Driving Innovation

Collaboration Across Digital IndustriesDr. Maurizio Pilu, Technology Strategy Board

C.I. KTN and D.C. KTN Partnering for Innovation EventGlasgow, 8 June 2010

Technology Strategy Board

• UK’s Innovation Agency• Set up to invest in business

innovation• We come from business

(and the public sector)• We work across business,

universities and government• We are investing £1bn over

the current 3 years

Trends shape markets

And several more strategies have been published….

For instance …..

Challenges & opportunitiesinform our strategies…

... which underpin our investments

The innovation climate

Challenge-led innovation

Technology-inspiredinnovation

2008-9 2010-11£1 billion investment over 3 years

Global opportunities, UK benefit

• Address systemic issues & barriers, market failures, societal challenges

• Our mission is for the UK to benefit from emerging opportunities by:– Accelerating adoption & demand– Fostering development of UK capacity– Influencing policy and public procurement

Tensions (aka what’s the problem with Digital?)

Photo: kaibara flickr.com/photos/kaibara/4481583340/

UK Digital “Pipes”

Finlan

d

Franc

e

Japa

n

Korea

Nethe

rland

s

Denm

ark

Ger

man

y

United

Sta

tes

Austra

lia

Norway

Gre

ece

New Z

ealan

d

Portu

gal

Sweden Ita

ly

Switzer

land

Belgium

Czech

Rep

ublic

Canad

a

Luxe

mbo

urg

Icela

nd

Slovak

Rep

ublic

Austri

aSpa

in

United

King

dom

Hunga

ry

Irelan

d

Poland

Turke

y

Mex

ico

10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000

100 000 110 000

Chart Titlekbit/s

7PB/month 12.5 GBytes per second 70 million requests

Will the UK digital infrastructure able to satify this growing demand?

Mobility

Usage of mobile Data exploding

Usage of Average monthly usage per user:2009: 273Mbytes

2015 (forecast) = x40 times higher

UK mobile data on 3’s network Mobile skype minutes on 3’s network

UK’s Creative Industry value chain

• Employs 1.98 million ~ 6.78% of the working population• Contributes 6.4% GVA • Internet and converging technologies are opening up

new possibilities• but disrupting value chains on an unprecedented

scale

• E.g. 66% of UK’s online advertising budget (£3b/y) flows out of the UK

• Legal music download growing at 25% year• But 95% of it still illegal

• 6.5 million illegal file-sharers in the UK • 70% of all digital music sales are through

a proprietary platform (Itunes)0

2000

4000

6000

8000

10000

2005

H1

2005

H2

2006

H1

2006

H2

2007

H1

2007

H2

2008

H1

2008

H2

2009

H1

Ads

pend

(mill

ions

)

Online versus conventional adspend

Total market

Online adspend

Conventional adspend

Apple Google RIM Symbian/Nokia

Palm Microsoft0

10

20

30

40

50

60

70

80

90

100

App store revenue shares

DeveloperStore

Perc

enta

ge re

vnue

shar

e

Source: Gizmondo

$3bn, 2009$15bn, 2014

Mobile Applications

UK’s Digital Inclusion

10 million adults never used the internet (4m socially excluded)

Missing out on economic benefits £270-£500year in savings (£1b / year) and better chances to find jobs and better chances to find better jobs

Estimated value of bringing everyone on line: £20b

A challenge to the Government ambition to deliver public service digitally

Digital Britain Report, 2009

Information explosion[Even if] “The Economy is Bad, Data Does Dot Care” (IBM)

Data: 281 billion Gigabytes, 45Gb per headGrowth: >50% CAGR Disimpersonation: 50% of data now unrelated to individual actionDisaggregation: info containers growing 50% faster than dataUsage: Information growing 50% faster than storage

Examples: Business: Tesco: 12 million purchases per week, 5b data items Generated by sensors: RFID Tags: 2005: 1.3b, 2009: 33 Billion Media: YouTube data = all world medical data imaging Scientific: World Climate Simulation Project: 1m datasets, 10 PBs

Far exceeding our capacity of creating value from it

Incumbent Business Models Struggling to Adapt …“Guardian Asks UK Gov't To Investigate Google News” “Pageviews do not pay salaries [Trinity]” “BT throttling IPlayer traffic” “Behavioral targeting: EU asks UK Government to

take action to protect consumers' privacy”“70 separate licencing agreements to launch the iplayer”“Pirate Bay P2P Trial Begins In Sweden” “No incentives to invest in rural NGA”“IPlayer mobile: please use you Wi-FI connection” [BBC Iplayer]“Tiscali and BBC quarrel over IPlayer”“beeTV Raises $8 Million For Stunning Personal TV Recommendation System”

From the news, about a year ago

.. and fundamental market tensions are poorly addressed....

• If you build it (the network) they will come vs cost of building it• What people are prepared to pay for bandwidth vs true cost• Open standards vs Closed standards• Wired vs wireless• Content vs technology• Data push vs info overload• Network vs What goes over it• Net Neutrality vs. Control• ISP vs Content owners • Old business models vs new reality• Free content vs protecting rights• Privacy vs targeted advertising• Bandwidth vs inclusion• Availability/usability vs security

Our guiding vision ..

For all participants in the Digital ecosystemto benefit fairly

from the creation, distribution and consumption

of digital content

Economics of the network & distributionNew models, sustainability, resolving tensions

Access, protection & empowermentSecurity, privacy, trust and usability

for the consumer

Economics of content and

servicesBusiness models

and tools to create value

Strategic framework

Working together: part of the challenge, part of the

solution

Collaboration Across Digital IndustriesPhoto: orinrobertjohn, flickr.com/photos/orinrobertjohn/1795685457/

Competition: Key facts

• Up to £10m investment for Collaboration Across Digital Industries

• Must address 2 or 3 of the key challenge areas together

• Part of a larger digital investment programme• Business-led collaborative projects• Application through a competitive process

– Watch out website: www.innovateuk.org

Economics of the network & distributionNew models, sustainability, resolving tensions

Access, protection & empowermentSecurity, privacy, trust and usability

for the consumer

Economics of content and

servicesBusiness models

and tools to create value

The 3 challenge areas

PRIORITY

Proposals must address two or three of the challenge areas together in order to be in scope

Enable a sustainable marketplace for

intellectual property

Deploy new infrastructure cost-

effectively

Create economic and social benefit from increasing

volumes of information

Protect privacy and security of users

PIPES POEMS

PEOPLE

Outcomes

• Support the development of a secure, trusted, inclusive, quality, experience for users

• Strengthen the case for investment in services based on digital content and information

• Strengthen the case for investment in hardware or software infrastructure

Competition formats & dates

Trials R&D

Fast Track

“Mainstream”

R&D vs Trials

• R&D “increases and integrates technology capabilities, and progresses in stages towards marketable products”

• Trials “investigate users’ responses to prototype products and extract market intelligence that can be used to build business confidence”

Getting scope right is KEY

What’s the challenge

• [Generalize your specific problem]• Is it an important Digital challenge/tension?• Does it credibly address 2/3 of Pipes, Poems,

People? • Who do you need to partner with?• What the impact in the industry and can you

make the case for it?• How would you exploit it?

Economics of the network & distributionNew models, sustainability, resolving tensions

Access, protection & empowermentSecurity, privacy, trust and usability

for the consumer

Economics of content and

servicesBusiness models

and tools to create value

Meeting the challenge

PRIORITY

PIPES POEMS

PEOPLE

challenge

Consortium / proposal

Consortia & Collaboration: key actors• “POEMS”

– Content and service providers– Information providers– .....

• “PIPES” – Infrastructure/ISPs players looking for new business models– Software middleware or distribution platforms– Technology providers– .....

• “PEOPLE”– End users (Business, Consumer or public sectors)– User studies, socio economics, HCI– Trust, security, privacy,– ....

Strategic alignment

• Consortia with the following interests might find a good strategic fit in this initiative– Innovation – New services, applications, business models– “Seedbed” and “Living Lab” approach to

innovation– Play a central role in high profile trials– ...

Network Services Demonstrators

£2mcloses 22/6/10 Collaboration across

Digital Industries£18m

Fasttrack closes 22/7/10 (CR&D 19/8/10)

Digital competitionsSummer / Autumn2010

Testbed

Trusted Services£5m

Fasttrack closes 10/09/10(CR&D 17/06/10)

Metadata£5m

closes 21/10/10

Network Services Demonstrators• £2m to fund network

services demonstrators• National ‘hotspots’ for

trials and innovation – in business models,

applications and services – that centre on advanced

network infrastructure and service enablers

• Making site available for other trials

Questions?