D/SRUPTION Magazine - September 2017

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Making sense of a changing world


The balance of power As we prepare for robots to leave their factory cages and walk among us, shouldn’t we be writing the rulebook for a post-human world?





How the Internet of Things is forcing product manufacturers to think differently

Will we ever fall in love with those poor, hard working, misunderstood chatbots?

Should the tech sector be obliged to address inequalities

Why energy storage is key to breaking society’s fatal attraction to oil

caused by innovation?

5th September 155 Bishopsgate, London In partnership with PA Consulting Group

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

Retail & Consumer

Travel & Hospitality


Financial Services



More information at disruption-summit.com




Disrupt or be disrupted Disruption has become a hot topic in business, moving beyond being a buzzword or a trend to rapidly become the new normal. It’s worth noting that disruption is nothing new and that incumbents have always been displaced by more innovative competitors offering better solutions. However, this time it’s different. The digital disruption of the last decade has occurred at a speed and scale never seen before, catching many businesses unaware. In December 2008, former Blockbuster CEO Jim Keyes confidently claimed in an interview that, “Neither RedBox nor Netflix are even on the radar in terms of competition.” Less than two years later, Blockbuster had filed for bankruptcy. Netflix now has over 100m users worldwide and is valued at over $70bn – more than 14 times what peak Blockbuster was worth. Yet Blockbusters wasn’t the first and

certainly won’t be the last market leader to be felled by rapid, disruptive change. From artificial intelligence and the rise of chatbots through to robotics and the Internet of Things, emerging technologies and innovative business models are driving the huge paradigm shifts that many established organisations are simply failing to grasp. When I meet business leaders, I am often struck by how few of them see the opportunities this presents or how they can take part in it. While incumbent businesses are often constrained by brand or legacy systems, what’s really holding them back is the legacy thinking of their organisations. Business leaders in the 21st century must look beyond the world as they know it. To me, the choice is simple – disrupt or be disrupted. Because if you don’t disrupt your own sector, someone else will. To ensure that you become the disruptor rather than the disrupted, join us on 5 September at Disruption Summit Europe. https://disruption-summit.com /Rob Prevett Managing director, D/SRUPTION



Are you a renovator or an innovator? Are you a digitally transformed company? D/SRUPTION founder John Straw offers some advice on how to know you’re moving in the right direction

ith regards to digital transformation, I hope we are all now far beyond the “why?” and moving swiftly into the “what?” stage. So what does a digitally transformed company look like? It’s a question with a thousand answers. Having both a corporate background (CDO Thomas Cook, NED Provident Financial plc) and a startup background (as entrepreneur and investor) I have a multidimensional view of the landscape. Here’s what that looks like… Firstly, I think you have to ask yourself, “Are we in business as a renovator or an innovator?” A renovator in the sense of being on a continual quest to make things better, or an innovator doing something completely new and radical. While both can have digital root structures, the cultures are entirely different. 06

For an established business, transformation should not mean any shocks, either good or bad. It should be ‘business as usual’ (BAU) but moving to ‘digital business as usual’ (DBAU). Culturally, this is a renovation approach and the most critical element, from a transformation perspective, is to get an enthusiastic buy-in from the senior middle managers who tend to have their eyes on bonuses and pensions, so are often resistant to change. Securing this buy-in can be done from a top-down/bottom-up approach. One tactic I saw work well was having a 30,000 strong workforce formally asked to help identify and document website bugs. The exercise was gamified and was viewed by the company board as being a great success, to the extent that some of the senior managers who had been so

resistant to change got carried along and so couldn’t been seen to rock the boat.

Less talk, more action For the innovator, a key lever to success is the ‘prototype’ culture – that startup mentality of, “We’ve got a great idea, so let’s build it and get it to MVP (Minimum Viable Product) to test”. This is normally at odds with the renovator mentality, which takes such a serial approach to ideation that it can get stuck in the mire of endless PowerPoints. I was tasked some years ago to build a new insurance website with radical functionality. My initial assessment was that to weave through the political minefield of stakeholders and the IT development waterfall would take 14 months to get to market. Instead, and to the astonishment of the business, I took a £5,000 internal budget, found an external web developer and built a working MVP in six weeks. The lesson I learned? That it’s far harder for any stakeholder with an objection to kill a prototype than it is for them to kill an idea. For both the renovator and the innovator, the use of digital analytics platforms can provide an insight into customer and engagement. I realise everyone’s saying “digital insight” and that it can look like an amorphous blob to many but here’s the thing – digital analytics can provide you with a view of what any hidden objection might be. This is crucial when such an objection may be a sale killer and only the prospective purchaser knows why they have walked away from a transaction, leaving your business clueless to the reason. With digital analytics ingrained into every conversation about the customer journey, you can expect to know these reasons in advance.

Then there is the question of creativity, the life blood of the digital startup and often the hidden asset of any business that hasn’t been transformed. Creativity can be the killer edge when your business may have to let off a ‘moon shot’ startup. My biggest challenge has always been trying to help HR work out how to find creativity without interfering in BAU.

What about big data? I frequently speak at conferences and when I ask who knows what big data is, I always get a universal show of hands. But when I follow that up by asking who knows what it can be used for, there is normally a sea of blank faces. But a transforming board doesn’t need to

The common question I get from boards is, “Should we be investing in startups to help the culture of our own transformation?”

people that agility, creativity and data can succeed over legacy businesses (preferably your competition) and provide the confidence that DBAU truly is a realistic goal. Finally, it’s often glaringly obvious from the outside to see if a business has been digitally transformed. If you want to see that in action, search for “kern the gnome experiment” on YouTube to see a business that’s gone from being boring to being both digitally centred and delightful. n

know about ‘big data’ but rather ‘layered data’. Overlaying many sets of data to identify new customers segments is a given for startups. They know how to take Facebook data, layer it over geographical data and then over weather data to work out, for example, that there’s a revenue opportunity selling rain capes to 24-yearold Glastonbury audiences. There’s money in them there Venn diagrams. The common question I get from boards is, “Should we be investing in startups to help the culture of our own transformation?” Certainly having crazy startup CEOs be disruptive inside your own offices has benefits aside from regular injections of passion, enthusiasm and brain power. However, the real benefit is to prove to your own 07



Should you be worried? An open letter from Louise Beaumont, co-chair, techUK Open Bank Working Group and strategic advisor to SapientRazorfish

Dear bank shareholder, In less than four months, the competitive environment in which your bank operates will undergo a massive transformation and your dividend is at serious risk. It’s already obvious that customers’ expectations are shifting and competition to offer them better, faster, more personalised experiences is emerging everywhere, led by innovative fintechs in financial services. But what you as a shareholder must realise is that the nature of competition in banking is also changing and with it, the way that banks will create value in the future. This is because they are entering the era of open banking.

to analyse for new insights that can lead to new services and experiences. This is the world in which companies such as Amazon, Google and Facebook have always operated – one in which they draw together ever larger pools of data as the raw material for new and better services. This is also the world in which banks will now have to operate. The risk for a bank that does not engage fully in this new way of working is that it will end up as a provider of back-end infrastructure – a dumb pipe – on which others will build the high-value services that become essential, daily fixtures in customers’ lives. Here are the five major signs that your bank is in danger of becoming a high-cost utility.

Open banking is mandated by regulators in the UK and Europe, who now require banks to create digital gateways (Application Programme Interfaces, APIs) that enable data to flow freely in real-time between separate organisations. For a business used to hoarding confidential customer information, this is a rude awakening. And it is unavoidable.

1. Treating it as an inconvenience If the bank you’ve invested in seems to regard open banking as an inconvenience or a threat to be grudgingly complied with, rather than the essential nature of its market from now on, you should be worried.

The key point about APIs is that they are tools to enable collaboration between different data owners. Once my data can combine with your data, we have a richer set of information

2. Losing visibility, not customers Check your own bank statement. If it shows entry after entry that say ‘Apple Pay’ or ‘PayPal’, or if it consists of just some direct


debits plus a monthly payment to Visa or Mastercard, you should be worried. One of the first signs that your bank is turning into a back-end utility is that it is losing visibility of what its customers are doing. Once someone else has created a layer of service that sits on top of the banking utility without feeding valuable customer data back into the bank, the bank’s own data becomes generic and its value starts to degrade. How can it then create value from that data? Who owns the truly valuable data and therefore has the right to monetise it? How can the bank feed its fraud detection and credit algorithms properly without detailed, high-quality information? This is not a threat that will show up in the customer numbers. Just because the customer hasn’t closed their account doesn’t mean that your bank hasn’t lost them. All it means is that the customer may be carrying out all their high-value activity with someone else and using your bank as the plumbing provider. No one who has opened a Monzo account has left their bank, it’s just that the bank can no longer see what they’re doing. If your bank talks more about the number of customers it has than what it knows about each of them individually, as a shareholder, you should be worried.

3. ‘Me too’ products are missing the point Look at the digital products your bank is developing. If its response to innovative products and services from other providers is to build a near-identical in-house replica, you should be worried. One of the biggest risks is that incumbents misunderstand the nature of the threat they face from datadriven entrants. Uber is not a taxi-hailing app, it’s a data company redefining the way people connect with services. To try to compete with Uber by building a ‘me-too’ taxi-hailing app is to misunderstand the seismic change in the nature of the competitive environment. For banks, this means that ‘jumping straight to product’ in response to a competitor’s innovation is a cause for concern. In the era of open data, banks must find partners with whom they can combine their pools of data in order to gain fresh insights into their customers’ needs and, ultimately, to create new services. The value of those services will be shared between data owners and service innovators. In a world where data flows freely, no bank is an island.

If your bank talks more about the number of customers it has than what it knows about each of them individually, as a shareholder, you should

4. Not prioritising tech talent It is no coincidence that the most successful and highly valued technology companies have open data at their core. This is the environment in which the most talented technologists want to work and therefore this is how companies attract the best minds. If your bank is struggling to hire high-calibre data scientists at volume – or is not even attempting to do so – as a shareholder, you should be worried. 5. No data partnerships In the open data era that is beginning, your bank will gain competitive advantage by collaborating more effectively with other organisations – large and small – to understand and release the value of the information it holds on its customers. This represents a new way for banks to create value. Whether or not the bank you have invested in decides to follow this approach, someone else certainly will. You can bet that whoever does, their goal will be to get as close to the customer’s day-to-day experience as possible – not to manage the utility bank plumbing on which their service is built. Yours, Louise Beaumont Co-chair, techUK Open Bank Working Group




Look ahead to stay ahead Disruption can be a force that destroys all organisations that didn’t see it coming. Rob Gear, futurist at PA Consulting Group, lays out the case for making foresight a ‘business as usual’ behaviour

ll organisations face the same challenge in today’s fast-paced and rapidly changing global business environment – how to plan effectively for the future. To achieve breakthrough innovation, each company must have a good understanding of what their future business will look like. They must also anticipate new entrants, business models and even entirely new markets. But many are very, very bad at doing this. There is a tendency to focus on quarterly or annual financial and performance cycles, which encourages such shortterm thinking that often, organisations don’t have any time left to consider their longer-term futures.

The challenge is further compounded by human nature. It’s scientifically proven that people’s brains are naturally predisposed to favour continuity and to avoid upset and disruption. The Holmes and Rahe stress scale, for example, illustrates that stress and related illness can be generated by positive changes and life events as well as negative ones. This means that business leaders would much rather prefer to keep things as they are rather than take the steps needed to transform their organisations.

Overcoming the limits of forecasting Right now, the effectiveness of conventional business forecasting is being undermined by the rapid pace of change in complex, highly interconnected

global markets. The intentions of individuals can be even harder to predict, as evidenced by the results of the Brexit referendum and elections in the US and UK, where the outcomes contradicted opinion poll forecasts. Even predictive analytics, that employ sophisticated machine learning models and large and varied data sets to spot unanticipated trends, will struggle to give a long-term view in a world that is characterised by volatility, uncertainty, complexity and ambiguity. To better prepare for the future, and to think differently, organisations need to make strategic foresight a ‘business as usual’ activity. But foresight isn’t about prediction. It’s more nuanced than that.


/the_big_idea A toolkit for change As a futurist, I am often asked for my top predictions but this – somewhat counterintuitively – misses the point. Strategic foresight provides a set of tools, methods and techniques that help organisations to actively explore, influence, plan for and manage the future. It is not about making accurate predictions. Rather, it requires the exploration of multiple possible and plausible futures that are shaped by the courses of current actions. By looking at uncertainty, exposing and challenging assumptions, and exploring the critical drivers of change as well as their future trajectories, businesses can prepare for a range of likely future outcomes and their implications. This anticipation of the possible allows for better decision-making in organisations of all types and size. Salesforce has, to take just one example, used foresight to capitalise on acquisition opportunities. There are many tools and techniques associated with strategic foresight. Here are just two activities that can make a real difference in both preparing for the future and strengthening innovation:

Scenario planning This is the process through which we create and bring to life possible and plausible alternative future narratives. By exploring the implications of these alternative future scenarios, we ensure that planning is more flexible and adaptable, while also highlighting risks and potential new opportunities for innovation. Scenario planning also has the benefit of opening up creative dialogue between different parts of the organisation, which builds consensus


By definition, innovation involves doing something new and different and it’s this fresh thinking that creates value and challenges embedded assumptions through the exploration of a range of likely ‘what if…’ narratives. The example that established the value of scenario planning was Royal Dutch Shell’s contingency plan which helped them to avoid the detrimental effects the ‘Oil Shock’ has had upon its competitors.

Horizon scanning Sometimes also referred to as ‘environmental scanning’, this describes the systematic identification of trends, drivers and weak signals of change that relate to a specific area. Horizon scanning should form part of a wider foresight process, where its outputs feed into scenario planning, visioning and development of strategic implications and responses.

The UK’s government operates a horizon scanning programme responsible for ensuring that senior policy makers are kept abreast of emerging issues, such as embryonic social trends and lab-based research, that may lead on to significantly transformative technologies.

Foresight at the front end of innovation By definition, innovation involves doing something new and different and it’s this fresh thinking that creates value. Disruptive innovation in particular demands radical thinking, discontinuity and the creation of entirely new business models, product and service categories. Foresight can benefit this process, particularly during the early stages, and this can: Stimulate new ideas – Horizon scanning allows organisations to anticipate changes in social and consumer trends. This can help to uncover new business models and alternative economic systems, environmental trends and issues, emerging technologies, and signals of change in the political and regulatory climate. It is often through looking far outside the organisation and market sector that inspiration is found. Test the strength of new ideas – Would a new strategy or product perform well under a ‘business as usual’ scenario, but fail if an alternative scenario occurred?

Create a vision for new initiatives – After all, what is a vision if not a scenario for a preferred future? Scenario planning, and specifically creating a scenario for a preferred future, can be used to create the kind of ambitious vision that any business can unite behind. Challenge assumptions – What will the core business be in the future? In my experience, it is not uncommon for different parts of the same business to be working under completely different (and occasionally contradictory) assumptions about what the future might hold. Foresight creates the opportunity for assumptions to be voiced so that they can then be shared and challenged in a safe environment. This can be invaluable in building organisational consensus and shared belief.

Making foresight ‘business as usual’ To really benefit from strategic foresight, it is important to move it beyond a discrete one-off project and make it part of everyday behaviour. For horizon scanning, this might mean creating a dedicated team that undertakes continuous scanning, feeding insight back into all parts of the business in order to inform and act as a catalyst for innovation. Broad horizon scanning is a particularly effective way for businesses to pick up insights from adjacent markets as well as entirely unrelated ones, or from different geographies. For organisations that do not wish to create a dedicated team, alternative approaches to scanning could be to engage professional futurists or to allow staff access to an automated scanning service – although it should be stressed that value from these is maximised when

‘Innovation Matters’ research supports this view, with 41% of innovation leaders frequently taking part in formal horizon scanning and scenario planning compared to 25% of their less successful peers doing so.

combined with expert curation and interpretation of the supplied data. That’s because effective foresight is about much more than a data gathering exercise. Its value lies in the rich dialogue and qualitative analysis and interaction that is part and parcel of good scenario planning and horizon scanning. In some of our own foresight work, clients repeatedly stress the value gained from participating in deep and open discussions about future possibilities. For organisations using scenario planning, there are a few basic pitfalls to avoid. It is important that any scenario work leads to an action plan that reflects a considered analysis of implications for future scenarios for all stakeholders. You can create the most beautiful, rich and immersive scenarios in the world but unless they are used to drive through actual lasting change, all that effort will have been in vain.

Foresight seeks to help organisations respond to a world of constant change. The current trends that could impact businesses, as well as potential future trends, are considered in the context of the impacts they might have on an organisation, market sector, product, project or team. Horizon scanning and trend research can also identify new growth markets and shifts in customer preferences and, in doing so, support product innovation and development. Scenario planning allows organisations to imagine futures that may be radically different from ‘business as usual’, highlighting new visions, alternative strategies, new business models and products, as well as the risks and opportunities that come with them. In a world where traditional quantitative forecasting looks increasingly brittle and unreliable, foresight offers a highly engaging, creative, immersive and qualitative approach to exploring future change. Much like the lookout on the sailing ships of old, foresight also acts as a lookout to help navigate turbulence and hazards, ensuring long-term business growth and survival. n

Boosting the bottom line There are other good reasons for making foresight a part of ‘business as usual’, not least bottom line impacts. Recent research has shown that organisations with a long-term perspective outperform their peers. PA Consulting’s own

Rob Gear is a futurist at PA Consulting Group. Find out more about the group’s latest ‘Innovation Matters’ research here: www.paconsulting.com/insights/ innovation-matters/



I AM NOT A ROBOT As robots stand poised to enter society, Technology vs Humanity author Gerd Leonhard says that the boundaries between man and machine need to be defined

aybe you recognise this title. Because if you’re spending time on planet Earth lately, you will have noticed something. The internet is constantly asking us whether we are still human because we are no longer alone. Robots are now reading websites and social media postings just as much as we are, and the internet wants to know if it is dealing with Homo sapiens still. Yes, we are still human, but for how much longer? The word ‘robot’ was first coined in a 1920 play by Czech writer Karel Capek but mechanical men have played on our imaginations for millennia. The word stems from a Slav word for slave (rabu) and how long have they been around?


That stem is also related to the German ‘arbeit’, a word made infamous by the Nazi’s use of ‘Arbeit macht frei’ (Work sets you free) cynically set above the entrances to concentration camps.

mindless repetition. But as progressive generations of robots learn to walk, talk and ‘think’ and as they start to come out of their industrial cages, will our liberation backfire?

The birthplace of modern democracy, Greece, had slavery. America, the selfproclaimed “Land of the free”, has had a long and difficult relationship to it. Humanity has always had robots, in the sense that it’s always told unpaid workers what to do. The difference today is that not all of them are our fellow human beings. Is this a natural evolution?

If they’re smarter, are we dumber?

Perhaps. Simple robots, such as those used in automotive welding, certainly liberate us from deadening routine and

Let’s consider the extent to which we have already abdicated the sovereignty of being human. Have you noticed your immediate distrust of any hotel or restaurant that isn’t recommended online? Have you ever checked someone’s LinkedIn profile before you responded to a meeting request from them? Has your sense of direction deepened or weakened through your constant use of Google Maps? Have your powers of mental

Could it be that we’re all actually getting dumber at the exact same moment in history that robots are finally getting super smart?

computation (never excellent, let’s all admit that) vegetated to the point that you’d instantly resort to using an online calculator to add 61 to 23? Could it be that we’re all actually getting dumber at the exact same moment in history that robots are finally getting super smart? As a futurist working in the 21st century, I may have the dubious privilege of charting the last generation of fully organic biological Homo sapiens before VR, AR and brain-computer interfaces (BCIs) replace the biological concept of ‘being alive’ with one that’s an organic/digital hybrid. The Google Glass concept may have backfired for now but the wave of technological change that it mobilised has continued to roll onwards. As our robots become ever more humanoid, our bodies will become ever more technologised. From wearable computing to ingestible microchips [1] and smart pills to neural implants, technology is getting ready to go inside of us.

[1] Ingestible chips – https://disruptionhub.com/getting-under-your-skin/


For the record, I am not a robot and intend to stay that way. But I do suspect that maybe the master/slave concept at the heart of the robot paradigm needs an upgrade. In my latest book, Technology vs Humanity, I explore the myriad moral and ethical issues that lie in wait for us as a species. Robotics is far more than a trending investment theme and so are the other Silicon Valley gold-rush divers – AI and deep learning, cognitive computing, the IoT and human genome editing, to name but a few. This will be a complete rewrite of the human plot as domestic robots join industrial ones to alter the look and feel of everyday life. Humanlike machines which have dominated our science fiction since Frankenstein will emerge, presenting humanity with a whole slew of moral dilemmas. These burning issues are, as yet, not being addressed by the manufacturers and policy makers (although D/SRUPTION presents a few of them on page 20). Okay, we get the paradigm of robots working alongside humans in factories, but how will domestic robots rewire our families in an environment where housework forms a hotbed of power play and confrontation?

Digital age human rights Sooner or later, slaves have always revolted, with Spartacus being only the most famous example of history repeating itself. Will a day come when our robots not only know more than us, but also know better than us? Will smart

After millennia of slavery and centuries of science fiction, robots are becoming science fact robot slaves collaborate with smart fridges to keep food away from us when we break our diets? Will the price of mechanical slaves disrupt the wages of workers and lead to Luddite attacks? Will human free will disappear, or was it an illusion to begin with? One shudders to think what competitive differentiation between robot makers will involve, or how soon walking, talking, thinking slaves will start to answer back. My take on this impending automation, virtualisation and robotisation of human life is that we must seize this moment to reaffirm the sovereignty of humanity and demarcate the line between the naturally human and the technologically ‘superfied’ versions. Never before have we so needed a Bill of Human Rights for the Digital Age and a Digital Ethics Manifesto (as proposed in my book), including the right not to be augmented, hyper-connected, optimised or otherwise ‘improved’ by technology. After millennia of slavery and centuries of science fiction, robots are becoming science fact. As they prepare to take

their place alongside humans, it would be wise of us to add ethical dimensions to practical necessities. Awareness and debate are urgently needed before ‘mission control for humanity’ is given to the handful of tech companies that will add global brains to robot bodies. Robots will be like us but not of us. It’s possible that they will simulate existence but they can never actually exist, yet this limitation doesn’t make them less valuable, it simply makes them not the same as being human. Let’s not confuse the tool – the robot – with the purpose, which we can broadly summarise as the flourishing of humans. Top marks to our species for finding a way to replace the drudgery of being a human on planet Earth, but now let’s work out the ethics. Here’s my advice: Think of robots not as friends but as beautiful tools. Smart machines, to be sure, but not Disney characters. Let’s not anthropomorphise the machines so that our own humanity starts to suffer in the comparison. We are not robots. They are not humans. Thinking machines don’t think like we do. Liberate the slaves but let’s not enslave the free. n

Gerd Leonhard is a futurist who has spent the last two decades speaking about the implications of technology on industry and culture. His new book, Technology vs Humanity, examines human existence in a post-human world www.techvshuman.com




Machine morality Living alongside robots

The question’s no longer ‘if’ robots will take jobs but ‘when’ and ‘how’. D/SRUPTION’s Cam Winstanley looks at some of the practical and moral issues of living side-by-side with thinking machines



hey’re already in the factories, the mines and on the ocean floor repairing deep water oil rigs. They are machines that tirelessly assemble, pack, repair or transport. Robots never come in late, their standards don’t dip when they’re hungover, tired or emotional and they can work round the clock in hot, cold, dusty or dangerous environments.

The thing is – no one’s entirely sure how that’s going to work out. We’ve started to address the big issues about an automated work force, such as looming job losses. And we’ve dared to get excited about the prospect of such convenience as within-the-hour drone delivery from Amazon. But what about issues such as privacy and public safety, or even morality? Surely they’re just as pressing?

Talking about robots taking our jobs isn’t the timeliest of discussions since in many cases, it’s already happened. But even though they build our cars, sort our mail and harvest our crops, the robots we know all work behind bars. These fast-moving, highly articulated and often massive machines exist in segregation, within areas marked by yellow and black chevrons, flashing lights and cages that protect weak, fleshy humans from their crushing, mashing power.

While it’s certain that robots will eventually enter the public domain, until we know their function and form, how many or their degree of autonomy, we can only speculate about the impact they’ll have on our daily lives. So let’s do that

When we say we are now entering a new era of robotics, what we mean is that we’re preparing to remove those barriers. In its current iteration, our robotic future will be one where the machines coexist with us in public and private spaces, interacting not just with their owners who can control them but also the general public, their pets and, probably, even other privately owned robots.


Autonomous vehicles differ from humans in one very significant way – they don’t panic

right now, picking a few questions about how unleashing autonomous thinking machines on the world might make us question our lives, responsibilities and even our ethical obligations…

Programming cars to kill If every vehicle on every road was controlled by perfectly functioning AI systems, our cities and motorways would be cleaner, safer, more efficient spaces. Traffic would flow smoothly, with minimum braking spaces maintained between vehicles. Yet even this system wouldn’t be 100% safe as robot vehicles would still kill people. A tyre blowing out on a busy stretch of road, a pedestrian distracted by a phone call, a little kid running out after a ball – the outcome of each could easily be fatal. How will society feel about these road deaths when there’s no one to blame? Once the bodies have been hauled away and the blood hosed off the asphalt, how will we rationalise accidents that have been recorded in high-def roadside CCTV, from the vehicle’s geolocation, speed and sensor data and, maybe, even from the victim’s own IoT-enabled devices and clothing? What comfort will relatives take from the news that all the vehicles worked perfectly right up to, and even beyond, the moment of sickening impact?

Image: Grendelkhan, Wikimedia

As dystopian as it sounds, no amount of bug fixes will ever prevent this. Self driving cars must be programmed to kill. Here’s why…

Calculating all the known knowns It’s not just the big-hitters of the automobile industry that are working on self-driving cars. Along with the likes of Ford, GM and BMW, relative newcomers such as Tesla as well as tech firms Apple and Google are also investing heavily. That’s because by 2030, over half of vehicle sales in the US are expected to be either fully or semi-autonomous. No two developers are using the same approach to overcome the technical difficulties. Instead, each one is employing a range of technologies to make their vehicles aware of their surroundings. Cameras ‘see’ the road but so too do ultrasonic sensors, radar and lasers. Embedded sensors ‘feel’ the road surface, detecting loss of traction due to sand, oil, ice or rain. GPS or IoT-enabled systems let each vehicle ‘know’ where it is as well as well as what weather and traffic conditions await it down the road. In most ways, these approaches replicate what a human driver does, only with enhanced 360° awareness and without distraction. On an open road, autonomous cars mimic a safe driver by following the rules of the road. They stick to the road, stay in lane, obey speed limits and overtake safely. But real-world driving can be far messier than that. A human driver seeing a parked car can instantly deduce whether or not the occupant is about to open the door and get out, yet for an AI system, that’s a hugely complicated task. It needs to first

be able to spot a human face, then detect the slightly open door and, finally, have some idea of typical human behaviour. And that’s just one of any number of complicated situations an autonomous vehicle might face every few seconds.

Current self-driving vehicles tend to be small, slow test beds for the emerging technology

The ethics of impacts Autonomous vehicles differ from humans in one very significant way – they don’t panic. Faced with an impending crash, a self-driving car won’t make a snap decision to yank the steering wheel one way or the other. Rather, it will react in a rational, logical way, which is why every car must be programmed to kill. Have a look at the ‘Who lives, who dies?’ diagram on the next page. With a human driver, any outcome will be less of a decision and more of a reaction. But to an autonomous vehicle, the result will


/automation Who lives? Who dies?


The car drives itself over the cliff in order to preserve the most lives

The car brakes as hard as it can, striking the side of the minibus

The car decelerates through the bushes, hitting the pedestrians

Car occupant survivability Minibus crew survivability Pedestrian survivability Fatalities

Car occupant survivability Minibus crew survivability Pedestrian survivability Fatalities

Car occupant survivability Minibus crew survivability Pedestrian survivability Fatalities

0% 100% 100% 1

50% 50% 100%


80% 100% 30% 1-5

In order the endanger the fewest human lives, the self-driving car’s logical desicion would be to drive itelf and it’s occupant over the cliff. But would anyone ever buy a vehicle they knew would be willing to sacrifice them?

In a head-on collision, the car occupant’s chances of survival are determined by the vehicle’s crumple zone and airbags. The two people in the minibus are similarly relying on the side-impact protection of their vehicle.

Easily the safest option for the car’s occupant is for the car to plough through the bushes, missing both the minibus and the cliff. However, since this would hit the most people, it’s likely to result in the most deaths.

be based on an algorithm that weighs the occupant survivability up against external factors.

This shows how tricky it will be to implement popular but safe robot cars. Should new owners take a morality test in order to determine the responses of their cars? Should self-driving vehicles have an ‘Us vs them’ survivability switch next to the air con? Or will society as a whole have to get used to the idea of their own robot vehicle favouring the needs of the many over the needs of the few?

of a job, the importance of self-esteem and how the purely financial doesn’t give us a full picture. Burgers first…

In 2015, Stanford professor Chris Gerdes expanded his research on self-driving technologies by teaming up with Cal Poly philosophy professor Patrick Lin to look at dilemmas like these. Polling hundreds of people via Amazon’s Mechanical Turk platform, the pair discovered that while most people favoured the idea of autonomous vehicles minimising casualties, few actually wanted to own such a vehicle. In other words, they thought that everyone but them should have a car designed to sacrifice its owner.




Would you work for a robot boss? It’s a bit of a stretch to move from cars to flipping burgers and then flying planes but stick with us here because these next two jobs can tell us a lot about the value

A fast food business is one that’s primed to be fully automated. A fixed supply chain feeds ingredients of known size, weight and texture into a production line that produces an end product notable for its homogeneity. When someone orders a Big Mac with fries, that’s all they want, no artistic flourishes necessary. It follows that in an automated world, so-called ‘McJobs’ can and will be some of the first to be replaced by robots. A spotless, branded restaurant producing

identical burgers all day and night is what the customers want, while the owner wants maximum profit from minimum operating costs. Automation can certainly deliver all this, but is it necessarily what fast food workers want? ‘McJob’ is used as a term of derision by some but to many others, such minimum wage service sector jobs are their only available employment opportunity. To a family on a low income, these flexible working hours may be the only way to fit a job around other commitments. So when a low paid job is a better alternative to no job at all, would the automation of the fast food sector really eliminate the drudgery of menial labour, or would it further limit prospects for those with already limited opportunities? There’s another possibility – that the robots will land the prime jobs in this sector and leave only a support role tier for a reduced number of humans. Sooner or later, a tomato’s going to roll off every production line or a grease trap get gunged up and the most flexible way to deal with the unexpected would be to hire someone. With robots feeding hundreds of customers every hour, a couple of humans could wipe, sweep, restock and unjam all the robots on even the most epic scaled production line. While that’s a logical use of a worker, would it be a fulfilling one? While there’s a certain degree of satisfaction in preparing and presenting food to hungry customers, could degreasing robots ever tick the same number of boxes? Could it be that being subservient to a robot would make this a profoundly demeaning occupation, even compared to a similar role cleaning up after human workers? To get a fresh perspective on how we might

feel about working, for rather than with, machines, let’s hold that thought and move onto being an airline pilot.

Rob is my co pilot In November 2014, systems on a Lufthansa Airbus A321 detected a dangerously low airspeed. To prevent stalling, the plane went into a programmed dive that could not be overridden by its pilots. Since the dive didn’t seem to increase the airspeed, the

In any fully automated airline of the future, the plane would be the pilot while any human operator would be more akin to an IT analyst plane just kept on diving. The quickthinking pilots eventually manually disabled all the fly-by-wire protections and took control – a procedure that no part of their training had ever taught them to do. If they’d followed the correct procedures, everyone would have died. What went wrong? It turned out that two of the plane’s three ‘angle-of-attack’ sensor vanes had frozen into position, triggering the stall warning. Since the logic system always disregarded the outlier – in this case the third,

fully functioning sensor – the aircraft faithfully relied on the two frozen sensors. It needed two humans looking at the bigger picture to save the day. What does this have to do with burgers? Well, both jobs show the changing roles of humans in systems that, for most of the time, can do without them. A fully automated fast food restaurant won’t need human intervention unless something goes wrong. Similarly, until the sensors on that Airbus froze up, the plane was more or less flying itself. Yet while the pilots contributed little, their crucial inputs were the difference between life and death. In both cases, the robots do the work while the humans step in when needed, not as a role replacement but to perform an alternate function. The fast food worker cleaning the production line isn’t the secondary chef, they are the primary cleaner. In any fully automated airline of the future, the plane itself would be the pilot while any human operator would be more akin to an IT analyst than a pilot. There are use cases like this for every sector. Future surgeons and dentists who monitor robots wielding the scalpels, grounded fighter pilots remotely overseeing robot planes on combat missions, a single office-bound driver keeping track of a whole fleet of delivery trucks on their daily routes. Ultimately, these ‘operator’ roles may be the only jobs that remain in these sectors and the feelings of dissatisfaction a fast food cleaner feels may well be the same as a pilot who rarely touches the controls, or perhaps is no longer trained to do so. Will switching to safe, cheap, reliable robots feel like progress to them?


The slaves that spy on us Most agree that the IoT is both the next big thing and just around the corner. This transformation of manufactured objects into physical extensions of the internet will, we’re told, usher in a new era of personalised products and services. It will do so by feeding real-time sensor data back to the manufacturers, letting them learn more about our behaviour the same way that Google learns about us through our search requests. And while this should result in better services, what it certainly will be is a widespread yet almost silent erosion of our privacy. A recent report from Reuters detailed Roomba manufacturer iRobot’s aim to expand into the smart home market by turning their autonomous roving cleaner bots into IoT-enable devices capable of measuring the size of each room along with activity levels and pedestrian footfall. By selling this data to third parties such as Apple or smart lighting companies, iRobot intends to feed into shared lifestyle data and also start a new line of revenue for the Roombas. While this is of obvious commerical benefit, what’s less clear is the payoff to consumers for having their homes mapped. Unless a clear ‘opt in’ option is included, there’s also the possibility of owners unwittingly allowing such information to be constantly streamed out of their homes.

What we say, what we do In July this year, a New Mexico police department credited an Amazon Echo for dialling 911 after a woman gave it a verbal command during an assault by her boyfriend. Following a standoff between SWAT and the armed assailant, the woman

and her child were rescued and while Amazon were quick to clarify that Alexa currently doesn’t have the capability to call the police, the continued reporting of this story has started a discussion about whether it should. Elderly people needing assistance would be a widely used application of such a feature, yet this does raise the issue of what Alexa hears. More specifically, what it records… The 911 story came hot on the heels of other recent Echo stories. In Dallas, there was the surge of Echo orders after a local TV news anchor said “Alexa, order me a dollhouse” on air, prompting many Echo-

enabled homes to do just that. There’s also an ongoing murder case in Arkansas where an Echo’s audio recording is the key piece of evidence of what occurred immediately before and after a killing. Both stories show that with Alexa, ‘always online’ may mean ‘always listening’ but might mean ‘constantly recording.’ Who has access to this data and what they can use it for is something that needs to be decided now. If we know of a problem with recorded audio, imagine the privacy implications of future robots with cameras, or smart clothing streaming location and activity data to the cloud. n

Rules? There aren’t any… yet 1. A robot may not injure a human being or, through inaction, allow a human being to come to harm. 2. A robot must obey the orders given it by human beings except where such orders would conflict with the First Law. 3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws. Recognise these? They’re the ‘Laws of Robotics.’ These first appeared in a 1947 sci-fi short story by Isaac Asimov and, in the absence of anything better, have been taken as gospel ever since. Look good, don’t they? The thing is that in the real world, they don’t work. We’ve seen that self-driving cars will be capable of limiting loss of life but must be allowed to deliberately injure a human or allow one to come to harm. We’ve considered how a household personal assistant system might be asked to intervene in a domestic dispute, yet how powerful would its AI have to be for it to determine whether calling the police would increase or decrease the threat of violence to one of the parties involved? The world we live in is messy, chaotic and complicated. Situations don’t follow clear cut rules and people rarely behave predictably, or even consistently. When we humans have trouble negotiating the world of our making after centuries of trying to make sense of it, we shouldn’t be too surprised when the first generation of robots to walk among us also screw up. Clarifying in advance what we expect of them and how they should behave might save us a lot of trouble in the long run. n


5th September 155 Bishopsgate, London In partnership with PA Consulting Group

The leading Digital Transformation event for the Enterprise

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

jobs taken by robots They are so precise, efficient and obedient, could it be that robots are the perfect employees? D/SRUPTION’S Laura Cox highlights ten sectors where robot workers are already clocking in

he statistics surrounding the current state of automation can make alarming reading to anyone concerned about their own job security. A recent Forrester report suggested that 6% of US jobs [1] would be automated by 2021 which, while certainly significant, is still a reminder that robots aren’t ready to put everybody out of a job quite yet. In many cases, it seems likely that most robots will serve as ‘cobots’, collaborating with human employees [2]. This gradual assimilation of robots into the global workforce seems such an inevitability that in time, the human workforce will have to scale and adapt. However, let’s see what’s happening right now by looking at ten roles that have already moved towards a state of automation.


/automation Da Vinci Surgical Systems allow precision keyhole surgery, although they are still controlled by a human surgeon

1. Call centre operative Picking up the phone and listening to an automated voice is something we’re all familiar with and computers can now connect conversationally with customers via natural language processing and machine learning. Financial company Swedbank uses an AI-powered personal assistant called Nuance Nina [3] for customer queries and, in 78%of cases, the issue is resolved immediately. Company research found that the majority of customers actually preferred interacting with a virtual assistant to trawling through FAQs, so as the capabilities of AI and natural language processing improve, robots may quickly edge out humans in this sector.

2. Courier Amazon’s delivery drones are definitely cool but there’s a big question mark over their functionality. Due to their small size and lightweight construction, the drones can only carry small packages and aren’t exactly robust. Founded in 2014, Starship Technologies [5] has worked on these issues to develop courier bots that can carry 10kg while also being relatively cheap to build and repair. The [4]

bots’ first customer [6] was presented with their Turkish takeaway in November 2016 via Just Eat. In future, Starship plans to deploy hundreds of bots and, if successful, this would disrupt the gig economy [7] of couriers now working for companies like Uber and Deliveroo.

3. Surgeon Healthcare has benefited hugely from robotics, from medicine dispensers to disease diagnosis, and advanced robots can now match and even outperform surgeons. In a 2016 study [8] published in Science Translational Medicine, a Smart Tissue Autonomous Robot (STAR) stitched up a pig’s small intestines more successfully than its human equivalent. Robot surgeons and doctors aren’t affected by external influences like stress

The fragile nature of Amazon’s trial drones plus their low lift capacity suggest that ground bots might be the way forwards


or tiredness, so make fewer mistakes. Having an operation under a robot surgeon may even make patients feel more comfortable, which will be great news for healthcare but less so for wellpaid medical professionals.

security bots received some bad press after a toddler was knocked over [12] in a California shopping centre. However, these accidents will become less common as sensors and cameras improve.

4. Farmer

Conversational interfaces are already an established part of online retail but robots are cropping up in physical shops as well. Retail company Lowe’s is introducing a fleet of robot shop assistants [13] called OSHbots in a California hardware store. The bilingual bots will deal directly with customers as they walk through the door, finding and locating desired items. They can work out if an item is in stock via a complete knowledge of the store’s inventory [14], which is basically impossible for a human employee. In future, quirky social robots could help shoppers to choose products as well as locating them.

Agriculture has always been at the heart of technological development, with the industry coming a long way since the first farming machines began to reduce labour. Recently, farming has been quick to adopt IoT-enhanced robotics as a production aid but now there are now bots which can grow crops from scratch without any human influence. FarmBot [9] is the next step in precision farming and runs on open source software. The robot sows and feeds the crop [10], as well as controlling weeds. It can also be manually controlled via an app. FarmBot isn’t strictly replacing farmers but it’s making their physical presence far less necessary, at least when it comes to arable farming.

6. Retail assistant

Fast food is a sector that’s ripe for rapid, low cost and efficient automation

5. Security guard Palo Alto based robotics company Cobalt has revealed a mobile, robotic security guard [11] equipped with 360-degree cameras, thermal cameras, laser scanners, a microphone and long range RFID. Unlike human security workers, the bot can stand on guard constantly without needing to take breaks and has a complete 360 view. Unfortunately,

7. Fast food worker In a fast food burger restaurant in Pasadena, you can find Flippy the robot. Flippy, seen above, is essentially a small cart with a six-axis arm and sensor bar [15]. Although Flippy doesn’t dress burgers, it does prepare them from scratch. The bot was created by Miso Robotics and is currently being trialled by CaliBurger which, over two years, plans to install Flippy in 50 locations. The employment of robot cooks in fast food chains could affect 2.3m workers in the US alone [16], so for more thoughts on how this sector might be affected, turn to page 20.

The OSHbot is capable of greeting shoppers, helping them with product queries and guiding them to the appropriate aisle


/automation The controlled environment of the office allows less sophisticated designs of robots to still meet user expectation

8. Journalist Robot journalists have proved that they can produce articles… with a little help. The first article to cover the LA earthquake in March 2014 was put together by a piece of software [17], while a Chinese robot journalist covered the Beijing Olympics for news outlet Toutiao [18] . Through AI, bots are far quicker than humans at drawing together and condensing masses of information. Articles written by journobots still require the input of a human editor [19] but even so, writers (especially of news commentaries) will be seriously affected.

9. Road haulage Robots are set to make life difficult for truckers as well as Deliveroo’s cyclists.

Further reading [1] Robots take US jobs – www. theguardian.com/technology/2016/ sep/13/artificial-intelligence-robotsthreat-jobs-forrester-report



[5] Starship Technologies – https:// www.starship.xyz/about-us/

[9] Farmbot – https://farmbot.io/

[2] Collaborative automation – https:// disruptionhub.com/future-artificialintelligence-robots-automation/

[6] Drones in action – www.gizmodo. co.uk/2016/12/forget-drones-meetthe-robot-that-could-be-the-futureof-deliveries/

[3] AI-powered personal assistant – www.raconteur.net/technology/ human-bots-are-chatting-upcustomers [4] Amazon’s drones – https:// disruptionhub.com/autonomousvehicles-drones-future-delivery-


[7] The gig economy – https:// disruptionhub.com/the-gig-economy/ [8] Robot surgeon – http://spectrum. ieee.org/the-human-os/robotics/ medical-robots/autonomous-robotsurgeon-bests-human-surgeons-in-

[10] Robotic farming– www.weforum. org/agenda/2017/03/this-robotfarmer-can-grow-your-food-for-you/ [11] Security guard – www.zdnet.com/ article/meet-cobalts-new-securityrobot/ [12] Robot accident – www.telegraph. co.uk/technology/2016/07/13/robotsecurity-guard-knocks-over-toddlerat-shopping-centre/

/automation Autonomous vehicles are now an unavoidable reality, so why pay a truck driver when a truck can drive itself? [20] Late last year, Uber sent a self-driving truck on a 120-mile delivery journey to drop off 50,000 cans of beer. While human employees will still always be needed to keep an eye on cargo and supervise the route, this will be a considerably reduced role. Changes to the trucking industry will also effect the numerous businesses that survive on trucker custom.

10. Soldier Robotics and the military go hand-inhand, especially where the US Army is concerned. Advanced robots such as Boston Dynamics’ BigDog and the humanoid Atlas [21] have been put through field trials by the military, although neither has yet proved robust enough to

be adopted. By 2025, it’s thought that the US Army could have more combat bots than human soldiers. In 2016, the Russian military responded by revealing its answer to Atlas – the Iron Man [22] – which was created specifically to replace humans in high-risk environments.

In conclusion Robots can now perform at and above human levels in many highly skilled professions. Using robots in the workplace is a smart move for companies because robots are more cost effective and time efficient than humans. And as much as robots will gobble up some types of job, they will also create many more. Robots aren’t necessarily the nemesis of human employees but they will definitely transform the employment market over the coming decade. n

Atlas is just one of Boston Dynamics’ robots to have a humanoid design

Further reading [13] In store assistants – http:// uk.businessinsider.com/lowes-newrobot-retail-worker-2014-10 [14] Inventory knowledge – http:// uk.businessinsider.com/lowes-newrobot-retail-worker-2014-10 [15] Flippy the griller – https:// techcrunch.com/2017/03/07/meetflippy-a-burger-grilling-robot-frommiso-robotics-and-caliburger/ [16] Robots affecting jobs – https:// techcrunch.com/2017/03/07/meetflippy-a-burger-grilling-robot-frommiso-robotics-and-caliburger/


[17] Earthquake article – www.slate. com/blogs/future_tense/2014/03/17/ quakebot_los_angeles_times_robot_ journalist_writes_article_on_la_ earthquake.html [18] Olympic reporting – www. newsweek.com/robot-journalistolympics-artificial-intelligenceai-493833 [19] Robot writers – https:// disruptionhub.com/5-journobotstaking-traditional-reporting/ [20] Self-driving vehicles – https:// disruptionhub.com/disrupted-

transport-retrofit-kit-turns-legacytrucks-self-drivers/ [21] Atlas robot – https:// disruptionhub.com/disrupted-robotsautonomous-robots-wikipedia-forrobots/ [22] Russian robot soldier – https:// news.vice.com/article/ivan-theterminator-russia-is-showing-off-itsnew-robot-soldier

Robotic process automation Robots are no longer just machines on the factory floor. Rob Hughes of Automation Anywhere explains how digital workforces are transforming business processes ack in 1965, companies stayed in the S&P 500 Index for an average of 33 years. That’s now down to just 18 years and expected to decrease to 14 years by mid 2020. Schumpeterian ‘creative destruction’ is continuously driving the turnover of those businesses too slow to match the pace of market change. This acceleration has, to some degree, been driven by a greater transparency in the supply chain and as such, customer tolerance has been replaced by customer expectation. Companies not able to adapt are replaced, purchased or put out of business by those nimble enough to take advantage of new ways of working.

Today’s expectations are met through speed, flexibility and customer service. The creaking model of siloed business processes is being replaced by collaboration and outcome ownership that allows businesses to deliver products and services when they are needed by the customer, not simply when they are available. While there are now numerous tools to help companies reorganise, a key component in this landscape has been the emergence of the digital workforce and robotic process automation (RPA). There are few more polarising terms than RPA and artificial intelligence. On one side are the naysayers espousing the downfall of humankind, on the other, there are

those who believe that automation is freeing the workforce of monotony so that they can focus on making the world a better place. Hype aside, early indications are that RPA has delivered more positive than negative outcomes. We have seen largescale deployments in the back office and increased customer retention through front office ‘attended’ automation. Rather than job losses, we have seen the creation of more customer-focused roles, allowing companies to differentiate themselves from their competitors through betterequipped staff aided by the speed, efficiency and productivity that the digital workforce delivers. So at a point in time


/automation Working with new ‘staff’

Robotic process automation



Think like a person

Analyse like a person

Front-end automation

Algorithm-based decision making

Provides real-time business insights

Multi-system automation

Self learning ability

Bot analytics

‘Democratise’ automation

Subject matter expert bots - vision, NLP, etc

Derive business value

Do tasks like a person Rule-based robotics

Structured data Enterprise scale

Semi-structured data

when the future is emerging, it’s worth revisiting how we got here and what’s driving this change.

The perfect storm The business service delivery sector has been adopting technological solutions ever since the personal computer was introduced as a client-side integration with the mainframe. As the tech industry has grown, so too has the complexity of getting programs, systems and applications to talk to each other. Predominantly delivered from low cost, distant locations, outsourcing filled the gap while the systems integrators grew their own ‘never ending’ revenue streams (smart people those consultants), promising to solve the problem of ‘inconsistent information’ by providing a single source of truth. Outsourcing works for cost reduction but not from a value perspective, since attrition, loss of knowledge, loss of control and wage inflation have all presented growing problems for the user organisations. At the same time, we have internal shared services organisations under pressure from the finance department to match outsourcing’s lower cost of delivery.


While we have all gotten better at creating information, we have not done such a great job of enabling its use to make better business decisions. With outsourcing’s diminishing lack of value creation and shared services struggling to match short-term cost advantages, we are also faced with a battle for talent as well as an ageing global workforce. This is a recipe for an approaching ‘perfect storm’ at the same moment that the digital worker is ready to step in to deliver faster and more accurate output than human workers at a fraction of the cost. Schumpeter wins again… or is it Darwin? With the digital workforce emerging as the next evolutionary step in business service delivery, we need to understand how to leverage its potential.

The term, ‘digital workforce’, is commonly understood to be part of a wider toolset that helps organisations to fill the gaps in their operations. Many believe that RPA is the most important lever to pull in the effort to digitise businesses. The digital workforce comprises of the three main shown in the diagram to the left – RPA, cognitive and analytics. While each of them provide value in their own right, things get really interesting when they’re combined, as in the diagram on the right. n Cognitive bots address the initial inputs – where information and format is often unstructured – by identifying common fields, drawing out the associated values and reformatting the layout into a standardised template. n RPA picks up on all standardised input formats then processes the inputs right up to the point of reconciliation. n Real-time analytics offer a level of insight not previously available. As software bots run through their operations, they report on everything they touch, meaning that information previously available at set reporting cycles is now available real-time. This delivers speed and service, with the organisation becoming a joined-up operation rather than a series of individual operational silos. Digital business is no longer the sole domain of cutting-edge tech companies. Just as Amazon can deliver your products on the same day through its Prime service and Google is able to align its advertisers interests with your own as you surf the internet, the combination of cognitive,

Data capture

Data enrichment

Data validation

Collect and synthesise your data

Modify, rationalise and normalise your data

Validate, authenticate your data



Perform the process actions

Ensure efficiency and accuracy

Analyse and report Reliable, accurate, timely analysis and reporting

Cognitive (IQ bots) Robotic process automation (task bots/meta bots) Real time analytics (bot insight)

RPA and real-time analytics allows all organisations to react immediately to opportunities and changing market conditions. The digital workforce is effectively collapsing operational business lines into a single, swift, outward-facing organisation.

The future is better than it used to be The digital workforce extends across existing systems, connecting disparate operational silos at a fraction of the cost of systems integration or human workers. If speed is the new currency, then the flexibility to adopt the best applications will no longer held back by IT departments not communicating. The bots can do that on their own. So, why would you not want to adopt RPA? Well, most organisations are just starting this journey, employing RPA only in the functions that best align to it. Highly repetitive processes are of low value, minimal risk, transactional and rely on standardised information inputs. These are traditional back office operations. They’re also a perfect fit for RPA. The path towards further integration requires three steps. First is the reliance on IT to be the sole deployment agent of

the digital workforce. IT departments try to manage the influx of new applicationled tech as well as the growing appetite of businesses for such developments. Prioritisation tends to be driven by spend and as such, the digital workforce is not an IT priority, given its low cost of entry. IT folk have enough on their plates, so bots need to be in part developed and driven by the business users themselves. The design philosophy around software has moved away from the IT departments custom coding each task towards selfenablement and reusability, so why should bot creation be any different? A business user building out the skeleton of the bot with no coding experience can then hand the ‘muscle’ development and governance to a digital workforce centre of excellence, sharing the workload and accelerating the deployment schedule. This model is proving to be very efficient but is still often hamstrung by the second component – change management. The potential impacts of the digital workforce make us reconsider what an optimal enterprise model looks like, where the priorities lie and why we do the things we are doing. The digital workforce holds the potential to build a level of flexibility previously unheard of

and to dynamically scale our businesses. However, moving away from our towers of process command demands a new level of change management, driven by strategic thinkers and supported by connected IT and business collaboration. Third is the lack of a strategic drive to adopt a digital workforce. We have seen bots clear four-year backlogs in three weeks, deal with high-volume churn problems and generate millions in savings, yet these are all tactical fixes to specific operational problems. The most successful implementations all have one thing in common, ‘top-down’ support and clearly defined goals by an on-board senior management. The digital workforce is no longer an idea but a proven and fast-growing component in the world’s leading organisations. If the new norm is next day delivery and on demand services, then the only companies that will retain or even grow their position in the S&P Index will be those bold and flexible enough to disrupt themselves. The future is already here. Are you ready? Rob Hughes is Senior Director, EMEA Marketing at Automation Anywhere, a global leader RPA www.automationanywhere.com



Why should I care about the IoT? As more products move towards an ‘always online’ mode of operation, Timothy Chou argues that manufacturers should start considering how the Internet of Things will affect them


hould you work for a company that produces such items as heating, ventilation and air conditioners, 3D cardiac imaging machines, seed drills or submersible pumps, chances are that you’re already aware of the rise of the Internet of Things (IoT). All of us in the tech community are constantly excited about any opportunity to tell the rest of you about our cool technology that can run on your machine, vehicle or product. We see the IoT’s potential to not only improve services but also to connect each product to the internet, to collect data from it and, using advanced machine learning technology, to derive predictions from the ongoing analysis of that data. But if you’re the CEO of an already successful manufacturing company, maybe the questions you’re asking right now are “Why should I care? Isn’t the IoT just the stuff my geeky R&D staff care about? Don’t my products sell just fine without IoT connectivity? How can it possibly be meaningful to my business?” In this article, I’ll be making the case that with IoT, you can not only double the size of your business but also create a barrier that your competition will find difficult

to cross. I’ll cover three basic business models and discuss the organisational implications of IoT, as well as some of the objections you’ll encounter. Now that you’re ready to lead the digital transformation of your company, here’s a roadmap to point you in the right direction.

Software-defined machine Out in the physical world, next-gen products are increasingly being powered by software. The new £68,000 Porsche Panamera is controlled by 100 million lines of code, up from only two million lines in the previous generation. Tesla owners have come to expect new features delivered to their vehicles through software updates, not by a mechanic. Healthcare machines are also becoming more software-defined. A drug infusion pump may run on more than 200,000 lines of code, an MRI scanner seven million. On construction sites, a modern boom lift has 40 sensors and three million lines of code, while on the farm, a combine harvester has over five million. We can debate whether size is a worthwhile measure of the value of software but you get the point. Software is starting to define physical machines. Since machines are now becoming more software-defined, maybe the business models that once applied only to software will start to apply more and more to the world of physical products. Let’s see how well this theory stands up to scrutiny…


/internet_of_things Business model 1: Product & disconnected services In the early days of the software industry, we sold them on a CD so, if you wanted to use the newest version, you’d have to go out and buy a copy. As software products became more complex, companies like Oracle moved to a business model where you bought each product (ERP or database) together with a service contract. Over time, this service contract became the largest and most profitable component of many enterprise software product companies. In the year before Oracle bought Sun (when they were still a pure software business) they had revenues of approximately $15bn but only $3bn was product revenue. The remaining $12bn – over 80% of their revenue – was high margin, recurring service contracts. But what is service? Is it answering the phone nicely from Bangalore? Is it flipping burgers at McDonald’s? No. Service is the delivery of information that is personal and relevant to you. That could be the hotel concierge giving you directions to the best Szechwan Chinese restaurant in town, or your doctor telling you that based on your genome and lifestyle, you should be on a specific medication. Service is personal and relevant information. I’ve heard many executives of product manufacturing companies say, “Our customers won’t pay for service”. Well of course, if you think that service is just fixing broken things, then your customers will think you should be building a more reliable product. Remember that Oracle service revenue. In 2004, the Oracle Support organisation studied 100m support requests and found that over 99.9% of them had been answered with already known information. Aggregating information for thousands of different uses of the software, even in a disconnected state, represented huge value over the knowledge of a single person in a single location. Real service is not break-fix support but rather information about how to maintain or optimise the availability, performance or security of the product. You might wonder why, in America, General Electric bothers to run ads about the industrial internet during Saturday Night Live commercial breaks. All you need to do is download their 2016 10-K [1] and look on page 36. Out of $113bn in revenue, GE recognised that $52bn, or nearly half of it, came from service revenue. So imagine if your business could move to 80% service revenue. Not only would you be tens of billions of dollars larger, overall margins could also easily double. And let me remind you this is all being done without connecting your products as IoT devices. If you’re currently the CEO of a power, transportation, construction, agriculture, oil & gas, life science or healthcare machine company, ask yourself this question – how big is your service business?

[1] GE 10K – http://www.ge.com/ar2016/assets/pdf/GE_2016_Form_10K.pdf


Business model 2: Product & connected services If they could connect to their own IoTenabled products, any business could make the service they provide even more personal and relevant. Many software and hardware product companies already connect to their products to provide assisted services, which help both the manufacturers and users maintain or optimise the security, availability and performance of these products. Now let’s shift that concept to the world of physical products. If I know both the model number and current configuration of a specific machine as well as the time-series data coming from its hundreds of sensors, then the service I provide can be even more personal and relevant. I can provide precision assistance for the users who maintain or optimise the performance, availability and security of that machine. If in business model 1 we charge 0.5-1% of product purchase price per month, then in model 2, I could charge an additional 1-2% for an improved service. At scale, these small margins can be significant. Consider a product which sells 4,000 units at $200K each. At just 1% per month, this product could generate $100m of high margin, recurring revenue for the manufacturer.

Business model 3: Product-as-a-service Once you can tell a human worker how to maintain or optimise the security, availability or performance of a product, the next step is for the manufacturer to take over those responsibilities. Over the last fifteen years, we’ve seen the rise of software-as-aservice companies (SaaS) such as Salesforce, Workday and Blackbaud. In the past seven years, this has also happened with hardware products, as companies such as Amazon, Microsoft and Google provide computational and storage products as a service. All of these new product-as-aservice (PAAS) companies have changed the pricing models to per transaction, per seat, per instance, per month or per year. We expect to see the same with agricultural, construction, transportation and healthcare machines. Early examples we’re familiar with are Uber and Lyft, which provide transportation-as-a-service, priced per ride. Of course, Uber’s most expensive operating cost is the human labour so, like those of us in high tech software and hardware products, it is looking at replacing the human driver with automation. At some point, the traditional car manufacturers will have to respond and the recent replacement of the Ford CEO is the most visible example of ongoing change. Which brings us to change management and leadership…

Many senior managers focus on the design and production of the physical product, not the software it depends on and certainly not the services that this software can potentially provide

The rise of the Chief Services Officer There are significant organisational changes that must be made if you decide to adopt a strategy of IoT-enabled products. Many senior managers of aviation, construction and healthcare equipment companies focus on the design and production of the physical product, not the software it depends on and certainly not the services that this software can potentially provide. Consider creating a Chief Services Officer (CSO) as a member of your leadership team and make sure they have a VP of service products and a VP of service sales reporting to them. There will certainly be some internal obstacles to choosing IoT adoption. Local distributors who have relied on one-off, humanpowered services and a commission based on selling only physical products are sure to stand in your way. Generalpurpose service companies, facilities managers in the building industry, or outsourcers in the tech industry will also see new business models as a threat and all of them can cause you to delay implementation. But if history is an

indicator, by the time your competitors have finally made the transition, it will be too late for you to do so.

The inevitability of change If you build machines for transportation, power, water, agriculture, construction, oil, gas or healthcare, I hope that you can now see a roadmap that’s based on the experiences of the software industry. Any business can start today with the first model I’ve described. It doesn’t require you be connected to any of your machines but does require you to focus on building service products, marketing and selling these to your customers. While the journey will not be easy, the rewards of having a high margin, recurring revenue, differentiated product will enable you to thrive in the coming decade. n

Timothy Chou is the former president of Oracle On Demand, a lecturer at Stanford University and chairman of Lecida, an industrial machine learning company lecida.com




What’s with all the crappy chatbots? Underwhelmed by your chatbot? You’re not alone. Filament’s Rory McElearney – an actual human – offers some comforting words

he market is currently seeing a proliferation of poor chatbot implementations. Part of the problem is a lack of understanding of chatbot user experience (UX) and the rigidity of frameworks on which they are being built. Another part is our high expectations of this form of technology. So what’s the current state of the art? And will we all ever truly love our ubiquitous chatbot companions?

Conversational UX – rushing to a new (old) medium It seems you can’t go a week without running into a new way to make chatbots. Whether it’s an open source code library for building the bot engine [1], big players such as Google’s api.ai or IBM Watson that manage conversation flows on top of their Natural Language Parsing (NLP) services, or a fully-fledged drag-and-drop

platform for ‘launching a bot in seven minutes’ [2], there can be little doubt that the massive appetite for bots is being served. But since their dramatic launch a few years ago, it does feel as though remarkably little progress has been made. The economic case for chatbots remains strong, as evidenced by the flow of money into the sector, but many customers have been decidedly underwhelmed by their first contact. The chat interface is nothing new, since giving orders via the command line was the original way of communicating with a computer. In many ways, all we’ve done is come full circle. However, since those early days, we have all become accustomed to navigating by screen, mouse and touchpad. All the factors that made a graphic interface preferable for the majority of people haven’t suddenly gone away, so what has changed to fuel this rise in demand for chatbots?

The economic case for chatbots remains strong but customers have been underwhelmed Two things stand out. Firstly, users are choosing to spend more time in smartphone messenger apps at the expense of their desktop devices. Since it’s almost impossible to entice users to download a new app, the old adage stands that companies must go where their customers are – into the chat space. Secondly, access to advanced machine learning algorithms has become

[1] Open source code library – http://bottr.co/ [2] Drag-and-drop bot platform – https://chatfuel.com/


/artificial_intelligence increasingly straightforward. An Application Programming Interface (API) economy which grants affordable access, one drip at a time, to a fortune of AI and machine learning IP is being used by developers who want to build machine learning into their products. The APIs powering the chatbot boom come from the field of Natural Language Parsing (NLP) or Natural Language Understanding (NLU). These allow bots to take the words that you type and detect what you really mean from this natural language. They can even deduce your mood as you’re typing or how you feel about specific topics based on your choice of phrasing. This is an exciting field, with breakthroughs being made all the time. Even so, turning this potential into an engaging chatbot has proved to be a difficult task.

Realistic expectations? It is possible to build chatbots whose responses are generated programmatically but beyond simple chit-chat, anything remotely complicated will require the bot to make a call to a database or some other external source. If there’s a button on a website that requires a call to a database, a developer needs to write code for it. The same is true for bots, as you can no more ask a bot to perform an unprogrammed action than you can ask an interface for a non-existent button. Chatbots present a unique challenge because unlike the graphic interface, where the aim is to clearly display all options, part of the allure of chatbots is the illusion that it understands you. Spelling out what you can and can’t do risks breaking that spell. The best bots are the ones that naturally draw users into asking them about what the bot knows best. Consider the




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perceived effectiveness of Amazon Echo’s Alexa versus Apple’s Siri. Most of the time, Alexa only has to deal with changing songs or reordering loo roll, yet Siri is expected to deal with all manner of requests. Creating a bot that maintains the illusion of understanding becomes more difficult as users ask more of it because the bot can be confused by requests across a wider range of topics.




And that’s when human users are actually making our wishes very clear. Alexa’s success is, in part, due to her plugged-inat-the-wall microphone’s ability to hear and understand more clearly than Siri. Up until now, the instructions humans have given to computers have been pretty unambiguous but on top of that, instead of a scroll and click, they now also have to try and interpret misspelled sarcasm. Deciding which bucket a word or phrase should go into – which is what your bot must do in order to figure out what you’re talking about – is known in machine learning as a ‘classification’ problem. Deciding whose face is in a picture or making a film recommendation fall into the same category. The machine is making decisions based on training from humans, so if even a human would have a hard time differentiating between buckets, the machine has no chance!

“It’s not you, it’s me” Even if what you’ve said has been understood, a bot still has to deal with the fact that humans are fickle creatures. They might not really know what they

want, then they often change their minds. Then the chat interface challenges some of our most basic assumptions about design and UX by denying the user the ability to see where they are, or where they can go next. It removes the ability to easily go back to where they have been. We have all become experts at navigating the flat space of a screen. Our eyes instantly detect navbars and dropdowns as if detecting the walls of a room we’ve just entered. These familiar web design conventions give this space a multidimensional quality. We scroll down to read more, up to read it again, left and right to go backwards and forwards in time like we’re reading a book. Yet having a conversation with a bot can be unsettling because these conventions are of no use. If you make a mistake and want to go back, it’s not always immediately apparent how to do so. This can generate a momentary panic and loss of trust that will have a massive impact on the quality of your experience. Another limitation of the chat interface is that it denies the user the ability to quickly browse results. The front page of a Google result is a dense, easy-toscan block of information that would be far less accessible in a chat interface. Web pages ease the pain by presenting large amounts of information using a consistent layout. You know what part of the screen to look at, that the headers are in a different text style from the content. You can quickly scan in the knowledge that you don’t need to click on any result unless it catches your eye. But in a chat console, there is no opportunity to lower the cost of scanning with clever design and layouts. Each line

of text is as important as the next and the total number of words on screen at any time is limited by both the chat window and the user’s ability to digest them.

Building bots remains a fledgling art form Despite all of these challenges, the forces driving the move towards chatbots are only going to grow stronger. Natural Language Parsing is going to grow better and cheaper, while lessons will be learned from the bots currently in production. Even users will help by slowly becoming accustomed to dealing with chatbots.

These first awkward bots and our stilted conversations with them are just the start of an ongoing relationship The tools the chatbot developer can employ will get more sophisticated too, such as bots’ ability to track the context of a conversation in a way that mimics human short-term memory. A skilled bot architect can also draw upon under-thehood machine learning assets such as trained classifiers and knowledge graphs, empowering the bot with the language of its domain, then bottling that ‘expertise’ into a set of entities and relationships. One of the most important things a bot builder can do is to be aware of the early

stage of this industry, both in terms of the tooling available and user acceptance. When deploying a bot, it’s unlikely to be perfect out of the box. Every bot will eventually be asked a question out of its scope because how a developer thinks users will behave and how they actually will are two completely different things! There are two key design principles to follow. One, the conversation must be designed with fallbacks and to fail gracefully. Two, a developer will need supporting analytics and tooling in order to iterate and retrain their bot based on this feedback.

Dating the Martian Will we ever fall in love with chatbots? For many users, talking to bots is like dating a Martian and at the moment, we’re all still on our awkward first date, with both sides talking past each other inbetween plenty of awkward silences. But as time goes on, we will adjust to the other’s foibles, learn each other’s language and, eventually, start having flowing conversations. We would urge you all to stick with it because without question, the relationship between user and computing power is evolving. These first awkward bots and our stilted conversations with them are just the start of an ongoing relationship. Within the next decade, we will be absorbing computing power in whole new ways and augmented realities will touch every aspect of our lives. n Rory McElearney is a developer and chatbot UX expert at Filament. He has spent 18 months specialising in this emerging field, designing and deploying elegant chatbot solutions filament.uk.com brainsteam.co.uk



The best of both worlds Leila Martine, director of new devices, Microsoft UK, explains why mixed reality offers businesses the perfect combination of digital innovation and real-world success


e’re all familiar with the expression ‘the best of both worlds’. But nowhere is the phrase more apt than when it comes to characterising mixed reality (MR), one of technology’s newest and most talked about innovations. In MR, real and virtual worlds merge seamlessly to create a new environment where physical and digital objects co-exist and, crucially, interact with one another in real-time. It is in the worlds of business, medicine and education where this technology’s true disruptive potential can be felt most strongly.

MR… not AR or VR Before I explain why it’s becoming so important, I need to first distinguish MR from both augmented reality (AR) and virtual reality (VR). After all, as its latest figures reveal, IDC [1] still lumps them all together as it predicts that they are set to become a $165bn industry by 2020. Although clearly interrelated, these three realities offer significantly different experiences. While VR shuts out the real world and transports us to an entirely digital environment, AR works by layering 2D or 3D content on top of real objects or actual physical locations, turning the physical into the digital. MR, meanwhile, is a hybrid of the two and more sophisticated than both.

“Believability is a core design principle in mixed reality”

By scanning our physical surroundings to create a 3D map, MR devices know exactly where, when and how to insert digital content for ultimate precision and realism. This changes things considerably because, unlike AR or VR, users can then interact with their new environment (and vice versa) with extraordinary tangibility and in real-time. As one of my Microsoft MR engineering colleagues, Cris Derr, said recently, “Believability is a core design principle in mixed reality.”

A disruptive lens I believe that of the three, it is MR that will drive the industry’s growth. At a time when businesses must choose between either embracing disruptive technologies or being left behind, it is MR that offers a path to true digital transformation. It’s for this reason that, at Microsoft, we’re continuing to innovate our own MR solution, HoloLens [2]. Combining a headset with a suite of supporting Microsoft Windows software, HoloLens works by extending the realities around the user. For customers of all shapes,

sizes and sectors, it’s helping change the game in terms of how they operate – from pioneering advances in areas like 3D design and scenario planning, to enhancing productivity and collaboration.

From surgery to safety checks Our work with University College London (UCL) [3] is a great example. Medical professionals and students are using HoloLens to make studying the human body and treating patients easier and more accurate than ever before. Whereas 2D CT scans can be difficult for doctors and surgeons to interpret, HoloLens lets them create interactive 3D models of bones, organs, blood vessels, muscles and even entire human bodies. This, in turn, means they can get to grips with their exact composition, focus in on areas of interest, diagnose issues and precisely plan surgical procedures. What’s more, because all the UCL projects are open source, they can share their discoveries globally with other medical practitioners and students. Similarly, engineers at University of Cambridge’s Construction Information Technology [4] (CIT) Laboratory are currently trialling HoloLens as a way for construction inspectors to spot potentially dangerous cracks in bridges without having to physically visit them. Instead of sending a team thousands of miles, workers at the location can take pictures of the structure using DSLR cameras before uploading them to a cloud service. The safety team then use HoloLens to view the images stitched together as a single 3D model. This lets them zoom in and out of the bridge, rotate the image and even ‘walk’ around it, no matter where they are. The benefits in terms of costs saved and

[1] Projected revenues – www.idc.com/getdoc.jsp?containerId=prUS41676216 [2] Microsoft HoloLens – www.microsoft.com/en-gb/hololens [3] Collaboration with UCL – www.youtube.com/watch?v=XCz0-VmEuW8 [4] Industrial application of HoloLens – https://news.microsoft.com/en-gb/2017/01/25/37491/ [5] Gensler – https://blogs.microsoft.com/transform/feature/design-revolution-microsoft-hololens-mixed-reality-changing-architects-world/[6] SketchUp Viewer – www.youtube.com/watch?v=12qd4rdN4N4


/mixed_reality the ability to identify and tackle problems quicker are extremely promising and, of course, highly replicable across different types of structures.

Designing the future While the application of MR in fields like medicine, academia and health & safety have the potential to directly improve quality of life for people and communities all over the world, many private sector organisations are also using MR as a business advantage. Take Gensler [5], the world’s largest design and architecture firm and, as designers of the first ever 3D printed office, no strangers to innovation. The firm is using SketchUp Viewer [6] for HoloLens – an MR solution developed by Trimble – to bridge the gap between the on-screen world and the real one. This lets the firm’s architects ‘step inside’ holographic representations of their creations to interact with, and evaluate, them in the context of the actual physical space.

The difference this is making to Gensler’s operations is significant. Collaboration between colleagues in separate locations is faster and easier than ever, allowing decisions to be made more confidently and consistently across the entire building process, from design to construction and even maintenance. What’s more, it also allows employees to share digital assets with clients and other stakeholders in the same natural, immersive way, helping keep all parties informed, in-synch and engaged throughout the project.

Business at another level In the same way that Gensler is using HoloLens to optimise internal workflows and deliver a better service to their clients, elevator company thyssenkrupp [7] has also spotted the potential of MR when it comes to taking its business to the next level (pun intended). Adding HoloLens to the toolkit of the company’s 20,000 field service engineers is helping them work more efficiently and safely.

With VR and AR still largely entertainment based, MR has many real-world applications They can now view detailed 3D models of the elevators and escalators they are required to visit before they leave the office, identifying any areas of concern ahead of time. Engineers are also able to access historical notes for each installation and even refresh their knowledge using HoloLens to access video tutorials. During the visit, they can share the project live with in-house experts for advice and guidance. The result is engineering teams that are better prepared and better supported on site than ever, with the knock-on effects of slashing the amount of time it takes to conduct repairs – often from hours to minutes – and, in many cases, reducing the number of visits required too.

A catalyst for innovation These stories highlight just some of the reasons why MR is already having such a powerful and positive impact across both public and private sectors. Yet what’s really exciting for us to see is how many businesses are now taking our existing

[7] thyssenkrupp – www.youtube.com/watch?v=8OWhGiyR4Ns [8] Agency readiness programme – https://blogs.windows.com/ devices/2017/03/13/microsoft-hololens-agency-readiness-partner-program-expands-europe/ [9] Mixed Reality Partner programme – https://blogs.windows.com/devices/2017/07/10/were-expanding-the-mixed-reality-partner-program/#FggbK16xkIVV4BSZ.97


technology and using it as a jumping off point for their own innovation. We have demonstrated our commitment to driving HoloLens growth through the community of developers and commercial partners around the world who are using MR to change their businesses. This has been done by welcoming select partners to the HoloLens Agency Readiness Partner programme [8] as well as service integrators (SIs) and digital agencies from around the globe to our Mixed Reality Partner programme [9]. For example, software development company Black Marble has come up with a way to digitise modern policing as a direct consequence of using MR. Its tuServ application [10] provides a whole new way of approaching crime scene investigation by letting police teams place virtual markers and gather multimedia evidence without disturbing the physical site or The precision of MR allows design decisions to be made in 3D and in real-time

running the risk of tainting evidence. Using HoloLens, they can continue to re-visit potentially vital clues at any time during a case in a far more interactive and stimulating way than simply staring at a crime scene photograph. With healthcare being one of the most prominent sectors for use of MR technology, Fundamental VR’s [11] HoloLens solution brings collaboration and medical training into a new dimension. Virtual operating theatres were once a pipe dream but we are now at a point where they are becoming a reality. Aspiring doctors will eventually be able to view the different layers of the body (skin, muscle, blood vessels etc) by wearing a HoloLens headset. Likewise, immersive technology company REWIND [12] is using HoloLens to help people experience one of the planet’s fastest and most exhilarating sports like never before. Due to safety issues at the Red Bull Air Race, only one plane is allowed in the air at any one time. For

spectators on the ground, this can make it hard to judge one racer’s performance against another’s. REWIND’s MR experience, Flight Deck, solves that problem by letting HoloLens users watch each race in real-time through their headsets while the previous competitors are added digitally as if the planes are going head-to-head. This makes the whole experience far more exciting and opens up the possibility of enhancing the likes of athletics, diving, Formula One and cycling too.

Just the beginning Mixed Reality is undoubtedly one of the most exciting technologies of this – or indeed any other – generation. Its possibilities for improving how we care for the sick, educate the young, design our cities, entertain ourselves and unlock new frontiers of success for our businesses are almost limitless. Which, in many ways, brings me full circle. After all, this is not about creating something completely virtual or new, or departing entirely from the real, physical world around us. MR is about improving what already exists. Making it more secure. More tangible. More interactive. More shareable. More profitable. More enjoyable. More intelligent. No matter what situation you’re using it in, that surely is the best of worlds. n At Microsoft UK, Leila Martine is responsible for introducing innovative products to market, including HoloLens. She is an expert on mixed reality (MR), the intersection between the real and virtual worlds www.microsoft.com/en-gb/hololens

[10] tuServ – http://blackmarble.com/specialisations/microsoft-hololens/ [11] Fundamental VR – www.fundamentalvr.com/ [12] REWIND – http://rewind.co/portfolio/hololens-flightdeck-future-of-live-sport/




The energising disruption of energy storage To harness the full potential of renewable energy, it needs to be available on demand. Minter Dial, president of The Myndset Company, lays out the case for investing in new ways of storing this energy



here are some technologies that tend to get all the press and hype. With the plethoric choice of new technological areas cropping up, it can be hard to know which are truly going to be the most important and disruptive forces for your industry. Sometimes, it’s blatantly obvious, such as if you are in the car business and the arrival of autonomous cars and ridesharing apps are all the rage. Other times, there are some technologies that lie low, yet still may have a quantum impact. Such technologies may not be ‘new’ per se but, with the latest advancements in science, are absolutely on the cusp of creating sizeable disruption. There are currently four such areas, with genomics, AI and the blockchain being three. However, the one that lies most below the radar is energy storage. I believe the fast-approaching improvements in storage capabilities will be important, in particular, in four cases: 1. For protection of the environment through energy conservation resources 2. For enhancing mobility by powering cars, smartphones and wearable tech 3. For driving the development of the Internet of Things (IoT) 4. For space exploration In terms of both investment and projected market revenues, the energy storage area is clearly in fast growth mode. In terms of its importance to a


heavily industrialised society trying to wean itself off oil dependence, the range of potential uses for energy storage is also huge and significant. On the one hand, improved energy storage will help propel much greater space exploration, led by a trio of entrepreneurial demigods through the initiatives of Elon Musk’s SpaceX, Jeff Bezos’ Blue Origins and Richard Branson’s Virgin Galactic. Enhanced energy storage will also materially impact satellites. More terrestrially, we’ll see applications to all modes of transportation, including planes, boats (Enza New Zealand, for example) and, of course, cars. But, the science of miniaturisation is also going to help boost energy storage technology and greatly enhance mobility. Among other centres of research, a team from King Abdullah University of Science and Technology in Saudi Arabia has created efficient batteries that measure a few micrometres [1]. These new micro supercapacitors will be an obvious boost to wearable tech and also be critical to the broader development of the Internet of Things, where items will need minute units of energy in order to remain autonomous for long periods.

The environmental challenge As much as climate change and the finite nature of fossil fuels has brought great advancements in renewable energy, the burgeoning challenge has been on the ability to efficiently convert, save and distribute energy for when it is needed. Energy storage is set to play a pivotal role at many levels.

Energy storage will become a matter of strategic importance for countries wanting to improve their autonomy. Speaking at the launch of the Faraday Challenge, a new UK government initiative [2], Professor Philip Nelson, chief executive of the Engineering and Physical Sciences Research Council (EPSRC) said, “Batteries will form a cornerstone of a low-carbon economy, whether in cars, aircraft, consumer electronics, district or grid storage. To deliver the UK’s lowcarbon economy, we must consolidate and grow our capabilities in novel battery technology.”

The global impact of energy storage There are three different groups that will be affected – if not disrupted – by the rise in importance of energy storage. The first and most obvious relates to those actually producing and storing energy. The second are those sectors that create products that need access to energy. The third are those business and households whose working and living environments use energy.

Energy storage advances will dramatically alter the conception and design of office spaces, manufacturing plants and homes

In this last group, you can include basically everyone. Energy storage advances will dramatically alter the conception and design of office spaces, manufacturing plants and homes. In living and working spaces, for example, we will see the spawning of storage and charging zones. In 2015, IKEA developed a series of lamps and tables that enable easy phone charging in the home. Waiting areas, stores, cafes, restaurants and hotels – to name but a few – will also have to follow suit.

n Brainstorm to seek innovative and durable competitive advantages n Check on your safety and legal responsibilities relating to it For businesses whose products and services are directly associated with energy storage, there are other important questions to be asked over the near-tomedium term:

As excerpted from my upcoming book, Futureproof, each of the three groups will face important questions. For those directly involved in the production of energy, there are important and nearterm strategic actions to take:

n How will products that require energy – printers, refrigerators, electric razors, toys – have to be adapted? n How will the usage of products that require energy change with the enhanced mobility now available to them? n What are the implications in terms of legislation and administration? n What new products and services will be possible and/or required with enhanced and cheaper energy storage capabilities?

n Evaluate the impact of energy storage on your business model n Search for new talent in energy storage n Identify potential non-traditional competitors within this sector

For businesses in general, even if energy storage is not a central part of your enterprise, here are the types of questions you need to be asking yourself over the longer term:

Key actions, sector by sector

[1] Microbatteries – www.digitaljournal.com/tech-and-science/technology/microscale-energy-storage-devicesadvance-wearables/article/480778 [2] Speech on the low-carbon economy – https://internetofbusiness.com/uk-battery-tech-greg-clark/

n How will workflow and the office space be impacted? n How can energy costs be reduced using emerging forms of energy storage? n How might commuting and transportation be changed? n How can overheads be reduced and productivity increased? n Do you or your business want to make a choice to go solar? Energy storage is surely an energising area for all future-facing businesses to be focusing on. The opportunities it will create and the disruption to all sectors will be vast in scope and scale. n

Minter Dial is the president and founder of the boutique agency, The Myndset Company. He is an international professional speaker and consultant on branding and digital strategy, working with brands including Samsung and Remy Cointreau. His latest book, Futureproof: How to get your business ready for the next disruption, is published by Pearson this month Web: myndset.com Email: minter@myndset.com Twitter: @mdial



Cyber attack first response

What should you do once a security breach has been spotted? Benjamin Hosack, CCO of cyber security firm Foregenix, outlines the steps that can minimise damage and protect data


he recent wave of ransomware attacks might give the impression that all cyber criminals want their pay-offs immediately. Yet far more of them don’t want to advertise the fact that they have penetrated a website and have access to its valuable data. Once a network has been successfully penetrated, attackers may even wait before taking personal or financial data at will as it is added, processed and stored. It’s actually quite common for cyber attacks to remain undetected for months as the criminals cover their tracks, repairing the gaps in the online defences that they have exploited in order to reduce the chance of being detected at a later date. The costs to businesses of such attacks will vary according to the data that’s exposed but breaches are getting more expensive and it’s often the smaller firms that are hardest hit. Visa, for example, imposes a fine on European merchants of up to €18 for each stolen set of card data. Given that it can take six months for a trader to even realise they have been hacked, a merchant with 100,000 transactions a year could easily face a fine in the region of €450,000 – a potentially fatal blow for any SME. Larger enterprises are no less vulnerable. A lone hacker took down British Airway’s website for a single hour, which resulted in a £100,000 loss. In 2015, Talk Talk lost up to £35m when over 150,000 customer records were accessed by a hacker. These are just the monetary losses. The loss of any company’s reputation is incalculable.

A recent report by industry analysts Cybersecurity Ventures predicts cyber crime will only increase A recent report by industry analysts Cybersecurity Ventures predicts that cyber crime will only increase, potentially costing the world an estimated £4.7tn by 2021. Since many victims never report incidents, even this vast figure could be a significant underestimate. From May 2018, organisations will be compelled to report breaches of their online security under the new General Data Protection Regulation (GDPR). This demands that security breaches are reported to the authorities within 72 hours of detection whenever third parties’ data is potentially at risk. Failure to do so can result in fines of 4% of worldwide turnover, or €20m. So what can be done to quickly detect cyber attacks, sparing your business from potentially crippling financial, reputational and regulatory costs? Organisations can prepare themselves by putting in place some simple day-to-day precautions as well as knowing what the danger signs are.

1. Install updates Our research at Foregenix, based on 60,000 websites, found that 78% are vulnerable to cyber attacks [1]. Incredibly, the main reason for this is that businesses simply fail to install the latest updates. It’s crucial to regularly patch or update all your software. The cost of pushing this down a list of priorities can ultimately be very costly, however inconvenient updates may seem to be at the time. 2. Use vendors’ response recommendations Microsoft and major anti-virus vendors provide detailed mitigation steps that should always be followed. 3. Use threat detection software Leading products should be able to detect standard intrusions within minutes. Such automated threat detection is an essential investment. 4. Use a honeypot A honeypot appears to be a legitimate part of any network containing valuable data when it’s actually a decoy containing nothing useful at all. As soon as a honeypot has attracted the attention of the cyber criminal, it triggers a warning of a cyber attack. Combining a honeypot with other security controls provides an extra layer of security, so is a highly recommended addition. 5. Train your employees The main cyber security weakness in many organisations is the people, not the technology. Keeping your team trained and up to date with cyber security makes them aware of the threats and the ways

[1] 78% of websites vulnerable to cyber attacks – www.foregenix.com/blog/78-of-ecommerce-websites-at-risk


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in which the website or network might be attacked. Every member of staff, even those in non-technical areas, are an additional set of eyes that might spot something, so help them contribute to your security by educating them on what to look for. 6. Monitor security alerts Attack traffic usually has a very specific pattern to it and hacked business systems can be detected quickly if security alerts are being monitored across the business. 7. Learn from the past to predict the future Cyber criminals learn from experience, so businesses that have been successfully attacked should use the lessons learned from these otherwise painful episodes. If they can, cyber criminals will strike in the same place twice, using the same methods. Pre-emptive action and diligent monitoring based on past attacks can lead to quick identification of a security breach.

When prevention isn’t enough The above activities will substantially reduce the chances of being hacked by making your business less of an inviting target. But what should you do if these preventative steps aren’t enough to stop you from being hacked? A speedy and well-rehearsed response is crucial in minimising damage. By investing time and thought today, attacks tomorrow will have less impact and any spend will easily repay itself by reducing losses. If a cyber criminal should breach your defences, you can help neutralise the attack and speed up recovery time with the following actions:

Have an incident response plan Make sure that in advance, all parties understand a plan that encompasses every aspect of incident resolution, including those that go beyond technical aspects, such as legal considerations and PR statements.

Scan your website for malware Website attacks often involve the use of malware (webshells/backdoors) to enable the criminals to have unfettered access to the website. Frequent malware scans of your entire website file system are highly recommended.

Call in your support team Many web developers and IT professionals don’t have specialist cyber security knowledge, even if they are specialists in their own areas. If you don’t have in-house specialists, make sure you have an ongoing relationship with a cyber security specialist team.

Removing your websites from blacklists It’s worth assessing the effects of an attack on the search ranking of any hacked website. Since infected websites can drop down Google searches, traffic can be reduced, which can have a major impact on your business.

Disable and/or block all server message block services and traffic Some ransomware is spread by exploiting vulnerable SMB shares/systems. Blocking SMBs is recommended as long as it’s done by experts, as it can cause additional damage if done insensitively.

Speed is of the essence and if the issues are resolved within a day, Google is unlikely to penalise the website in the rankings. Websites tend to recover reasonably quickly but the losses from being on anything other the first page of a search can be very costly. n

Remove network access Shutting down a suspected system can result in the loss of vital evidence so if possible, remove network access rather than shutting it down, then contact your cyber security partner to analyse it. Backup critical systems The sooner a site is backed up, the less damage there will be due to loss of sales, lower search rankings and reputation. Backup as a matter of routine. Change all passwords By changing all system passwords and giving each user a unique login, you will be able to identify who is accessing your systems and when and if a particular user profile is being used maliciously.

In conclusion… Since cyber criminals generally look for easy targets, any organisation can deter or reduce the impact of an attack with the above steps. While it’s understandable why cyber security is often overlooked, the cost of not taking the steps outlined cannot be underestimated. By building cyber security into any organisation’s routine and with a little planning, the chances of being a cyber crime victim are greatly reduced. Benjamin Hosack is Chief Commercial Officer at Foregenix, an information security consultancy and cyber security products developer and supplier www.foregenix.com



The negative effects of innovation Technological advances often widen the power and wealth divisions between creators and users. Margaret Rice-Jones asks whether the government and tech community should do more to address the balance


echnology is a hugely disruptive force. Sir Isaac Newton stated that for every action, there is an equal and opposite reaction as he defined one of the basic principles that govern the natural world. So does it follow that for every technical advance, there is an equal and opposite regression? And if this principle holds true, should it be the job of government or the tech community to address this imbalance?

Back when local manufacturing was the key driver of business growth, trickledown benefits were seen locally, as the people of the area were employed in the supply chain. Growth was therefore shared by communities. However, the rise of outsourcing over the last two decades has seen the trickle-down growth occur elsewhere. So while communities in China and India have been transformed by global business, local communities in the UK and USA have stagnated.

The recent rise of populism would indicate that the answer is a yes and that there are regressive effects to disruption. Yet we seldom stop to consider the negative impacts of the innovations we develop, tending to see them as largely positive.

With software-based businesses, we see all positive impacts of growth concentrated in a small number of people. The recent Snap IPO demonstrates this, creating billions of dollars of value with fewer than 400 employees. As computing

power, robotics and AI increasingly replace manual labour, any notion of a trickle-down effect stops and our demand creation and tax systems become severely challenged. In many western countries, the benefits of the economic recovery since the 2008 crash have been biased toward higher income households, as the OECD concluded late last year. Income inequality is still at record high levels, despite low unemployment. The tech sector could argue that this isn’t our problem and that in the end, innovation can resolve all the issues that result from this. And, to a certain extent, that is true. However, Stephen Hawking

maths and programming skills we are all so desperately short of. Could your organisation send people into schools to act as role models, to sponsor projects at colleges and to promote retraining for people looking for a career change? How much time do the people in your company spend making sure we will have access to the skills we need five years from now?

Innovation to provide the basics

recently commented in The Guardian that more people in Sub-Saharan Africa now have access to a mobile phone network than to clean, safe, drinking water. We are innovating far faster in some areas than other crucial ones and this distortion is amplifying the feeling in many that they are being left behind. Wherever a clear profit motive doesn’t exist, it is clear there is far less innovation and investment in that sector. This startling truth has prompted a few high profile entrepreneurs to start initiatives that address some of these issues, as well as the creation of various funds aimed at social enterprise. Many governments have been slow to address these issues, creating the perception they are out of touch. At a time when we know that the pace of change is increasing and that AI and robotics will replace many of today’s jobs,

the tech world needs to shoulder some responsibility and play a role…

Education Making sure that those who write policy understand the level of disruption that is coming over the next decade as well as its impact. Office for Budget Responsibilities forecasts from the recent budget suggest continued low levels of unemployment for the next five years. How could you talk to your MP, minister or policy maker about this?

Training Playing a part in delivering training locally, so that the people leaving school and college have the marketable

Access to clean water or social care for the vulnerable are just two examples of areas where the lack of a profit motive has led to very little innovation. The tech community working together could change many of these areas if we adopted a different view of our responsibilities. How about letting your staff have paid time so they can contribute to innovation by working with a charity, without your organisation looking for a profit from this work? Go beyond the one-day team building project to build a playground and you could use the skills you already have to really change something! As the divisions in society seem to grow, with many groups turning inwards towards protectionism, maybe the only solution to the negative effects of disruption is for the tech community to collaborate and innovate freely and globally in order to make a stand and address some of the imbalances. n

Margaret Rice-Jones is chairman of Openet and CTRLio, two privately backed software companies. She is SID at Xaar PLC, an innovative inkjet company. She has extensive consumer market experience from her role as chairman of Skyscanner, the travel comparison site that was sold in 2016 for over £1bn


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