Maurizio Pilu's presentation at the RC UK Grand Challege Event in Leicester, April 12 2011. http://www.dmu.ac.uk/research/grand-challenges/rcuk/rcuk-event.jsp

1. Challenges and opportunities in the Digital economy: a TSB perspective Dr. Maurizio Pilu Technology Strategy Board RCUK Grand Challenges Event, Leicester12 April 2011

2. What is the Technology Strategy Board? We are a national body set up in 2007 to invest in business innovation We work across business, universities and government We mostly come from business 130 people with over 1700 years of business experience We were responsible for investing £250m a year over our first 3 years

3. What is “Digital” We see it as the: “complex interaction of people, processes and technology that aims at increasing the socio-economic benefits of ICT” Digital Strategic Update, October 2010

5. Gobal telecom spend $926b in 2009

6. Ad-supported Internet contributes $300b to US economy and supports 3.1m jobs

7. UK’s “internet economy” worth £100b

8. ....... And it barely existed only 20 years ago

9. Digital landscape It ripples through the economy and society Source: “Connected Kingdom”, Boston Consulting Group Photo: kaibara flickr.com/photos/kaibara/4481583340/

11. The total R&D spend of these companies is £4.5 B,equivalent to 3.2% of their total sales of £139 B.

12. This makes ICT the third largest sector in the UK in terms of sales and the second largest in terms of R&D.

13. The largest sector in terms of sales is Oil & Gas Production at £348 B.

14. The second largest sector in terms of sales is Banking at £166 B.

15. The largest sector in terms of R&D is Pharmaceuticals & Biotechnology at £8.9 B.Thanks to Philip Hargrave, ICT KTN, for providing this slide

16. Thanks to Philip Hargrave, ICT KTN, for providing this slide

17. ...Digital technology now branches out everywhere ... ... And there are many challenges & opportunities out there ....

18. But here we are about the “buds” that can grow: innovation ...

19. But innovation needs “problems” ... ... Here are some examples ...

20. UK Digital “Pipes” 7PB/month 12.5 GBytes per second 70 million requests Will the UK digital infrastructure able to satify this growing demand?

21. Mobility Mobile skype minutes on 3’s network UK mobile data on 3’s network Usage of mobile Data exploding Usage of Average monthly usage per user: 2009: 273Mbytes 2015 (forecast) = x40 times higher

23. Contributes 6.4% GVA

24. Internet and converging technologies are opening up new possibilities

25. but disrupting value chains on an unprecedented scale

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

27. Legal music download growing at 25% year

28. But 95% of it still illegal

29. 6.5 million illegal file-sharers in the UK

31. Information explosion [Even if] “The Economy is Bad, Data Does Dot Care” (IBM) Data: 281 billion Gigabytes, 45Gb per head Growth: >50% CAGR Disimpersonation: 50% of data now unrelated to individual action Disaggregation: info containers growing 50% faster than data Usage: Information growing 50% faster than storage Examples: Business: Tesco: 12 million purchases per week, 5b data items Generated by sensors: RFID Tags: 2005: 1.3b, 2009: 33 Billion Media: YouTube data = all world medical data imaging Scientific: World Climate Simulation Project: 1m datasets, 10 PBs

32. Connecting Things

34. Added Value Services

35. Transforming Healthcare Worldwide the adoption of wireless sensor in healthcare could lead to savings of $25b NHS savings alone could £1 billion p.a. through the widespread adoption monitoring for assisted living

36. Public Information: Opportunities Potential for considerable growth: US is x2 to x5 greater per capita than in EU Estimates of the indirect value to UK businesses of the exploitation of public sector data suggest that it can be valued at £10-100bn (0.8-8% UK economic activity).

37. Digital Delivery of Public Services Saving by switching a transaction with government on line: Between £3.30 and £12.00 All excluded adults / 1 transaction per month on line £900 million savings per annum Saving on each tax returns filed on line ~£10 , or £80m/year Projected saving via NHS Direct i£80 million per year7 What are the new opportunities when public services become more and more innovative, addressing more and more people and aspects of our lives?

38. Connecting people Twitter and Google searches as a “pulse reading” of the world 9 billion tweets sent since launch London has the highest number of Twitter users 400m Google searches per day Google claims to have a two week lead on predicting outbreak of diseases What is the economic and social impact of this revolution?

40. Innovation is a bumpy ride for most

41. Most often not just about cool new technology: sectors can absorb innovations in different ways and at different speeds TRANSPORT HEALTH BUILT ENVIRONMENT .................

42. And sometimes it all clicks: the “IPod moment”

43. Societal: + aging + environment + inclusion +.... Technology: + data generated + demand on networks + mobility + m2m + openness+ cloud + services + user generation + crow sourcing + .... ... But the underlying trends are clear ...

44. ...and so are the “tensions” ... Examples Open standards vs Closed standards Sustainable vs economically viable Wired vs wireless Old value chains vs new value chains Content vs technology Data push vs info overload Net Neutrality vs. Control ISPs vs Content owners Old business models vs new reality Free content vs protecting rights Privacy vs targeted advertising Bandwidth vs inclusion Availability/usability vs security Photo: kaibara flickr.com/photos/kaibara/4481583340/

45. What perspective?

49. Working together More and more the big problems out there are such that stakeholders need to look for answers together ...

50. TSB’s investments in ICT/Digital Fostering the innovation climate (KTNs, KTPs) Technology-inspired ICT & EPES programme Challenge-led Digital programme Other Challenge-inspired innovation Intelligent transport, Modern built environment Innovation Platforms such as Assisted Living Application areas such as Creative Industries Support to EU programmes Pre-commercial procurement

51. The Technology Strategy Board’sDigital programme Mission: to help innovative businesses unlock the economic potential of digital technology, by identifying and addressing systemic challenges and resolving tensions between people, processes and technology.

52. Supply side Demand side Transport Energy ICT base Digital End-users Health Built env. Cities ..... Challenge-inspired, Sector specific innovation Digital programme, challenge inspired Technology innovation (e.g. ICT and “EPES”)

53. Some of our challenges .... Moving towards a world of pervasive digital services Building the case for investment in emerging digital infrastructure and platforms Enabling new business models and opportunities in a world of connected objects Increasing trust and resilience in a rapidly changing, connected world Improving people’s lives and experiences in the digital world Harnessing the economic value of information and content Enabling and creating business opportunities in and across new digital value networks and communities

54. Biggest challenge? “Internetization”.....

55. ... but not in isolation: Perspectives Information Services Advanced Infrastructure and Capabilities Digital Challenges Human Factors Value Networks, Communities and Businesses Risk and Resilience Digital Economics

58. £10m competition

59. Aiming to bring together Internet players and communities

60. Objective: resolving tensions in the overlaps

61. Proposals eligible only if straddling at least two areas

63. IC tomorrow A programme aimed at connecting an catalysing stakeholders in the Digital value network People with assets (content, data, infrastructure) Applications developers Users IT platform used to broker relationships, reduce barriers to licensing, run and manage trials Starting off with creative media Soon moving to public data [e.gLinkedGov].

64. On the horizon: “Internet of Things” Investment in the area of the “physical internet” The “we wills” Focus on ecosystem convergence of “connected things” Not a single competition, but a programme Reaching out to the verticals, not just the ICT community Ultimately helping enable innovative application and services development

65. UK’s businesses know best... Connectivity Scorecard The UK is an keen adopter of innovation Best in class in using ICT for creating value for business This is a systemic UK competitive advantage An indicator of the potential to absorb and create value frominnovation

66. http://www.innovateuk.orgtwitter: maurizio_tsb Dr. Maurizio Pilu THANK YOU