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

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



Maurizio Pilu's presentation at the RC UK Grand Challege Event in Leicester, April 12 2011.

Maurizio Pilu's presentation at the RC UK Grand Challege Event in Leicester, April 12 2011.



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

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