ict and future education

PAGES THEME – HOW CONNECTED LEARNING IS TURNING EDUCATION UPSIDE DOWN

Ericsson Issue no. 1 2012USD 25 • EUR 20 • JPY 2,300

GANDHIREVISITEDSAM PITRODA WANTS INDIA TO BUILD

ITS OWN TECHNOLOGICAL ECOSYSTEM

17

What makes a grid smart

DON’T BE FOOLED BY THE GREEN LIGHTS

Televisionin the eye of its beholders

A MAGNA CARTA FOR DIGITAL CONTENT

OpinionYOU’RE NOT AS CLEVERAS YOU THINK

Together, Telcordia and Ericsson can help you realize

value through unparalleled efficiency and customer

experience with the industry’s foremost capability in

operations and business support systems. Because

perfect moments begin with an outstanding experience.

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4 • EBR #1 2012

Ericsson

contents

ERICSSON BUSINESS REVIEW

is Ericsson’s global business

magazine, focusing on thought

leadership and providing a

long-term perspective on business

strategies in telecommunications.

The magazine is distributed to

readers in more than 130 countries.

ADDRESSTelefonaktiebolaget LM Ericsson,

SE-164 83, Stockholm, Sweden

Phone: +46 8 719 00 00

ADDRESS CHANGESStrömberg Distribution AB,

E-mail: [email protected]

PUBLISHERPatrik Regårdh

EDITORIAL COUNCILPatrik Regårdh, Ulrika Bergström,

Susanna Bävertoft, Erik Kruse,

Dag Helmfrid

EDITOR-IN-CHIEFMats Thorén

[email protected]

DEPUTY EDITORNathan Hegedus

ART DIRECTORJan Sturestig

EDITORIAL OFFICEJG Communication,

www.jgcommunication.se

COVER PHOTOChris Maluszynski

CHIEF SUBEDITORBirgitte van den Muyzenberg

SUBEDITORSMichael Costello, Teslin Seale,

Paul Eade, Robert Naylor,

Lindsay Holmwood, Ian Nicholson

GRAPHSClaes Göran Andersson

PRINTERVTT Grafiska, Vimmerby 2012

VOLUME17, Issue 1, 2012

ISSN1653-9486

COPYRIGHTTelefonaktiebolaget LM Ericsson

[9] Editorial: It’s old school, reallyConnected learning has the potential to take education back to original values. Socrates would

most likely have approved.

[10] Cover story: Building a better IndiaSam Pitroda, the man behind India’s communications revolution, believes that India must

build its own technological ecosystems based on holistic, sustainable, Gandhian values that

originate from rural realities.

[20] THEME: The tools of education – soon at a museum near youEricsson ConsumerLab’s Future School project is providing important insights into the

education of tomorrow.

[27] THEME: We defi ne innovation too narrowly Ken Banks, creator of the nonprofit mobile service FrontlineSMS, says development issues

such as education require us to start with the problem, not the technology.

[29] THEME: Can technology eliminate teachers? Professor Sugata Mitra’s approach is to create a self−organizing learning environment.

[30] THEME: Don’t rely too much on technologyProfessor Richard Fletcher believes nothing will ever replace human storytelling as the most

effective and popular means of educating people.

[33] THEME: Reinventing corporate learning Ericsson shares its own experiences of creating a new kind of corporate learning.

[38] Smart−grid communications: enabling next−generation energy networksThis involves more than just a simple bolt−on to the existing power grid.

[42] Content discontents: cultural protection in an internet world The regulation of audiovisual services is becoming more complex as some states begin to

recognize “the cultural exception.”

[45] How to get paid twice for everything you do, part 3: Innovation managementSuccessful innovation management is primarily about recognizing and understanding

effective routines and facilitating their emergence across the organization.

[51] An action plan to embrace the digitization of creativity in the digital single marketThe European Commission needs to address some of the fundamental barriers preventing

member states from reaping and sharing productivity and creativity gains.

[55] Don’t be fooled by the green lights – become service−awareEnsuring service quality isn’t as straightforward as it may appear. Customer experiences

now depend on the performance of multiple systems within the operator’s architecture.

[58] What is TV these days? And do consumers really care?Understanding the multifaceted nature of TV is crucial to all players in the market.

[62] OPINION: You’re not as clever as you thinkInnovation is hard and most of us, if we are honest, are not very good at it. The worry is that

in the internet age, things might be getting worse, not better.

[64] EXECUTIVE SUMMARIES

ERICSSON BUSINESS REVIEW was awarded Best Business-to-Business publication 2010 by The Swedish Association of Custom Publishers (SACP)

EBR #1 2012 • 5

▶ BLACKBOARD, CHALK AND SLATES are already becoming museum pieces. Soon, textbooks might follow. Technology is playing a key role in a radical transformation of education – and a fierce debate is ongoing about whether this is a good thing or not. Is new technology being used wisely? Is it be−ing used to cut costs, or to improve quality? The fact is that

we are already in a situation where education does not always need schools; it can take place anywhere, anytime.

This issue’s theme examines the roles of the teacher, of tra−ditional learning institutions of the teacher, and of corporate learning – all from the perspective of what new opportunities technology might bring.

[20–35] THEME The old school – ready for the museum gallery

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The big picture Enigma

6 • EBR #1 2012

THE ENIGMA OF MACHINE INTELLIGENCE

LO-TECH HI-TECH COMMUNICATION During World War II, German communications were encrypted

on the Enigma cipher machine, which has now gained cult status. While original models fetch very high

prices at auctions, there is also a healthy market for replicas and online simulators. The one pictured here is a

three-rotor model made around 1937, and is still in working order. When sold by Rau Antiques in 2010, the

asking price was USD 112,500.

As the moving rotors and wheels in the Enigma produced ever-changing alphabetic substitutions, the

secret codes were supposed to be unbreakable, even by someone in possession of the machine.

Breaking the codes or ciphers did present a formidable challenge. In fact, they had to be broken

afresh over and over again. The results of these eff orts laid the groundwork for modern computing and

artifi cial intelligence.

The British mathematician and cryptanalyst Alan Turing was recruited to work at Bletchley Park, Britain’s

code-breaking center, devising techniques for breaking German ciphers.

It is now widely accepted that Turing was the father of theoretical and practical computing, although he

died in 1954 – just as developments in the fi eld of computing were getting underway.

After the war, he talked about the prospect of a machine “learning” and even “building a brain.”

He wrote algorithms for chess-playing programs and regarded these as examples of what computers might

eventually be able to do. In his 1946 report on the new opportunities that computers represented, he

made his fi rst reference to machine “intelligence” in connection with chess. ●

EBR #1 2012 • 7

details

? ▶ Have African telecom companies

become more innovative than their counterparts in more developed markets?

… to Samson Isa, Head of Value Added Services for Globacom Nigeria.

JUST ONEQUESTION

In terms of technolo-gy, Africa remains

dependent on more devel-oped countries. However, there has been some real innovation in value-added services like M-PESA (mobile money transfer) in Kenya and specifi cally in interactive voice response (IVR), which gets informa-tion to customers in the languages they understand and encourages rural telephony/penetration.

And we have seen development in applica-tions. We’ve seen collabo-ration between original equipment manufacturers, operators and local devel-opers to work on apps that locals in Nigeria and West Africa can use, such as tra-ditional African games or localized “Western” prod-ucts for the African market.

However, in general, African operators remain caught in a trap of short life cycles, rising costs and low average revenues per user because of prevailing low disposable income and, sadly, low investment in R&D. The telecom indus-try in Africa also lacks strong organizations, such as telecom unions, and this weakness can often make operators parochial and less likely to take a long-term view of how to devel-op both their networks and their services.

It is going to be very dif-fi cult to break this cycle of high costs and low profi ts. There needs to be a para-digm shift that includes foreign investment, which will help transfer skills to African operators and spur more R&D.

Control of personal environments▶ WristQue is a proto-type wristband contain-ing a processor; sensors for temperature, humidi-ty and light; and an ultra-wideband radio used for communicating with home automation sys-tems as well as pinpoint-ing the wearer’s location.

Part of the Massachusetts Institute of Technology’s MediaLab responsive en-vironments research, the project is intended to cre-ate a practical way for people to communicate with smart sensors in-stalled in a building. The wristband includes just

three simple buttons: two to control tem-perature, and a third offering the ability to interact with multiple electronic devic-es (computers, projec-tors, TVs) using gestures. New Scientist. ●

8 • EBR #1 2012

NOW READ THIS!

MOBILE INTERFACE THEORY: EMBODIED SPACE AND LOCATIVE MEDIA BY JASON FARMAN,

ROUTLEDGE, . The mass adoption of mobile devices – from smartphones to tablets

to whatever comes next – is changing users’ very sense of self, as virtual space and

material space continually enhance, cooperate and disrupt each other.▶ BODIES, SPACE AND CULTURE. The author, an assistant professor at the University of Mary-land in the US, argues that we are using mobile media in a transformative way. The pervasive com-puting model behind mobile devices allows people to connect across a range of locations, and this has changed the ways we “produce lived, embodied spaces.” In the book, Farman explores a range of mobile practices, including storytelling projects, mobile maps and GPS technologies, as well as

location-aware social networks, among many others.

FIWI ACCESS NETWORKS BY MARTIN MAIER AND NAVID GHAZISAIDI, CAMBRIDGE UNIVERSITY PRESS, .

Could the development of bimodal fi ber−wireless− (FiWi) access networks be the

endgame of broadband−access evolution? Here is an overview of the network that

may change everything.▶ INTEGRATION CHALLENGE. Many researchers think that future broadband-access networks will be bimodal, merging the strengths of both optical and wireless technologies. In one scenario, an optical-fi ber network could provide a broadband connection to antenna base stations, which then wirelessly transmit signals to customers. The authors of this book – one of, if not the fi rst on FiWi – explore the main technologies involved, describing both state-of-the-art fi ber-access networks and

the latest developments in wireless-access networks, including Gigabit WiMAX and LTE, and also examine recent ad-vances such as network coding.

THINKING, FAST AND SLOW BY DANIEL KAHNEMAN, FARRAR, STRAUS AND GIROUX, . One of the

leading psychologists of our age and a Nobel Prize winner in economics continues to

challenge the rational model of judgment and decision−making, which carries

special relevance with regard to corporate strategies.▶ FAST VERSUS SLOW. Kahneman argues that we have two modes of thought: one is fast and emotional while the other is slower and more logical. The ways these two modes work together, and against each other, determine much of our decision-making, including the impact of loss aver-sion and overconfi dence on corporate strategies. The infl uential computer scientist Jaron Lanier

says about the book: “Before computer networking got cheap and ubiquitous, the sheer ineffi ciency of communica-tion dampened the eff ects of the quirks of human psychology on macro-scale events. No more.”

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“At this point, the iPhone is like a drug, and the carriers are hooked. The question isn’t whether it’s worth it. It’s whether they can get by without it.” CRAIG MOFFETT, ANALYST AT SANFORD C. BERNSTEIN, TO CNET.

!

editorial

MATS THORÉN, EDITORINCHIEF

EDITORINCHIEF

▶ SMART FABRICS that behave like the touchscreens on mobile phones are being developed at the Polytechnique Montréal technical school in Montréal, Canada. These fabrics can be used to control items such as music players and to adjust temperature. BMW already has plans to install touchscreen fabric in future car models. The fabric is made from a soft polymer-based fi ber that can be woven and is easy to clean. Its electrical properties change depending on where it is touched. Finger touches or swipes can modify the capacitance of the fabric, and software can pinpoint and log exactly where it is touched. (New Scientist) ●

Fabrics of the future:the new touchscreen

▶ THE US FEDERAL Bureau of Investigation (FBI) plans to continuously monitor the global output of Face-book, Twitter and other so-cial networks. Plans show that the bureau wants a system that is able to auto-matically search “publicly available” material from Facebook, Twitter and other social media sites for

keywords relating to terror-ism, surveillance opera-tions, online crime and other topics of interest to the FBI. Agents would be alerted if the searches pro-duced evidence of “break-ing events, incidents, and emerging threats.” (New Scientist) ●

FBI to monitor social networks

It’s old school, really▶ “I CANNOT TEACH ANYBODY ANYTHING. I CAN ONLY MAKE THEM THINK,” is a quote

often attributed to Socrates.

Forget school as you know it. It’s quite apparent that the internet, computers

and mobile devices are already changing the way education is organized and

carried out. Why must a school be a place that you go to at certain times?

To people like me, who quite frankly hated school, this is good news. But more

to the point, technological advancement represents a welcome opportunity to

bring education back to its origins and founding values.

Radical teachers have always emphasized the importance of fostering critical

thinking in education. The oldest and still the most powerful teaching method is

Socratic teaching, which focuses on giving pupils questions rather than answers.

And that is why we, in this issue, have dared to address some of the big ques-

tions about education – such as those concerning its ultimate purpose and ob-

jectives. Unless you can answer these questions, it doesn’t matter what kind of

technology you throw into the mix.

IN SOCRATES’ TIME, SCHOOLS DIDN’T EVEN EXIST. Now, as connectivity brings peo-

ple and knowledge together in an unprecedented way, we have a unique oppor-

tunity to go back to the drawing board. How should learners and learning insti-

tutions change? This is a challenge that cuts across many traditional industrial

and societal borders, and concerns policy-makers and social as well as business

innovators everywhere.

The Networked Society Forum, hosted by Ericsson, recently brought togeth-

er thought leaders, scholars and leading practitioners for a bout of inspiring

panel conversations aimed at reimagining education, learning and schools for

the present generation and beyond. Our theme, “Connected learning,” was in-

spired by their discussions.

Another dose of Socratic questioning is served up by evolutionist Mark Pagel.

From an evolutionary perspective, copying – also known as culture – has been

a decisive advantage for humankind. On the Opinion page, though, he wonders

what happens to innovation when the internet takes copying to a whole new

level.

IS IT POSSIBLE TO LEARN TO BE INNOVATIVE? In his third and concluding article in

our series on managing innovation, Göran Roos puts forward his ideas on how

companies can create structures that capture new ideas and methods.

Two articles remind us that borders still matter: one about cultural protec-

tion in an internet world; and the other about the need for a

Magna Carta for digital content. It makes a lot of sense to

tear down market barriers, but policy-makers still need

convincing.

Knowing what’s going on in your network used to be

simple. Not anymore. Our increasingly complex digital

media behavior makes it necessary to develop advanced

methodology aimed at making networks “service aware.”

The Socratic question embedded here is really “what is

quality?” as outlined in the article “Don’t be fooled by

the green lights.” The complexity of the answer is a true

blessing in disguise for network operators. ●

Single interface for business users▶ AT&T has launched a cloud-based unifi ed communications (UC) service, off ering enterprises the

ability to integrate chat, e-mail, voice over IP calls and audio and video meetings

over desktops and mobile devices. AT&T UC Services consists of UC Central and UC Voice. UC Central

will give a business a single user communications interface for both mobile and desktop computers, while UC Voice will off er IP telephony from an AT&T

cloud that can be used alone or with UC Central.

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10 • EBR #1 2012

cover story Sam Pitroda

Basic facts NAME Satyanarayan (Sam) Gangaram Pitroda TITLE Adviser to the Prime Minister on Public Information Infrastructure and Innovations EMPLOYER Government of India AGE 69 HEADQUARTERS New Delhi and Chicago

EBR #1 2012 • 11

TEXT Nathan Hegedus

PHOTOS Chris Maluszynski

Western development models are not sustainable, scalable or desirable, says Sam Pitroda, a top Indian government adviser and the father of the Indian telecom revolution. Instead, he says the answers to India’s challenges lie in the “Gandhian model” of development.

Building Building a better a better India India

12 • EBR #1 2012

S AM PITRODA is the man who brought telephones to rural India, essentially connecting India to itself.

Today, at the age of , this son of a carpen-ter remains tirelessly true to a vision deeply rooted in his familys devotion to Gandhi. As influential as ever in India civic life, Pitroda preaches that India must drive its own open-source tech revolution, one based on sustain-able and rural-based values. In its latest form, he describes it as thedemocratization of in-formation through connectivity.

“We are a nation of over a billion people and we cannot afford to follow a short-term mod-el meant for a population of less than mil-lion people,” Pitroda said at a recent confer-ence on Gandhi and connectivity.

But Pitroda is not simply a visionary tech-nocrat grounded in Gandhian philosophy. He is also a gifted electrical engineer with more than patents to his name. Even now, talk-ing to Ericsson Business Review, he sits up straight and says with a says with a spreading smile that he can most certainly “still do the bits and bytes.”

So it is no surprise that when he considers his career, he uses the language not of a poli-tician but of an engineer and speaks of “the

life cycles of Sam Pitroda” as if he were one of the groundbraking digital switches that he once developed as a young immigrant in Chicago.

PHASE ONE: STARTING OUT

One of eight children, Pitroda was born and raised in Titilagarh in the state of Orissa, a deep-ly poor town with no running water or electric-ity and certainly no telephones. His father, an immigrant from the faraway state of Gujarat, was a small-time lumber dealer with a drive for his children to become something more.

“In those days, he used to sell nails to the British,” Pitroda says. “But he couldn’t speak English. So he felt inferior to them. He said, when his children grew up, that he wanted them to speak English.”

And then there was Mahatma Gandhi – a fellow Gujarati and a central figure for both India and the Pitroda family.

“When I was growing up, Gandhi was al-ways in our midst,” Pitroda says. “I still remem-ber when I was a little kid, six years old, I was playing outside my house, and my father came in and said Gandhi had died. I didn’t quite understand it. Then everybody in the household had to take a bath, as if someone

Pitroda on… Indian versus Chinese development

Culturally, the two countries are very different. India is going to focus on democratizing information. India is going to focus on young talent. The Indian innovation model is very different.

in the family had died.“So we knew that he was ‘part of the fami-

ly.’ He taught us… Make sure you do the right things. So a sense of sacrifice, love for every-body, truth, simplicity: all these things are em-bedded in me, in my lifestyle.”

But there is another side to Pitroda: the American side.

In , inspired by the romanticism in us President John F. Kennedy’s speech about put-ting a man on the moon, Pitroda – newly grad-uated with an MSc in Physics and Electronics – boarded a boat, the start of a long journey away from India and to the us.

It was in the us that Pitroda made his first phone call, home to India, and it was in the us that he got a degree in electrical engineering. He found a niche in telecom in Chicago, work-ing with digital switching for the US telecom company gte. Later, after his father told him he was too young to get into the habit of work-ing for other people, he started his own com-pany with two partners.

Around this time, Pitroda was also editing an issue of an ieee magazine that focused on telecom development in the third world.

“I said, ‘Don’t focus on telecom density, focus on accessibility,’” he says now.

Sam Pitroda: walking the telecom talk

▶ SAM PITRODA SAYS “ percent” of his fo-cus is on India and innovation, but it is im-portant to remember that this is a man who can back up his tech talk. He holds more than telecom and technology-based patents, and his visionary mobile-wallet technology may soon be in millions of smartphones.

In , Pitroda had recently returned to the US after living in India for most of the previous decade. He noticed his wife writ-ing personal check after personal check to pay their household expenses. Then he con-sidered all the other daily financial tasks that could even then be carried out online, and he came up with the idea of a digital wallet, complete with “id cards,” “money,” “receipts” and branded “credit cards.”

Pitroda patented his mobile-wallet idea in , founded a company (c-sam) to devel-op it in , and later wrote a book on mo-

bile money. He is no longer the ceo of c-sam, but the business has thrived as the concept of mobile payments – and the tech-nology surrounding it – have finally caught up with his vision.

“It was too far ahead of its time,” he says of his initial idea. “Now is the time to build (on) it.”

CSAM’S FIRST MOBILE wallet was launched in Japan in and has since been used in the us, China, India and Mexico, among other places. And the company keeps gaining new, ever bigger customers. In August, , Isis – the joint venture formed by at&t Mobil-ity, T-Mobile usa and Verizon Wireless – adopted c-sam’s platform to provide its mobile-wallet service.

Yet the mobile wallet is just one of Pitro-da’s many innovative ideas. In the s, he created the dss digital switching system,

which made him a millionaire. During the same period, he also patented an idea for a personal electronic diary. In the s, this patent was incorporated into the popular Casio Digital Diary, a precursor to the per-sonal digital assistants of the late s and the smartphones of today. In the past five years alone, that patent has been referenced by the likes of ibm, Microsoft and Nokia.

But Pitroda’s most fun idea was probably Compucards. Developed in , this is a deck of cards with binary numbers (, , , , …) for the computer generation. Any-one who reads the instructions closely can use the cards to play family games such as poker and rummy. The joker is a hairy soft-ware bug complete with legs and antennae. But the most interesting card is probably the king, who appears to resemble none other than Sam Pitroda. ●

EBR #1 2012 • 13

Pitroda is an accomplished painter who first started drawing in meetings: “When people talk, they spend useless time talking. And their message takes just two minutes of a 30-minute conversation. So I learned early that the best thing you can do is to doodle. Meetings and all… That’s how I started.”

Sam Pitroda cover story

14 • EBR #1 2012

In 1993 Pitroda described how US success influenced his work in India: “I was almost brutal in my determination to root out hierarchy and bureaucracy: I once shouted and made a thoroughly mortifying scene in order to get typists to stop leaping to their feet every time a manager entered their work space.”

cover story Sam Pitroda

EBR #1 2012 • 15

Nobody paid attention to his articles, he says. But if they had, it would have been no surprise when, after he sold his digital switch business to Rockwell International in and made millions, Pitroda turned back to India to put his words into action.

In a Harvard Business Review article in , Pitroda said that he had dreamed all his life of wealth and success, but that af-ter he sold his business, he was suddenly confronted with the fact that he had walked out on India. The selfishness of his success set him off in pursuit of another American dream, he said: the exploration of a new frontier. The frontier? Using tel-ecommunications as a bridge between the first world and the third.

PHASE TWO: GROWTH

On his first trip to Delhi in the early s, Pitroda tried to call his wife in Chicago. It took four hours. So with a mixture of what he calls “arrogance and ignorance,” he decided then and there to “fix” telecom in India.

“I saw that it and telecom could change the face of India,” he says. “I just saw it. In-dian culture is a rural culture. India was disconnected. If I could just connect eve-rybody … Maybe it was because I was poor. Because I lived in a village. If I had been from Mumbai, it would have been very different.”

What follows is Indian political legend, as the man The Economist later called “the Indian with the long hair and the manner of an American superbrat” fought to get an unthinkably long one-hour meeting with Prime Minister Indira Gandhi. After eight months, he got the meeting and, most importantly, he also met Rajiv Gan-dhi, Indira’s son, who would become prime minister in and Pitroda’s great-est ally.

Over the following years, in a series of jobs culminating in a minister-level tech-nology mission, Pitroda created the infra-structure that placed now-famous yellow phone boxes in almost every Indian vil-lage. It is this achievement that garnered him the unofficial title of the father of In-dian telecom. It also put him at the cen ter of debates about whether or not technol-ogy was a luxury, about the balance be-tween the state and the free market, and about whether it was possible to move In-dia forward without the help of big mul-tinational corporations.

Pitroda believed fervently that technol-ogy was as crucial a developmental tool as education or clean water. And he used his faith in connectivity to push for core Gandhian tenets such as indigenous development and an emphasis on rural development.

For this, he was branded an Indian na-tionalist and an enemy of foreign firms.

“Look, we took Intel’s processor,” he says. “That was collaboration. We took software from other companies. We took Motorola’s switch. The idea was ‘Don’t give me lock, stock and barrel products. Give me components.’

“It was not homegrown just for the sake of homegrown. If we had not used the homegrown technology, we would not have the it business we have in India today.”

Pitroda and his team soon had phone booths rolling out to one village a week, then to a village a day, then to three villag-es a day. There are more than , of these pay phones today. But then Rajiv Gandhi lost an election in , and while Pitroda stayed at his post, things got tougher. He was accused of corruption, and there were threats that drove his fam-ily back to the us. He had a heart attack and a quadruple bypass. Then in ,

Pitroda on… the future of telecom

You can’t say telecom like we did in the eighties.It is more pervasive. You have to talk about the role of telecom in research. You have to talk about the role of telecom in medicine. You have to talk about the role of telecom in education and the role of telecom in government.

Background check

▶ 2010–present: Government of India, Adviser to the Prime Minister on Public Information Infrastructure and Innovations

▶ 1998–present – C-SAM, founder, former CEO and current Chairman, Chicago, US

▶ 2005–2009: Government of India, National Knowledge Commission, Chairman, New Delhi, India

▶ 1993–2005: started a series of business ventures, including World-Tel Limited (an International Telecommunication Union project), and served on several United Nations commissions

▶ 1987–1991: Government of India, Adviser to the Prime Minister of India, with the rank of Minister on national technology missions, New Delhi, India

▶ 1987–1991: Government of India, founder and Head of Indian Telecom Commission, New Delhi, India

▶ 1984–1987: Centre for Development of Telematics, founder, New Delhi, India

▶ 1979–1983: Rockwell International, Vice President of Advanced Technology and Engineering, Chicago

▶ 1974–1979: Wescom Switching, founder, Chicago, US

▶ late 1960s–early 1970s: General Telephone & Electronics, various engineering positions, Chicago, US

▶ 1966: MSc in Electrical Engineering, Illinois Institute of Technology, US

▶ 1964: MSc in Physics and Electronics, The Maharaja Sayajirao University of Baroda, Gujarat, India

16 • EBR #1 2012

while campaigning to return to power, Rajiv Gandhi was killed by a suicide bomber.

“It was the biggest shock of my life,” Pitro-da says. “I just didn’t know what to do. Went to the house, thought about what to do next, and realized that this phase had to end in life. I had to go back.”

Plus, after years of working for a token sal-ary of usd per year, Pitroda was out of mon-ey. Yet he refused to do business in India.

“I didn’t want to work in India in telecom,” he said in an interview with India’s Skoch Consultancy Services. “I didn’t want a spec-trum license… didn’t want people to say: ‘Oh, that’s why you did all this stuff. So that when the right time comes you cash in.’ I didn’t want them to say: ‘He had this mas-ter plan.’”

He went back to Chicago sick, broke and on a tourist visa.

PHASE THREE: MATURITY During the rest of the s, Pitroda looked after his business interests and made some more money. He put his kids through col-lege and stayed close to his dying mother, who had moved to Chicago.

But India and public service never stopped calling to him and, in , he was named head of the National Knowledge Commission. From that point on, Pitroda has been a whirlwind, advising and work-ing on everything from fighting hunger to reforming the railways, to reorganizing state telecom operator Bharat Sanchar Nigam Ltd (bsnl).

Today his official title is Adviser to the Prime Minister on Public Information In-frastructure and Innovations, though he is most often referred to in the Indian press as a “technocrat.” His position allows Pitro-da to operate freely across the political and economic spectrum, as he relentlessly push-es his agenda to lift hundreds of millions of

people out of poverty and to find jobs for the hundreds of millions of Indians under the age of .

“Who am I to do it? I don’t know,” he says. “Do I have the authority? I don’t think so. But I try to get it done. That’s the advantage (of my position). A lot of times, people ask: ‘Why don’t you become a minister?’ No, I don’t want to be a minister. That precludes my entire flexibility to operate.”

He still believes in centralization as a pre-condition to decentralization and in build-ing a scalable India-centered ecosystem. And he still gets exasperated at being tagged as an anti-colonial leftist.

“We need to centralize the thinking in setting up infrastructure,” he says. “That is very different from saying, ‘Centralize eve-rything.’ But the kind of infrastructure we are trying to build… no private enterprise would ever build it. It’s not viable. You have to do it from the top because it is a nation-al infrastructure.”

Yet he insists there remain great business opportunities in the Indian market.

“Where is the money in telecom in India? Applications. Local applications, local lan-guage, local content. There is a huge oppor-tunity in applications, applications, appli-cations.”

He has big numbers to match his big plans. The government is working to con-nect , key nodes – libraries, universi-ties and research facilities – with high-speed fiber. There are plans to connect , local governments with fiber. In January he announced a usd billion gov-ernment investment in creating an “infor-mation highway,” including usd billion for a national fiber-optic network.

At the World Economic Forum, Pitroda talked about how Mahatma Gandhi’s dream of the development of the villages and decentralization had remained

only a dream because the “information element” had been missing. But now, final-ly, India had built the tools to realize Gandhi’s dream.

PHASE FOUR: THE NEXT STEP

Even after a fight with cancer and a second heart attack, Pitroda is busier than ever, his life reduced to a transcendent simplicity of work – now in Chicago, now in Delhi, now at a conference in Oslo, Norway.

The new plans keep coming too. Now he wants to build an indigenous hardware industry that would match India’s strength in software. Otherwise, hardware imports could someday be more costly than petro-leum, he says. Now, since Indian companies have missed the g opportunity, he says, they need to get a jump start on “g” Gigabit Passive Optical Network (gpon) technology.

“I am Gandhian in many ways,” he says. “I don’t have personal needs. I don’t go shop-ping. I don’t have my own bank account. My wife takes care of that. If she buys me new shoes, I wear the shoes. If she buys me a new shirt, I wear the shirt. I don’t give much thought to these things. They don’t matter.”

For Pitroda, being Gandhian goes far be-yond studying or emulating Gandhi him-self. He doesn’t like to talk about Gandhi as a person. It is more about asking the bigger questions, such as “How do I run my life?”

This brings him back to his childhood in Orissa, back to the focus that has brought him so far and back to the long-term vision he has for a prosperous and sustainable In-dia. It will not be easy to achieve this vision, he says. But it must be done. And who bet-ter to construct this future than the son of a carpenter, a man who builds things?

“Technology is just a tool. At the end of the day, I am the son of a carpenter. I look at tools.” ●

Pitroda on… the impact of moving to the US as a young man

It really opened up possibilities. I could talk about this for hours… For example, the most fascinating thing for me was the door knob, because in India, we had only this latch.

Then I saw a revolving door and I thought, “What a good idea!” Then I saw a post-office box in the US and said, “What a design!” I had never thought that way. There had been nothing in my village. Nothing.

EBR #1 2012 • 17

Sam Pitroda cover story“When I came back from the US (in the 1980s), I had made money, so I used to dress very nicely,” Pitroda says. “After about three months, I realized my clothes were intimidating. So I said, ‘Trash all these American clothes,’ and got some visibly Indian-looking suits stitched.”

18 • EBR #1 2012

technology report

Voice interfaces will soon be everywhere: in cars, home appliances, medical equipment, production lines, and on websites. They are already helping us to make phone calls. But these services have yet to fi nd business models that actually make money.

▶ “Call Mom.” “Am I busy Tues-day afternoon?” “I want pizza.”

People have waited a long time for their machines to be able to understand simple speech. And now it appears that machines are beginning to fi nd their voice, so to speak, with voice control poised to become the latest paradigm-shifting innovation in computer interaction, after the mouse and touchscreens.

The hottest buzz surrounds Siri, the voice-recognition sys-tem included in iOS, the latest version of Apple’s mobile oper-ating system, as well as similar eff orts from Google in Android-powered phones.

Just hard workScientists have worked on voice recognition and natural- language processing for more than fi ve decades, with voice-recognition technology included in some computers since the early s. So it is not hard to do, but it is extremely hard to do right.

A good system must recognize the context of a question, includ-ing follow-up questions that refer to an original question but make

little sense on their own. It must also use sophisticated logic to fi nd the appropriate answer and be able to intelligently ask for clarifi cation if wrong.

The most relevant fi eld for developing voice recognition is computational linguistics, which marries linguistics with data-driven processing. Refl ect-ing this dual focus, models may be “knowledge-based” with written linguistic rules or “data-driven.” These two approaches have often been in confl ict, though the gap between them has closed in recent decades. It turns out there are too many possible sounds in human speech for a computer to un-derstand using only linguistic rules – the data is needed, too.

Computational linguistics is used in a wide array of products besides voice recognition, including text-to-speech synthesizers, automated voice- response systems, web search engines, text editors and lan-guage instruction materials.

Talking about big dataIn recent years, both Google and Apple have made great

strides in voice recognition, largely due to two factors: the capability to collect huge amounts of voice data, and then the ability to process it quickly.

Google is running several ar-tifi cial intelligence programs – others include language trans-lation and the image searches necessary for highly function-ing augmented reality – that depend on the kind of massive computing power of which the company is in a special position to take advantage.

For voice recognition, Google has collected voice samples – the data – from Android’s speech-recognition system, Google Voice’s e-mail transcrip-tion service and the now de-funct information service Goog, among other sources.

In both the Apple and Google voice-recognition systems, most of the comput-ing is done not on the user’s phone but on the Apple or Google servers. With Apple’s Siri system, the voice command is recorded, compressed and sent back to Apple’s servers, which process the request and return a text answer for the phone to “read” to the user.

For all this, current voice- recognition systems are far from perfect.

Both Siri and the Google sys-tem often fail to register slang and regional accents, and they depend on both external serv-ers and sometimes unreliable

network connections. Many media outlets ran practical tests comparing Siri with Google Voice with mixed results, and both systems still required some of the stilted formal com-mands so typical of early voice systems to get the right results.

Until recently, Google was the leader in the mobile fi eld, introducing Google Search by Voice for Android in February . However, Jared Cohen from Google says the industry is still years, if not decades, away from seamless voice recogni-tion on the mobile phone. But that doesn’t mean the systems will get much better very fast in the next decade.

Where does this conversation go from here?The real power of voice recog-nition may not be in our mobile phones, but in applications in everything from our TVs to our cars, especially if systems like Siri become able to interact with third-party apps with artifi cial intelligence capabilities of their own.

Norman Winarsky, the cofounder of Siri, said in Tech-nology Review in October : “It’s clear that it would be technically possible to integrate any web service into Siri; you can put a Siri front end in front of anything.”

And almost to prove him true, within weeks of its Apple debut, Siri had been hacked to

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TEXT Nathan Hegedus

VOICE RECOGNITION: A STEP TOW

EBR #1 2012 • 19

technology report

allow people to start certain cars with voice commands.

Google already off ers voice commands for searching on Google TV, and earlier this year it introduced Android@Home, a framework for controlling light switches, alarm clocks and other home appliances through An-droid-powered devices using voice as well as other means of input.

Apart from Google and Apple, the most promising develop-ments have come from Microsoft and Nuance, with its Dragon products. Microsoft’s Kinect con-troller for the Xbox now features a voice-activated system that lets users speak directly to the Kinect console to search for music, games, movies and TV shows. Plus, the automaker Ford has in-stalled a Microsoft Sync voice-recognition system in even its cheapest models.

What is Siri?Siri has a distinguished pedigree. It started in as CALO (Cog-nitive Assistant that Learns and Organizes), a project funded by the Defense Advanced Research Projects Agency (DARPA), an agency of the US Department of Defense. According to its web-site, DARPA’s mission is to “pre-vent technological surprise to the US, but also to create technologi-cal surprise for its enemies.” The agency has played a central role in the development of computer networking, including creating the predecessor to the internet.

In Siri was acquired by Apple, which removed the inde-pendent Siri app from the market and introduced it exclusively in the iPhone S, which was un-veiled the day before Apple founder and CEO Steve Jobs died.

Will phones think like us?Many people consider the defi ni-tive test of artifi cial intelligence to be the “Turing test,” proposed in by English computer scien-tist Alan Turing.

No machine has ever defi ni-tively passed the Turing test, and neither Siri nor its Android coun-terparts are close, though their increased “natural language” functionality seemingly brings them closer than any other mass-market product.The most successful example of artifi cial intelligence has been the IBM supercomputer Watson, which beat two human contest-ants on the TV quiz show Jeop-ardy! in the US in . ●

What’s the killer app? Your voice.

Technology at your fi ngertips▶ For more on technology, Ericsson Business Review has a partner journal designed to encourage dis-cussion on a wide range of R&D topics and innovative solutions. Written by em-ployees since 1924, Ericsson Review is now available as an app for Android tablets in the Android Market, and for iPad through the App Store. To download the app, go to the Ericsson Review page, ericsson.com/review, and select the link for your device.

Smartphone signaling storm a growing problem▶ NTT DOCOMO and Verizon Wireless have suffered several network outages caused by the signaling behavior of modern smartphones. According to Nikkei News, this has caused DOCOMO to demand that Google rein in the signaling and data loads imposed by Android. In particular, the problem is the way devices are transmitting control signals to the network and pinging the servers automatically to support constantly updating apps.

Shopping sites slow to load▶ It takes an average of 10 seconds to load a retail website, according to a study by Strangeloop Net-works. The 2,000 retail sites tested were from Amazon’s Alexa list of top sites. The speed-testing tool used in the test added delays called latency to round-trip communications to better simulate how consumers several steps removed from a website see it. The study shows that web-pages are becoming more complex at the same time as economization measu-res and browser speed are improving.

▶ In , Steve Jobs stood before the crowd at MacWorld and introduced the iPhone for the fi rst time. And what did he think was its most revolutionary function? The touch screen? The in-tegration with iTunes?

“What’s the killer app?” he asked. “The killer app is making calls! It’s amazing how hard it is to make calls on most phones.”

And he was right, maybe more than he knew at the time. Voice is the gold standard for communication (video too, but only when it includes voice). Humans love to talk. They always have, and they always will.

Sure, many voice minutes are going “over the top.” But people are still going to talk, in both old and new channels, and they will likely always value voice higher than data apps. Plus, at least for now, many, if not most, consumers seem to value the inter-operability and reliability that comes with their phone number and carrier billing.

But that is just the beginning, and the most conservative guess at the future of voice. With Siri in the new iPhone, we have seen voice recognition hit the mainstream. And even if most iPhone owners are not chatting with their phones just yet, many are at least thinking about voice commands. Think of the possibilities as we expand the realm of voice communication from human-to-human to human-to-machine (and vice versa).

Soon every context that can support voice will support voice. You’ve got voice in cars, voice on medical equipment and voice on production lines. With the advent of HTML, you could soon have one-click voice services on every website out there, which opens up a so-far unexplored range of communi-cation possibilities.

All these voice services will need developing and organizing, and the answers may not always fi t the wishes of the telecom industry. Plus, someone needs to fi nd a business model that ac-tually makes money, as “freemium” is far from a sure thing.

WARD THINKING PHONES

20 • EBR #1 2012

▶▶EBR #1 2012 • 21

Beyond educational technology «« Connected learning «« THEME

▶▶

▶ As education reinvents itself, new opportunities for growth abound. ▶ Technology makes it possible to bridge educational gaps on all levels of society, and globally. ▶ The market for education is set to grow, primarily by diversification.

CONCLUSION ▶ Broadband, computers and mobile devices are key enablers in the creation of a whole new market for education. ▶ Network operators can choose from a range of different roles in the new value chains, even becoming schools themselves – or they can remain bitpipe providers.

Connected learning – theme in short

Technology represents a provocation to schools’ traditional ways of working. But investigating its role in tech-savvy schools clearly shows that, by building on two fundamental human needs – communication and curiosity – technology can be used to broaden students’ horizons.

The tools of education – soon at a museum near you

PHOTOS Jann Lipka

22 • EBR #1 2012

▶▶THEME »» Connected learning »» Beyond educational technology

BY COMBINING the results of expert inter-views, literature searches, and ethno-graphic case studies carried out in five

schools (for students aged four to ) in Stock-holm, Chicago, and Hong Kong, Ericsson Con-sumerLab’s Future School project is providing im-portant insights into tomorrow’s education.

Schools have always been a reflection of the so-cieties in which they operate. In agrarian socie-ties, which tended to be small, homogeneous and socially cohesive, the model was one village, one school, one teacher. Later, the birth of the indus-trial society led to the emergence of the factory-model school, with clocks, scheduled lessons, standardized tests and national curriculums. To-day, with the rise of the Networked Society, schools are changing yet again, this time in re-sponse to the process of modernization and in-dividualization – a trend that network theorist Andreas Wittel at Nottingham Trent University in the UK calls network sociality. This develop-ment is based on an individualization that is deeply embedded in new technology – an infor-mation-focused, ephemeral but intense way of living, characterized by an assimilation of work and play.

What will schools be like in the Networked So-ciety? To understand the ongoing paradigm shift in education, the Future School project identified the following six key areas of change...

WORK TOOLS

Today, : programs, in which every student and every teacher has a computer, have become the model for progressive schools that focus on inte-grating ICT into education. Often, students have their own laptops to use both at school and at home. However, in schools that are underfund-ed or are located in economically disadvantaged neighborhoods, : programs can also consist of mobile carts with laptops that students loan for a specific class or throughout the day.

The : model is not restricted to laptops. Schools now increasingly favor tablets, especial-ly for use by younger students who find the app-based devices easier to handle.

Even though the mobile phone has been pro-claimed the epitome of modern society, the Future School project has not discovered much support for mobile phones in education, at least not in formal educational activities. However, in-formally, students and teachers frequently use

mobile phones as flexible multipurpose tools – mostly for recording information and communicat-ing, but also for listening to music while working.

During interviews with teachers, we were told that the touchscreens on mobile phones were too small to write on. However, we later observed stu-dents using digital pens to “write” on their tablet and laptop screens. Older students may favor key-boards, but younger ones often use pen and screen instead of pen and paper.

Whether the school of the future uses laptops, tablets, mobile phones or something in between, the future will demand individualized, mobile, easy-to-use devices. Having said that, it is inter-esting to see that several schools are also making great use of interactive whiteboards. Like an analog whiteboard, an interactive whiteboard is a fixed device, but it can support – like a moth-er screen – interaction with each student’s com-puter. Some experts view these devices only as a stepping-stone on the road to a classroom that has no fixed devices at all, while others recognize the potential of interactive whiteboards for sup-porting both individual and collaborative work.

WORKSPACE

In the new ict environment, where mobile de-vices are more common, a classroom filled with rows of individual desks no longer fulfills any pur-pose. Students carry their mobile work tools around throughout the day. Several of the schools studied in the project have broken down walls to make large rooms with plenty of lightweight, movable desks and chairs that can be rearranged to suit the needs of each class or group of stu-dents. Students can work in “islands of learning” in large rooms, creating flexible classrooms that enhance collaboration.

Breaking down walls is one way for schools with old architectural structures to redefine their classrooms. Schools that are renovating or build-ing new premises are better able to adapt their architecture to include new technology and new pedagogical methods. Two of the five schools in the study are currently renovating by building rooms of various sizes with movable furniture.

Work space includes not only physical but also virtual space, extending the classroom through the use of e-mail, Facebook, Skype, Google Docs document-sharing software, OneNote planning and note-taking software, Prezi presentation soft-ware, and many other open or closed forms of

The school of the future will require hybrid forms of

connectivity, including wireless, fixed and mobile broad-

band, to meet the need for flexible but reliable high-speed

internet access.

▶ Bill Clinton:

“The great genius of the network is that it is a continuously evolving expe r-iment. And as long as our goal is to do things smarter, cheaper and better, we don’t have to be afraid of not having all the answers. We don’t have to be afraid of trying something that doesn’t work.”

▶ Jon Eddy Abdullah:

“The real question is: what’s next? In this industry we have spent years trying to get mobile handsets into the hands of people. We’re almost there with 100 percent coverage in many countries. Some people might think it’s game over for telecoms – but it’s not. We can help other industries to use this technology for good.”

EBR #1 2012 • 23

software that allow students to do schoolwork without being restricted to the physical class-room. With connectivity, schools start to inter-act and learn from each another. Classes in dif-ferent countries are using Skype to communicate with each other and take virtual tours of each oth-er’s schools. Teachers are using blogs and social media to exchange ideas and lecture materials, driving forth new pedagogical ideals.

Virtual schools can and will be a great comple-ment to physical schools, especially in areas where students and teachers must travel long dis-tances to school, or when individual disabilities make participation in physical schools difficult. However, the physical school with eye-to-eye communication is still the norm. But in a socie-ty with omnipresent connectivity, the focus should not be on whether to work online or of-fline, but rather on using the best work tool and space for the specific task and situation at hand.

INFRASTRUCTURE REQUIREMENTS

The schools of the future will rely heavily on con-nectivity. As computers are used more frequent-ly, additional control mechanisms, backups and filters will be necessary. Teachers will use ict to manage, observe, coach, protect and evaluate stu-dents. Without stable, high-speed connectivity, many of these tasks will fail. The schools studied in the Future School project are building heavily on wireless systems, but also using fixed broad-band for components such as printers and serv-ers to reduce the load on the Wi-Fi network. One school in Chicago has also begun looking at mo-bile broadband as a complement to Wi-Fi.

Even in the tech-savvy schools studied in the project, connectivity is lost from time to time, forcing teachers to improvise and always have an analog backup plan. All the schools in the study reported problems with “dead spaces” and lagging Wi-Fi connectivity when large groups of students moved from one end of the school to another.

A sometimes unreliable Wi-Fi network is not the only problem being encountered by these schools. In several of the schools studied, we have also seen that school administrators do not have a clear understanding of students’ media habits. For example, in one school, administrators were trying to figure out why their modern Wi-Fi sys-tem was not up to scratch. Their calculations were accurate – they knew how many connected de-vices the school owned – yet the network wasn’t

meeting the school’s needs. The answer was found in students’ informal internet use. In our observations of students between classes, we saw their informal use of devices and the internet. The total number of devices connected to the school’s wireless system was not equal to the number of devices owned by the school – not by a long shot. Most students had smartphones, which they had connected to the school’s Wi-Fi network. Some also carried personal tablets.

The school of the future will require hybrid forms of connectivity, including wireless, fixed and mobile broadband, to meet the need for flex-ible but reliable high-speed internet access. And that connectivity will be required not only in schools, but also when students are on the way to and from school, in locations such as the li-brary and even at home, in districts where they would otherwise be unlikely to have internet access at home.

WAYS OF WORKING

New technology represents a challenge to schools’ traditional ways of working. As the work tools used in schools change, the ways of working are also changing.

With increased connectivity, information is available anywhere, anytime. This raises ques-tions about the future of textbooks. Although textbooks (both analog and digital) are still being used in the schools studied in the Future School project, extensive amounts of schoolwork and lecturing are taking place without them. Text-books only represent one collected interpreta-tion and presentation of a subject. If students are not satisfied with the explanation – or lack of ex-planation – provided in a particular textbook, they use Google to search for another perspec-tive on the topic.

All the schools in the study are moving away from the idea that all students should do one spe-cific thing at one particular time in one place. Project-based learning seems to be the way of the future. Like many adults working in projects, stu-dents are learning how to divide and take respon-sibility for different parts of their projects. In one Chicago school, the students appointed project managers and gave them the mandate to fire team members who did not do their jobs. Promoting leadership skills through project-based learning is meant to prepare students for future work at the management level.


Using video to reinvent education▶ The Khan Academy,

based in Mountain View,

California, started out in

2006 by teaching math

online for free through

simple conversational-

style YouTube videos. The

company was able to ex-

pand after receiving sig-

nificant donations, and

now it has grown with

the addition of features

such as exercises that test

students’ understanding

of the videos and track

their progress with met-

rics. The focus is primarily

on math, but topics rang-

ing from algebra, calculus

and economics to history

and preparation for

standardized assessment

tests are included.

Teachers or coaches

can monitor student pro-

gress in groups, and stu-

dents can earn badges to

keep their interest up. The

idea is that teachers inter-

vene only when a student

gets stuck; ideally, they

are only needed as cor-

rective influences.

▶▶

▶ Hans Vestberg:

“The ICT industry has now reached a point where it’s possible to bring education and learning opportunities to all, no matter where they are. It’s time to act to close the education gap.”

24 • EBR #1 2012

▶▶THEME »» Connected learning »» Beyond educational technology

Working in projects redefines the concept of a class of students. When most work and socializing takes place in project groups instead of classes, the class exists only for administrative purposes.

In projects, students need to work both indi-vidually and in groups. Despite extensive fears that the : model risked isolating students, the schools and experts in the study now say that mo-bile digital tools actually promote both individ-ual and collaborative work. As Stephen Heppell, Professor of New Media Environments at the Centre for Excellence in Media Practice at Bournemouth University in the uk, put it when we interviewed him: “With the : model, we see that kids are doing it together. Who would have thought that personal computers could be a great collaboration tool?”

NEW ROLES FOR TEACHERS

Teachers will clearly continue to play a central role in students’ learning process. However, with new tools and changed ways of working, a new role for teachers is emerging. Teachers will have to accept being more of a “guide by the side” in-stead of a “sage on the stage.”

This does not mean that students are left to learn entirely by themselves. On the contrary, the teacher is more important than ever – not as an all-knowing deity, but rather as an instructor or coach whose wisdom goes beyond mere textbook facts, expanding into the realm of everyday life and including the use of Facebook and Skype. Several teachers we met had set up teacher pro-files on Facebook as an additional way to com-municate with their students – meeting the stu-dents where they were, using their preferred tools.

Through the use of ict, parents are also gain-ing greater opportunities for involvement in their children’s education. Technology is making schools more transparent, offering new ways for parents to keep track of their children’s perfor-mance at school and to establish direct contact with teachers and school administrators. Teach-ers do not always welcome this development, since it places greater demands on their shoulders.

SKILLS, KNOWLEDGE AND GAMES

Schools are facing new challenges in their mis-sion to prepare students for their working lives. With the rise of the Networked Society, we are seeing changes in the skills demanded from young people. Basic skills such as reading, writing and arithmetic will always be important. But integrat-ed technology is creating the need for new, st-century skills, such as information and ict liter-acy; communication; collaboration; and critical and analytical thinking.

A school that has access to almost unlimited information must teach students how to search for relevant, trustworthy material and how to an-alyze and understand information in different contexts. The focus in education is shifting from rote memorization and worksheets to collabora-tion and content creation.

Laptops and other devices provide students with access to global information, collaborative tools, and creative applications that enable them to create their own content. Projectors and inter-active whiteboards are used for collaboration and presentations. What’s important is not only knowing all the right answers, but also under-standing how to formulate and present the best questions.

Looking at these schools, it is evident that an ICT revo-

lution in a school is never the end; it is the beginning of

a continuous evolution.

South Koreans launch mobile school▶ South Korean operator

SK Telecom’s T Smart

Learning is a tablet-based

education platform for in-

teractive learning. An on-

line support community

enables students to share

study tips via a knowl-

edge-sharing system.

For this project, SK Tele-

com is partnering with 12

education companies and

groups, including the Ko-

rean Federation of Teach-

ers’ Association.

Designed to support

classroom coursework,

T Smart Learning suggests

a customized study sched-

ule, tips and learning ma-

terials that reflect each

student’s academic level

and learning style. It also

provides constant motiva-

tion for the student

through diverse measures

including text messages.

The platform includes

support tools such as a

dictionary, vocabulary

boxes, review notes, smart

notes, and educational

games.

T Smart Learning allows

parents to check on and

assist with their children’s

learning progress. It is also

expected to contribute to

reducing household

spending on education.

Its online content store,

called Library, offers a

wide variety of electronic

study materials at prices

30 to 40 percent lower

than those of printed

books, and allows users

to buy each chapter

separately.

SK Telecom will pro-

mote the South Korean

government’s policy initi-

ative on smart learning by

actively cooperating in

the development of digi-

tal textbooks, new after-

school programs and a

smart learning system for

students with disabilities.

▶ Sir Harold Kroto:

“The internet is the most remarkable innovation since the invention of the printing press. We need to use this technology to unlock the creative potential of every kid on the planet and to inject the ideas of every brilliant teacher into every school.”

▶▶EBR #1 2012 • 25


New technology has also brought gaming into schools. In Chicago, the children in the study played Nintendo Wii interactive video games dur-ing recess. In Stockholm, they played Word feud, an interactive crossword game. Recreational and educational gaming are also becoming tools for learning. An example is the first lego League, an international robotics competition for stu-dents aged nine to . Each year, the organizers of the competition announce a new challenge that focuses on a real-world topic related to science and technology. Part of the current challenge con-sists of a robot game, which is set up like a giant board game and revolves around designing and programming lego robots to complete tasks. Students collaborate and work out solutions to the various problems they are given and then meet for regional tournaments to share their knowledge, compare ideas, and display their ro-bots. The gaming part of the competition includes lectures, and extensive physical and intellectual work. Science, global issues and strategic think-ing are natural focus areas during the challenge.

REVOLUTIONARY SCHOOLS

Findings from fieldwork for the Future School project show that when ict is successfully inte-grated into schools, it can help engage and em-power students, thus adding value to their edu-cation. Building on two fundamental human needs – communication and curiosity – ict can be used to broaden students’ horizons, enhance their motivation to learn, and prepare them for their working lives in a society characterized by individualism, mobility, and the blurring of boundaries between what is private and public, as well as between work and play.

However, to successfully integrate ict into ed-ucation, it is important to understand the peda-gogical changes that must accompany the new technology. These changes will in turn encour-age the development of new technology. Fancy gadgets that have no real impact on schools’ ways of working will soon lose their novelty and begin to collect dust.

By adopting new technology, educators hope to bring about beneficial educational and admin-istrative changes and to better prepare students for their professional lives. Most of the schools in the study have a legacy of using ict in educa-tion, including advanced computer labs and shared laptop carts. Their use of technology is

evolving as they adopt the : model to further improve learning and provide students and teach-ers with access to the most cutting-edge ict tools.

We also witnessed a revolutionary develop-ment in one school. A school in Chicago was on academic probation a few years ago, and under-went a complete reorganization – a total change in its pedagogical approach that included the ad-dition of new technology. As one of the schools’ teachers says: “What we were doing wasn’t working so much, because we were declared a failing school.” Today, the school is off proba-tion, and the students’ test scores have signifi-cantly increased.

Some of the schools in this project have or years of experience of working with ict, and as such they have already undergone their revo-lution. But they are still working hard on trying new devices, new software and new ways of work-ing. Looking at these schools, it is evident that an ict revolution in a school is never the end; it is the beginning of a continuous evolution. Today the majority of schools worldwide are still facing the revolution that connectivity and integrated ict is ushering in. The shaping of a new educa-tional infrastructure has only just begun.

About the projectFuture School is a project co-financed by Ericsson ConsumerLab, an organization that provides con-sumer insight to influence strategy, marketing and product management within the Ericsson Group, and Riksbankens Jubileumsfond, an independent Swedish foundation designed to promote and sup-port scientific research. The ethnographic field work in Chicago and Hong Kong was done in co-operation with Conifer Research. ●

AUTHOR

▶ MARCUS PERSSON is a

Consumer Researcher at Ericsson

ConsumerLab. Since 2010 he has

held a postdoctoral position as in-

house sociologist at the lab, con-

ducting research on consumers’

use of, and relationships with, technology in various con-

texts. He holds a PhD in Sociology from Örebro University,

Sweden. In 2007 he published an award-winning disserta-

tion called Between Humans and Things: an Interactionistic

Analysis of Collecting, at Lund University in Sweden..

([email protected])

▶ Chris Hughes:

“The textbook is dead. It’s no longer the basic building block of education.”

▶ Jeffrey Sachs:

“At Columbia University, every week we turn on the screen and 20 campuses are on live, simultaneous video conference. We now have a worldwide classroom.”

▶ Jan Eliasson:

“Education needs input from everyone involved. ICT has the business models, education has the experience, and government has the policy. It’s a triple win.”

26 • EBR #1 2012

EBR #1 2012 • 27

The experts’ opinions «« Connected learning «« THEME

▶▶

How can technology help bring learning to everyone? Ericsson Business Review posed the question to three prominent experts in the fi eld of education – each with his own vision of the classroom of the future.

Lessons on learning

TEXT Nicholas Smith

Ken Banks: “We defi ne innovation too narrowly”

Creator of FrontlineSMS, a mobile messaging application aimed at the grassroots

nonprofit community, Ken Banks argues that development issues such as educa-

tion require us to start with the problem, not the technology. In developing

countries, most high-tech solutions just don’t work.

What role can mobile technology play in devel-

opment?

Too many people today are disconnected from the world and the opportunities it offers. Many developing countries still lack landlines, and in many cases where the infrastructure does exist, it is often poorly maintained. Mobile networks open up the possibility of reaching communities that would otherwise miss out on any meaning-

ful connection with the rest of the world, and al-low them to engage, make themselves heard and to be empowered by information.

Mobile phones are, of course, the main drivers here. This is the first time in history that billions of people have had a real-time, immediate digital communication channel that is cheap, portable and easy to use. And for development projects looking to widen public access to

28 • EBR #1 2012

▶▶THEME »» Connected learning »» The experts’ opinion

education, to give just one example, mobile phones can enable them to reach out to people who would previously have been beyond reach. But it is not development organizations or even governments that have made this happen; the pri-vate sector is ultimately responsible for much of the rollout of mobile phone networks in the de-veloping world, and many operators are making healthy sums of money by doing so.

You have been involved in many fruitful mobile-

centered development initiatives. What sepa-

rates the successful projects from the unsuccess-

ful ones?

The single most important thing is starting with the problem and not the technology. It is quite common for people to grab the latest smart-phone or iPad or whatever happens to be hot at the moment and try to figure out how it could be used in a development context. This approach can work, but most of the time it is destined to fail. If you go in with technology as your main ob-jective, you will end up shoehorning it into con-texts where it will not always work. The solution to a development question could be pencils or paper – it does not necessarily need to have an-ything to do with ict.

I think that the correct sequence should instead be problem-people-technology. By “people” I mean the individuals at the grassroots who usually un-derstand the problem better than anybody else. Many outside projects bulldoze their way in and try to modernize everything from scratch without stopping to ask for advice. The schools, churches and cooperatives that have been there for a long time and better understand the culture and geog-raphy are often not spoken to or listened to.

Does the Western world have too much faith in

the power of ict to drive development?

The problem is that the West views innovation in a fairly narrow sense. The focus is almost ex-clusively on high-tech solutions, but most of this technology simply does not work in the places that need most developmental help, whether that means education, health care or something else. Technologies like tablets or g networks that the West sees as innovative and exciting are just not applicable to rural areas in developing countries. So we need a big mindset shift, where we stop seeing innovation exclusively in our own terms and realize that local solutions to some problems may actually work best. Perhaps we should be scaling these solutions rather than thinking about how we can scale our own.You referred earlier to the crucial role played by

private enterprise in bringing mobility to the de-

veloping world. How do you see this role evolv-

ing in the future?

“Operators often get quite a hard time from de-velopment organizations, although I think that some of this criticism is unjustified. On the one hand, issues such as the high cost of mobile ser-vices in areas where people do not have enough

money or delays in network rollout in rural re-gions with small populations certainly need to be addressed. But on the other hand, it is unfair to expect businesses to act like charities, and I be-lieve that the development sector is very lucky that the mobile industry exists and can make money from what it is doing.

Operators are doing a better job than anybody else of meeting the insatiable demand for mobile technology, and the development sector has many more opportunities to make a positive difference as a result. In fact, there is probably space for operators to get even more involved in develop-ment issues.

What kind of relations do operators and non-

profit organizations have at present?

A lot of nonprofits never get an answer when they try and contact operators. The reason is that there is a “thousand flowers blooming” scenario right now, where the number of development pro-jects just keeps on rising. If representatives of each of these projects knock on an operator’s door asking for free minutes or text messages, it quick-ly becomes unmanageable. Operators do not have the time to speak to everybody, and in many cas-es the project scale is too small. The development sector requires a coordinated effort, where eve-rybody gets together to determine the aggregate value of what they need, and then makes a com-mon case to the operators.

Is this united front realistic?

The nonprofit world is as competitive as the business world. Everybody is chasing the same funds, and each project tries everything possible in an attempt to look better than the others. There is a fear that if everybody gets together then eve-rybody ends up looking the same. I hope it does materialize, however. Development organizations really should stop assuming that they only need to turn up on an operator’s doorstep and they will au-tomatically be given everything they need for free.

Until developing countries are in a position to

develop their own solutions, is mobile technol-

ogy not just another form of aid from the West?

Sometimes it is, yes. But if we take Africa as an example, there is more local innovation to-day than ever before – just look at the iHub in-cubator in Nairobi or the new technology cen-ters springing up in Ghana and South Africa. The numbers are still low, but three or four years ago there was practically nothing at all. There is a general realization that the best place to devel-op technology solutions for Africa is in Africa, and a clear sign of this change in mindset is the number of people who are now choosing to pursue entrepreneurial opportunities at home rather than leaving for the West. Although de-velopment continues to be dominated by the West bringing in technologies to the developing world, in five years’ time it might just be the other way around. ●

MIT pushing the boundaries of online learning▶ Students at the Massa-

chusetts Institute of Tech-

nology (MIT) pay thou-

sands of dollars for cours-

es, but now anyone, any-

where can take MIT

courses online free of

charge – and earn official

certificates.

Ten years ago, MIT be-

gan leading the way in

online learning by post-

ing course materials from

almost all of its classes. Its

free OpenCourseWare in-

cludes nearly 2,000 cours-

es and has been used by

more than 100 million

people. The new MITx in-

teractive online learning

platform will go further,

giving students access to

online laboratories, self-

assessments and student-

to-student discussions.

For an affordable fee,

students will be able to

receive a document stat-

ing that they have dem-

onstrated an understand-

ing of a given topic. Al-

though they are not MIT

degrees, these documents

will be legitimate creden-

tials bearing the name of

a new nonprofit body to

be created within MIT.

The MITx learning plat-

form will eventually host

a virtual community of

learners around the world

and will be accompanied

by an MIT-wide research

initiative on online teach-

ing and learning, includ-

ing grading by computer.

EBR #1 2012 • 29


▶▶

Sugata Mitra:“Can technology eliminate teachers? – Well, almost”

Everybody agrees that ICT has a place in education. Questions remain, however,

about just how far this involvement should go. The views of Sugata Mitra, Professor

of Educational Technology at Newcastle University in the UK, lie at the extreme end

of the scale.

Creator of the Hole in the Wall experiment in , which showed that children in a New Del-hi slum could learn to use computers without adult supervision, Mitra has suggested that IT equip-ment could soon assume many – if not most – of the responsibilities currently held by teachers.

Why should Mitra’s vision matter to operators? The answer is that if broadband really is more im-portant than blackboards, and netbooks really can take the place of textbooks, the classroom won’t be able to do without them.

One of your most provocative views is that teach-

ers should be replaced by computers wherever

possible. Can you explain your reasoning?

The idea actually comes from the science fic-tion writer Arthur C. Clarke. I received an e-mail from him back in when I was in the middle of the first Hole in the Wall project in India and he was extremely interested in what I was doing. I met Clarke at his home in Colombo, Sri Lanka, and he said that although nothing can complete-ly replace a good teacher, large parts of what they do could be better handled by computers. He was right then and I think he is even more right to-day. Aptitude is increasingly measured only in terms of the ability to regurgitate existing knowl-edge and pass question-and-answer tests. But why teach this knowledge if you can get it instant-ly on Google?

So what should the classroom of the future look

like?

My approach is based on something called a self-organizing learning environment. This is a place where children can work in groups, access the internet and use software, follow up on a class activity or project, or go wherever their interests lead them. There are always five times as many children as computers, so a class of children gets five computers – one of the things I learned from the Hole in the Wall experiment was that the children using those computers tended to work in groups of three to five. Children work-ing by themselves do not, as a rule, get the results that groups can manage. I arrange the furniture so that each computer has a cluster of five chairs around it and then ask the children to form groups of their choice.

Having set that up, I ask a question – a really

difficult one. For example, I was recently at a school in England where the nine-year-olds were showing no interest in learning about the solar system. This is a subject that normally holds the attention of most children, so the lessons were clearly not taking the right approach. So my ques-tion for the class was, “When and how did the world begin, and when and how will it end?”

The children got to work on the computers. After minutes they came back with the Big Bang theory and the fact that the Earth was com-posed from solidified gases. They told me that the universe was formed billion years ago and that the Earth is about billion years old. Most importantly, they found the question fascinating. They found all kinds of mumbo jumbo on the in-ternet, but had taken a collective decision to be-lieve the explanation that the sun will expand and eventually swallow up the Earth, and that this will happen four billion years from now. In other words, they had opted for the scientifically ac-cepted theory.

So I am not proposing to eliminate teachers completely. My classroom of the future will have the children learning in groups by using comput-ers to solve challenging questions for most of the school day, but the teachers are needed to ask those questions and then, depending on how the children progress, ask the next question and then the question after that and so on. Schooling be-comes a sequence of answers to the big questions, and if these questions are engineered properly, the curriculum will naturally follow. I am not anti- curriculum in the least. A teacher I know in Hong Kong asked his students how an iPad knows where it is. After minutes with the computers, the children ran into trigonometry, and asked the teacher to explain what it was. They then listened intently – because they had a reason to do so. He told me it was the first time in his career that any-body had asked him to teach them trigonometry. The computer had opened the door to teaching by creating a situation where he could say, “So you really want to know? OK, I’ll explain it to you.”

The sheer volume of “mumbo jumbo,” to use

your term, seems to weaken the value of the in-

ternet as a learning resource.

Collectively speaking, the children always make the right decision and never opt for the

30 • EBR #1 2012

mumbo jumbo. Groups of children inter-acting with each other seem to have a self-correcting mechanism. At another school in Eng-land, I asked the children a particularly contro-versial question: “What was the British Raj, and was it good or bad?” They sat down at the com-puters and straight away I could see that four girls were headed in completely the wrong direction. One of them came up to me and said: “The Brit-ish Raj is an Indian restaurant in South Shields – and we’re looking at the menu to find out if it’s good or bad.” At that point I could see all my the-ories collapsing in front of my eyes. But then a boy from another group made his way across the room to the girl and explained that the question was about history, not Indian restaurants. As soon as he had done so, the group of four girls followed him over to the other corner and worked togeth-er with his group instead.

The children had corrected themselves, and that is one of the things that gives me full confi-dence in the role of computers and the internet in the classroom. In fact, that same group went on to give an absolutely brilliant answer to my original question. At first they said that the Brit-ish Raj was both good and bad. The British did a lot of terrible things in India, but they also built the railways and created the machinery of gov-ernment.

I replied that I was not satisfied with that an-swer, and asked them to go back to the comput-ers and take a definite stance. In the end they made a decision. “It was bad,” one little boy said. “The British may have done some good in India, but nobody asked them to.” These are supposed to be stupid children in disadvantaged schools, but those are just stories made up by adults try-ing to cover their own inadequacies. Every child can think for themselves and combining the right

questions with computers can be enormously powerful in helping this process.

Today’s children are, of course, tomorrow’s pro-

fessionals. If your way of educating becomes

widespread, what do you think that means for

the future business environment?

More and more people have grown up with computers and lead increasingly digital lives, and companies need to adjust to this new reality. For example, they need to accept that employees will use Facebook in the office and that trying to ban it is not the right response. Nothing can be banned. People will do what they want to do.

In the long run, I think that the business im-pact of my approach will be even more profound. I have been using this system in schools for sev-eral years, and this has given me the opportuni-ty of seeing so many children, when confronted with different learning challenges as they grow older, asking their teacher if they can get into groups of four or five. Together they feel that they can achieve anything. Their self-confidence lev-els just go through the roof. So their behavior im-proves, their interpersonal relationships get bet-ter, and in the long run they become an employ-er’s dream.

Do you see the wider implementation of your

approach as a job for markets or governments?

I used to think that governments should make it happen, and my job was simply to explain it to them properly. However, I am beginning to re-vise my opinion. This kind of change will proba-bly only happen from the grassroots upwards. My experience has been that one school tries it and sees the benefits, and then another one contacts me, and then the next. There seems to be every chance that it will happen by itself. ●

Richard Fletcher: “Don’t rely too much on technology”

A specialist in physical sensors and augmented reality, Professor Richard Fletcher of

MIT Media Lab believes that ICT-enabled learning is about much more than

computers and mobile phones.

Fletcher’s research group works on ways to in-corporate digital education into the physical world by using toys, robots and models to inter-pret and apply the rich data now available for learning and training.

Techno-utopians take note: despite his posi-tion at the cutting edge of ict-enabled learning, Fletcher cautions against relying exclusively on technology to teach.

Is there a right way and a wrong way to combine

ict and education?

Using a computer to learn has historically been a very isolating experience. I think it is tremen-dously sad to go to a computer lab and see stu-dents, each sitting by themselves with head-phones on, completely isolated from the world around them. This has been a problem in some way ever since the emergence of the pc in the

THEME »» Connected learning »» The experts’ opinion

EBR #1 2012 • 31


s. ict has the potential to give so much more. One of the main priorities for the Media Lab

is finding new ways to bring technology out into the physical world and make our interactions with it more natural. If we can do this, we can help to transform ict-based education into a social, rath-er than an isolating, experience. The fact that we now have the ability to use various types of sen-sors to make computers aware of their surround-ings is therefore very significant from an educa-tional point of view.

The Media Lab has a long-running collabora-tion with lego to create something called lego Mindstorms. These are kits containing hardware and software that enable children to create, pro-gram and customize small robots. Most impor-tantly, each kit comes with a set of modular sen-sors that can respond to touch, distance, light or sound. This has proven to be a great way to get started in programming, regardless of age or ex-isting technical skills, and it has been enabled by these new types of sensing technology. It is a way of educating by bringing computation out from behind screens and into the physical world, and it becomes a more natural learning experience. For me, that is the right way to combine educa-tion and ict.

What are the key ingredients for a successful

ict-enabled learning project?

I believe that the most important thing of all is that the system can adapt to the learner. Every-one is different and we all learn in different ways. My research group has done a lot of work with autistic children, who have very specific needs and conditions for learning, and we have focused on finding solutions that can adapt to the partic-ular set of skills that these children have. This is an approach that I think is relevant to everybody, autistic or not. When the industry talks about ac-cessibility to ict-based learning, there is a ten-dency to structure the discussion around connec-tivity. That is a very important question, but ac-cessibility is equally relevant. We have to think about things like interfaces, user style and natu-ral language that enable a system and a learner to have a conversation on the individual’s level.

Augmented reality represents one of your main

research interests. How should this technology

be used in education?

As the name suggests, augmented reality is there to augment, rather than replace. And I have a way of testing whether an augmented reality system is good or not. What happens when you turn off the electricity? If the system remains workable, beautiful and useful for educational purposes, then you have succeeded. If it becomes instantly useless, you have not. So pull the plug and see what you have left.

My philosophy is not to rely completely on dig-ital technology for learning, but to take a physi-cal object like an abacus or a set of wooden blocks that has been used to teach for hundreds of years

and augment it. This can take different forms – perhaps we add sensors to the object itself, or per-haps we project some digital information into physical space that helps and guides the user to achieve whatever they are proposing to do.

What could ict-based learning mean for cur-

rent education models?

We are on the verge of a generational shift in education models, and right now it is probably too early to know for sure exactly which approach will prevail. But some distinct trends are definitely emerging. Firstly, many of the world’s most prom-inent universities have embraced online learning – along with the idea that it should be free.

On the other hand, watching an hour-long lecture on a subject like calculus is not necessar-ily for everyone. And we all know from YouTube how easy it has become for people to make and publish videos. So the other major trend that we are seeing is a shift from university- to student-produced content – or, in other words, students teaching each other. For example, students at mit are being commissioned to create videos designed to teach a specific point, rather than the complete theories or textbook chapters that a faculty class might cover. The mit experiment has so far been very successful because there is such a variety of videos available, meaning that there is something that will appeal to just about everyone. It may be-come more natural to learn about certain subjects from people your own age, rather than from an older professor from a different generation.

Some educational thinkers believe ict has the

potential to take on many of the responsibilities

currently held by teachers. Do you agree?

I do not believe that anything will ever replace human storytelling as the most effective and pop-ular means of educating people. This will contin-ue to be true regardless of how great our technol-ogies become.

Over the past few years I have come to under-stand just how powerful the human element re-ally is. I have been doing a lot of work related to health care in rural communities in the develop-ing world, and of course education is a very im-portant part of these efforts. In many cases it is necessary to convince people that they need to make some dramatic lifestyle changes in order to reach a particular health benefit, and in that con-text the best form of education is based on story-telling. One project in particular has been very successful simply by providing a way to make a film, burn it onto a dvd and then properly distribute it. People can watch other people tell-ing or acting out stories using natural language, and this has been remarkably effective in making a difference.

We should make technology as human as pos-sible rather than asking it to replace humans, and perhaps the true measure of success will be whether we even notice the technology at all. ●

Forum for a smarter society▶ NEST – The Networked

Society Forum, held in No-

vember 2011, included an

intense debate on how ICT

can help bring learning to

everyone, everywhere.

With almost 80 leading fig-

ures from business, politics

and academia gathered in

Hong Kong, the conversa-

tions both inspired and

challenged – and led to

several new initiatives.

Opening the forum, Eric-

sson President and CEO

Hans Vestberg said that ICT

can play a key role in reshap-

ing education to the benefit

of everyone. “If we can

rethink education, we get a

smarter society,” he said.

The discussions at NEST

were structured around

three themes: the role of

technology access in re-

shaping education; the re-

defined educational mod-

els needed in a Networked

Society in which everything

that can benefit from a

connection is connected;

and how education can

support social mobility.

With some participants

going so far as to question

the need for teachers at all,

the event usefully illustrat-

ed some of the fracture

lines – explored in depth in

this issue – between the

techno-utopian thinkers

who see ICT as radically re-

defining and digitalizing

our whole approach to ed-

ucation, and those more

cautious observers who in-

sist human teachers are ir-

replaceable.

Vestberg announced an

agreement between Erics-

son and the Earth Institute

to develop metrics that

describe the relationship

between education and ICT

– just as Ericsson previously

measured connectivity’s

impact on GDP and jobs.

“After this weekend,”

Vestberg said, “I think we

have come closer to ex-

perts in academia, the pub-

lic sector and our industry

colleagues to understand

the challenges and oppor-

tunities before us.”

▶▶

32 • EBR #1 2012

EBR #1 2012 • 33

How to gain a competitive edge «« Connected learning «« THEME

Talent and competence management has emerged as a strategic issue for today’s businesses. A key

part of this can be defined as corporate learning. Companies currently have an opportunity to reinvent

corporate learning to ensure they adapt more rapidly to a fast-changing business environment. Here,

some Ericsson insights are shared on how to approach this new reality.

Reinventing corporate learningW

ITH THE CONVERGENCE of the telecom, in-ternet and media industries, a new multiplex technology and business

landscape is emerging. Social trends are harder to foresee, and the life cycles of solutions and ser-vices are more difficult to predict. These uncer-tainties make it necessary for organizations to be-come more responsive and agile in terms of the way they build competence for the future.

In a dynamic environment corporations can gain a competitive advantage, by implementing a new approach to corporate learning.

Such an approach consists of a number of com-bined efforts, explained later in this article. The first one is to push learning beyond the tradition-al classroom and e-learning, and work with the larger question of how people acquire compe-tence, and how you can make the less formal part of learning a success.

Secondly, in a fast-changing reality, it becomes critical to cut the middlemen between the source of knowledge and the learners, wherever possi-ble. Connected to that, online and mobile tech-nologies become critical to explore. Therefore, the it department needs to be a key partner to the learning and development function.

At last, modern corporate learning needs to be designed to stimulate employees to make better use of online learning and opportunity sharing.

As the workforce demographics change, a new generation of talent is entering the workplace. Often highly educated, and with technology in their dna, these “millennials” are shunning the nine-to-five lifestyle and bringing with them new expectations, norms and values into the work-place.

WHAT FACTORS SHAPE THE WAY WE LEARN?

We all know how important corporate culture could be for success, and part of such culture is about the way we acquire new knowledge and skills. So can we see some key trends that affect us in shaping a learning culture? Here are our four main trends:

3The sheer volume of information now availa-ble online is increasing rapidly. With such in-credible resources at hand, the challenge of finding the best source of knowledge at the right time is becoming a key issue

3The globalization of organizations puts even higher expectations on the borderless utiliza-tion of knowledge & skills

3Communication technologies and digital tools offering radical new ways to collaborate and learn are available, and new technologies pro-vide endless opportunities

3The way we process and memorize the infor-mation we need to perform is changing.

▶ Anna Simioni, Executive

Vice President, Head of Corpo-

rate Learning at UniCredit:

“Technology has enabled us to make the shift away from dependent learning – where it’s the teacher who gives you the knowhow. Today we are able to off er a more community-based approach to learning, ultimately drawing together multiple sources of knowledge that combine to make a fundamental diff erence for the business.”

▶▶

34 • EBR #1 2012

▶▶THEME »» Connected learning »» How to gain a competitive edge

We have a shorter attention span, and we are making selective decisions faster than we did before.

Based on those trends, corporate learning must respond by fulfilling five criteria:

3Online on-demand – whenever possible, knowledge should be available “at my finger-tips”

3Personalized – information should be tailored to individuals’ specific needs

3Contextual – learning should be embedded into business processes

3Collaborative – employees should be able to use the power and cooperative creativity of all their colleagues worldwide, inside as well as outside the company walls

3Trusted source – there needs to be confidence in the reliability and quality of the information being used.

Besides being well grounded in corporate strate-gic priorities, a company’s learning architecture must be agile and able to offer exactly what indi-vidual employees need. It should be designed not only to support people’s aspirations and career dreams, but also to meet their immediate needs in a highly demanding and dynamic workplace.

THE NEW REALITY

There is no doubt that technology is the main theme that will impact corporate learning the most for the years to come. Technology provides companies with access to incredible experts, com-munities, written or recorded resources, speak-ers, lecturers and teachers that would otherwise be out of reach. Technology can also be used to facilitate the individual learning process itself. If harnessed properly, the digital revolution has the potential to lift the level of competence develop-ment, scale up and enrich the learning experience.

Ericsson was one of the first companies to ex-plore the possibility of providing all its employ-ees with access to recorded Harvard lectures on-line. We chose the lectures based on a number of carefully selected key strategic themes. We want-ed to provide a source of inspirational strategic thinking, penetrating insights and practical ad-vice – not only for a selected few, but for every-one. By making only a minor investment in tech-nology, we were able to deliver these lectures along with access to transcripts, additional related

resources and study material. The delivery cost for each participant to attend a lecture was in the range of a cinema ticket, and the spontaneous re-action from employees was remarkable.

Interestingly, the employees who responded with the most enthusiasm were not only strate-gy and product managers but also staff working in areas such as software development, r&d pro-ject management and service delivery – typical-ly, groups of employees who would otherwise be unlikely to have the chance to attend lectures at an Ivy League university.

All of this is good, but how do we move beyond simply taking an old teaching and learning mod-el and making it available online?

We believe teachers and classrooms will con-tinue to exist in the new world of learning. How-ever, new educational paradigms will make great-er use of technology, and classrooms will be used only when they bring additional value to educa-tion. For learning professionals, this will place new demands on the design of learning solutions.

LESSONS LEARNED

Bottom line: a modern approach to corporate learning should support a company’s ability to better understand the market and its customers, introduce new products and services faster, open up more opportunities with customers, boost em-ployee productivity and engagement and increase customer satisfaction.

At Ericsson, we are experiencing our own transformation in this field. Here are some of the lessons we have learned during our journey.

. Extend the learning proposition beyond the classroom and e-learning

We are all aware that for each of us individu-als, learning happens in a variety of ways. In some cases, it’s about receiving a challenging task, per-forming beside a more experienced person or re-ceiving continuous coaching and feedback. In other situations, it’s about collaborating and shar-ing with colleagues and others.

It is important to ensure that various function-al stakeholders understand that there are many ways to build employee competence – not only by designing e-learning and instructor-led train-ing. And it is important to make sure that em-ployees realize that competence development is much more than just the traditional experience of classroom programs.

All of this is good, but how do we move beyond simply

taking an old teaching and learning model and making

it available online?

▶ Krish Shankar, Executive

Director HR, Bharti Airtel:

“People are changing the way they learn, and prefer short bursts of training supplemented by a lot of interesting hands-on projects. Our success depends on how rapidly we up-skill our people on new capabilities. We have to be very creative and focused in how we do this, and change our existing models.”

▶▶EBR #1 2012 • 35

How to gain a competitive edge «« Connected learning «« THEME

In addition to this, traditional metrics and funding models for companies’ learning programs can create a resistance to change. Companies that measured delivery of education by counting the number of days spent in the classroom or course fees from instructor-led training could be hold-ing back their progress toward a more effective approach. In this regard, our insight is that a mod-ern corporate learning function must overcome its reliance on restrictive kpis and funding mod-els like these. There is now an increasing focus on metrics that are instead related to actual knowledge, skills, behaviors and business impact.

. Rethink the assignment of responsibilities for competence development

To build a successful learning culture that gen-uinely drives business value, it is critical to be clear about roles and ownership. If the speed of business is high, then we need a model that ena-bles us to respond to change quickly.

As part of this process, we are moving away from a centralized model of corporate learning. The responsibility for identifying and building competence should instead be assigned closer to the owner of the challenge addressed. But at the same time as we try to cut middlemen, corporate learning efforts need to be synchronized and co-ordinated well. Working closely together with teams of learning professionals in the regional and local organizations, we are systematically identifying learning strategies to support achieve-ment of business goals. By gaining a clear picture of our local needs on a global scale we can focus our efforts on enabling capabilities that contrib-ute most to the business, resulting in the best competence for our customers.

So how do you organize competence develop-ment in an efficiently distributed way, but coor-dinated under the same global framework?

The first step is to establish functional owner-ship with responsibility for the various compe-tence categories. This means that some owners focus on professional competence, others on technical competence or general skills. For each category, having good teamwork between func-tions is a must.

In , Ericsson’s product management group for lte asked the company’s Learning & Devel-opment (L&D) team to ensure competence read-iness among the employees who would contrib-ute to the success of lte. Our team’s first response

was to ensure that the learning initiative was re-tained as an integral part of product management. Under guidance of our l&d function, they put to-gether teams consisting of r&d experts, sales and marketing professionals, solution architects, ser-vice delivery personnel and regional managers. A comprehensive knowledge gap analysis was in-itiated looking at various target groups. One of the largest gaps identified was among the engi-neers responsible for lte implementation and rollout.

We decided to launch a dedicated online learn-ing space for lte within our Ericsson Academy web portal, providing more than options for learning ranging from two-minute tutorials to hands-on lab experiences. All employees were in-vited to choose the lte-related courses that best met their personal requirements.

The findings were very encouraging:

3Within a year, 25 percent of Ericsson’s total workforce had visited the lte learning portal, and 14,000 employees had completed one or more of the learning modules

3Competence increased by 30 percent.

Our analysis following the launch of the learn-ing space clearly showed that online learning modules resulted in the largest increases in com-petence; specifically:

3Service engineers who took 10 or more learn-ing modules increased their competence by 114 percent, while those who completed up to four modules boosted their competence by less than half that amount

3The greater the number of learning modules taken, the greater the resulting improvement.

. Team up with itLearning & Development is one of the hr disci-plines that can benefit most from the opportuni-ties presented in the new digital workplace. A modern corporate learning architecture must explore how technology can provide better ac-cess to knowledge, foster a learning culture and offer a more personalized experience. Advanced companies are looking at areas such as web por-tal technologies, collaboration and social media platforms, mobile learning applications, content server architecture, gaming platforms for learn-ing, remote lab environments, virtual classroom alternatives, and more.

▶ Bernardo Quinn,

HR Director at Telefónica:

“With our corporate university, the aim is to be as good as any business school academically – but, critically, far more relevant for Telefónica. We ensure the whole learning experience is focused on business needs and mission-critical issues. We also endeavor to maximize the networking, team-building and general cross-cultural exchange of the university participants.”

36 • EBR #1 2012

▶▶THEME »» Connected learning »» How to gain a competitive edge

it departments should take a key role in corporate learning programs. Our l&d team is working closely with our it department on dif-ferent levels, influencing the functionality on our collaboration sites, enabling efficient distribution of videos, and exploring mobile devices as a plat-form for learning.

As a result, we have been able to establish an Ericsson Academy portal, where more than percent of the company’s global workforce pop-ulation now enters every month.

. Leveraging on the desire to learnIn a world of instant connectivity and broadband, we have the opportunity to encourage a “self- served” online learning behavior. But just as on-line learning is easy to access, it is also easy to put off – employees may tend to postpone acquiring new competence in favor of other, more pressing work. The discipline required to set aside time for online learning doesn’t develop by itself.

The use of online learning resources can be stimulated in many ways, some of which fall into the category of portal and learning design. For example, in our experience, the length of time re-quired to complete an online tutorial is extreme-ly important. Our studies show that people tend to complete percent of a module if its dura-tion is minutes or less, but they complete only percent of a -minute module.

Social context is important for stimulating par-ticipants’ eagerness to learn. Designing learning using gaming theories with various scoring and points systems is one example. Peer recognition and formal certification are other concepts to consider. Feedback and results from learning ac-tivities must be easily available to managers so that they can act as a source of encouragement for employees and be used as input for perfor-mance discussions between managers and staff.

Creating an environment that supports and recognizes the use of online digital learning, and integrating it with other hr and business process-es makes learning a very attractive proposition. Ultimately employees need to take charge of their own competence development, and in doing so, support the shift from training to an everyday learning culture.

. Foster excellence in sharingIn theory, most people will readily share knowl-edge, insights and expertise. But in reality, if it is

not clear how sharing contributes productively to an individual’s working day, it can easily be-come a low priority. The architecture of the on-line communities used for learning programs is important, but companies also need to reinforce the message by leaders and experts walking the talk, and making it part of job duties, recognition systems and performance follow-up.

A challenge we are facing ourselves is the need for access to experts in various fields. We discov-ered that by recording an expert’s knowledge on a specific topic, tagging it and making it availa-ble to others we could dramatically reduce the time to productivity for new employees. As a re-sult, these experts actually had more time to ded-icate to their day jobs and spent less time re-sponding to employee questions.

Giving individuals access to experts through virtual classrooms also improves the scalability of expert knowledge and reduces the need to spend time and money on travel.

Excellence in sharing doesn’t stop there. The idea of erasing borders between geographies and organizational functions shouldn’t be limited to a company’s walls. Applying the same principles as an extended enterprise will bring added value to a company’s relations with customers, suppli-ers, partners and universities.

We firmly believe that a strong learning organization can harness all that technology, globalization, collaboration and shifting socio-economic trends have to offer. To remain suc-cessful, businesses must match the accelerating pace of change within the industry. And corpo-rate learning should be at the core of helping to drive that change. ●

AUTHOR

▶ PETTER ANDERSSON is Vice

President Learning & Develop-

ment and Head of Ericsson Acade-

my. With a background in busi-

ness consulting and strategy,

he assumed his current role in

2006. In 2009 he established Ericsson Academy, in collabo-

ration with key stakeholders at Ericsson. The Ericsson

Academy portal provides training in a broad range of areas

of competence, and two years after its launch, it is visited

by more than 25 percent of the global Ericsson workforce

every month. Andersson holds an MSc in business and

economics from Uppsala University, Sweden.

([email protected])

Ultimately employees need to take charge of their own

competence development and in doing so support the

shift from training to an everyday learning culture.

▶ Terry Jones,

Head of Learning at BT:

“With a company the size of BT, there are numerous challenges and aspirations when it comes to implementing a fi rst-class learning program globally. Transformation, business improvement, leadership and management skills are all critical to drive the business forward. But, equally, our engineer force must be fully equipped with the knowledge to meet the varying demands of a customer on a single visit. This means equipping them with the right technology to deliver social learning opportunities and real-time support.

▶EBR #1 2012 • 37

A brave new world «« Reinventing money «« THEME

Många uthyrningsalternativ hos Hertz

www.hertz.mobi

For a better journey

Strategy Green business

38 • EBR #1 2012

▶ Electricity utilities around the world are updating and redesigning their power net-works. This is largely in response to growth in user demand, regulatory changes, and the restructuring of generation capacity to in-clude distributed supply from renewable sources such as wind and solar energy.

Consequently, there is a compelling need to incorporate far more pervasive commu-nications systems. The resulting “smart grid” is a synthesis of energy, it and communica-tions infrastructure.

Some power engineers argue with justifi-cation that communications has been part of utility networks for decades. Supervisory Control and Data Acquisition (scada) net-works have been monitoring power-trans-mission lines and equipment in substations since the s. Utilities have been control-ling user demand through control of off-peak hot-water systems and pool pumps since at least the s, and possibly even earlier.

However, these are modest communica-tions components incorporated into a pow-er network architecture that has changed lit-tle since the basic model was introduced by Edison and Tesla in the s. And the great bulk of utility-distribution infrastructure (lo-cated in streets and on poles) is still almost entirely offline, so utilities often have no way of detecting faults; they simply have to wait for their customers to call and complain.

Today energy utilities are testing, piloting or rolling out the building blocks of their smart grids. The key enabler is the communications infrastructure that overlays and intertwines with the power-distribution infrastructure. It works in conjunction with field devices and IT systems to monitor and manage power-distribution infrastructure, making automat-ic adjustments as real-world events such as storms, fires and runaway trucks damage the integrity of the physical grid.

The benefits for consumers and business users include a more robust supply of energy with reduced carbon emissions, and tools to help users reduce their own carbon footprint.

This concept of a smart grid goes beyond the deployment of smart meters, also called Advanced Metering Infrastructure (ami). On the smart-meter front, the main focus has been on the introduction of “time of use” tar-iffs and in-home displays, with the expecta-tion that users will modify their behavior and consume energy at times of lower demand. While the smart-grid concept incorporates smart meters, it is more far-reaching in that it directly helps utilities manage their pow-er networks better.

The challenge for engineers when imple-menting a smart grid is to understand the dynamics of monitoring and managing the power network and to map this into communications-traffic requirements (throughput, latency and so on), to ensure that the communications infrastructure can be scaled and deployed to meet realistic fu-ture requirements.

As a provider of smart-grid communica-tions networks, Ericsson has a keen interest in a gaining detailed understanding of this subject and is collaborating in several re-search programs to model these require-ments and validate the models against real power networks.

This modeling is expected to cover the fol-lowing range of scenarios or use cases.

GRID MONITORING AND CONTROL

scada networks have been used to monitor and control the transmission and substation sections of power networks for many years. A smart grid is aimed at extending the mon-itoring into the distribution network. Exam-ples of devices to be monitored include transformers, fault detectors, pole-top switches, sectionalizers and reclosers. Communications-traffic requirements are expected to be modest, but status reporting will be frequent.

When monitoring identifies grid failures, the root cause of the failure will have to be quickly identified, and appropriate devices commanded to fix or minimize the

What makes a grid smart? Intelligence is not just a simple bolt-on to the existing power grid. Understanding how the

combined grid, communication and IT systems will interact requires research and sophisticated modeling. The answers

will be key to meeting challenges and realizing a range of new opportunities for utilities.

Smart−grid communications: enabling next−generation energy networks

consequences of the problem. This is often referred to as Fault Detection, Isolation and Recovery (fdir). Traffic-volume require-ments are expected to be small, but com-mands and responses must be dealt with quickly and with high priority.

The volume and nature of communica-tions for fdir will be determined by the extent to which detection and recovery are dealt with centrally, or through local distrib-uted mechanisms, or a combination of cen-tral and distributed control mechanisms.

The introduction of grid monitoring and control is expected to greatly reduce the fre-quency and impact of faults in the distribu-tion networks, leading to improved reliabil-ity for the utility.

Pervasive communications will also reduce the cost of introducing new regimes for using and maintaining grid equipment. “Dynamic Rating” allows switching and dispatch deci-sions to be based on the actual condition of equipment, taking into account the operat-ing environment and operating history, rath-er than the factory specifications. “Condition-Based Maintenance” allows grid equipment to be serviced according to actual load histo-

ry and condition, rather than fixed schedules. This avoids the cost of premature servicing, and prolongs asset life by making sure servic-ing happens when necessary.

ADVANCED METERING INFRASTRUCTURE

One can assume that smart meters, once in-troduced, will be read frequently, even sev-eral times a day.

Traffic volumes are expected to be small and infrequent for each smart meter, but will be substantial in aggregate across the thou-sands of meters to be read. While each “read” may have a low priority, the records are of high importance to the utility because they are the basis on which it charges customers.

“Demand Management” for household de-vices, when implemented by distribution-service operators, is likely to be done through the meter. This may be regular (such as turn-ing hot-water systems on or off at different times of the day), or ad hoc (for example, dis-abling particular devices such as pool pumps or air-conditioners) in emergencies or for supply shortages. Traffic volumes are expect-ed to be small and infrequent but substan-tial in total.

Green business Strategy

EBR #1 2012 • 39

Smarter power grids: The key enabler is the communications infrastructure.

40 • EBR #1 2012

Strategy Green business

“Service Connection/Disconnection” (disabling or enabling energy supply to prem-ises) offers significant benefits. Perhaps the most obvious is the ability to deal with a change in ownership or tenancy of a prop-erty without a truck roll. There are also ben-efits when dealing with disaster recovery, such as the gradual ramping up of supply on the distribution grid after a major failure. Traffic volumes are very low, but of relative-ly high priority.

Perhaps the most challenging scenario for smart-meter communications is the remote “over-the -air” (ota) updating of the meter firmware. In a worst-case scenario, this could apply to all the meters in a region, and might have to be done relatively quickly (say, over a day).

While some calculations suggest this could be a very challenging task, with thousands of meters having to receive megabytes of data, these tend to ignore techniques that allow efficient use of the communications infrastructure, such as the use of multicast.

DISTRIBUTED ENERGY RESOURCES

While large renewable energy sources, such as wind farms, and solar, geothermal and wave/tidal generators, are increasing in num-ber, they do not of themselves change the to-pography of the power grid, other than by requiring new transmission capacity to allow connection. However, the irregular nature of their supply may lead to the introduction of new elements within the grid, such as dis-tributed storage (for example, flow batter-ies). And these elements will themselves have to be monitored and managed.

Co-generation or tri-generation, where business owners generate electricity, typical-ly from natural gas, introduces another new source of supply – one that is somewhat pre-dictable and somewhat distributed through-out the grid (although probably centralized in certain areas such as business districts).

More challenging is the introduction of autonomous distributed generation through-out the grid (small-scale solar/photovoltaic plants, natural-gas turbines or fuel cells), which requires the distribution network to be redesigned as a bidirectional grid, along with the increased use of embedded storage to smooth out supply. Smart meters will typically be used to record the energy generated, and then must be read for cross-charging and billing settlements where

incentive tariffs are in place.“Distributed Energy Resources” will be an

increasingly important aspect of the smart grid. It will mean the introduction of new devices and processes for monitoring and managing the grid. Current understanding suggests that these changes – while challeng-ing for the power grid – will mean only mod-est communications requirements. But the area is new and much remains to be learned.

ELECTRIC VEHICLES

The introduction of electric vehicles will require a major rethink of the grid, and not just because of the expected massive increase in night-time demand. No other element on the grid is simultaneously a load, embedded storage, distributed generator and roams from place to place throughout the day.

The mobility of electric vehicles introduc-es a need to handle the authentication of devices, before energy is transferred to or from the vehicle. This is a novel concept for a grid designed for supplying energy to sta-tionary, not mobile units.

It is difficult today to be confident of the communications requirements for a smart grid with a large population of electric vehi-cles because the business models are still be-ing tested. However, early work suggests that the changes in it systems and energy infra-structure will overshadow the communica-tions requirements.

Ericsson is taking part in several smart-grid pilots incorporating the charging of electric vehicles, and the associated authen-tication and billing of the driver. Such trials will no doubt lead to greater insight into the issues around electric-vehicle charging.

INTERACTING WITH FIELD STAFF

Then there is the need to interact with field staff as they go about changing, maintaining and repairing the grid. In addition to “Field Force Automation,” which supports the optimized scheduling and dispatch of crews, the ability to communicate real-time grid sta-tus and outage information to field staff will significantly improve fault-resolution times. This is an unusual smart-grid scenario in that it requires mobile telecommunications.

There will also be a need to introduce communications gateways so that those in the field can easily communicate with cor-porate/office-based staff, and in some cases with other field teams (such as emergency

AUTHOR

▶ YOCHAI GLICK is a utili-

ties industry expert focusing

on international standards,

communication and data

protocols. He has worked on

numerous projects for Eric-

sson in the following organizations: SP AusNet, Pow-

erlink, Energy Australia, ENERGEX, Integral Energy,

Origin Energy, AGL, Alinta, United Energy, Multinet,

Jemena, Acea Italy, City West Water, South East Water,

United Water, SA Water, Yarra Valley Water, Weston

Milling, and many others. He holds a BSc in Engineer-

ing and Computer Science.

([email protected])

AUTHOR

▶ JOHN GORMAN

is Head of Value Creation

and Consulting for Engage-

ment Practice in Region

Western and Central Europe,

responsible for operational,

technology and strategy consulting engagements

for telecom, IT and utility clients. Prior to joining Eric-

sson in 2009, he worked as Operations Director for

an internet service provider, and he has 20 years’ ex-

perience of managing large teams for operators such

as BT, Esat Telecom and Eircom. He holds an MSc in

Telecommunications Business from University

College London, UK, awarded as part of the BT

Masters’ Program.

([email protected])

AUTHOR

▶ RÉGIS HOURDOUILLIE

is Principal Consultant in the

Global Utility Team and is an

expert on smart grids. He

has more than 20 years of

experience in telecommuni-

cations and energy, ranging from R&D and technical

project management to strategy consulting and

global profit and loss management. Before joining

Ericsson in 2011, he worked for Alcatel-Lucent, EDF,

Booz & Company, and Alstom Grid. He holds an MSc

from Télécom ParisTech technical college in France,

an MSc from Cornell University in Ithaca, in the US,

and an MBA from École des Hautes Études Commer-

ciales de Paris (HEC) business school in France.

([email protected])

EBR #1 2012 • 41

Green business Strategy

services workers) who may be using quite different wireless technologies.

During normal operations, communica-tions requirements are expected to be rela-tively modest, though traffic could be more substantial when crews are on location for a major event.

CONCLUSION

Smart-grid communications have a wide variety of requirements, from regular low-priority traffic to mission-critical emer-gency traffic.

Utilities have considerable experience with the communications requirements for the real-time monitoring and management of the high-voltage transmission section of the grid, moderate experience with the medium-voltage section, and the least experience with the low-voltage distribution network.

Understanding how the grid, communica-tions and IT systems will interact requires sophisticated modeling, testing the modell-ing results through validation against real smart grids as they are deployed, and “learn-ing by doing” through participation in pilot networks.

It is already clear that utilities have to design for the future. A communications network designed merely to handle meter-reading cannot cope with the complexities of a smart grid with distributed generation and electric vehicles.

The introduction of a smart grid is not a simple bolt-on to the existing power grid. A smart grid enables different and efficient processes that can increase the reliability of the grid, optimize demand, and reduce the carbon emissions and costs (both operation-al and capital expenditure).

Achieving these important benefits will re-quire investment in communications infra-structure, smarter grid-power equipment, and new skills and it systems. However, it’s not just an issue of access to funds. In many countries, the nature of energy-network reg-ulation and legislation is designed to con-strain investment, with the intention of keep-ing costs down, and reining in price rises for energy users.

To allow utilities to introduce future-proof communications for their smart grids, many jurisdictions may need to change their leg-islation on access to capital to fund this in-frastructure, so that utilities really can build for the low-carbon future we all need. ●

Are public networks up to the task?▶ There has been an ongoing animated debate about whether, for smart-grid communica-

tions or smart-meter reading, the utility should or shouldn’t use existing public mobile-

telephone networks, or build a private dedicated communications network owned and

operated by the utility.

Around the world, the small-scale reading of commercial and industrial electricity meters

over existing mobile-phone networks is common, often using basic connectivity such as

GPRS (the data service supported by 2G networks). However, this is a long way from the scale,

capacity and reliability required for residential-meter reading, and even further from the de-

manding requirements of a communications infrastructure supporting a full-scale smart grid

– with millions of meters, and many thousands of sensors, reclosers and the like.

In the various scenarios discussed here, many uses of the communications infrastructure

have stringent latency, availability, security and capacity requirements, which are different

from the traffic profile of mobile-broadband services. We cannot simply assume that the util-

ity’s communications needs can be met by a mobile operator’s network. Rather, it is up to

the operator to demonstrate to the utility that the mobile network has been designed and

will be operated to meet the utility network’s needs.

The ability to handle the utility’s traffic requirements is not the only issue. Most utilities

need to deal with natural disasters, and they may need to monitor and manage their power

grid during floods or fires that last many days and destroy parts of the grid. The communi-

cations infrastructure will be needed for tasks ranging from communications with field main-

tenance crews to the eventual, cautious restoration of power. Mobile networks, however, are

seldom designed with power backup that lasts more than a few hours.

Such technical issues can be dealt with through cooperation, and a willingness to consid-

er all the various forms of network sharing – from mobile virtual network operator (MVNO)

contracts, to facility-sharing (towers, power, racks, backhaul) and perhaps co-investment.

The toughest issues, however, are those that arise from the different regulatory constraints

in various countries.

▶ In many countries, the regulated income of a utility is calculated as a return on capital in-

vested (ROCI) in the power grid. Consequently, a utility will prefer to invest in a private

network rather than incurring increased operating costs.

▶ In many countries, utilities may be barred from bidding for spectrum, which encourages

them to consider deals with telcos, or alternatives such as proprietary mesh-radio on un-

licensed spectrum or old-fashioned, slow power line communication (PLC).

The right decision for a utility is based on the complex interplay of regulatory, commer-

cial and technical issues pertinent to that utility and its stakeholders. Ericsson uses special-

ized consultants to advise utilities and telcos on the appropriate strategy.

Should-or-shouldn’t debates are irrelevant when, for most utilities, the issue is actually

about choosing the right combination of public and private communications to meet their

strategic goals within regulatory constraints.

Smart meters need smart communications.

42 • EBR #1 2012

Regulation Controlling content

▶ It is normal to analyze regulation in an in-ternational context by considering the pow-er exercised over such regulation by states and companies. However, the regulation of audiovisual services is more complex owing to the recognition by some states of “the cul-tural exception.” In many countries, particu-larly member states of the European Union (eu), Australia and Canada, there is state sup-port for the audiovisual-services sector. In the eu, for example, broadcasting is an exception in the European school of the politics of reg-ulation owing to the absence of competition-based management of the sector, and the ex-istence of cultural-diversity policies.

THE CULTURAL EXCEPTION

The original call for a “cultural exception” for trade in cultural services was made by France during the pre-World Trade Organ-ization (wto) negotiations on the General Agreement on Tariffs and Trade (gatt). In an article by Jacques Delacroix and Julien Bornon published in the Independent Re-view in , the authors describe the French

position: “France has special interest because it has adopted the most active and most vo-cal policy of cultural protectionism.” It is sig-nificant to note that the French government was influenced by civil society expressing concerns for French culture (or, at least, the French way of life), and by French firms that deliver audiovisual services reflecting a sim-ilar view.

In , author and research scholar So-phie Meunier argued that the French gov-ernment’s decision not to trade in audiovis-ual services was taken in the context of an-other decision on agricultural goods and ser-vices and the preservation of a “rural way of life.” In , she also pointed out in the jour-nal Comparative European Politics that the Court of Justice of the European Union re-quires a majority ruling on any matter relat-ing to agricultural trade, but unanimity when it comes to cultural trade.

REGULATION OF BROADCASTING

The regulatory process has been described by Kenneth Abbott and Duncan Snidal, for

Content discontents: cultural protection in an internet worldHow can the state maintain control of cultural policy in an environment where content-delivery platforms are evolving

so rapidly? An examination of different regulatory approaches shows the complexity and the paradox of having policies designed to protect the audiovisual sector, while is regarded as just another aspect of electronic commerce.

Source: Adapted from Abbott and Snidal

Agenda-setting

Negotiation of standards

Implementation

Monitoring

Enforcement

Figure 1: Regulatory process applied to broadcasting

EBR #1 2012 • 43

Controlling content Regulation

whom it comprises five separate tasks. Fig-ure illustrates their approach. While their original description of the regulatory pro-cess was linear, it has been adapted and de-veloped by adding the regulatory-process feedback (on the left) and the stakeholder feedback (on the right).

A feedback process takes place between enforcement and monitoring (for effective enforcement to take place in one area, mon-itoring of other areas might be required). There is also a feedback path running be-tween the enforcement, monitoring, imple-mentation and agenda-setting tasks involved in establishing new or amended regulation. In the case of audiovisual services, the cur-rent agenda-setting phase is affected by the availability of technologies that facilitate market entry by new players.

Broadcasting is regulated in a limited number of ways. In respect of content, there is scope to define the genres of program-ming. For example, there might be an obli-gation imposed to deliver certain quotas of drama and children’s programming. There might also be obligations to meet in respect of the timing and availability of types of pro-gramming. This might mean showing pro-grams with certain censorship classifications after a particular time of day (the “water-shed”), or an obligation to air religious pro-gramming. There may also be restrictions in the form of domestic-content rules.

In addition to content rules, the owner-ship of broadcasting licenses may be restrict-ed in terms of both the licensee’s nationali-ty and their ownership of other media inter-ests. The number of market participants may be limited by regulation, even when the orig-inal technical limitation (typically that of spectrum scarcity) has disappeared. In ad-dition, there may be measures restricting the entry of new firms, or the exit of incumbents. With allocated spectrum influencing broad-casters’ operations, there may also be regu-lations concerning the reach and availabili-ty of services.

The limited range of processes associated with the regulation of broadcasting means that a simple typology can be used to de-scribe regulatory changes, . Each of the reg-ulatory issues that would lead to a change in the structure of the relevant market is set out in Table .

The regulation of broadcasting is different

from the regulation of other networked in-dustries in that broadcasting can be an ex-pression of culture, and specifically national or regional culture. One or more of three forms of cultural regulatory intervention drive each of the regulatory issues in Table .

Cultural protection is the use of barriers in trade in services to protect the integrity of domestic culture on a national basis. As the Organisation for Economic Co-Operation and Development (oecd) notes, it is widely practiced.

Pluralism in broadcasting is the delivery of a “fair, balanced and unbiased represen-tation of a wide range of political opinions and views.” Lesley Hitchens analyzes issues of pluralism in broadcasting through her comparative study of the uk, the us and Australia.

Censorship is designed to limit access to material that the state deems “unsuitable” for consumption by particular groups.

In the regulatory typology of Table , only foreign control and domestic-content re-quirements are based on cultural protection. That is, the typology provides a basis for analysis of three forms of regulatory inter-vention, as set out in Table .

Number of licensesReachForeign controlCross-media controlDomestic content requirementsCensorship

Regulatory issue Pluralism Culturalprotection

Censorship

Table 2 – Using the typology to analyze regulatory intervention

Number of licensesReachForeign controlCross-media controlDomestic content requirementsCensorship

Regulatory issue

Table 1 – Regulatory typology

44 • EBR #1 2012

REGULATING BROADCASTING

The European school of politics of regulation generally treats the politics of broadcasting regulation as an exception. This is logical in that the fundamental assumption of this school is that competition is the driver of reg-ulation using the regulatory capitalism mod-el. In broadcasting regulation, social policy rather than economic policy (and with it, the promotion of competition) is the driver.

ONLINE DELIVERY OF AUDIOVISUAL SERVICES

The regulatory paradigms governing radio and television broadcasting in the th cen-tury have since been challenged. The deliv-ery of audiovisual content by download or streaming – either through an over-the-top (ott) or managed iptv service – is an at-tractive alternative to consumers. If regula-tion is to be applied to these types of servic-es, a different approach is required. The eu codified the Audiovisual Media Services Di-rective in as an appropriate response. However, many other jurisdictions (for ex-ample, Canada and Australia) are currently coming to terms with the challenges provid-ed by convergence, particularly the issues as-sociated with encouraging domestic content delivered through the internet.

AUDIOVISUAL SERVICES AS ECOMMERCE

The us changed its position on trade in au-diovisual services between and . The thrust of the us Trade Representative’s (ustr) argument was that audiovisual ser-vices were being delivered by a variety of means, and that the “old-world” services that use analog delivery mechanisms were entire-ly different from the “new-world” services de-livered by digital transmission mechanisms.

In , Australia provided separate reg-ulation of audiovisual services, according to the delivery platform. Services delivered through the internet were deemed outside of the regulatory environment for broadcast-ing services. This reflects the intent of one of the Microsoft “technical essays,” which ar-gued that regulation of internet content should be limited. Indeed, perhaps the lob-bying that led to separate regulatory treat-ment is comparable with the current debate on global approaches to net neutrality. In the case of the determination of internet servic-es as being outside of broadcast repulation,

Microsoft’s technical essays represented the exercise of global commercial power (rath-er than market power) by Microsoft.

POWER OF STATES AND FIRMS

One of the key issues in cultural protection is the ability of content providers to deter-mine which content can be viewed and where. Instead of national regulators inter-vening to regulate the areas set out in the ty-pology outlined in Table , content aggrega-tors are using geolocation technology as the basis for restricting the delivery of services. Hulu is available in the us, but not in Asia, and the bbc limits the use of iPlayer in Eu-rope. In the rapidly evolving digital environ-ment it is firms, rather than states, that are imposing a form of private regulation. Many of the classification issues are dealt with by self-censorship (to maximize the potential market), and local ownership restrictions make no sense in an internet-enabled world.

CONCLUSIONS

In a period of rapid technological change, cul-tural protection is not easy to implement. The significance of the position of the us as a cul-tural exporter with a trade policy that char-acterizes cultural services in e-commerce terms compounds these issues. Filling the regulatory vacuum, content aggregators are providing private regulation. However, this is not caused by a change in the power of states. The ability of states to regulate has not changed. However, the capacity or willing-ness to keep up with the challenges provid-ed by convergence has changed the way in which cultural protection is implemented. ●

Filling the regulatory vacuum, content aggregators are

providing private regulation.

AUTHOR

▶ ROB NICHOLLS

is Principal Advisor, Consul-

tancy, based in the Sydney

office of Webb Henderson,

an international legal and

regulatory advisory firm. He

holds a BSc (Hons) from the University of Birming-

ham in the UK, and an MA and PhD from the Univer-

sity of New South Wales (UNSW), Sydney, Australia,

where his doctorate thesis examined broadcasting

regulation. He provides regulatory and business

strategy advice within the fields of telecommunica-

tions and broadcasting. He specializes in spectrum

management and the interaction between lawful

interception and human rights.

([email protected])

References Jacques Delacroix and Julien Bornon. . “Can Protectionism Ever Be

Respectable? A Skeptic’s Case for the Cultural Exception, with Special

Reference to French Movies.” The Independent Review ():-. Sophie Meunier. “The French exception.” Foreign Affairs ():. Sophie Meunier. . “Trade Policy and Political Legitimacy in the Eu-

ropean Union.” Comparative European Politics ():. Kenneth Abbott and Duncan Snidal. . “The Governance Triangle:

Regulatory Standards Institutions and the Shadow of the State.” In The

Politics of Global Regulation, eds. Walter Mattli and Ngaire Woods.

Princeton: Princeton University Press. Rob Nicholls. . “Axes of integration in the delivery of audiovisual

services.” Telecommunications Journal of Australia (). Rob Nicholls. . “Regulatory reform in broadcasting: cultural excep-

tion or race to the bottom.” In (Re)Regulation in the Wake of Neoliber-

alism, ed. David Levi-Faur. Utrecht: European Consortium of Political Re-

search Standing Group on Regulatory Governance. OECD. . “Communications Outlook .” Paris: Organisation for

Economic Co-operation and Development. Lesley Hitchens. . Broadcasting Pluralism and Diversity: A Compar-

ative Study of Policy and Regulation. Portland: Hart Publishing. David Levi-Faur. . “Regulatory Capitalism: The Dynamics of Change

beyond Telecoms and Electricity.” Governance ():-. See Levi-Faur above. Also see Fabrizio Gilardi. . Delegation in the

Regulatory State: Independent Regulatory Agencies in Western Europe.

Cheltenham: Edward Elgar; Jacint Jordana, David Levi-Faur and Xavier

Ferdinandez Marin. . “The Limits of Europeanization: Regulatory

Reforms in the Spanish and Portuguese Telecommunications and Elec-

tricity Sectors.” Governance ():-; and David Levi-Faur. .

“The Political Economy of Legal Globalization: Juridification, Adversar-

ial Legalism, and Responsive Regulation. A comment.” International Or-

ganization ():-. USTR. . Communication from the United States on Audiovisual and

Related Services. Council for Trade in Services Edition. Washington: WTO. Rob Nicholls and Carolyn Lidgerwood. . “Ministerial Determination

gives pause for thought to high speed internet providers.” Telemedia

():-. Microsoft. . “World Trade and E-Commerce.”

Regulation Controlling content

EBR #1 2012 • 45

▶ In the previous article in this series (Issue no. , ), we looked at innovation activ-ities that drive value creation and value appropriation. Here, in this follow-up arti-cle, we address issues that surround the management of these types of integrated innovation activities.

Successful innovation management is pri-marily about recognizing and understand-ing effective routines and facilitating their emergence across the organization. Unfor-tunately, such routines are not easy to estab-lish since they represent lessons learned over time, through a process of trial and error, and hence tend to be very company- specific. Each company has to develop its own par-ticular routines. The good news, though, is that we can identify some general rules about how to manage innovations well

DON’T CONFUSE CREATIVITY WITH INNOVATION

Creativity is a process undertaken by the individual, and nearly everyone is capable of coming up with good ideas. But individuals do not innovate. Innovation is a group pro-cess for a simple reason: individuals may have part of the solution to a problem, but they rarely have the whole answer. To be creative, they require domain knowledge expertise, which takes an average of years to devel-op, whatever the domain. If this knowledge is lacking, most ideas will either be reinven-tions of others that already exist, or impossi-ble to implement. In addition, many of today’s product-service systems, for example, are so complex that no single individual can have knowledge of all their critical components. Innovation is therefore a group process.

Creativity also requires imagination, and the ability to fantasize – to allow the mind to wander, free from the constraints of log-ical patterns. Other characteristics of crea-tivity include the ability to see the things that others miss, or to ask the questions that oth-ers do not. It is also the ability to complete-

ly redefine an existing problem. Creativity requires interaction with people who have knowledge expertise in domains other than one’s own. This generates cross-fertilization and the ability to combine ideas from differ-ent fields. Creativity also involves rational analysis based on having a good feel for the target audience. And all of this takes time.

INNOVATION IS ABOUT GENERATING VALUE

Innovation is ultimately about the conversion of knowledge into money. High-performing organisations in value-creating innovation have several things in common. They have clear value-creating innovation strategies, and their employees know what these inno-vation strategies mean for them in their jobs. They incorporate demanding customers and/or true consumer insights into the value- creating innovation process already at the idea stage. They know what they are good at and they identify, maintain and leverage core competencies. They also know what they are not good at, and ensure that activities requir-ing skills outside the organisation’s core com-petence are avoided or outsourced.

Other characteristics shared by high per-formers in value-creating innovation are that they put best-practice innovation manage-ment systems in place, and they ensure that value-creating innovation activities and out-comes are constantly evaluated and measured.

Research shows that there is a strong cau-sality link between innovation management and performance in value-creating innova-tion. An example of findings in this domain is shown (in simplified form) in Figure .

BESTPRACTICE INNOVATION MANAGEMENT SYSTEMS

Best-practice value-creating innovation management systems are used to keep track of all projects for the current budget year, both planned and ongoing, including evalu-ations and suggestions for corrective actions. Projects are also evaluated annually,

How to get paid twice for everything you do, part 3: Innovation managementIndividuals with good ideas tend to be creative, but not innovative. Innovation is a group process that needs to

be managed like any other business process. To become a high-achieving performer in the field, you need

a best-practice innovation management system in place.

and their financial outcomes are docu-mented.

Best-practice value-creating innovation management systems have the following or-ganizational features:

3a top-down element that determines and approves the value-creating innovation strategy for the next product-service sys-tem life cycles, as drafted by the value-cre-ating innovation management group. The top-down element also decides on and ap-proves the strategy document, outlining the different projects as provided by the value-creating innovation prioritization meeting and documented by the value-creating innovation management group. The top-down element is responsible for decisions on strategic investments, as well as for initiating and responding to stake-holder relationships that follow as a con-sequence of the value-creating innovation strategy that is chosen. This occurs in alignment with the corporate strategy and includes initiating cooperation agree-ments, negotiating joint efforts with stake-

holders that require peer-to-peer interac-tion, and articulating corporate interests when involving key stakeholders in projects. The top-down element further initiates key projects to ensure that the strategy decided is delivered upon.

3a value-creating innovation management group, which is the permanent staff func-tion that oversees and runs the value-cre-ating innovation management system. This group is responsible for organizing and leading the work and preparing the strategy and the plans, as well as prepar-ing and documenting the value-creating innovation prioritization meeting. It com-prises senior people with relevant back-grounds. It is important to note that the management group’s responsibility is to oversee and coordinate, though it does not have the authority to make any project- or strategy-related decisions.

3a series of value-creating innovation pri-oritization meetings. Together with the value-creating innovation strategy, these meetings are the key component of the val-

Management Understanding innovation

46 • EBR #1 2012

Stimulus factors of innovationmanagement

Technologicalcapacity for innovation

management

Innovationperformance

Innovationleadership

Collaborativecapabilities

Innovationcapabilities

Sales increase

Financialperformance

Marketperformance

Explains 37%of the varianceExplains

36% of thevariance

Explains 26%of the variance

Explains 17% ofthe variance

Explains23% of thevariance

Explains 18%of the variance

Explains69% of the variance



Figure 1: Impact of innovation management on value-creating innovation performance

(Extracted, adapted and simplifi ed, based on Prajogo et al.1, and on Moser2, respectively)

Value-creating innovation is a business

process like any other and needs to be

managed accordingly.

Understanding innovation Management

EBR #1 2012 • 47

ue-creating innovation management sys-tem, ensuring transparency and adherence to the innovation strategy. The frequency of prioritization meetings depends on the industry in which the company operates and the strategy that it pursues. One of the meetings is dedicated to developing the upcoming year’s budget and plans, while the others address re-prioritization as a consequence of emerging issues. At the former meeting, both the bottom-up ele-ment (defined below) and the top-down element are represented, together with the management group. The prioritization-meeting attendees discuss priorities against the background of the innovation strategy. Based on this discussion, the chairman of the prioritization meeting de-cides which projects and programs should be launched within the existing budget. The prioritization meeting delivers its out-put to the management group for process-ing into the plans. The management group then forwards this to the top-down ele-ment for a formal decision and sign-off.

3a bottom-up element, which is responsi-ble for generating ideas, evaluating these against the innovation strategy, and executing the projects and evaluating the results. The bottom-up element includes representatives of both the providers of the value-creating innovation and its us-ers, and is frequently linked into a semi-open value-creating innovation network.

Best-practice value-creating innovation management systems should also have pro-cesses that outline how these elements work and interact, as outlined in Figure .

The rise of open innovation changes noth-ing in the above system, which is inherently an open-innovation system, though it does place even higher demands on the value-cre-ating innovation strategy.

Value-creating innovation is a business process like any other and needs to be man-aged accordingly. This entails the articulation of a clear value-creating innovation strategy against the backdrop of which the manage-ment system operates. This manage-

Decision

Corporate head of innovation

CEO

Innovationmeeting Innovation office

Innovation groups

Externalproposals

Externalproposals

Suggestions from all parts of the organizationand

membership from all parts of the organization

Strategy

Figure 2: The value-creating innovation management system operating against the backdrop of the innovation strategy

(Roos3)

48 • EBR #1 2012

ment system ensures that all major value-creating innovation activities are exe-cuted using the integrated approach of val-ue-creating innovation – utilizing value- creating innovation that is based on technol-ogy, design, art, hermeneutics and efficiency improvement.

PRACTICAL TOOLS FOR ASSISTING IN THE

VALUECREATING INNOVATION PROCESS

One of theese tools, the living lab, is an em-bodied research methodology for sensing, prototyping, validating and refining complex solutions in multiple and evolving real-life contexts. In essence it applies a methodolog-ical approach to design within a semi-open innovation framework. Such frameworks build on the principal of crowd sourcing, meaning that tasks traditionally performed by individuals are outsourced to a group or community through an open call. In this case, the crowd is defined and delimited by the originator of the problem, to enhance fast prototyping co-creation thinking when it comes to products, services and solutions that are either systemic in nature or part of a greater systemic/ holistic setting. The aim is to achieve behavioral change in the user which is: desirable from the user’s point of view (in other words, they are better off in

their own opinion after the change); benefi-cial to the supplier and has a positive impact on other stakeholders. One of the best known living labs is the Aalto Design Factory.

The stage is a delimited and controlled do-main in which the customer or consumer in-teracts with the product-service-system of-fering and experiences the value (for exam-ple, authenticity, beauty, delight) that the art-ists have added through using their individ-ual understanding to question reality and ex-press insights in the form of a holistic but abstract attribute of the offering. One such stage could be “fashionable-people’s” expres-sions of opinions on the esthetics of mobile phones in online fashion media, such as blogs and magazines (for more on this, see Juhlin et al.)

Getting inside the consumer’s mind is about being able to, through the use of the senses or information, create a predictable feeling in the consumer. For example they can feel hunger if the smell of newly baked bread is released into a shop, fear or excite-ment can be generated through the use of music and visual techniques in movies, and relaxation can be encouraged through the tactile experience of bedding materials.

Classical productivity tools include all the well known efficiency improving tech-


Business-model innovation timing differs according

to whether the company is in proactive or reactive

mode.

A

Separation strategySerious

Minor

Nature of conflictsbetween the establishedbusiness and the innovation

Low strategic relatedness(different markets)

High strategic relatedness(similar markets)

Similarity between the established business andthe innovation

Phased integrationstrategy

Phased separationstrategy

Integrationstrategy

B

D C

Figure 3: Strategies for managing dual business models

(Markides et al)6

EBR #1 2012 • 49

Understanding innovation Management

niques like lean manufacturing, Six Sigma, and so on.

The company needs to master the tools that are appropriate for the various knowl-edge domains that are to be deployed for value -creating innovation purposes.

INNOVATION IS ABOUT APPROPRIATING VALUE

Successful innovation involves the appropri-ation of the highest possible share of the val-ue created. High performers in innovation have several things in common. They have a clear strategy for when and how to increase the relevance of the product-service system offering and when and how to innovate as-pects of the existing business model. At the idea stage, they have already incorporated insights into the structure and dynamics of the business ecosystem, as well as the devel-opments in the knowledge domains that un-derpin their value-appropriation innovation process. High performers also constantly evaluate and measure the value appropria-tion achieved.

BUSINESSMODEL INNOVATION MANAGEMENT

Business-model innovation timing differs according to whether the company is in pro-active or reactive mode. In proactive mode, there appear to be three main situations in which business-model innovation is poten-tially required:

3when scaling up new product-service systems

3when entering a market that includes entrenched competitors and requires a “breaking the rules” approach

3when facing a near-death experience in which the continued use of the existing business model would likely lead to the company’s demise.In reactive mode, a company must respond

to an entrant that is using a new business mod-el. The appropriate response could be to:

3abandon the existing business model and develop a new one through innovation or imitation of the entrant’s business model. Both of these approaches are highly risky and very difficult to achieve, so they are rarely used. The longer the incumbent has been in the industry and the longer the life cycle of the product-service system in the industry, the less likely it is that these strat-egies will succeed.

3maintain the existing business model while

developing a new one through innovation or imitation of the entrant’s business model. This has been seen in several industries (for example, the establishment of low-cost carriers by incumbent airlines), with varying success. Charitou et al.)5 identify four strategies for managing dual business models. These are outlined in Figure 3.Using a separation strategy entails keep-

ing the two business models separate and minimizing any interaction between them. As the opportunity for achieving synergies between the two business models decreases and the conflict between them increases, the appropriateness of the separation strategy increases.

Markides et al. found that companies which adopt the separation strategy will do better if they:

3give operational and financial autonomy to their units, but still maintain a close watch over each unit’s strategy and en-courage cooperation between the unit and the parent through common incentive and reward systems

3allow the units to develop their own cul-tures and budgetary systems

3allow each unit to have its own ceo, who is transferred from inside the organization (rather than being hired from outside the company).The use of a phased integration strategy

entails initial separation between the two business models for a period of time, fol-lowed by a slow merger between them with a focus on minimizing any disruptions from the conflicts that initially exist between the two. As both the opportunity for achieving synergies between the two business models and the conflict between them increases, so does the appropriateness of the phased integration strategy.

When a phased separation strategy is used, the first step is to establish the new business model inside the company’s exist-ing organizational infrastructure, to leverage the firm’s existing resources and resource-deployment system. This results in a faster learning curve. When the learning is deemed sufficient, the new business model is sepa-rated into an independent organizational unit. As both the opportunity for achieving synergies between the two business models and the conflict between them decreases, the

50 • EBR #1 2012

appropriateness of the phased separa-tion strategy increases.

The integration strategy entails embrac-ing the new business model through the company’s existing organizational infra-structure. As the opportunity for achieving synergies between the two business models increases and the conflict between them de-creases, the appropriateness of the integra-tion strategy increases.

Markides et al. found that companies which adopt the integration strategy will do better if they:

3 treat the new business model as an oppor-tunity to grow the business (rather than see it as a threat)

3 leverage the strengths of the traditional business to find ways to differentiate themselves (rather than imitating the strategies of their attackers)

3approach the task in a proactive, strategic manner rather than as a hasty knee-jerk reaction to a problem

3 take extreme care not to suffocate the new business through the firm’s existing policies.Incremental business-model improve-

ments should be a continuous process (Mitchell et al.), whereas discontinuous busi-ness-model innovation should not be a con-tinuous process due to its disruptive effect and high associated risk (Markides). Suc-ceeding through business model innovation is normally better than competing on the same business model as competition since successful new business models offer more value to customers, and as a consequence, sets the standards for the next generation of entrepreneurs. Furthermore, they normally create new, incremental demand, they fail neither the narrative nor the numbers test, and they are difficult to replicate (Magretta).

CONCLUDING REMARKS

Achieving the objective of being paid twice for everything you do – or, in more practi-cal terms, having the profit of your activities exceed the gross revenues from your prima-ry revenue stream – requires the ability to simultaneously manage value-creating inno-vation and value-appropriating innovation. To succeed in this, the following sequence of steps is suggested:� confirm that the company has access to

the right resources� ensure that these resources are deployed in

an effective resource-deployment system� make sure that knowledge relating to as

many of the science, technology, engineer-ing, design, art, hermeneutics and effi-ciency domains as are relevant exists with-in the company, and deploy this combined domain knowledge in an integrated way with the aim of maximizing the value that can be created and embodied in a prod-uct-service system

� see to it that domain knowledge relating to effectiveness and business models ex-ists within the company, and deploy this combined domain knowledge in an inte-grated way with the aim of maximizing the value that can be appropriated from the newly innovated product-service system

� design the innovation process to enable the necessary dynamic interaction and feedback loops between steps 3 and 4

� develop an appropriate set of systems, structures and processes to manage the complete integrated-innovation approach in a scalable, efficient and effective way

� make sure that all this fits in with the com-pany culture and strategy typology

continuously measure and evaluate pro-gress made toward the objective. ●


AUTHOR

▶ GÖRAN ROOS is

Chairman of VTT Technical

Research Centre of Finland,

Honorary Professor at

Warwick Business School in

Coventry, UK, Visiting

Professor of Intangible Asset Management and

Performance Measurement at the Centre for

Business Performance at Cranfield University, UK,

part-time Professor in Strategic Design in the Faculty

of Design at Swinburne University of Technology in

Melbourne, Australia, and Senior Advisor, Asia Pacific,

at Aalto Executive Education Academy. Presently the

Managing Director for Intellectual Capital Services

Ltd in London, he has founded or co-founded several

companies, worked as a consultant in 50 countries

and held management positions in several corpora-

tions. He presently sits on several corporate advisory

boards.

([email protected])

References

Daniel I. Prajogo and Pervaiz K. Ahmed. . “Relationships between

innovation stimulus, innovation capacity, and innovation performance.”

R&D Management (): -. Roger Moser. . Strategic Purchasing and Supply Management: A

Strategy-Based Selection of Suppliers. Dissertation. European Business

School Oestrich-Winkel. Deutscher Universitäts-Verlag. Roos, G., Innovation Management – A Success Factor for Competitive-

ness, VTT Intelligence Forum ; Tuottavuus ja T&K-strategia mur-

roksessa; Miten vastata haasteeseen?, VTT SYMPOSIUM , VTT ,

pp - Juhlin, O. and Zhang, Y., , Unpacking social interaction that make

us adore: on the aesthetics of mobile phones as fashion items, in Pro-

ceedings of the th International Conference on Human Computer In-

teraction with Mobile Devices and Services (MobileHCI ‘), ACM, New

York, NY, USA, pp. - Charitou, C. D. and Markides, C. C., , Responses to Disruptive Stra-

tegic Innovation, MIT Sloan Management Review, Vol. , Nº , pp. -

Constantinos Markides and Constantinos D. Charitou. . “Compet-

ing with dual business models: A contingency approach.” Academy of

Management Executive (): -. Markides et al. . Markides et al. . Donald Mitchell and Carol Coles. . “The ultimate competitive ad-

vantage of continuing business model innovation.” Journal of Business

Strategy (): -. Constantinos Markides. . “Disruptive innovation: in need of better

theory.” Journal of Product Innovation Management : -. Joan Magretta. . “Why business models matter.” Harvard Business

Review (May): -. Magretta. .

A complete list of references can be found in the PDF-version of this article at ericsson.com/thecompany/our_publications

EBR #1 2012 • 51

THE SINGLE MARKET became a reality in and is generally accepted to be one of the European Union’s (eu)

greatest achievements. Its main goal is to promote economic liberties by limiting sov-ereign member states’ ability to restrict the free flow of trade in goods and services and the free movement of capital and labor. How-ever, the Single Market is still a work in pro-

gress, and significant limitations remain. Even in the year , many barriers still

block the free flow of lawful cultural and entertainment-oriented digital services across member states’ national borders. The European Commission’s (ec) Digital Agenda for Europe, which consists of action points, has been devised to bring the Single Market into the digital era by

Market barriers Regulation

An action plan to embrace the digitization of creativity in the digital single marketThe best ideas never age. It may be almost years since the feudal barons of England created the Magna

Carta, but the unequivocal opposition of this remarkable document to the arbitrary exercise of power

remains highly relevant to every European. In fact, it has never been more necessary.

Magnacarta

Regulation Market barriers

52 • EBR #1 2012

removing some of these barriers. Digitiza-tion is of course not an end in itself, but a means of contributing to Europe’s econom-ic recovery (adding at least percent to the eu’s gdp) by driving competitiveness and innovation. It would also generate many con-sumer benefits, ranging from more choices to better quality and lower prices.

The issue of achieving a vibrant Digital Single Market (dsm) goes beyond the self-interest of the established players within me-dia, entertainment and ict wishing to pro-tect the status quo. It is about improving the supply-side incentives to invest and innovate in new cultural and entertainment-based creativity, services and high-speedbroad-band infrastructure.

The aim of a dsm is equally about shaping better demand-side conditions, whether the demand is for productivity, culture or entertainment-oriented services. While Europe is rightly proud of its rich cultural heritage, there is an obvious and urgent need to boost productivity growth. Productivity will play an even greater role in the future, especially given the current European eco-nomic climate. Smart use of ict technology is fundamental to productivity, which is ul-timately not all about raising consumption but rather a social and political imperative, because declining productivity would result in declining living standards.

A vital link between digital productivity and digital creativity is the presence – and the mass adoption, not just mere rollout – of ubiquitous high-speed broadband. High-speed broadband on its own is not enough; demand-side drivers need to be in place. These include economies of scope (expand-ing digitization of trade in goods and servic-es) and scale (the size of the Single Market); lower transaction costs; personalization of services according to individual preferences; and the establishment of trusted relationships between creators, innovators and end users.

Another vital but missing link between digital productivity and digital creativity is the availability of consumer-friendly legal al-ternatives to piracy.

To make matters worse, the creative tran-sition to a digital economy has been mispor-trayed in the media and in policy circles as

being a zero-sum game with only two pos-sible outcomes: the elimination of control, through piracy – sometimes depicted as un-limited and growing consumer demand for entitlements; or the perfection of control, through further strengthening of copyright protection and enforcement to maintain the analog Single Market status quo. It is time to demystify the false zero-sum doctrine and resolve the market supply failure as the ad-equate path for the dsm.

PRODUCTIVITY AND CREATIVITY ARE LINKED

If the goal is to achieve sustainable, smarter and more inclusive economic growth, a continuous expansion of the digital pan-European trade in goods and services – for instance, e-commerce – is essential. It there-fore does not make sense to exempt the cre-ative, cultural and entertainment-oriented markets from the dsm. Exemptions on the basis of national copyright laws and protec-tion of conventional media practice and li-censing have a counterproductive effect on the dsm.

Why should digital productivity be vigor-ously pursued but digital creativity exempt-ed from contributing to sustained, smarter and inclusive economic growth? The simple answer is of course that it should not. Nor does it make sense to continue to pursue a false zero-sum doctrine.

A revision of the current fragmented and digitally restrictive copyright approach in the eu offers a unique opportunity for the ec to lead by example. This is an opportunity the dsm cannot afford to miss. Through the Dig-ital Agenda, the ec can update the current state of play in the European digital creative market by tearing down key structural bar-riers to making lawful digital content wide-ly available within the eu in an appealing, timely and user-friendly way.

The ec needs to address some of the fun-damental barriers that hinder the possibili-ty to reap and share the digital productivity and creativity gains that we so greatly need in the eu. It is time to tear down these bar-riers and solve the failure of the market to supply lawful digital content. This failure is caused largely by three structural barriers:

3Limited availability of lawful digital con-

The digital Magna Carta needs to be implemented

across Europe as a matter of urgency.

Piracy is the result of a market supply failure.

EBR #1 2012 • 53

Market barriers Regulation

AUTHOR▶ RENE SUMMER

is Director of Government

and Industry Relations at

Region South East Asia &

Oceania, Ericsson. His exper-

tise is in media, content, copyright and convergence.

He is also General Manager of Government Affairs

for Ericsson in Australia and New Zealand, responsi-

ble for spectrum, telecom and media/content regu-

lation. Summer is a member of the Board of Direc-

tors of the Internet Industry Association in Australia.

([email protected])

tent through “windowing” (selling and re-selling products over time using various channels, for example the film industry us-ing cinemas, home video, rentals, cable, video on demand, and free-to-air broad-cast) and territoriality

3Technology-specific copyright and licens-ing conditions limiting or delaying inno-vation of new services

3Unreasonable transaction costs making digital content unnecessarily more expen-sive.

THE DIGITAL MAGNA CARTA

Tearing down these structural barriers should be the goal and purpose of a Digital Magna Carta. As in the original document from , the Digital Magna Carta should introduce a pan-European “digital equiva-lence” liberty principle that decisively chal-lenges and limits the arbitrary use of mo-nopoly powers by economic rights holders over digital content. It should also form the basis of guiding enforceable eu-wide policy directions. These policy directions must en-sure that creative and entertainment-based digital services and related transactions can take place without legislative restrictions by other member states (such as national cop-yright law), any commercial conduct (such as windowing or other technology-specific licensing terms) over any electronic distri-bution channel and without the artificial im-position of any additional inequitable re-quirements or restrictions discriminating the digital choice.

The European Digital Magna Carta should include, but not necessarily be limited to, the following actions:� Ensuring the principle of technology-

neutral licensing by mandating an “any-where, anytime and any device” exploita-tion right which is not specific to distri-bution, technology or device. This right should be combined with remuneration based on actual and identifiable private-sphere consumption, rather than poten-tial consumption and reach.

� Ensuring the principle of technology-neutral exhaustion, or the first-sale prin-ciple for creative works extending to digital/electronic formats, thereby pro-hibiting and abolishing any statutory windowing provisions. Also, abolishing discrimination against legal premium video-on-demand services released in competition with cinema-release win-dows – for example, mandating a digital-ly available first-release window option.

� Ensuring a simplified and efficient cross-border licensing and collective rights-management regime for creative works such as tv, film and music.

� Ensuring technology-neutral fair-use/copyright exception provisions that can enable the proliferation of pan-European private “cloud” content such as tv, film, music, e-books and services, thereby en-suring that contract law and technical standards cannot be allowed to override statutory exceptions, such as fair-use re-gimes or private copy exemptions, in ways that would limit the ability of lawfully ac-quired content to shift format, place or device within the private sphere. As in the case of the original document,

the Digital Magna Carta should establish a digital equivalence liberty principle that should decisively challenge and limit arbi-trary use of the monopoly powers of eco-nomic rights holders. Fragmented and dig-itally restrictive copyright laws and conven-tions are today exploited by economic rights holders – as opposed to creators – to extract monopoly rents from consumers. To coun-ter this, the Digital Magna Carta should assure fair, reasonable and non-discrimina-tory terms and conditions for lawful digital exploitation of creative works and facilitate the proliferation of lawful digital creative services across the eu.

It took time for the significance of the orig-inal Magna Carta to be fully appreciated. The Digital Magna Carta, on the other hand, needs to be recognized and implemented across Europe as a matter of urgency. Such a document would carry symbolic as well as practical value. It would stand as a visible commitment to completing the integration of European markets. It would symbolize the development of digital equivalence liberty principles not only in the eu but eventually also elsewhere. Above all, it would draw a line between the past – the adherence to the zero-sum doctrine often associated with bi-ased questioning of digital creative transi-tion – and the future, with the commitment to solving the digital market supply failure.

Which policy-maker would not be proud to be associated with such a charter? ●

References European Policy Centre , Digital Single Market, http://

www.epc.eu/dsm/ McKinsey Global Institute, “Beyond austerity: A path to eco-

nomic growth and renewal in Europe, October ” Ericsson Business Review issue No. , “Fighting piracy –

the smart way”, http://www.guardian.co.uk/media//

nov//economist-profits-digital-subscribers, and http://

www.tennessean.com/section/OPINION/ International Federation of the Phonographic Industry (IFPI):

Digital Music Report . Josh Lerner: “The Impact of Copyright Policy Changes on Ven-

ture Capital Investment in Cloud Computing Companies” European Broadcasting Union (EBU): Modernizing Copyright,

, http://www.ebu.ch Economic Impact of Copyright for Cable Operators in Europe,

, http://www.cableeurope.eu EU Study: Legal Analysis of a Single Market for the Informa-

tion Society. Draft Report October

54 • EBR #1 2012

Xxxxxxx Xxxxxxx

ICT partners interested in joining this initiative are welcome to contact:

[email protected] To learn more: www.connecttolearn.org

70% of African girls don’t get a secondary education. When a girl is educated, she can earn 25% more income, 90% of which she’ll invest in her family and community.

The global education initiative provides

This public-private partnership has

now connected the first schools and

awarded the first scholarships but

there are still many more to go before

the Millennium Development Goals

are achieved.

Access to secondary

schooling for girls through

scholarships.

Quality teaching and

learning resources

through broadband

connectivity.

A global advocacy

platform supporting the

importance of universal

secondary education,

especially for girls.

ICT partners interested in joining this initiative are welcome to contact:

[email protected] To learn more: www.connecttolearn.org

The global education initiative provides

This public-private partnership has

now connected the first schools and

awarded the first scholarships but

there are still many more to go before

the Millennium Development Goals

are achieved.

Access to secondary

schooling for girls through

scholarships.

Quality teaching and

learning resources

through broadband

connectivity.

A global advocacy

platform supporting the

importance of universal

secondary education,

especially for girls.

EBR #1 2012 • 55

SE RVICE QUALIT Y isn’t the same as network-performance management. It’s easy to confuse them given that,

historically in telecom, network uptime has been equated with service quality. Today the stakes are higher than ever as soaring mo-bile data usage puts pressure on the net-works. Customers won’t accept poor service quality because they now rely on high-class mobile-broadband services to run both their personal and professional lives. If they are disappointed, they simply vote with their feet and take their custom elsewhere. However, in many cases, operators simply aren’t suffi-ciently aware of what’s going on in their net-works. They need to adopt service- and ap-plication-aware approaches, as well as ap-propriate tools and methodologies to ensure high-class service delivery.

Ensuring mobile-broadband service qual-ity isn’t just about preventing bad experienc-es from occurring; it’s about providing cus-tomer satisfaction. To do that, network op-erators need to understand the requirements of subscriber applications and ensure that the various elements in their networks work seamlessly with them.

That requires a shift in operator strategy. Analyst firm Yankee Group has identified that, in order to catalyze adoption of new services and increase customer loyalty, the operator needs to move on from a network-based operational-service-management strategy to a more customer-focused, application-aware service-management model. This is the only way service provid-ers can differentiate themselves from in-creasingly aggressive competition and re-duce churn.

Service quality has two key roles to play: it helps operators to retain customers; and encourages them to spend more money. It isn’t a complete solution in itself, however. Service providers also need the appropriate tools and methodologies to ensure that cus-tomers receive the level of service they have paid for. And it’s equally important that they don’t over-deliver to the extent that opera-tional costs escalate out of control.

TOP TOOLS AND PRACTICES

State-of-the-art measurement tools, which work in multi-vendor environments, can be used to describe the characteristics of data traffic through traffic profiling and advanced algorithms.

At Ericsson, we employ a methodology based on analyzing live traffic that enables us to look in detail at the subscriber’s per-ceived quality of service. This is important because it describes how the user feels, rath-er than how the network is actually behav-ing. We reconstruct application-level trans-actions from raw data packets, so we can measure the service quality as it is experi-enced by end users.

We can also investigate how the sub-scriber actually perceives the mobile-broadband service by analyzing the control and user planes using a method called deep packet inspection (dpi) which can be used to examine and filter traffic according to its type. The benefit of this approach is that system performance is measured on the control plane, according to system service key performance indicators (s-kpis). We can also measure application-dependent user-plane performance, which helps us to understand whether the raw performance results are of a satisfactory quality for the given user application. This is done by analyzing pattern-based application recog-nition, kpis for application performance and real webpage or video-download performance.

With these tools we can correlate the sub-scriber experience data from multiple mea-surement points, such as dpi in the user plane, and the control-plane-interface traf-fic, node events, node counters and network topology. The benefit of this is that action-able results are produced for better fault lo-calization. With this information, we are able to accurately locate the bottleneck or prob-lem wherever it may be – in the user expe-rience, the radio network, the core network, the internet or the server – and then fix the problem if it is located anywhere within the operator’s network.

Get to know your network Management

Social networking

(s) (bytes)

319

95

320

1203

Web browsing

Activity duration (s)Packet size uplink (bytes)Packet size downlink (bytes)

Source: Ericsson

Rows of green lights on network-performance systems only tell you that the network is working – they provide no insight into the service quality being delivered. Operators must become much more aware of what’s going on in

their networks. This is a challenge since services that didn’t exist just a few years ago are now dominating traffic.

Don’t be fooled by the green lights – become service−aware

Different activities put different demands on the network

56 • EBR #1 2012

Management Get to know your network

HIT TING QUALIT Y GOALS ON A MOVING PITCH

The issue of service quality would be far sim-pler to address if the situation in terms of user behavior, services provided and tech-nologies used remained static. But that is unthinkable in any technology-related industry, and the pace of change has inten-sified in recent years. Service providers need to adapt their strategies to the cost of provid-ing quality in this rapidly shifting landscape. This is one of their greatest challenges.

Services that didn’t exist just a few years ago are now dominating network traffic, and op-erators have had to scale accordingly. Approx-imately percent of the world’s data trans-actions are related to social-networking ser-vices and to Facebook in particular. Face book has seemingly come from nowhere to have a direct impact on service-provider revenue.

Application classification is critical be-cause the demand placed on the network by different applications varies. For example, certain types of traffic may be composed of long packets, or may be particularly sensi-tive to issues such as jitter or packet loss. Classification enables the network to under-stand the varying traffic characteristics of diverse applications.

An algorithm for analyzing traffic patterns applied to a client’s network revealed that web surfing, and browsing of public social networks were by far the most dominant types of traffic, accounting for more than three-quarters of the service provider’s to-tal traffic. That clearly has severe implica-tions for a service provider’s approach to ser-vice quality, given that such applications are typically not monetized.

The client had not previously been aware that a large percentage of its network re-sources were being consumed by a specif-ic social-networking application. That ap-plication had characteristics that were un-known in the dimensioning and network design of the service provider’s network. Simply put, trying to deliver service quali-ty with a network not designed for the most popular service being delivered presents a challenge. The shorter messages, longer sessions and equal downlink and uplink us-age that social media generate present new challenges in handling and dimensioning mobile data traffic and have a consequent impact on service quality. That’s in com-

plete contrast to traditional web browsing, which typically involves shorter sessions and a heavy bias toward consumption on the downlink, as Figure illustrates.

Activities such as social networking, downloading large files or watching video streams place different demands on the net-work and, with video messaging potentially coming to the mass market, the landscape will continue to shift. Performance for each of these application areas requires separate investigation, and our application identifi-cation technology – combined with DPI ca-pabilities – enables service providers to un-derstand the perceived subscriber quality for each application. That enables optimization of network performance for each and every application. As an example, there’s no point in optimizing video for a user who isn’t in-terested in video applications.

The launch of the smartphone opened up the market for mobile data applications. The wide distribution of smartphones in G net-works has changed end users’ behavior and radically altered the balance between sig-naling load and traffic load in the networks. Smartphones have introduced heavier usage of the network from a signaling-load per-spective because they enable the use of so-cial networking, chat applications and the fast dormancy feature.

Advanced event analysis has shown that one of the issues caused by smartphones, as a result of the types of traffic they enable, is that fast dormancy results in constant con-nections and disconnections. Those signal-ing communications put additional load on the node processors. Our further analysis found that, in a worst-case scenario, per-cent of radio-access establishments were af-fected by this behavior. As a direct conse-quence, the client had to expand the access network in order to guarantee the desired service quality. That entailed substantial costs – an investment that, in the eyes of the customer, only allowed the service provider to maintain the existing quality levels. The impact of the smartphone, therefore, must always be considered when planning and de-signing future network expansions.

MULTI-DATA SOURCE METHODOLOGY

Greater understanding of the impact of smartphones can be achieved by applying a multi-data-source methodology, which helps

▶ Ericsson recently modeled the poten-

tial additional revenue that a service

provider in a mature market could gen-

erate from improved service quality and

greater end-user satisfaction. The ef-

fect model showed that operator

revenue per subscriber could in-

crease by 6.9 percent if service qual-

ity was optimized. For some operators,

that could unlock additional revenues

of USD , each month, depend-

ing on their average revenue per user

(ARPU).

Unlocking revenue potential

Application classification is critical because

the demand placed on the network by different

applications varies.

▶ Ericsson recently conducted a

service- quality investigation and

benchmarking process using ETSI-

based S-KPIs and Ericsson’s world

benchmark database for a service-pro-

vider client. The investigation analyzed

signaling sequences and payload traf-

fic and uncovered that the client suf-

fered from a poor network setup

success rate for mobile data servic-

es. If the network isn’t set up correctly,

the user receives poor or no service.

Vendor-independent tools were

used to identify the performance and

organizational issues that existed in the

client’s multi-vendor environment. A

key finding was that the operations

functions of the service provider and

the vendor were aware of the network

setup issues but, because they didn’t

know how to solve them, had in es-

sence ignored them. The issue had a

high impact on subscriber churn, so

management set it as a high priority. In

fact, management decided to address

both the network-access issue and the

service-quality reporting process.

Using advanced bottleneck localiza-

tion capabilities in traffic analysis helped

to identify the root cause of the perfor-

mance problem, and once that had

been achieved, the resolution was

straightforward to implement.

Addressing setup issues

EBR #1 2012 • 57

Get to know your network Management

to reveal the reasons behind performance limitation. That means drawing data from several sources within a network architec-ture – from the edge to the core. We can iden-tify smartphone users from their control plane, investigate smartphone-generated traffic, record each transaction and recon-struct entire communication histories from the packet sequence. As it captures traffic using advanced filtering algorithms devel-oped in cooperation with Ericsson Traffic Lab, the methodology is scalable in terms of the processable data rates it can deliver.

The ability to scale up is critical because, according to business forecasts, data traffic is expected to increase by a factor of be-tween and . This means that a sig-nificant change in the demand can occur on a week-by-week basis. Against that back-drop, maintaining service quality requires continuous planning and optimization ef-forts – areas in which we have a significant track record building on the capabilities of our global service engineer community.

Ensuring service quality isn’t as straight-forward as it may appear because customer experiences now depend on the performance of multiple systems within the operator’s ar-chitecture. In the past, these have been run as separate entities from an organizational and technological point of view. From now on, it will be necessary to refine this ap-proach and to make adjustments to the ex-isting organizational structures in this com-plex environment – although massive reor-ganization may not always be necessary. In-stead, significant positive service-quality results can be achieved if service providers alter their network performance indicators, and focus on quality of service rather than performance.

A multi-faceted approach is required that encompasses how operators set up the ex-perience for their customers. This is espe-cially important for over-the-top services, because operators face a communications challenge when explaining to customers how the best-effort delivery of such services im-pacts on service quality. Service providers need to explain to consumers what best-effort delivery of services means and man-age their expectations accordingly. If they don’t, they will be leaving money on the ta-ble and failing to deliver a high level of cus-tomer satisfaction. ●

▶ Service quality is not only about in-

creasing customer revenues; it can also

lower operational and capital expendi-

tures. Ericsson estimates that by opti-

mizing resource utilization, a mature

service provider can achieve a

4 percent gain in infrastructure ef-

ficiency, releasing a value of as much

as USD , per month depending

on the ARPU and number of users. By

optimizing and maximizing coverage,

the operator’s cost per packet can drop

by . percent. By improving network

design, coverage gains of 8.6 percent

can be achieved, delivering greater us-

able capacity without adding extra net-

work base stations, unlocking a value

of about USD ,.

Increased operational efficiency

AUTHOR

▶ MARCIN CZECHOWSKI is

Service Product Manager at

Product Area Business Line

Consulting and System Inte-

gration. His work is focused

on asset development for

technology consulting. He has more than 15 years of

experience in telecommunication, and his previous

roles include Senior Core Network Consultant. His

broad-ranging project experience includes work as a

Project Manager focusing on the development of

methods and tools for services. He holds an MSc in

Electrical Engineering from KTH Royal Institute of

Technology in Stockholm, Sweden.

([email protected])

AUTHOR

▶ BORIS BABIC is a Senior

Solution Architect, Packet

Core Networks at Ericsson

Croatia. His work at Ericsson

has ranged from network

design, audits and optimiza-

tions to driving technology consulting programs.

Prior to joining Ericsson, he worked on packet core

network solutions at Siemens. He holds an MSc in

Radio Communications from the University of Za-

greb in Croatia.

([email protected])

AUTHOR

▶ PÉTER MICHALETZKY

is a Solution Architect at

Ericsson Hungary, working

with technology consulting.

His focus is on transforming

business ideas related to

subscriber quality of experience into solutions, in-

cluding software and hardware systems, by driving

the development team and contributing to the con-

sulting community. He holds an MSc in Electrical En-

gineering from Budapest University of Technology

and Economics in Hungary and an MBA from the

same institute.

([email protected])

▶ Based on Ericsson’s S-KPIs and MMS

failure-breakdown analysis, an operator

found that less than 10 percent of

MMSs sent were successful. The im-

pact on the customer was obvious:

a user would have to try to send such a

message times before succeeding.

In addition to a substantial revenue loss,

the area affected was in a very popular

tourist spot with a large number of

roaming visitors. Alarmingly, the cli-

ent was unaware of the MMS perfor-

mance issues because the information

focused on the network’s functionality

and not on the end user’s experience.

Ericsson performed an MMS investi-

gation measuring the performance

based on DPI and transaction recon-

struction. This enabled the sequence of

every MMS sent to be made visible. The

investigation was performed on three

levels: TCP, HTTP and the MMS layer. It

found that the HTTP and MMS layer

were causing the issues, with major fail-

ures in the latter as well as the MMS

servers.

Solving a case of unawareness

58 • EBR #1 2012

Strategy Consumer behavior

▶ Television has been a fundamental part of most people’s lives since its inception. What started out as a black-and-white broadcast channel has now evolved into something that the pioneers of the medium would probably neither understand nor appreciate, at least not immediately. If we could snatch C.F. Jen-kins immediately after his experimental tv broadcasts outside Washington, d.c. in and teleport him through time to the tv room of a present-day Netflix-addicted fam-ily, he would probably have to sit down and catch his breath.

Although consumers still watch quite a lot of broadcast tv, sometimes choosing be-tween several hundred tv channels, they now also consume media à la carte by down-loading and streaming tv shows and mov-

ies, not only on their living room tv, but also on their mobile phones, tablets and laptops.

EVOLVING DEFINITIONS

From a technical perspective, tv is a medium for sending and receiving video – nothing more, nothing less. In the minds of consum-ers, however, “tv” can also be the programs they watch or even the actual television set.

This should not come as a surprise, since the television set has become a standard ap-pliance in most homes. It has, for many, be-come the main source of news and entertain-ment. According to Ericsson ConsumerLab’s tv & Video Consumer Trends report, which stemmed from research conducted in countries, with more than , respon-dents, no less than percent of all house-

What is TV these days? And do consumers really care?The notion is that the internet and social media are killing old-school television. But consumer research reveals that

TV is not necessarily a loser in tomorrow’s increasingly complex media consumption behavior. Understanding the

multifaceted nature of TV is crucial to all players in the market.

The sofa-perspective: there’s a lot more to choose from today.

EBR #1 2012 • 59

Consumer behavior Strategy

holds have at least one television set, and as many as percent have at least one flat-screen tv.

But the definition of tv is not fixed – nei-ther technically nor in the eyes of consum-ers. What used to be a uniform, one-size-fits-all, medium is now an mixture of many different things.

From a technical perspective, the old an-alog terrestrial broadcast tv still exists in some markets, but it has been complement-ed – or even replaced – by other technolo-gies: Digital Video Broadcasting – Terrestri-al/Cable/Satellite/Mobile (dvb-t/dvb-c/dvb-s), iptv, internet streaming and down-loading, to mention just a few.

tv, by definition, naturally still includes traditional broadcast tv, but consumers also regard the catch-up tv available through set-top boxes or tv network internet pages as tv. Furthermore, tv also includes on-demand tv shows watched on mobile phones, tablets and laptops – the definition of tv is simply much broader than it was before.

FROM TECHNOLOGY TO EXPERIENCE

When asking consumers about their tv con-sumption, their answers revolve around con-tent. Consumers don’t think in terms of spe-cific technology or distribution channels. In fact, functionality demands are secondary to demands on the overall experience. For con-sumers, functionality is merely a means to an end.

Consumers have started to expect to be able to watch what they want, when and where they want. They want full access to all content, including:

3all tv provider services on all screens

3all video-on-demand on all screens

3all downloaded content on all screens

3all online tv on all screens.Naturally this does not mean all consum-

ers will watch all content on all screens all the time, but they want the ability to do so.

The large variety of tv/video content and services available online is becoming integrat-ed into the traditional living room setting. Consumers are connecting add-ons and set-top boxes to all of their screens so that they are able to experience tv the way they want.

One out of four respondents in the Con-sumerLab study expressed a strong interest in being able to access all of their tv/video

content on all of their personal devices. Consumers are beginning to, at least par-

tially, abandon their traditional tv service providers and instead use on-demand, over-the-top (ott) services, thereby avoiding – for example – expensive movie channel packages. By mixing and matching different services and suppliers, they create their own individual tv/video solutions, getting the best of both worlds: a mixture of live and on-demand content.

SUPER SIMPLICITY THE PARADOX OF CHOICE

The drawback of these homebrewed solu-tions is that they add complexity for tv viewers. If each service has a unique inter-face, or even its own remote control and mode of access, it will become prohibitive-ly difficult for less advanced consumers to both set up and manage. The user experi-ence revolution brought about by the mo-bile internet and apps has greatly increased our expectations of new services.

The ConsumerLab study revealed that it has become a basic requirement for the in-terface to be super-simple and intuitive. “Us-ability and super-simple interfaces” was ranked as one of the top three most impor-tant factors contributing to the overall tv/video experience, and this criterion clearly influences consumers’ habits and consump-tion of content.

An important aspect of usability is the ef-fort it takes to do something. Forcing con-sumers to use several services/interfaces to access the tv/video content they want com-plicates things. Many video-on-demand (vod) services do not offer both old and new content, so consumers must use several ser-vices to access all of the content they want. This makes their vod usage both time-consuming and complicated.

Consumer demand for super-simple con-tent discovery and consumption will, in the long run, favor major tv and video-content players that can offer services and a wide range of content in an easy-to-use manner to all devices.

The ability to also consume tv and video content off-line will be another success fac-tor, since in the short- to medium-term per-spective, internet access will not be available everywhere. Airplanes, trains, cars – as well as remote and foreign locations – will remain disconnected for many consumers.

60 • EBR #1 2012

Strategy Consumer behavior

FROM BROADCAST TO CONTENT ON DEMAND

For a long time, physical media – such as video cassettes, dvds and now Blu-ray Discs – have made it possible for consumers to break free from the program schedule and view recorded broadcast material as well as purchased or rented video content. This means that on-demand consumption is not really as new as we sometimes seem to think.

A large part of consumers’ tv/video hab-its are now based on different types of time-shifted and on-demand content. No less than half of all consumers watched streamed or downloaded tv/video content more than once per week in . That is an increase by percent compared to .

As on-demand content contributes to an ever-increasing percentage of daily tv/vid-eo consumption, it is becoming a basic hab-it. This will affect the way consumers pay for such content, and also how much they are willing to pay. As on-demand viewing be-comes a basic feature, it is more likely to be considered something that should be includ-ed in basic tv fees. This will, however, pose challenges to existing players and their busi-ness models. Service providers that can cost-effectively extend their broadcast offering to allow super-simple access to a wide range of on-demand content and offer a multitude of payment models and schemes will be much more likely to succeed in this new world.

There are still some types of content that consumers are willing to pay extra for. Fresh and new content – such as movies will continue to elicit a higher willingness to pay. Theatrical releases direct to tv were ranked fourth in terms of tv/video functions and features consumers are most prepared to pay for.

Although subscription video-on-demand (svod) services clearly appeal to many tv/video consumers, it is also clear that many others are not prepared to pay extra for on-demand content – at least not on a regular, subscription basis. That means that to cre-ate mass-market appeal, it will be essential to combine svod services with pay-per-view content and sponsored free content that in-cludes advertisements.

Top of the list of things worth paying for, according to participants in the Consumer-Lab study, is quality. Clearly, high-quality content is still worth paying extra for.

FROM SOFA TO VIRTUAL SOCIALIZING

We are social creatures by nature and like to share and discuss the things we see and ex-perience. This remains the case for most of the tv/video content we consume. The way we furnish our living rooms, with comfort-able armchairs and sofas arranged around a tv, and invite people to watch – for exam-

ple – sports together, is further proof of this. Content and social aspects are very much linked together and combining them adds extra value. More than percent say they use social media services – for example Face-book and Twitter – on a weekly basis while watching tv, and a quarter of the sample in the ConsumerLab study say that they are more likely to pay for tv/video content when watching it together with others, rather than watching alone.

Enabling online social interaction around tv/video could therefore drive consumption and increase willingness to pay for it. Sever-al social tv services are already available that enable consumers to discuss the things they watch – not only during, but also before and afterward.

This kind of behavior will impact the way consumers explore and discover content, be-cause we have a tendency to trust advice from friends more than advice from people we don’t know.

A possible future scenario would involve content discovery through social forums. In-stead of discovering content through an elec-tronic program guide or a classic content store interface, consumers could use their social connections to help them decide what to watch – for example, using Facebook.

INTEGRATING SOCIAL SERVICES WITH TV

When considering expanding traditional tv by adding new services and features, we have to be careful not to interrupt or disturb the tv experience. The first attempts to inte-grate social services into the tv resulted in conflicts between the private nature of many of the conversations and the social/shared nature of the tv screen.

A possible way of resolving this conflict would be to introduce a second screen – for example, a tablet or a mobile phone. By al-lowing consumers to decide whether the conversation should be private or social by switching between a big-screen tv and a smaller, separate screen, the problem is eas-ily managed.

Even though the main tv screen is by far the most-used screen, computers, smart-phones and tablets are also becoming im-portant media consumption devices. In fact, tablet owners consume much more tv/vid-eo content on their tablets than smartphone users – especially outside the home. Accord-ing to the ConsumerLab study, almost percent of all tablet video consumption takes place outside the home.

MOVING FROM ONE TO MANY SCREENS

Restricting consumers’ access to content through different devices restricts their to-tal tv/video experience. When purchasing Traditional TV is not necessarily a loser.

EBR #1 2012 • 61

Consumer behavior Strategy

or subscribing to content, consumers pay for the movie or tv show itself – not for access-ing it in a certain way. ott content distrib-utors are flourishing because they allow con-sumers seamless access to all of their songs, movies and tv series across all of their internet-enabled devices.

Apps, internet access, online shopping, chatting and video telephony are transform-ing the traditional tv screen into a multipur-pose device. The shift from being a passive, one-way channel to also allowing interaction is enabling not only new services and features, but also new business opportunities. tv, one of the largest windows for consumer adver-tising, is now becoming interactive.

Advertising on an interactive, multipur-pose screen will generate higher click-through rates, as the advertising and point of purchase are combined. More personalized advertising will increase click-through rates even further, and also increase consumer ac-ceptance of advertising.

The risk is that consumers might revolt against this increased interactivity, because of their previously passive tv consumption experience – but again, the introduction of a second screen could be what is needed to off-set that risk. If the interactivity is managed through a connected tablet or even a smart-phone, the big-screen experience can remain more or less intact.

POWER OF THE REMOTE CONTROL

This brings us to another challenge – the re-mote control. It was more or less designed for one purpose: basic control of media on the screen – or, more colloquially, channel surfing. As the tv experience becomes in-teractive and flexible, the remote needs to keep up. A flexible and multipurpose tv screen requires a flexible and multipurpose interface by which to control it – it needs a new remote. A lot of consumers are frustrat-ed with existing remotes, longing for some-thing that offers tailor-made navigation. The solution is, however, close at hand: the touchscreen devices that many consumers already have in their hands.

Several tv service providers across the globe already offer downloadable apps for both tablets and smartphones, enabling their customers to interact and remotely control various aspects of the tv experience. As these solutions become more powerful and com-plete, consumers might soon be able to toss away the old remote control altogether, and welcome a truly interactive tv experience.

GLOBALIZATION OF MEDIA

The internet is truly accelerating the pace of globalization. Anything that works against the globalization trend is not in line with the

consumer mindset. “Windowing,” as in de-laying the release of certain content for some consumers or offering content only through certain exclusive channels, is frustrating to consumers – not least because it makes it much harder for affected consumers to participate in online discussions about that content.

Some argue that consumers don’t turn to piracy just out of cheapness or bad will, but instead as a reaction to the windowing issue and a lack of competitive legal alternatives. Comparing the level of piracy in the us, with its many reasonably priced legal offerings, to that of Spain and other countries seems to add weight to that theory. Consumers will no doubt use, and pay for, products and ser-vices that provide them with the best value for their investment – whether this is mea-sured in money, time or effort, or the bene-fits are improved status, entertainment or content. Improving the quality of legal solu-tions is the best way forward.

CONCLUSIONS

The tv industry is clearly migrating toward the internet:

3user-friendly and cost-effective technical solutions give consumers access to inter-net content across devices, including the main tv, pcs, mobile devices and tablets

3high-quality content is becoming more easily available online

3consumers are increasingly consuming tv and video online.So far, this migration has followed a steady

path that is evolutionary, rather than revolu-tionary. But it will nevertheless have a pro-found impact on the industry. Consumer in-terest and willingness to pay for live content will likely remain high, but some traditional tv network services, like pay-tv movie chan-nels, will face an uncertain destiny, due to competition from the new internet players. The tv industry already enjoys a fairly strong position online. Many tv networks offer on-line access to their own tv content for catch-up purposes. Above all, amongst the “old” tv industry players, the major rights holders are most likely to benefit from the globaliza-tion trend.

The current media rights model based on exclusive, “windowed” availability will fail to deliver enough consumer value. By embrac-ing new opportunities, as well as consumers’ needs and expectations, rather than obstruct-ing them, television will remain a core video service also in the future. ●

AUTHOR

▶ ANDERS ERLANDS-

SON is a Senior Advisor

at Ericsson Consumer-

Lab engaged in analyz-

ing consumer behavior,

attitudes and trends

that help Ericsson develop strategies that gener-

ate revenue and improve the customer experi-

ence. He joined Ericsson in 1991 and has worked

extensively with consumer insights in areas such

as social media, privacy and integrity, rich com-

munication and TV/media. He holds an MSc in

Industrial Engineering and Management from

Linköping Institute of Technology, Sweden.

([email protected])

AUTHOR

▶ NIKLAS RÖNNBLOM

is an Advisor at Ericsson

ConsumerLab, working

with consumer behav-

ior and trends. His areas

of research include

smartphones, app culture, fixed and mobile

broadband, the connected home and, recently,

TV and video consumption. Understanding how

all kinds of technology fit into the everyday life

of consumers is the ultimate aim of this work. He

holds an MSc from KTH Royal Institute of Tech-

nology in Stockholm, Sweden.

([email protected])

� Send your contribution to the editor-in-chief at [email protected]

62 • EBR #1 2012

� INNOVATION IS HARD AND MOST OF US, if we are honest with

ourselves, are not very good at it. Still, one of our conceits is to call our

species Homo sapiens or “wise man”, so why do we struggle so much

with innovation? The difficulty we have might be a consequence of a

new form of evolution our species introduced to the world around

200,000 years ago. Whereas all evolution before we arrived depended

upon genes, our species created a second great form of evolution to

act alongside them.

The competitor to genes that we introduced was the world of ideas

and, without us knowing it, there is reason to believe that this new

world of ideas turned around and sculpted us – and in ways we might

never have imagined. For one, it made us less creative than we might

think – and the worry is that things might be getting worse, not better.

It might sound odd, but introducing ideas was a true form of evolu-

tion because among human beings, ideas can arise, be transferred

from mind to mind and evolve. And they can do so independently of

the far slower process of genetic evolution. At first, ideas produced

simple things like hand axes, spears or fishhooks as one person copied

another’s ideas. But like genes, ideas could be accumulated, one on

top of the other, and so they eventually produced objects of great

sophistication and complexity.

We call the accumulation of ideas cumulative cultural adaptation,

and it has utterly transformed the world in what amounts to just the

last 0.01 percent of the 3.8-billion-year history of life on Earth. Today,

we owe to it everything around us in our bustling everyday lives. Our

toasters and mobile phones, our trains and airplanes, hammers and

saws, bicycles, computers and space shuttles didn’t just appear out of

nowhere when a light bulb went on in someone’s mind. They were all

built on innovations that came before them. Even something as simple

as a pencil is a combination of a great range of technologies and ideas.

The power to transform the world by accumulating ideas, knowl-

edge and skills is our “capacity for culture”. This is what created an

unbridgeable gap in the evolutionary potential between humans and

all other animals. Only we have the capacity to observe others,

understand their actions and then choose to copy the best of their

ideas, objects and behaviors.

Now this all makes us sound rather intelligent, but there is a twist:

our capacity for culture – for learning socially from others – introduces

a conflict between being innovative or creative ourselves and merely

copying others. If I am living in a society, and I can observe the people

and the innovations they’re coming up with, I can simply take my pick

of their best ideas rather than attempting to create something myself.

For instance, if I am trying to make a better spear or hand ax, I could

make lots of different shapes and sizes, until I figure out by trial and

error which one works well. On the other hand, if I notice that some-

body else has made a very good spear, I can simply copy it.

BUT WHY WOULDN’T I WANT TO INNOVATE ON MY OWN?

Well, innovation is difficult. It takes time. It requires energy, and it could

even be dangerous; eating the wrong berry or mushroom could kill

you. And so, if we can survey others, if we can sift through a range of

alternatives, and choose the best one going at any particular moment,

we don’t have to pay the cost of innovation: we don’t have to invest

the time and energy it takes to come up with the idea ourselves. In

fact, the time and energy I save by copying someone’s idea for a spear

means I might even kill that mammoth or moose before they do.

Our awareness of the value of ideas is illustrated even today: in our

reluctance to share them, whether they are old family recipes, knowl-

edge of fishing lures, or scientific or business innovations; but also in

the existence of our many patents and copyrights; in the prevalence

of espionage and theft; and even in the insatiable appetites of busi-

nesses for acquiring each other. It is often easier to buy or steal

someone’s technology than to create it yourself.

This gives us a whole new perspective on what it means to be

You’re not as clever as you thinkWe can blame evolution for making us glorified karaoke singers in most aspects of our lives.

So what happens to innovation when mass communication, the internet and

social networking make copying others pay off even more?

OPINIONMARK PAGEL

EBR #1 2012 • 63

human. An unexpected and, you could say, unintended byproduct of

our capacity for social learning, is that natural selection will have favored

the tendency – for most of us at least – to be copiers rather than inno-

vators. In any given group, a small number of innovators is sufficient

because the rest of us can simply copy, plagiarize or steal their works.

Successful inventors and entrepreneurs are rare, and efforts to find

them in television reality shows or to produce them in the classroom

seldom yield results. Social learning tells us why.

Still, it is tempting to dismiss this argument as clever evolutionary

mumbo jumbo. After all, we are intelligent, aren’t we? Maybe compared

with other animals… But think of things that have made a difference

in the history of life: the first hand ax, the first spear, the first bow and

arrow, the first fishhook. And now ask yourself, how many comparable

ideas have you had – ideas that have changed humanity?

You might object to setting the bar so high. So let’s lower it a little and

ask: how many of us have had an idea that influenced others – something

they felt like copying? I think even then, very few of us can say we’ve

invented much that has really made a difference to someone else.

THE BENEFITS OF COPYING OTHERS

Even in our everyday lives, most of us don’t know the answers to the key

questions we face. Should you buy that house? What mortgage product

should you opt for? Which car should you buy? Who should you marry?

What sort of job should you take?

If we really were the highly intelligent species we like to think we are,

we might know the answers to these questions. But if you are like most

people, you probably look around and tend to do what everybody else

is doing. Indeed, one reason the service industries exist is that we aren’t

very good at working things out for ourselves.

Our evolutionary history of living in ever-larger social groups has only

served to reinforce the benefits of copying others, because there is almost

no limit to how many times a small number of good ideas can be copied.

Indeed, in my book Wired for Culture: Origins of the Human Social Mind,

I show how this granted a prominent role to language in our species.

Today, mass communication, the internet, and social networking might

inadvertently intensify this situation by pandering to our tendency to

copy. These technologies connect hundreds of millions or even billions

of us, and this means that an innovation by someone somewhere in one

corner of the Earth can instantly travel to another corner of the Earth, in

a way that it would not have done just 10 years ago.

ENCOURAGED TO BE LESS INNOVATIVE

It’s not that the internet is a bad thing, it’s just that in the cold calculus

of evolution by natural selection, and at no time in history more than

now, copiers can benefit from the innovators. Our modern world might

be encouraging us to be more docile, more bovine, less innovative and

more susceptible to fads and blind alleys, at a time when we need to be

increasingly innovative if we’re going to be able to survive given the vast

numbers of people on this Earth. Indeed, the banking crisis of 2007–2008

came about at least in part because thousands of bankers used imagi-

native financial products built by a very small number of people, whose

risks they didn’t understand.

We have been domesticated by our cultures. In fact, most of us today

can get by just fine without ever really having to invent, create or even

understand much of anything. For many of us, life is little more than

being a glorified karaoke singer, and the surprising cause of this

pre dicament is our capacity for social learning. ●

EBR #1 2012 • 63

▶ MARK PAGEL is a Fellow of the Royal Society and Professor of Evolutionary

Biology; Head of the Evolution Laboratory at the University of Reading in

the UK; author of the Oxford Encyclopedia of Evolution; and coauthor of The

Comparative Method in Evolutionary Biology. His book Wired for Culture:

Origins of the Human Social Mind was published in February.

([email protected])

executive summaries

64 • EBR #1 2012

Building a better India, by Nathan Hegedus page 10

▶ Sam Pitroda is the man who brought telephones to rural India, essentially connecting the country to itself. He made millions of dollars in the us, and has held some of the high-est political positions in India.

He is a dreamer and policy maker, who rose from rural poverty to great power and influence, and who has now transformed himself into a tireless visionary.

Pitroda believes that India must build its own technologi-cal ecosystems based on holis-tic, sustainable and rural-based Gandhian values.

One of eight children, Pitroda was born and raised in Titila-garh in the Indian state of Orissa, a deeply poor town with no running water or electricity, and certainly no telephones. His father, an immigrant from the faraway state of Gujarat, was a small-time lumber dealer with a drive for his children to become something more.

His success in the us set him off in exploration of a new fron-tier: using telecommunications as a bridge between the first world and the third.

In a series of jobs culminating in a minister-level technology mission, Pitroda created the infrastructure that placed now-famous yellow phone boxes in almost every Indian village.

In , he was named head of the National Knowledge Commission. From that point on, Pitroda has been advising and working on everything from fighting hunger and reforming the railways, to reorganizing state telecom operator bsnl.

He still believes in centraliza-tion as a precondition to decen-tralization and in building a scalable India-centered eco-system.

“We need to centralize the thinking in setting up infra-structure,” he says. “That is very different from saying, ‘Central-ize everything.’ But the kind of infrastructure we are trying to build… no private enterprise

would ever build it. It’s not vi-able. You have to do it from the top because it is a national in-frastructure.”

Yet he insists there remain great business opportunities in the Indian market.

“Where is the money in tel-ecom in India?” he says. “Ap-plications. Local applications, local language, local content.”

The tools of education – soon at a museum near youby Marcus Persson page 20

▶ By combining the results of expert interviews, literature searches, and ethnographic case studies carried out in five schools (for students aged four to ) in Stockholm, Chicago, and Hong Kong, Ericsson Con-sumerLab’s Future School pro-ject is providing important insights into the school of the future.

The schools of the future will rely heavily on connectivity. As computers are used more fre-quently, additional control mechanisms, backups and fil-ters will be necessary. Teachers will use ict to manage, ob-serve, coach, protect and evaluate students. Without stable, high-speed connectivity, many of these tasks will fail.

With increased connectivity, information is available any-where, anytime. This raises questions about the future of textbooks. Although textbooks (both analog and digital) are still being used in the schools studied in the Future School project, extensive amounts of schoolwork and lecturing are taking place without them.

All of the schools in the study are moving away from the idea that all students should do one specific thing at one particular time in one place.

Findings from fieldwork for the Future School project show that when ict is successfully integrated into schools, it can help engage and empower stu-dents, thus adding value to their education. Building on two fun-damental human needs – com-munication and curiosity – ict

can be used to broaden students’ horizons, enhance their motiva-tion to learn, and prepare them for their working lives in a soci-ety characterized by individual-ism, mobility, and the blurring of boundaries between what is private and public, as well as between work and play.

We defi ne innovation too narrowly by Nicholas Smith page 27

▶ Founder of kiwanja.net and creator of Frontlinesms, Ken Banks argues that development issues, such as education, re-quire that we start with the prob-lem, not the technology. In de-veloping countries, most high-tech solutions just don’t work.

For example, it is quite com-mon for people to grab the lat-est smartphone, iPad or what-ever happens to be hot at the moment, and try to figure out how it could be used in a devel-opment context. The correct sequence should instead be problem-people-technology.

The problem is that the West views innovation in a fairly nar-row sense. The focus is almost exclusively on high-tech solu-tions, but most of this technol-ogy simply does not work in the places that need the most de-velopmental help.

“In the West, social media is something we use for fun, but there are huge opportunities to use it for more meaningful things in developing countries, particularly when there are not many other options,” Banks says.

“There is a general realiza-tion that the best place to de-velop technology solutions for Africa is in Africa, and a clear sign of this change in mindset is the number of people who are now choosing to pursue entrepreneurial opportunities at home rather than leaving for the West.”

Can technology eliminate teachers? Well, almost. by Nicholas Smith page 29

▶ Sugata Mitra, a professor of Educational Technology at Newcastle University in the uk, created the Hole in the Wall experiment in , which showed that slum children could learn to use computers without adult supervision.

His approach is based on something called a self-organ-izing learning environment. This is a place where children can work in groups, access the internet and use software, fol-low up on a class activity or project, or go wherever their interests lead them.

“I am not proposing to elim-inate teachers completely,” Mitra says. “My classroom of the future will have the children learning in groups by using computers to solve challenging questions for most of the school day, but the teachers are needed to ask those questions and then, depending on how the children progress, ask the next question and then the question after that and so on.

“I used to think that govern-ments should make it happen, and my job was simply to ex-plain it to them properly. How-ever, I am beginning to revise my opinion. This kind of change will probably only happen from the grassroots upwards.”

Don’t rely too much on technology by Nicholas Smith page 30

▶ Richard Fletcher of mit Media Lab works on ways to incorporate digital education into the physical world by using toys, robots and models to in-terpret and apply the rich data now available for learning and training.

lego Mindstorms are kits containing hardware and soft-ware that enable children to create, program and customize small robots. This has proven to be a great way to get started in programming, regardless of

executive summaries

EBR #1 2012 • 65

age or existing technical skills, and has been enabled by these new types of sensing technol-ogy. Rather than just simulating things in a virtual space, chil-dren can try out all kinds of things for real, whether they want to do a science experi-ment or just build a toy.

Fletcher’s philosophy is not to rely completely on digital technology for learning, but to take a physical object and aug-ment it. This can take different forms – perhaps adding sen-sors to the object itself, or some digital information into the physical space that guides the user to achieve whatever they are proposing to do.

“I do not believe that any-thing will ever replace human storytelling as the most effec-tive and popular means of educating people,” he says. “The goal must be to offer new tools that help make the best teachers or the best storytellers even better.”

Reinventing corporate learning by Petter Andersson page 33

▶ Ericsson’s approach to cor-porate learning consists of a number of combined efforts. The first one is to push learning beyond the traditional class-room and e-learning, and work with the larger question of how people acquire competence, and how to make less formal learning a success.

A second way is to cut out the middlemen between the source of knowledge and the learners, wherever possible. This is where online and mo-bile technologies become criti-cal. The it department needs to be a key partner in the learn-ing and development func -tion. Lastly, corporate learning needs to be designed to stimu-late employees to make better use of online learning and shar-ing opportunities.

The main trends that shape learning are the sheer volume of information now available online, globalization of organi-zations, communication tech-nologies, and the way we pro-

cess and memorize information. Based on these trends, corpo-rate learning must respond by fulfilling the criteria of being online, on-demand, personal-ized, contextual, collaborative and from a trusted source.

Ericsson is moving away from a centralized model of corporate learning; the respon-sibility of identifying and build-ing competence should instead be assigned closer to the owner of the challenge addressed.

Social context is important in stimulating participants’ eagerness to learn. Designing learning using gaming theories with various scoring and points systems is one example. Peer recognition and formal certifi-cation are other concepts to consider.

The bottom line is to create an environment that supports and recognizes the use of on-line digital learning, and inte-grate it with other hr and busi-ness processes. Most people will readily share knowledge, insight and expertise. Giving individuals access to experts through virtual classrooms also improves the scalability of ex-pert knowledge, and reduces the need to spend time and money on travel.

Smart-grid communications: enabling next-generation energy networksby John Gorman, Yochai Glick and Regis Hourdouillie page 38

▶ Smart-grid communications have a wide variety of require-ments, from regular low-prior-ity traffic to mission-critical emergency traffic.

Utilities have considerable experience with the communi-cations requirements for the real-time monitoring and man-agement of the high-voltage transmission section of the grid, moderate experience with the medium-voltage section, and least experience with the low-voltage distribution network.

Understanding how the grid, communications and it systems will interact requires sophisti-cated modeling, and the testing

of modeling results through validation against real smart grids as they are deployed.

The introduction of a smart grid is not a simple bolt-on to the existing power grid. A smart grid enables different and efficient processes that can increase the reliability of the grid, optimize demand, and reduce the carbon emissions and costs (both operational and capital expenditure).

Achieving these important benefits will require investment in communications infrastruc-ture, smarter grid-power equipment, and new skills and it systems. However, it’s not just an issue of access to funds. In many countries, the nature of energy-network regulation and legislation is designed to constrain investment with the intention of keeping costs down, and reining in price hikes for energy users.

Content discontents: cultural protection in an internet worldby Rob Nicholls page 42

▶ Regulation of audiovisual services is more complex owing to the recognition by some states of “the cultural excep-tion.” Broadcasting is regulated in a limited number of ways. In terms of content, there is scope to define the genres of program-ming. For example, there might be an obligation imposed to deliver certain quotas of drama and children’s programming.

The regulation of broadcast-ing is different from the regula-tion of other networked indus-tries, in that broadcasting can be an expression of culture, and specifically national or region-al culture. Cultural protection is the use of barriers in trade of services to protect the integrity of domestic culture on a na-tional basis.

The European school of regulation generally treats the politics of broadcasting regula-tion as an exception. This is logical in that the fundamental assumption of this school is that competition is the driver of regulation using the regula-

tory capitalism model. In broadcasting regulation, social policy rather than economic policy is the driver.

In a period of rapid techno-logical change, cultural protec-tion is not easy to implement. The significance of the us as a cultural exporter with a trade policy that characterizes cul-tural services in e-commerce terms compounds these issues. Filling the regulatory vacuum, content aggregators are provid-ing private regulation. The abil-ity of states to regulate has not changed. However, the capac-ity or willingness to keep up with the challenges created by convergence has changed the way in which cultural protec-tion is implemented.

How to get paid twice for everything you do, part 3: Innovation managementby Göran Roos page 45

▶ Successful innovation man-agement is primarily about recognizing and understanding effective routines, and facilitat-ing their emergence across an organization. Creativity is a process undertaken by the indi-vidual, and nearly everyone is capable of coming up with good ideas. But individuals do not innovate. Innovation is a group process for a simple reason: individuals may have part of the solution to a problem, but they rarely have the whole answer.

Innovation is ultimately about the conversion of knowl-edge into money.

Having the profit of your activities exceed the gross rev-enues from your primary rev-enue stream requires the abil-ity to simultaneously manage value-creating innovation and value-appropriating innova-tion. To succeed in this, the following sequence of steps is suggested:� Confirm that the company

has access to the right resources.

� Ensure that they are de-ployed effectively.

� Make sure that knowledge in the relevant science, tech- »»»

executive summaries

66 • EBR #1 2012

nology, engineering, design, art, hermeneutics and effi-ciency domains exists with-in the company, and deploy this combined domain knowledge in an integrated way with the aim of maxi-mizing the value that can be created and embodied in a product-service system.

� Domain knowledge relating to effectiveness and business models should exist within the company. Deploy this combined domain knowl-edge in an integrated way with the aim of maximizing the value that can be appro-priated from the newly in-novated product-service system.

� Design the innovation pro-cess to enable the necessary dynamic interaction and feedback loops between steps 3 and 4.

� Develop an appropriate set of systems, structures and processes to manage the complete integrated-inno-vation approach.

� Make sure that all of this fits in with the company culture and strategy.

Continuously measure and evaluate progress.

An action plan to embrace digitization of creativity in the digital single marketby Rene Summer page 51

▶ The Single Market became a reality in and is generally accepted to be one of the Euro-pean Union’s (eu) greatest achievements. However, the Single Market is still a work in progress, and significant limi-tations remain.

The issue of achieving a vi-brant Digital Single Market (dsm) goes beyond the self-interest of the established play-ers within media, entertain-ment and ict wishing to pro-tect the status quo.

The European Commission needs to address some of the fundamental barriers that hin-der the opportunity to reap and share the digital productivity and creativity gains that we so

greatly need in the eu. It is time to tear down these barriers and solve the failure of the market to supply lawful digital content.

Ensuring technology-neu-tral, fair-use/copyright excep-tion provisions that can enable the proliferation of pan- European private “cloud” con-tent, such as tv, film, music, e-books and services, means that contract law and technical standards cannot be allowed to override statutory exceptions, such as fair-use regimes or pri-vate copy exemptions, in ways that would limit the ability of lawfully acquired content to shift format, place or device within the private sphere.

Don’t be fooled by the green lights – become service-awareby Marcin Czechowski, Boris Babic and Péter Michaletzky page 55

▶ Service quality has two key roles to play: it helps operators retain customers, and encour-ages them to spend more money. It isn’t a complete solu-tion in itself, however. Service providers also need the appro-priate tools and methodologies to ensure that customers re-ceive the level of service for which they have paid.

Services that didn’t exist just a few years ago are now domi-nating network traffic, and operators have had to scale ac-cordingly. Today, most of the world’s data transactions are related to social-networking services. This places different demands on the network.

A greater understanding of the impact of smartphones can be achieved by applying a multi-datasource methodology, which helps to reveal the rea-sons behind performance limi-tation. That means drawing data from several sources within a network’s architecture – from the edge to the core.

Ensuring service quality isn’t as straightforward as it may appear, because customer ex-periences now depend on the performance of multiple sys-tems within the operator’s architecture.

A multi-faceted approach is required that encompasses how operators set up the experience for their customers. This is es-pecially important for over-the-top services, because operators face a communications chal-lenge when explaining to cus-tomers how the best-effort de-livery of such services impacts service quality. Service provid-ers need to explain to consum-ers what a best-effort delivery of services means and manage their expectations accordingly.

What is TV these days? And do consumers really care? by Anders Erlandsson and Niklas Rönnblom page 58

▶ When asking consumers about their tv consumption habits, their answers revolve around content. Consumers don’t think in terms of specific technology or distribution channels, according to a ConsumerLab study.

Consumer demand for su-per-simple content discovery and consumption will, in the long run, favor major tv and video-content players that can offer services and a wide range of content in an easy-to-use manner to all devices. The added ability to consume tv and video content offline will be another success factor.

A large part of consumers’ tv/video habits are now based on different types of time-shift-ed and on-demand content. No less than half of all consumers watched streamed or down-loaded tv/video content more than once per week in .

More than percent say they use social media services on a weekly basis while watching tv, and a quarter of the sample in the ConsumerLab study say that they are more likely to pay for tv/video content when watch-ing it with others, rather than watching it alone.

So far, the migration of the tv industry toward the inter-net has followed a steady path that is evolutionary, rather than revolutionary. Consumer inter-est and willingness to pay for

live content will likely remain high, but some traditional tv network services, like pay-tv movie channels, will face an uncertain destiny because of competition from the new in-ternet players. The tv industry already enjoys a fairly strong position online. Many tv net-works offer online access to their own tv content for catch-up purposes. Among the “old” tv industry players, the major rights holders are most likely to benefit from the globalization trend.

OPINION: You’re not as clever as you thinkby Mark Pagel page 62

▶ Innovation is hard and most of us, if we are honest with ourselves, are not very good at it. Whereas all evolution before we arrived depended upon genes, our species created a second great form of evolution to act alongside them – the world of ideas. It made us less creative than we might think – and the worry is that things might be getting worse, not better.

An unintended by-product of our capacity for social learn-ing is that natural selection will have favored the tendency – for most of us at least – to be copiers rather than innovators. Today, mass communication, the internet, and social net-working might inadvertently intensify this situation by pan-dering to our tendency to copy.

It’s not that the internet is a bad thing. It’s just that in the cold calculus of evolution by natural selection – and at no time in history more than now – copiers can benefit from the innovators.

Most of us can get by just fine without ever really having to invent, create or even under-stand much of anything. For many of us, life is little more than being a glorified karaoke singer, and the surprising cause of this predicament is our capacity for social learning.

executive summaries

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