Technology will drive growth

When Martin Wolf, the FT’s venerable economics commentator, endorses a concept, it’s usually sensible to give it hearing. Today, he’s backing the idea that we’re a post-growth society. That the growth generated by the industrial revolution and advances of the 20th century simply cannot be matched by the changes being wrought by the current technological revolution.

The argument that jet engines, running water and electricity are all inventions and innovations that rapidly drove up productivity and that current technological innovations pale in comparison will appeal to many. It will receive a warm welcome from those who hark back to a time when we built things, who think the service sector part of the economy is illusory. However, it is wrong.

At first glance a lot of the benefits of technological innovation are incremental, but they enable productivity improvements far beyond those we have so far reaped. Capital is already global, yet despite the massive growth of cities, labour lags behind – people move around the world a fraction of the amount and the speed that resources do.

Technology mitigates this need for travel. It connects people in a way never before possible. It frees up time and forges closer bonds over greater bonds over greater distances. Very few companies have been able to capitalise on this yet but those who have, have found that international, collaborative working has driven innovation. GE is a prime example. Back in 2010, it created a private network to connect its 5,000 global marketers. It enabled people working in different divisions to share problems and create solutions that weren’t previously possible.

Collaborative workplace tools have the potential to change business structures and productivity in the same way the specialisation and rolling assembly lines did during previous periods of high innovation and growth.

A recent McKinsey Global Institute report stated that collaborative workplace tools could generate productivity gains of up to $1.3 tn in the consumer packaged goods, retail financial services, advanced manufacturing, and professional services sectors. There are hard numbers that support this prediction: Microsoft paid $1.2bn for Yammer, the social networking tool for businesses.

Collaborative tools are just one element of the changes that the internet and related technologies are enabling. Yet they alone have the potential to boost innovation and growth in key service sectors. The technological revolution is increasing not only our ability to innovate but the speed at which we can do so.

This article originally appeared here on the Huffington Post.

Mobile wallets: who’s after your money?

Mobile money and wallets (paying for things with your phone) have been all over the news recently. Many companies see a valuable income stream flowing from such payments and they’re all setting up systems in the hope that theirs will become dominant in the market.

Many of the companies behind mobile money come from different sectors, and the sectors they come from indicate their motivation. So let’s take a look at who’s after your money.

Payment Companies
Perhaps the most obvious sector, is the one who’s dependent on making money from your cash: payment companies like Visa and Mastercard. Both have invested in mobile payments systems. They believe that payments will, over time, move from credit and debit cards to smartphones. They already have the systems in place to process payments – Visa processes $4tn worth of payments annually – and they make a small sum for every transaction. For payments companies, mobile payments are the future of their industry, so they’re making sure they’re part of it.

Telecoms Companies
Mobile network operators, including recently rebranded EE, Vodafone and O2, are facing a fork in the road. One path leads to them becoming providers of wireless data. This path essentially makes them utilities like energy suppliers or water companies. This low-growth, generic product path is one they’re absolutely petrified of. The other route they can take is the horribly jargon-ised “move further up the value chain”. The idea is to provide services to customers that add value beyond data and phone calls. The operators hope that one of these additional services will be payments. The beauty of mobile payments is that they offer strong growth potential and that payment processing fees to do not fall directly on the consumer. So exciting are the potential revenue streams, that EE, Vodafone and O2 have worked together to build a common standard for mobile payments.

Loyalty schemes have been one of the great innovations in retail history. Such schemes have enabled retailers to move from marketing their wares to segments of society, to marketing to individuals. Mobile wallets would enable them to capture more data by ensuring they record online purchasing data as well the offline purchases at the tills. It means they’ll never miss a transaction.

Internet and Technology Firms
Google already have a wallet, Apple have taken tentative steps with the creation their Passbook and start ups like Square and iZettle are bridging the gap by providing card reader attachments for attachments for smartphones. The Googles in this space are driving innovation partly because they’re in an industry that is changing rapidly and those who don’t innovate fail, and partly because, like retailers, they seek to add to their vast stores of consumer data. The Squares and their ilk are in the market because they seek to disrupt the payments industry – either by usurping Visa and Mastercard or by adding a whole new group of consumers and small businesses to the electronic payments industry.

So who’s going to win?

In the short term, no one is. Cash and cards remain at the centre of the payments ecosystem. That’s not going to change in the short term. However, systems like Square, which incorporate card readers but also go beyond those to visual recognition and automated payments, will be common in the not-too-distant future. A lot of money is at stake and a lot of companies are fighting for a piece of it.

When winners do appear, there won’t be many of them. Much like the smartphone ecosystem battle, retailers and consumers will gravitate to one or two systems. So the race is on to find out who’s able to get your money from your phone.

This article originally appeared here on the Huffington Post.

Is unlimited growth a thing of the past?

The venerable Martin Wolf, the FT’s hugely respected chief economics commentator, has written a very thought-provoking article looking at a study by Robert Gordon of  Northwestern University. One of the central arguments is that the technology revolution will not drive growth in the way previous industrial revolutions have. It is an argument that many in the technology and public policy circles will disagree with, but the article is sensible, thoughtful and a must-read.

Is unlimited growth a thing of the past?

Is your Klout changing or is it just Klout changing?

Many opinions have been put forward about the ability of Klout, Peerindex and others to measure social influence accurately. Suffice to say, they’re controversial, few buy into them 100%, and those who do use them do so as one part of a broader spectrum of measures.

In their defence, the measurement providers talk of developing models and tweaking algorithms. Recently, after beingrumbled for purchasing twitter followers, PeerIndex CEO Azeem Azhar explained that he’d done so as an experiment to prove that follower numbers don’t affect your score. He explained that the boost in followers did change his score a little. They analysed it and then they changed their algorithm to eliminate the spike.

A couple of weeks earlier, Klout’s CEO Joe Fernandez was speaking at LeWeb and announced that they’d be changing their algorithm too.

Changing the algorithm to make scores more accurate is, of course, sensible. The models are new, they need to be developed and the fact that PeerIndex, Klout and others are monitoring and improving them shows the investment in time that these companies are making to become better.

This changing of algorithms creates a problem: where does that leave tracking data?

If you do use Klout or PeerIndex to measure influence (at whatever level), then every time they change their algorithm, you’re technically starting from scratch because you can’t really, accurately compare the scores from before the change to the ones after the change.

This is a common problem in market research. Do you change your methodology to improve accuracy, or do you stick with your current process so you can retain the validity of your time-series data.

Realistically, most changes to the social influence algorithms won’t be so large that they’ll throw scores massively off, and comparisons to some extent will still be able to be made. However, that’s assuming you know when the algorithm has changed and how it’s changed. I’m not aware that it’s the policy of any of these firms to announce the date of an algorithm change and its likely affects.

Those who do use these scores for measuring and tracking social influence may well be watching a score rise or fall with no real change in their actual influence.

This piece was originally posted here on the CommsTalk blog.

BlackBerry – a managed decline?

RIM’s chief executive has announced his new strategy for the ailing mobile devices firm: they are going to focus on the business sector. For RIM’s new strategy to work they will need to subvert some key IT trends, some of which have already taken hold and will be difficult to uproot.

BlackBerry smartphones, although still selling in large numbers and a leader in some segments, have seen their popularity decline in the face of competition from Apple, Samsung and others. Something had to change. Moreover, with BlackBerry’s heritage as a provider of devices to businesses, it makes sense to focus on a market you know and one where you have a strong foothold.

There are two challenges, however, which might make this new strategy one of managed decline rather than renewed growth: tight IT budgets; and the consumerisation of IT.

In terms of IT budgets, the story is simple: money’s tight and there is lots to do. According to Gartner, budgets are still below their peak and, as economic uncertainty persists, companies are keeping a tight rein on costs. This problem is compounded by the need for companies to keep up with the changing IT landscape. The rise of cloud computing, trends toward home working, the need to integrate tablet computers and securing networks from data loss – both internal through the greater use of cloud computing and external as hacktivists overtake hackers in their strike rate – are all big issues that need addressing. Shortly, in Europe at least, there will new data protection legislation that will require new compliance regimes. This all points to tight IT budgets becoming tighter.

Many companies have found that there’s a way to minimise some costs and get a boost in productivity: let your employees buy their own mobile devices and use them for work. Indeed I’m writing this on a tablet computer, from which I can also access work emails and my calendar. I have similar functionality on my phone. When working from home I can access the work network from my laptop using a virtual desktop.

The trend, which encompasses a number of other factors such as the development of more consumer-centric software, is grandly called the consumerisation of IT. My employer isn’t alone in doing this. A recent study by Accenture found that 40% of employees use personal devices to access work information. That number is set to grow and will do so rapidly; it has more than doubled in the past two years.

There are security issues in allowing employees to access work data on their personal devices, but systems exist and will continue to develop which minimise or mitigate these. The benefits are clear: a flexible, responsive, always connected workforce.

As people use their personal smartphones, tablets and laptops to access their work data, it is inevitable that IT departments will spend less and less of hardware and more on systems that prevent data loss while enabling access from a variety of personal devices.

Blackberry used to set the trends, then they tried to follow them with the launch of touchscreen phones and tablet computers, now they’re trying to fight them. I’m not sure they’ll succeed.

This post originally appeared on the Huffington Post.

Europe’s technology centre?

Europe’s Technology Centre?

Chancellor George Osborne announced his intention to ensure Britain becomes Europe’s technology centre in his Budget speech. In order to make this a reality he announced support in two areas: Digital Content; and Infrastructure.

Digital Content

The Chancellor announced the corporation tax reliefs from April 2013 for the video games, animation and high-end television industries. These reforms will be subject to consultation and will need to pass state aid rules. The film industry already enjoys reliefs of this kind.

The aim of this tax relief is to try and retain these industries, and the jobs they create, in the UK. It is also hoped that it will encourage inward investment from the likes of Disney into the UK. Last autumn it was reported that animation studios were planning to leave the UK because of preferable tax breaks and subsidies in countries including Ireland and Canada. This move is clearly designed to address that issue and signal to similar creative industries that they are valued.


On infrastructure, the Chancellor confirmed the selection of Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, Manchester, Newcastle and London to become broadband Super-connected cities. This move is part of a previously announced £100m investment. The Treasury says that this investment will this will deliver ultrafast broadband coverage to 1.7 million households and 200,000 businesses, and high speed wireless broadband for three million residents by 2015.

In terms of mobile networks, rural areas and selected A-roads will see an increase in the quality of coverage. There will also be a government review to decide whether intervention is required to improve mobile coverage for rail passengers.

The UK’s broadband and mobile phone infrastructure isn’t exactly the envy of the world and improving it is essential. As my colleague Charlotte from our Hong Kong office noted recently, we don’t even have wifi on the Tube. The Chancellor also alluded to the fact our network is sub-par when he noted that, “Two years ago Britain had some of the slowest broadband speeds in Europe.”


At first glance, the creative industries can be broadly pleased with the outcome of this budget. The video games developers and animators, in particular, will feel their voice is being heard and the benefits they bring to the UK are being recognised.

On infrastructure, it’s all a little less clear cut. Additional investment is, of course, welcome but until the details are reviewed, it’s hard to judge how significant these announcements are.

The announcements for technology were underpinned with additional announcements about youth training, business loans and development zones. There were also measures supporting scientific and engineering research. It all pointed to the Chancellor wanting to lessen the economy’s reliance on financial services but keep Britain very much as a service-based, intellectual property creating economy.

This post originally appeared on the Huffington Post.

Some thoughts on Visa’s repositioning

PR week recently reported that Visa Europe has retained Hill & Knowlton to promote Visa as a technology company to consumers and the business community. This is an interesting move. Traditionally seen as a payments company, why would Visa want to reposition itself?

My initial thoughts run to three possible reasons.

Firstly, I think consumers often perceive Visa to be a financial services company, in particular a credit card provider. The public’s dislike of financial services is obvious and “banker bashing” continues among politicians and commentators. Visa’s reputation might improve if it were to break the association with financial services and make people understand that although Visa processes financial transactions, it doesn’t charge interest or lend money.

My second thought involves mobile payments. Last night, I attended an excellent event called Digital Surrey where PayPal UK’s head of social media, Jon Bishop, spoke about the mobile web. His words on mobile payments in Africa and on NFC particularly struck a chord with me. He pointed out that people are, and will increasingly, use mobile devices to purchase products and services. With this in mind, it is obvious that if Visa is to maintain its dominant position within payments, it will need to convince businesses to use its technology rather than allow other companies to enter into payments (even if Visa still processes the underlying transactions).

Finally, there’s the money. Visa Europe is owned by its members – banks and other payments providers – however, Visa Inc. is a listed company. Perhaps Visa Europe wants to promote itself as a technology company not to reposition itself but rather to increase its profile overall in preparation for it to be floated at some future point.