The Future, This Week 16 June 2017

Introduction: The Future, This Week. Sydney Business Insights. Do we introduce ourselves? I'm Sandra Peter, I'm Kai Riemer. Once a week we're going to get together and talk about the business news of the week. There's a whole lot I can talk about. OK, let's do this. 

Sandra: Today in The Future, This Week: inventors versus innovators, what drones are for, and the self-proclaimed space nation. 

Sandra: I'm Sandra Peter. I'm the director of Sydney Business Insights. 

Kai: I'm Kai Riemer. I'm professor here at the Business School. I'm also the leader of the Digital Disruption Research Group. 

Sandra: So Kai what happened in The Future, This Week? 

Kai: Our first article is from Medium.com and titled "Innovation is combination". The author makes the argument that we think of innovation all too frequently as an invention. As a genius person having this light bulb moment and coming up with something that is new to the world and that this is actually a fallacy that innovation is always the combination of things that were already there, that we never have these moments that something comes into the world completely new. Innovation is never a single event, the article says, but it happens when fundamental concepts combined with important problems to create an impact. So it's really a combination of things that are already there that of then being put into a new context or being recombined in a new way.

Sandra: Indeed the article talks a lot about how we combine different parts or different components to achieve these innovations, so not a single event. However I think it could go a step further by thinking about context. So we often talk about innovation as the product or the service or the business model that has appeared. 

Kai: Widgets right? So often we say innovation is really a thing a material thing that comes into the world - the iPhone the iPad. 

Sandra: And it's that world that it comes into that I want to talk about. So if look at history and that's one of our favourite things here on The Future, This Week. If you look at 15th, 16th century moments we often talk about how the landscape was reshape the Gutenberg invention of the printing press. And now this invention of the printing press is said to have started this cultural transformation. Yet if we look at that moment in history it was actually more than just the Gutenberg technology that led to all the transformation. First this was a range of disparate inventions that came together to produce this. So it was on the one hand Gutenberg but it was also Manutius, who invented the small format inexpensive volume bound portable books so that Gutenberg's printing press now became moveable books. But they also came at a time when they were a product of a new economic system of religious upheaval of huge movements of population. And that is what enabled these technologies to actually take off and these inventions to actually play off each other, so context. 

Kai: So why the author is right to say that invention is not a single event and it's often the recombination of things. The focus is far too narrow it's too focused on the things that are being recombined to make a new thing. Right so innovation at the same time is fundamentally social. It's about interpreting, it's about sense making. 

Sandra: So if some space alien just gave us the ultimate way to make clean energy would we even know what we have? 

Kai: No if something like this dropped from the heavens and landed in our midst, likelihood is that we wouldn't be able to actually make sense of this thing because we wouldn't be familiar with any of it. So surely every innovation every invention is always in some way shape or form an outgrowth of what was already there. But the important thing is that not all innovations are alike. Some are just evolutionary steps on a certain path of development. Others however allow us to do fundamentally new things. The words we use as they disclose a new word, they allow us to do new things, they give us new possibilities and they also allow us to reinterpret the way in which we go about our daily business. So when the iPhone was released initially it was just a phone without a keyboard maybe. It wasn't even a good phone. But over time we came to understand that there was fundamentally new things that we could do with this in terms of social media, communication, apps that we could have on this phone and became so much more. So it was transformative because it allowed us to interpret many of our daily activities in new ways. And it also changed us so it brought about a holistic change of the world. So innovation is not just about things, it's social and it has to do with interpretation. 

Sandra: And conversely if these things don't come together then innovation doesn't actually happen. So if it's not accompanied by the intellectual phenomenon or by a social one or a political one or a commercial one many of these innovations then fail to realize themselves. And that was the case for instance with the first iPod that even though it came to the market it was very unsuccessful for the first part of its life because people just didn't think of it as an iPod as these luxury object that had all these new songs. So until it ended up in 50 Cent videos and Mary J. Blige videos and it was associated with this thing that you really wanted and wanted to have in your pocket and that had all this range of possibilities. 

Kai: That's right. And it brings us to a different point. True innovation doesn't solve a known problem. True innovation lets us do new things but it takes time sometimes for us to see those new things as valuable. With a lot of things we don't and they just fade away and fall into oblivion. But with the things that are truly transformative over time we come to see them as enabling things that we couldn't do before and that was the case with the iPod. No one needed a thousand songs in their pocket at the time but we have come to accept and in fact expect this over time so we have changed as much as the technology has changed.

Sandra: The fact that the invention lets us do the things we couldn't do before also highlights the distinction between inventors and innovators. So quite often we have inventions like in the field of genomics when we were able to finally sequence the human genome and even a sort of a second hand reference of the human genome cost almost 50 million dollars now that was the invention. However the innovation came along when we managed to reduce that to below a thousand dollars. And whilst in 2003 to sequence properly the whole genome was almost two point seven billion dollars. Today we have companies like Illumina who has unveiled a machine that is expected to produce a whole human genome for less than a hundred dollars. 

Kai: So what we're saying is that not only do we need the kinds of people like Steve Jobs who can imagine new futures and build the things for it where it takes time for the rest of us to catch up with those ideas. But we also need execution right? Having a great idea is only great if you can bring it to the masses and execute. And over time make things affordable and roll them out at scale.

Sandra: Exactly. So we need people like the Wright brothers to invent and build the first viable aeroplane. But we also need companies like the Curtis company for instance, who managed to make that commercially available. 

Kai: So while we agree with the article that of course innovation is much more than invention it's social, it's about interpretation, it's about execution. 

Sandra: This reminds me of what David Thodey who was the former CEO of Telstra and he's chair of the CSIRO board now, was speaking at the Advance conference and he was saying that we have really good basic research in Australia but we are not really good at taking them to the markets. Whilst we're really good in Australia at inventing things, innovation and entrepreneurship and having the start-up community. We need to get better at that as well.

Kai: And that brings us to our second story. 

Sandra: Drones. 

Kai: What are they good for? 

Sandra: Exactly. This is a classical case.

Kai: There is an invention here. There is a new technology we can fly these things in the sky. We can take funny pictures of our neighbours in their garden. But drones are now becoming big business so we have outgrown the invention stage. We have recombined those technologies to come up with something new. And now these things make their way into the world and they are becoming big business and they're really changing practices in all kinds of different industries so this is an article in The Economist and it looks at what drones can do in spaces such as construction, agriculture, health... 

Sandra:...Law enforcement... 

Kai:...Public safety. 

Sandra: The argument that the Economist makes is that although we have all these commercial applications really in essence all these drones are doing is gathering data and that as machines will become more capable we should think of a whole range of applications and of new uses. 

Kai: And the article mentions a few exciting ones. So in essence as you said taking photographs is really only the beginning of things. Drones offer new possibilities when it comes to 3D measurements of terrain for example where you use sophisticated camera and location information to create 3D maps, 3D models of a landscape and that can be used for example to monitor a building site to make sure that buildings are built in the right way. Material movement on site is on track. It can be used in grading off building sites where a lot of dirt and earth has to be moved in order to prepare the land for the eventual construction of a building. Now conventionally this takes a lot of time trial and error back and forth and manual measurement but a drone can fly over the landscape and create a 3D model in a matter of a couple of hours and cut out labour that would taken a couple of days maybe.

Sandra: So we've seen similar developments in things like agriculture recently in South Africa I've seen a drone fly over a winery and basically take infra-red pictures of the grapes. It would know particularly which grapes were ripe so you could pick only the grapes that were ripe on that morning and then pick the different ones the next morning and so on and so forth. They were also using drones to watch over wildlife and count numbers of animals out there or location of animals out there. Of course you could also use them for poaching with the exact same accuracy.

Kai: In Australia they're now being used to patrol beaches to alert swimmers with the presence of sharks.

Sandra: We've seen police use it to track criminals or to take aerial photography of accident sites that have happened.

Kai: Insurances they use it now, they pre-programmed a drone to investigate say a house fire. The drone flies off, surveys the site, takes photography, measurements, comes back, the data is being analyzed to then process the insurance claim. And drones can be real life savers. There's drones that drop inflatables for people at sea. There's drones that engage in search and rescue in avalanches and there's been an article recently about a drone which delivers a defibrillator in cases of sudden cardiac arrest. So these are quite exciting developments that can be lifesaving in all kinds of different situations. 

Sandra: This is still not telling us really what the innovation will look like. Whilst we have adoption of surveillance or better ways to take pictures or better ways to make movies or follow criminals around or do agriculture - how will this change industries for instance? How is this going to change agriculture if we indeed put this in the hands of the farmer? Will this be something that insurance companies take up first? Will this be something that farmers will pick up? Who will own the data that is being generated by this? Who will have access to improving the way they manage their crops? Is it the farmers who collect the data? Is it the company that has lent them the drone? Is it other people? Will this lead to more inequality? 

Kai: Absolutely. And these are all open questions. The article says that this is what businesses are grappling with at the moment. We have these great use cases. We have these great demonstrations. Drones can do all these things but how do we actually scale this? How do we make this part of the everyday lives of people in business? And there's a few ways that are being discussed. So one is that there is no marketplaces for drone services so companies might be hesitant to invest in the technology because they don't quite understand the benefits but they also don't understand how to operate them. So the article names a few marketplaces where you can actually hire drone services and companies come and they do a surveillance for you or they do a demonstration. And in many cases being reported the clients then realise that flying those drones and operating them is not actually that difficult and they might then be inclined to invest into the technology. The article also mentions training schemes, certifications where you can actually now have a profession on the back of drone flying and drone based services. So all of these things are emerging much more slowly than the development of the actual technology.

Sandra: But let's not forget that besides the problems that we have around the actual technology and the integration in industry and the integration and even in the drone production and operating systems and so on, there are quite a few unresolved problems around privacy, surveillance, security. 

Kai: So in Australia it is allowed to fly a drone over someone else's house. 

Sandra: And not even tell them about it. 

Kai: And not even tell them about it while in the European Union this is a no go, right privacy law actually protects you from your neighbours taking photographs. 

Sandra: So I would have to get your permission to fly my drone to surveil your terrain, whilst here if I want to take pictures of your house to put them on Domain? 

Kai: So it's a bit of a wild west still and legislation will catch up eventually but it also raises issues around worker surveillance and monitoring. If I'm able to fly drones over construction sites I am also able to monitor in real time in a very detailed way how people work and operate. And this is done under the pretense of precision and quality of construction. But it also means that more and more people have to comply with what the robot overlords essentially are telling them right? If those robots are flying overhead and monitoring your every movement this might lead to certain management practices on the back of it. 

Sandra: It might also lead to industrial espionage where we've seen more and more drones being flown to actually take high accuracy pictures from windows of buildings and so on. 

Kai: This brings me to one of my favourite stories. 

Sandra: One of our favourite stories. 

Kai: Birds of prey being trained to take drones out of the skies as a countermeasure to espionage.

Sandra: In the south of France, the French are training golden eagles to spot drones and perform midair takedowns of rogue drones. 

Kai: And we have some sound for you here. <bird 

Kai: So there's a good solution to this problem but I'm sure many other problems will have to be solved by legislation through unions being involved in negotiating new management practices around drone based monitoring of all kinds of different workplaces. 

Sandra: So we can't wait to see the new uses and the ways in which this will shape new industries. 

Kai: So this brings us to our last story of the day. This story is in Motherboard. It's called "the first space based nation wants to store data of planet beyond the law". So what's that all about?

Sandra: So we've got the self-proclaimed space nation of Asgardia. And what happened last year was that an international team of scientists and researchers of course led by a Russian business man and computer scientist by the name of Igor Ashurbeyli announced the founding of a new nation in space which is launching a satellite later this year and this will carry the nation's flag, the nation's constitution and a whole lot of data of up to its potentially one point five million citizens which are at this point... 

Kai: So this is a virtual nation. It's a nation without a country because it's going to live in space. But this is not about colonizing a particular planet. It's just a nation that is beyond the Earth. 

Sandra: So this opens the door for the currently about 200,000 online citizens, opens the door for off planet data and potentially tax havens which would be an important step towards opening conversation around regulation in space. 

Kai: Yes. So first of all anyone can pledge allegiance to Asgardia and fill in a citizenship form online to become a potential citizen of Asgardia. The question though is why? Why would anyone want to become a citizen of a nation that you can't live in? You can't visit. That is merely an idea. So what are those ideas? What is the ideology behind creating a space nation? 

Sandra: There are a couple of reasons why this could happen. First there was of course the idealistic side of things where we can overcome the divisions that we have and the failures of the nation states that we have now. But by creating one space nation that would provide a shield for the entire world and humanity. 

Kai: It’s almost a romantic idea of moving beyond the current mess that people see and the dissatisfaction with the political systems. 

Sandra: And the divisions that we have between nations today. The other is sort of a more grey area around creating maybe an off planet data-center that would be shielded from the intrusion and the surveillance that you have on planet. It would create the tax haven, it would create a different monetary authority that would not be subject to any of the laws and regulations that we have. 

Kai: You could store data are off limits from current regulation and the long arm of the law. Now there's certain problems with actually doing this right so you can't just go and create a new nation especially one that doesn't actually fit the definition of a nation with a permanent population, a defined territory, government and the capacity to enter into relation with other states and it has to be recognised by other states and it says so in the article. 

Sandra: So whilst Asgardia has reached the first step - it has a population of over 200,000 people now. So it could potentially, eventually go to the United Nations that has to be recognised, there's still a whole lot of problems here that it probably can't solve. 

Kai: So it doesn't fit the definition of a nation. And also there's a small problem with the fact that whenever you launch a satellite that becomes legally the property of the country you're launching this from, so there's no neutral place where you could launch a satellite that could then legally become its own constitution or nation in space. So there's small legal problems around this. 

Sandra: Although it is legally doubtful that this will happen, it does present a good challenge to some of the regulations that we have around what we do in space which date back to the 60s or to right after the Second World War and so probably this Russian businessman and Nano Scientist who is also currently chairman of UNESCO science office space committee, would allow him to open up a conversation about regulations around space activity. 

Kai: Now this has drawn quite a bit of commentary on Twitter. There's actually been a hashtag for it where people should comment and pledge their allegiance to Asgardia. We weren't quite so impressed with the numbers of returns and responses they got. By those stats The Future, This Week could become a nation state right. But that's beside the point. 

Sandra: Why are we talking about this? Why are we not calling bullshit and really talking about this. 

Kai: Is this just a bullshit idea or is there something more serious in here? And I think there's a deeper point to be made about this story. Now first of all the idea that people find creative ways to circumvent established authorities and institutions is nothing new. Take pirate radio for example in the 1960s. In the 1960s the BBC in the UK would play pop music for one hour per week. And so that motivated people who were into this kind of strange new bebop music to set up radio stations beyond the reach of the UK or the British law, offshore on boats and they would blast their radio waves to the mainland for people to enjoy pop music any time of day. So that is kind of the same idea with different means and it served an important function in popularizing pop music and innovating in this sector. 

Sandra: So are we thinking now space pirates?

Kai: Space pirates.

Audio: "I've been thinking about laws on Mars. There's an international treaty saying that no country can lay claim to anything that's not on Earth. By another treaty if you're not in any country's territory, maritime law applies. So Mars is international waters. I'm about to leave for the Schiaparelli Crater where I'm going to commandeer the Ares IV lander. Nobody explicitly gave me permission to do this, and they can't until on board the Ares IV. So that means I'm going to be taking a craft over in international waters without permission which by definition makes me a pirate. Mark Watney. Space Pirate" 

Sandra: So this was Matt Damon in the Martian explaining how he has become a space pirate by being in no man's land on Mars. 

Kai: So piracy is a pattern here. So pirate radio set off innovation in the music industry that was kind of later followed by Napster. Equally classified as piracy but played an important role to popularize the idea of music sharing and then later streaming. So these services that challenge established institutions that come up at the fringes often driven by an ideology of freedom of information sharing and working against the establishment can be dismissed initially as either bullshit or irrelevant or renegade or even unlawful. But often those fringe activities lead to serious innovation that later make it into the mainstream.

Sandra: And we are seeing that again today, we're seeing that with the cyber punk movement that began in the 80s and that advocated for the use of cryptography and other technologies that enhanced privacy to promote sort of the social and political change to the situation that they saw in the 80s. And if you fast forward to 2008 we've got Satoshi Nakamoto and we've got the inception of Bitcoin as a direct response to these fringe activities that are seen as so out there and that nothing will ever come of them.

Kai: To building a currency that can live beyond the reach of any nation state and to also protect the privacy of transactions. So in essence a fringe activity grounded in a certain ideology that even if you don't subscribe to the ideology can become mainstream ideas and we see this with blockchain now which transcends the original idea of Bitcoin and has now been taken to be a motor for change in storing identity, creating a universal ledger.

Sandra: So whilst in the inception of Bitcoin we had Satoshi Nakamoto advocating for the removal of financial institutions and the removal of third party mediators from the entire transaction process. We are seeing now blockchain such as etherium really outpacing Bitcoin and leaving it behind and actually creating something that is not even a bitcoin competitor, a completely different platform for new kinds of decentralized but often financial applications in which financial institutions and other kinds of institutions actually play a bigger role. So we are running on a peer to peer network but it's meant to disintermediate transactions but still having the a lot of these institutions as players within that network.

Kai: The learning here once more is ideas that can be outlandish like space nations, pun intended, can still harbour a certain spark for new innovation and who knows we might see in the not too distant future a certain space based services that everyday people can use. What these services might be we don't know but it was hard to imagine that Napster would roll into a complete paradigm shift in the music industry at the time. 

Sandra: Or that pirate radio would actually get the broadcasting licence a few weeks ago. 

Kai: Fifty years after the 1967 Marine Broadcasting Offences Act that was intended to stop pirate broadcasting, pirate radio station Caroline in the UK actually got its full time AM broadcasting licence. And now robot of the week. Today's robot is from Germany's Bielefeld University, a robot with a human touch.

Sandra: Flobi. And let's be honest we just picked it for the name. 

Kai: This is a robot that has sensors on its hands and it learns something that robots are really not very good at, gently picking up objects and putting them down without squashing or destroying them. 

Sandra: Applications in agriculture, applications for Amazon's warehouses. 

Kai: Applications in retail and everywhere where it's about the handling of delicate objects, Flobi. 

Sandra: And that's all we have time for today. 

Kai: Thank you for listening.

Sandra: Thanks for listening.

Outro: This was The Future, This Week brought to you by Sydney Business Insights and the Digital Disruption Research Group. You can subscribe to this podcast on Soundcloud, iTunes or wherever you get your podcasts. You can follow us online, on Twitter and on Flipboard. If you have any news you want to discuss please send them to sbi@sydney.edu.au.