As weeks go, the last one proved to be jam-packed with tech goodness. London Technology Week (LTW) has taken over the capital, showcasing the city’s prowess as a hotbed of innovation, entrepreneurship and creative talent.
Before our Chief Executive, Phil Smith, stepped out on stage to deliver his keynote on the ‘Digital Effect’ to a fittingly device-laden LTW audience on Tuesday, I caught up with him what digitalisation of business looks like, why it is a $19 trillion opportunity globally and perhaps most importantly, how it can help me stop getting a cold.
LB: So, Phil. Let’s start with the basics, why is the digitalisation of business such a big opportunity?
PS: Digitalisation is as much an opportunity as it is a necessity for businesses today. In fact, it is estimated that 40 per cent of the Fortune 100 companies won’t exist in 10 years if they do not digitally transform themselves. Ultimately, digitalisation is connecting everything– things, devices, people and processes – in the supply chain digitally to help provide intelligence back into the organisation. When it comes to digitalisation of business the message is clear. Disrupt digitally or prepare to be disrupted.
Whilst the retail sector as a collective has been a front runner in digital adoption, it is by no means alone; as all industries and sectors will become digital. As they do so we’re seeing touch points for the Internet in places that would never previously have been imaginable, we estimate that more than 99 percent of all physical objects that may one day join the network are currently still unconnected. We now stand at the cusp of an era in which everything from cars, trees, street-lights and even elephants can be given an Internet address and connected to an ever-expanding network. This is the “Internet of Everything” (IoE), and will provide a platform from which an ever-increasing number of connections will help to “wake up” the world around us.
LB: The pledge that digital will transform every business is quite a claim. How can we be sure this will happen?
PS: Over the next five years another 1 billion people will be connected to the internet, meaning over half the world’s population, 3.9 billion in fact, will be digitally connected, and not with just one device either. It is estimated that people will own up to 10 devices connected to the internet – that’s not one for every hand, it’s for every finger and thumb. Millions, if not billions of people, are now operating on a ‘digital as default’ mindset meaning businesses are following suit. Those that don’t run the risk of missing out on the $19 trillion IoE opportunity.
The examples of digitalisation are already available. Digital-native retail marketplaces, such as Amazon and eBay have transformed the retail sector. eBay in particular means any person can become a global tradesman in a few simple clicks. Meanwhile many Londoners would already struggle to recall a life before Uber – a digitally-centric service that places the consumer needs for a quick and affordable service at its core. The Uber story doesn’t end there either, we’re now seeing rise to the ‘Uberpreneur’ – savvy Uber drivers who are selling products to their captive audience of passengers. Through such a method, one driver in San Francisco achieved over $200,000 worth of sales in jewellery to his passengers last year, on top of his $3,000 monthly gross earnings from Uber.
LB: You mentioned connecting people to the internet earlier. Is that really essential? Or even advantageous?
PS: If I told you that through the use of wearable technology and analysis of big data I could predict you will have a cold two days before you do so, allowing you to take precautionary action, would that sound advantageous to you? As that is exactly the digital technology the England Rugby Sevens team is using to help keep a fully fit team. The capabilities don’t end there, that same technology has helped team physios cut soft tissue injuries by 80%.
When it comes to digitalisation, it’s the collection and then analysis of the data produced that offers truly amazing opportunities – cures for illnesses can be unearthed, traffic congestion in cities can be close to eradicated and energy consumption can be reduced, to name but a few uses.
LB: So where does responsibility lie to enable this digital opportunity for businesses and consumers alike?
PS: To build a successful digital world, developing an ecosystem of innovation is essential. Big companies must partner with agile and different thinking start-ups to help embrace digital technology. The Cisco-led British Innovation Gateway (BIG) aims to achieve exactly this, we’re supporting technology startups and the upcoming generation of innovators and entrepreneurs. We’re working with the likes of Snap Fashion in the retail sector and uMotif in healthcare – the way in which these start-ups are transforming these respective sectors leaves me in awe and I’m very proud to say we are helping them on their journey.
LB: No discussion about digital opportunities would be complete without touching on the challenges and obstacles which must be overcome to ensure it is a success. What’s going to stop or delay us from getting there?
PS: The digital world which is evolving is producing endless data, which provides fantastic insights and opportunities, but of course such production of data leads to questions over security and privacy, and ultimately trust. There is no silver bullet to any of these challenges, but there are approaches which should be adopted. In the case of security, focus must be placed on securing digital technology and networks end-to-end. Too often, attempts to secure IoE is done so in silos, by aiming to secure individual parts of the connection process in isolation – such an approach will always lead to gaps appearing which will be targeted by the savvy and forward thinking internet hackers of today.
When it comes to privacy, adopting industry-wide standards is key. It helps ensure both businesses and consumers are clear on how and what the data collated will be used for. The Hypercat consortium is aiming to deliver exactly this. Such common standards across the industry also help deliver interoperability across all industries, which is essential if the opportunities of IoE are to be realised fully.
Beyond privacy and security, the biggest challenge stopping digitalisation is skills – over the next ten years there is potentially a million jobs for young people in digital technology. This is a real headache for business, but a fantastic opportunity for the next generation. Much like the characteristics of IoE, connected is better, and to help overcome this skills shortfall business, government and educators must work collaboratively to ensure the ‘digital effect’ is maximised and not missed.
Fascinating stuff – which certainly convinced me on the reality of the digital effect. And with that, Phil made his way onto the main stage in an attempt to convince the LTW audience of the same.
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