3D printing has found niches within industry

iDisrupted Ltd 86-90 Paul Street London EC2A 4NE www.disruptionhub.com @disruptionhub

60 IoT smart cities Connect infrastructure that helps reduce pollution and congestion

46 Investing in AI The appeal of AI-based businesses for venture capitalists

62 Signing out The ‘internet of bananas’ and how it could disrupt more than just the supply of bendy fruit

Contact our editorial team on: submissions@disruptionhub.com Contact our sales team on: media@disruptionhub.com No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means without the Publisher’s permission. The editorial does not necessarily reflect the views of the Publisher. The Publisher accepts no responsibility for errors within the publication.

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/signing_in

Power to the people Will innovation blur the distinction between energy generator and consumer? D/SRUPTION founder John Straw shows how we all might feed the grid ince the drive towards renewable energy began, critics have dismissed it as unreliable, inefficient and intermittent. Solar power, they say, is all well and good but when it’s cloudy or dark, you’re straight back to fossil fuel powered stations. The biggest challenge for wind, wave, solar and other green energy sources isn’t generating power, it’s storing power until people actually want to use it. We’ve seen numerous innovate largescale solutions to this. In Norway, they use mountain reservoirs essentially

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as the world’s largest batteries. When the wind is blowing and the sun is shining during the day but most of the population is at work, excess green energy is used to pump water uphill. At night, when demand for electricity from busy homes is high, the stored water is released from the mountain reservoirs to power turbines and produce instant, clean, cheap energy. In America, the Advanced Rail Energy Storage project also uses gravity but does so without water. Surplus energy on the grid powers electric motors that drag 10,000 tons of rock-filled railcars up a 2,000-foot hill. When required to do so, they rumble down again and those same motors act as generators to produce electricity.


These are both innovative but also large cost, large infrastructure projects. Yet over the last few months, we’ve also seen two examples that could disrupt the paradigm of ‘large-scale producer and individual consumer’ by completely redefining those terms. At the tail end of 2016, Tesla and SolarCity founder Elon Musk launched a range of solar panel roof tiles. Since they look like a conventional roof tile and are the same dimensions, it’s now feasible to build new homes with built-in power generation without any unsightly additional solar panels. It’s my understanding that these will be priced very close to traditional tiles, motivating the builders of today to build the solar-powered homes of tomorrow. The issue with solar is that it produces most power during the day when we don’t need it, which is why Tesla’s battery technology has such value. Not only will a battery in each home store power for the night, Tesla will also allow homeowners to sell their excess into the grid. This is good news for consumers, who will be able to buy

cheap rate electricity produced by other homeowners. It’s even better news for Tesla, who will get the double win of selling you the battery and making money from sale management fees. How this could effect the power companies fascinates me. They maintain hugely expensive nuclear, gas and coal powered power stations which must be able to kick in the moment they’re needed. So if large numbers of households start to generate power that’s traded at lower prices than the power companies can make it, who pays to keep power stations online during the periods they’re sitting idle? SolarCity is one of the first disruptors to get my attention. Another is LO3 Energy, a startup that’s developed a peer-to-peer platform for consumers to trade electricity. With LO3, when your neighbour uses a lot of electricity, rather than buying it from the grid, they can buy it directly from you using blockchain technology.

This creates the next generation of interruptions. Not just a situation whereby you can generate electricity from your solar panels but one where you can sell it on to another consumer, cutting out the grid entirely. Of course, consumer electricity markets are smaller than industrial ones but supplying industries such as aluminium smelting is only a stay of execution. And it’s worth noting that Lockheed believe that viable cold fusion (nuclear without the risk) is just ten years away. So what happens to the power companies when electricity becomes so cheap that it becomes almost free at the point of use? And who will pay for the grid’s infrastructure – its power lines and sub stations – that we all rely on? None of this will signal the demise of the energy businesses but I suspect we will see a significant reorganisation of existing energy providers caused by homeowners being able to generate, store and sell their fair share of power.

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For a briefing on disruption, innovation, emerging technologies and digital transformation, visit disruptionhub.com. Every day, it delivers fresh opinion, insight, news of technological trends and more DISRUPTED COMMUNICATIONS

DISRUPTED AI

Internet for all… from space When minds connect In April this year, SpaceX succesfully recovered its seventh reusable rocket, bringing founder Elon Musk’s dream of fast, low-latency internet for the masses one step closer. Musk’s vision is to use his Falcon 9 rockets to put 4,425 satellites into low orbit, making 1GB/s internet available to all. An affordable network of such speed and scale would revolutionise education and communication in the Third World and have a huge knock-on effect for quality 10

of life and employment possibilities. However, if Musk’s venture succeeds, all the broadband providers that currently use fibre and other cabling solutions simply won’t be able to compete with this new, global network. In short, Musk’s ubiquitous internet won’t just disrupt the current set of dominant telcos, it will kill them all off completely.

As if he wasn’t busy enough with space missions, in March we learned that Elon Musk has also founded a medical research company called Neuralink. This biotech startup is working on a brain-computer interface to allow direct human-to-machine communication through electrodes implanted in the brain. The goal is not just to control machines by thought commands but also to ultimately allow data to be uploaded into the brain.

https://disruptionhub.com/ elon-musk-disrupting-telcos/

https://disruptionhub.com/ ai-brain-literally/


/news DISRUPTED MANUFACTURING

Bacteria as living building blocks The Department of Bionanoscience at TU Delft has created a custom bio-ink out of bacteria and chemicals that can be used in a modified off-the-shelf 3D printer costing just $300, a far cry from the big budget solutions using in other cellular printing methods. Possible applications include healthtech – particularly bioprinting – and in the expanding world of foodtech and lab grown produce. https://disruptionhub.com/ 3d-printing-bacteria/

DISRUPTED SECURITY

Walk this way Smartphones can be unlocked with fingerprints, Barclays is replacing its phone banking security questions with voice recognition and now Jaguar Land Rover is developing a car locking system that recognises the way its approaching owner walks. Biometric security measures are on the increase, from retinal scanning to ‘selfie pay’ facial recognition apps. Analysing an individual’s gait is an unusual approach that still has some hurdles to clear. If you twist your ankle, for example, will your car still recognise you or will it lock you out? https://disruptionhub.com/bodyrecognition-security/

Disruption Event

The inaugural DSE takes place in London on 5 September 2017, when it will bring together over 400 business leaders to address the challenges and opportunities in this era of disruption. The event will showcase the latest in 3D printing, AI, advanced robotics, AR, blockchain, IoT, VR and more. http://disruption-summit.com/

Disruption Report

Autonomous Vehicle 50 In the first of our special report series, we look at the 50 companies that are shaping the future of autonomous vehicles. Who’s in the race to build the first, or the best, driverless vehicle? http://bit.ly/2qJsHqt 11


/day_in_the_life

Scott Cohen What if you find that five senses simply aren’t enough? Meet the man dedicated to expanding his experience of the physical world beyond the normal parameters

hhhhh… Don’t tell my parents but I am a cyborg. I haven’t told them yet, although I am pretty sure that my father knows – he must have seen it on Facebook by now. He only has 20 friends, so everything I post goes into his news feed. In our family, we don’t discuss uncomfortable issues. My parents flipped out a couple of months ago when they saw a girl with dyed blue hair working at the shopping mall in Boca Raton, Florida. Imagine their reaction when they discover that mid-October, I inserted two titanium rods into my chest and then, in December, permanently attached a silicone-encased circuit board with a compass to this anchor. Oh mama… I am a cyborg. I’m part human, part machine.

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“A few of us decided that we didn’t want to wait for biology to catch up. We decided to intelligently design our own senses”

I rarely set an alarm. If you need one to wake then you are not getting enough sleep. I track my sleep every night. Not just how many hours but the quality too – how many minutes of REM and deep sleep I get. There are few things more important to my working day than getting a good night’s sleep. I love waking up by the sunrise streaming into the room. It feels so natural and energising. The morning is my time. My Italian wife is a night person so she sleeps late. I drink a double espresso and start to read the news, check my social feeds and catch up on my emails from the day before. Somewhere in the middle of all of this, I fill a bowl with muesli, fruit and oat milk. I have been a vegan for 20 years and sugar free for nearly 35 years but I do still have my vices.


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/day_in_the_life Back in 1995, in the then grungy Lower East Side of Manhattan, I started a record company with my business partner Richard Gottehrer. He was already a successful music industry veteran 25 years my senior and I was a moderately successful artist manager. We had big plans to take over the world. We failed. Miserably. If there was an award for the worst record company in the world, we would have taken first place with ease. But founding the world’s worst record company turned out to be a lucky break. Out of desperation, we started using some new technology to run marketing campaigns – the World Wide Web. It was new, uncharted territory. We connected ten bulky beige desktop computers to the web using state-of-the-art 28.8 modems and a team of unpaid interns from New York University. This was the web of no photos, no videos and no sound. But we worked with what we had and, to our amazement it, was a huge success! Each day now, I walk to work and track my steps – a bare minimum of 10,000 a day. I never look at my phone. I gather my thoughts from the morning and prepare for the day. It is 20 minutes of bliss. It is so important to be able to think since most of my day is ‘doing’, so these moments are precious.

From the outside, my day-to-day life can seem quite hectic but maintaining a process is the key for me to stay focused. I sit on five boards, including one charity (The Fund for Global Human Rights) and they each require about a day of my time each month. I have a little investment company and also have a small record label and artist management company, which both require daily attention. And I go to the office daily to work at The Orchard, the first music digital distribution company. I founded it 20 years ago in NYC and it now has offices in 25 countries.

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The North Sense gently vibrates whenever Scott faces Magnetic North, enhancing his natural sense of direction

Around 10am, I am at my desk and gearing up for back-to-back-to-backto-back meetings, each one typically scheduled a month in advance. Every hour is booked up. On a good day, I get to end each day with a workout. I used to belong to a gym and loved going to classes but after a while, they all seemed the same without any progression. Also, I didn’t like it that I had to fit my schedule around the classes.


But now there is an amazing app that is like Uber for personal trainers. When I need one, I book one. They have all my details so they can design programmes just for me and it’s the same price as my old gym membership. They come to me and, when the weather is nice, we work out in the park. I live in London now, so have learned to lower the bar for what ‘nice weather’ means. Back to the ’90s, where having a “huge success” with an online business didn’t mean that it actually made any money. In my case, I lost everything – my savings, my car, my apartment and all my possessions. I was over $3m in debt, homeless and living in my office. All the amazing press and accolades we’d received didn’t pay a single bill. Welcome to the world of a pioneering digital distribution company… When I was truly on the edge, when I had no more excuses to give the creditors and the IRS could have sent me to prison, I was saved. When iTunes launched, the digital music industry took off and it was as if a switch had been thrown. I sold a large chunk of the company to an old friend so that we had growth capital and the last bit of the company was sold to Sony a couple of years ago. So now I can think about what comes next. I realised there is an entire world around us that we are unaware of. Intellectually, we may understand that we are surrounded by radiation, ultraviolet light, gamma rays and X-rays. But we can’t sense any of them. Our five senses are the interfaces between the physical world around us and our minds. All of our experiences, memories, thoughts and feelings come

from this sensory interface but biological evolution has been cruel. It has only given us just enough senses for survival, even though we stepped outside this system long ago and no longer use our senses for their original biological function of simply keeping us alive and uneaten by predators. A few of us decided that we didn’t want to wait for biology to catch up. We decided to intelligently design our own senses. The first one is called the North

“I don’t want to work on artificial intelligence without devoting an equal amount of work on human intelligence” Sense, which gives us the sense of Planet Earth’s electromagnetic field. It’s a sense that many other species already have, including many migratory birds, fish and a host of other animals.

all spending so much time, money and energy on making electronic devices smarter. Why aren’t we investing the same energy in humans? I have only begun the process yet I already know that this is the right path. I don’t want to work on artificial intelligence without devoting an equal amount of work on human intelligence. My wife is an actress and film producer by day and an amazing chef by night. Each night, we have the most delicious vegan meals – healthy and packed with flavour. Sometimes it is a classic Italian dish with a bottle of wine from her hometown, other times it’s something super simple after a trip to the farmers’ market. After dinner, I have one last peek at my email, the news and social media and then I turn off. I’m 52 years old, married, normal. I am not crazy and I am not extreme. I don’t have any tattoos and, other than my ear lobes, have never had a piercing. I just decided to take a step out of my comfort zone and into the future.

Scott Cohen is founder of Cyborg Nest and The Orchard https://cyborgnest.net/ www.theorchard.com

This new sense has added a richness to my sensory palette. It makes my brain stronger and I experience the world in new, deeper, ways. I still don’t have the vocabulary to describe it so I think I already know my next project. I am now asking the world why we are

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the_big_idea

Are we done with owning stuff? We’re drowning under a tsunami of possessions so why are we still buying more? D/SRUPTION’s Cam Winstanley looks at an emerging business model that makes for a leaner, greener world

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veryone now accepts that obesity is a major problem in the Western world. In Mindless Eating: Why we eat more than we think, American food scientist Brian Wansink said, “We have millions of years of evolution and instinct telling us to eat as often as we can and as much as we can.” He argues that this genetic imperative to feast before famine has been twisted by modern farming and supply chain techniques that provide us all with a never-ending surplus.

the occasional recession and financial market meltdown, living standards have been on the rise for decades, allowing several generations to mark their successes through retail acquisition.

But has the same thing also happened to the West’s obsession with material possessions? Globalisation and mass production have created conditions of constant surplus, with goods so abundant that it’s usually cheaper to buy new rather than have old ones repaired. Even with

Peak ownership creates a number of problems for a consumer-driven society. At the bottom of this list is the shared embarrassment of all the waste associated with our collective greed. Top of the heap is that the wheels quickly start to come off a supply-and-demand

We are fast approaching ‘peak ownership’. That’s not to say that everyone owns a yacht and private island, just that within our individual spending brackets, most of us have as many TVs and phones as we want, along with houses filled with all manner of other stuff.

economy once all demands have been met. That’s why the concept of ‘productas-a-service’ has come about. Because PAAS doesn’t just supply a finite number of products, it also serves our neverending need for services.

Everything comes in a bundle PAAS is a business model that uses technology to deliver a complete service to the satisfaction of customers and the profit of suppliers. On the surface, it sounds like the kind of rental agreement that has existed for years, albeit one that’s better attuned to the internet. And while it hasn’t yet been widely adopted, D/SRUPTION thinks that PAAS will usher in a quiet revolution. To explain why, let’s first outline what PAAS provides before looking at ways that it could disrupt different sectors…

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the_big_idea

Are we at peak ownership? n Anthropologists at UCLA found that 75% of households in their study had so many possessions boxed in their garages, there was no room for the family car n One out of every ten Americans rents space in one of the country’s 50,000 self-store depots. With an average of 0.7m2 of storage per person, the whole country could shelter from the rain in these depots n An average British 10-year-old owns 238 toys worth £7,000 but plays with just 12 daily, worth £330 n The average American woman has 30 outfits. She owned nine in 1930 n The average British woman buys 59 items a year and owns 22 items that she’s never worn n In the 2011 book What’s mine is yours, authors Rachel Botsman and Roo Rogers argued for the expansion of ‘collaborative consumption’, with local groups sharing the cost and use of many products • What’s mine is yours claims that the average lawn mower is used for four hours each year, the average car sits idle for 22 hours a day and the average power drill is used just 20 minutes across its entire life

A vehicle manufacturer might provide a customer with a car for their weekly commute then a van for the one weekend they go to IKEA n Supply a solution A person who owns a car takes possession of an expensive object with wheels. A person with a PAAS contract will be supplied with a complete transport solution. We’ll explain the distinction in a moment. n Own what you make Customers never own the products they use and manufacturers never sell the products they make. This cradle-to-grave ownership compels each supplier to strike up a long term, meaningful relationship with each customer. n Create a revenue stream Customer don’t have to pay upfront for the product they are using and manufacturers don’t get an immediate return on their investment. Instead, a ‘long tail’ approach of monthly payments offsets the short-term win of a sale with a long-term revenue stream. n Stay in control While the Internet of Things offers suppliers the means to

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automate stock control, that’s just the start of it. Through the IoT, products can report their own mechanical failings to allow seamless repairs and maintenance. Additionally, the usage data generated by products can create additional income for suppliers – and offer additional services to users – when it’s sold to third parties. n Keep customers happy Is a PAAS contract worth it? To answer that, all a customer has to do is see whether the service they’re getting is worth the fee they’re paying. If it’s not, they can move on. If it is, then suppliers can expect loyalty and income for years. Because of this rich reward, it’s worth supplying a better service than a cheaper one, even if that means tailoring the service or payment plan to each customer.

Transport solutions Existing lease models already allow individuals to ‘own’ a new car every year and for companies to operate fleets of up-to-date vehicles. PAAS allows for even greater flexibility of fleet ownership


while handing over the responsibility of car ownership to the supplier. They take care of the service but you pay them for it. What might a PAAS ‘transport solution’ look like? A vehicle manufacturer could provide a customer with a car for their weekly commute, with a van for the one weekend they go to IKEA and with a people carrier for the six weeks of the school holidays. Insurance would be supplied by an offshoot branch of the diversified manufacturer. Through IoT, each vehicle would monitor itself and check into a garage – also owned by the parent company – for service and repairs. This flexibility of use could extend to flexibility of payment. Different payment plans could range from a simple per month or pay-as-you-drive rate to more sophisticated pay-how-you-drive rates, with insurance and maintenance fees adjusted in real time through constant evaluation of speed limit observation and aggressive braking. Careful driving could save money as well as lives.

PAAS in the home Few of us crave a new dishwasher, tumble dryer or fridge – we just want to use the service they offer us. So, as IBM’s Dave Locke explained in the previous issue of D\SRUPTION (January 2017), white goods are ripe for conversion to PAAS. Rival white good products rarely offer a discernible choice, with the cost, power consumption and

specifications more or less the same. A PAAS agreement could be a major differentiator by offering a lower upfront cost, superior service, effortless repair or replacement due to IoT monitoring and automated consumables replacement through IoT stock checking.

Built-in obsolescence is the way that manufacturers have forced us to replace our products

There are environmental benefits too. Built-in obsolescence is the way that manufacturers have forced consumers to replace their products but under PAAS, any replacement costs them money. By building white goods to last a lifetime (or at least constructing them in such a way that they can be maintained) products will last longer in the home, undergoing updates through IoT-enabled patches and fashion shifts with fascia panels.

Business to Business PAAS With the lofty expectations of the online retail experience migrating to business, automatic consumable replacement services similar to Amazon’s Subscribe & Save and real time tracking and delivery are expected. PAAS could deliver that, plus many other benefits. Let’s look at how PAAS would work in a B2B world… Under a traditional agreement, a car manufacturer buys red paint from a supplier, stores it on site then uses it to make red cars. If the production run of that colour ends early, or too much red paint has been ordered, the manufacturer is left with a surplus of paint they’ve already paid for. Under a PAAS agreement, the contract would be to ‘supply

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GSA SYMPOSIUM LONDON • 27-28 JUNE 2017

11 PROGRAMMES. 2 DAYS. 1 SYMPOSIUM. Digital transformation, automation, cyber security and the use of customer insight for competitive advantage are all defining today's strategic sourcing strategies, with many organisations finding themselves ill-equipped or unprepared in the race to keep up. The UK Symposium is the sourcing calendar's must-attend event, packed full of content influenced by the key drivers disrupting the sourcing industry and featuring new speakers with thought-provoking insights and all-new powerful case studies. It is a culmination of the major issues affecting strategic sourcing today and gives you the impartial insight, that only an independent association can, to transform your business. If you want to discover new initiatives, trends and technologies that will transform your business, and take advantage of the many opportunities to meet with and develop new partnerships, all whilst keeping a watchful eye on the fundamentals that underpin sourcing excellence, then look no further than the GSA's UK Symposium.

Speakers include:

Microsoft • Coca-Cola • Airbnb • Arise • Heathrow • Deloitte • HfS Research • Ulster Bank • State Street • Scalefocus • Societe Generale • Zurich • MGT Technologies • Telegraph Media Group • BBC • Nordic IT Association • Devott

Join us at the GSA  Symposium and re-ignite your organisation's sourcing.

Visit www.gsa-uk.com to see the latest agenda and to register your place, or email admin@gsa-uk.com for more information.

Event details

Day 1 • Sourcing Workshops: 9am-1pm • Networking lunch: 1pm-2pm • Sourcing Strategy Forum: 2pm-5pm Day 2 • Full day Conference: 8.30am-5pm • GSA's 30th Birthday Extravaganza 6.30pm-11pm

Venue

Etc Venues, St Pauls, London, UK

Pricing

Sourcing Buyers £1000 +VAT per person for the full two days Sourcing Service Providers & Advisors £2000 +VAT per person for the full two days Unable to attend both days? Tickets are transferable!

Partnering

Interested in partnering with us? Contact nataliem@gsa-uk.com to find out how you can become a partner at this year's Symposium

SOURCING. RE-IGNITED.


Let’s look at chains such as H&M, Zara or Topshop for a way that PAAS could radically rewrite the fast fashion rule book. Out go store loyalty and credit cards and in comes a PAAS subscription card. Casual shoppers would still be able to buy items but for cardholders, the store suddenly becomes a fast fashion lending library and place to hang out.

Casual shoppers would still be able to buy items but for cardholders, the store suddenly becomes a fast fashion lending library paint for cars’ rather than any particular colour or amount. With the paint supplier’s automated system ‘talking’ to the manufacturer’s system, only the required volume of each colour would ever reach the assembly plant, optimising the supply chain, reducing bulk transport costs and almost entirely eliminating warehousing. This efficient use of data management in a PAAS system directly impacts on costs and reduces waste too. Flexibility of payments can drive efficiencies on both sides of any deal by having costs directly linked to efficiency and productivity, with a more effective service costing more but also benefiting the customer. A construction site just needs ‘earthmoving capacity’, not the burden of a vehicle fleet. A holiday resort chain needs ‘landscaping’, not a workforce of gardeners. A large hospital needs ‘heart monitoring services’, not a vast inventory

of devices that require constant servicing and updating. By switching to PAAS to supply these needs, B2B deals could meet end-to-end service requirements.

Service on the high street High street stores currently face a far more immediate threat than peak ownership – online retail. Yet even as Amazon takes more and more slices of the pie, the much talked about ‘death of the high street’ is unlikely to happen. Why? Because people still love to go out into towns and buy things. Sure, bricks and mortar stores are struggling at the moment but they’re also adapting quickly. No one shop can offer the same range of products as the entire internet but a physical store can offer more from the experience by becoming an entertainment venue or centre of excellence. By offering something extra, innovative shops can still thrive.

Think about how appealing this could be. Fast fashion thrives by converting catwalk trends into high street clothing within weeks, clothes are made to last only as long as they’re fashionable and customers wear them only until the next big thing comes along. So, for a monthly subscription, our fashion PAAS model would let each customer take away up to six items at a time, returning and replacing worn items to prevent them from being resold on eBay. Stores would have to work harder to recycle or repurpose these returns but they’d profit from converting one-off customers into long term subscribers. After all, it’s more efficient to maintain an existing satisfied customer than it is to find a new one.

Who does PAAS serve? If product-as-a-service takes off then it will be because everyone benefits from it. Manufacturers will produce longer lasting products that will provide them with a revenue stream from the day they’re installed until the day they’re recycled. Customers won’t have to pay upfront for products, or pay to have them repaired or replaced. And we should all reap the environmental benefits of fewer items being thrown into landfill before their time. All we’ve got to do is shake off that desire to own everything that we use.

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best_practice

Managing change in an everchanging world How can businesses face digital transformation realistically, ethically and sustainably? Maggie Lonergan of Publicis.Sapient lays out a roadmap for lasting change

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riday 21 April 2017 was a milestone day for the UK. The National Grid proudly announced that for the first time since the Industrial Revolution, Britain had gone a full day without using coal to generate electricity. It was the culmination of a transformation programme that has been ongoing for nearly 50 years. Energy production doesn’t usually top the bill at transformation conferences yet aspects of this milestone are pertinent when thinking about organising for and managing change. Here are some key things that stand out for me… n Over the full period, the interface for the provision of electricity has never changed. Flicking the light switch or plugging in the kettle have remained the same simple operations for the consumer.

n Over 50 years, the sources of energy have multiplied. Wind, wave, solar, natural gas and nuclear-powered electricity production have all co-existed alongside coal. It’s been an additive evolution rather than a revolution. n The sources of energy production are an interconnected ecosystem of providers – both at the macro scale where power stations are owned and operated by companies and at the micro scale, where people who have installed solar panels are able to sell surplus energy back to the grid. n Our domestic appliances are much more energy efficient than they were 20 years ago, we have smart meters to help us use energy more efficiently and we are much more aware of and emotionally engaged in the need to conserve energy than we were a generation ago.

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best_practice

n This is a journey, not a destination. Friday 21 April was a milestone yet there is no end point. The energy sector is always looking for new ways to create and conserve energy.

think about how to empower people and orchestrate systems to ensure we’re creating an operating model that delivers on the business ambition and transformation objectives.

3. The increased competition the fintech wave has created, with new operators launching services that are eating away at the most profitable parts of the retail banking offer.

The revolutionary approach How can we apply these observations to transformations that are taking place in other industries? What learnings can we apply to our own businesses? At Publicis.Sapient, we’ve been working with a range of organisations across financial services, retail, telco, travel & leisure and fast-moving consumer goods to help them through their own transformation imperatives.

Our experience in retail banking highlights two approaches to transformation borne out of the same imperatives. Financial services have led the charge in transformation for a long time and their uptake of IT and automation of services in the 1970s paved the way for other industries to

The approach of Lloyds Banking Group, one of the UK’s largest banks, was to embark upon a customer journey-led transformation programme that reengineered all its lines of business and operations in order to deliver its vision of being the best possible bank for its customers. It’s a bold programme to reinvent the bank in two years by being revolutionary rather than evolutionary.

Our starting point is always a relentless focus on the customer. If you don’t make it simple, frictionless and delightful for your customers or consumers, you won’t have a thriving business. If using energy from increasingly green sources had involved anything more than flicking the same old light switch, we’d never have embraced it. So the customer seems like an easy place for us to start. After all, how hard could it be to architect a perfect customer experience, create an experience or design a website or app? Well, we’ve learned that it’s never simple. When we think about how any digital experience integrates seamlessly with a physical one, or how to use data to remain relevant when a customer switches channel, we automatically start thinking about how a business needs to organise its operations in order to sustainably deliver the desired customer experience. In doing so, we think about the whole customer experience across all channels and touchpoints. We also

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Our starting point is always a relentless focus on the customer

follow. However, the industry hit rock bottom a decade ago with the global financial crisis and, in the UK, the government had to bail out the banks. Since that 2007 crash, retail banks have faced three big pressures: 1. Increased regulation to avoid another crisis and the need to open their systems in order to comply with regulation. 2. The increasing cost of maintaining legacy systems dating back to the early days of automation.

The approach starts with thinking about how each product, service, utility and interaction might be simpler and quicker. It then looks at how to organise and orchestrate its people, systems and processes in support of this by rapidly testing prototypes with real customers. Each capability is only rolled out once its value has been established. This is being done by dedicated teams who don’t have a ‘day job on the side’ so it requires commitment across the business from the exec board down. It also means that Lloyds is able to re-imagine and re-engineer itself in a timeframe that was simply unimaginable a decade ago. In doing so, it’s delivering ROI within months rather that years. As an example of change, it can now take as little as three hours to open a new account when it used to take anything up to 21 days.

Progress through evolution However, this revolutionary approach is not always possible. Much depends on culture, operational complexity and


executive mandate. Our experience with another retail bank shows it’s possible to achieve transformation in a more evolutionary way, leading the charge from one area of the bank so that it impacts across the whole organisation. We’ve been working with RBS NatWest for over five years to improve the customer experience across its online and mobile banking. The bank’s brand promise is “Helpful Banking” so in order to ensure that the new experiences live up to that, we created the role of ‘Journey Manager’. We initially equipped four of these with data from all digital touchpoints to enable them to identify how to improve outcomes from existing experiences and how to spot which new services, utilities and experiences we could create that would enhance the experience overall. What became clear is that the digital experiences and improved outcomes they were seeking are inextricably linked with the broader customer experience – the call centres and bank branches – and rely on all the bank’s operations and processes, from compliance and sales to product management and servicing. The role of the Journey Manager now includes a mandate to work across the organisation so that the new experiences drive the outcomes. There are now over 60 Journey Managers and they’ve been responsible for driving many, many small, incremental improvements to the mobile banking app. Other larger scale innovations include Get Cash, the facility that allows customers who’ve lost their bankcard to still get cash from an RBS NatWest cash machine. Another one is Auto ID, a digital first that allows customers to open a savings account online in 24 hours rather than 11 days.

A revolutionary approach is not always possible – much depends on culture, operational complexity and executive mandate Cumulatively, these have led to significant cost savings as well as an impressive increases in business from students, first savers and successful mortgage applications. The NatWest banking app is now the UK’s most recommended banking app. So what has happened over time is that the operations of the bank have oriented themselves around the customer through the role and remit of the Journey Managers. This has taken longer but it’s been far less disruptive to the organisation due to the role of the Journey Manager evolving and growing over time.

Transformation across borders While they contrast a revolutionary with an evolutionary transformation, neither of these two examples involve the complexity that geography adds to change. Managing multiple geographies, multiple brands and devolved operations where the profit and loss (P&L) structure maps to local markets present its own set of challenges to any programme. We think of it as ‘push’ and ‘pull’ engagement models. Our experience shows that global companies with a large central organisation and a homogenous brand portfolio management strategy can, when set up with the right stakeholder buy-in, successfully adopt a ‘push’ model to execute a transformation.

They most often have the executive mandate, the global organisation and enough budget to fund the roll out of digital enablement. Transformation becomes more complex where there is a small central function, where the P&L resides with local markets or brands and where brands are highly tailored to local markets. The challenge here is to adopt a ‘pull’ model to identify a use case in a specific product category or market where digital enablement can swiftly yield clear benefits and ROI. This use case then becomes the lighthouse within the organisation to pull other parts of the business into the solution. The stakeholder management in this pull model is much more complex, since any central roles cannot mandate take up of a technology or a programme but only advise and influence their market colleagues. Agility also becomes more of an imperative in the pull model to adopt a transformation approach that can deliver tangible capabilities and benefits within a single fiscal year and, ideally, within an Opex rather than a multi-year Capex funded model. The shift from Capex to Opex is nothing new but with cloud computing now becoming the new default environment for building capability, ‘as-a-service’ is how much of the transformation will be delivered. One of the largest

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Cheapside House, 138 Cheapside, London EC2V 6BJ

Contact us for an informal chat about how we could help your business

info@kemplittle.com

Cheapside, London EC2V 6BJ 020 Cheapside 7600 8080House, 138 @KempLittle

Kemp Little www.kemplittle.com

020 7600 8080

www.kemplittle.com

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020 7600 8080

Entrepreneur advert - A4.indd 1

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Contact us for an informal chat about how we could help your business Contact us for an informal chat about how we could help your business

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Kemp Little

Kemp Little - the leading technology Kemp Little - the leading technology & digital media law firm_ & digital media law firm_

Kemp Little - the leading technology & digital media law firm_

020 7600 8080 27/08/2015 14:57:50

www.kemplittle.com info@kemplittle.com @KempLittle

27/08/2015 14:57:50

info@kemplittle.com

@KempLittle

27/08/

@KempLittle

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www.kemplittle.com

27/08/20

@KempLittle

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020 7600 8080

Contact us for an informal chat about how we could help your business Contact us for an informal chat about how we could help your business

Cheapside House, 138 Cheapside, London EC2V 6BJ 020 7600 8080 @KempLittle

n Stay focused on the consumer or customer and organise your change around them. 27/08/2015 14:57:50

info@kemplittle.com

n Think about what business you’re in. Are you in ‘coal-fired power’ or ‘energy provision’? A broader definition of your business can identify adjacencies that can yield rich growth areas.

Follow the Entrepreneur advert - A4.indd 1

n What are your means of production and operations in the future? Must you own all your assets? Could you procure capability through an interconnected ecosystem of specialists? Can you shift to cloud ‘as-a-service’? n Is it revolution or evolution for you? What incremental improvements can you make to improve customer experiences? Where do you automate? How do you create differentiation and value? n Change is about mindset. Do you push or pull change through? How do you organise your business and empower your people to work more nimbly? Who are your change agents? How do create something that lasts forever?

n Where and how do we make human interaction a core differentiator of our brand experience? If we want people to buy products and services from us then how do we bring meaning and purpose to millions who might otherwise have catastrophic outcomes for themselves, their families and society? n The Fourth Industrial Age is exciting but it’s challenging too. Harnessing human potential is emerging as the most important challenge of this ‘Connected Age’. As we face the prospect of millions of roles being wiped out by automation and digital transformation, we need to think responsibly about how to combine human potential with technology. n All of these questions are not for someone else to address at some point in the future. Since we’re the ones currently living through this period of digital transformation, these are the pressing questions of our time. It is up to all of us to find answers for them.

Maggie Lonergan heads up Strategic Growth for Publicis.Sapient in Europe, the Middle East and Africa. Publicis.Sapient is the first purpose-built digital transformation platform designed to help clients reimagine core business activities for today’s digital world publicis.sapient.com Entrepreneur advert - A4.indd 1

Cheapside House, 138 Cheapside, London EC2V 6BJ

As brands look to develop services, they need to think about using the lens of brand purpose, brand promise and brand values to determine where they invest and prioritise their efforts. This will create genuine differentiation vs category hygiene to build salience, preference and love.

What can we take away from the recent coalfree energy milestone and from Publicis.Sapient’s involvement with financial services?

Kemp Little www.kemplittle.com

The importance of brand The other dimension that will become more important is brand. We have all been bombarded with the concept of ‘brand-as-service’ as brands move from purely focusing on narrative, to connecting their purpose to how they operate, to what they do as well as what they say. The challenge is that as brands develop capability around a range of experiences and services that add value to their core products, they are setting a category norm which is rapidly being commoditised. Which retail bank, for example, doesn’t have a mobile banking app that allows you to make a payment or transfer funds?

In conclusion

Kemp Little

Kemp Little - the leading technology Kemp Little - the leading technology & digital media law firm_ & digital media law firm_

transformation programmes we’re currently delivering is being funded from Opex and delivered for a monthly service fee. So, much as the printer and ink ecosystem works by selling printers as loss leaders then recouping profits from ink sales, so consultancies and system integrators like ours are engaging in new commercial models where the cost of implementing the platform is baked into running the platform for clients over a certain period of time. This has implications for technology vendors and how they evolve their sales model since the service provision and surrounding service level agreements may eclipse whether it’s Adobe, Oracle or Salesforce per se providing it.

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/artificial_intelligence

White collar AI As intelligent machines seem poised to take over the office, D/SRUPTION’s Cam Winstanley assesses the disruptive potential of artificial intelligence

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Machines don’t have to be better than humans to take their jobs, they just have to be on par with them

irst they took the work from our manual labourers – the digging and the harvesting, the ploughing and the carrying. As time went by, they took over the factories, sorting, welding, cutting and packing faster, more accurately and for longer than any human workforce ever could. But until recently, the rise of the machines has been constrained by their limitations. Sure they can work tirelessly but they do so unthinkingly. And yes, they can add, subtract, divide and multiply millions of times faster than human. But being able to count doesn’t actually make a computer clever. They can do but they’ve never had the capacity to wonder why. That’s what makes the Fourth Industrial Revolution different. As AI and machine learning begin to impart machines with some level of insight, they are starting to threaten not just blue collar jobs but white collar ones too. This is what Bank of England Governor Mark Carney warned might “hollow out” the middle classes. It’s why many people believe that ‘call centre employee’ has a 95% or greater chance of being an extinct job role within the decade. It’s why even the City of

London Corporation, the governing body of London’s financial district, is already making contingency plans to fill up office space currently occupied by soonto-be downsizing financial and legal businesses.

Thinking machines matter Machines don’t have to be better than humans to take their jobs, they just have to be on par with them. Once that happens, it makes sound financial sense to turn tasks over to automated systems that are never later, never sick and don’t require paid holidays. And when that happens, headcounts in businesses are set to nosedive. A major reason that white collar sectors such as legal and financial are so susceptible to such massive change is that they both still rely on numerous time-intensive yet repetitive tasks. Examples of this ‘grunt work’ in the financial work include onboarding client data and collating performance results. In the legal sector, it includes tasks such as checking existing documents for errors or clauses that deviate from standard formatting. This is mental rather than physical work but it does involve a large

amount of repetition and demands a high degree of accuracy and, just as repetitive, semi-skilled production jobs were replaced by machines in factories, this grunt work is also being automated. Indeed, one of the principle reasons that so many bank branches have closed in recent years is that the transactional nature of the requests – transferring money to different accounts, providing statements and so on – can be done more efficiently in digital form. In business, AI is now being applied to source and collate information, recognise and highlight patterns and read the clear, unambiguous language that is typical of legal documents. No wonder that automating these tasks and outputting the results through user-friendly systems such as chatbots is likely to eliminate many junior roles.

Why humans still count As bad as that sounds, careers in these sectors aren’t screeching to an abrupt stop… yet. As head of disruption for financial services at PA Consulting Group, Christopher O’Driscoll advises business clients on how they can stay ahead. He believes that a key factor is

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/artificial_intelligence

interpersonal skills would be one way to solve this, although Chris sees additional value in all newcomers.

understanding that the human touch is integral to most high value tasks. Since common sense, emotional intelligence, powers of persuasion and ‘doing the right thing’ based on moral judgement all require a human in the room, human roles remain vital to all businesses. “We’re not all sitting down and using technology more,” he notes, “we’re allowing it to do the work so we can spend more time with each other. In this way, new technologies can help not only the products and services sector but also the customer as well. The future is this combination of part human, part algorithm.”

Human-AI hybrids To see how that might work, let’s take a look at a fund manager whose daily tasks involve obtaining market data, managing team diaries, finding information for clients and building a complete picture of each customer. Since many of these tasks are manual and repetitive, AI powered systems can do them almost instantly. This then frees up far more of each day to spend with clients and team members in order to provide better, more tailored services. The disruption around this is that it interrupts the career ladder. Once the ‘grunt work’ has been automated, junior employees will no longer have any boring-but-necessary work to get on with, yet they’ll lack the experience to handle greater responsibility. Retasking them as aides to senior staff to hone their

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“Change has been so quick that younger generations are living and breathing these newer technologies,” he says. “In many cases, they’re driving them forwards too, so it’s possible that they have a greater understanding of how best to use them than their bosses do.

“We’re not using technology more, we’re allowing technology to do the work so that we can spend more time with each other”

“This creates a space in which the old guard meeting the young guard really works. You have a generation that’s experienced an industry in all of its peaks, troughs and regulatory changes, so they can spot the challenges, the opportunities and the friction points that technology might be able to help with. Then you have this younger generation that understands the technology but doesn’t have the experience to apply it to a market. Put those together and you have something that’s really quite special.” So AI machines will trade stocks and shares. They’ll analyse performance results and advise on strategy. They’ll handle customer queries and even draft legally binding documents. Yet machines don’t yet have the power to replace all office workers and probably never will. It seems that sometimes, being human is what counts the most.


Robot lawyer LISA Chrissie Lightfoot quit being a solicitor eight years ago when she felt that the legal system was resisting change that would benefit consumers. Determined to push disruptive change from the outside, her latest venture is the free-to-use robot lawyer LISA

What is LISA? Legal Intelligence Support Assistant – the world’s first impartial AI lawyer. The first product is a non-disclosure agreement (NDA) which negates the use of lawyers on both sides by starting in the middle ground between both parties. How do someone use LISA? It’s a cloud-based AI that sits on an AI platform surfaced through a URL, so you can access it from a computer or smartphone. LISA asks a series of questions then the created document is sent to the receiver to review. They then use LISA to help with any changes before the revised NDA is sent back to the initiator. Once everyone is happy, the document is ready to be signed by both parties. LISA is unique in being a two-way AI app. Nothing else out there caters for two sides sorting something out together. It’s that simple? And that’s why it’s disruptive, because LISA challenges the traditional behaviour of lawyers who fan the flames to increase the time and costs the parties need in order to reach the middle ground that lawyers know they will inevitably end up at. LISA benefits consumers and businesses by ‘brain-dumping’ the high end thinking of a lawyer’s knowledge and experience into an AI platform and then allowing this to support the users in their own decision making.

How can ‘free’ be a viable model for lawyers? I believe lawyers need to start giving stuff away at the bottom – the ‘low hanging fruit’ – so they have time to provide the high-end legal and strategic advice that should, quite rightly, be charged at their higher rates. This is what my co-founder, solicitor Adam Duthie of Duthie & Co LLP, is doing. Some of the businesses that Duthie law firm currently supports with free services will become the next Facebook, so ultimately, everyone benefits. With LISA, we’re approaching the same issue from the bottom coming upwards. We’re saying that any lawyer can brain-dump their entire legal knowledge and experience into AI apps. Then, instead of charging for one-on-one legal support, which is very limited, their app can be scaled to service thousands of existing and potential clients through the cloud. It’s a technology-based business model but it still pays.

Chrissie Lightfoot is the author of The Naked Lawyer and Tomorrow’s Naked Lawyer robotlawyerlisa.com

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artificial_intelligence

The rise of the human hive mind

Unanimous AI founder and CEO Louis Rosenberg outlines the coming fight for survival against a threat of our own creation

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he dominance of humanity may soon be challenged. That’s because an alien intelligence is heading towards us at breakneck speeds. Many experts believe it will arrive within the next 50 years while others think it will get here in 20. Either way, it will not show up in a rocket ship but will be born right here on Earth, in a research lab. I’m talking about the first sentient AI. It will be as different from us as any alien we can imagine and we have no reason believe its interests will be even remotely aligned with our own. This intelligence will be flexible and cunning, able to infiltrate our computer networks and permeate our critical infrastructure. Upon first contact, it might appear harmless, childlike even. But it will quickly become smarter than we are and when that happens, humans will struggle to understand how it thinks, feels or acts. But it will understand us completely. After all, we will have told it everything we know and it will have spent decades studying human actions and reactions. And if that sounds incredibly dangerous, that’s because it is.

Coming together Can we harness the vast potential of AI while at the same time preventing any unforeseen consequences from being unleashed on the world? Maybe we can and maybe we can’t, although humanity has a poor track record for keeping dangerous technologies in check. Do we even need to worry, since if we invent such an alien intelligence, surely it will exist to make our lives better? While that’s possible, it’s equally likely that it will pursue its own interests, just as humans vigorously dominated Earth’s other species and exploited its resources.

So if we can’t stop this alien intelligence from arriving and we can’t count on it to be friendly, how can we protect ourselves from being intellectually outmatched by our own creation? A good place to look is Mother Nature, where many species have evolved ingenious methods of jointly amplifying their intellects to levels well beyond the capacity of any single individual. Evolution has enabled these species to ‘think as one’, combining the knowledge, wisdom, intuition and instincts of large groups into closedloop systems that are smarter together than any of the individuals could ever be alone. Biologists call this process ‘swarm intelligence’. It’s a primary reason why birds flock, fish school and bees swarm. Every spring, for example, when a bee colony need to find a new home, it sends out hundreds of scouts to search a thirty square mile area and find dozens of candidate sites. But how do they select the right spot? Individually, honey bees aren’t that clever – just read ‘Small brain, big decision’ on the right. But by forming a hive mind – a ‘brain of brains’ – the colony combines its collective insights to consider all the options. They share their knowledge by vibrating their bodies in what biologists call a ‘waggle dance’. These competing signals are compared and contrasted until the swarm converges on a single solution that is not just decisive but also ends up being the optimal outcome the vast majority of the time. Now if you were a human CEO looking to locate a new factory, you’d face a similarly complex problem and be hard pressed to pick the optimal solution. Yet researchers at Cornell University have shown that honey bees are able to find the best possible location about 80% of

Small brain, big decision A single honey bee is pretty dumb. Its brain is smaller than a grain of sand and contains just one million neurons compared to a human brain’s one hundred billion neurons. Yet it’s not just the number of neurons that drives intelligence, it’s the number of connections, which are significantly lower as the neuron count drops. Yet in scouting for a new home, a bee needs to assess multiple factors. It needs to find a site that’s large enough to store enough honey for winter, will be cool on hot days yet warm on cold nights. It needs to be near fresh water but protected from the rain. It needs an entrance that’s large enough for busy bee traffic yet small enough to defend from predators. And it must be close to abundant sources of pollen. Imagine reducing your mental capacity 100,000 times and then, with the capacity of a single honey bee, making a life-or- death decision for your whole family. Since it can’t do it alone, that’s why honey bees colonies rely on swarm intelligence to boost their capacity.

LB Rosenberg and N Pescetelli, “Amplifying Prediction Accuracy using Swarm AI,” Intelligent Systems Conference (IntelliSys) 2017, London, UK

1

LB Rosenberg, “Artificial Swarm Intelligence vs Human Experts”, International Joint Conference on Neural Networks (IJCNN), IEEE, 2016

2

3 LB Rosenberg, “Human Swarms, a real time method for collective intelligence.” Proceedings of the European Conference on Artificial Life, 2015, pp. 658-659

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the time. That is a massive amplification of intellectual ability.

A human hive mind? So what about us? If birds, bees, and fish can form a real time ‘brain of brains’, could humans do the same, thereby amplifying our intelligence beyond the limits of any one individual? Our species may not have evolved to do a waggle dance but over the last half-century, we have built a global infrastructure that connects every man, woman and child in the industrialised world. The interfaces and algorithms to connect people into real time swarms also exist already and are referred to as ‘artificial swarm intelligence’. Governed by AI algorithms, these combine the knowledge, wisdom, insights and intuitions of real people and in real time, enabling large groups of networked humans to quickly converge upon optimised decisions, predictions, solutions and evaluations. Perhaps unsurprisingly, it turns out that these ‘human swarms’ can be really, really smart. Recent studies have shown that by forming real time swarms, significant improvements can be made in everything from predicting financial trends to assessing whether a person is lying.

For example, in a published study by researchers at Unanimous AI and Oxford University, a human swarm was used to predict the outcome of all English Premier League games.1 The experiment was conducted using a group of average sports fans, who logged into UNU, a platform for artificial swarm intelligence developed by Unanimous AI. Results showed that individuals who averaged 55% accuracy when working alone – only slightly better than flipping a coin – were able to amplify their predictive accuracy to 72% by thinking together as swarms. This corresponds to a 131% amplification in sports predicting ability across five consecutive weeks and 50 games. And this result appears to be the norm, not the exception. Human swarms are smart.2,3 When people are linked in real time using swarming algorithms, we can form closed-loop systems that amplify our intelligence to a level higher than our own individual abilities. This suggests that artificial swarm intelligence is a viable pathway to building superintelligent systems. After all, if a swarm

of bees can make complex life-or-death decisions better than a human CEO, a swarm of already smart humans working together should be able to soar to unimaginable intellectual heights. How does this help us mitigate the rise of purely artificial intelligences? Well, because these systems are a combination of AI algorithms and real human participants, they will always be inherently aligned with human morals, interests, values and sensibilities. The resulting super-intelligence won’t be an alien entity with conflicting values and interests but instead will be the natural evolution of the human intellect. This is why I believe the best way for us humans to stay ahead is by amplifying our intelligence. Machines may soon rival our intelligence and may even threaten our existence but real time human swarms may save us by being our evolutionary destiny. After all, it’s the same path that was taken by the birds and the bees when they were faced with the need to boost their intellectual capacities.

Dr Louis Rosenberg is a Stanford graduate who founded Unanimous AI to amplify the intelligence of human groups. A prolific inventor, he has been awarded more than 350 patents for his technological efforts in AR, VR, collaborative systems, artificial intelligence and human-computer interaction unanimous.ai

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artificial_intelligence

Chatbots 10 to try

Chatbots are bringing new functionality to communication and organisation through powerful AI systems. a D/SRUPTION’s Laura Cox takes look at ten of the most innovative

arlier this year, chatbot startup Cleo received an impressive $700,000 in funding from a string of high-profile investors, including Niklas ZennstrĂśm, the founder of Skype. The continued interest of big companies in innovative chatbot startups emphasises their importance in the tech world

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and the potential of interesting future advancements for these app-dwelling assistants. Through the extensive capabilities of AI, chatbots have found a place within finance, marketing, retail and, of course, good old entertainment. Here are a few of the chatbot companies and products that have caught our eye, starting with Cleo itself.


Aiden

1 Cleo London-based startup Cleo has created an AI-powered chatbot that helps users manage their finances. The chatbot is presented as a ‘financial assistant’ that can be accessed through the Cleo app or Facebook Messenger. Users can talk to it via text or voice to access a breakdown of their financial data, track their spending and set reminders and alerts. In a funding round closed in late 2016, they gained $700,000 from Skype founder Niklas Zennström, Zoopla co-founder Alex Chesterman, Wonga co-founder Errol Damelin and Lovefilm co-founder Simon Franks. The company’s mission is to reduce the complexities of the financial sector, which is a general trend in fintech and insurtech.

Launched in 2016, Aiden was showcased at TechCrunch Disrupt London 2016. The company has created a virtual colleague that helps businesses to manage their marketing budgets. CEO Marie Outtier has a background in marketing and wants to use AI-enabled personal assistants to enhance the marketing strategies of SMEs and digital agencies. She notes that marketers spend ten hours a week hunting for data, yet Aiden can do this instantly through data analytics and machine learning. Aiden’s conversational interface does more than just respond to commands and offers individualised advice based on data collected from Facebook and Google Analytics. It is designed to feel like a co-worker rather than a program by compiling data into comprehensive charts. Aiden currently works with six major clients.

2

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artificial_intelligence

Swelly bot

HealthTap

Swelly bot was created by Swell and was launched in early 2016. It’s essentially a Yelp for everything, using a community of users to back each recommendation. The developers of the opinion-gathering interface have capitalised on the value users place in the opinions of others and turned this into a chatbot.

HealthTap created its chatbot in 2010 with the aim of making healthcare more accessible. The bot connects user queries with advice from a bank of 67,000 medical professionals and can be installed via Facebook Messenger.

The team at Swell claims that the two main reasons that people leave a shop without buying are that they are indecisive and that they don’t trust the opinion of in-store assistants. Swelly bot addresses these issues by reinforcing choices with the support of an unbiased community. The bot doesn’t just work in retail and can also be used to find the best restaurants, places of interest or even business-related services. As of December 2016, Swelly bot boasted an impressive community of 1.5m users.

3

4 Kip Kip was set up in 2015 and is a chatbot designed as a penguin that organises collective purchases for businesses. Kip finds the required items, compares prices on Amazon, then works out what purchase has the best value. That could be anything from the number of office chairs that need replacing to how many skinny lattes to order from Starbucks. It’s compatible with Slack, an instant messaging and sharing platform for coworkers. Kip isn’t just for teams and can be messaged directly by individuals to become a savvy personal shopper. Although it currently only works with Amazon, (which, let’s be honest, is hardly going to hold it back), it is looking to partner with other stores including eBay. What sets this chatbot apart is the fun use of emojis – just send an umbrella emoji to buy an umbrella, for example.

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It works by analysing a request and drawing on previous questions related to the topic. If it can’t provide a suitable answer, users can choose to send their question to a doctor and HealthTap then notifies the user when a reply has been written. If the question is time sensitive, there’s also the option to talk directly with a doctor in real time. The healthcare industry as a whole is facing massive disruption and the availability of on demand, mobile advice from comprehensive chatbots will accelerate this trend. To date, HealthTap has raised almost $38 million.

5


Erica

6 X.ai Chatbot x.ai schedules meetings for small-to-medium business owners and busy entrepreneurs. This might sound like a simple task but, according to CEO and founder Dennis R Mortensen, companies can lose hours each week just trying to do this. Users just have to cc amy@x.ai (or Andrew if you prefer) in emails requesting meet ups and the bot takes it from there. There’s no additional download or set up required and the chatbot deals entirely with the planning so that the user doesn’t have to worry about it. X.ai is proof that even smaller companies and busy individuals as well as larger corporations can benefit from automated organisational systems.

The Bank of America has developed a chatbot financial advisor called Erica that will go live later this year, despite a Forrester report warning banks not to release chatbots for the next few years due to underdeveloped technology. Regardless of this, the Bank of America debuted its personal finance expert at the Money20/20 conference in LA. Erica uses AI, predictive analysis and personal spending habits to offer tailored advice to each customer. The aim is to encourage better spending habits while keeping customers informed about their own finances. Users can interact with the chatbot via text or voice, with Erica uniquely initiating the conversation rather than simply responding. This platform is one of many financial chatbots, which show the willingness (or at least acceptance) of banks to innovate.

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8 Cyra Hiring the right people is one of the most important tasks of any business but it can be an expensive, time-consuming process. Cyra is a UK-based chatbot startup that was founded in 2016 to take on the burden of sorting through potential employees in order to highlight the right type of candidate. Using machine learning and natural language processing, it eases the hiring workflow by acting as a virtual recruiting assistant. Job seekers simply fill out a short form and upload their CV. The bot then sorts through applications and matches them to relevant vacancies. Cyra suits any type of businesses looking for recruits and any person in search of work, which partly explains why the startup has been backed by EF, Europe’s largest technology accelerator.

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Who’s going to eat your lunch? Disruptor or Disrupted. You decide. Emerging technologies and innovative new business models are transforming life, business and the global economy at a speed never seen before. Whilst it is hard to predict the next big disruption, it is possible to identify forces at play right now that will have a major impact on the future of business.

Register today as a D/SRUPTION member www.disruptionhub.com/subscription


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Niki.ai Niki.ai is a personal shopper chatbot that was founded in 2015 in India. The AI powered bot is designed for personal instead of corporate use, like Kip. Niki.ai is incredibly capable – it can recharge phones, hail taxis, reserve hotel rooms, pay utility bills, order food and even collect laundry. If that wasn’t enough, even more features will soon be added including courier tracking, flight bookings and insurance services. The company’s aim is to become a smart marketplace for everything, everywhere – in other words, a one-stop digital service for all purchases. The company has currently raised almost $450,000 in seed funding.

Pypestream Pypestream is an American chatbot that uses real time chat to enhance communication between companies and customers. The platform’s mission is to drive customer loyalty through smart messaging. By establishing a direct connection, Pypestream improves the relationship between brands and consumers, which also makes it a useful marketing tool. On top of this, it’s also cost efficient. According to Pypestream research, traditional call centres cost $4m, while switching to smart messaging saves $3.2m of that. Pypestream is already used in the healthcare, finance, energy and retail industries, showcasing a trend towards automated customer services.

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Chatbots go mainstream These examples showcase the variety and ability of chatbots, from fintech to personal shoppers. Since April 2016, over 34,000 bots have been developed for Facebook Messenger alone. With so many of them circulating in numerous different apps, it’s a constant race for businesses (both user and creators) to keep up with the latest advances. Chatbots have become synonymous with AI, which has captivated investors and developers alike. This is proving to be a killer combination in advancing the technology behind bots. In short, if you aren’t already using chatbots on a regular basis, you soon will be. Welcome to the chatbot economy.

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artificial_intelligence

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In a voice controlled world… where do the ads go? D/SRUPTION’s Managing Editor, Kev Cooke explains why advertising is about to change forever. .

t present, online ads usually involve a visible distraction, a banner or an interruption on your screen that you have to click to either view the ad, or to banish it altogether. Voice control removes the need for the screen, and with it the visible web page—meaning there is no longer an intermediary step between our search and our result. Up until now, this intermediary step is where the ads lived, so with direct access to the internet through speech, voice interfaces will change advertising forever. All the digital assistants are currently impressive and are set to become more

so. Each time we use them, we train them—the AI gets better, as does the speech recognition. Increased use brings increased usefulness—and increased usefulness likely leads to ubiquity. If speech becomes a major, or even the primary method of interacting with the internet, where does that leave the advertising model?

Changing interactions Very few of us will tolerate Alexa or her cousins reading out unsolicited ads in our homes. Although a premium subscription service is possible of course—something akin to Spotify (where the free account plays ads every few songs but premium users get it ad free). Would free users of a

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artificial_intelligence voice operated digital assistant agree to hear ads after a certain number of uses? It’s not a very appealing idea—no one wants invasive advertising getting in their way, especially not at home in what has, up until now at least, been regarded as your private space.

The opportunity is in the data It seems more likely that the advertising opportunity will be found not with the device or platform itself but in the data it gathers and how it influences what we are shown during our other interactions with the internet. Voice control is perhaps the most natural and intuitive way we have of using the internet. Through what we say, and how we say it, the data gleaned from your searches and uses online mean advertisers and our service providers are better informed about us, and their advertising can be better targeted at us. Targeted advertising, based on previous searches, purchase history and website visits informed through your digital assistant are likely the way things will go. Any visual form of advertising, on your tablet or computer or - for example, on a screen on your aeroplane seat, or a digital advertising board at your bus stop - could be targeted at you and triggered when you are near. And if there’s more than one person at the stop? Simply pool their collective data and deliver the most appropriate ad for the assembled group. Alongside rapidly improving speech recognition, it’s likely that ads will be triggered by other devices listening out for your (fairly) unique vocal signature. Ubiquitous high quality speech recognition is likely to be massive for targeted advertising. There are other

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ways of triggering identification too: your phone, your contactless card, your passport, or an RFID chip in your train or cinema ticket—or in your clothing. We are also now seeing facial recognition used in airport security and the beginnings of it in retail and purchase too. Any of these could activate display ads tailored specifically to you.

Significantly, it doesn’t have to be personal to ‘you’ either - ads could be ‘personal’ to the product you’re carrying, wearing or using. The RFID chip in your phone, for example, could trigger follow up ads from your phone’s manufacturer—or, notably from their rivals. We’ve already seen an innovative use of this kind of targeted advertising

Achieving the right balance Certainly when ads are overly familiar or too personal it can alienate rather than attract. Many people are uneasy about targeting and personalisation but if advertisers get the balance right by being useful and not creepy, then there are tangible benefits to them and us. Significantly, these technologies potentially open up advertising to niche areas that previously wouldn’t have the budget for blanket coverage. If you can target the one person who is interested in that one product or service through one ad, then that’s a huge success. The audiovisual landscape of what we experience around us in terms of advertising, will become unique. We will all get slightly different experiences on the same walk through town. In a sense, that’s not so different to how things are now— as we are attuned to our own interests and tend to notice these things more than others - but with targeted advertising, much of this selection will be done for us by algorithms based on our previous, and increasingly often voice based, interactions with the internet.

With voice control we lose the web page as a visual medium through which we interact with the internet, which forces advertisers to change the way they work. Advertisers need to be smarter about the ways in which they approach us, using data and targeting or else they will lose out, and it seems likely that the voice platform with the most seamless integration and the fewest invasive ads will be the platform that wins. Amazon is perhaps ahead of the game here - Alexa is just one place where we interact with their ecosystem. For them, it’s a single point of data collection - for us, a place of slick and simple, hands-free interaction with the internet. By making internet use more seamless, through speech rather than surfaces, we get a more integrated, immediate and less invasive experience. This is good news for everyone, and forces advertising to be more specific, more creative and less invasive - moving advertising away from the traditional interruption model while potentially saving money and increasing the effectiveness of ads.


on digital display boards on motorways in Moscow. A team from Synaps Labs set up high speed cameras to quickly identify oncoming vehicles from specific manufacturers enabling them to select and deploy an ad for their rivals within seconds. For advertisers, this type of technology is appealing as this level of targeting and specificity increases advertising impact while reducing costs.

The future is open Amazon Lex, the software that powers Alexa, is now available for developers outside of the company to work with. Lex uses automatic speech recognition and deep learning to enable the creation of conversational voice interfaces for use in any application - the most immediate example being chatbots but this is assuredly only the beginning. Understandably Amazon hopes to see widespread use and by offering Lex as a scalable service, they place voice technology in the hands of any developer who wants to use it.

Amazon is already integrated into our lives, supplying and delivering products, providing access through our devices and now fundamentally changing how we interact with the web. The knock-on effects of this to advertising and other businesses are huge.

The shift to voice will have wideranging effects, from advertising and search to the way we use the world

Once again, we see the clear business advantages of making a technology open to all - developers gain access to use Lex in their own applications, while Amazon simultaneously collects anonymised data to constantly improve its ability, and creates and becomes the hub of a rapidly expanding market on which all these developers and new applications will rely.

create new naturalistic and screen free interactions and controls with our devices and immediate environment. The shift to voice will have wide ranging effects - from advertising and search, to how we interact with things themselves, and the way we use the world.

It seems inevitable that soon, Amazon’s voice system will be everywhere. We already have third party integration and a number of deals made to include Alexa in specific products, and as more developers are working on the Internet of Things (IoT), connected devices will see more use of Amazon Lex’s functionality to

Amazon & Google Amazon is of course not the only operator in the voice sphere but their commercial model is not tied in to advertising in the same way as Google which means the voice layer does not directly compete with key ad revenue for Amazon as it does for them. With its existing infrastructure,

Amongst many things, Google is still arguably the leader in providing information, even entering the language. When don’t know something we tend to say “Google it”, not, “search the web”. Amazon is set up to deliver more than just information, it delivers products and has a head start on the necessary network and infrastructure to back it up - the ability to find answers through search is a large part of Amazon, but it is a byproduct of everything else. Amazon is trying to integrate the company and Alexa into every aspect of our day to day lives. It’s likely we will soon see a decent Amazon Alexa wearable, as a natural next step in voice assistants this would also open up even more opportunity within the existing business framework but without the need for interruptive and intrusive ads, and have it integrated with near seamless ordering and delivery, IoT and search. It’s a powerful proposition - what has up to now been, “Google it”, may soon very well become, “ask Alexa”.

Kev Cooke is Managing Editor at D/SRUPTION – He is currently writing a book on foresight, creativity & innovation to help you build a better future. @_KevCooke

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/talent

Investing in AI

ll industrial revolutions have been driven by some kind of new technology. Steam powered the first one, electricity the second and the transistor powered the third. This Fourth Industrial Revolution is being driven by artificial intelligence. As in the past, one of the outcomes of the current upheaval will be a step-change

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What makes artificial intelligence so compelling for venture capitalists? Simon King of Octopus Ventures explains the appeal

in productivity due to increasing levels of automation. The socio-economic implications of this have quite rightly been given a lot of air time already, so there’s no need to repeat them here. Instead, I will focus on why venture capital is focusing on AI and what types of business this technology will change. As early stage investors, one of the things we at Octopus Ventures look for in a


business is its ability to scale rapidly and disrupt a sector. Startups that automate tasks fall into this category because they use machines and software to augment or replace human tasks. Why do we consider this to be important? 1. Automation increases productivity without increasing cost. 2. Startups are generally more profitable than established businesses. An app, for example, can sell millions of copies at negligible additional production costs. Speed of implementation and higher margin business mean that companies selling technology based on automation can grow quickly and cost effectively. Additionally, the speed, safety, reliability, repeatability and accuracy of automation combine with reduced costs to create a powerful economic case for disruption. Taken together, these factors make such AI-based startup businesses extremely attractive for VCs. In previous industrial revolutions, automation was driven by the defining technology of the period and while that’s easy to visualise with steam power, electricity and electronics, I think people have been less aware of software’s power to automate. Yet even before we start to consider AI, existing software has already created lasting automated change: n Automated writing in all sectors with word processors n The replacement of physically delivered postal communications with email n Automated and personalised marketing through email marketing tools n Automated manufacturing process management with SCADA (Supervisory Control and Data Acquisition) software

AI is now taking software automation to an entirely new level. Historically, automation has been dumb – the mechanical replication of step-by-step recipes produced by humans. However, some processes are too complicated to produce a recipe for, either because the number of steps is too large or the recipe is intangible.

One of the most exciting things about AI is that it can ask the questions we didn’t even think about

For example, while it’s easy to explain all the rules and strategies for winning a game of noughts and crosses, it’s impossible to write a recipe that guarantees success at Go. Within the last ten years, AI advances have allowed programs to create their own recipes. AI victory over humans at Go marks a point where an increasing number of processes which historically couldn’t be automated now have been and it’s these successes that are the basis of the VCs’ feeding frenzy around AI. This technology will touch all markets and industries

and, as sector generalist investors, we are already seeing that most startups who come to us use it in some form. But because it is still relatively early days, few of them have core products, services or business models that rely entirely on AI. Since AI technology can be applied to many problems, we haven’t seen AI startups cluster around a particular sector. However, AI based businesses require a couple of features that other startups don’t: n Access to data – the more you have, the better your algorithms learn n Access to AI talent – because it’s currently in relatively short supply By its very nature, it is hard to predict where disruption will come from. That said, it seems clear to me that AI-powered businesses and products will push through a lot of disruption in the near future. That’s why we believe that now is a fantastic time to be an entrepreneur or early stage investor. One of the most exciting things about the application of AI isn’t that it can help us provide the answers we want but that it can ask the questions we didn’t even think about. It seems likely that the most disruptive AI companies will be the ones that create the products and services we didn’t even know we needed.

Simon King is investment manager at Octopus Ventures, a London and New York based venture capital firm that over the years has worked with the founding teams of over 60 companies, including graze.com and Zoopla www.octopusventures.com

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/communications

Chirp

Making some noise through sound Anyone with a smartphone knows the limitations of Bluetooth or Wi-Fi. Moran Lerner, CEO of Chirp, explains how sound can bridge the gaps to put our devices in touch with each other

ound is our main method of communication and it surrounds us constantly. Yet we at Chirp don’t think we’ve exhausted the ways in which it can be applied. In particular, we believe that machines can use sound as a way to connect with each other as part of the Internet of Things. Our advanced software developer’s kits (SDKs) encode data into an audio stream on the sending device before transmitting it to a receiving device, or group of devices, that can decode it. This transmitted data can be a file, a link or even a business object such as a payment ID or robot command. Any device that has a speaker can transmit a ‘Chirp’, while most devices with a microphone can receive one. The magic of Chirp isn’t limited to

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being easily applicable to an existing devices. It’s also that our special SDKs are robust in even the most challenging acoustic environments, making audio transmission a viable communication method for IoT devices.

Sound vs Wi-Fi So why would anyone want to use sound when we already have Wi-Fi? With the relentless onslaught of new connected devices, there are instances when alternative methods of machineto-machine communication might be needed. We’ve rapidly progressed from large boxy computers using dial-up, to mobile phones, to IoT-enabled light bulbs that relay data. But the rate at which these devices have come onto the market has created a chasm between legacy devices and newer ones which simply can’t and don’t play nice with each other. Even if older devices still function

perfectly, their inability to communicate with newer devices can render them useless and obsolete in the eyes of their owners. This over-reliance on internet connectivity for IoT devices also excludes environments in which the use of radio frequency (RF) based networking technologies such as Wi-Fi or Bluetooth is either not possible, or not preferable. Therefore, creating data-over-sound links between a group of devices is useful for ensuring that full functionality is available, regardless of RF based network connections being available. Chirp’s ability to be used by most devices that have a microphone or a speaker also opens up a wide range of previously inaccessible legacy technologies to the IoT. We’ve been able to send data from a vinyl record to an internet-connected device!


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Because our technology reduces a device’s reliance on an internet connection, it is naturally being used by companies that have always wanted to add a data transmission function to their products but have never been able to do so, for cost, practicality or even security reasons.

When games Chirp For Activision Blizzard’s billion dollar video game franchise Skylanders, we created a custom Chirp that was used to transfer data between an offline game and its companion mobile app. In Skylanders, players can use thousands of different components to create their own unique ‘Imaginator’ – an in-game avatar. Activision Blizzard came up with the idea of transferring these creations to a companion mobile app so that players could order 3D models of them, print them on custom T-shirts or make further edits to the character. Chirp’s data-over-sound solution was selected over a more traditional web based community building tool since Activision Blizzard was aware that many of their players were children, so wouldn’t necessarily have access to internet passwords. Creating a childfriendly way to transfer the characters was paramount to the success of the app, which has helped to expand and enrich the Skylanders community. One of the things we found incredibly interesting was how the technology in turn affected user behaviour. By opening up this new form of communication between video games and a player’s phone, users quickly came to understand that it was the sound that was transmitting the data. So they created YouTube videos and SoundCloud files of

each Chirp to share their creations with their friends.

Finding a niche for sound New user behaviour excites us because it opens up fresh avenues of interaction through Chirp. For example, with nearfield communication (NFC) ‘contactless’ payments becoming commonplace, businesses are looking for alternatives that can recreate the same easy payment

We’re still finding new ways to utilise sound to expand the existing IoT landscape, making it accessible to a much wider audience experience but ideally at a much lower cost. Kawa (www.getkawa.com) is a payment card, loyalty programme and directory of coffee shops all rolled up into one app. Kawa recently partnered with Chirp to create the Kawa box, a small wooden box that detects when a customer’s device is near and plays a .wav file that can be picked up by the phone, confirming redemption of the coffee and deducting funds from their pre-paid balance. Even though a similar experience could be achieved through NFC, Chirp’s technology was chosen because we can offer an NFC-

like experience with a portable, simple and low cost solution, allowing smaller independent coffee shops to offer a smoother transaction process. We’re finding similar opportunities with the rise of IoT and developments in technologies such as VR. At Visual Vocal (www.visualvocal.com), virtual reality is being used to create shared VR experiences in order to improve productivity. Visual Vocal recently partnered with Chirp to create an onboarding solution that would be simple to use and location agnostic. By turning a conference session’s ID into a Chirp, it can be played down the phone to connect users to the conference room, enabling anyone else in the room to easily connect to the meeting without having to input their own details. It’s not Chirp’s intention to attempt to replace traditional data mediums such as Bluetooth and Wi-Fi. Instead, we hope to fill the gaps in the market where these technologies are impractical for the user or where Chirp can provide a more friction-free set-up process. With new technologies being developed all the time, we’re still finding new ways to utilise sound to expand the existing IoT landscape, making it accessible to a much wider audience and set of device types, be those smart enabled or legacy. From VR to coffee shops, our aim is become as ubiquitous in machine-to-machine communications as sound is in all other aspects of our lives.

Moran Lerner is the CEO of Chirp, the global leader in data-over-sound communication technology www.chirp.io

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virtual reality

The future of VR? Look around Whatever happened to the virtual reality revolution? Digital Jam’s Tanya Laird says we should start looking beyond living room VR gaming headsets and towards the workplace

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PICS NEED TO BE CREDITED TO Spearhead Interactive

here’s no such thing as a ‘mainstream’ adoption of virtual reality, at least not in the way most people imagine it. We won’t all end up sitting at home, Ready Player One style, plugged into a virtual reality headset. That sort of set up is too complex and expensive (for now) to be anything other than the preserve of hardcore gamers and early tech adopters. And VR won’t replace smartphones because there’s no realistic scenario where we’ll all need to start inhabiting our own VR bubble 24/7. So why did we bother to create Digital Jam? Because we realised early on that the potential for VR goes far beyond entertainment verticals. The perception of ‘mainstream’ VR is an illusion. In practice, there is already a spectrum of immersive technologies being applied across the military, automotive, fashion, retail, medical and education industries. The confusion partly stems from the fact that industrial VR is not always being used in a familiar head-mounted display, emerging instead as a hybrid of augmented reality, artificial intelligence and haptic interfaces. Since most folks are already familiar with the gaming application of VR, here are some current

examples of workplace applications that you might not have considered…

Industry Being able to remap production lines in virtual environments can allow experimentation without the costs of physically repositioning factory machinery. VR remodelling also allows a machine operator – or a whole team – to test out multiple configurations. By experiencing layouts before they’re implemented, ongoing savings can be achieved through increased time management and efficiencies. Fujitsu is currently experimenting with on-the-floor training using augmented reality. For manufacturing industries that operate big, complex machines requiring skilled operation, it’s using displays that map real time instructions over the view of the trainee. In this way, the trainee can operate large, unfamiliar and dangerous machinery without the very real risks of physical harm.

High-risk training The survival of workers in life-or-death situations could depend on the responses they learned in realistic, high-stress simulations. While the military leads the way in realistic battlefield / high stress

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training exercises, the high costs of such realistic simulations prevent other industries from following suit. Training in virtual reality can be cheaper and safer but, most importantly, can deliver believable levels of stress and danger. We’re talking here about VR on a room scale for oil rig workers, the police, fire department and first responders, using a combination of headsets and interaction with physical props. So an ambulance crew might experience treating a casualty next to a burning vehicle when in fact they are in a room, the car is just stacked boxes and the patient is a regular CPR dummy.

Spreading knowledge globally The teaching of surgeons hasn’t changed much over the last hundred years, with trainees still standing at the edge of an operating theatre observing the surgical team. Inserting a 360° camera directly over the patient not only records the

details of the surgery but also allows trainees to observe the team’s dynamics. In April 2016, Medical Realities (www. medicalrealities.com) broadcast the world’s first live cancer surgery. This reached 4.6m people, many of whom were students in universities and teaching hospitals worldwide. For the first time, students in countries unused to such high levels of teaching were witnessing procedures they’d never seen before.

VR as treatment Psychologist ‘Skip’ Rizzo and the team at the University of Southern California have, for some time now, been using VR systems for battlefield scenario testing. That’s placing former soldiers into realistic military situations in order to clinically assess their post-traumatic stress disorders by finding its triggers. But of course, PTSD isn’t unique to the military and Rizzo’s research can

The survival of workers in life-ordeath situations could depend on responses learned in realistic, high-stress simulations

Creating virtual environments allows users to not only experience spaces but also quickly alter them too be applied to help people mentally adjust to many different situations. The ‘social learning theory’ is that you can encourage people to adopt beneficial behaviours by watching others perform them. So VR could be used to deal with social phobias by introducing chronically shy people to virtual crowds. We’ve barely begun to explore such possibilities.

Virtual pain management The University of Washington’s SnowWorld is being used by burn victims to let them ‘escape’ into a virtual environment when their dressings needs to be removed. By engaging in snowball fights with penguins during this painful procedure, the reliance on pain killers can be reduced. Not only does SnowWorld distract but the snowy scenes also work to lower the patient’s core temperature. Such is the power of the mind. Tanya Laird has been at the forefront of emerging creative technologies spanning games, film & TV, comics, music, VR and AR. She is the winner of a Women in Games Award (Unsung Hero) and the founder of Digital Jam. digitaljamlimited.com

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3D printing

The building blocks of industry What impact has 3D printing had on industrial production? Phil Reeves of Stratasys reveals how manufacturers can and are making the most of its numerous strengths

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ver the first half of this decade, we’ve seen the lavish promises of a consumer 3D printing revolution gradually settle down into a number of highly-specific niche applications with limited growth. Yet while 3D printing at home has made a lot of noise yet minimal impact, a more profound change has been quietly taking place behind the factory gates. Although it’s been around for 30 years now, an increasing adoption of industrial 3D printing is being driven by an everincreasing array of applications. Why have giants like GE recently spent billions to acquire both technology vendors and technology users? The answer lies in 3D printing’s ability to increase top line growth and bottom line profit by solving multiple problems in a single stroke.

The development tool of choice 3D printing has been key to helping companies shorten product development times but today’s rapid prototyping is much more than just a modelling solution. Thanks to increased machine accuracy, 3D printed parts can now be used to check assembly tolerances and the fit of complex components and systems. With an ever-increasing palette of printing materials available, functional prototypes can also be used to test the capabilities of design concepts long before they go into full production. The need for physical, tangible and tactile prototypes is, and always will be, very real. Yet one of the biggest growth areas is now coming not from the development environment but from a desire to use 3D printing during the production process, or even to put 3D-printed products into the supply chain itself.

Leaner, less wasteful logistics 3D printing is a digital technology suited to making complex geometry shapes in a variety of metals, thermosetting polymers and ceramics. As such, it’s an ideal way to make rapid, low cost and reconfigurable tooling, jigs and fixtures as well as short-run injection moulding, blow moulding and die casting tools. In the composites industry, 3D printing using thermoplastics can make layup

to just print the production part and be done with it?

Production using 3D printing There are many examples of successful business models that already use 3D printing to produce the end product. From the exterior shells of hearing aids to dental caps, from hip implants to aerospace components – all these are printed to order.

3D printing can effortlessly produce complex lattices and honeycombs compared to the bulky chunks of plastic from traditional manufacturing tools while soluble polymers can be printed into easily removable cores used in filament winding. In the casting sector, 3D printed wax and plastic parts are used as sacrificial patterns in the investment casting process, while sand casting cavities can be printed directly within the foundry by binding granules of sand with an ink-jet print head. In short, 3D printing is becoming an invaluable enabling technology for many upstream manufacturing processes. In the assembly environment, 3D printed jigs and fixtures are also being used to hold traditionally manufactured component parts during drilling, bonding and inspection operations. But if it’s possible to print a prototype and it’s possible to print the tooling used in the manufacturing process, why bother to use traditional manufacturing at all? Would it be simpler for most industries

What are the advantages to 3D printing such objects? Firstly, there is the design freedom. Given the layered, particleby-particle nature of the technology, it is possible to produce parts with a very high level of geometric complexity with little or no cost penalty. 3D printing can effortlessly produce complex lattices and honeycombs compared to the bulky chunks of moulded plastic or metal from traditional manufacturing. This allows 3D printed components to have near-perfect strength-to-weight ratios and be made with the minimal amount of raw materials and production waste. This particle-by-particle approach to manufacturing also allows materials to be very specifically combined in order to increase the functionality of a product or control its aesthetics. For example, combining multiple elastomeric and damping materials can create a ‘tuned structure’ capable of compensating

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for vibration, shock, sound or impact. Or, more simply, differently coloured materials can be combined to save on painting the finished product. Beyond the physical nature of each product, there are several significant commercial implications and benefits to 3D printing parts. Firstly, eliminating the tooling associated with traditional production frees up working capital within a business and removes the needs to pass these costs on to the consumer. Secondly, with 3D printing, production runs of one unit are no longer a ridiculous idea. Also, by producing parts on demand rather than investing in an entire production run in the hope that all will sell, the entire supply chain is de-risked. Costs no longer need to be put into making and then warehousing large numbers of unsold products. There is also a customer stickiness and value proposition that can be achieved by 3D printing products. Given that 3D printing is suited to individual units and is capable of producing highly complicated geometries, it is well suited to the manufacture of personalised and customised products, from jewellery and toys through to medical inserts and prosthetic limbs and devices. 3D printing also allows businesses to entirely reconfigure their supply chain, since the production of components no longer need to be constrained to any single location where the tooling resides. To this end, components can be made whenever and where ever they are needed – a potential revolution in the spare parts and aftermarket supply chain. But let’s not get too carried away and carefully underline the word ‘potential’.

3D printing is well suited to the manufacture of personalised and customised products, from jewellery through to medical inserts Since the percentage of 3D printed finished products remains small, let’s see why that’s still the case.

There is always a ‘but’ Currently, the vast majority of end-use 3D printed parts are made on machines optimised for prototyping and made from materials developed specifically for prototyping. Many of the sectors that want to exploit the low volume, high value benefits of 3D printing – such as aerospace and medical – are heavily regulated. So to serve these fields with 3D printed parts, both the technology and materials need to be elevated to a production-ready state. Processes need to be repeatable, interoperable and validated. Materials need to be traceable, capable and qualified. Fortunately, all these factors are now being addressed across the industrial 3D printing supply chain, from the enabling CAD, software vendors and raw materials companies, to the regulators, technology platform vendors and end users.

How is Stratasys responding? As one of the world’s leading 3D printing companies, Stratasys® is profoundly aware of the changing landscape of industrial 3D printing. We brought our first concept modelling 3D printer to market almost 25 years ago based on our own thermoplastic extrusion Fused Deposition Modelling process, although

present day FDM® technology is far removed from those early systems. Our current technology platforms can print high temperature-stable and aerospace approved materials as well as clinically approved medical materials. We can print full colour, materials with tuned mechanical properties and combine plastics with carbon composites. We have developed software to streamline the workflow between the design and print environments and have made 3D printers larger, faster and more repeatable, increasing productivity while at the same time decreasing the cost of ownership. By integrating 3D printing with other automated industrial production processes, we’re driving this technology onto the modern shop floor. Industrial 3D printing has come of age. To maximise its benefits, businesses needs to think strategically. It’s not the solution to every problem but it can do some things no other process can. Applying it to the right job is the key to its success. Dr Phil Reeves is VP of consulting at Stratasys and leads the company’s expert services consulting activity. With his team he specialises in helping companies across numerous sectors to identity where 3D printing can increase sales and decrease waste. stratasys.com

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Clean, safe, efficient IoT cities How can cities continue to grow without collapsing under the weight of their own infrastructures? Mike Zeto from AT&T shows how IoT solutions can drive power and utility efficiencies

he world’s booming cities are changing the face of our planet. An estimated 77 million people moving from rural to urban areas every year1 has led to the rise of the ‘megacity’ – each one with a population of over 10 million people. In 1995, there were 14 such megacities on Earth. It’s hard to imagine that many people but by 2016, that figure had risen to an incredible 29.

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This increase of scale to megacities challenges the infrastructure of each city that was never built to cope with the needs of so many. At AT&T, we’ve been working on the smart city concept for the last few years, a market that could be worth $1.5 trillion by 20202. We formed a dedicated Smart Cities group and formed Smart Cities Framework to help cities better serve their citizens as well as their immediate environments.

This now includes projects with Dallas, Atlanta, Chicago and Chapel Hill, North Carolina, as well as Miami-Dade County, Florida and Montgomery County, Maryland. We also launched a pilot programme – the Living Lab – in the historic West End of Dallas in March, which includes smart LED street lamps, a digital street kiosk and environmental sensors. And we’re working with The Georgia Institute of Technology to


combine academia with our own realworld research.

Global smart cities This year, we signed an agreement with IDA Ireland and Dublin City Council to collaborate on Dublin’s journey towards being a smart city hub. Dublin’s an ideally sized city to develop concepts that will benefit those who live, work and visit. Through integrated IoT and data-driven infrastructures, it will attract even more high-tech companies. All cities want to drive efficiencies around cost, to be safer, to provide attractive environments for businesses and employment opportunities. Every city has to deal with water and lighting, managing their own limited resources. Data from IBM shows that IBM and AT&T solutions can reduce traffic congestion by up to 25%, resulting in fewer traffic accidents that could equate to 310,000 fewer casualties each year. Cutting the carnage could save lives while also saving up to $185bn annually.

Connectivity will make smart cities work because data is the driver that informs all critical decisions driving data for decades. And, as we enter the era of 5G networks, we are at the tipping point of making smart cities a reality. AT&T is collaborating with members of the Bridge Alliance, a group of leading mobile carriers in Asia Pacific, the Middle East and Africa. AT&T currently connects 13m cars in the USA and elsewhere. Teaming up with the Bridge Alliance will help simplify global deployments with local operator networks. It’s also huge for our automotive customers because it gives them access to the Alliance’s market, which covers nearly 30% of the world’s population as well as bringing new IoT solutions to the global auto industry.

Driving towards an IoT world A thing is just a thing until it’s connected, at which point it becomes smarter, more insightful. By the first quarter of 2017, our network had more than 32m connected devices – everything from cars and shipping containers to city infrastructure and soil monitors. Our goal is to connect it all.

The strategy of alliance No one can do everything themselves. Part of the trick in developing AT&T’s smart cities concept is to collaborate with key players and so far, we have formed alliances with Cisco, CIVIQ Smartscapes, Deloitte, Ericsson, GE, Hitachi, HydroPoint, IBM, Intel, MetroTech, Qualcomm Technologies, Southern Company and Streetline.

Connectivity will make smart cities work because data is the driver that informs all critical decisions. AT&T’s background in communications networks provides us with a terrific advantage as we’ve been

We recently signed an agreement with Current, powered by GE. It uses smart LED lighting technology to help traffic flow and parking optimisation in a system that can also aid gunshot detection,

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monitor air quality and provide weather emergency alerts. In deals such as these, we can play to our strengths and use our infrastructure and expertise to help deploy these technologies. AT&T acts as the data carrier, providing highly secure connectivity for Current’s LED deployment in San Diego, for example, which helps the city save about $2.4m a year in energy costs.

Looking to the future As we move beyond our traditional focus on telecom networks, we are still able to use our expertise to expand the benefits of connectivity and software apps. Fast, highly secure and mobile connectivity is the engine that’s powering our economy. It’s creating a better, more sustainable world – from connected cars and homes to smarter and more resilient energy grids. The cities we’re working in, the collaborations we’ve begun, these are only the start. Megacities must and will be connected all around the world.

Mike Zeto is assistant vice president, Internet of Things solutions, at AT&T. He’s based in Atlanta, Georgia. http://about.att.com/sites/internet-ofthings

World Economic Forum: https://www.weforum.org/agenda/2016/07/this-map-shows-the-incredible-growth-of-megacities/ Based on Frost & Sullivan’s study on ‘Strategic Opportunity Analysis of the Global Smart City Market’ published in 2013

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The internet of bananas ast year, the world wasted $1tn of food due to food being produced at the wrong time, or the wrong price, or delivered to the wrong place. That’s not just costly, it’s a global disgrace. Yet once it’s fully implemented, the Internet of Things is expected to bring huge efficiencies to the supply chain. The IoT will know what level of demand exists, where that is and when consumers will need the food. This kind of efficiency could keep $600bn of food within the system, improving efficiencies but, most importantly, actually feeding people. A great example of an IoT application is what I call ‘the internet of bananas’. Imagine there’s a small, disposable sensor attached to the skin of each banana – the back of the label seems the logical place to put it. Samsung smart fridges can already be connected to your online supermarket trolley so every time you eat a banana, your kitchen will calculate the rate of consumption and add just enough replacement fruit to the weekly shop. Since it is also part of the IoT, your supermarket will then aggregate all banana orders in your town and it too 62

“Last year, the world wasted $1tn of food... That’s not just costly, it’s a global disgrace” will only order enough fruit. Each step up the supply chain will suddenly become super efficient, saving on transport costs, packing, storage and, of course, bananas. This is obviously fantastic news, especially since the concept can be equally applied to everything from food and clothing through to oil production and cars. By connecting the dots using powerful cognitive analytics, the IoT will drive efficiencies at every level. But we also have to be aware of something called ‘the economics of abundance’. Put simply, this says that when you produce too much of something, the price can fall so low that the producers lose less money giving it away rather than trying to sell it. So let’s say that the internet of bananas

reveals that global production is 70% more than actual consumption. As the system becomes super efficient, this overproduction causes the price to drop through the floor. As a direct result, a bunch of bananas costing £3 now will cost just 30p in two years, then reach a point where bananas are being given away with some other type of grocery. If you don’t believe this could ever happen, look at Google, who just give away the kind of detailed maps people used to pay a lot for. Or take a look at the Japanese economy, which became a global powerhouse in the ’70s and ’80s on the back of increasingly sophisticated yet low price electronic goods. Consumers quickly became so adverse to purchasing product they deemed were dropping in price all the time that it led to a deflationary cycle that continues to grip the country to this day. This is why it’s always important to consider the wider economic consequences of technology. Because when no one is making any money, the system itself stops working. John Straw is an advisor to McKinsey & Co and IBM. The views expressed are his own. @john_straw


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D/SRUPTION Magazine - May 2017