- The large incumbents will not be able to reinvent themselves in time to compete with the newcomers.
Remember reengineering in the nineties, and the e-commerce/dot.com boom-and-bust of 2000? This time the ‘bubble’ is all about Innovation.
Lloyds Bank stated at the FT conference that it had already spent £750M on innovation and was about to commit another £1B prior to 2020 — but what exactly has changed for the customer, other than a me-too online and mobile channel?
At the other end of the spectrum, the CEO of Bank Leumi declared that she was launching an entirely new bank based on mobile to compete with the incumbents; I was reminded of Egg and many other abortive attempts to launch new dot.com start-ups by large incumbents.
Maybe it’s a new era, given the vast improvement in connectivity and proliferation of smart mobile devices (some two billion and growing). However, history suggests that the large incumbents will not be able to reinvent themselves in time to compete with the newcomers. After all, Amazon, Apple and Google have created a trillion dollars of new shareholder value. Tell me who in the old Fortune 1000 list has done the same?
- Innovation is all about applying new techniques to old problems.
It’s hard to argue with the evidence of a successful start-up.
For example, SwiftKey’s co-founder described how after completing a PhD in natural language processing, he applied his knowledge to text entry on mobile phones. Instead of challenging the lay out of the QWERTY keyboard he developed a predictive technique to help complete words. His technique is now embedded in 80% of all mobile smart phones.
The founder of KANO computers spoke about how most of the Millennials hardly understand anything about the technicalities of computing. He decided to develop a simple learning kit that would help students penetrate the ‘substrate’ of computing – what lies behind the glass screen. His kit is now adopted in 87 countries across the globe.
- It’s the Education, Stupid
Much of the debate at the conference was about job displacement, especially amongst professionals such as accountants, lawyers and doctors, and how the shift of computing from routine and mechanical tasks to cognitive ones, accelerated by machine intelligence, will unavoidably impact white collar employment.
But employment weathers seismic events remarkably well. I am reminded of the shift from manufacturing in the seventies to the call centres of the eighties, and the shift again in the nineties from onshore to off-shore.
We need to focus instead on education, to enable the next generation to develop into entirely new areas of our economy. BREXIT may appear bleak from one angle, but it’s got a silver lining: in my opinion it is a wake-up call for the UK to exploit its remarkable creativity, ranging from media and FinTech to fashion and sport. It’s our opportunity to steer away from traditional economic hot-spots such as financial services, and implant ourselves as global leaders in the emerging digital arts arena.
Roger Camrass is a visiting professor at the University of Surrey and a member of SurreyCoDE. Over forty years, he has helped Fortune 1000 companies harness the power of successive waves of technology. He is author of the book ‘Atomic: reforming the industrial landscape into the new structures of tomorrow’.