The Innovator #5

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#5 – February 2018 - Mobile World Congress/4YFN
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CHINA RACES AHEAD
WHY HIGH-SPEED
WIRELESS IS
A HIGH-PRIORITY
NATIONAL STRATEGY
PUTTING AR/VR TO WORK
BUSINESSES
ARE PROVING TO BE
FAST ADOPTERS
A $1 TRILLION TELECOMS
OPPORTUNITY?
Q&A WITH MOBILE WORLD
CONGRESS SPEAKER
BRIAN BEHLENDORF
HOW5G
WILLIMPACT
COUNTRIES
CITIES
AND
COMPANIES

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LETTER FROM THE EDITOR
EuropeshouldtreatChina’s5Gambitionsasawake-upcall.The
country is determined to gain dominance not just in high-speed wireless technology
but in the Internet of Things and artificial intelligence. Dominance in all three of these
key technologies would potentially make China a tech powerhouse and benefit its in-
dustries over those in other countries.
It will be tough for Europe to compete. But it is not impossible. In the 1980s the French
and Italian governments took a step back and decided that computer chips were crucial
to everything and resolved to merge their respective national semiconductor compa-
nies. Many scoffed at the merger of Italy’s SGSMicroelettronica and France’s Thomson-
CSF’s semiconductor operations. Neither company had succeeded in imposing itself on
the global semiconductor market, by then dominated by the United States and Japan.
SGSMicroelettronica, although profitable, was crippled by a heavydebt load, while the
Thomson-CSF business had long been losing money. Neither companyhad been able to
keep pace with the rapid technological developments of the era, as semiconductor ma-
nufacturers began investing heavily in new random-access memory chip technologies.
Yet both companies were strongly backed by their respective governments, which were
eager to maintain their own – and Europe’s – presence among the world’s semiconduc-
tor industry. Merging the two, in 1987, created a global chip company, which –thanks
to smart investments and good management — rose to as high as the number three po-
sitionamongtheglobaltop10chipmakers.(ThomsonsoldoffitssharesinSGSThomson
in 1998, and the company then changed its name to STMicroelectronics).
If AI is, as Google’s CEO says, more important than the invention of fire and electricity
and 5G is truly a general-purpose technology that will bring about changes as sweeping
asthosebroughtbytheinventionofthesteamengineortheInternet,thensimilarmeasures
arenecessary.By20355Gispoisedtocreate22millionnewjobsglobally,generate$3.5
trillion in economic activity and fuel sustainable long-term growth to global real GDP. It
willunderpinthedevelopmentoftheIndustrialInternetofThingsandartificialintelligence,
two technologies that will be crucial for economic development. It is time for countries
and companies to once again step up. Europe can’t afford to miss out.
ByJenniferL.Schenker
Editor-in-Chief,TheInnovator
CLOSINGTHEDIGITAL
SKILLSGAP
THEBRIEF
COVERSTORY
5G’SIMPACTONCOUNTRIES,
CITIESANDCOMPANIES
WHYCHINAWANTSTOLEAD
THE5GCHARGE
WHYTHEU.S.ANDEUROPE
NEEDTOWININWIRELESS
BARCELONA’SBIDTOBECOME
AGLOBAL5GHUB
TELEFÓNICAISUSING
MOONSHOTSTOREINVENTITSELF
HOWBLOCKCHAIN
COULDTRANSFORM
THETELECOMINDUSTRY
ANDMORE
THE25STARTUPSTOMEET
AT4YFN
CYBERCRIMEISGOINGMOBILE
NEWWAYSOFCOLLABORATING
INTHEWORKPLACE
PUTTINGAR/VRTOWORK
WHYGRAPHENESHOULDBE
ONEVERYEXECUTIVE’SRADAR
HOWUNILEVERFOUNDRY
ALLOWSSTARTUPSTOCONNECT
TOITS400BRANDS
5GANDNEWREGULATIONS
AREEXPECTED
TOHELPDRONESTAKEOFF
P.05
P.06
P.08
P.11
P.14
P.16
P.20
P.22
P.24
P.26
P.30
P.32
P.34
P.38
P.40
TABLE
OF CONTENTS
— P.03

THE IOTA FOUNDATION
IOTA is overseen by the IOTA Foun-
dation, a non-profit organisation
dedicated to building sustainable
ecosystems around IOTA, develo-
ping the DLT technology for real
life applications and maintaining
it license-free for all developers to
work with. The Foundation gathers
a team of world leading experts in
the respective fields and sets up de-
dicated working groups with com-
panies and research institutions in
those sectors to share know-how,
initiate experimentation and proac-
tively engage the startup communi-
ty, innovators and developers.
THE BACKBONE OF THE IOT
IOTA is a revolutionary new transac-
tional settlement and data transfer
layer for the Internet of Things. It’s
based on a new distributed ledger,
the Tangle, which overcomes the
inefficiencies of current Blockchain
designs.
IOTA is also the missing puzzle pie-
ce for the Machine Economy to fully
emerge and reach its desired poten-
tial. It is envisioned to be the pub-
lic, permissionless backbone for the
Internet of Things,that enables true
interoperability between all devices.
ZERO FEES - INFINITELY SCALABLE
Unlike blockchains, which are inhe-
rently limited by the bottleneck of
block size and rigid chain, which
leads to congestion and high fees
when usage goes up, IOTA’s Tangle
gets more efficient the more activity
occurs on the ledger. Perhaps more
importantly, because the Tangle eli-
minates the requirement of miners
and stakers, newly mined units of
currency and transaction fees do
not need to be extracted from the
system to pay validation fees. The
result is that IOTA has zero fees.
DATA INTEGRITY
IOTA’s main features (in its current
form) are feeless micropayments,
secure data transfer and data an-
choring. Combined with IOTA’s sca-
lability and partition tolerance, the-
se two features allow a plethora of
use cases to be derived which are
only possible with IOTA.
The main focus of IOTA is the Inter-
net of Things, with machines pay-
ing each other autonomously for
resources, services and/or access.
INTRODUCING IOTAINTRODUCING IOTA
Tangle
Txs
NetworkCapacity
Blockchain
www.iota.org / info@iota.org

DIGITAL SKILLS
At press time “thousands of people” from 66 countries had already pre-re-
gistered for the free courses, which are aimed at both white collar and
blue collar workers, says Adam Sherman, The forum’s community lead
for the Information technology industry.
“We have identified eight specific skill sets that we think all industries will
need in the future,” says Sherman, a former president of the Highland
Park, New Jersey, Board of Education. “While the platform is industry
agnostic one of the sectors we want to zero in on is the manufacturing
sector, which impacts a lot of workers globally. But we will also target sec-
tors that will experience an equally significant impact from workforce
changes, such as financial and legal services,”
A CALL TO ACTION
The initiative, which is committed to reaching one million people with
resources and training opportunities on the SkillSET portal by January
2021, will be discussed as part of the ministerial agenda at the Mobile
World Congress in Barcelona, Feb. 28-March 1.
“The Forum is great at catalyzing action around specific topics,” says
Sherman. “We are hoping to grow the SkillSET platform which will be
singularly focused on enabling new opportunities for individuals. Funding
will ensure the platform’s rapid adoption, scalability and wide reach. We
are trying to form partnerships with organizations that can really push
this product to people who will most benefit from it. We really believe
that this product can only be as powerful as the number of people who
join and so we are actively looking to partner with businesses, govern-
ments and NGOs.”
SkillSET was conceived by the Forum’s IT Governors community under
the chairmanship of Chuck Robbins, the chief executive officer of Cisco
Systems. In addition to Cisco the founding partners are Accenture, CA
Technologies, Cognizant, Hewlett Packard Enterprise, Infosys, Pegasystems,
PwC, Salesforce, SAP and Tata Consultancy Services.
The Forum plans to target an additional nine million people for retraining
by 2020 through another program called Closing the Skills Gap 2020, a
call for top global businesses to lead training, reskilling and upskilling ini-
tiatives between 2018 and 2020.
To date, 26 global founding partners have signed up for Closing the Skills
Gap and have collectively committed to providing training opportunities
to over 8.1 million people by 2020. The program will be supported by a
dedicated online platform, closingtheskillsgap.org (developed by Tata
Consultancy Services), that aims to help businesses share insights and
best practices around retraining their workforces.
The goal of both programs, says Sherman, is to make sure that people
with jobs in every industry are given the means to learn new skills so they
can continue to be productive members of the global workforce.
J.L.S.
Roughly 50% of workers’ current activities – the equivalent of
$15 trillion in global wages – could be automated by adopting current
technologies, according to a briefing for corporate leaders compiled by
the World Economic Forum.
That said, new research quoted by the Forum suggests that 96% of all
workers whose jobs are threatened by technology could find similar or
better work with adequate training. The briefing, entitled “Enabling
Employees to Thrive in the Fourth Industrial Revolution,” urges execu-
tives to start preparing their workforce for the jobs of the future.
The Forum is planning to offer a concrete way for companies to do just
that. It is launching an app in April that will teach the basic skills it says
any person will need in the digital economy. Users will have access free-
of-charge to up-to-date, self-paced training materials designed by global
IT companies, says Alan Marcus, the Forum’s head of technology, media
and digital industries. The courses range from general business skills to
introductory digital literacy to more advanced topics such as cybersecu-
rity, Big Data or the Internet of Things. The portal – which will be called
SkillSET and be accessible through a mobile app – will offer a tailored
skills assessment to help users determine which coursework is the best fit.
— P.05
ClosingtheDigital
SkillsGap
— Soon there will be an app for that.

P.06 — THE INNOVATOR
THE BRIEF
The Olympic Games in Pyeongchang –
thebackdropforwhatIntelclaimedwasthelargest
real-world demonstration of a high-speed wireless
networking technology called 5G – offered a
glimpse of what’s to come.
Attendees were able to watch live feeds from
bobsledders’ helmet-mounted cameras or switch
between multiple cameras placed along the cross-
countryskiingroutetofollowracesusingSamsung
5G-equipped tablets. Some 100 cameras set up
around Gangeung Ice Arena allowed for a 360º
look at an ice skater performing a pirouette and
selected guests were able to ride in a 5G-powered
self-driving bus.
At 10 gigabits a second, 5G won’t just be used
for sports and entertainment. It will power smart
factories, surgeries at a distance and autonomous
vehicles. Rival Qualcomm was quick to point out
that Intel’s gear was not “real 5G” as it does not
conformtoatechnical standardpassedinDecember.
Fon,aglobalWiFisharingnetwork,plansto
announcedealswithcarriersduringMobile
WorldCongressthat–iftheyworkas
promised–willhelpsolveunevenWiFi
coverageinsideconsumerhomes.Fontech
HomeWiFi combinesnext-gensoftware,a
simpleapplicationforendusersand
advancedWiFiextenders,toenable
operatorstoimproveandmanagecoverage
andexperienceforusersathome,reducing
operatorhelpdeskcostsandhome
maintenancecalls.
BREAKINGSPEED
RECORDS
Voicing
APreference WiFiReboot
In any case 5G handsets are not expected to be
available for another year. But that is not stopping
vendors–includingQualcommitself–frommaking
announcements of their own and showing off 5G
gear at Mobile World Congress. The show theme
this year will be” 5G, 5G and 5G,” say industry
analysts. Qualcomm planned demonstrations at
MWC will showcase the Snapdragon X50 5G
modem, which will be used in live, over-the-air
mobile 5G trials with multiple global wireless
network operators in different spectrum bands
while everyone waits for 5G handsets to go on
the market. Finland’s Nokia, China’s Huawei and
Sweden’sEricssonwillalsoshowoff5Gnetworking
equipment at MWC while carriers like Orange
will talk up their upcoming 5G trials.
VisitorsatMobileWorldCongresswillbe
abletoexperiencetheintegrationofAmazon’svoice
activated assistant Alexa in the SEAT Ateca model
(SEAT is the first carmaker in Europe to integrate
thisfeatureincars.)AmazonAlexawillenableSEAT
drivers, using voice commands, to optimize their
timewhileintheircarbydoingthingslikemanaging
their personal schedule, finding songs, locating
points of interest, real-time news or the nearest
dealership, among many other functions. What
will take-up of voice-activated assistants- which is
projected to more than double this year globally –
mean for the telecoms industry? Consumers may
rely less on their mobile phones while on the go
andathome.Thosewhoownin-homedigitalvoice
assistants use their mobile phones less often for
entertainment and online purchasing, according
to one recent study.
Amazon’svoice-activatedassistant
AlexacanbeaccessedfrmaSEATAteca
atthepushofabutton
Thewintergames
inPyeongchang
arebeingusedtoshowcase5G

THE BRIEF
The telecom industry is poised to
seize the greatest share of value from the
implementation of blockchain technology, says
the global consultancy Accenture in a report
scheduled to be released at Mobile World
Congress.Itisrecommendingthatcommunication
service providers “build upon their existing
ability to quickly and effectively exchange data
acrosstheircollectivefive-billion-personnetwork”
to construct a massive asset exchange network
based on blockchain.
The inherent strengths of telecom operators,
which Accenture lists as “their large user base,
Togettechnologynewsincontexteveryweek,subscribetoournewsletter:http://innovator.news
— P.07
40%
SHOULDOPERATORS
PUTTHEIR
NETWORKS
ONTHEBLOCK?
high speed, high fidelity, low latency networks,
multi-layer security architecture, existing
internetwork data exchange models, and rapid
product offerings,” make telecommunications
the perfect industry to harness blockchain’s
full potential at scale, says the consultancy.
By using the scaled existing capabilities, and
collective assets of telecom operators at both
the regional and global levels, “a coordinated,
interoperable transfer network could feasibly
be built upon blockchain,” Accenture says in
its report. In addition to enormous disruptive
potential, a coordinated blockchain could also
ease operators’ internal operations and drive
down costs, it says.
In its report Accenture discusses a consortium
that has already been formed by TBCASoft, a
U.S.-based blockchain technology startup; and
Japan’s Softbank, the U.S.’s Sprint, and Taiwan’s
FarEasTone. The three carriers have already
demonstrated a cross-carrier payment platform
system using TBCASoft’s blockchain technology.
Other telecom operators are expected to join.
$1
Trillion
Percentage of 3,600 large, global companies facing serious
challenges from new entrants, according
to a Disruptability Index scheduled to be released at Mobile
World Congress by the consultancy Accenture.
The Index positions 20 industries – including
telecommunications, consumer technology, automotive,
and retail – in four different states of disruption.
It will also highlight how susceptible each industry
is to future disruption.
Size of the opportunity for telecom operators
if they use blockchain to construct a massive asset
exchange network that would cover
their collective five-billion customers, according
to a report that Accenture is scheduled to release at
Mobile World Congress.

HOW5GWILL
IMPACTCOUNTRIES,
CITIESAND
COMPANIES
Every five to ten years the telecoms industry introduces
a new generation of wireless technology that it promises will change
everything. This time it just might be true. If pundits are right, the emerging
new high-speed wireless standard known as 5G could have the same impact
as the printing press, electricity, the steam engine, the telegraph and the
Internet. Each of these discoveries or inventions are known as General
Purpose Technologies (GPTs) that have served as catalysts for transformative
changes, redefining work processes and rewriting the rules of competitive
economic advantage. And 5G is expected to pack the same kind of punch.
“The emergence of 5G is a fulcrum in the evolution of mobile technology
from a technology that had transformative impact on personal
communications to a true GPT that promises to transform entire industries
and economies,” says a report by IHS Markit and Berkeley Research Group
that assesses the importance of 5G technology to the global economy.
Indeed, the report predicts that by 2035 5G will create 22 million new jobs
globally,directlygenerate$3.5trillionineconomicactivityandfuelsustainable
long-termgrowthtoglobalrealGDP.From2020to2035,thetotalcontribution
of 5G to real global GDP will be equivalent to an economy the size of India,
says the report. “5G is expected to impact the competiveness of nations,”
says Sam Paltridge, an analyst in the Paris-based Organization for Economic
Cooperation’sDirectorateofScienceTechnologyandIndustry,whoiscurrently
working on a study on the topic. China views 5G as key to helping it become
a tech leader not just in wireless but in The Internet of Things and artificial
intelligence while at the same time boosting its own industries over those
of others. (See the story on pages 11-13.) The U.S., which is projected to
initially lead in the number of 5G subscribers, is expected to be quickly
surpassed by China, as is Europe, which has high ambitions of its own for
the rollout of the technology. (See the story on pages 14 and 15.) The
United States and China are expected to dominate 5G R&D and capital
expenditure, investing a total of $1.2 trillion and $1.1 trillion respectively,
says the IHS Markit and Berkeley Research Group report. Major investments
will be made in 5G in Europe as well, and these are expected to have
“trickle-down”impactsacrossthewholeoftheEuropeaneconomy,potentially
generating €141.8 billion in new revenues across the EU and creating
2.39millionjobs,accordingtoareportpreparedfortheEuropeanCommission’s
Directorate General for Communications Networks, Content and Technology
by Trinity College Dublin, the wireless advisory firm realwireless, the
mobile technology research firm InterDigital and the research consultancy
tech4i2.
So why will 5G be so different? (See the box.) Unlike mobile technologies
adopted to date, 5G is expected to radically transform the public and
industrial sectors of economies.
5G could enable about 4.6% of global real output in 2035, though its uptake
by industry is expected to vary. (See the chart on page 10.) Most notable,
says the IHS Markit and Berkeley Research Group report, is that 5G could
enable 6.5% of public service and 6.4% of agricultural output by 2035,
transforming other sectors of the economy.
Autonomous Cars and Drones
According to the report to the European Commission, 5G will have a big
impact on the auto industry. It will enhance connectivity and improve data
management and sharing between automotive manufacturers and motorists,
COVER STORY
— 5G is expected to create 22 million new jobs, generate trillions of dollars in economic activity and
fuel sustainable long-term growth to global real GDP.
By Jennifer L. Schenker

— P.09
and provide opportunities for next-generation services within the automotive
industry and the supply chain, allowing further improvement in vehicle
design, vehicle production and performance. 5G networks will have the
ability to support a large number of connected cars, provide always-on
connections, focus on optimizing energy efficiency, provide real-time
maintenance and enhance safety, the report says.
5Gisalsoexpectedtohelpusherinautonomouscarsandthemorewidespread
use–andcontrol–ofdrones.Theavailabilityofdriverlesscarsandunmanned
aerial vehicles will do more than stimulate sales to consumers, says the
report. They will also be deployed in agricultural and mining applications
ranging from surveillance of remote natural resources to autonomous
transport of metals or valuable minerals to self-driving tractors. Autonomous
vehicles will also be widely used in the transportation sector for driverless
transport and for delivery of commercial and consumer goods. Municipalities
will integrate autonomous vehicles into their transit systems while using
drones for monitoring functions. In manufacturing, autonomous vehicles
will also be used in intra-plant stocking and retrieval systems. And they
are expected to positively affect the insurance industry as vehicle accident
rates decrease.
Factories
5G will aid industrial automation by enabling and enhancing the critical
control of production-line robotics, including tethered or untethered robots
that can be controlled, monitored and reconfigured remotely, making
manufacturing more efficient.
WHAT IS 5G?
5G is short for fifth generational wireless broadband technolo-
gy. It has three main distinguishing characteristics that will
help enable mission-critical applications such as autonomous
vehicles, management of drones, industrial automation, smart
grids and remote surgeries and patient monitoring.
Speed: 5G will be approximately 10 times faster than existing
wireless networks.
Better Response Times: The technology’s ultra-low latency
allows things in the virtual world to sync with the real world,
leading to a new paradigm known as Synchronized Reality. It
will enable the transfer of expertise over great distances in
real-time using robotics and haptic feedback.
More Capacity: Lower power requirements, the ability to
operate in licensed and unlicensed spectrum and lower costs
will enable a greater number of devices to connect using higher
volumes of data, ushering in the age of the so-called Massive
Internet of Things.
5Gisexpectedtoaidindustrial
automation.

P.10— THE INNOVATOR
Healthcare
5G is expected to enhance connectivity and improve data management
and sharing between healthcare providers, medical device manufactures,
patients, medical and life insurers, the pharmaceutical industry and other
stakeholders. Reducing the cost of health monitors, expanding their reach
and their reliability also has the potential to unleash many innovations in
the sector, according to the report to the European Commission.
Utilities
By 2020 utilities are expected to account for two-thirds of the 30 billion
wireless connected devices in houses and industry worldwide. Strategic
benefits of installing smart meters with embedded 5G capabilities will arise
from increased access to data and real-time information provision, says
the report to the European Commission. This will support efficient energy
generation, enabling savings in generation capacity, particularly during
periods of high demand. When supply loads are shifted from peak to off-
peak periods, electricity providers observe savings in short-term marginal
costs due to lower generation costs. The load shifting between peak and
off-peak periods reduces the size of capacity investment in electricity. The
reportfoundthat5Gdatacapabilitiesinsmartmeterswillprovideoperational
benefits in the European utilities industry of €2.7 billion in 2025 and €3.1
billion in 2030.
Smart Cities
Enhanced access to information from numerous sensors located throughout
smart cities in households, workplaces, from transport routes, citizens and
platforms will provide policymakers with better real-time data about their
cities. For example 5G is expected to improve transportation in cities in
multiple ways. Greater access to real-time information by travelers should
enable faster journey times within and between cities. Greater access to
real-time information by transport providers should enable better co-
ordination between different transport modes. And enhanced information
about traffic flows and journeys should help traffic controllers better manage
traffic, says the report for the European Commission. 5G data capabilities
are projected to provide €8.1 billion in congestion, accident and pollution
reduction benefits to smart cities in Europe by 2025, according to the report
to the European Commission.
A Step Change for the Mobile Sector
Among the industries that look set to be changed by 5G is the mobile sector
itself. Internet giants don’t rebuild the network from scratch every five to
ten years but the telecom industry has been doing just that, an expensive
and long process that requires spectrum allocation, licensing fees, regulatory
permissions to install equipment and the purchasing and maintenance of
proprietary gear.
European mobile phone companies spent $129 billion on 3G mobile licenses
alone in 2000 only to shell out billions more a few years later for 4G licenses
andequipment. Thecostofbuildingout5GnetworksinEuropeisconservatively
estimated to be around $56.6 billion, according to the report prepared for
the European Commission.
The good news is that 5G is software-based and will run on commodity
hardware. “Since it is now software driven the next generations will not
be advanced on a system but on a feature basis,” says Mischa Dohler, head
of the Centre for Telecoms Research at King’s College in London and a
former employee at the global telecoms operator Orange. “Therefore it
will be much quicker to upgrade. I predict we will not have a 6G.”
In any case 5G looks poised to be the wireless broadband standard for the
foreseeable future, and if analysts are right, embracing it will be necessary
for any country, city or company that wants to gain the speed, scope and
scale to take part in the Fourth Industrial Revolution.
COVER STORY
INDUSTRY
Ag.,forestry & fishing
Arts & entertainment
Construction
Education
Financial & insurance
Health & social work
Hospitality
Info & communications
Manufacturing
Mining & quarrying
Professional services
Public service
Real estate activities
Transport & storage
Utilities
Wholesale & retail
All industry sectors
Enhanced
Mobile
Broadband
Massive
Internet of
Things
Mission
Critical
Services
5G -enabled
output
( 2016$, M)
Percent of
industry
output
$510
65
742
277
676
119
562
1,421
3,364
249
623
1,066
400
659
273
1,295
$12,300$4,300$3,600$4,400
6,4%
3,5%
4,7%
3,5%
4,6%
2,3%
4,8%
11,5%
4,2%
4,1%
3,7%
6,5%
2,4%
5,6%
4,5%
3,4%
4,6%
5G WILL ENABLE $12 TRILLION OF DIRECT AND
INDIRECT GLOBAL ECONOMIC ACTIVITY IN 2035
No impact High impact Source IHS

train computers and develop artificial intelligence (AI), a field China has
vowed to lead. Serving the world’s largest population and a vast domestic
market, China’s tech companies can potentially collect data on a much
greater scale than their counterparts elsewhere.
The rewards could be huge. Accenture, the global consultancy, estimates
that the IoT could deliver gains of up to $1.8 trillion in cumulative GDP
for China by 2030 through the transformation of manufacturing,
transportation, resources and utilities.
Eric Schmidt, a former CEO of Google and former chairman of Alphabet,
is among the business leaders who believe China will fulfil its AI ambitions.
“By 2020, they will have caught up. By 2025, they will be better than us.
By 2030, they will dominate the industries,” Schmidt said at the Artificial
Intelligence and Global Security Summit in Washington in November.
A Boost to Self-Driving Cars
One of the most profound applications of AI and the IoT is likely to be self-
driving cars, which could transform economies around the world. “The
main difference that 5G will make is the realization of the Internet of
China is undeterred by worries that consumers and
companies won’t pay more for faster, more responsive connectivity: The
country’s leaders see 5G as an important stepping stone on the road to
becoming a global tech powerhouse to rival the United States.
“China will be a global leader in terms of scale and investment in 5G
because it is a high-priority national strategy,” says Edison Lee, head of
telecom research at Jefferies in Hong Kong. “In other countries, 5G is being
driven by operators looking to gain a competitive advantage; in China it
is part of its national goal to become a leading digital country.” The logic
goes like this: 5G is designed to support a massive expansion in the Internet
of Things (IoT) – a shorthand term for connecting all kinds of machines,
devices and vehicles to each other and to the Internet. All this connectivity
will generate vast amounts of data about the world, which can be used to
— P.11
— Rolling out the technology is part of a
“high-priority national strategy” to become a global
tech powerhouse
By David Pringle
WhyChinaWants
toLead
the5GCharge

COVER STORY
Things,” says Markus Seidel, head of BMW Group Technology Office China.
“For the auto industry, it will greatly boost the development of autonomous
driving.” Having launched its ConnectedDrive service in China as early as
August 2012, BMW is using 4G cellular connectivity to provide its Chinese
customers with concierge services, automated emergency calls and real-
time traffic information, along with remote-control functionality.
The next step for BMW is to trial 5G connectivity, but Seidel says the timing
will depend on how fast telecoms operators deploy the new technology.
China Mobile, in particular, is making a big bet on the IoT. It has said it
will pay out 2 billion yuan ($303 million) as subsidies to IoT device
makers. China Mobile plans to add another 120 million IoT connections
in 2018, taking its total to about 320 million, as it scrambles to connect all
kinds of products to the internet, including home appliances, vehicles, and
water and gas meters.
Made in China 2025
As the world’s workshop, China is naturally looking to use 5G and the IoT
to transform its manufacturing sector. The Chinese government’s “Made
in China 2025” initiative has echoes of Germany’s “Industrie 4.0” program
to transform manufacturing through automation.
Connected robots and assembly lines can exchange information in real-
time, giving each other early notice of potential faults, changes in production
schedules and supply shortages. “5G can enable and enhance critical control
of production line robotics,” says Zhiwei Zhang, head of marketing for
Ericsson North East Asia. “This includes tethered or untethered robots that
are controlled, monitored, and can be reconfigured remotely. This
technology could be used in factory floor production, reconfiguration and
layout changes, real-time analysis and even to steer a robot’s movement
from a remote location.” “China has a vision to be a world leader in
precision manufacturing,” says Sylwia Kechiche, lead analyst at GSMA
Intelligence, “China is pushing hard to automate factories.” She points to
the rapid rollout of 4G as an example of how fast China can deploy new
technologies when the government plays a coordinating role. China’s
operators have implemented 4G much faster and more comprehensively
than their European counterparts. One of the biggest changes between 4G
and 5G will be the responsiveness and density of IoT connectivity, says Low
latency connections will enable the so-called tactile Internet in which people
will be able to remotely control machines as if they had them in their hands.
Remote-controlled machines could be used to carry out otherwise hazardous
inspection and maintenance of infrastructure, as well as enable humans to
stay out of clean-room environments.
The Internet of Everything, Including Camels
As well as making its cities smarter and greener, China is using the IoT to
help rural areas develop and become more prosperous. In Alxa League, a
remote part of Inner Mongolia known as the “Hometown of Camels,” China
Mobile is enabling local people to track the location of their camels using
cellular connectivity. The animals wear solar-powered necklets, equipped
with a GPS chip and a cellular connection, which can transmit their
whereabouts to their owners’ cellphones. If the system detects a camel
moving at an abnormal speed or the herd goes beyond the grazing range,
it will send an alert. China Mobile estimates this “intelligent grazing
system” can save each family nearly 50,000 yuan by reducing losses and
improving grazing. With the arrival of 5G, agriculture will be transformed
CHINA — FORECAST FOR 5G CONNECTIONS
Source: The GSMA
5G connections (million)
4
44
117
227
354
428
2020 2021 2022 2023 2024 2025

— P.13
country’s largest mobile operator, has said it will deploy 10,000 5G base
stations by 2020. Edison Lee at Jefferies expects major cities in China to
have 5G coverage by the end of 2020, with capital spending on 5G
networks peaking in the country in 2021 and 2022. For China, Lee says
the benefits of deploying the technology fast are twofold: China will be
able to claim many of the patents underpinning 5G technologies, while
scaling up will reduce the unit cost of the equipment and encourage the
rest of the world to adopt 5G earlier than would have been the case.
Indeed, China is hoping that its equipment makers, such as Huawei and
ZTE, will be leading suppliers of 5G technologies to other countries. The
China Academy of Information and Communications Technology (CAICT)
has estimated that 5G-related revenue for network equipment and
handset manufacturers will reach a total of around 17.5 trillion yuan
($2.8 trillion) between 2020 and 2030, according to a report by
Telegeography. CAICT believes the network operators themselves will
see total revenue from 5G reach roughly 7.9 trillion yuan between 2020
and 2030.
To be sure, China is cooperating, as well as competing, with the West on
AI and 5G. For example, researchers at Edinburgh University and experts
at the Chinese telecoms equipment maker Huawei are working together
on the development of robots supported by 5G. Teams from Huawei’s
Wireless X Labs and the University’s new Bayes Centre are “investigating
how AI systems can use wireless 5G networks to provide optimum
support for connected robotics and autonomous systems,” according to
a press release.
Such research highlights the interdependence of 5G, the IoT and AI. For
China, the strategic aim is nothing less than global leadership in all three
technologies, a goal it looks poised to achieve.
further still, making it possible for connected drones to stream live footage
of animals to their owners, while also surveying the surrounding landscape.
At a China Mobile event in Shenzhen in November, ZTE demonstrated how
a 5G-enabled drone can transmit high-definition images to the cloud and
generate topographic maps in just a few seconds.
Huge Investment Needed
But this kind of high-tech wizardry won’t be cheap. The research arm of
China’s Ministry of Industry and Information Technology expects China’s
three mobile operators – China Mobile, China Unicom and China Telecom
– to invest a total of 2.8 trillion yuan ($411 billion) in 5G technologies
between 2020 and 2030, with annual spending peaking at 313.3 billion
yuan in 2023, according to the South China Morning Post.
Why is 5G so expensive? Early commercial rollouts are likely to require
investment in small cells and transmission upgrades, with fiber backhaul
providing transmission speeds of 10 Gbps and sub-10 millisecond
responsiveness, according to a report by GSMA Intelligence. Moreover, if
they are to serve mission-critical applications, such as remote surgery, 5G
networks will need to be ultra-reliable. They will have to deliver a “very
high quality of service and uptime burden when the stakes are life and
death, rather than just a great service,” the report notes.
Ahead of Schedule
In November 2017, China started the third phase of its 5G technology
research and development tests, ahead of schedule. China Mobile, the
5Gwillmakeiteasierforpeople
inInnerMongoliatotracktheircamelswithdrones.

Therehasalwaysbeenafiercerivalryamongstwirelessoperators
andequipmentmakerstobefirsttomarketwithanewtechnology.But when
it comes to 5G the stakes could be considerably higher. Racing ahead in 5G
could help China dominate in the Internet of Things and artificial intelligence
– boosting its GDP and industries over those in other countries and regions.
(See the story on pages 11-13.) Operators in North America and East Asia
are leading the race to deploy 5G. Europe is expected to lag behind by at
least a year, with some analysts predicting that EU 5G coverage may be
limited to a few city centers and airports until 2022-2023. “There are some
challenges that Europe clearly faces,” says Kester Mann, a principal analyst
at CCS Insight, a UK-based research firm focused on the global wireless
sector. “It won’t be among the leading regions.”
U.S. Rollout
Like China, the U.S. will be a leading adopter of 5G. But the rollout will
be less systematic and more ad-hoc. The largest U.S. telecoms companies,
AT&T and Verizon, are planning to launch 5G services as early as this
year. However, these early deployments are focused primarily on serving
fixed connections – linking to a 5G receiver in a customer’s home or office,
rather than to a mobile device.
Sprint announced it would launch a nationwide 5G network in the first
half of 2019 in the U.S. While that could leave the operator behind rivals
AT&T and Verizon Wireless in terms of deployment, Sprint says it will
offer more extensive coverage, rather than just a few cities. It would also
be ahead of T-Mobile, which plans its rollout for 2020.
TheRaceIsOn
— Why the U.S. and Europe need to win in wireless.
By Jennifer L. Schenker and David Pringle
COVER STORY
Europe’s Operators Take Cautious Approach
Europe also has big ambitions. In addition to a number of pan-EU trials,
it is planning extensive smart-city trials and European operators are already
announcing plans. Orange, for example, says it will launch France’s first-
ever end-to-end test in the northern cities of Lille and Douai between mid-
2018 and mid-2019 as soon it has the necessary authorizations. And the
UEFA EURO 2020 soccer championship games, which will be played in
13 different cities in Europe, will be used to showcase 5G.
But mobile operators are taking a cautious approach to network rollouts.
They complain that the EU isn’t creating the right regulatory environment
to attract sufficient investment. In particular, they are unhappy that more
in-market consolidation has been blocked and there isn’t greater pan-EU
coordination of spectrum policy. Some countries are likely to make spectrum
available much later than others, making it tough for the industry to gain
economies of scale. This was one of the reasons 4G was rolled out more
slowly in Europe than in the U.S. and East Asia.
Local Projects With Big Ambitions
While it seems almost certain that the region will not be an international
frontrunner in the next generation of wireless technology, that is not
stopping some European countries and cities from vying to become global
5G leaders in their own right.
For example, Barcelona aims to harness the city’s scientific and technology
startup strengths as well as its ties to the annual Mobile World Congress
to become an international 5G hub. (See the story on pages 16-18.)

Research centers located in Barcelona are focusing on 22 of the 37 European
5G research areas. While they and others involved in what is known as
the 5GBarcelona initiative are participating in EU programs, they also
want to create their own independent initiatives in order to attract
international companies to test 5G technology in the city, says Carlos
Grau, director of Mobile World Capital, the Barcelona-based nonprofit
organization that helps organize Mobile World Congress and 4YFN, a
sister conference focused on startups and innovation taking place at the
same time. The goal is to boost the local economy and create jobs in
Barcelona.
Meanwhile, in the UK, three British universities – King’s College London,
Bristol University and the University of Surrey – are being linked up via
5G test beds thanks to a £16 million investment from the UK government
to fund the first trials of end-to-end 5G systems.
The University of Surrey’s 5G Innovation Centre, which is leading the
project, is developing 5G radio technologies and a fully virtualized mobile
core network; Bristol University is charged with deploying 5G capability
in extensive “Smart City” and “Smart Campus” test beds, targeting full
5G and fiber infrastructure convergence; while King’s College London is
driving ultra-low latency 5G tactile Internet developments with so-called
“Internet of Skills” applications, which enable the transfer of expertise
over great distances in real-time using robotics and haptic feedback.
Ultra-low latency allows things in the virtual world to sync with the real-
world, enabling a new paradigm known as Synchronized Reality. Uses
include remotely controlling or repairing machines or conducting surgery
on a patient from a distance. Through the King’s College London 5G
initiative, the university is also co-designing 5G approaches with various
sectors, including smart cities, smart transport, performing arts and health.
The focus on specific industry vertical use cases is key, says Mischa Dohler,
head of the Centre for Telecoms Research at King’s College and a former
employee at the global telecoms operator Orange. “We have been out
there talking to cultural spaces, big airports like Heathrow and hospitals,”
he says. “There is a lot of appetite for low latency. Synchronized reality
will permit manipulation of mission-critical applications at a distance.
By creating demand we are ensuring that industry will understand what
is the value and will not question the cost.” In December the global
mobile operator Vodafone, Ericsson and King’s College performed what
they said were the first successful 5G tests in the UK that work independently
of 4G technology. King’s College was one of only a few applicants chosen
by the global telecoms gear-maker Ericsson to test its 5G equipment. “That
is important because King’s College is among the first to have an end-to-
end coordinated system thanks to Ericsson and our in-house developments,”
Dohler says.
Rolling out such end-to-end systems nationwide will require the installation
of 5G-specific antennas, a costly, time-consuming process for mobile
operators. Dohler, a member of the spectrum board of Ofcom, the UK
telecoms regulatory agency, says the country may have found a way around
thisproblem.“WhatIhaveproposedtotheNationalInfrastructureCommission
in the UK is a framework that would allow operators to negotiate a license
to roll out antennas to all public street furniture in the country rather than
having to do this on a regional or city scale,” says Dohler. “This would be
a major game-changer and make rollout much faster and economical.”
Reasons for Optimism
While all 5G frequencies will not be available in the UK until 2020 due to
spectrum availability issues, Dohler believes it is possible to build what
he calls “100% of perceived coverage” by creating hotspots that would
allow the pre-buffering of bandwidth-hogging applications while in a
coverage zone. “The regulatory issues are not easy but they are not
impossible,” he says.
There are also some other reasons for optimism. In the past wireless
standards have been reliant on the development of hardware that had to
be designed, installed and maintained by engineers. But 5G can run over
commodity hardware, widening the field to new entrants. “5G is now a
software industry and Europe is good at software – particularly B2B
software,” says Dohler. 5G represents “an exciting opportunity” both for
the UK and for Europe as a whole, he says, with the power to transform
not just the tech sector, but all industries, for those countries, cities and
companies that move fast enough to reap the advantages.
— P.15
5G subscribers, millions (year end)
Source: CCS Insight
2019 2020 2021 2022 2023 2024
North America 2.084024 13.69929 68.21391 136.9507 220.3113 301.3545
Western Europe 0 2.594615 15.83894 53.05347 116.8971 188.1054
China 1.970739 13.23471 93.8094 432.3648 736.6089 897.1792
5G FORECAST

Barcelona’sBid
toBecomeaGlobal
5GHub
— The city aims to turn its wireless technology
prowess into a local economic advantage.
Barcelona doesn’t want to be known simply as the host city
ofMobileWorldCongress, an annual international exhibition and conference
that attracts over a 100,000 attendees. It aims to be at the center of the
wireless industry all year long.
“We want to position Barcelona as a leading global 5G hub,” says Sergi
Figuerola Fernandez, chief technology and innovation officer at i2CAT, a
Catalonian nonprofit research and innovation center that promotes R&D
activities in information and communication technologies and future
Internet.
To that end, new local 5G projects in Barcelona focusing on four verticals
– connected cars, healthcare, industrial applications and entertainment
– will be announced during this year’s Mobile World Congress.
The projects will include the participation of large international companies
and telecom operators, says Carlos Grau, the head of Mobile World Capital,
a nonprofit organization based in Barcelona that is behind Mobile World
Congress and Four Years From Now (4YFN), a sister conference focused
on digital disruption. Both conferences will take place in the city between
February 26 and March 1. 5G, a big focus at Mobile World Congress 2018,
TheTorreGlòries,formerlyknownasTorreAgbar,
inthe22@district,theheartofBarcelona’sstartupsector,
whichisrankedfifthinEurope.
Thecityhopestoleverageitstechstrengths
tobecomeaninternational5Ghub.

promises to open the way for the generation of new services in areas such
as autonomous and connected vehicles, drone-based services, access to
remote health services and smart manufacturing, the use of advances in
robotics, artificial intelligence, material science, 3D printing and the
Internet of Things to allow every object in a factory to communicate with
the others.
An International Testbed
Cities, countries and companies that move fast to adopt 5G are expected
to gain a significant economic boost. (See the story on pages 8-10.)
With that goal in mind i2CAT, Mobile World Capital, the government of
Catalonia, the Barcelona City Council, the Telecommunications Technology
Centre of Catalonia (CTTC), the Polytechnical University of Catalonia
(UPC) and the research lab of Atos, a European IT services company,
signed an agreement in January in support what is being called the
5GBarcelona initiative.
During the course of 2018, as part of the next phase of the European
— P.17
COVER STORY
Union’s 5G-Public Private Partnership program, the European Commission
will select a small number of projects for 5G testing and validation.
5GBarcelona aspires to be one of those projects. Barcelona is also already
acting as a public test bed for 5G through the European Commission’s
5GCity project. But Barcelona’s ambitions are larger than just being part
of pan-European projects, stresses Grau. It wants to translate its 5G
prowess into a local economic advantage.
Major investment in 5G is expected to have “trickle-down” impacts across
the whole of the European economy, potentially generating €141.8 billion
in new revenues across the EU and creating 2.39 million jobs, according
to a 2016 report prepared for the European Commission’s Directorate
General for Communications Networks, Content and Technology by Trinity
College Dublin, the wireless advisory firm realwireless, the mobile technology
research firm InterDigital and the research consultancy tech4i2.
The aim is to attract up to 12% of that revenue by “turning Barcelona into
a global 5G testbed and attracting the digital units of large corporations
to relocate here,” says Grau. “We don’t want to just be experts in antennas
CarlosGrau,
MobileWorldCapitalDirector
“We wanttodifferentiate
ourselvesfrom
techhubslikeLondon
andBerlinbyanalyzing
thescenariosinwhich
5Gcouldbeusedand
anticipatingtheeconomic
impactofnewuses
andnewservices.”
BARCELONA’S STRENGTHS
— ItistheheadquartersofMobileWorldCapital,theorganizer
ofMobileWorldCongress.FoundingpartnersareSpain’s
MinistryofIndustry,EnergyandTourism;thegovernmentof
Catalonia;theBarcelonaCityCouncilandtheGSMA,anindustry
tradebodythatrepresentstheinterestofoperators
worldwide.Privatesectorpartnersincludethetelecom
operatorsTelefonica,VodafoneandOrange.
— Fourscientificresearchcentersfocusedon22oftheEU’s37
5Gprogramsarebasedthereasisi2CAT,theCatalonia
government’scommunicationsresearchcenter.
— BarcelonaisrankedfifthinEuropewhenitcomestonumber
ofstartupsandtheirsize,qualityandinvestmentrounds.
— Itishometolargecorporationsthathavedecidedtoembrace
5G,suchasthecarmakerSEAT,aunitoftheVolkswagengroup.
— Thecityisexperimentingwith5Gtechnologiesaspartof
whatitcallsan“openlivinglab”togaugethetechnology’s
impactonitsfuture.
— Barcelona’sFootballClubhasagreedtotest5Ggearinthecity’s
stadium
— TheSpanishgovernmentjustagreedtoheadquarter
anew”5GObservatory”toanalyzeusecasesfor5Gandtheir
projectedeconomicimpactonSpaininthecity.

COVER STORY
and chips. We want to differentiate ourselves from tech hubs like London
and Berlin by analyzing the scenarios in which 5G could be used and
anticipating the economic impact of new uses and new services.”
Involving Barcelona’s Residents
One of 5GBarcelona’s goals is to establish an open experimental infrastructure
inthemetropolitanarea,whichwillserveasanurban,citizen-ledtechnological
laboratory for validating 5G technologies and services, says Francesca Bria,
the city’s chief technology and innovation officer, an advisor for the
European Commission on Future Internet and Smart Cities policy, a member
of the EC Expert Group on Open Innovation (OISPG) and a member of
the European Research Cluster on the Internet of Things (IERC).
To that end, in the run-up to Mobile World Congress, the city organized
what it calls “Mobile Week Barcelona” from February 15 to 24. During the
week-long event, Barcelona’s districts were converted into “places for open
debate, creativity and learning as a means of reflecting on how digital
transformation will change everyday life.”
Mobile Week fits in with existing initiatives launched by the city of Barcelona
that allow for “new forms of policy-making that are open, experimental
and able to build in the collective intelligence of citizens” according to the
city’s website.
“This needs to happen from the bottom up,” says Bria. “By putting citizens
at the center, we also aim to increase their digital sovereignty, enabling
them to fully exercise their freedom and digital rights, including their right
to data protection, privacy and information self-determination.”
The city has launched a democracy platform called Decidim.Barcelona to
experiment with new types of participatory democracy. It is also starting
training programs to help people hone digital skills and it is attempting
to show people that the addition of new types of technologies can lead to
improvements in everyday life through programs that can be then scaled
throughout the city. One example is the “Superblocks,” a participatory
urban planning intervention that targets CO2 emission, closing off entire
districts of the city to traffic and applying all the technological and
environmental advances at the city council’s disposal to create more green
spaces and improve air quality and the environment.
As the technology evolves “it is important that the city itself can experience
the changes that will be brought about by 5G,” says Bria. “We want to
avoid a digital divide and we want to let the people see how this technology
can be put to work for them. «At the same time we want our local industrial
sector and SMEs in particular to be at the center of this technological
revolution.”
J.L.S.
“Itisimportantthatthecity
itselfcanexperiencethechanges
thatwillbebroughtaboutby5G.
Wewanttoavoidadigital
divideandwewanttolet
thepeopleseehowthis
technologycanbeputtowork
forthem.”
FrancescaBria,
Barcelona’s Chief Technology and Digital
Innovation Officer

WE NEED
Y U
“If you want to be a startup billionaire, you have to solve a billion peoples‘ problems”
Thimo V. Schmitt-Lord MBE, Head of Bayer Foundations
We believe in the game changing power of innovation – we support pioneers who apply tech innovations to humanity’s
biggest challenges around heath and food.
In 2018 we are scouting for Startups, Innovators, and Impact Innovations particularly focused on agriculture and food
production for our seed funding programs and new book "The Beauty of Impact - Food". We are searching for innovations
that solve the food crisis and other global grand health-related challenges that we can promote and fund to bring to the
rising billions in need around the world.
The next opportunity to meet the the Foundations CEO Thimo V. Schmitt-Lord and Open Innovation Hub Director and
Speaker Marc Buckley is at 4YFN in Barcelona, Spain on Feb. 26-28 and at Skyberries in Vienna, Austria on Feb. 28-March 2.
Seeking funding yourself for a crazy “innovation-4-good” idea?
Get in touch with us at bayer.foundations@bayer.com. More Info: www.bayer-foundations.com

Fearing that their core business will become a commodity,
turning them into little more than “dumb pipes,” telecom operators have
spent the last 30 years trying to reinvent themselves as everything from
content providers to banks, with limited success.
So now Telefónica is sending people trekking all the way to the Amazon
jungle and Peruvian Andes to try and find radically different paths forward.
One idea being explored by the global telecom operator is to become an
energy service provider that will “redefine power generation for the 21st
century.” To that end, it is exploring ways it could serve the three billion
people globally who have no access to electricity or are stuck with unreliable
service. It is also looking at how to apply advances in artificial intelligence
and behavioral science to monitor and improve peoples’ health. These are
just two of the “moon shots” being pursued by Telefónica’s Alpha, which
is billed as Europe’s first moon shot factory.
Telefónica has three well-established startup investment arms – Wayra,
TelefónicaVenturesandAmérigo–and,likeotherbigcorporates,isconstantly
developing new ways of approaching innovation internally. These efforts
are primarily aimed at keeping the current business running and taking
incremental steps in new directions.
Alpha is a radically different program. It is completely separate from the
core company, staffed primarily by outsiders and its goal is to help Telefónica
branch into entirely new high-impact business lines in the future. “By our
SeekingAlpha
— Telefónica is attempting to define its future revenue
and profitability through moon shots.
TELECOMMUNICATIONS
definition of a moon shot, there are only two moon-shot factories in the
world: X [launched by Alphabet, Google’s parent company] and Alpha,”
says Maurice Conti, Alpha’s chief innovation officer. Conti previously
worked as Director of Applied Research & Innovation at the U.S. software
giant Autodesk. He has expertise in applied machine learning, advanced
robotics, augmented and virtual realities, and the future of work, cities
and mobility and is a member of the faculty of future/io, a new European
education and research institute focused on exponential technologies and
desirable futures.
Emulating a Scrappy Startup
Conti and his team are responsible for coming up with ideas, prototypes
and proofs of concepts that will go on to become full-blown moon shots,
i.e. things that have not been tried before that will affect a 100 million
people or more and grow into impactful businesses. The team is comprised
of people who are not your typical phone company employee.
“If you polled most of the people who work at Alpha I don’t think they
would say they work for a big telephone company, but rather for a small,
fast, scrappy startup that is exciting to be a part of,” says Conti. “This is
partly due to the fact that Telefónica has come up with a very clever
business model. Alpha is not an in-house center of innovation excellence
– which we have all seen ad nauseam. They don’t work. We have the
benefit of Telefónica’s support (without which we wouldn’t exist), but our
identity is Alpha. It’s what we live and breathe every day. That’s part of
what helps us attract a whole different kind of talent.”
As an example Conti recalls how Alpha recently contacted a “crazy musician/
artist /hacker type and asked him to build a prototype – a VR thing. He
was wary of working with Alpha. We were almost too corporate for him.”
But, says Conti, “we talked him into it by showing him we’re not just
corporate types, we have plenty of eccentric brilliant weirdos doing really
groundbreaking stuff. So he came in and after four, five days he built this
truly awesome prototype that incorporated some off-the-wall ideas which
might have never occurred to us.” To Conti this is an example of how
Alpha can attract brilliant people who are not interested in a big-name
brand or big paycheck. “Most of the folks here are motivated by the
opportunity to make a big difference in the world,” he says. The Alpha
ideation team’s mission is to deliver new moon-shot ideas for board approval.
The board is comprised of Telefónica CEO José María Álvarez-Pallete López
(Alpha was his brainchild) and a group of Telefónica executives, scientists
and Silicon Valley innovators.
“If a moon shot is approved, Telefonica knows they may take up to a
decade to become viable businesses, which means we can pursue challenges
that are out of the reach of startups fueled by venture capital,” says Conti.

“The ideation process is like a linear funnel,” he adds. “In the beginning,
there are a lot of concepts, very rough ideas and a lot of assumptions. We
use different methodologies like science fiction futures and Worldbuilding
to come up with several dozen candidates.
At the end of this phase we reduce it down to between five and ten and
double down on them with more resources and prototyping – not just
developing gizmos but prototyping business plans, thinking about potential
collaborations and partnerships, exploring the bleeding edge of the relevant
technologies, and generally envisioning what the world with this thing in
it would look like.” During the process, the Alpha team start decreasing the
amount of risk or number of leaps of faith. “We get down to three ideas and
we go heavy and serious on all three, developing a robust business plan,
market analysis and technology,” says Conti. “If the moon shot is intended
for a certain part of the world, we go there and meet the people who intend
to use this technology and do ethnographic research. We also seek to get
external validation from the world’s top experts. We look for the top two
or three people on the subject to get their feedback. Usually the projects
are so interesting that even these folks – the best in the world at what they
do – are willing to give their time and energy. Then, at the end of the process,
we go from three to the one candidate that is going to be presented to the
board and we do two things: we do everything we can to prove it is a solid
moon shot and then we do everything we can to kill it.” The team tries to
come up with a dozen questions designed to question the moon shot. “We’re
actually super motivated to kill the moonshot before presenting it to the
board,” says Conti. “No one wants to be working on something for the next
decade that isn’t the very best idea we can come up with.”
Shooting for the Moon
So far two moon shots have been approved. Offering access to electricity
to people who have no access or are underserved “could be both a very
interesting large business and at the same time a net force for a good,”
says Conti. “We believe there is a significant healthy long-term market in
this space but I can’t share too much publicly. All I can tell you is we are
sending people into the Amazon jungle and Andean mountain villages to
work with these folks around what energy could mean.” Alpha is releasing
few details about the health initiative.
So what kind of other moon shots can we expect to see from Alpha? “We
are not tasked with developing things like 6G [the next potential wireless
broadband standard],” says Conti. “We’re here to solve some of the biggest
problems facing society. We have no boundaries in the areas that we
investigate so I’d say you should expect something big, audacious and,
well, unexpected.”
J.L.S.
— P.21
Alphaemployeesspeaktopeople
inanAndeanvillageaboutwhattypesofenergyservices
couldmakesenseintheregion.

Brian Behlendorf, a
scheduled keynote speaker at Mobile
World Congress in Barcelona, is
executive director of The Hyperledger
Project, an open-source collaboration
initiative hosted by the Linux
Foundation. Its charter is to build a
set of distributed ledger or blockchain
technologies that can be used for a
wide variety of purposes and
embedded inside the emerging next-
generation Internet.
Behlendorf, a leading figure in the
open-source software movement, was
a primary developer of the Apache
Web server, the most popular web
server software on the Internet. He
is a member of The World Economic
Forum’s Global Future Council on
Blockchain and is on the boards of
directors of the Mozilla Foundation
andTheElectronicFrontierFoundation.
He recently agreed to speak to The
Innovator’s editor-in-chief about how
the telecommunications industry –
and other sectors – might leverage
blockchain technology.
A consortium of telecom operators is
being formed to construct a massive
asset exchange network based on
blockchain that would leverage and
build upon their existing ability to
exchange data across their collective
five-billion-person network.
Accenture calls it a $1 trillion
opportunity for the industry. How do
you foresee the telecoms industry
using blockchain?
—B.B.:The idea of telecom operators
building something based on open-
source distributed ledgers is not far
fetched. The use of blockchain makes
sense when you need to record a
transaction or implement a directory.
Inthetelecomssectorthereareseveral
use cases worth thinking about. The
simplest one is number portability:
when a sim card is turned on you are
assigned a phone number and when
there is consensus to move that phone
number with all of its transaction
history you want to be sure that it is
done in a way that is transparent and
distributed.
Q: What are some other possible
use cases?
— B.B.: Another potential use case is
cross-border billing for using minutes
or services on a number of different
provider networks. Every transaction
is tracked and reflected back on a bill
to an end user. Before blockchain
technology, the sector was limited to
point-to-point integration of networks
or centralized transaction hubs. This
creates certain challenges. These
centralized networks are great for
BLOCKCHAIN
HowBlockchain
MightTransform
TheMobile
Industry
AndMore
AnInterview
With
BrianBehlendorf,
AscheduledkeynotespeakeratMobile
WorldCongressinBarcelona

passing around small payments and
keeping track of lots and lots of small
granular transactions, but when a
problememergesorthereareattempts
at malfeasance it is important to have
a record in an immutable ledger
shared between network providers.
The blockchain provides a good way,
when problems do emerge, to have
an audit trail back to understand what
was the change and who was
responsible for it.
Could telecoms also use blockchain
to generate new sources of
revenues?
— B.B.: Digital identity services are
one potentially very large opportunity
for today’s retail network operators.
There are very few other sectors that
have billing relationships with such
a broad segment of the population.
Globally, there are 1.1 billion people
in the world who do not have formal
identity documents and thus can’t
open a bank account or even have
access to government services. There
have been attempts to address this
with digital identity solutions, such
as Aadhaar, a national biometric
identity program in India created by
the tech entrepreneur Nandan
Nilekani. But there are significant
challenges with such centralized
directories, whether from corruption
and abuse or simply because they are
like big honeypots that are vulnerable
to hacking.
So to address this we have a project
called Hyperledger Indy, which
implements a different concept for
digital identity called “Self-Sovereign
Identity.” In such a system individuals
manage their personal data in
something more personal and closer,
likeadigitalwallet,whichholdsdigital
equivalents of drivers licenses, birth
certificates, diplomas, titles to your
house,healthrecordsandmore. Such
a wallet uses a distributed ledger to
record your signatures, and other
signatures on these documents, so
you can prove they are valid when
you present them to others. The data
remains stored at the source – with
the person it concerns – and each
person could keep track of whom they
share the data with. Permissions and
access history would all be recorded,
and the original data would stay safe.
Telecom companies are in a unique
position to assist with the rollout of
such a service, because of the direct
retail consumer relationship they
have with so many individuals.
Furthermore,asimcardcanhelpattest
to who a person is or assist in resetting
in case of lost ID.
Will people trust their phone
companies to handle their identities?
— B.B.: There are three sectors –
telcoms, banking and government
– that many people love to hate.
That is one of the challenges. But
what M-Pesa [a mobile phone-based
money transfer, financing and
microfinancing service, launched in
2007 by Vodafone for Safaricom and
Vodacom, the largest mobile network
operators in Kenya] demonstrated
is that telecom operators have the
reach – even more so than financial
service companies. Banks are closing
retail branches everywhere, whereas,
especially in the developing world,
every bodega or kiosk operator is
selling added minutes or can help
you with transferring money via
mobile phones. That is why telecom
operators are in a great position to
be the touch point for managing
digital identity.
What other sectors are likely to use
blockchain?
— B.B.: Any sector that has to deal
with real problems involving trust.
Supply chains of all sorts. The
diamond industry has an active
blockchain project this year. Food
safety projects, such as one involving
IBM and Walmart, that seek to track
the provenance of everything from
pork to mangos or salmon. In
healthcareitcanbeusedforthesupply
chain of pharmaceuticals or the
sharing of medical records. Telecom
can’t be too far behind from what we
see, but now is the time for this
industry to get things rolling.
Hyperledger is here to help.
Are we at the top of the blockchain
hype cycle?
—B.B.:It does feel like there is some
over-cheerleading, but blockchain
will be transformational. It’s a
technology that makes it easy to
record and verify and easy to have
a memory. This is something that
will impact every business. It is a
bit like the Internet in the days when
it moved from being a research
platform and a place to play with
tech to a platform for how business
was changed. If your business has
lots of transactions and is working
with a large number of parties where
trust is always an issue then you
should be doing research and be
developing a plan for deploying
blockchain. You should have someone
on your innovation team or
somebody from IT doing a proof of
concept internally so that you start
to get the physics of the technology,
in the same way that in the mid-
1990s Fortune 1000 companies were
getting the sense of the physics of
this thing called the Internet. A lot
of blockchain technology is still early
but not so early that you can’t apply
it to a real business need today.
What other advice do you have for
executives at big companies that
are considering deploying
blockchain?
— B.B.: There is no such thing as a
blockchain of one. The technology
is about coordinating interactions
between parties. So first you need
to be talking to the other participants
in your value chain, the people you
buy from, sell to and perhaps even
your competitors. Then you need
to ask yourselves “how do we
demonstrate that applying blockchain
for this use will have commercial
value?” You need to be having
conversations about common use
cases and to put in some R&D effort
work to see what’s worth doing and
then make it happen.
J.L.S.
— P.23
“Telecom
operatorsare
inagreat
positionto
bethetouch
pointfor
managing
digitalidentity”

THETOP25
STARTUPS
TOMEETAT4YFN
INBARCELONAEach year 4YFN gathers hundreds of innovative startups from around
the world to pitch to investors and corporates.
The Innovator selected the 25 startups we think would be most interesting
to big business.
CYBERSECURITY
EVERSPIN
SOUTHKOREA
WHATITDOES:Everspin’s security platform is
designed for industries adopting IoT systems. It is
focused on protecting increasingly connected
production and manufacturing facilities from
growing cybersecurity threats.
http://www.everspin.co.kr/
CYBERSECURITY
EXCALIBUR
SLOVAKIA
WHATITDOES:Excaliburletscompaniesturntheir
employees’smartphonesintosecuretokensthat
canbeusedtoaccessenterprisesystemsinplaceof
passwords.Theideaistoeventuallyeliminateall
corporatepasswordsandreplacethemwitha
dynamicsecuritysystemthatismoredifficultto
hack.
https://getexcalibur.com
BLOCKCHAIN
VALIDATED ID
SPAIN
WHATITDOES:An ID validation system for
businesses based on blockchain technologies. It
allows companies to centrally manage identification
for customers and partners to facilitate transac-
tions and sales.
http://www.validatedid.com
ANALYTICS
VIISIGHTS
ISRAEL
WHATITDOES:The company uses software, deep
learning, and cognitive computing to power a
platform that analyzes video for smart city
applications, connected businesses, security, and
other IoT uses. The processing is fast enough to
provide real-time warnings and alerts.
http://www.viisights.com
ANALYTICS
BITPHY
SPAIN
WHATITDOES:Provides predictive business
intelligence based on AI, IoT and Big Data for the
retail sector.
www.bitphy.es
CYBERSECURITY
COUNTERCRAFT
SPAIN
WHATITDOES: CounterCraft uses a new security
technique called ” deception” to fight hackers. The
tactics assume hackers will get into a system and
attempts to trick them and manipulate them to
minimize damage and theft.
https://www.countercraft.eu
AUGMENTEDREALITY
WIDEUM
SPAIN
WHATITDOES:Wideum makes smart glasses
called Remote Eye, which are aimed at heavy
industrial users and manufacturers. Remote Eye
delivers live video feeds and uses augmented
reality to allow companies to provide remote
support to technicians in the field.
http://www.remoteeye.com
ENVIRONMENT
TRACKSCO2
SPAIN
WHATITDOES:AnEthereumblockchainsystem
thatallowscompaniestosignsmartcontractsto
offsettheircarbonemissions.Thesystemaimsto
connectcorporateclientswithvarious
environmentalprojectsaroundtheworld.
http://tracksco2.com/
FOOD
EVJA
ITALY
WHATITDOES:Hardware and software system
that draws information from sensors installed in
fields. A farmer can monitor this information on
things like temperature and humidity to make
decisions and, in some cases, even benefit from
predictive models for advance warnings on
potential threats such as various plant diseases.
http://www.evja.eu
HEALTH
IOMED MEDICAL
SOLUTIONS
SPAIN
WHATITDOES:Providesadigitalplatformfor
managingunstructureddatageneratedbydoctors
andhospitals.Inaddition,theserviceanalyzesthe
aggregatedataitgathersusingAItoprovideanalytics
onpatientcareandhospitaloperations.
http://www.iomed.es
ROBOTICS
LUXROBO
SOUTHKOREA
WHATITDOES:Luxrobo sells MODI, a modular
system that lets users design and build their own
IoT and robotic devices. MODI’s clients include
small businesses looking to develop basic IoT
devices.
http://www.luxrobo.com

— P.25
MOBILITY
ECCOCAR
SPAIN
WHATITDOES:Develops a car-sharing platform
businesses can use to manage fleets of cars and
trucks. Administrators control the system from
the back end but employees can book and serve
vehicles directly through a mobile app.
http://www.eccocar.com/en/
BLOCKCHAIN
JELURIDA
NETHERLANDS
WHATITDOES:Develops tools to allow mains-
tream business to build products and services
that leverage blockchain technologies. Its
blockchain-as-a-service approach has been used
to create voting systems, transactions, and some
basic monetary exchanges.
http://www.jelurida.com
MOBILITY
TERAKI
GERMANY
WHATITDOES:Terakimakessoftwarethattaps
intothegrowingamountsofdatageneratedbycars
tobetterpredictmaintenanceissues.Itisalso
workingwithinsurancecompaniestodevelop
systemsfor”usage-basedinsurance”that
personalizepremiumsbasedondriverbehavior.
http://www.teraki.com
PRODUCTIVITY
ZAPIENS
SPAIN
WHATITDOES:UsesAItocreateacentralized
knowledgemanagementsystemforcompaniesthat
allowsemployeestosharedataresources.Asthey
shareinformation,theplatformalsobuildsprofilesof
employeestohelpmatchthemtovariousjobsor
tasksthatariseelsewhereinanorganization.
www.zapiens.org
COMPUTING
COGNIFIBER
ISRAEL
WHATITDOES:CogniFiberisdeveloping”scalable
photoniccomputing,”anewtechnologythatallows
machinelearningandAItobeprocessedinfiber
cablesratherthanhavingtogoallthewaybacktoa
centralcomputingsources.Theconceptaimsto
speedprocessing,cutcosts,andsaveenergy.
http://www.cognifiber.com/
VIRTUALREALITY
NEURODIGITAL
TECHNOLOGIES
SPAIN
WHATITDOES:Develops virtual reality hardware
and software, including haptic gloves, for mobile
phones and computers. Clients include NASA, the
U.S. Navy, Airbus, Alstom, BMW, British Telecom and
Vodafone.
www.neurodigital.es
IOT
DEVICEHUB
ROMANIA
WHATITDOES:Operates a platform and
marketplace for IoT devices and systems. Its
open- source tools are designed to make it easier
for businesses to connect and manage IoT
technologies.
https://www.devicehub.net/
ENERGY
HYBRICO ENERGY
TECHNOLOGIES
GUATEMALA
WHATITDOES:Allowscompaniestopowertheir
mission-criticaloperationsusingsustainable,green
powersources.Itsmodular,solar-powered
generationsystemcanalsobeusedtodeliverpower
toremoteareasnotconnectedtothepowergrid.
http://www.hybricoenergy.com
ENERGY
AEINNOVA
SPAIN
WHATITDOES:To reduce wasted energy,
AEinnova creates power by using heat generated
by electronic and industrial machines. This
captured and recycled energy can then be used for
low-powered IoT devices.
http://www.aeinnova.com
DRONES
UNMANNED LIFE
UNITEDKINGDOM
WHATITDOES:The company has built an IoT
platform to manage both flying and earthbound
drones by allowing them to operate autono-
mously. The system works over a variety of
wireless networks and initially is targeting large
industrial users who want to augment their
production systems.
http://unmanned.life
Compiled and written by Chris O’Brien.
O’Brien is European c orrespondent
for VentureBeat, currently based in France. Before
moving to France in 2014, he spent 15 years
covering Silicon Valley for the San Jose Mercury
News and Los Angeles Times.
ARTIFICIALINTELLIGENCE
DIGITALGENIUS
UNITEDKINGDOM
WHATITDOES:Applies deep learning and artificial
intelligence to the customer service opérations of
large companies. Customers include KLM Royal
Dutch Airlines.
www.digitalgenius.com
ARTIFICIALINTELLIGENCE
PIXONEYE
ISRAEL
WHATITDOES:Pixoneyeusescomputervisionand
AItohelpbusinessesmeasurecustomerbehavior.
Onceitssoftwaredevelopmentkitispluggedintoa
company’sconsumerappitscanstheusers’photos
toenhanceabusiness’sprofileofcustomersand
predicttheirbehavior.
http://www.pixoneye.com
LOCATIONSERVICES
GIPSTECH
ITALY
WHATITDOES:Thecompany’ssystemcombines
twotechnologiesitdeveloped—geomagnetic
sensorsandaspecializedlocalizationengineto
sensethedirectionofpedestrians–withpublic
technologieslikeWi-FiandBluetoothbeacons.The
platformallowsprecisemappingandtrackingof
indoorspacessuchasmuseumsandairports.
http://www.gipstech.com/
SMARTCITIES
XAPIX
GERMANY
WHATITDOES:Uses open data to create
smart-city services. It’s currently focused on
solving the challenge of helping auto
manufacturers make better use of connected car
data and linking to urban mobility systems.
https://www.xapix.io

Sometime last November an anonymous group of hackers
began hijacking smartphones and redirecting their browsers to a website
that conducts “crypto-mining,” the term for using computing power to tally
transactions made on the blockchain, a type of digital ledger technology.
By the time cybersecurity firm Malwarebytes detected the campaign against
Android phones in late January, it estimated that millions of phones had
been compromised. “The threat landscape has changed dramatically over
the past few months, with many actors jumping on the cryptocurrency
bandwagon,” Malwarebytes researchers wrote in a report. “Malware-based
miners, as well as their web-based counterparts, are booming and offering
online criminals new revenue sources. Forced crypto-mining is now also
affecting mobile phones and tablets en masse.”
Rather than attempting to infiltrate inside a mobile phone user’s network
to steal information, forced crypto-mining makes use of 100% of the
processing power of each compromised phone to make money for the
hackers. (As payment for their mining or processing services, miners are
paid cryptocurrency as fees.) It is just the latest example of how the long-
feared security risks posed by gadgets such as smartphones and tablets
have finally become a reality. Over the past two years, the number of
malware attacks and vulnerabilities on mobile devices have exploded,
leading 4YFN, an innovation conference taking place in Barcelona at the
same time as Mobile World Congress, to put cyber-security on the agenda
for the first time. While innovative technologies, startups, and strategies
Cybercrime
IsGoingMobile
— Innovative startups are helping corporates combat
security risks posed by smartphones and tablets.
By Chris O’Brien
CYBERSECURITY
are emerging mobile offers too many entry points to prevent the bad guys
from getting in. The goal now is to use deceit and vigilance to isolate the
hackers’ movements and limit the damage. “Companies use to think of
security as putting up walls and creating a fortress” to prevent anyone
from getting in, says Nico Goulet, a scheduled speaker on the February
27th 4YFN cyber-security panel and a partner at Madrid-based Adara
Ventures, which focuses on cyber-security and Big Data investing. “Now
you assume the world is more open and the walls are not going to protect
us. Now you have to assume people are going to get in.”
Mobile as the Target
Of course, mobile and the Internet of the Things are extensions of existing
corporate networks, which are facing a growing wave of attacks on all fronts.
JuniperResearch,ananalystfirm,recentlypredictedthattherapiddigitization
of consumers’ lives and enterprise records will increase the cost of data
breaches to $2.1 trillion globally by 2019.
An increasingly connected world where more information is digitized and
storedonlinehasdramaticallyincreasedthevalueoftargets,offeringtantalizing
opportunitiesforincreasinglywell-fundedinternationaldigitalcrimesyndicates
and state-sponsored hacking. There’s been a non-stop parade of headline-
grabbing breaches over the past year, from ransomware cyberattacks such
as WannaCry and NotPetya to the catastrophic Equifax hack. As a result,
spending on cybersecurity is exploding. IDC projects that the $83.5 billion
spent worldwide on security hardware, software and services in 2017 will
climb to $119.9 billion by 2021. Even as cyber-security spending overall
increases, a report from Thales and research firm 451 notes that mobile
will be a particular focus of this investment, with 57% of organizations it
surveyed saying they planned to spend more on end point and mobile
defensein2018.That’sbecauseoverthepasttwoyears,mobilehasincreasingly
become the focus of attacks. While security experts have fretted about this
possibility since the iPhone ushered in the smartphone age more than a
decade ago, it’s only more recently that the ubiquity of phones and tablets
atworkhavemadethemvaluableenoughtodrawmoresubstantialinvestment
and attention from hackers. The lack of security on the devices combined
with the growing amounts of data they contain make them much easier
access points.
“The evolution of the mobile device into a computing device, I would say
it’s something organizations didn’t put high on their radar for a long time,”
says Robert Arandjelovic, director of security strategy at Symantec, a U.S.-
based global cyber-security software company. “And security is still an
unpopular topic. Because people still look at security as a weight that will
pull you back rather than something that will allow you do these things.”
In an annual security report, Kaspersky, a Moscow-based cyber security

and antivirus software company, notes that during the first half of 2017
it detected almost twice as much ransomware on smartphones as it did
for all of 2016. Hackers tend to target Android phones because its open
source code and the Google Play stores make development and distribution
of apps containing some kind of malware more efficient.
CVE Details, which compiles a database of security issues, received reports
of 842 Android vulnerabilities in 2017, up from 523 the previous year
and only 13 in 2014. “Google has been playing catch up to improve the
security posture of apps available within their store,” says Pablo Garcia,
CEO of Japanese security firm FFRI, which has developed a mobile malware
detection product. “Google removed roughly 700,000 malicious apps from
their app store in 2017.” But Apple’s iOS is not completely immune. CVE
Details lists 387 iOS vulnerabilities reported in 2017, up from 161 in 2016.
An Uptick in Vulnerabilities
Trend Micro, which specializes in enterprise data security and cyber security
solutions for businesses, was one of the earliest to move into mobile
security. In 2012, the company released its Trend Micro Mobile App
Reputation Service, which scans publicly available apps for suspicious
behavior and malware across all app marketplaces. When employees at
big corporates first started using their personal devices at work, IT managers
kept a pretty tight lid on access, says Loïc Guézo, Trend Micro’s cybersecurity
— P.27
CYBERSECURITY
STARTUPS
TOWATCH
WISEKEY
SWITZERLAND
WHAT IT DOES : Authentication,
identity management and cybersecu-
rity for the Internet of Things.
www.wisekey.com
strategist for Southern Europe. But as the practice has become more
common, those devices have become more integral, and thus more enticing
to digital thieves. “There’s more data on these phones and there are more
privileged access points they can use to get into the corporate network,”
says Guézo, So it is no surprise that cyber-security startups which are
driving some of the more innovative approaches to mobile security, are
in hot demand.
For instance, Fireglass, an Israeli startup, founded in 2014 raised $20
million for its pioneering security strategy known as “isolation.” The
company’s technology creates virtual versions of corporate functions that

employees can access on mobile browsers without being connected to the
main corporate network. If someone hacks their phone, it can’t be used
asagatewayintothemainsystem.Symantec,aU.S.-basedglobalcybersecurity
company, acquired Fireglass in July 2017 for an undisclosed sum. Five
days later, Symantec acquired another Israeli security start up called Skycure,
which had raised $27.5 million in venture capital.
Skycure created a platform that combined crowd-sourced threat information
and artificial intelligence in an attempt to predict and prevent attacks on
mobile devices. After the acquisition, Skycure was renamed Symantec
Endpoint Protection Mobile.
CounterCraft, a Spanish security startup founded in 2015 that has raised
$2.6 million, sets various traps inside networks for hackers who break in,
using another strategy called “deception,” which assumes hackers will find
awaytobreak-in.Theseincludevariousappsthatareplacedonasmartphone
or tablet that the owner knows not to touch or launch. But if someone
steals the phone, or breaks in, and tries to launch or access one of these
apps, they can release fake information, or do things like activate the
phones’ camera to snap a picture of the thief, or send out GPS coordinates,
or turn on the microphone. “You have to be one step ahead of any threats,
and we try to use concepts from counter intelligence,” says David Barroso,
co-founder and CEO of CounterCraft, a scheduled participant on the 4YFN
conferencecybersecuritypanel.Still,theassumptionremainsthatinformation
will be stolen. Increasingly, that information is being used for things like
accessing accounts, particularly financial accounts. The stolen data is
used to create fake identities that mix information from various victims
to create new personas that are then used to open fraudulent accounts.
Enter 4iQ, a startup launched in 2016 with a service that tracks the use
of stolen personal identities that are traded on what is known as the “Dark
Web.” The company was founded by the Spanish developer Julio Casal,
who previously launched another pioneering cybersecurity startup called
AlienVault. That company, which was launched in 2007, was backed by
Adara, as is 4iQ, which has raised $14 million. 4iQ CEO Monica Pal, who
previously worked with Casal at AlienVault, says the mobile topography
is only going to get more challenging for companies as employees turn
to new gadgets and the lines between personal and business uses and
applications blur. “The new perimeter is the individual,” Pal says. “And
the way the individual gets online is their mobile device.”
CROWDSTRIKE
UNITEDSTATES
WHAT IT DOES : Analyzesendpoint
eventsinrealtimeusingmachine
learningandhumanintelligence.Itaims
to detectactiveattacksatendpoints
anddisableattacksbeforeanetwork
break-inoccurs.
https://www.crowdstrike.com/
SECURITHINGS
ISRAEL
WHATITDOES: Provides a platform
that lets service providers monitor all
activity across IoT devices in real time
to detect threats.
https://securithings.com/
TANIUM
UNITEDSTATES
WHATITDOES: Provides a dashboard
that gives visibility and control over
every device in a corporate network,
with the aim of detecting any security
issues within 15 seconds.
https://www.tanium.com/
CYBEREASON
UNITEDSTATES
WHATITDOES: Endpoint detection of
attacks. Its technology finds a
weakness in the attack and then
designs a specific response to stop it.
https://www.cybereason.com/
CYBERSECURITY
Financial services
Utilities and energy
Aerospace and defense
Technology and software
Healthcare
Services
Industrial/manufacturing
Retail
Public sector
Transportation
Consumer products
Communications
Life science
Education
Hospitality
Sources: Ponemon Institute and Accenture
Average annualized cost
by industry sector
US$ millions
Total annualized cost
($1 million omitted)
FINANCIAL SERVICES HAS THE HIGHEST COST
OF CYBERCRIME
$0 4 8 12 16 20

AnInterview
With
JulienCodorniou,
Vice-PresidentofWorkplacebyFacebook
more than one million work groups.
Usersincludeglobalphonecompanies
like Telenor, Spotify, Telefonica,
Deliveroo and India’s Airtel. The
Innovator’s editor-in-chief recently
interviewed Julien Codorniou, vice-
president of Workplace by Facebook,
about how its mobile-first enterprise
collaboration platform is changing
the way people work.
When did Facebook launch
Workplace and why?
J.C.: Workplace launched in October
Facebook,anexhibitor
atMobileWorldCongressinBarcelona
Feb. 28-March 1, is aggressively
expanding into the market for
enterprise social networking and
collaboration applications through
Workplace by Facebook. This
collaboration tool allows co-workers
to communicate and share project-
related messages, documents, videos
andothercontentoverawebinterface
or mobile app. Workplace now serves
more than 30,000 corporations and
organizations, which have formed
of 2016, so less than 18 months ago.
It is based on a system that we built
for ourselves and used internally for
many years. A few companies asked
us if they could use it so we granted
them access and then based on that
success we decided to package it and
launch it officially. The vision is that
it is possible to change the way
companies work by connecting
everyone from the CEO down to the
people on the front lines that were
never connected before – people who
never had a desk, a company email
or a computer. Every CEO we meet
tells us that everybody in the next
generation is coming to work with
different expectations about how to
communicate so we knew that if we
could increase connectivity via our
platform – which uses an interface
most people are already familiar with
–wecouldincreaseproductivity,boost
employee engagement and help
retention.
So is Workplace more of a
communications tool or a
collaboration tool?
J.C.: It’s both. It is a communications
platform and it is an automation
platform. Workplace connects with
industry business tools, along with
custom integrations like bots, to help
businesses get more done.
It’s a crowded market – what does
Facebook offer that other services
like Microsoft’s Yammer or IBM
Connections don’t? Workplace’s
functionality also overlaps that of
team collaboration tools such as
Slack, Microsoft Teams and
Atlassian Stride. What do you see
as your key differentiators?
J.C.: The fact that nearly two billion
people know how to use Facebook
means that they also know how to
use Workplace. This means that no
training is needed for employees,
which is important for non-technical
populations.Workplace,likeFacebook,
is also mobile-first, so it’s built for
the way people work now. We believe
that Workplace is a product that every
company – regardless of size, industry
and geography – can use and benefit
from.
For big companies we have
developed an ecosystem of partners
to help with onboarding that
includes Deloitte, Slalom and PwC,
because even if technical training is
not necessary, giving everyone in the
company a voice can sometimes
necessitatesomechangemanagement.
The fact that we connect to other
applications that many companies
use, like Box, Microsoft Office,
ServiceNow, Okta and G-Suite, really
resonates as well. Our pricing is also
a plus. Companies pay $3 per active
user per month – if someone is not
using it the company does not pay
– and there are no long-term
contracts. We are also adding
features all the time to make
Workplace better and faster. All of
these things together explain our
traction in the marketplace. We more
than doubled the number of
Workplace users last year.
Can you give us some examples of
how companies are using
Workplace?
J.C.: Our customers include Starbucks,
Walmart, Heineken, AirAsia, Booking.
com, Spotify and telecom operators
like Telenor. More than 75% of
employees at Telenor are using
FUTURE OF WORK
NewWays
OfCollaborating
AtWork

devices, but it works for people like
CEOs or managers, who use their
mobilestoaccessitbetweenmeetings.
What about some of the young
high-growth companies that are
using your service, like Spotify?
What are the advantages of using
Workplace for them?
J.C.: The platform is helpful for
companies that are trying to scale
their culture and rapidly integrate
new employees.
What about the SME market ?
J.C.: We are starting to address the
the minute they wake up in the
morning to go to discover content,
communicate and get things done.
It soon becomes the home page of
the company.
Do most people access Workplace
through their computers or via
mobile phones?
J.C.: The vast majority use Workplace
ontheirmobile.Manyoftheemployees
connected at companies like Walmart,
Danone, Heineken previously didn’t
have email addresses. Now, these
employees use Workplace on mobile
Workplace by Facebook on a weekly
basis. It has already replaced most
internal emails and the company
newsletter. Now teams within the
company, like marketing, are using
small groups, chat and video calling,
to get things done. Equally, it works
for large groups – the CEO of Telenor
uses Workplace to do live sessions,
in HD, on his mobile phone to
communicate with everyone in the
company,whichhaseffectivelyreplaced
the company’s intranet. Workplace
is the platform that people use from
SME market now, making it easier
than ever before for them to sign
up and get up and running quickly.
We decided to first go after large
corporate customers because it is
easier to branch out from big
corporates to startups and SMEs
than the other way around.
Q: Is Workplace evolving from being
a platform to a kind of ecosystem?
JC: We are seeing a lot of startups
building apps on top of Workplace.
One is called Safety Officer, by
Service Rocket, which is a safety
check app that helps a company
determine quickly who is safe and
who is not in times of crisis. Since
the entire company is on the same
platform it makes it easy to reach
everyone quickly. Other startups are
creating Workplace bots for things
like inventory management, shift
management or to do employee
surveys. I foresee a growing quantity
and diversity of bots on Workplace
that will be built by other companies
and not by us.
Facebook has been receiving a lot
of negative press recently for its
role in spreading fake news,
creating questions around abuse
and trust. Is this an issue for
Workplace customers?
J.C.: Workplace is a software-as-a-
service startup that is completely
separate from consumer Facebook.
When a company uses Workplace,
it is that company that owns, and
administers the account data, not
us or Facebook. This allows the
company to control and monitor
what appears in their News Feed
and across Workplace for their
employees.
— P.31
“Morethan75%ofemployeesatTelenorareusing
WorkplacebyFacebookonaweekly
basis.Ithasalreadyreplacedmostinternalemails
andthecompanynewsletter.”

AR/VR
BusinessesAre
PuttingVirtualReality
ToWork— The technology is being applied to everything from
aviation to auto manufacturing
By Leila Abboud
It’s easy to dismiss virtual reality as a fad that appeals only to
couch-bound video-game aficionados. After all, people do look a bit silly
with clunky goggles strapped to their faces. Yet businesses are proving to
be fast adopters of the technology, which will once again be on display at
Mobile World Congress in Barcelona.
From aviation to construction, companies are putting virtual reality (VR)
to work with the aim of reaping efficiency and productivity gains. Forrester
Research predicts that starting this year, businesses will buy more mid-
priced virtual reality gear than consumers. Augmented reality (AR), which
layers virtual 3D images on top of what a person sees in the real world,
is also turning out to be particularly well suited for the workplace. Since
it doesn’t distract users in immersive environments, they can carry on
conversations and use their hands naturally. Microsoft is among the
biggest boosters of augmented reality for businesses. Its HoloLens glasses
went on the market in March 2016 and are now sold in 39 countries.
Other manufacturers include start-ups like the U.S.-based DAQRI. It’s a
much less crowded field than on the consumer side of the VR business,
where Facebook, Samsung, HTC and others are jockeying for position.
The market researcher IDC forecasts that sales of AR and VR headsets
will grow from about 10 million units in 2016 to 100 million in 2021.
A Need for Speed
While AR/VR technology is still nascent, the most innovative companies
in their respective sectors, such as Airbus and Ford Motor Co., have already
completed pilot projects and are starting wider deployments. Florent
Pelissier, the product lead in France for Microsoft’s HoloLens, believes
that businesses need to move quickly. “If you’re in an industrial or
manufacturing sector and you have not yet started using or at least
experimenting with mixed reality, then you are falling behind,” he says.
So what should executives be doing to ensure that doesn’t happen?
First off, companies need to think about how AR/VR can actually help
solve business problems. There is no point deploying a big virtual reality
project if it doesn’t lower costs, reduce time to make a product, or make
workers perform better. To that end, companies should define key metrics
to measure the impact of the technology. That way, executives will be
armed with data with which to decide if broader use is warranted.
Although costs for AR/VR gear have been dropping, projects remain
expensive and time-consuming to implement. Companies often have to
bring in specialized developers or outside consultants to write software
for them since there are few off-the-shelf programs available. Even though
most AR/VR headsets come with some software, making them work with
the IT systems of a company or perform specific tasks usually requires
custom-built programs. This will eventually change as more software
emerges, but for now deploying AR/VR projects can be a slog. Startups,
such as Immersion and Diota in France or Re’Flekt in Germany, are helping
big companies implement AR and VR, as are big IT firms like Accenture
and Capgemini.
Industrial Applications
It is easier for companies that are already accustomed to working with
3D images on computers to jump into AR/VR. Think of a car company
designing a new sedan or an architect working on a new office tower.
Both would already be using computer-aided design software to manipulate
3D images. It’s a natural evolution for them to create virtual reality
versions of the designs, which can then speed up the prototyping and
building process.
Airbus, for example, has been a leader in using virtual reality in its design
process. While conceiving a new helicopter, the company had four so-
called virtual reality immersion rooms installed at the various production
sites involved in the project. This allowed the engineers to collaborate
more easily, using 3D models of the aircraft.
AR/VR tools help make Airbus staffers more efficient, says Christophe
Chartier, the CEO of the French virtual reality company Immersion, which
has done work for Airbus. “While designing the cockpit for the passenger
jet A380, the virtual reality rooms were so lifelike that Airbus staffers

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