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Global Growth Companies and Technology PioneersCEO Workshop

July 2014

San Francisco, California, USA 19-20 June 2014

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The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.

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3Global Growth Companies and Technology Pioneers CEO Workshop

Contents

5 Introduction

6 Leveraging Disruption to Tackle Crucial Global Challenges

8 Talent in the 21st Century

11 Driving Impact through Complexity: New Models of Leadership

13 Scaling Operational Efficiency and Innovation

15 The Complexity and Paradoxes of Big Data for the Social Good

16 Norms and Values in Digital Media: Rethinking Intellectual Property

17 Community Lunch: Design and Technology

18 The Internet of Things – Business Models and Infrastructure

20 Smart and Connected Transportation

22 Disconnect to Connect: A Social Gathering

23 Participants

27 Acknowledgements


01: Joe Gebbia, Airbnb – welcoming participants to the workshop02: David Aikman, World Economic Forum03: (left to right) Linda Boland Abraham, comScore; Krista Donaldson, D-Rev04: (left to right) Razmig Hovaghimian, Viki; Chung Joon, SOLiD; Genri Goto, Kenko.com

Introduction

Global Growth Companies and Technology Pioneer companies share similar challenges and opportunities in scaling their companies while maintaining a flourishing innovative and entrepreneurial spirit. To derive the greatest benefit from cross-community interaction on this issue, the workshop aimed to:

– Build and enhance a sense of community among Technology Pioneer and Global Growth Company executives through peer-to-peer interaction and shared learning.

– Generate insight on issues of relevance to both communities through open and informal exchanges among stakeholders.

– Generate positive impact on Technology Pioneers and Global Growth Companies, their strategies and operations, within the broader mission of improving the state of the world.

The workshop themes reflect the issues of importance to the community that cut across sectors and countries. Several Global Growth Company Business Councils were launched.

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6 Global Growth Companies and Technology Pioneers CEO Workshop

Leveraging Disruption to Tackle Crucial Global Challenges

Longevity, urbanization and prosperity are greater than ever before in human history. At the same time, profound technological, process and business model innovations are transforming our lives, communities and institutions.

Technology can help address and alleviate the most pressing challenges of our time. What are these challenges and what is the role of technology in addressing them? Four crucial global challenges were addressed by a confluence of emerging technologies, government policy and new business models: Universal Connectivity, Income Gap, Climate Change and Sustainable Resources.

Moderator: Andrew Thompson, Chief Executive Officer, Proteus Digital Health Discussion Leaders: David Frigstad, Chairman, Frost & Sullivan Julius Genachowski, Managing Director and Partner, The Carlyle Group Lee Sang Yup, Distinguished Professor, Director and Dean, Korea Advanced Institute of Science and Technology (KAIST) Yossi Vardi, Chairman, International Technologies Ventures Session Rapporteur: Krista Donaldson, Chief Executive Officer, D-Rev: Design revolution

A week before the session, Jill Lepore, a writer for the New Yorker, set off a firestorm with her critique of the term “disruption”, and more specifically of Clay Christensen, the Harvard academic who coined the phrase “disruptive innovation”. Christensen describes disruption as “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”

Key points from the session debate:

– Be user-centric or die. New and disruptive solutions emerge when a problem is not solved, continues to not be solved and the user population that is unserved keeps growing. There seems to be a proverbial tipping point of demand. The focus of the disruptions is often on the supply of something new and innovative, yet the pre-condition is the demand. Organizations with user-centric design approaches will better anticipate, adapt and innovate.

– Often it is the product or the thing that is seen as the disruptor; not so. Just as often, there is an innovative business model to match the product. We see this clearly with the sharing economies of Airbnb, Lyft and others. But there are simpler innovations like direct sales to users in an industry that always had distributors.

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01: (left to right) Julius Genachowski, The Carlyle Group; Yossi Vardi, International Technology Ventures; David Frigstad, Frost & Sullivan; Lee Sang Yup, Korea Advanced Institute of Science and Technology02: Julius Genachowski, The Caryle Group – speaking with participants about crucial global challenges03: (left to right) Guo Xiao, ThoughtWorks; Krista Donaldson, D-Rev; Andrew Thompson, Proteus Digital Health; Srikar Reddy, Sonata Software


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– The speed of disruption is changing rapidly. In the days of Christensen’s research, technologies evolved over years – sometimes decades – until the disruption was evident (always clear in retrospect). The newer disruptors fill gaps quickly, almost unexpectedly, in areas that previously seemed too mundane for innovation. (Does anyone else think commercial air travel is next?)

– It was debated who will and can provide the leadership to solve critical global problems – industry, civil society, governments? All have roles, but it appears that policy is often behind, scrambling to catch up with industry and constituents. Proactive government leaders are needed to create and maintain an enabling environment for innovation.

– Disruptions are often hidden in the mundane details: Bill Gates, when speaking to the Technology Pioneers at Davos earlier this year, said that major global health challenges could be solved with “more people who can run grocery stores” – not the latest technology. We forget this when the focus can be on the big idea, especially in Silicon Valley. It is often the “little” ideas that change the game.

01: Participants debating solutions to global challenges02: (left to right) J. Alberto Yepez, Alienvault; Bill Tai, CRV03: Lee Sang Yup, Korea Advanced Institute of Science and Technology04: (left to right) Ann Winblad, Hummber Winblad Ventures; John Hagel III, Deloitte Center for the Edge; Anthony Goldboom, Kaggle05: Workshop Participants


Talent in the 21st Century

To develop talent faster, executives need to look beyond training programmes and focus on redesigning the work environment of front-line employees to accelerate learning and performance. The opportunity is to take a holistic approach, effectively integrating physical dimensions, virtual dimensions and relevant management systems. This session explored various dimensions of the opportunity, highlighting specific examples of initiatives and their impact. Dimensions addressed included: – Experimentation platforms to reduce risk and iterate

more rapidly – Smart capture and sharing of insights and reputation – Real-time performance dashboards and peer- to-peer

learning – Physical environments that support more effective

connections Facilitated by: Lionel Mohri, Head of Design Research Strategy, Intuit Special Guest: Brad Smith, President and Chief Executive Officer, Intuit

Discussion Leaders: John Hagel III, Co-Chairman, Deloitte Center for the Edge, Deloitte Tim Whipple, Head of Agent Community, NexRep Brian Doll, Vice President, Marketing, GitHub

Session Rapporteur: Shantanu Prakash, Chairman and Managing Director, Educomp Solutions

In the 21st century, talent development is not training. When considering talent development, it is important to look at the workplace environment as a whole and apply holistic principles of design. The design-oriented view encompasses management systems, workplace environment and the fact that today’s employees need to learn and work not only with internal employees but with people everywhere. The holistic approach has three main goals: Concentrate employee focus on issues of high performance and high importance – Support communication between employees and

between employees and management – Amplify the impact that talent can have on the business

outcomes by using collaborative, technology-oriented platforms

Some design principles which drive this thinking include: – A company’s readiness to experiment with models, tools

and platforms for talent

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01: Brad Smith, Intuit02: John Hagel III, Deloitte Center for the Edge03: Tim Whipple, NexRep04: (left to right) Maria Pinelli, EY; Chris Traub, SES Global; Gerald Loeb, SynTouch; K. Shan Padda, Health Integrated; Jean-Marc Frangos, BT Group; Adrian Turner, Borondi Group


– Using smart capture and sharing as a core aspect of performance and management review

– Real time performance feedback – Redesigning the physical workplace environment

towards one that embraces collaboration The opportunity to enhance employee engagement in talent development can be aided by social systems comprising daily polls, discussion boards, charts and real-time performance feedback that give employees the details they need to know what they accomplish daily. Gamifying tasks and teamwork often leads to greater productivity. Essentially, the world of command and control is over; focus now is on collaboration and cooperation. Smart capture is about creating and moving work online while documenting and capturing everything about work visibility.

– When did the conversation happen? – Ensuring that all conversation is captured and in

electronic format – It should be available and must have a URL – It should be asynchronous – It should not be interruptive

Key insights are often found in the detail and no one learns anything from private emails. Learning happens when everything is open. Privacy should be a special case scenario where everything is open by default and only private when absolutely necessary. It is important to be experimental and innovative. Organizations must recognize that costs of failure can be high. Hence, even if companies want to experiment, they can experiment in small ways by giving space, by creating a community of “innovation catalysts”, by providing unstructured time and wide spaces to people to develop their ideas, their projects and themselves. The role of the leader in leading and inviting experimentation will be the key to the success or failure of experimentation.

To the question of how to launch the “design thinking” approach, John Hagel, Co-Chairman, Center for the Edge, Deloitte, suggested focusing on taking those aspects of the organization to redesign which have the greatest impact. For example, on revenue growth or cost reduction, as incessant focus drills down the data, key insights emerge to do the re-designation. Organizations that focus on talent build a reputation for developing talent and that reputation alone attracts talent that is so scarce, he said.

Another issue raised was how to inspire employees, particularly in times of restructuring and transition. Building the right rituals as a part of a process can help, so that employees feel they are part of something bigger than themselves. The design process is based on trust that assumes competence and demonstrates benevolence.

Leadership Lessons: A Q&A with Brad Smith, Chief Executive Officer and President, Intuit

Q. How does Intuit keep their ability to move so quickly? A. Time management. I spend 40% of my time in managing operations and reviews. 30% is management of employees in real connections. 20% is outside engagement and shadowing other companies. 10% is unstructured time and reflection.Q. How do you foster the right mindset for culture in the company? A. When the student is ready to learn, the teacher will appear. There are four levels of learning: unconscious incompetence, conscious incompetence, conscious competence, unconscious competence. The key is learning to oscillate between the last two.

Q. What is the role of leadership in developing talent? A. Create an environment where people can learn and lead. Paint a grand challenge. Lead with questions NOT answers. Use experimentation to test your hypothesis.

Q. Is there a way to assess whether the company is making the right decisions about how to work? A. The key is to see if a culture is attracting the people and then see if the companies are surviving shifts in environments, to see if people can adapt. Can a company be a learning company and pivot its business model?

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01: Tim Brown, IDEO02: Silvia von Gunten, World Economic Forum


Q. To what level do you use social engagement in the outside community?A. An important part of community culture is ethnography. Get involved with customers at a deep level to see what it’s like to walk in their shoes. At Intuit, each employee gets 32 hours each year to participate in any cause they see as important to them personally. The mission is to give back to the community.

Q. How do you motivate employees to help each other? A. Focus on the natural leaders in the organization.

Q. How much time do you delegate to external ventures versus implementing frameworks? A. Face to face engagement is more impactful. One to many is secondary. Ask yourself (and others) three questions: What is better than six months ago? What is worse than six months ago? What can I do to make things better when I leave?

Q. How do you keep attracting talent when you are an older company and people want to work for the “new guy”? A. We have a young atmosphere, are located next to Google in Mountain View, but we try to produce an environment where people feel they contribute and do something important with their lives. As soon as you get a new hire, shorten the time to when they put code into play makes an impact. They can point that out to friends.

Q. In a volatile, uncertain, complex and ambiguous world, what helps a CEO remain aware and on top of things? A. Adaptability, but how do you build that into the organization? Fall in love with the problem, not the solution. When an issue comes up, think of three questions: Name three companies experiencing same issue and what are they doing? Tell me three people in our industry trying to solve this and which one inspires you? Tell us three groups inside the company that are looking to do something comparable?

Q. When change is needed what is the next thing that you think should be implemented?A. Be clear about what the goal is and then get out of the way. Create a common purpose. Create a shared consciousness. Empower execution where you are “eyes on and hands off”. Let people do what they do. Trust your team, assuming competence and benevolence.

Q. What advice do you have for effectively managing your board?A. Be clear about roles. Listen closely to the board. Make sure their role is to give direction, not manage. Give the board the stuff you need help on rather than just stuff that is good news, because the board wants to help.

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01: (left to right) Lionel Mohri and Brad Smith, Intuit


Driving Impact through Complexity: New Models of Leadership

What is required from leaders when addressing complex problems? Dimensions to be addressed include: – Understanding human-centered design – Leveraging talent in the digital age – Embracing decentralized, creative organizations

Facilitated by: Banny Banerjee, Associate Professor and Director, Stanford Change Labs, Stanford University Session Rapporteur: Jorge Soto, Founder, Data4

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Scaled challenges must be met by scaled solutions, not incremental ones.

Banny Bannerjee, Associate Professor and Director, Stanford Change Labs, Stanford University

Innovation is difficult. It takes focus, openness, risk taking, testing, iterating and sometimes, a little bit of luck. However, today more than ever we need to think out of the box because are living in a world where the confidence levels to succeed in tackling humanity’s grandest challenges is very low, just 15 years before our deadline. According to the World Bank, by 2030 we should have at least 40% more fresh water, 45% more food, 39% more energy, 50% reductions in CO2 and a maximum of 700 million people living in poverty instead of the three billion today.

There is shared recognition that the old ways of problem solving are not working. That we have failed in taking people out of poverty, providing water or food to almost half of the world’s population. Business as usual is not good enough and new solutions are needed to solve old problems. The world needs extremely powerful innovation techniques and implementation systems that can tackle our grand challenges in relevant time frames. And for that we need to start understanding how can we encourage, foster and enable scaled innovation in our organizations and in our own problem solving methodology.

There are different, and sometimes very limited views on what innovation means. Bannerjee offered a comprehensive definition of innovation: “Innovation is outperforming normative modes, to drive new behaviors, outcomes, value creation and system transformations at scale”.

After discussing the need for short- and long-term solutions with radically new approaches and business models, Bannerjee introduced a transdisciplinary and transagency co-creative approach. This implies that it is first necessary to understand the ecosystem of the problem to be addressed from different views: science, engineering, data, policy, industry, business, behavior and innovation.

01: Banny Banerjee, Stanford University02: (left to right): Guo Xiao, ThoughtWorks; Jorge Soto, Data4; Pradeep Sharma, Rhode Island School of Design03: Eben Bayer, Ecovative Design


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With the objective to put this discussion into practice, facilitated by the Stanford ChangeLabs staff, participants were separated into teams and each team was assigned a grand challenge (water stress, food security, climate change, rapid urbanization and financial inclusion). They were asked first to understand the dynamics driving each problem, then to come up with possible intervention pathways, embed scalability into the intervention and finally to question and validate the current process. Each team was asked to work on a highly scaled and complex challenge considering that each had a $1 billion fund to use towards a scaled strategy that would deliver the most transformative and deep impact. Considering the magnitude and scale of the challenge, $1 billion is meager – this forced each team to start thinking about impact multiplication and designing a scaled intervention strategy.

The first phase of a scaled intervention strategy is to understand the driving dynamics of the challenge. That is, to identify underlying phenomena and the root causes of the challenge, and thus, identify powerful leverage points to transform the system behavior. The expected outcome of this initial step is to have clearly identified what to change and how to change it.The second phase is to identify the intervention pathways. Having targeted the most important set of driving dynamics and root causes, the result of this step is to design strategic paths of action.

Finally, the third phase is to brainstorm at scale (scale storm). The scaled innovation work and solutions can be directed through: positive feedback loops that reinforce the behavior, resource multiplication, novel economic engines, distributed systems and piggy backing on previous existing channels.

01: Workshop participants discussing leadership techniques that drive impact02: Practical exercises for addressing complex world problems

In just one hour, each team came up with scalable strategies to solve humanity’s grandest challenges. The common trait of all the team’s solutions were that to understand complex issues require deconstruction in order to examine root causes and that complex issues cannot be addressed by governments alone, but require a multistakeholder approach.

The world’s biggest problems are the world’s biggest opportunities. We need a brand new thinking regime. Most innovation dies inside companies and bureaucracies if it’s anything other than incremental, because it threatens them. To deliver on innovation as a fundamental part of how companies operate, they must have leaders who know how to foster and support creative thinking, who enable and support the right kind of risk taking, who understand the value of ideas and that know how to encourage and let their teams innovate.

Key points: – Force yourself to think about the problem without

thinking about solutions – Think of scaling since day one and find points of leverage – Look at each individual problem through a variety of

lenses – Empathize with the users’ experience; define goals and

motivations of the user; test solutions


Scaling Operational Efficiency and Innovation

How do you increase operational efficiency while maintaining the innovation and nimbleness that makes your business such a success? Dimensions discussed include: – Marketing and Branding – Culture, Organizational Design – Finance and Growth Strategy – International Expansion

Moderator: Linda Boland Abraham, Co- Founder and Executive Vice-President, Global Development, comScore Discussion Leaders: Chip Conley, Head of Global Hospitality, Airbnb Robert I. Sutton, Professor, Management Science and Engineering, Stanford School of Engineering, Stanford University Jaleh Bisharat, Head of Marketing, Elance-oDesk Mitch Zuklie, Chairman, Orrick Herrington & Sutcliffe

Marketing is what you do. Branding is who you are.

Jaleh Bisharat, Head of Marketing, Elance-oDesk

Culture is what happens when the boss isn’t around. Successful companies invest in culture.

Chip Conley, Head of Global Hospitality, Airbnb

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Session Rapporteur: Andres Ruzo, CEO, LinkAmericaIn today’s increasingly global, hypeconnected VUCA, we ascertained that this new term outlines the challenges that companies and leaders effectively face in today’s market.

There was clear consensus that fostering a unique “culture” is perhaps the most important factor in determining the success trajectory of a venture that seeks sustainable operational efficiency and scale. Culture is therefore the cornerstone of any organizational success and growth strategy. Complete alignment is critical to drive required operational effectiveness and continued innovation into any “start up” or “rapid growth” businesses. Too often, business transformation efforts concentrate on process improvement strategies and reengineering while essentially ignoring the human aspect of the change initiative. Transformation initiatives therefore do not achieve the desired results. Studies have shown that approximately

01: (left to right) Chip Conley, Airbnb; Robert Sutton, Stanford University; Jaleh Bisharat, Elance-oDesk; Mitch Zuklie, Orrick Herrington & Sutcliffe02: (left to right) Srikar Reddy, Sonata Software; Changhua Wu, Climate Group; Adrian Turner, Borondi Group; Brian Doll, GitHub03: Chip Conley, Airbnb


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01: (left to right) Shyam Sankar, Palantir Technologies; Nathaniel Manning, Ushahidi; Maria Pinelli, EY02: Linda Boland Abraham, comScore03: Michael Wolf, Activate04: Scaling Operational Efficiency05: Robert Sutton, Stanford University

three-quarters of business re-engineering efforts do not achieve their objectives and subsequently do not sustain themselves or even scale over the long term. One of the most commonly cited reasons for their failure is the lack of focus on the organization’s culture. People, processes and technology are the three key critical elements that need focus and special attention to drive scale, scope and speed into business.

Key discussion points: – Stay true to the organization’s culture at all times –

create DNA fingerprints in all you do – Marketing is what you do. Branding is who you are. – Branding – Do what you say and say what you do. – Organizational design – be aware of “The problem of

more”… – In the startup phase – set rules and adhere to them. – In the rapid growth phase – be ready now! – International – think global, act local.

The rapporteur challenged participants to redefine their business value proposition based on a mobile, social and hyperconnected society, focusing on innovative solutions that drive scale, scope and speed in the business. In summary, it can be said that this is the era of the WHY. Purpose and passion are central to any organization, and this is something that cannot be either dictated or feigned, it is something that must be developed and demonstrated. What will the future bring? In the current ecosystem, we cannot tell. But looking at some megatrends, attitude appears more important than aptitude. If we want to be proactive in the VUCA era and develop skills sets in advance – the economy is becoming more “NBIC “– Nano, Bio, Info and Cogno.


The Complexity and Paradoxes of Big Data for the Social Good

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01: Workshop Participants02: Big Data for the Social Good03: Alix Dunn, The Engine Room, leading a discussion on big data

Session Rapporteur: Chris Beard, Chief Executive Officer, Mozilla

How to unlock the potential for big data to create social good in the context of human rights and humanitarian aid was the focus of this session. If natural disaster strikes, for example, how can we ensure NGOs can access data that will help save lives in a way that also respects the needs of other participants who manage or generate that data? The complexity of this opportunity wash an examination of the underlying incentives and risks for all participants in the data ecosystem, from individuals to data providers to NGOs.

As a framework, we explored requirements around ensuring accountability, transparency and the empowerment of individuals as necessary precursors to establishing a trusted and robust ecosystem. Two key themes emerged as barriers to unlock the potential for big data for social good: the friction for data providers around sharing (and losing control of) data that is a core asset for their competitive advantage, and, the unintended consequences to individuals (and the data ecosystem at large) in having large-scale data sets widely available, e.g. circumvention of privacy and data protection, government surveillance, political retribution, commercial exploitation, and more.

In my view, unless we address this friction for data providers and mitigate the potential for unintended consequences to individuals we are unlikely to be successful in unlocking the social good.

As a way forward, we should explore both technical and policy approaches to create data exchanges or escrows that provide the necessary controls to ensure that data contributed to a social good is used only for that purpose. This must be a fully accountable and transparent process, so access and the data itself are only used as intended.

From a policy standpoint this could mean the establishment of a certification framework with one or more non-profits acting as data exchanges or escrows. Data providers could then build into their privacy policies the ability to participate in these certified exchanges, removing one of the key barriers to participation. From a technology standpoint, the ideal would then be some form of software guaranteed data protection with revocable usage controls and rights. Positive actors in this data ecosystem could then accomplish data analysis for a particular social benefit while protecting against unintended consequences of data sharing -- and the risk of losing competitive advantage or violating the privacy rights of individuals.

Establishing a trusted verifiable commons for the exchange and analysis of big data could go a long way toward enabling better and more effective collaboration between individuals, data providers, governments and NGOs in the context of human rights and humanitarian aid.


Norms and Values in Digital Media: Rethinking Intellectual Property

What legal and technical solutions are required to enable more content sharing and communal creation? Can the future intellectual property (IP) framework support more models than ownership-and-payment for creative works?Dimensions to be addressed: – Technology enablers – Business model and value chain shifts – Legal and policy framework

Discussion Leaders:Razmig Hovaghimian, Founder and CEO, VikiJeff Jarvis, Professor, City University of New York Graduate School of Journalism, BuzzMachinePaolo Lanteri, Legal Officer, World Intellectual Property Organization (WIPO)Cecily Mak, General Counsel and Corporate Secretary, FlipboardRobert Osher, President, Sony Pictures Digital Production DivisionTimothy Vollmer, Manager of Public Policy, Creative Commons

Session Rapporteur: Chris Traub, Chairman, SES GroupA diverse group of 15 GGC and Tech Pioneer companies met with the goal of envisioning and imagining new, flexible technology and legal frameworks to support multiple business models. Participants discussed different models that could serve as alternatives or supplements to the ownership and payment model, including: creative commons model, the patronage model, the popularity model and the data as payment model. It was agreed that these models are not mutually exclusive and that there exists significant interplay between them. Exploration of how these models translate internationally was encouraged.

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01: Jeff Jarvis, City University of New York Graduate School of Journalism02: Vikram Kumar, Dimagi, leading a discussion on intellectual property03: Participants of the discussion

Also discussed was the notion of “credit-right” and attribution, noting that attribution can be just as salient to contributors of content as copyright due to the social capital it provides. As one participant noted, “recognition in and of itself is powerful.” The high potential of data as a form of currency was also mentioned. Demographic data on users and their preferences is just as powerful as hard dollars if it is of high quality and easily digestible. The rise of digital content makes it easier to track and analyse use and user demographics on a significant scale and it is necessary to establish a structure around data as currency for content.

Participants identified the criteria needed to build flexible and dynamic system(s) around digital content. They include:Metadata : Need to attach metadata to content that records contributions along chain of creation and distributionMarketplace: Need a means to measure and value contribution and negotiate rewards and permissionsPayment structures: Need payment structures to handle multiple currencies (including data)Legal Framework: Need policies that support models other than traditional ownership-payment modelGeographic Flexibility: Need to ensure the system transcends geographic borders (as content does)


Community Lunch: Design and Technology

Opening remarks by Chris Wanstrath, Chief Executive Offficer and Co-Founder, GitHub. Special Guest: John Maeda, Design Partner, Kleiner Perkins Caufield & Byers

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01: Chris Wanstrath, GitHub02: John Maeda, Kleiner Perkins Caufield & Byers03: (left to right) Shan Padda, Health Integrated; Andrés Ruzo, Link America04: (left to right) Hank C.K. Wuh, TruTag Technologies; Ann Winblad, Hummer Winblad Venture Partners05: John Maeda, Kleiner Perkins Caufield & Byers – talking about design and technology at the community lunch

A good design is both familiar and novel.

John Maeda, Kleiner Perkins Caufield & Byers


The Internet of Things – Business Models and Infrastructure

What are the required catalysts and enablers for leveraging the internet of things economy? - Dimensions to be addressed:- New business models- Economic implications- Infrastructure context

Facilitated by: Adrian Turner, Chief Executive Officer, Borondi Group

Discussion Leaders:Sara Clemens, Chief Strategy Officer, PandoraAnthony Goldbloom, Founder and Chief Executive Officer, KaggleTarkan Maner, Chief Executive Officer, NexentaPeter Schwartz, Senior Vice-President, Global Government Relations and Strategic Planning, Salesforce.comYossi Vardi, Chairman, International Technologies Ventures

We don’t yet know how consumers will react to the Internet of Things.

Peter Schwartz, Salesforce.com

In an increasingly hyperconnected world, there will emerge a united nations of things to deal with complex cross-border issues.

Adrian Turner, Borondi Group

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Session Rapporteur: David Ulevitch, CEO, OpenDNS:Computing power today makes it economically feasible to collect, store and process vast amounts of data to extract key insights. It is a natural technology evolution to harness that capability and enable millions of devices to be connected to the Internet where they can provide data, metrics and actions on a vast scale – an Internet of Things. Just as the business opportunities are massive – for instance, reading a cargo ship manifest and comparing it to actual inventory in seconds, or taking precise weather, water and soil samples from every plot of farmland in the United States every five minutes – so too are the potential privacy and legal concerns.

As with most evolutionary technology steps, it’s important to be cognizant of the risks to privacy in the collection and use of data, but that should not impair the advancement of incredible business efficiencies. The legislative environment in the EU promotes the idea that the use-case for data collection needs to be defined at the time and point of collection, and not later on. Unfortunately, this is not a reasonable request. The potential applications of data analysis are not always known until other events happen, or the state of the art advances. Every transaction, page load and communication on the Internet should be a privacy concern; Internet of Things does not alter that. Moreover, as our society begins to place a higher premium on privacy, our cultural expectations, behaviours and laws will adjust accordingly. To try to pre-empt this with legislation would be overreaching. I believe that our society has benefitted tremendously from the reality that technology legislation lags behind technology innovation.

01: Peter Schwartz, Salesforce.com02: Anthony Goldbloom, Kaggle – leading a discussion on the Internet of Things new business models.


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One point about the Internet of Things that bears reinforcing is that it might very well be an Internet of Industrial Control Devices. We might be measuring flow in power grids, movement of water, inventory of supply, etc. It might not have much to do with people at all. And yet, in the aforementioned examples, we know there are incredible efficiencies that can be realized by having the capability to measure, monitor and track the fundamental components of an industrial society. Even as we become an information-driven economy, the industrial building blocks need to come along for the ride. Connecting them to the Internet helps do that. The potential cost, power and waste savings are so large as to be difficult to estimate. But we should find out, and we should maximize the opportunity.

To answer the question: “How do we open up and capture incredible opportunities, and store data from millions or billions of Internet-connected devices, but prevent potential privacy abuses we might not know could exist?,” I think we have to admit there is risk, but it’s a risk worth taking.

The world is moving in a direction where the internet of things is becoming everything. It can improve operational efficiencies and create new types of engagement, but it is also important to explore the unintended consequences, e.g. the move to where platform economics dominate; blurring boundary between hardware and software; rising importance of situational awareness of identity and environment. Risk and reward will be more linked and transparency will be of utmost importance.

01: Yossi Vardi, Chairman, International Technologies Ventures02: Tarkan Maner, CEO, Nexenta and participants of the discussion03: J. Alberto Yepez, Chairman, Alienvault

A lot of new business opportunities are emerging in this space. Our capacity to act goes before the demand and the lack of infrastructure will not stop the internet of things. The main constraint will be investments: opportunities are so big, but the important question is who will fund them? There are also trade-off between merits of collecting data for long term and privacy issues. Do consumers have the right to audit algorithms that run internet of things using their data? The pace of change and our ability to leverage the internet of things economy is dependent on our acceptance of new phenomena. The internet of things opens tremendous opportunities, but many users don’t know the consequences.


Smart and Connected Transportation

How can we combine existing technologies to bring us closer to truly integrated travel and self-driving vehicles? Dimensions to be addressed: – Technical solutions – Industry cooperation: standards, joint – ventures and consortia – Business models

Special Guest: Charles Ehredt, Group Director, New Ventures and Innovation, Odigeo Moderator: John Moavenzadeh, Senior Director, Head of Mobility Industries, World Economic Forum USA Discussion Leaders: Rodney Brooks, Founder, Chairman, and Chief Technical officer, Rethink Robotics Charles Ehredt, Group Director, New Ventures and Innovation, Odigeo Toshiro Muramatsu, Director, Vehicle Information Technology, Nissan MotorCyriac Roeding, Co-Founder and Chief Executive Officer, shopkick Inc., Simon Sproule, Vice-President Marketing and Communications, Tesla Motors Robert Torres, Managing Director of Travel, Google

Session Rapporteur: Andrew Zimmerman, President, frogThe first breakout session focused on the concept of integrating and facilitating the travel experience. For example, when a consumer books a flight to a city, other apps are informed and the customer receives information and offers related to restaurants and tourist venues in that city. Charles Ehredt, Head of New Venture and Innovation at Odigeo, described a travel industry initiative to establish standards and a platform that the travel industry could plug into to offer an integrated travel experience. Two models were considered for implementation.

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The first is to provide a joint platform solution, a central system that allows for integration of different transport providers and enables the desired user experience. Such an approach rests on the ability to create a consortium of key players and encourage them to integrate their processes and systems to allow for such an experience. Such consortiums, however, are difficult to implement due to concerns regarding data and revenue sharing and potential anti-competition clauses.

Silicon Valley entrepreneurs in the group suggested a second model that advocates starting on a smaller scale with a problem that can be clearly defined and decisively addressed and then enabling a user experience that is so compelling that it captures the market. They suggested that a start-up was more likely to come up with a breakthrough app in the travel space rather than established industry incumbents. They suggested that others would draft behind the entrepreneur’s wake, plugging into their standards. Others believed the industry consortium model was a good one, perhaps with an integrating agent like a Google or Facebook playing a key facilitating role. But whenever any of the large players were named, they also became the potential “villain” of the travel industry.

Participants noted that one of the most frustrating elements of travel is the need for constant identification, repeatedly having to prove that we are indeed who we say we are. This is inefficient and a poor customer experience, as it re-emphasizes that one is not known or valued, but is rather a number to be moved. Participants agreed that eliminating constant identification through better technology and data integration presents a huge opportunity to improve the travel experience.

Finally, it was pointed out that some of the key travel intermediaries were realizing very high margins and were likely to be cautious in supporting any integration that might lower the barriers to entry in their particular segment of the industry.

A second breakout session focused on the self-driving car. Of prime interest to the group was who would be the early adopters of this technology. Two groups emerged, at opposite ends of the age spectrum. For ageing Baby Boomers, self-driving vehicles could represent a way to retain their cherished independence via access to mobility. For hyperconnected Millenials, however, the value proposition revolves around their view of mobility as a service. For them, many might gladly give up the “hands on” control of the steering wheel in order to have “hands on” control of their smartphone.

01: Rodney Brooks, ReThink Robotics, leading a discussion on smart and connected transportation


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01: Toshiro Muramatsu, Nissan Motor02: Cyriac Roeding, shopkick03: Workshop Participants

Keeping with the theme of opposite ends of the spectrum, session participants hypothesized that self-driving vehicles would be more popular at either end of the pricing spectrum. For luxury cars, self-driving vehicles represent the logistical next step in the ever-growing array of driver assistance technologies. For budget cars, self-driving technology can be an ideal addition to an intra-urban mobility offering in the likes of DriveNow, Lyft or Uber.

John Moavenzadeh, Head of Mobility Industries, World Economic Forum USA, was optimistic that enlightened cities, early adopters of smart city technology, were the prime candidates for scaled implementation.

Keeping with the theme of duality, there were two views regarding adoption timeline. One view was incremental; namely, we would take a long time to get to truly self-driven cars, but the sophisticated assisted driving technologies would roll out and the driver would increasingly “give up” the driving to the car, while always maintaining ultimate responsibility for it.

The other view was the convergence of a number of trends—smart city, urbanization in emerging markets, the sharing economy and the growing millennial and aging segments – would create a true self-driving car market within the next decade.

All participants agreed that technology and new business models provide a tremendous opportunity to transform personal transportation systems.


Disconnect to Connect

A social gathering at a private ranch in Woodside, California, hosted by David Frigstad, Chairman, Frost & Sullivan.


Participants

Michael Wolf Founder and Managing Partner Activate USA

Joe Gebbia Co-Founder and Chief Product Officer Airbnb USA

Chip Conley Head of Global Hospitality Airbnb USA

J. Alberto Yepez Chairman Alienvault USA

Ma Zhongwei Chairman Anshan Qinyuan Energy-Saving Equipment Manufacturing Co.

People’s Republic of China

Linda Boland Abraham Co-Founder and Executive Vice-President, Global Development

comScore USA

Jorge Soto Founder Data4 Mexico

Oren Netzer Chairman DoubleVerify USA

Krista Donaldson Chief Executive Officer D-Rev: Design Revolution

USA

Eben Bayer Founder and Chief Executive Officer Ecovative Design USA

Shantanu Prakash Chairman and Managing Director Educomp Solutions India

Paul Nahi President and Chief Executive Officer Enphase Energy USA

William Lansing Chief Executive Officer Fair Isaac Corporation (FICO)

USA

Andrew Zimmerman President and Chief Executive Officer frog USA

David Frigstad Chairman Frost & Sullivan USA

Brian Doll Vice President, Marketing GitHub USA

Chris Wanstrath Chief Executive officer and Co-Founder GitHub USA

Shinichi Takamiya Partner and Chief Strategy Officer Globis Capital Partners Japan

Guillermo Romo President Grupo Mega Mexico

K. Shan Padda Chairman and Chief Executive Officer Health Integrated USA

Tim Brown Chief Executive Officer IDEO USA

Anthony Goldbloom Founder and Chief Executive Officer Kaggle USA

Genri Goto Founder and Chief Executive Officer Kenko.com Japan


Andrés Ruzo Chief Executive Officer Link America USA

Adrian Turner Founder and Managing Director Borondi Group USA

Carlo Dapuzzo Founding Member and Partner Monashees Capital Brazil

Chris Beard Chief Executive Officer Mozilla USA

Tarkan Maner Chairman and Chief Executive Officer Nexenta USA

David Ulevitch Chief Executive Officer OpenDNS USA

Mitch Zuklie Global Chairman and Chief Executive Officer

Orrick Herrington and Sutcliffe

USA

Shyam Sankar President Palantir Technologies USA

Andrew Thompson Chief Executive Officer Proteus Digital Health USA

Michael Fertik Founder and Chief Executive Officer Reputation.com USA

Rodney Brooks Founder, Chairman and Chief Technical Officer

Rethink Robotics USA

Ram Shanmugam Chief Executive Officer Sacrum Inc. USA

Walter Schindler Founder and Managing Partner SAIL Capital Partners USA

Chris Traub Chairman SES Global Limited Taiwan

Cyriac Roeding Co-Founder and Chief Executive Officer shopkick USA

Chung Joon Chief Executive Officer SOLiD Republic of Korea

Srikar Reddy Managing Director and Chief Executive Officer

Sonata Software India

Perry Tam Co-Founder and Chief Executive Officer Storm8 USA

Gerald Loeb Chief Executive Officer SynTouch USA

Guo Xiao Chief Executive Officer ThoughtWorks USA

Hank C. K. Wuh Co-Founder and Chairman TruTag Technologies USA

Razmig Hovaghimian Co-Founder and Chief Executive Officer

Viki Singapore

David Aikman Managing Director, Head of New Champions

World Economic Forum Switzerland

Rodolfo Lara Torres Director, Deputy Head of Global Growth Companies

World Economic Forum Switzerland

John Moavenzadeh Senior Director, Head of Mobility Industries, World Economic Forum USA

World Economic Forum USA

Silvia von Gunten Director, Head of Technology Pioneers and North America Membership

World Economic Forum USA


Technology Pioneer Selection Committee Members and Special Guests

Stephen Cross Chief Executive Officer Aon GRIP Solutions

Aon Corporation Ireland

Jean-Marc Frangos Managing Director, External Innovation BT Group Plc France

Andrew Tarver Chief Executive Officer of Bold Rocket Capital Markets Company (Capco)

United Kingdom

Jeff Jarvis Professor City University of New York Graduate School of Journalism

USA

Tim Vollmer Head of Public Policy Creative Commons USA

Bill Tai General Partner CRV USA

Donn Tice Chairman and Chief Executive Officer d.light design USA

John Hagel III Co-Chairman Deloitte Center for the Edge

USA

Vikram Kumar Co-Founder and Chairman Dimagi USA

Ravi Moorthy Executive Vice President Bay Area Edelman USA

Jaleh Bisharat Head of Marketing Elance-oDesk USA

Jane Marie Chen Co-Founder and Chief Business Officer Embrace Innovations USA

Maria Pinelli Global Vice-Chair, Strategic Growth Markets

EY United Kingdom

Cecily Mak General Counsel Flipboard USA

Brett Rochkind Managing Director General Atlantic USA

Rob Torres Managing Director of Travel Google USA

Meredith Kendall Head of Communications Hulu USA

Eileen Donahoe Director of Global Affairs Human Rights Watch USA

Max Levchin Founder and Chief Executive Officer HVF USA

Ann Winblad Co-Founder and Managing Director Hummer Winblad Venture Partners

USA

Yossi Vardi Chairman International Technologies Ventures

Israel

Brad Smith President and Chief Executive Officer Intuit USA

John Maeda Design Partner Kleiner Perkins Caufield & Byers

USA

Lee Sang Yup Distinguished Professor, Director and Dean

Korea Advanced Institute of Science and Technology (KAIST)

Republic of Korea

Patricia Rios Haniger Global Director, KPMG Technology Innovation Center

KPMG USA

Nathan Wolfe Founder and Chief Executive Officer Metabiota USA

Brian Behlendörf Managing Director Mithril Capital Management

USA

Yves Pitton Senior Vice-President, Director and General Manager, Advanced Advertising

Nagra Kudelski Group Switzerland

Tim Whipple Head of Agent Community NexRep USA

Toshiro Muramatsu Director, Vehicle Information Technology Division Silicon Valley

Nissan Motor Corporation

USA

Charles Ehredt Group Director, New Ventures and Innovation

Odigeo Spain


Mireille Hildebrandt

Professor, Smart Environments, Data Protection and the Rule of Law

Raboud University Nijmegen

Netherlands

Pradeep Sharma

Provost

Rhode Island School of Design

USA

Jochen Mundinger Founder and Chairman RouteRank Switzerland

Ripley Martin Senior Director, Corporate Strategy Royal Philips USA

Marco Cantamessa Professor, Department of Management and Production Engineering (DIGEP)

Politecnico di Torino Italy

Peter Schwartz Senior Vice-President, Global Government Relations and Strategic Planning

Salesforce.com

USA

Jeremy Howard Data Science Faculty Singularity University USA

Robert Osher President Sony Pictures Digital Productions

USA

Banny Banerjee Associate Professor; Director, Stanford Change Labs

Stanford University USA

Robert Sutton Professor, Management Science and Engineering, Stanford School of Engineering

Stanford University USA

Simon Sproule Vice President, Marketing and Communications

Tesla Motors USA

Julius Genachowski Managing Director and Partner The Carlyle Group USA

Changhua Wu Director, Greater China The Climate Group People’s Republic of China

Alix Dunn Creative Lead & Co-Founder the engine room USA

Nathaniel Manning Executive Director Ushahidi USA

Sam Gregory Program Director WITNESS USA

Paolo Lanteri Legal Officer

World Intellectual Property Organization

Switzerland

Jason Harris Chief Executive, International Property and Casualty

XL Group United Kingdom


Acknowledgements

We would like to thank the World Economic Forum colleagues without whose effort and support this workshop and industry initiatives would not have been possible:

David Aikman, Rod Ajates, Silvia von Gunten, William Hoffman, Satu Kauhanen, Janine Khraishah, Elena Kvochko, Floris Landi, Darko Lovric, Annie Luo, Jesse McWaters, Simon Mills, Alex Mitchell, John Moavenzadeh, Lisa Pang, Bernhard Petermeier, Thomas Philbeck, Emily Richards, Adam Sherman, Rodolfo Lara Torres, Marika Volosin, Nina Vugman, Andrea Wong.

World Economic Forum91–93 route de la CapiteCH-1223 Cologny/GenevaSwitzerland

Tel.: +41 (0) 22 869 1212Fax: +41 (0) 22 786 2744

[email protected]

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.

Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests.

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