Challenges and opportunities in the Digital economy: a TSB perspective<br />Dr. Maurizio Pilu<br />Technology Strategy Boa...
What is the Technology Strategy Board?<br />We are a national body set up in 2007 to invest in business innovation<br />We...
What is “Digital”<br />We see it as the:<br />“complex interaction of people, processes and technology that aims at increa...
Digital is poorly defined as a “market”, except it’s very big and diverse<br /><ul><li>IT spend w.w. will hit $3.6t  in 2011
Gobal telecom spend $926b in 2009
Ad-supported Internet contributes $300b   to US economy and supports 3.1m jobs
UK’s “internet economy” worth £100b
....</li></ul>... And it barely existed only 20 years ago<br />
Digital landscape<br />It ripples through the economy and society<br />Source: “Connected Kingdom”, Boston Consulting Grou...
Size of UK ICT Sector<br /><ul><li>272 of the top 1000 companies by R&D investmentin the BIS 2010 Scoreboard are ICT compa...
The total R&D spend of these companies is £4.5 B,equivalent to 3.2% of their total sales of £139 B.
This makes ICT the third largest sector in the UK in terms of sales and the second largest in terms of R&D.
The largest sector in terms of sales is Oil & Gas Production at £348 B.
The second largest sector in terms of sales is Banking at £166 B.
The largest sector in terms of R&D is Pharmaceuticals & Biotechnology at £8.9 B.</li></ul>Thanks to Philip Hargrave, ICT K...
Thanks to Philip Hargrave, ICT KTN,  for providing this slide<br />
...Digital technology now branches out  everywhere ... ... And there are many challenges & opportunities out there ....<br />
But here we are about the “buds” that can grow:  innovation ... <br />
But innovation needs “problems” ...  ... Here are some examples ... <br />
UK Digital “Pipes”<br />   7PB/month<br />12.5 GBytes per second<br />70 million requests<br />Will the UK digital infrast...
Mobility<br />Mobile skype minutes on 3’s network<br />UK mobile data  on 3’s network<br />Usage of mobile Data exploding<...
UK’s Creative Industry value chain<br /><ul><li>Employs 1.98 million ~ 6.78% of the working population
Contributes 6.4% GVA
Internet and converging technologies are opening up new possibilities
but disrupting value chains on an unprecedented scale
E.g.  66% of UK’s online advertising budget (£3b/y) flows out of the UK
Legal music download growing at 25% year
But 95% of it still illegal
6.5 million illegal file-sharers in the UK
70% of all digital music sales are througha proprietary platform (Itunes)</li></li></ul><li>UK’s Digital Inclusion<br />10...
Information explosion<br />[Even if] “The Economy is Bad, Data Does Dot Care” (IBM)<br />Data:  281 billion Gigabytes, 45G...
Connecting Things<br />
Added Value Services<br />
Transforming Healthcare<br />Worldwide the adoption of wireless sensor in healthcare could lead to savings of $25b<br />NH...
Public Information: Opportunities<br />Potential for considerable growth:<br />US is x2 to x5  greater per capita than in ...
Digital Delivery of Public Services<br />Saving by switching a transaction with government on line:<br />Between £3.30 and...
Connecting people<br />Twitter and Google searches as a “pulse reading” of the world<br />    9 billion tweets sent since ...
Innovation is a bumpy ride for most<br />
Most often not just about cool new technology: sectors can absorb innovations in different ways and at different speeds<br...
And sometimes it all clicks: the “IPod moment”<br />
Societal:<br />+ aging<br />+ environment<br />+ inclusion<br />+....<br />Technology:<br />+ data generated<br />+ demand...
...and so are the “tensions” ... <br />Examples<br />Open standards vs Closed standards<br />Sustainable vs economically v...
What perspective? <br />
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Maurizio Pilu - Perspectives on the Digital Economy - RCUK grand challenges - Leicester 12 april 2011

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Maurizio Pilu's presentation at the RC UK Grand Challege Event in Leicester, April 12 2011.
http://www.dmu.ac.uk/research/grand-challenges/rcuk/rcuk-event.jsp

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Maurizio Pilu - Perspectives on the Digital Economy - RCUK grand challenges - Leicester 12 april 2011

  1. 1. Challenges and opportunities in the Digital economy: a TSB perspective<br />Dr. Maurizio Pilu<br />Technology Strategy Board<br />RCUK Grand Challenges Event, Leicester12 April 2011 <br />
  2. 2. What is the Technology Strategy Board?<br />We are a national body set up in 2007 to invest in business innovation<br />We work across business, universities and government<br />We mostly come from business <br />130 people with over 1700 years of business experience<br />We were responsible for investing £250m a year over our first 3 years<br />
  3. 3. What is “Digital”<br />We see it as the:<br />“complex interaction of people, processes and technology that aims at increasing the socio-economic benefits of ICT”<br />Digital Strategic Update, October 2010<br />
  4. 4. Digital is poorly defined as a “market”, except it’s very big and diverse<br /><ul><li>IT spend w.w. will hit $3.6t in 2011
  5. 5. Gobal telecom spend $926b in 2009
  6. 6. Ad-supported Internet contributes $300b to US economy and supports 3.1m jobs
  7. 7. UK’s “internet economy” worth £100b
  8. 8. ....</li></ul>... And it barely existed only 20 years ago<br />
  9. 9. Digital landscape<br />It ripples through the economy and society<br />Source: “Connected Kingdom”, Boston Consulting Group<br />Photo: kaibara flickr.com/photos/kaibara/4481583340/<br />
  10. 10. Size of UK ICT Sector<br /><ul><li>272 of the top 1000 companies by R&D investmentin the BIS 2010 Scoreboard are ICT companies.
  11. 11. The total R&D spend of these companies is £4.5 B,equivalent to 3.2% of their total sales of £139 B.
  12. 12. This makes ICT the third largest sector in the UK in terms of sales and the second largest in terms of R&D.
  13. 13. The largest sector in terms of sales is Oil & Gas Production at £348 B.
  14. 14. The second largest sector in terms of sales is Banking at £166 B.
  15. 15. The largest sector in terms of R&D is Pharmaceuticals & Biotechnology at £8.9 B.</li></ul>Thanks to Philip Hargrave, ICT KTN, for providing this slide<br />
  16. 16. Thanks to Philip Hargrave, ICT KTN, for providing this slide<br />
  17. 17. ...Digital technology now branches out everywhere ... ... And there are many challenges & opportunities out there ....<br />
  18. 18. But here we are about the “buds” that can grow: innovation ... <br />
  19. 19. But innovation needs “problems” ... ... Here are some examples ... <br />
  20. 20. UK Digital “Pipes”<br /> 7PB/month<br />12.5 GBytes per second<br />70 million requests<br />Will the UK digital infrastructure able to satify this growing demand?<br />
  21. 21. Mobility<br />Mobile skype minutes on 3’s network<br />UK mobile data on 3’s network<br />Usage of mobile Data exploding<br />Usage of Average monthly usage per user:<br /> 2009: 273Mbytes <br /> 2015 (forecast) = x40 times higher<br />
  22. 22. UK’s Creative Industry value chain<br /><ul><li>Employs 1.98 million ~ 6.78% of the working population
  23. 23. Contributes 6.4% GVA
  24. 24. Internet and converging technologies are opening up new possibilities
  25. 25. but disrupting value chains on an unprecedented scale
  26. 26. E.g. 66% of UK’s online advertising budget (£3b/y) flows out of the UK
  27. 27. Legal music download growing at 25% year
  28. 28. But 95% of it still illegal
  29. 29. 6.5 million illegal file-sharers in the UK
  30. 30. 70% of all digital music sales are througha proprietary platform (Itunes)</li></li></ul><li>UK’s Digital Inclusion<br />10 million adults never used the<br /> internet (4m socially excluded)<br />Missing out on economic benefits<br /> £270-£500year in savings (£1b / year)<br />and better chances to find jobs<br />and better chances to find better jobs<br />Estimated value of bringing everyone on line: £20b<br />A challenge to the Government ambition to deliver public service digitally<br />Digital Britain Report, 2009<br />
  31. 31. Information explosion<br />[Even if] “The Economy is Bad, Data Does Dot Care” (IBM)<br />Data: 281 billion Gigabytes, 45Gb per head<br />Growth: >50% CAGR <br />Disimpersonation: 50% of data now unrelated to individual action<br />Disaggregation: info containers growing 50% faster than data<br />Usage: Information growing 50% faster than storage<br />Examples:<br /> Business: Tesco: 12 million purchases per week, 5b data items<br /> Generated by sensors: RFID Tags: 2005: 1.3b, 2009: 33 Billion<br /> Media: YouTube data = all world medical data imaging<br /> Scientific: World Climate Simulation Project: 1m datasets, 10 PBs<br />
  32. 32. Connecting Things<br />
  33. 33.
  34. 34. Added Value Services<br />
  35. 35. Transforming Healthcare<br />Worldwide the adoption of wireless sensor in healthcare could lead to savings of $25b<br />NHS savings alone could £1 billion p.a. through the widespread adoption monitoring for assisted living<br />
  36. 36. Public Information: Opportunities<br />Potential for considerable growth:<br />US is x2 to x5 greater per capita than in EU<br />Estimates of the indirect value to UK businesses of the exploitation of public sector data suggest that it can be valued at £10-100bn (0.8-8% UK economic activity).  <br />
  37. 37. Digital Delivery of Public Services<br />Saving by switching a transaction with government on line:<br />Between £3.30 and £12.00<br />All excluded adults / 1 transaction per month on line <br />£900 million savings per annum<br />Saving on each tax returns filed on line ~£10 , or £80m/year<br />Projected saving via NHS Direct i£80 million per year7<br />What are the new opportunities when public services become more and more innovative, addressing more and more people and aspects of our lives? <br />
  38. 38. Connecting people<br />Twitter and Google searches as a “pulse reading” of the world<br /> 9 billion tweets sent since launch <br />London has the highest number of Twitter users<br /> 400m Google searches per day<br />Google claims to have a two week lead on predicting outbreak of diseases<br /> What is the economic and social impact of this revolution?<br />
  39. 39.
  40. 40. Innovation is a bumpy ride for most<br />
  41. 41. Most often not just about cool new technology: sectors can absorb innovations in different ways and at different speeds<br />TRANSPORT<br />HEALTH<br />BUILT ENVIRONMENT<br />.................<br />
  42. 42. And sometimes it all clicks: the “IPod moment”<br />
  43. 43. Societal:<br />+ aging<br />+ environment<br />+ inclusion<br />+....<br />Technology:<br />+ data generated<br />+ demand on networks<br />+ mobility<br />+ m2m<br />+ openness+ cloud<br />+ services<br />+ user generation<br />+ crow sourcing<br />+ ....<br /> ... But the underlying trends are clear ...<br />
  44. 44. ...and so are the “tensions” ... <br />Examples<br />Open standards vs Closed standards<br />Sustainable vs economically viable<br />Wired vs wireless<br />Old value chains vs new value chains<br />Content vs technology<br />Data push vs info overload<br />Net Neutrality vs. Control<br />ISPs vs Content owners <br />Old business models vs new reality<br />Free content vs protecting rights<br />Privacy vs targeted advertising<br />Bandwidth vs inclusion<br />Availability/usability vs security<br />Photo: kaibara flickr.com/photos/kaibara/4481583340/<br />
  45. 45. What perspective? <br />
  46. 46. What’s the problem?<br />Business Investment is too low and too late<br /><ul><li>Technical and financial risks need to be mitigated
  47. 47. The time for financial return is too long for many players</li></ul>Innovation disrupts value chains and business models<br /><ul><li>New partnerships are required to build new supply chains
  48. 48. Investment and innovation is required at multiple points</li></ul>Longer term trends not visible to all players<br /><ul><li>Impact and opportunities from emerging technologies & policies</li></ul>Innovation infrastructure complex and inefficient<br /><ul><li>Fragmented and difficult to navigate</li></li></ul><li>Often it not about just technology ... <br />
  49. 49. Working together<br />More and more the big problems out there are such that stakeholders need to look for answers together ... <br />
  50. 50. TSB’s investments in ICT/Digital<br />Fostering the innovation climate (KTNs, KTPs) <br />Technology-inspired ICT & EPES programme<br />Challenge-led Digital programme <br />Other Challenge-inspired innovation <br />Intelligent transport, Modern built environment<br />Innovation Platforms such as Assisted Living<br />Application areas such as Creative Industries<br />Support to EU programmes<br />Pre-commercial procurement<br />
  51. 51. The Technology Strategy Board’sDigital programme<br />Mission: <br /> to help innovative businesses unlock the economic potential of digital technology, by identifying and addressing systemic challenges and resolving tensions between people, processes and technology. <br />
  52. 52. Supply side<br />Demand side<br />Transport<br />Energy<br />ICT base<br />Digital<br />End-users<br />Health<br />Built env.<br />Cities<br />.....<br />Challenge-inspired, Sector specific innovation<br />Digital programme, challenge inspired<br />Technology innovation (e.g. ICT and “EPES”)<br />
  53. 53. Some of our challenges ....<br />Moving towards a world of pervasive digital services <br />Building the case for investment in emerging digital infrastructure and platforms<br />Enabling new business models and opportunities in a world of connected objects <br />Increasing trust and resilience in a rapidly changing, connected world <br />Improving people’s lives and experiences in the digital world<br />Harnessing the economic value of information and content<br />Enabling and creating business opportunities in and across new digital value networks and communities<br />
  54. 54. Biggest challenge? “Internetization”.....<br />
  55. 55. ... but not in isolation: Perspectives<br />Information<br />Services<br />Advanced <br />Infrastructure and Capabilities<br />Digital Challenges<br />Human Factors<br />Value Networks,<br />Communities and Businesses<br />Risk and Resilience<br />Digital Economics<br />
  56. 56.
  57. 57. Example: “Collaboration across digital industries”<br /><ul><li>For all participants in the Digital ecosystem to benefit fairly from the creation, distribution and consumption of digital content
  58. 58. £10m competition
  59. 59. Aiming to bring together Internet players and communities
  60. 60. Objective: resolving tensions in the overlaps
  61. 61. Proposals eligible only if straddling at least two areas
  62. 62. Two types of projects: R&D and Trials</li></li></ul><li>Collaboration Across Digital Industries Round 2 <br /><ul><li> Integrated Digital Value Chain</li></ul>Information, Content and Services<br />Creation<br />Distribution <br />Use <br />Value Fairly Distributed Across Digital Value Chains<br />
  63. 63. IC tomorrow<br />A programme aimed at connecting an catalysing stakeholders in the Digital value network<br />People with assets (content, data, infrastructure)<br />Applications developers<br />Users<br />IT platform used to broker relationships, reduce barriers to licensing, run and manage trials <br />Starting off with creative media <br />Soon moving to public data [e.gLinkedGov].<br />
  64. 64. On the horizon: “Internet of Things”<br />Investment in the area of the “physical internet”<br />The “we wills”<br />Focus on ecosystem convergence of “connected things”<br />Not a single competition, but a programme<br />Reaching out to the verticals, not just the ICT community<br />Ultimately helping enable innovative application and services development<br />
  65. 65. UK’s businesses know best...<br />Connectivity Scorecard<br />The UK is an keen adopter of innovation<br />Best in class in using ICT for creating value for business<br />This is a systemic UK competitive advantage <br />An indicator of the potential to absorb and create value frominnovation<br />
  66. 66. http://www.innovateuk.orgtwitter: maurizio_tsb<br />Dr. Maurizio Pilu<br />THANK YOU<br />

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