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SUPPLEMENT GRATUIT AU # 22701 DU QUOTIDIEN”LES ECHOS” DU 24 MAI 2018

NE PEUT ETRE VENDU SEPAREMENT

AFRICA:TECH’SNEWFRONTIER

LVMH’S DIGITALTRANSFORMATIONQ&A WITHIAN ROGERS

LA FRENCH TECHHAS THE HYPESURPASSEDTHE REALITY?

ON THE MOVEJACQUES ASCHENBROICHEXPLAINSVALEO’S STRATEGY

#6 – May 2018 – Special Edition for VivaTechnology

SPECIAL EDITIONFORFOR

ADVERTORIAL

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industry and more and morebuilders have understood andadapted their range to this newsolution which is better and bettercontrolled. At Jaguar, this transitionis translated by the birth of a newmodel, completely in tune with thetimes, an SUV that sports elegantlines, luxurious and spacious interiorand autonomy. The breathtakingperformances of the I-PACE, sincethat is his name, has been officiallypresented at the Geneva MotorShow. Designed by Ian Callum andthought by Jaguar engineers, theI-PACE is a vehicle full of promisesfor the greatest use practices daily,and especially without any pollutingemissions. For Jaguar, it representsa remarkable beginning of a longadventure towards a cleaner and

more efficient range. For the brand,the electrification of its vehicles isnot just an argument of industrialcleanliness, but a real appropriationof a constant evolution technology,in order to create new excitingmodels to drive and that are alwaysin step with its own identity. Withthe I-PACE, the first step of this hugechallenge is accomplished in themost beautiful ways!

With the new Jaguar I-PACE, it hasnever been so exciting andconvenient to own a 100% electricvehicle. This is primarily due toits unique design, but also andespecially to the progress madeboth in the battery technology andcharging solutions. These factorscome together to make this vehiclethe most desirable, easier to live,efficient and fun to drive, in theworld. At the heart of its structure,

we can find a state-of-the-art90kWh lithium-ion battery composedof 432 cells. Chosen for their highenergy density and better thermalmanagement: thanks to them, theI - PACE boasts an autonomy of 480km. The charge of the battery from0 to 80% is done in barely 45 minutesusing a 100 kW fast charger.With a 7kW wall box type home charger, youcan reach a 80% charge in 10 hours30 minutes, perfect time for a chargeovernight. A variety of technologicalsolutions and applications forsmartphones optimizes the autonomyof I-PACE and gives drivers completepeace of mind, whether it is to monitorthe vehicle charge from home orto ensure the remaining autonomyduring a trip.

Electrical performanceThe new I-PACE is equipped withfour-wheel drive as standard.Associated to the 400ps power and696 Nm of torque, they make this 1stJaguar zero emission vehicle, one ofthe most performant electric car. Theimmediate availability of the couple,inherent in the nature of an electricvehicle, gives the new Jaguar SUV animpressive acceleration ability, from0 to 100 km / h in just 4.8 seconds.

ELLE VA FAIRE DU BRUIT,MAIS PAS SUR LA ROUTE

NOUVELLEJAGUAR I-PACE 100%ÉLECTRIQUE

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L’art de la performance*Autonomie jusqu’à 480 km, qui est susceptible de varier selon notamment la configuration du véhicule, l’état de la batterie,le style de conduite, le type d’utilisation, les conditions climatiques ou l’environnement routier.**En utilisant un chargeur rapide de 50 kW à courant continu (DC). Les temps de recharge réels peuvent varier selon les conditionsenvironnementales et l’équipement de recharge utilisé.Consommation mixte (l/100 km) : 0. Émissions de CO2 (g/km) : 0.Jaguar France. Siren 509 016 804 RCS Nanterre.

Jaguar, partenaire de la 3ème édition de

— P.5

LETTER FROM THE EDITOR

This issue marks the one-year anniversary of TheInnovator.The launch pad for ourmagazine was last year’s VivaTechnology conference. It was a fitting setting. The raison d’êtrefor the Paris conference, which is jointly owned by Les Echosand Publicis, is to bring together big corporates and start-ups.It is also one of The Innovator’s key missions.Articles in ourMay Viva Technology special edition demonstratethat there is a greater need for such collaboration then everbefore. It will be difficult for politicians in France and the EU torealize their ambitions to become leaders in artificial intelligencewithout the help and support of the private sector. Hub FranceIA is working hard to bring together corporates and startups tocreate a united AI ecosystem that complieswith European ethics,laws and regulations and serves the European economy first.Viva Technology, whichwill this year gather some 100 of Africa’sbest startups and thousands of entrepreneurs from around theworld, is another great way for companies to engage withstartups. I urge them to take advantage of it.

ByJenniferL.SchenkerEditor-in-Chief, The Innovator

THE BRIEF

COVER STORYAFRICA: THE NEWTECH FRONTIER

THE FINTECH THAT IS DRIVINGTHE GROWTH OF AFRICA’S SMES

HOW TECH IS HELPING TACKLEAFRICA’S HEALTHCARE CHALLENGES

POWERING (AND EMPOWERING)AFRICA

THE STATE OF THEFRENCH TECH NATION

FRANCE’S AI AMBITIONS

THE 25 STARTUPS TO MEETAT VIVATECH

AN INTERVIEW WITH IAN ROGERS,CDO OF LVMH

REINVENTING LUXURY RETAIL

RE-ENGINEERING THE INTERNET

LIVING WITH UNCERTAINTY

AN INTERVIEW WITH JACQUESASCHENBROICH, CEO OF VALEO

PREVENTING AI BIAS

WHAT EVERY EXECUTIVE NEEDS TOKNOW ABOUT QUANTUM COMPUTING

BLOCKCHAIN: BEYOND THE HYPE

HELPING CHANGE MANAGEMENTTAKE FLIGHT

P.06

P.08

P.12

P.14

P.18

P.24

P.32

P.34

P.36

P.38

P.42

P.46

P.48

P.50

P.52

P.55

P.56

TABLEOF CONTENTS

P.6 — THE INNOVATOR

Jacques Bughin,a senior partner at McKinsey and scheduled speaker at Viva Technology.Bughin is the co-author of a new report about what skills will be in demand in2030 when artificial intelligence dominates the workplace.

“Sinceemployment itselfwillberadically transformed companiesshouldnotadoptawait-and-seeapproachbutuse AI toredefinethecore oftheirbusiness.”

THE BRIEF

It’sbecomeafamiliar refrain:robotswillgetever-moresophisticateduntil they effectively replacemanyjobs now done by humans.Justhowmanypeoplewillbeaffectedand how soon is proving hard toforecast. One often-cited 2013academic study estimated that upto half of U.S. jobs could beautomated. But a study released inApril by the OECD predicted a lessdramatic effect: namely that 14%of jobs in developed countrieswerehighly automatable,while a further32%of jobswere likely toexperiencesignificant changes to theway theywere carried out. So what shouldcompanies be doing to prepare?“The fundamental question onemployment is not howmany jobswill be displaced, but rather whatkinds of new skills do people havetodevelop tomaintain employmentintheageofAI,”saysJacquesBughin,a senior partner atMcKinsey & Co.In a report to be released at VivaTechnology,McKinsey studied howautomation and AI will alter theskills needed by the workers oftomorrow.Theconsultancy identified25 coreworkplace skills that peopleuse in today’s jobs, and thenforecasted how the need for theseskills will evolve by 2030. (Seeaccompanying chart.)The upshot: the workers who willthrive in 2030 will not only needrobust technological skills likecoding,but will also need advanced socialand emotional skills. The latter

THE ROBOTSARECOMING!ARE YOU READY?

includes negotiating techniques,communication skills to ensurechanges are accepted by staff, andthe ability to empathizewith others.Suchsofterskillswillbe indispensableto coping with the inevitablechallenges that will crop up whenhumanswork alongside robots andAI. Unsurprisingly, the need forphysical labor will drop by 16% oftotalworkhours inWesternEurope,and the need for basic cognitiveskills gleaned during high schoolwill also fall by 17%.Another ofMcKinsey’s findingswasthat changeswill playoutdifferentlyacross sectors. Companies in high-tech sectors such ase software,telecoms andmedia aremore likelyto spend to retrain and redeployworkers in the new areas of need.But labor-intensivemanufacturers,retailers andbankingaremore likelyto lay offworkers because their jobscan be automated more easily. Itwill beup to companies, civil-society

groups and governments to ensurethat laid-off workers have accessto retraining so they are not leftout of the labor force permanently.Thebifurcationofworkers intohigh-and low-value jobs,whichhaspickedup pace in recent decades,will onlybedeepenedby further automation.

“Thereneedstobeanurgentupgradeto the skills of the workforce,” saysBughin. “The set of skills that peoplewill need to thrive in theworkplaceis getting more sophisticated. Thetalent wars have already begun,andwill only accentuate over time.”

30150-15-30 45 60

Physical + manual skills

Basic cognitive skills(high school equivalent)

Higher cognitive skills

Social + emotional skills

Technological skillls

-16-17

72252

CHANGE IN NUMBER OF HOURS OF VARIOUS TYPESOF LABOR FROM 2016-2030

— P.7

THE BRIEF

Curious about your future robot co-worker? You can seesome of them up close at the Robot Park, sponsored by the Frenchutility EDF, during Viva Technology. Robotic arms that can be installedin factories to safely work alongside humans will be displayed, as willan agile rover than can be used to fight fires more safely. Startups andlarge companies are racing to build industrial robots that are becomingincreasingly common in factories around the world. Challenges remainthough, including slashing costs to make the return on investment forsuch robots more attractive.As depicted in the accompanying chart, so far Asian countries likeSouth Korea and Singapore are leading in adoption of robots in themanufacturing sector. Germany is not far behind because of its traditionalstrength in automobile manufacturing and heavy industry. To date,the automotive industry has been the biggest adopter of robots inmanufacturing and accounts for about 35% of all industrial robots.Since 2010, the number of industrial robots has been increasing by10% on average per year.

To get technology news in context every week, subscribe to our newsletter : http://innovator.news

MEET YOUR FUTUREOVERLORDS

350 525 700

Source:International Federation of Robotics, World Robotics 2017 Report

ROBOTS IN INDUSTRIAL SETTINGSNUMBER OF INSTALLED INDUSTRIAL ROBOTS PER 10,000EMPLOYEES IN THE MANUFACTURING SECTOR

Republic of Korea 631Singapore 488Germany 309Japan 303United States 189Italy 185Spain 160France 132United Kingdom 71China 68

0 175


AFRICA:THENEWTECHFRONTIER

Look around any African city and some of the remotest villagesand it seems that everybody is carrying a mobile phone.That’s because thecontinent is the world’s fastest growing region when it comes to mobilepenetration, according to the GSMA, a mobile industry tradeorganization.There were 445 million unique mobile subscribers on the continent in2017, and that number is projected to grow to 638 million in 2025 inSub-Saharan Africa alone, according to a GSMA Intelligence report.And in every sector that lacks infrastructure – a huge challenge acrossAfrica and one of the major factors that elevates costs and impedeseconomic development – mobile is helping bypass traditional modes ofoperation. New types of services developed to meet local needs haveemerged not just in finance (Africa is credited for giving the world mobilemoney) but also in insurance, energy, education, agriculture, logisticsand health care. The innovation is attracting the interest of big corporatesin fields like health and energy who are looking for new business modelsand new technologies and a better understanding of coming disruptions.(See the stories on the following pages.)“What is happening in Africa is that because of a lack of infrastructurestartups are leapfrogging what can be found in European or American

markets and are going straight to the next generation of mobile services,”says Emmanuel Delaveau, a general partner at Partech Ventures, whichlaunched a dedicated Africa fund earlier this year. “This digitalizationof traditional areas of the economy is very intriguing. We consider Africato be one of the most exciting opportunities for the years to come.” Somestartups use basic mobile services like text messaging to move moneyor provide education or healthcare services. But others are starting touse cutting-edge technologies like blockchain for everything fromdigitizingmedical records to delivering affordable renewable energy.“Our advantage is that we do not have enough infrastructure so it iseasy to start fromscratch,” says EthelDelali Cofie, aGhanaian ITprofessional,entrepreneur and consultant who is considered one of the top five womenimpacting tech in Africa.Cofie is part of a group advising the government of Ghana about how itmight use blockchain technology for things like immigration and passportcontrol. “There is barely any infrastructure, so it is easy to design,” shesays. It was the same thing when Africa leapfrogged landlines and wentstraight to mobile. “We are a mobile-first continent now. The same thing

COVER STORY

— The combination of local talent, new technologies, VC money and big corporates’deep pockets, expertise and ability to scale has the potential to profoundly transform lifeon the continent.

By Jennifer L. Schenker

South Africa1 - Jozihub Civ2 - Capetown Garage Civ3 - Black Girls Code Civ4 - ThoughtWorks Civ5 - TechInBraam Hy6 - Jozihub Civ7 - Silicon Cape Initiative Civ8 - Impact Amplifier Civ9 - Codebridge Civ

10 - Angel Hub Civ11 - Eastern Cape Information

Technology Initia tive Civ12 - Cape Innovation and

Technology Initiative (CITI) Civ13 - Smart Xchange Hy14 - CodeInBraam Civ15 - SoftStart Technology Civ16 - The House 4 Hack Civ17 - mLab Southern Africa Civ18 - Start-up Garage/88MPH Hy19 - The Hub Civ20 - Rlabs Civ21 - Invo Tech Incubator Hy22 - The Innovation Hub (TIH) Gvt23 - Startup 90 Civ24 - Grindstone Ci

Liberia1 - iLab Liberia Civ

Côte d’Ivoire1 - Jokkolabs Abidjan Civ2 - W Hub Civ3 - Akendewa Civ4 - AMN Co-Working Space Civ

Ghana1 - mFriday Civ2 - Meltwater Entrepreneurial

School of Technology (MEST)(Incubator) Aca

3 - gSpace Civ4 - iSpace Civ5 - Ghana Multimedia Incubator

Center Gvt6 - Mobile Web Ghana Civ7 - Kumasi Business Incubator Hy8 - Oguaa Business INcubator Civ9 - Hub Accra Civ

Togo1 - Woe Lab Civ

Benin1 - e-TRILABS Civ2 - Jokkolabs Cotonou Civ

Nigeria1 - L5Lab Civ2 - Co-Creation Hub Civ3 - Wennovation Hub Civ4 - Technology Incubation Centre Gvt5 - Minna Tech Incubation Centre Gvt6 - Information Developers

Entrepreneurship Accelerator(IDEA) Hy

7 - Focus Hub Civ8 - Enspire Incubator Hy9 - Calabar Technology Incubation

Center Civ10 - 88 MPH (400 NG) Hy

Kenya1 - iHub Civ2 - m:lab East Africa Hy3 - GrowthHub Civ4 - NoLab Civ5 - C40 Lab Aca6 - AkiraChix Civ7 - Lake Hub Civ8 - iBiz Africa Aca9 - iLab Africa Aca

10 - FabLab Nairobi Aca11 - 88 MPH/Start-up Garage Hy

Rwanda1 - kLab Hy2 - The Office Civ3 - THINK Technology Incubator Civ

Tanzania1 - Kinu Innovation and

Co-Creation Space Civ2 - TANZICT Hy3 - Dar Teknohama Business

Incubator Civ4 - Buni Hub Civ

Madagascar1 - I-Hub Malagasy Civ2 - Hobaka Civ

Mauritius1 - Ebène Accelerator Civ

France (Réunion)1 - Cyclotron Réunion Indian

Ocean (CYROI GIP) Aca2 - Technopôle de la Réunion Hy

Zimbabwe1 - Sky Hub Initiative Civ2 - Hypercube Hub Civ3 - Muzinda Umuzi Hub Civ

Mozambique1 - MICTI Technology and Business

Centre Gvt

Morocco1 - Jokkolabs Casablanca Civ2 - New Work Lab Civ3 - Girls In Tech (GIT) –

Morocco Chapter Civ4 - OCP Entrepreneurship

Network Hy

Senegal1 - Jokkolabs Dakar Civ2 - CTIC Dakar Civ3 - Africa Living Lab Aca4 - Mobile Senegal Hy5 - Jiguene Tech Hub Civ

The Gambia1 - Jokkolabs Banjul Civ

Egypt1 - Cairo Hackspace Civ2 - The District Civ

- 3 - Flat6Labs Hy4 - IceCairo Civ5 - Fab Lab Egypt Civ6 - The Greek Campus Hy7 - Technology Innovation

Entrepreneurship Center Gvt8 - Alexandria Hackerspace Civ

Ethiopia1 - IceAddis Aca2 - xHub Civ

Cameroon1 - ActivSpaces Civ

Uganda1 - Hive Colab Civ2 - @TheHub Civ3 - Outbox Hub Civ4 - Grameen Foundation AppLab Civ5 - Hive Colab Civ6 - Mara Launchpad Civ7 - Women in Technology Uganda

(WITU) Civ

Tunisia1 - Wiki Start Up Civ

Mali1 - Jokkolabs Bamako Civ

Burkina Faso1 - Yam Pukri Civ2 - Jokkolabs Ouagadougou Civ

Congo1 - BantuHub Civ

D.R. Congo1 - Mwasi Tech Hub Civ2 - Imani Hub Civ

Angola1 - Angolan Institute of Support

for Micro, Small and MediumEnterprises [INAPEM](ICT Incubator) Gvt

Zambia1 - Bongohive Zambia Civ

Namibia1 - Namibia Business Innovation

Centre (NBIC) Aca2 - Fablab Namibia Hy

Botswana1 - Botswana Innovation Hub Gvt2 - First Steps Venture Center Hy

— P.9

TECH HUBS INAFRICA— Hubs have been springing up across the continent, fueledby an increase in VC funding.

Gvt Government-LED [ 10 ]Civ Civil Society [ 79 ]Aca Academic Institution-Led [ 9 ]Hy Hybrid [ 19 ]

TOTAL TECH HUBS BY 09/2015 = 117GSDPMThis map was produced by the map design unit of the World Bank


might happen with blockchain,” says Cofie, a scheduled speaker at VivaTechnology, a May 24-26 Paris tech conference. This year’s conferencewill include an Afric@tech space that will welcome 100 of the mostpromising tech startups in Africa, with a dedicated lab, country pavilions,startup challenges and dedicated sessions.

A Growing EcosystemInnovation is not new to Africa. “It has always been entrepreneurial. Theworld is just now noticing it,” says Cofie. When hubs starting springingup in Europe around five years ago, money became available to createthem in Africa. After the iHub in Kenya – which is widely seen as a catalystfor the region’s tech acceleration – proved themodel, hubs started springingup across the continent. (See the chart.) “Once you have hubs, acceleratorsfollow, and the more of those you have, the cheaper it is for startups tohave access to places towork, somore people decide to join and it becomesa never-ending loop of growth,” says Cofie.The growth is being fueled by an increase in venture capital funding. VCfunding raised by African tech start-ups in 2017 totaled $560 million,compared to $366.8million in 2016, a 54%growth year-on-year accordingto a Partech Ventures study. (See the charts.)What’s more, “we have more million-dollar funding deals happening inAfrica, the highest there have ever been,” she says. Among the latest suchdeals was Partech Ventures’ newAfrica fund’s first investment: a $3millionSeries A round of financing for TradeDepot, a Lagos-based company thathas developed a SaaS platform that integrates all participants in the trade-value chain, including manufacturers, distributors and retailers.Partech Africa – which announced earlier this year that it secured morethan €57 million in commitments toward its target size of €100 millionand says it is making good progress – is the first technology fund of sucha size from a top-tier international VC to be exclusively dedicated to the

fast-growing tech ecosystem in Africa. Silicon Valley investors are alsoactive in Africa. Tim Draper was among the first Silicon Valley investorsto bet on Africa with Savannah Fund and Draper DarkFlow. AndreessenHorowitz, another well-known Valley fund, led a $9.2million 2016 SeriesA investment in Branch.co, a fintech focusing on bringing digital financialservices to mobile phone users in Sub-Saharan Africa. Finally GV, theChan Zuckerberg Initiative (CZI) and other funds grabbed headlineswhen they invested $40 million in Andela, a startup that aims to trainAfrica’s best software developers and get them jobs at some of the world’sbiggest tech firms. Still, many startups are facing a dearth of investmentcapital, especially across the continent outside of the three tech hubs(Nigeria, Kenya, South Africa) where investment funds are highlyconcentrated.

COVER STORY

TOTAL FUNDING PER COUNTRY - 2017 (IN US$ M)Partech analysis 2018

Sout

hAf

rica

Keny

a

Nig

eria

Egyp

t

Rwan

da

Ghan

a

Ugan

da

Sene

gal

Mor

occo

Cam

erou

n

Tuni

sia

Zam

bia

Tanz

ania

167,9

147,0114,6

1,21,52,73,910,716,020,4

36,736,9

0,4

Source: Partech Ventures

— P.11

place in history,” says Viola Llewellyn, the co-founder of Ovamba, aCameroon-based fintech company (see the story on page 12) and ascheduled speaker at Viva Technology. “Never before has the Africancontinent had a better chance to get it right. Will leapfrogging teach usthe best way to trade the trillions of dollars in commodities, productsand services profitably, responsibly and sustainably? Will we learn fromthe failed oil and gas sector, where value has been eroded by dependency,mismanagement and poorly structured regulation? Perhaps this time thedemocracy of technology will create abundance, or at the very leastaccess for all.”

Corporate CollaborationWith StartupsCorporate VC could help meet the financial needs of startups outsidethese hubs. Orange Digital Ventures Africa launched a €50million Africancorporate venture fund to stay at the helm of Africa’s mobile revolutionlast year. And VINCI Energies, Total and Sanofi are all participating inthe Afric@tech lab at this year’s Viva Technology conference, with thehope of forging collaborationswith startups that could help themunderstanddisruptions, but also to manage disease and make affordable energyavailable to those who need it.The combination of local talent, new technologies, VC money and bigcorporates’ deep pockets, expertise and ability to scale, has the potentialto profoundly transform life on the continent. “We stand at an amazing

B2B & TechAdoption

INVESTMENT BY SECTOR

Online&Mobilecustomerservices

Financial inclusion

13%

42%

45%

Source: Partech Ventures

Viva Technology speaker Temie Giwa-Tubosun, founder of Lifebank, a Nigerian venture-backed startup that usesmotorbikes to deliver blood to Lagos hospitals.


tracted further investment from other platforms, such as Crowdcredit, aJapanese fintech emerging markets investor, enabling it to expand its ope-rations into other countries.

A $500 Billion OpportunityThe need is great. The owners of many African SMEs are “functionallyilliterate and not professionally trained,” says Llewellyn. “They can’t producea balance sheet. It is in their head and they can’t write it down in a way thebanks can understand.” Another issue is that many business owners andsmall farmers can only communicate in their local dialect.So how does Ovamba gets around these challenges?It uses on-the-groundteams and technology to assess the risk. Traders or SMEswho need financecanmake a request via theirmobile phones or a computer. A decision aboutcredit-worthiness is made within 48 hours with the help of algorithms thathave been trained using data not just about banking habits and sale cyclesbut local customs, including ethics, social norms and business practices.Knowledge about the economics of local trade – such as the way that se-condhand clothing markets work and the fact that many SMEs are run bywomen but fronted by their husbands for legal or cultural reasons – are alsofactored in. Chat bots – a recent addition – are able to translate businessowners’ demands in local dialects into English, Arabic or French. (The chatbots currently handle five broadly used dialects. They plan to add more.)Financing is based on the Islamicmodel, which prohibits interest andworkson the basis of risk-sharing on agreed terms. Rather than giving loans,Ovamba purchases the assets or receivables on behalf of its SME clients.The merchandise is owned by Ovamba and is sold to SME clients at a pre-agreedmarkup that is inclusiveof all costs incurredandamargin forOvamba.Customers buy back the material over a period of time. The merchandiseis released in batcheswhenever a payment ismade. Themargin is anywherefrom1.5%permonth to 3%permonth, depending on how longwarehousespace is used and whether Ovamba provides additional services such as lo-gistics or customs clearance on a customer’s behalf. Ovamba has processedover 1,600 transactions on its platform, representing $150 million in dealflow, says Llewellyn. Ovamba has been able to fund $22million of that. Therest is being funded through a crowdsourcing platform that allows inves-tors from the UK, U.S. and Japan to invest in local businesses. Once thecustomers buy back all the merchandise Ovamba pays the investors andtakes a fixed fee for itself. There is little risk, she says, because if a customerfails to pay, Ovamba is free to sell the merchandise elsewhere. The defaultrate is less than 4% since coming out of beta, she says.“People can’t believe startups focusing on emerging markets can have highreturns,” says Llewellyn. “They say it is not possible because they thinkAfrica is a mess. Mymessage to them is you have just missed a $500 billionblue ocean opportunity where you can do well.”J.L.S.

Small and medium-sized businesses are the backbone of theAfrican economy, but most face significant challenges when it comes toaccessing quick, affordable and reliable credit. That is where Ovamba comesin. The five-year-old startup, which currently operates in Cameroon andCôte d’Ivoire, with plans to expand into Sudan, Nigeria, Senegal andMorocco, offers a short-term funding solution for African SMEs in the tradeand commodities sectors who want to grow but are unable to front the costof trade or inventory purchase.It’s a $500 billion revenue opportunity, if you include unbanked traders anda chunkof the$2.7 trillionwholesale and retailmarkets, saysViola Llewellyn,a scheduled speaker at Viva Technology, a Paris tech conference taking placeMay 24-26. Llewellyn, who was born in London and now splits her timebetween Cameroon and theU.S., was recently featured in Vanity Fair as oneof 26 black women business founders in the United States who have com-pleted $1 million or more in fundraising.“Microfinance operations will never meet the need no matter how hardthey try andbanks areunable tomeasureSMErisk,” says Llewellyn. “Ovambais about bridging the gap between technology and finance so that the disen-franchised, under-served and un-served can connect to the products andservices they need.” A year after launchOvamba attracted investment fromUK-basedGLIFinance,whosebackers includeBlackrockGlobal,AXAInvestmentManagers and Barclays Wealth. Ovamba then set up its first operations inCameroon, a country with over 200 local languages, Muslim and Christiancommunities, and an economy almost entirely comprised of SMEs. It wasthe perfect place to prove the model, says Llewellyn. In 2016 Ovamba at-

The Fintech That IsDriving the Growth ofAfrica’s SMEs— Ovamba Solutions is using mobile technologyand chat bots that understand local dialects to bridgethe credit gap

OVAMBAOvamba co-foundersMarvin Coleand Viola Llewellyn.


one-and-a-half-year-old company has expanded its operations to Côted’Ivoire, Gambon, Senegal and Tunisia. “We have a chance in Africa becausewehave a high level ofmobile technology penetration andweare leveragingthat to bring value added services to the population,” says Ahouansou, alaureate of the Prix Projet Afrique Future In Africa and an alumnus of theWomen In Africa Entrepreneurship Program. “This technology can be ofuse by everyone, everywhere. Themarket is there. Our ambition is to scaleup outside of Africa and implement this solution in Europe and the US.”KEA Medicals is not stopping there. The next step is to use artificialintelligence and blockchain, a digital ledger technology that promises toensure transparency and traceability, to help hospitals and doctor’s officesdigitize more sensitive medical records. The records,will be the propertyof the patient and can only be accessed with patients’ permission, throughthe use of pin codes assigned to doctors. KEAMedicals is also working ona digital system for hospital management so administrators know what ishappening in real time.

Using Technology to Leapfrog AheadIf it succeeds, patients, doctors and hospitals in Africa could end up beingthe first to go completely digital, one more example of how the Continentis using technology to leapfrog ahead. KEA Medicals is one of 10 Africanstartups that theFrenchdrugmakerSanofiselected tobring toVivaTechnology,aMay24-26Paris tech conference that connects startupswith big corporates.The ten companies are finalists in the The Sanofi Africa Challenges, whichseek to identify startups with innovative and adaptive solutions with thepotential to disrupt Africa’s health sector. The challenges focus on multi-device andmulti-channel solutions that can both educate and informhealthprofessionals, solutions that can diagnose non-communicable diseases andtelemedicine solutions with mobile payment options.“The continent has opportunities aswell as challenges that aremonumental,”says Jon Fairest, Sanofi’s head of Africa. “As a company that has been partof the healthcare system in Africa for decades we have to help. How canwe create new medicines and make sure they are affordable, ensure thattechnologyhelpsmanagediseaseandefficiently freeup funds for innovation?’

HowTechIsHelpingTackleAfrica’sHealthcareChallenges— Sanofi plans to work with startups to scale the bestinitiatives.

SANOFI

Years ago Dr. Vèna Arielle Ahouansou watched a young mother-to-be die during childbirth because the woman couldn’t remember her bloodtype.By the time the information was retrieved it was too late to save her.The experience spurred her to create KEA Medicals Pharmaceutics andTechnologies, a Benin-based startup that uses cutting-edge technology tostore and transfer basic medical information that can be accessed in timesof emergency.People can register themselves via their mobile phones, providing key datasuch as blood type, allergies, whether they have a chronic disease andwhoto contact if there is a medical crisis. The information is placed onto a QRcode that can be integrated into a bracelet or on a patch that can be addedto a watch, mobile phone or personal jewelry. If someone passes out onthe street, hemorrhages while giving birth or is hit by a car, for example,not justdoctors but anyonenearby canhelpbyeasily scanning the informationwith their mobile phones. The bracelets cost $4 and the patches sell for$2. They need to be renewed once a year. After a strong start in Benin, the

SANOFI’SAFRICANHEALTHTECHFINALISTS

BISA HEALTH APPLICATIONGHANAWHAT IT DOES : A mobile applicationthat allows users with an Android,iPhone or Windows phone to directlyinteract with medical practitionerswithout being physically present at ahospital.

bisaapp.com

INFOMED HEALTHEGYPTWHAT IT DOES : Operates a 24-hourhotline with doctors who providepossible diagnoses at a distance basedonthesymptomsdescribed. Ifnecessarypatients are referred to geographicallyclose clinics; the local doctors are thenrated by users on the platform.https://www.infomed-me.com/

— P.15

To that end Sanofi wants to connect with startups to see “how can we usetechnology to connect nurses, physicians and pharmacies to increase thelevel of understanding in the management of diseases,” says Fairest. Forexample, Vula Mobile in South Africa, one of the 10 Sanofi Challengesfinalists, offers amobile phone application that aids rural health professionalsin providing effective eye care by communicating directly with specialistsover a messaging system.The aim is to reduce the impact of treatable and reversible illnesses. Thesetypes of apps are even more crucial when it comes to the management ofchronic diseases. “The next big health explosion is Westernized diseases,such as diabetes and cardio vascular diseases, as the population ages andmiddle class expands,” says Fairest. “Africa is a ticking time bomb for health– a lot of knowledge and expertise from the developing world can beadapted and used to support the health care system in these developingmarkets. The next step is around partnerships with government to come

up with the best solutions to get as much reach as possible. Technology isgoing to be the cornerstone of that process.” Thanks to mobile technology,it is now easy to get course material to medical personnel in remote areas.For example, SouthAfrica’sAppenbergDigital Publishing is helpingpublishersof medical information make their content available on mobile apps. Itstechnology ensures the content is up-to-date, interactive and easy to readacross a variety of devices.And Otrac, a Nigerian startup chosen as one of the ten by Sanofi, enableshealth workers to take courses and learn at their own pace on their mobiledevices irrespective of their location, and earn a formal recognition fortheir achievements. “What we are finding is where we can use programsto reach doctors in remote areas and start to educate them on diseasemanagement programs we can really improve patient lives in terms ofearly diagnosis and prevention,” says Fairest. “Some of the apps let youknow where to go for information ,where there is a group of expertise

SAGATARIXKENYAWHAT IT DOES : ThroughitsappiSikCure,patientscanconnectandcommunicatewithdoctors, laboratories,pharmaciesandwellnessprovidersandpayforthehealthservicesreceivedfromtheirmobilephones.

www.isikcure.com

GIFTED MOMCAMEROONWHAT IT DOES : A mobile healthplatform that uses text messages tohelp mothers and pregnant womenaccess medical advice in ruralcommunities.

www.giftedmom.org

YAPILITHE NETHERLANDSWHATIT DOES: Started by fourentrepreneurs who met in East Africa,Yapili offers ways for Africans toconnect to health professionals toseek medical care and advice on topicssuch as pregnancy, diabetes,hypertension, HIV and mental health.https://yapili.com

KEA MEDICALSBENINWHATITDOES: : Allows patients tocreate their own digital medicalidentity. The goal is to use artificialintelligence and blockchain to digitalizethe entire health sector in Africa.

https://www.keamedicals.com/

Mobile phones are the key to accessing many health-related services.


SANOFI

whether it be in disease management or diagnosis or treatment. As thesenetworks grow in numbers to tens of thousands it will possible to createa ready-made clinical database sowe canmeasure outcomes in communitieswhere these programs are being used.”

Real-World Solutions for Real-World ProblemsBeyond education, African tech startups like KEA Medicals are bringingreal-world solutions to real-world problems. In some cases telemedicinesolutions are helping doctors in remote locations get second opinions tohelp with the diagnosis of disease. And, startups are finding ways to bringthe right medical equipment to the doors of people with chronic disease.Take the case of Medtrucks, another one of the 10 startups selected bySanofi to come toVivaTechnology. It operatesmobilemedical units equippedwith dialysis equipment that provide care for patients with kidney diseasewho live in remote areas. In Morocco one-third of kidney disease patientsdo not have access to dialysis treatment. And many of those that do must

travel great distances. Medtrucks is able to treat 30 kidney patients withamobile truck equippedwith five beds. Sanofi is also interested in startupsthat can help everyone stay healthy by digitally connecting to doctors.GiftedMom, which uses text messages to help mothers and pregnantwomen in Cameroon access medical advice in rural communities, is oneexample.Sanofi plans to continueworkingwith three of the 10 startups it is bringingto Viva Technology. The winners will be announced at the conference.“These type of events are crucially important as a conduit to bring everyonearound the table and shape the dialogue and take targeted approacheson specific topics for Africa – around Africa optics and challenges – andchannel the right people, with the right dialogue at the right time,” saysFairest. “There are startups sitting with brilliant ideas and Vivatech givesthem a forum where they can sit down with companies like Sanofi thatcan help make their vision happen.”J.L.S.

Left, a patch from KEA Medicals Pharmaceuticals that stores basic information.Above, Dr. Vèna Arielle Ahouansou, the founder of KEA Medicals.

APPENBERG DIGITALPUBLISHINGSOUTH AFRICAWHAT IT DOES : Helpspublishersofmedical informationmaketheircontentavailableonmobileapps. Itstechnologyensuresthecontent isup-to-date,interactiveandeasytoreadacrossavarietyofdevices.http://www.appenberg.co.za

MEDTRUCKSMOROCCOWHAT IT DOES : Operates mobilemedical units equipped with dialysisequipment that provide care forpatients with kidney disease who livein remote areas.

https://medtrucks.com

VULA MOBILESOUTH AFRICAWHATIT DOES: A mobile phoneapplication that aids rural healthprofessionals in providing effective eyecare by communicating directly withspecialists over a messaging system.The aim is to reduce the impact oftreatable and reversible illnesses.www.vulamobile.com

OTRACNIGERIAWHATITDOES: Enables health workersto take courses and learn at their ownpace on their mobile devicesirrespective of their location, and earna formal recognitionfor their achievements.

https://otrac.com.ng


It’s a great irony that Africa – one of the sunniest places on Earth– has less access to energy than nearly anywhere else. The World Bank’s2017 State of Electricity Access Report emphasizes that UN SustainableDevelopment Goals like health, education, food security and employmentare all largely dependent on consistent, reliable access to energy.While nearlyone billion people in Sub-Saharan Africa alone may gain electricity accessby 2040, an estimated 530 million will still not have electricity access dueto population growth.Solar is the cheapest and most abundant form of energy, but finding andconnecting with thousands of small micro-grid distributors is difficult. As aresult,many homes and entire villages in Africa lack adequate energy. Otherchallenges include making reliable estimates about howmuch energy first-timeuserswill consume andfiguring out how to get people –many ofwhomhave little or no access to banks – to pay for their energy use.So African startups are beginning to connect with big energy companies tofigure out howcutting-edge technology andnewbusinessmodels could helpelectrify the continent.Take the case of The Sun Exchange, a South Africa-based startup that istaking part in theAfrica Tech Lab during Viva Technology, aMay 24-26 Paristech conference that connects startups with big groups. Sponsors of the labinclude the French energy companies VINCI Energies and Total.The Sun Exchange doesn’t just put together energy projects, it incentivizesinvestors – which could be individuals or large energy companies – to buylocal solar panels through their platformand then lease them to local villagesto earnmonthly income paid in bitcoin.The systemuses the crypto-currency

ENERGY

so that payments can easily be accepted and made from anywhere in theworld inminutes. The blockchain, a digital ledger technology underpinningthe exchange, enables transparency and traceability of payments.“There are no standards formicrogrids yet,” says AbrahamCambridge, CEOof The SunExchange. “Our role is to serve as a global portal andmarketplacefor those projects. Our innovation is not just in the payment system but alsoin streamlining the on-boarding and having our teams of solar engineerschecking the solar projects.” The Sun Exchangemakes money on themark-up, says Cambridge. If, for example, it costs $1 million to install a solarproject, TheSunExchangewill sell the project for $1.1million. The exchangeis also creating its own cryptocurrency called SUNEX, which is designed toreward the people who use its platform. Any SUNEX bought through theirtoken saleor earnedon theplatformcanbeapplied toa solarproject insurancefund. The fund covers the cost of solar plant relocation in the event of acustomer default. “This makes projects far less risky for utilities, makingthem more bankable”, he says.Innovation doesn’t stop there The Sun Exchange is planning to buildcryptocurrency mining equipment into their system. Surplus solar energygenerated by the local solar panels will be used to “mine” cryptocurrency, aprocess that involves an immense number of mathematical calculations,which in turn occupies vast computer server capacity, requiring a lot ofelectricity. The mining business is lucrative enough that 20% to 30% of thecryptocurrency generated can be given away to local villagers for free,whilestill getting the owners of the solar panels a reasonable return. Once thedigital currency is sent to their mobile phones, villagers can use it to pay forthe electricity they consume. “It is a closed system,” says Abraham. “Theyare effectively connected to the electricity but by asking them to pay for itwe ensure they don’t overuse it. It also gives people an immediate and easyway of joining the crypto-economy that is already radically transforminghow money flows around the African continent.” Leftover cryptocurrencycan be used by villagers for other things like topping up mobile phones.

Leapfrogging AheadIt is just one example of how African startups are leapfrogging. Just as theintroofmobilephonetechnologyallowedAfricans toskipfixed-line installations,in the case of energy it is helping them to skip thermal plants and powerlinesbut alsopropelling them into theworldofblockchainandcryptocurrency,even beforeWestern countries embrace the technologies enmasse. The SunExchange has recently partnered with the United Nations DevelopmentProgram to scale into Eastern Europe. It is not yet working with VINCIEnergies or Total but hopes the energy companies will eventually become

Powering(andEmpowering)Africa— Startups are helping the French energy giantsTotal and VINCI Energies experimentwith renewable energy, new business models andtechnologies like blockchain.

— P.19

customers. Participating in the Africa Tech Lab is a start. “We need to figureout how to leverage the implementation of micro grids and blockchain inAfrica and we think the best way is to ask the local ecosystem, starting withstartups,” says Lydia Babaci-Victor, development and innovation director ofVINCI Energies.The company envisions applying blockchain to uses such as monetizingenergy surplus or to creating smart contracts in associationwith smart gridsprojects.To make the innovation ecosystem stronger, VINCI Energies andTotal are collaborating on theAfrica Tech Lab. “No one should be innovatingalone,” says Babici-Victor. “Things aremoving too fast and there are somanythings going on that you cannot do it on your own. This iswhywe are takingan open innovation approach with Total to help projects emerge.”

Working With African Startups“The aim of the Africa Tech Lab is tomake sure we accompany and help therise of the local innovation ecosystem and at the same time address ourfuture challenges,” she says. “We need not only new technologies but newbusiness models.”To get started VINCI Energies conducted an audit in 2016 of the Africanecosystem to get a good picture of the countrieswhere themost startups areemerging. “What we saw was especially 10 countries that were going veryfast. Morocco is one of them,” says Babaci-Victor. “Last year one of ourcustomers launched a challenge and 100 startups responded. Threemonthsago they posted another challenge and800 startups applied. The innovationecosystem is booming in places likeMorocco,Nigeria, SouthAfrica, Senegal,

AFRICATECHENERGYSTARTUPS

SAMAWAT ENERGYSOMALIAWHAT IT DOES : A renewable energycompany that provides affordable,off-grid, solar home solutions toresidents in Somalia through the useof a micro-leasing, rent-to-ownsystem.

www.samawatenergy.com

THE SUN EXCHANGESOUTH AFRICAWHAT IT DOES : Incentivizes investors tobuy local solar panels through theirplatform and then lease them to villagesto earn income paid in bitcoin. It usessome of the solar power generated tomine cryptocurrency, some of which isdistributed to villagers.www.thesunexchange.com


Cameroon and the Ivory Coast. We focus on the startups in the countrieswhere the ecosystem is dense enough.” Events such as one last year in SouthAfrica, which gathered the tech ecosystem in Cape Town to pitch to largecorporations, arean indicationofhowmuch theAfrican tech sector is evolving.“What I saw was really impressive,” she says. “The level of startups is veryhigh.” Similar events pairing startups andbig companies arebeingorganizedthis year in Casablanca, Lagos, Dakar and Nairobi.The focus onAfrica startups is part of larger digital transformation programsat bothTotal andVINCIEnergies. Total approaches open innovation throughmore than 1,000 active partnerships with both public and private researchinstitutions, universities, customers, suppliers, small businesses and startups;through its capital venture fundTotal EnergyVentures; its partner theTechstarParis Accelerator and its own multicorporate “plant 4.0” startup incubator.VINCI Energies is accelerating internal entrepreneurial projects through aprogram and it separately has a corporate investment fund that aims to pair

ENERGY

startupswithoperationalpeople inside the companywhocan serveasmentorsin developing global solutions for customers. The company has reviewedsome2,500 startups since Babaci-Victor joined in 2014. It selected 180,withwhich itworks actively via different formsof partnerships, and it has investedin seven.“The challenge for VINCI Energies is not if it can set up a startup program.It iswhat comes afterwards, tomake sure the startupswill develop alongsideus. This is especially true for our startups inAfrica,” says Babaci-Victor. “WhatI want is to build a real offering from VINCI Energy that includes training,methodology, the right ecosystemand then all what they need to accelerate.Without a presence locally it is very difficult to build tangible pragmaticsolutions used in an African country. Our presence locally, our innovationstrategy globally and this rising of the innovation system throughout Africaare three key factors that are prompting us to be active and do it.”J.L.S.

“The aim of the Africa Tech Lab isto make sure we accompany andhelp the rise of the localinnovation ecosystem and at thesame time address our futurechallenges. We need not onlynew technologiesbut new business models.”Lydia Babaci-Victor,Development and innovation director of VINCIEnergies

WECASHUPFRANCEWHAT IT DOES : Amobilepaymentsystemforemergingmarkets. Itcurrently targetsbanks, telecomoperatorsande-commercemarket-placesbutplanstoexpandintotheenergysector,usingAIandblockchain.

https://www.wecashup.com/

MANDULIS ENERGYUGANDAWHAT IT DOES : Delivers on-grid andoff-grid energy projects. Its proprietarydigital platform uses artificialintelligence and blockchain for thecontrol and management of electricitygeneration and distribution.

www.mandulisenergy.com

PAYGO ENERGYKENYAWHATIT DOES: Developed asmart-meter system that brings cleancooking fuel to the masses by allowingpay-as-you-go distribution of liquidpropane cooking gas in East Africa.

www.paygoenergy.co

REUNIWATTREUNION ISLANDWHATITDOES: A solar forecasting toolthat’s been designed to meet thereliability standards of an island gridheavily reliant on solar farms. Its targetcustomers include energy traders,transmission and distribution systemoperators and micro-grid operators.www.reunitwatt.com

National finalists pitchingin Indonesia, April 2018

When students live aReal Life Innovation Experience

©Copyright2018L’Oréal-Allrightsreserved

34000 students from 2000 schoolsworldwide have just competedin the 2018 Edition of theBrandstorm Competition,with the challenge of inventingthe professional hair salonexperience of the future. Canyou explain what the game isconcretely?

— Brandstorm is theL’Oréal’s worldwideinnovation game.The competitionoffers studentsto put themselvesin the shoes ofentrepreneurs.It gives them ahands-on case studyto tackle. During6 months, thecontestants workin teams to createa concept, confront

their ideas and work on the feasibilityof their project. A final round gathersall the international finalists in Paris toparticipate in a Tech Fair event in whichstudents pitch their ideas in front of juries.Each year, more than 150 students arerecruited for internships or permanentjobs. It’s a way to detect the innovativetalents that will invent the beauty of thefuture with us. Perhaps, the future CEOof L’Oréal is among these students…

Why is Brandstorm so importantfor L’Oréal?

— It’s a way to share two strong pillarsof the Group’s identity with potentialcandidates: entrepreneurship andinnovation.Innovation is one of our foundingvalues. We always have in mind thefact that our company was founded bya scientist. At L’Oréal, it is vital. Alwaysthinking outside of the box allows us todiscover new ways of creating productsthat are truly different and innovative.This year, more than 8000 ideas weregathered from 34 000 students.

Entrepreneurial spirit is part ofour heritage which has always beenencouraged in the way we work. Today,it is still the driving force behind acompany which values the importanceof individuals and their talents.

The gamewas created 25 yearsago. Its success continues to groweach yearwith a growth of 76%since 2016. How do you explainsuch consistent success?

— Brandstorm offers real life experience.Working on innovation in an experimentalmode is increasingly attractive- that’s whythe number of applicants has more thandoubled in the last two years. It’s a greatopportunity to discover our culture andthe way we work at L’Oréal.

What do you bring to students?

— From the students’ perspective,L’Oréal is committed to providingparticipants with an exclusive learningexperience, offering 80 hours ofe-learning resources, digital certificationand personalized coaching fromL’Oréal’s experts and external partners.Additionally, a day of workshops theday before the Final with experts andpartners is organized.

How has the game evolved tomeet students’ expectations?

— Initially, Brandstorm was a businessgame with a marketing focus.Over the years, it has branched out andoffers a multi-disciplinary experience.Also, the competition has becomeaccessible for all universities, beyondpartner schools. This year, studentscame from 2000 universities versus300 in the past.The scope has also been revised andenlarged to new fields and expertises,such as engineering.All teams are encouraged to tackle thechallenge from different perspectives:marketing, technology and CSR.To illustrate this, awards are given inthree categories: Brand, Tech and CSRawards.Thanks to a new gaming platform,participants from different majors canteam up and work together virtually.Last but not least, the format of the finalround has evolved from a traditionalevent to an agora, a startup-like fairwhere students pitch their ideas in frontof jurie.

https://www.facebook.com/lorealbrandstormofficial/

CarolePASCO-DOMERGUE

Chief Marketing Officerfor Global HR,L’Oréal Group

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FRENCH TECH

The online advertising firm Criteo is the poster child of France’snewfound success in technology.Founded in2005, itwas nurturedbyFrenchfounders,expandedearly to theUnitedStates,andwentpublic inaspectacularlysuccessful listing in New York in October 2013 with a $2 billion valuation.Criteo executives, such as its founder J.B. Rudelle and former chief operatingofficer PascalGauthier,movedon tohelp foundanewcropof French startups.This feel-good story has lately gone sour. Criteo shares have halved in valuein the past year to trade below the IPO price. The business model of re-targeting ads to people as they surf the web is under assault as tracking getsharder, and critics say Criteo has done a poor job of diversifying into newproducts. In late April, Rudelle was called back by the Criteo board to retakethe helm as chief executive and fix the mess.Criteo’s currentwoes arenot the only issue.Gauthierwonderswhyhis formercolleagues at Criteo haven’t founded more new companies or had more bigexits by now. Such renewal has been typical in the tech world since alumniofPayPal,anearlySiliconValleysuccess story,wentonto fundmanyemblematicstartups like Palantir, Tesla Motors and LinkedIn. “Creating unicorns is stillnot a French speciality,” saysGauthier,while lookingout over theParis skylineduring an interview at the top of the PompidouMuseum. France is home to

only three unicorns, or private tech companies worth more than a billioneuros, while the United Kingdom has 10, Germany 5, Switzerland 3, andSweden 2, according to a March Dealroom.co report. Gauthier is trying toadd another unicorn to the list: he is now at the helm of a Paris-based start-upcalledLedger,whichbuilds infrastructure forblockchainandcryptocurrenciesby leveraging France’s traditional strengths in encryption and chip and pintechnologies.Other aspiring French unicorns are also in the pipeline. But theCriteo saga stands as an example of how tough it can be for companies tostay on top of the fast-changing technologymarket. It also shows howmuchremains to be done to realize the dreamofmaking France a true technologyleader. While access to capital has improved and more people are flockingto entrepreneurship, too few companies manage to reach critical mass. Toomany are still selling out early, often to foreign buyers. Nicolas Dufourcq,who heads the state-backed bank BPIfrance, which is a major tech investor,says he often urges entrepreneurs not to sell their companies, and insteademulate an earlier generation of French companies. “I tell them to persevere,keep going. The founders of Atos, Capgemini, Dassault Systemes could’vesold out many times but didn’t.”So why aren’t more heeding Dufourcq’s advice? To assess the progress of

THESTATEOFTHEFRENCHTECHNATION— The Innovator surveyed 20 influential figures to assess how France is doing in its effort to nurturea vibrant tech sector.

By Leila Abboud and Jennifer L. Schenker

— P.25

J.B.Rudelle

Founder andchairman

Less*Founder and

chief executiveofficer

Project SapiensFounder

BuzzFeedPresident(Left in Nov. 2017)

TeemoCo-founderand chiefexecutive officer

AldebaranRoboticsChief technology officer

ViadeoChief technology officer

KarosCo-founderand chieftechnologyofficer

AmazonWeb Services

Principalevangelist --

machine learningand AI

Less*Cofounder and

chief technologyofficer

LifenFounder and chief

executive officer

KaikoFounder

AOL**Senior directorfor analyticsand optimization

Social BakersChief executive officer (Sept. 2015 - April 2017)

LedgerPresident

AlephDFounder and

chief executiveofficer

THE CRITEO DIASPORACriteo has been an incubator for top tech talent at many other companies. But alumni have not

gone on to create and exit asmany new companies as some expected.

JonathanWolf

Chief productofficer

Rudelle recentlyreturned to

Criteo as chief executive

RomainNiccoli

Cofounder andchief technology

officer

GregColemanPresident

FranckLe Ouay

Cofounder andchief scientist

BenoitGrouchkoProductmanager

PascalGauthier

Chief operatingofficer

JulienSimon

Vice president,engineering

MaximeAgostiniBusiness

developmentmanager

TristanCroiset

Softwareengineer

RobertLang

Executive MDfast growing

markets

*Less was acquired by BlaBlaCar in April 2018.**AlephD was sold to AOL in January 2016.

the French ecosystem, The Innovator surveyed20 influential figuresworkingin the field today, including the BPI’s Dufourcq; the former French ministerFleur Pellerin; the founders of the promising start-ups Algolia, ManoManoandBlaBlaCar; and venture capitalists from IndexVentures, Partech Partners,BaldertonCapital, ISAI andRingCapital. (The complete list of the respondentswho agreed to be named is on pages 24-25.) Our aim was to get a sense ofwhat has been achieved in the past decade and what remains to be done.Weaskedquestionson the followingareas:France’s efforts topromote startups,access to capital, regulation, administrative burdens and tax, access to talent,prospects for exits, and the educational system.Wealso conducted interviewswith many of the participants.

Here are our findings:

LESSON #1French government efforts to encourage startupsare paying off

Last June, President Emmanuel Macron spoke to a raucous crowd at the

opening of Station F, themassive startup incubator funded by the telecomsbillionaire Xavier Niel. “I want France to be a startup nation, a nationthat works with and for the startups, but also a nation that thinks andmoves like a startup,” Macron said. Since then Macron and his ministershave never missed an opportunity to talk up French Tech or visit StationF. It’s easy to be cynical about such hype. In fact, French governmentefforts to make life easier for startups began almost a decade ago andwas backed by the two prior presidents, not just Macron.The most visible of them was the creation of the French Tech label bythen-junior minister Fleur Pellerin. Tech start-ups widely adopted theimage of the red rooster and it helped raise awareness both domesticallyand abroad at big tech fairs like CES in Las Vegas. Beyond the FrenchTech label, additional important changesweremade. Pro-business reformswere enacted, such as ending penalties for founders whose companiesdeclare bankruptcy. Most important, the BPI was given a broadermandateand a bigger budget to fund innovation.The state-backed bank has invested €1.3 billion annually for the past


three years, a big jump from its traditional levels. As a result, the BPI hasbecome the biggest single backer of French venture funds, and also madedirect investments in start-ups such as Sigfox, Devialet, and Doctolib.Macron has gone further on the reform front to make hiring and firingeasier for all types of companies. He also introduced a flat tax rate of 30%on capital gains and dividends, which Xavier Niel has said is one of themost significant reforms for companies looking to invest in new technology.Our survey respondents unanimously say France’s efforts in recent yearswent beyond mere marketing and have really helped tech entrepreneurs.And 90% of them also think that Macron’s election has helped the outlookfor France as a home for tech companies and scientists.To build upon this success, several of those surveyed say more must bedone to simplify corporate law so as to make it more flexible and lowerthe costs involved in founding companies. Nicolas Colin, one of the foundersof the incubator The Family who has also worked in government, saysregulations still too often favor old-school incumbents over disruptivestartups. “In every sector, the government should adopt policies to encourageinnovation without letting corporate lobbyists wreck the process,” he says,citing healthcare, education and agriculture as areas to focus on.

LESSON #2French founders are going international sooner

For too long, France has been a trap for startup founders who first focusedon building a business domestically, and neglected or delayed developingsales abroad. Several of the respondents to our survey cited this “Francefirst” approach as one of the historical reasons why the country hasn’tproduced more large tech companies in the past decade.“Unlike the U.S. or China, France simply isn’t big enough for unicorns tosubsist only on local sales,” says Nicolas Celier, a venture capitalist whoco-founded a new fund called Ring Capital last year. “Start-ups here needto think about expanding internationally much earlier.” Thankfully, thisprovincialism is changing. The long-distance carpooling service BlaBlacar,one of France’s unicorns, went on an aggressive international expansionin 2014 and 2015. Armed with roughly $300 million in VC funding, itlaunched in India, Brazil, Russia and central Europe, buying four companiesalong the way. Somemarkets didn’t take off but Russia is now BlaBlaCar’sbiggest market in terms of rides.Algolia, a fast-growing French enterprise software company founded in

THE STATE OF THE FRENCH TECH NATIONA survey of 20 leading figures in the sector reveals how far the ecosystem has come and how far it has to go

Do you believe the election of PresidentEmmanuel Macron has improved theoutlook for France as a home fortechnology companies and scientists?

Has the marketing of ‘French Tech’and France as a startup nation gottenahead of reality?

Yes

Stronglyagree

Agree, but moreneeded

Disagree, littlehas changed

Noopinion

Strongly disagree, 0 %

No Too earlyto say

Yes, it isa big

problem

Sometimes,but it is

manageable

No, notat all

Yes No SometimesYes No No opinion

No, 5 %No opinion, 5 %

Does France’s often negative imageabroad as a place to do business affecttech startups’ ability to grow?

Can you attract and keep good techtalent in France?

France has reduced administrative burdens and regulations on startups,and is now an attractive place to found a company.

French government effortsto encourage startups pay off

French founders are goinginternational sooner

Access to capital has improvedbut more is needed at late stage

Exits are still very toughto come by

No opinion, 5 %

No, 5 %No view, 20 %

No view, 10 %

90 %

0 %10 %

25 %

70 %

5 %

50 %

5 %

45 %35 %

15 %

75 %

50 % 25 % 10 %

50 %15 %

Do startups in Francehave access to enoughearly-stage capital?

Do startups in France haveaccess to enough later-stagecapital to gain critical scaleand competeinternationally?

It would be preferable ifmore French startupsreally scaled up vialistings on publicstock marketsinstead of sellingbefore they gaincritical mass.

Is there still worry thatFrance’s best companiesare being sold off to U.S.and Asian buyers?

Yes90 %Yes

70 %Yes

35 %Yes

60 %No

20 %No

— P.27

FRENCH TECH

2015, is another good example of how France’s new breed thinks globally.Its founders aimed to build a global business from day one so they madeEnglish the official language for the staff and the website. After goingthrough the prestigious Y Combinator accelerator in Silicon Valley, Algoliaopened its headquarters in San Francisco. But 60% of its roughly 200employees and all its engineering talent remains in France; the two co-founders split their time between the U.S. and France. Algolia createstechnology that allows developers to build a search engine for their appor website. It has reached roughly $20million in annual recurring revenuefrom subscriptions, two-thirds of which are in U.S. “The distance and timedifference can be a pain,” says Nicolas Dessaigne, one of the co-founders.“But we knew we could build a great team of engineers in Paris muchfaster than in the Valley, where our brand is not well known.” This hybridapproach was also used by Criteo, which expanded into the U.S. early onbut kept its software development teams in Paris.Martin Mignot, a partner at Index Ventures, which has backed Algolia andBlaBlaCar, sees the dual-country strategy as a competitive advantage. “I dothink French engineers are really high quality – better and cheaper andmoreloyal then their U.S. counterparts,” says Mignot. “But the French are pretty

terrible at marketing so it is good to bring U.S.-style marketing and salestalent and merge them with French engineers. That is the most powerfulcombination.”Several of those surveyed agreed that France simply doesn’t have enoughexperienced tech executives who can drive growth into the hundreds ofmillionsofeuros.«Hiringexecutives thathaveworkedat largetechorganizationsis expensive in the U.S. but at least you can find them there,” says NicolasBrusson, a co-founder of BlaBlaCar. “You still struggle to find them inEurope,especially in Paris.”

LESSON #3Access to capital has improved but more is neededat later stages

The good news: France is no longer a laggard in the European venture-capital stakes. Total investment into French start-ups hit €2.5 billion last year,a three-fold increase from 2013 levels, according to Dealroom.co data. Thisremainsmuch smaller than the €7 billion euro invested in the U.K. last year,but the fact that France is on par with Germany is significant progress. Oursurvey respondents believe that France has ample funding for early-stagestart-ups. About 90% say access to early funding has improved in the pastfive years, and 70% think it is now adequate.But behind the rosy numbers of rising tech investment, it can still be verydifficult forentrepreneurs to raisemoney,especially in thebusiness-to-consumersegment. Philippe deChanville, one of the founders ofManoMano, an onlinestore for do-it-yourself tools and gardening supplies, got rejected by some30 French funds along the way. The low point came when a prominentFrench angel investor refused to believe the company’s rosy revenue targets.He snapped at de Chanville and his co-founder Christian Raisson that he“didn’t invest in clowns” before stomping out of the room. EventuallyManoMano did secure funding from Partech Partners and the BPI, amongothers. Since then, the business has grown rapidly, expanding to serve Spain,Italy, Germany and theU.K. It’s nowwidely considered a future unicorn andis expected to make €500 million in sales this year. “Don’t listen to whatlocal investors tell you because theywill kill your dreams,” says deChanville.“It’s a problem with the general mindset. “There is a real lack of ambitionand believing that success is possible.” The picture is darker when it comes

LIST OF RESPONDENTSTO THEINNOVATOR’SSURVEYBenoit Bergeret Hub France IA, founding memberNicolas Brusson BlaBlaCar, co-founderNicolas Celier Ring Capital, co-founderJean-David Chamboredon ISAI, chief executiveNicolas Colin The Family, co-founderPhilippe Collombel Partech Partners, managing partnerNicolas Dessaigne Algolia, co-founderPhilippe Dewost Head of Leonard, VINCI’s Open

Innovation ProgramCarlos Diaz The Refiners Seed Fund,

general partnerNicolas Dufourcq BPIfrance, general managerPascal Gauthier Ledger, presidentBernard Liautaud Balderton Capital, managing partnerMartin Mignot Index Ventures, partnerFleur Pellerin Korelya Capital, acting CEOChristian Raisson ManoMano, co-founderGreg Revenu Bryan, Garnier & Co, managing partnerSébastien Soriano ARCEP, head

(French telecoms regulator)Roxanne Varza Station F, director


FRENCH TECH

to late-stage capital, which promising startups need if they are to truly beable to scale up. Some 60% of those polled say there is not enough growthcapital available nowadays in France. To be fair, growth capital is lacking inEurope in general, so this is not a France-specific problem. As a result, thebest French startups often turn towell-knownU.S.-based investors for growthcapital. The thinking is that U.S. funds also bring with them expertise andknow-howabout internationalmarkets thatmost FrenchVCs cannotmatch.That’s what ManoMano ended up doing. In September, the company raised€60 million in a round led by General Atlantic, a U.S.-based growth fund.

LESSON #4Exits are still very tough to come by

The goal of all startups is to achieve an initial public offering or exit by sellingto a larger company. It’s only when an IPO or exit occurs that the venturecapital investors who backed the startup are rewarded, ensuring a healthyecosystem. A large majority of our respondents expressed the desire thatFrench startups stay independent longer so as to get big and list shares inEurope. But this route remains difficult: European equity investors are lessknowledgeable about technology than their U.S. or Asian counterparts.Liquidity for listed tech shares can be lacking. As a result, listing locally isless attractive and riskier, saysGregRevenu, amanagingpartner at investmentbankBryanGarnier. “Companies going public onEuronext have traditionally

seen lower growth than ones that go public on the Nasdaq,” he says. Ideally,Europe shouldcreateanequivalentof the tech-focusedNasdaqstockexchange,said Sebastian Soriano,who heads ARCEP, France’s telecoms regulator. Overtime, European investors would becomemore tech savvy andmore startupscould list regionally.Dessaigne, the Algolia CEO, admitted that his firmwould likely chooseNewYork if it were to do an IPO. “It would be too hard to do it in France today,”he says. “We can’t make that decision out of ego or national pride – it has tobe what’s best for the company.” Since listings in Europe remain difficult,

ALGOLIAUNITED STATES AND FRANCEWHAT IT DOES : :Makes software forcompanies to help them improvesearch functions across websites andapps. Total funding amount:$74.2million,accordingtoCrunchbase.

https://www.algolia.com/

FRENCHTECHSTARTUPSTOWATCH

Station F, Xavier Niel’s massive startup campus,has become the focal point of tech in Paris.

LEDGERFRANCEWHAT IT DOES : Makes securehardware wallets that allow people tostore their Bitcoin and Ethereumholdings offline without fear of beinghacked.Total funding amount:$85.1 million, according to Crunchbase.

https://www.ledger.fr/

DOCTOLIBFRANCEWHAT IT DOES : An online and mobilebooking platform for doctors inEurope. Total funding amount:$96.4 million, according to Crunchbase.

https://www.doctolib.fr/

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many startups choose to sell to corporate buyers. A large majority of ourrespondents expressed the desire that French startups stay independentlonger so as to scale up and list shares in Europe. About 70%of respondentssaid theyworry that the best startups are still being sold to foreign companies.They often don’t have much choice, since large French companies aren’tin the habit of buying startups. There are signs that things are evolving:BNP Paris and the telecoms group Altice bought startups last year. But thesewere relatively small deals worth a few hundred million euros. Selling tocorporates can also go terribly wrong— just look at how Nokia botched its2016 takeover of the French health-device maker Withings. The foundersrecently bought back the company from Nokia to try to revive it.Phillippe Dewost, a seasoned tech executive who now heads Leonard,VINCI Group’s new open innovation program, cautions that successfulexits will be the true measure of France’s progress in tech. The formergovernment adviser alsoworries that the torrent of publicmoney deployedby the BPI in recent years may not generate spectacular returns. «Latelywe’ve all been cheering at any new investment round and proclaimingour unicorns,” Dewost said. “But we shouldn’t forget that valuation isopinion; cash out is a fact. La French Tech will only have delivered onceexits occur and funds are returned to all limited partners, including theFrench government.” Philippe Collombel, co-managing partner at PartechPartners, urges patience. “Let’s wait to see how companies like Sigfox andAlgolia do,” he says. “It is still too early to declare victory or defeat. Thestory is still in the making.”J.L.S.

DATAIKUUNITED STATES AND FRANCEWHATIT DOES: Platform to facilitatecollaboration between analysts anddata scientists. It helps teamsprototype, build and deliver productsmore efficiently. Total funding amount:$45.7 million, according to Crunchbase.

https://www.dataiku.com/

SCALITYUNITED STATES AND FRANCEWHATITDOES: Founded in 2009, thestartup sells software to manage andprotect data for companies usingmultiple cloud systems. Total fundingamount: $152 million, according toCrunchbase.

https://www.scality.com/

FRENCH TECH

Fleur Pellerin vaulted to promin-ence in 2013 as the public face of “LaFrench Tech,” a government-backedinitiative to promote French startups.As a junior minister for all thingsdigital, she helped raise theinternational profile of the sector andenact tech-friendly reforms. She’s nowthe acting chief executive of KorelyaCapital, a venture fund with €200million under management. Sherecently spoke toThe Innovator aboutthe evolutionof theFrenchecosystem.Does France produce enoughunicorns?FP: Wedon’t create enough unicorns.Itwasoneofmycrusadesasaministerand is still one of my crusades as aninvestor. There is a real difficulty togrow global companies from France.We still lack the ability to scale.Entrepreneurs and theVC investmentfunds haven’t managed to grow theirbusinesses to become worldwidechampions.

In the past the French governmentmoved to create a global chipcompany by merging the French andItalian players. Given the lack of asingle market in Europe, is there aneed for this type of industrial policyto create global champions in newfields such as AI?FP: Iwouldnot relyonthegovernmentto build a new economic actor but Iwould rely on them to enact goodregulatory measures and fix somemarket failures. They should bethinkingaboutnewantirust regulationsbecause they do not always play intothe economic interests of Europeanplayers. In Europe we have 130telecom operators while in the U.S.there are three or four, so how canwe compete? It is the same in manyother sectors. There must be somekind of balance.When it comes to AI,crypto-currency, and blockchain thereis a need for regulation in these fields.Theway you regulate themarketwilldetermine whether you have acompetitive edge or not. Smartregulations can really be anasset. Thedecisions that are made on ICOs,blockchain, AI and crypto-currencieswill determinewhetherwe can createbig domestic or Europeanmarkets tocompete with the Chinese andAmericans. Iwould hate to see a newwave of innovation and have Europeshoot itself in the foot.What are some of the other waysFrench companies could go global?FP:There is a chance tobuild strategicalliancesbetweenEuropeanandAsianplayers. By adding the know-how ofsomebigregionalandAsianchampionsand promising European startups,maybe we can build companies thatcan compete globally. That is the bet.Cathay Capital is doing it with theChinese and here at Korelya Capitalwe are trying to build bridges withSoutheast Asia.

TheCrusadeforUnicornsAnInterviewWithFleur PellerinTheformerministerthinkssmarterregulationcanhelpFrenchTech

CreditMXavierLahache.

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Thetimingcouldnothavebeen worse for theFrenchenergygiantTotal to announce that it had signed an agreement with Google Cloud tojointly develop AI to analyze oil and gas exploration and production data.Thedealcamejustweeksafter theFrenchgovernmentannouncedanambitiousplan to shore up the country’s ownAI sector, which included a pledge of €1.5billionof publicmoney. TheFrenchmathematiciananddeputyCédricVillani,author of the recent governmental report on artificial intelligence, did nothesitate tohidehisdispleasure. “In termsof sovereigntyandeconomy itwouldbe much better if a French solution were developed in this particular case,”Villani said in an interview with The Innovator. “It is one of many examplesof a Frenchactor saying ‘weneedagreatAI solution so let’s turn to big expertslike Google or Facebook or IBM.’ They reject the idea of searching for an ideahere,” he says, even though France is home to top tech talent and researchcenters. To ensure that its AI sector thrives, the Villani report recommendsadopting an aggressive data policy, targeting four strategic sectors (health,transportation, environment and defense), boosting the potential of Frenchresearch, planning for the impact of AI on labor and ensuring AI supportsdiversity and inclusivity. But the support of the private sector is key. The lackof it is why critics say a top-down, government-led approach will not beenough to help France and Europe catch up in the AI race.

Competition is FierceOn the positive side Google, Samsung and Fujitsu have all announced thatthey are setting up AI centers in the country. “The fact that they are cominghere is a sign thatwe are not out of the race,” says Villani. “When importantthings occur here it means you still have a chance to have a good position.”But the new research centers also increase the risk that more of France’stop AI talent will end upworking for foreign companies. The list is already

France’sAIAmbitions— The key to competing with the U.S. and Chinais engaging big corporates and consolidatingefforts across the Continent through a bottom-upapproach.

ARTIFICIAL INTELLIGENCE

long. Notable examples include Yann LeCun, Facebook’s director of AIResearch; and the French academic Françoise Soulié-Fogelman (LeCun’sPhD advisor), whowas later hired to teachChina’s topAI students at TianjinUniversity. Souliémoved back to France recently and is bringing the FrenchAI ecosystem a fresh, much-needed insider’s view on the Chinese AI sector.While the Villani report outlines ways to try and stop the brain drain, thecompetition for talent is fierce.Governments around the world are deploying extensive AI strategic planswith comprehensivepolicyplatforms, researchactivities andfinancial supportfor private investment. The Chinese government, which aims to becomethe world leader in AI by 2030, has announced a detailed three-year planwithconcretegoals tobeachievedby2020,suchas increasingthemanufacturingsector’s energy efficiency by 10%.Meanwhile, Canada and theUnited Statesaredeveloping their own strategies. “WhileCanada seeks to increase scientificexcellence in Al and develop a framework on ethics, policy and the legalimplications of AI, the United States focuses on the need for basis and long-term research on AI but considers the government’s role as a regulator tobe minimal,” notes a March report produced by the European PoliticalStrategy Centre (EPSC), the European Commission’s in-house think tank.In Europe, only a few countries, including France and the United Kingdom,have adoptedAI policies. At the end of April the EU announced that it wantsto invest €1.5 billion in artificial intelligence by 2020 to catch up with Asiaand the United States, which are each investing at least three times more.In 2016 European private investments in AI totaled around €2.4 billion to€3.2 billion, compared to almost €10 billion in Asia and €18 billion in theU.S. The lag could have serious repercussions for Europe.“It is difficult to imagine any segment of society thatwill not be transformedby AI in years to come,” notes the EPSCMarch AI report. It quotes estimatesthat the global adoption of AI across a wide variety of sectors will driveworldwide business revenues from €6.4 billion in 2016 tomore than €37.8billion in 2020.More broadly, AI could contribute €12.8 trillion to the globaleconomy by 2030, representing an increase of 14% on today’s global GDP.

Mastering Europe’s Destiny“To master our destiny requires us to master AI technology and the AIecosystem, says Nathanael Ackerman, an engineer who has served as anadvisor onAI and innovation to the FrenchMinistry of Economy. That iswhyAckerman co-founded and is nowheading upHubFrance IA, a not-for-profitorganization that wants to serve as the “operating system” of the Frenchartificial intelligence ecosystembyuniting all actors, including big corporates,SMEs, startups, research labs and not-for-profit organizations. The Frenchhub wants to take a leadership role in the development of AI Europe-wideand in defining and communicating an AI industrial policy for France andEurope. “Very few big corporates concretely understand what are the newusages of AI and how they can use it to develop their businesses,” says

— P.33

Ackerman. “The hub is a one-stop shop for AI for big companies. If theyhave strategic or technical questions they can ask the hub and the hub willfind the person who is able to answer. We plan to introduce a marketplacefor talent, technology, projects andmergers and acquisitions before the endof 2018. Training for corporate executives has already started, and includesthe strategic impact of AI and management-level courses on best practicesin AI adoption and ethics.” SNCF, RATP, Société Générale, Air France, AirLiquide, Leonard, TF1 LeGroupe, La Banque Postale and France Télévisionsare alreadymembers. “Manyother big companies have expressed an interestin the Hub, including LMVH, Renault, L’Oréal, Accor, La Poste, Ipsos, LaFrançaise des Jeux, EDF, Orange and Capgemini.” says Ackerman. BenoitBergeret, a Hub France IA co-founder and its treasurer, says that “todaycorporates hear aboutAI tools thatGoogle andothers have developed. Thesetools are fantastic but when you are talking about industrial-level problemsthose tools will only get you about 20% of the way.” Adds Bergeret, a serialentrepreneurwho is the generalmanager of CyclopeAI at VINCIAutoroutes,“The Hub is helping companies identify and push AI systems all the waydown to production by connecting corporates to the right actors in theecosystem.”

United We StandTheHub France IA’s ambitions are not limited to helping France’s corporategiants. Its experts are actively advising the European Commission on its AIpolicy. “Nothing new will happen at the European level if it’s not engagingall the main stakeholders, including the member states,” says Jean-LucDormoy,whospearheadsHubFrance IA’sworkwith theEuropeanCommission.“Matthias Machnig, the new German minister for industry (SPD), has aclear idea of the necessity of startup existence and growth, at least that’s

HUB FRANCE IA ATA GLANCEObjective: To serve as the ”operating system” and ”one-stop-shop”of the French artificial intelligence (AI) ecosystem by uniting allactors, including big corporates, SMEs, startups, research labs andnot-for-profit organizations. It also seeks to take a leadershiprole inthedevelopmentofAIEurope-wideand indefiningandcommunicating an AI industrial policy for France and Europe.Corporate Members to Date: SNCF, RATP, Sociéte Générale, AirFrance, Air Liquide, Leonard (groupe VINCI), Le Groupe TFI,La Banque Postale, France TélévisionsWhat It Plans to Offer: A marketplace for talent, technology,projects and mergers and acquisitions beginning summer 2018.Training for corporate executives has already started and includesthe strategic impact of AI and management-level courses on bestpractices in AI adoption and ethics.Cross-Sector Working Groups: Education; Legal, Ethics andDesign; Skills, Inclusion and Job Transformation; Open source,Startups and Ecosystem; Global AI Barometer; Bridge-building withEU institutions and European, North American and Asian tech hubs.Business Groups: Mobility, energy, smart cities and smartbuildings, cybersecurity, robotics, conversational agents, humanresources, health, wellness, sport, finance and insurance, media,telecom, creative industries, industrial processes, the intelligententerprise, digital transformation of government.

“Europe must create a united AIecosystem that complies with Europeanethics, laws and regulations and serves theEuropean economy.France, with its deep technology expertise andexperience of European-level leadership, is agood place to start.”Nathanael Ackerman,co-founder and managing director, Hub France IA

what he says; now, the solutions still have to come.” Dormoy points out thatamongmanyothers, SebastianThrun–whowon theDARPAGrandChallengefor the autonomous vehicle while a professor at Stanford, and initiatedGoogle’s activities in the domain – is German and studied at the FraunhoferInstitute, but found no satisfactory support in Europe. “Personally, I believethat the solution must come step by step – which does not mean slowly –in particular by changing the mindsets of the elite and using incentives toengage the private sector,” says Dormoy.

Aggregating OpportunitiesFor theHub, thatmeans complementing government-driven directiveswitha bottom-up approach that involves forging relationshipswith other hubs inEurope. The idea is to organize meetings with startups and big companiesin hubs in places like London, Berlin andAmsterdam, andexchange expertiseand experts. “Every hub needs to have a clear view of the AI ecosystem sothroughthisnetworkofhubswecanspread informationaboutAIdevelopmentandhelp createopportunities,” saysAckerman. “For example if a big companyin France is searching for a specific service maybe it exists somewhere elsein Europe. That is why we will set up a marketplace for projects and alsoformergers and acquisitions in Europe. The EuropeanUnion is taking a top-down approach to AI, but we think it is important to construct a network ofhubs in Europe from the bottom-up so we can aggregate opportunities.” Ifit works, France – and Europe – could still have a shot at competing withtheUnited States andChina. “Europemust create a unitedAI ecosystem thatcomplieswithEuropeanethics, laws and regulations and serves theEuropeaneconomy,” says Ackerman. “France, with its deep technology expertise andexperience of European-level leadership, is a good place to start.”J.L.S.


THETOP25STARTUPSTOMEETATVIVATECHA selection of young companies disrupting business

FUTUREOFWORKTALMUNDOTHENETHERLANDSWHAT IT DOES: An HR platform that simplifies theon-boarding process for new employees, fromsigning a contract to starting work.

https://www.talmundo.com/

FUTUREOFWORKREALWEARUNITEDSTATESWHAT IT DOES: A shock resistant augmented realityhead-mounted wearable device for connectedindustrial workers.

www.realwear.com

FUTUREOFWORKDAQRIUNITEDSTATESWHAT IT DOES: An augmented reality platform forindustrial use that aims to improve communication,training and diagnostics.

http://www.daqri.com.

MOBILITYSTARSHIP TECHNOLOGIESUNITEDKINGDOMWHAT IT DOES: Building a fleet of autonomousrobotic vehicles that deliver a wide range of goods tocustomers’ homes or offices.

https://www.starship.xyz/

MOBILITYIRIDIUM DYNAMICSAUSTRALIAWHAT IT DOES: Makes high-performancefixed-wing drones for a wide range of commercialmarkets.

https://iridiumdynamics.com/

FUTUREOFWORKDATAIKUUNITEDSTATESWHAT IT DOES: A software platform that pulls indata from across a company and uses visualdesign to make it accessible to employees in orderto drive analysis and decision making.

https://www.dataiku.com/

RETAILDEMOOZFRANCEWHAT IT DOES: A platform that enablesconsumers to try gadgets that might not beavailable in local brick-and-mortar retailers byconnecting them with other consumers who havealready purchased them.

https://demooz.com/

HEALTHQMENTAUNITEDSTATESWHAT IT DOES: Blendsadvanced imagingandcomputationalanalyticstodiagnoseandstudyneurologicaldisease..

https://www.qmenta.com/

ENERGYIRLYNXFRANCEWHAT IT DOES: Leverages thermal infraredtechnology and sensors to create smart buildingsthat detect the presence of people to automateenergy savings.

http://www.irlynx.com/

ENERGY

ENERGIENCYFRANCEWHAT IT DOES: Developedasoftware-as-aaservice(SaaS)platformforcompanies thatemploysmachinelearningtomakemoreefficientusesofenergy.

http://www.energiency.com/

FINTECHPAYJOYUNITEDSTATESWHAT IT DOES: PayJoy has built a consumer financeplatform that uses data science to make loans topeople with limited access to banks so they can affordconsumer electronics such as smartphones.

https://www.malong.com/

— P.35

FUTUREOFWORKSHIPPEOFRANCEWHAT IT DOES: A real-time transport platformthat gives shippers greater visibility into thetracking of deliveries while allowing directcommunication with end customers.

https://www.shippeo.com/

FUTUREOFWORKTELLMEPLUSFRANCEWHAT IT DOES: Deploys artificial intelligencewhere the data is produced and where decisionsneed to be made in order to automate the creationand deployment of predictive models

www.tellmeplus.com

FUTUREOFWORKYOBSUNITEDSTATESWHAT IT DOES: Analyzes video interviews of jobcandidates to determine their aptitude andemotional intelligence, helping companies hire thebest people.

https://www.yobs.io/

MOBILITYMOTIONTAGGERMANYWHAT IT DOES: Allows transportation companies totrack travelers using their smartphones, eliminatingthe need to check in and buy separate tickets.

https://motion-tag.com/

RETAIL

SOUNDHOUNDUNITEDSTATESWHAT IT DOES: A voice-enabled AI andconversational platform that lets developers andbusinesses include voice search and assistants intheir products.

https://www.soundhound.com/

RETAILWYNDFRANCEWHAT IT DOES: A point-of-sale platform thathelps businesses manage sales channels bothin-store and out-of-store.

https://www.wynd.eu/

AGRITECH

NEO.FARMFRANCEWHAT IT DOES: A robotic-driven farming system thatreduces the need to use chemicals and petroleum.

http://neo.farm/

SMARTCITIESCITYTAPSFRANCEWHAT IT DOES: Processes pay-as-you-gopayments through mobile money so that waterutilities can connect the urban poor to theirnetworks.

www.citytaps.org

ENERGYENERBEEFRANCEWHAT IT DOES: Develops energy harvesters thatcapture energy from motion and can be used toreplace batteries in both consumer and industrialconnected objects.

http://www.enerbee.fr/

Compiled and written by Chris O’Brien.

O’Brien is European c orrespondentfor VentureBeat, currently based in France.Before moving to France in 2014,he spent 15 years covering Silicon Valley for theSan Jose Mercury News and Los Angeles Times.

FINTECHPERSONETICSISRAELWHAT IT DOES: Offers a predictive service thatenables financial institutions to deliver persona-lized customer experiences across online, mobileand tablet platforms with the goal of increasingcustomer interaction.

https://personetics.com/

FINTECHGAMBIT FINANCIALSOLUTIONSBELGIUMWHAT IT DOES: Arobo-advisorthatcanbeusedbybankstocreatepersonalizedfinancialadviceforclients.

http://gambit-finance.com/

RETAILQOPIUSFRANCEWHAT IT DOES: Uses computer vision, robots,connected cameras and smartphones to trackstock for retailers.

https://www.qopius.com/

RETAILGESTOOSSPAINWHAT IT DOES: An AI platform that enablescameras and sensors to see, analyze and respondto human gestures and behavior in multipleenvironments. Uses include integration into digitalsignage to increase interactions with consumersinside stores and shopping malls.

http://gestoos.com/

RETAILBLUEFOXUNITEDSTATESWHAT IT DOES: Helps businesses and brandsdetect nearby mobile phones so they can interactand engage with customers without requiringthem to first download an app or opt-in.

https://bluefox.io/


Ian Rogers, the formerdirectorofAppleMusic, ischiefdigitalofficer of LVMH, the Paris-basedconglomerate that owns 70 luxurybrands, including Céline, ChristianDior, Berluti, Bulgari, Fendi andGivenchy. (LVMH also owns GroupeLes Echos, The Innovator’s parentcompany.) Rogers is responsible forLVMH’s foray intomulti-brand luxurye-commerce, 24 Sèvres, a boutiqueshopping website and mobile appnamed after the Paris street whereLVMH’sflagshipParisdepartmentstoreLe BonMarché is located. In the lastyearhehasadditionallyhelpedLVMHto ramp up its e-commerce businessacrossbrandswithnewsites forCélinehandbagsandBerluti shoes; launchedthe first online store in China for thegroup brand Louis Vuitton ;andapproved the launchof LVMHbrandsin the luxury section of Tmall, theInternet giant Alibaba’s multi-brande-commerce site.Rogers, who will help preside overthe LVMH Innovation Awards at VivaTechnology, a May 24-26 Paris techconference, recently spoke to TheInnovator’s editor-in-chief about howtech is transforming the luxury sector.

tionship with Farfetch and withothermarketplaces around the wor-ld. We have also increased our ef-forts when it comes to search engineoptimization and affiliates such asGoogle Shopping and Lyst as part ofour overall e-commerce strategy.What would you say is 24 Sèvres’primary differentiator online?IR: The first is a unique and exclusiveselection. The French and Parisiantake on fashion wasn’t representeduntil 24 Sèvres came online. 24Sèvres is the only onlinemulti-brandto offer Louis Vuitton, Dior and

looking for. It is not just about beinga multi-brand retailer. We have in-vested heavily in our brand-to-consumer platforms. Last yearCéline, Givenchy and Berlutilaunched direct e-commerce fromtheir web sites and most all LVMHbrands, including Louis Vuitton andDior, expanded e-commerce geogra-phically including China. Sephora,in cosmetics, is the clear industryleader, and we are building ourstrength in multi-brand fashione-commerce as well with 24 Sèvres.Many of our brands have a rela-

It has been one year since LVMHlaunched 24 Sèvres. Although LVMHdoes not break out traffic to the site,press reports say the figures stilltrail way behind those of otherdigital luxury e-commerce playerssuch as FarFetch and YooxNet-A-Porter. Is that a fairstatement? Are you pleased with thesite’s progress?IR: We are extremely pleased. Wedon’t compare to those e-commerceplayers. The way we look at thelandscape is you have to be able tooffer all the things a customer is

FUTUREOF RETAIL

DefiningtheLuxuryCustomerExperienceAnInterviewWithIan Rogers,ChiefDigitalOfficerofLVMH

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Céline, and we have offered manyother exclusives, fromour initial cap-sule collection to Rimowa/Supreme.The second is unparalleled service.When you visit 24 Sèvres you canclick a button and via video you areconnected with a stylist in Paris, sono matter where in the world youare, you can get the same advice youmight get if you walk into Le BonMarché in Paris and are interactingwith a salesperson. Our belief is thatthe future of luxury e-commerce isnot a bunch of dresses in a grid. Insome ways it more similar to a

Warby Parker or Uber approach, onethat solves consumer problems usingtechnology as opposed to digitizingthe space.With Uber I can call a car with anapp and have a physical world expe-rience that made it convenient forme to get from one place to another,similarly with 24 Sèvres instead ofdresses on a grid I can reachsomeone who can give me stylingadvice, arrange to pick up my dressor try it on at Le Bon Marché if thatis what I want to do and receivegreat content in my inbox showingme the daily looks on the streets ofParis. That is why in [an October2017 report published by Exane BNPParibas] that analyzes the customerexperience in Paris throughout theonline purchasing process, we camein at number one, above Burberry.Two of China’s biggest e-tailers —Alibaba and JD.com — are alsotrying to get into the luxury retailmarket, as the Chinese account for athird of luxury goods sales. Do youview these new Chinese entrants ascompetitors?IR: I love the China challenge. I per-sonally find it one of the most inte-resting and fun parts of my job hereat LVMH. The leaders of Alibaba andJD.com have an appreciation forluxury. They value it. It is a part oftheir ecosystem. Alibaba has madebigmoveswith Tmall. Our initial res-ponse was that it was OK for cosme-tics but not appropriate for luxuryfashion.We talked a lot with Alibabaabout this directly. Recently they res-ponded to our feedback by launchingthe Tmall Luxury Pavilion – and weimmediately started with a test withLoewe. When I joined the groupthere were zero LVMH brands onTmall. Today we have nine and thatis likely to expand in the future. We

are also experimenting with JD.com’s Top Life – their own mul-ti-brand retailer –as well. They offerwhite-glove delivery of luxury goodsto enhance the experience.How is LVMH marketing directly toChinese consumers?IR: Many of the luxury goods pur-chases by the Chinese happen whenthey travel and 100% of Chineseconsumers are usingWeChat. It is anincredible messaging system and weare investing heavily in using it toconnect to customers and influencers.How would you describe LVMH’soverall approach to creating aninspirational luxury experience bothonline and off, and how do you seethat evolving?IR:Weare considering this very care-fully and are building to meet cus-tomer expectations both now and inthe future. Luxury is not going to be-come a commoditized experience.That is notwhat customerswant. Asour lives become more and moredriven by our phone,s in-person ex-periences will demand a premium.With 24 Sèvres, the online extensionof the original department store, LeBon Marché, your order arrives in agorgeous box adornedwith your ini-tials and a paper Eiffel Tower popsupwhen you open it. Le BonMarchéitself is increasingly experiential. Ican have a coffee there, buymy gro-ceries, get my hair cut and atChristmas time there are acrobatsand opera singers. Every Januarythere is an art exhibition. I can stillgo to the second floor and buy a$15,000 dress but I also go there be-cause it is a great place to go. It is adestination in itself. Just as you needto create a compelling in-store expe-riencewe believe you have to have areally excellent and convenient on-line experience and offer people so-

mething special. When you visitCeline.com and 24 Sèvres, each onedoes what they do exceptionallywell. At the same time Céline storesare incredible and women and menwant to have that experience so weare going to need to have that com-bination of both.What types of innovations can weexpect in the future that will helpstores do a better job of recognizingand connecting to their customers ?IR: One of the things we are testingis a card that goes into your digitalwallet, like a boarding pass for aflight, so that when I walk into thestore – a sales assistant or it could bea kiosk –will immediately know I amhere. I think people would get up inarms if we used facial recognitionand would say “Hello there Mr.Rogers who know you were lookingonline last night at a Trio bag,” buton the other hand if they have in-vested their precious time to createa wish list, customers might like toconnect thatwith their in-store expe-rience. I think this is why everybrand is looking at all of their cus-tomer journeys and trying to updatethem with their brand values.Everyone is working hard on thisproblem. It will be some time for thepieces to come together and I thinkyou will have some missteps alongthe way.Is the luxury sector behind when itcomes to adopting technology?IR: I don’t think luxury brands shouldbe the early adopters but I don’tthink we should be on the Ludditeside of the curve either, which ismaybewherewe have been. It is notabout shiny objects. It is about “Wowthat was definitely a great expe-rience.” That is what we are all ai-ming for.J.L.S.

“Webelieveyouhavetohaveareallyexcellentandconvenientonlineexperienceandofferpeoplesomethingspecial.”


Walk into the Sephora store at Gare St. Lazare in Paris and a“smart” mirror will help you select and apply the make-up that is right foryouand takenote of your choices for future reference. Thinkof it as amirrorinto the future, not just for cosmetics but for luxury retail. It is omni-channel,it is personalized and it is already coming to stores near you.The MemoryMirror on display in the Sephora store was developed bymemomi, a startup that first connected with LVMH, the owner of theSephora brand, at Viva Technology, a May 24-26 tech conference thatconnects startups with big corporates.The Paris-based luxury conglomerate has been particularly active inembracing new technology in the last year, building a multi-brand onlineshop called 24 Sèvres, named for the group’s flagship brick-and-mortarLe Bon Marché Paris department store, launching a $50 million venturefund dedicated to emerging luxury brands, and starting La Maison desStartups program at the Paris-based incubator Station F. (memomi is oneof 50 startups working within the 220-square-meter LVMH space.)It is part of a trend. “Luxury is finally getting its tech upgrade,” concludesa recent report on the sector from the analyst firm CB Insights. For years,incumbents in the luxury industry refused to even sell products online,notes the report. But luxury-focused e-commerce startups like FarFetch,based in London, have changed the relationship between luxury consumers

ReinventingLuxuryRetail— Tech is helping to transform the in-store andonline experience.

FUTURE OF RETAIL

and brands by successfully building online retail businesses.Meanwhiletwo of China’s biggest e-tailers — Alibaba and JD.com— are also gettinginto the luxury retail market, as the Chinese account for a third of luxurygoods sales. Alibaba launched the Luxury Pavilion on Tmall, a shoppingsite featuring Burberry, Guerlain and other brands. And JD.com, whichalready invested $389 million into Farfetch, has unveiled the luxury sitewith fashions from Saint Laurent, Emporio Armani and others.Against this backdrop LVMH’as chief digital officer, Ian Rogers – who washired away from Apple in 2015 – not only launched 24 Sèvres, the group’sfirstmulti-brand luxury e-commerce play, but expanded the online presenceof “Maisons” like Berluti, Givenchy, Louis Vuitton and Dior; set up anaccount for Céline on the Chinese social networking appWeChat to appealto Chinese customers; and approved the sale of nine LVMH brands onTmall. (See the interview on pages 36 and 37).

Upgrading the In-Store ExperiencePhysical stores of LVMH brands are also cautiously beginning to embracetech. That is important, because luxury companies have historically usedcustomer experience, andmoreparticularly in-store experience, todistinguishthemselves from mainstream brands. Although global luxury companieshave finally moved online, stores are still where customers connect withthe brand through private shopping sessions, personalized styling, andtop-notch customer service, says the CB Insights report.Retail andwholesale also remain luxury brands’main distribution channels,generating 10 timesmore revenue than online shopping, according to theglobal consultancy Bain. Upgrading the in-store experience using newlyavailable technologies is both an opportunity and a challenge for luxurybrands, which pride themselves on crafts and traditions.Rogers cautions that retail customers crave white-glove service overdigitalization. “This is not about shiny objects, it has to really improve theexpérience,” he says. “There are interactions between customer cellphonesand associate cellphones that offer ways to reduce friction and enhancethe experience that are simple and very useful.”While Rogers believes that in-store technology is likely to be mainly

behind the scenes, new technologies such as AR/VR are starting to beinstalled in luxury stores, including smart mirrors like the one developedby memomi. In addition to the makeup mirror, memomi has developeda fashion mirror that allows shoppers to try on items virtually – changing

— P.39

colors and patterns instantly, adding accessories and other items to createthe perfect look without having to physically try on anything.Memomiwas one of the startups pre-selected through the LVMH Innovation Awardthat is given at Viva Technology each year. Award finalists (30 this year;32 in 2017) are invited to showcase their technologies during the threedays of the Paris tech conference.“We had 500-plus startups apply last year and 800-plus apply this year,”says Isabelle Faggianelli, LVMH’s director of digital transformation. “It’san efficientway for both startups andMaisons to identify potential businesspartners.Smart ideasweregeneratedduringVivaTechandmanycollaborationshave been realized after the event.”

Personalizing DesignsAmong them is a collaboration with SmartPixels, a Paris-based startupwhich first connected with LVMH, Groupe Les Echos’s owner, at the firstedition of Viva Technology in 2016.

RETAILSTARTUPSTOWATCH

HEROU.S. AND BRITAINWHAT IT DOES : Turns in-storeassociates intoconnected,personalshoppersviaaconversationalcustomerrelationshiptool.Throughreal-timemessagingandlivephoto/videocontent,associatescansell to,serveandearnwithonlinecustomers.http://www.usehero.com

During the 2016 conference, SmartPixels showcased animated bottles ofthe LVMH champagne brand Moët Hennessy, and also digitally projecteddesigns onto a Berluti Alessandromodel shoe. This led to discussions withBerluti and a project to support Berluti’s made-to-order special in-storeoffer. Berluti has been experimenting with a range of designs by the artistScott Campbell that can be digitally projected onto shoes and leathergoods in-store to help customers choose how they want to personalizetheir shoes. The first step is photo-realistic renderings of all textures and

LVMH’s flagship brick-and-mortar department storeis now represented online by 24 Sèvres, a boutique shoppingwebsite and mobile app named after the Paris streetwhere Le Bon Marché is located.


colors. The second is a drag-and-drop application, helping clients visualizeall the possibilities. The last step is a snapshot of the desired product. Atechnical file is then sent to an artisan digitally as a special order.The application of personalized designs to Berluti shoes is still being fine-tuned, but it is a good example of how “startups are helping us to bringmore personalized and interactive customer experiences to brick-and-mortar stores,” says Faggianelli. At the time same time, LVMH is lookingto improve the online experience. “E-commerce is an important part ofour business today,” she says. “It can generate even more sales than aphysical store.”

The Startup SolutionExamples of how startups are helping LVMH enhance customers’ digitalexperience include its workwith Smartzer, a 2017 LVMH Innovation Awardfinalist that specializes inmaking online videos interactive and shoppable,allowing brands to monetize video content on-site, in video ads and onsocial networks. And Louis Vuitton is working with the startup Mode.ai,which is using its virtual advisor chatbot to give customers a personalizedand real-time experience for online discovery and shopping via FacebookMessenger.“We look for solutions that can benefit our business and/or inspire ourculture or accelerate our transformation,” says Faggianelli. LVMH isinterested in startups that can offer raw materials, product design, onlineand offline retail solutions, AR/VRormixed reality tools, data and analyticalsystems, marketing and B2B solutions and forward-looking devices or

services, she says. It is an affirmation that technology is becoming moreintegral to luxury retail, both online and off, says Faggianelli: “At the endof the day, it’s not about e-commerce or the physical store, but providingan excellent digital experience across the different touch points of thecustomer.”J.L.S.

ORBISFRANCEWHAT IT DOES : Orbiscreatesinteractiveholographiccontenttotransformcustomersfromspectatorsintoactiveparticipants insideabrand’suniverse.

http://orbis-prod.fr/

VECHAINSINGAPOREWHATITDOES: Uses the blockchain tomanage and update supply-chain data.For example, to combat the sale ofcounterfeit luxury goods it embedscustomized NFC chips into leatherproducts, to achieve traceability and aproduct’s authenticity.https://www.vechain.com/

MALONGCHINAWHATITDOES: Visual productrecognition based on artificialintelligence. Its ProductAI cloudplatform equips businesses with imageretrieval and auto-tagging for industryverticals such as fashion, furniture, cars,textiles and wine.www.malong.com

KRONOS CAREFRANCEWHATITDOES: Kronos Care aims tohelp brands deliver the best post-pur-chase experience from delivery trackingto after-sale service by engaging andreassuring customers during thetracking process via email, FacebookMessenger or WeChat.https://kronoscare.fr/en

Physical retail outlets, like Sephora’s Gare St.Lazare store, are become powerful platforms for anomni-channel customer experience.

FUTURE OF RETAIL

WE NEED

Y U“If you want to be a startup billionaire, you have to solve a billion peoples‘ problems”Thimo V. Schmitt-Lord MBE, Head of Bayer Foundations

We believe in the game changing power of innovation – we support pioneers who apply tech innovations to humanity’sbiggest challenges around health and food.

In 2018 we are scouting for Startups, Innovators, and Impact Innovations particularly focused on agriculture and foodproduction for our seed funding programs and new book "The Beauty of Impact - Food". We are searching for innova-tions that solve the food crisis and other global grand health-related challenges that we can promote and fund to bringto the rising billions in need around the world.

The next opportunity to meet the Foundations CEO Thimo V. Schmitt-Lord and Open Innovation Hub Director andSpeaker Marc Buckley is at EAT Stockholm Food Forum 2018 in Stockholm, Sweden on June 11-12 and at Tech Open Airin Berlin, Germany on June 19-22.

Seeking funding yourself for a crazy“innovation-4-good”idea?Get in touch with us at [email protected]. More Info: www.bayer-foundations.com


It isnosecret thatthere isabacklashbrewingagainst thewaydataprivacyishandledbySiliconValleycompanies.TheFacebook/CambridgeAnalytica scandal brought the issue front and center. The firm is accused ofusing data it improperly obtained fromFacebook to build voter profiles andinfluence the U.S. presidential election.Europe is now taking the lead, enacting privacy-protection law in the formof GDPR, Europe’s new stricter data protection law that takes effect onMay 25. (See the story on pages 46 and 47.) But there is also amovementafoot to use AI and blockchain technologies to safeguard data privacy inways that could profoundly change theway the Internet and social networksoperate and – in the opinion of some entrepreneurs, researchers andinvestors – better reflect European values.“Our personal data is being used to create trillions of market cap by the‘big guys’ like Facebook, Google and Amazon,” says the investor AnastasiyaBelyaeva. “While sensible regulation is of course important, what’s perhapsevenmore important is a technology-native approach toprotecting individualprivacy and sovereignty.”Belyaeva and her partners RichardMuirhead andMaxMersch are raisinga London-based venture fund dedicated to investing in decentralized datanetworks that enable individuals to regain data ownership sovereignty,while powering a new level of technological experimentation and becomingthe “data substrate” for artificial intelligence.“We see decentralization and crypto as a way to move from ‘don’t be evil’” to ‘can’t be evil,’ ” says Belyaeva.What decentralization allows is to have

Re-EngineeringtheInternet— How AI and blockchain might be used to protect dataprivacy.

By Chris O’Brien

DATA PRIVACY

all the profiling data and tracking data stored locally, where the user ownsit and can personally delete it at any point in time, she says. Only thenetwork itself can programmatically access the data, and zero knowledgeproofs or protocols like those being developed by a Berlin-based projectcalledOceanProtocol canbeused to allow theuse of data – formonetizationor training of AI algorithms – without giving away ownership or evenseeing the data.“Overall, we see this as the way for people to retain their right to managetheir personal data in a sovereign manner at scale, while also benefitingfrom the AI-enhanced software services,” she says. “A swarm of devicesconnected by wireless broadband with this new self-sovereign data layerwill be the substrate for AI-enhanced ‘human-centric computing.’ ”

Keeping Data LocalEntrepreneurs in France are also developing technology to safeguard users’privacy. For example, the AI expert Rand Hindi, CEO of Snips.ai and ascheduled speaker at Viva Technology, told The Innovator that he plansto commercialize an Amazon Alexa-like smart speaker by the end of nextyear that will process data locally instead of uploading it to the cloud. TheFrench company is already working with automakers and other largecompanies that do not want U.S. tech giants to be the interface with theircustomers and collect their data. Meanwhile Qwant, a search enginedeveloped five years ago in France, is engineered to respect privacy.Fabric Ventures’ investments include Blockstack, which allows users tomanage their digital identity and sign in to apps without giving away theiridentity, while projects like Orchid, another U.S. venture, allow deeperlevels of censor/tamper-resistant security on the internet.The projects are actively seeking developers. And some of them are adding

DATAPRIVACYSTARTUPSANDPROJECTS

The founding partners of London-based Fabric Ventures: Richard

Muirhead (L), Anastasiya Belyaevaand Max Mersch.

— P.43

BLOCKSTACKUNITED STATESWHAT IT DOES : Helps users managetheir digital identity, and sign in toapps without giving away theiridentity to centralized providers likeFacebook.

https://blockstack.org

QWANTFRANCEWHAT IT DOES : A search engine thatrespects your privacy and easesdiscovering and sharing via a socialapproach.

www.qwant.com

OCEAN PROTOCOLGERMANYWHAT IT DOES : A decentralized dataexchange protocol that allows the useof data for monetization or training ofAI algorithms without giving awayownership or even seeing the data.

https://oceanprotocol.com

SNIPS.AIFRANCEWHAT IT DOES : Its Voice Platformallows anyone to integrateAI-powered voice interaction in theirdevices. The information is storedlocally, rather than in the cloud, toprotect user privacy.

https:/snips.ai

sweeteners. Blockstack, a global project headquartered in New York,announced in aMay 10 blog posting that it will invest $1million to rewritethe fundamental basis of how we work. “No single entity should haveunilateral say over how two billion people connect and communicate,”Blockstack said in its blog post. “The current centralized model of socialnetworking has created a stranglehold on our collective consciousness,communication, and friend network. But we’re at an inflection point —a moment where people can reclaim control of the way they network.”Blockstack says it want the future of social networking to look like aconstellation of decentralized applications that preserve digital rights,privacyanduser choice. Itwould includeanetworkof applications compatible

“We see decentralizationand crypto as a wayto move from ‘don’t be evil‘to ‘can’t be evil.’ ”Anastasiya Belyaeva,founding partner of Fabric Ventures, a London-based venture funddedicated to investing in decentralized data networks that enableindividuals to regain data ownership sovereignty, while powering anew level of technological experimentation and becoming the “datasubstrate” for artificial intelligence.


with one another — that no single company owns — built on underlyingprotocols used for communication and data transmission. Each developeror team that is accepted will receive $100,000 to build a social networkusing the Blockstack infrastructure. Teams will have the opportunity topresent at future Blockstack Summits, and receive further support in theform of capital or mentorship.Teams have the autonomy to build different features, or target broad ornarrow audiences. They could, for example, build online networks foractivists in authoritarian countries, or forums for people with a sharedillness. And their apps could have completely new features, or take interfacecues from Facebook or Twitter. They’ll just have to prove product marketfit and show an ability to reach mass adoption, like Blockstack.

A Collaborative EnvironmentBy building on top of an infrastructure like Blockstack’s, developers willhave identity and storage baked into the underlying infrastructure, sothey can focus on user experience and not passwords or storage. Andsince all users will own their identities, data, money and social graph,Blockstack promises they will have the freedom to adopt the very best ofwhat these social networks have to offer.Enough developers are interested in working on projects like Blockstackthat Fabric Ventures is building Fabric House, a co-working space thatintends to bring together founders and teams working on decentralizednetworks, to create an environment for collaboration and open-sourcingof knowledge in London. “Because teams in Europe are so distributed,many individual members end up working from coffee shops or fromhome in different corners of Europe,” says Belyaeva. “Our goal is to bringthem together in one physical space, while also partnering with similarhubs in other cities, such as FullNode in Berlin.”Grassroots efforts like Fabric House could dovetail nicelywith the EuropeanCommission’s attempts to devise an EU policy on artificial intelligence.“Given that machine intelligence and learning is driving access to largevolumes of data, Europe’s practice ofminimization and high data protection

standards can be seen as a disadvantage against the likes of China, wherepersonal data flowsmore freely,” says a report produced by the EuropeanPolitical Strategy Centre (EPSC), the European Commission’s in-housethink tank. “But digital prosperity will have to go hand-in-hand withcitizens’ well-being. This is where Europe can create a competitive edgefor itself.”

DATA PRIVACY

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Rand Hindi,founder and CEOof France’s Snips.ai and a scheduledspeaker atViva Technology


As the British pub chain JD Wetherspoon prepared for Europe’snew stricter data privacy law, it was still smarting from a massive hack inwhich customer information was stolen. So it decided it was more prudentto erase an email marketing list of 700,000 people rather than risk holdingso much personal data.Such course corrections are occurring at many companies with business inEurope ahead of the new General Data Protection Regulation (GDPR),which takes effect on May 25. But even those doing their best to complyface a thicket of unknowns.The law grants individuals expanded rights overhow their personal information is collected and used, and companies thatdon’t respect those rights will be subject to potentially huge fines. Butmuchremains uncertain about how it will be implemented by businesses andenforced by authorities. As a result, it’ll take years for companies affectedto truly understand the law’s impacts and costs, according to nearly a dozenexecutives, lawyers and consultants interviewed by The Innovator.The law only sets out broad principles, such as the obligation to obtainconsent anda requirement that companies define the legal basis for collectingsomeone’s data. Policymakers intentionally leftmuch about implementationvague, leaving companies tomake educated guesses about how to comply.National regulators and the courts will gradually weigh in on whetherdecisions about GDPR now being made in boardrooms around the worldwere on themark or not. The costs and burden on businesses also dependon other unknowns, such as whether European consumers will decide toexercise enmasse their right to obtain a copy of their data from companies.Another question is how aggressively privacy advocates – such as theAustrian lawyerMaxSchrems,whowona landmark lawsuit against Facebook– will use the courts as a weapon.

LivingWithUncertainty— Corporations struggle to adjust to the fog of Europe’snew data privacy law.

By Leila Abboud

DATA PRIVACY

“The GDPR regulation is complex, much more so than existing law,” saysLaurie-Anne Ancenys, a lawyer with Allen & Overy in Paris. “It will takeyears to figure out what it means to be compliant.”

A Marathon, Not a SprintSowhat should businesses do? Treat compliance as amarathon, not a sprint,GDPR experts advise. Regulators have discretion to decide which violationsto pursue and at what pace. Companies will have to lobby regulators, andtake part in debates about the details of implementation for their sectorsand in the countrieswhere they operate. Businesses can’t just declare victoryon May 25 and move on. It will take money and effort to stay on the rightside of data protection law as it evolves.Just how much money compliancewill cost over time is also hard to gauge, says Richard Hogg, a GDPR expertat IBMCorp.Hehas seen largemultinationals spend$5million to$10millionto assess and revamp their data-handling systems, dependingon their startingpositions. Smaller companies canmanagewithmuch less expense. Althoughmany companies won’t be done by the May 25 deadline, those that startedby fixing the dozen or somost critical systems should be fine if they can showregulators a road map to take care of the rest, Hogg says.

A Boon for Lawyers and ConsultantsGiven that much remains unknown about the application of Europe’snew data privacy law, businesses have to learn to live with uncertainty.That doesn’t mean they should take a “wait and see” approach becausethe issues can cut to the core of their businesses.One example is a fight brewing in the media sector: Google and onlinepublishers disagree over whomust get consent from an individual beforea targeted advertisement sold via Google’s technology can be shown tothem. Is it the media outlet where the person sees the ad, as Googleargues? Or should it be Google since it targets, sells and places the ads?Ad-targeting occurs millions of times per day on the modern web; itunderpins billions in revenue for Google. Yet no one is really sure howit should work in the brave new world of GDPR. Getting it wrong couldexpose Google or the publishers to liability and fines.Now imagine similar debates over basic business processes taking placein sectors such as banking, retail, airlines, energy providers or healthcare. It’s a boon for the lawyers and consultants who help corporationsdeal with data protection, and it has also led to a talent war. France’sdata protection regulator CNIL estimates that 80,000 companies willneed to hire data protection officers as required by the law, comparedwith about 14,000 today. Schools are barely churning out a few dozenper year, says Bertrand Liard, a lawyer atWhite & Case in Paris. “Expertiseis sorely lacking,” he added.The stakes are high, because GDPR ratchetsup the fines that regulators can inflict on companies who break the rules.Under Europe’s old approach, the maximum fine in Britain was £500,000

— P.47

while in France it was €150,000. Some countries did not even have theability to inflict fines on wrongdoers.Under GDPR, companies can befined up to 4% of their global revenue. That’s enough to make evendeep-pocketed tech companies like Facebook and Google shudder.

Unexpected BenefitsDespite significant uncertainty and cost, complying with GDPR can havea positive side for corporations. The savviest of them have used the run-up as a catalyst to better organize the data they collect on employeesand customers with the aim of then using it to drive higher sales orsqueeze out costs. Others have usedGDPR to justify information technologyupgrades or new strategies that are better in the long run.For example, the Dutch financial institution Rabobank worked with IBMto use cryptography to alter terabytes of customer data, such as names,birthdays and account numbers, so as to remove all personally identifiableelements. The pseudonymized data is used by the bank’s softwaredevelopment teams to test new services such as mobile apps or paymenttechnology without fear of running afoul of Europe’s data rules. “GDPRis a transformation opportunity for companies,” says Hogg. “You keepless information but better and cleaner data that allows you to get closerto customers.” That companies are being forced to think harder aboutdata collection means that GDPR is already having its desired effect.“Firms are taking this very seriously,” says Daniel Mikkelsen, a seniorpartner at McKinsey & Partners in London. “The big stick changeseverything.”

GDPR AT AGLANCEEuropean citizens’ rights under GDPR:

The right to be informedThe right of accessThe right to rectificationThe right to erasureThe right to restrict processingThe right to data portability

Responsibilities of companies under GDPR:Post clear notices for users to get ”unambiguous”consent to collect data.Determine the legal basis for all data being collectedor processed.Avoid retaining data for longer than necessary.Hire a data protection officer if the business has morethan 250 employees.Respond to data access requests from individuals.No collection of data of children under the age of 16.

A MANDATE FOR BUSINESSES TO DO MORE, CALLS TO PUT SECURITYOVER PROFIT AND FOR GOVERNMENT INTERVENTION

The Role of Business and GovernmentTo what extent do you agree or disagree with eachof the following ?

Business should be doingmore to actively protect consumersagainst cybersecurity threats

Given the lack of success businessesare having when it comes tocybersecurity. it’s appropriate forgovernment to step in.

100%

0%

4% 11% 40% 45% 85%agree 91% 93% 76% 93% 89% 83% 67%

Business are fully aware of thecybersecurity risks they face, but aremore focused on profits thanaddressing security needs.

Source: IBM Cybersecurity and Privacy Research. The survey was conducted onlineby The Harris Poll on behalf of IBM between March 20-26, 2018, among8,461 adults above age 18 in the U.S., UK, Germany, China, India, Brazil and the U.A.E.

Strongly disagreeSomewhat disagreeSomewhat agreeStrongly agree

100%

0%

6% 21% 48% 25% 73%agree 79% 82% 57% 78% 72% 78% 61%

100%

8% 21% 46% 25% 71%agree 67% 83% 58% 63% 83% 83% 63%


AnInterviewWithJacquesAschenbroich,Chairman and CEO of Valeo

year 50% of its orders were forproducts that did not exist threeyears ago.The company has earned recognitionfor its stock-market performanceand Aschenbroich was named the#4 best performingCEO in theworldby the Harvard Business Review in2017, the first French business leaderto earn that honor. He recently spokewith the Innovator’s editor-in-chief,Jennifer L. Schenker, about the futureof mobility.How is mobility changing?JA: Mobility and economicdevelopmentbelong together.Withoutmobility there is no economicdevelopment. We need to find waysto improvemobility tomake it easier,

Jacques Aschenbroich,a scheduled speaker at VivaTechnology, is chairman and chiefexecutive of Valeo, an automotivesupplier that works with automakersworldwide. As a technology company,Valeo proposes products and systemsthat contribute to the reduction ofCO2emissionsandto thedevelopmentof intuitive driving. Among otherthings, it produces sensors that serveas the eyes and ears of autonomousvehicles and is a world leader in theproduction of electric motors. In2017, the group generated sales of€18.6 billion and invested 12% ofits original equipment sales in researchand development. Valeo has filedmore than 2,000 patents, and last

more fluid, more affordable andmore respectful of the environment.The other thing you have to bearin mind is that the cities are nowbecoming new regulators. Byregulating traffic the goal is obviouslyto limit air pollution, but they shouldalso, like I said, take care of theimprovement of mobility. In Europe,where diesel is going down quickerthan expected, and in China, thismeans a faster-growing market forhybrid and electric cars. Valeo isextremely well positioned: a pioneerand number one in the world inelectrical systems, Valeo equips oneout of every three cars on the planetwith an electrical machine.What else is changing?JA:Everything is changing. The entireworld is today experiencing a smart-car revolution, which is in fact thecombination of three simultaneousrevolutions: the electrification justmentioned above, the autonomous-and connected-vehicle revolutionand the digital mobility revolution.Valeo is oneof the keyplayers shapingthese three revolutions and the futureof mobility. Now let’s talk about theautonomous- and connected-carrevolution: the robot taxis will comerelatively soon, before 2020, butfully autonomous cars that you orI can buy will take longer and beon the roads between five to tenyears.The digital mobility revolution isalready here.We are all experiencingit alreadywhenwe’re taking anUberor renting a car through Drivy orsharing a car with BlaBlaCar.What role does Valeo plan to playin shared mobility?

JA:Valeo does notwant to be a playerin the digital mobility revolution.Wewant to be an enabler helpingcompanies to develop new services,create new business models. Suchas the Valeo InBlue virtual key, whichcan be securely passed from onesmartphone to another.How does mobility changethe city?JA: The electric, shared andautonomous car is probably thereconciliation of the car and the city.It brings safer roads,more breathableand less congested cities. We haveall the technologies needed to speedup the emergence of a new kind ofmobility, a personalized flexible andat the same timemass transportationthat will reconcile the car and thecity.What does this mean for Valeo?JA:Thanks to our leading position inthese three major revolutions, wehave immense growth ahead of us:with electrification, we will multiplythe value that we add to cars fromtwo to seven, depending on thesolutions.With autonomous driving,we will multiply the value we addby 10. Moreover we already havehad €10 billion in order intakes withour Valeo-Siemens Joint Venturededicated to high-voltage powertrains.Are you bringing any innovationfrom the outside?JA: The world is moving fast. Thatis why we are spending more than10% of our Original Equipmentrevenue on R &D, but at the sametime we also go for an open-innovation strategy. Across a wideecosystem spanning universities,

INTERVIEW

DrivingtheSmart-CarRevolution

— P.49

laboratories, companies in otherindustry sectors and startups, Valeoleverages cooperative innovationto diversify its sources of inspirationand streamline its developmentcycles. For example, we have somepartnerships with Safran to developsome common systems, withCapgemini on a virtual key andwithCisco on autonomous valet parking.What about startups? How are youworking with them?JA: Valeo estimates that there arearound 30,000 startups in ourautomotiveworld. To select themostpromising cooperation opportunities,Valeo invests in venture capital fundsin theU.S.,Germany, Israel andChina.We want to be sure that we are

identifying the trends of the industryand we should ignore none of thoseable to challenge our position.Do you find it difficult to integratestartups into your company?JA: There is a big difference betweenintegrating startups and changinga company. It is easier to changerather than deal with startups. Wehave demonstrated over the last 10years that we are able to changeand be much more focused oninnovation and growth and morebalancedbetweengrowth andprofits.At the end of 2009 we had 45,000employees and as of last month wehave 116,000 employees. We havebeen able to integrate 70,000 newemployees. That has been possiblethanks to our ability to adapt andto speed up.Integrating a startup within a groupis somethingverydifferent, as startupsare more focused on one specifictopic, and can lose money for yearsin order to fulfill their dreams aslong as they can convince investorsthat their dreams are worth theinvestment. They want to conquerthe world because they think theyhave a product that will change theworld. For them, short-termprofitability is less important thanlong-term valuation. That is why itis not easy to integrate a startup ina big company like ours.What do you see as Valeo’sgreatest challenges going forward?JA: There are two main challenges.The first one is tomaintain our speedeven if we are growing. The secondchallenge is to find the right balancebetween growth and profitability.J.L.S.

“Theentireworld istodayexperiencingasmart-carrevolution,which is infactthecombinationofthreesimultaneousrevolutions:electrification, theautonomous-andconnected-vehicle revolutionandthedigitalmobility revolution.”


PreventingAIBias— What every business should consider.

WhenAxon,theU.S.’sbiggestsellerofpolicebodycameras,voicedinterest inpursuingface-recognitiontechnologyandotherAIcapabilities intoreal-time video,which could allowofficers to scan and recognize the faces ofpotentially everyone they seewhileonpatrol, some42civil rights, technologyand privacy groups – including the AmericanCivil Liberties Union – stronglyprotested. Theywrote a letter urging an outright ban on face recognition onpolice body cams,which it called “categorically unethical to deploy” becauseof thetechnology’sprivacyimplications, technical imperfectionsandpotentiallylife-threateningbiases. The letterpointedout that recent research found thatmost facial-recognition systems perform far less accurately when assessingpeople with darker skin, opening the potential for an AI-enabled officer tomisidentify an innocent person as a dangerous fugitive.Other recent examples of how machine learning could fail to preventdiscrimination include:• Loan services: Applicants from rural backgrounds, who have less digital

infrastructure, could be unfairly excluded by algorithms trained ondata points captured from more urban populations.

• Criminal justice: The underlying data used to train an algorithm maybe biased, reflecting a history of discrimination.

• Recruitment: Applications might filter out people from lower-incomebackgrounds, or those who attended less prestigious schools, basedon factors such as educational attainment status.

All of these biases pose a danger to society and underscore why strongstandards are urgently needed to prevent discrimination andmarginalization

ARTIFICIAL INTELLIGENCE

“The idea istodrawalineinthesand soeveryonewill knowthis is thestandardofyourgovernment inyour jurisdiction.Companieswillbeawareofthisandeffectivelyconformtobestpractices.”Kay Firth-Butterfield,Head of artificial intelligence and machine learning at the WorldEconomic Forum Center for The Fourth Industrial Revolution

— P.51

of people in artificial intelligence, says Kay Firth-Butterfield, head of artificialintelligence and machine learning at the World Economic Forum’s Centerfor The Fourth Industrial Revolution and vice chair of the global engineeringstandards group IEEE’s Global Initiative for Ethical Considerations in theDesignofAutonomousSystems.TheForum, the IEEEandother organizationsare focusing on issues around bias in AI. Different sets of guidelines areemerging as everyone from governments to technologists and philosophersgrapple with what is the best approach to a murky area. “It is one of thereasons I came to the Forum – to create some harmony between all thosedifferent things,” says Firth-Butterfield. “There are a lots of different typesof stakeholders doing their own work. It is one of the problems. Scientistswere not keen to talk to lawyers or philosophers and vice-versa but nowwe can see in this space that it won’t work if we are thinking about it onlyfrom our own perspective. It will only work if we actually bring everyonetogether.” Thatmay take some time. In themeantime, the Forum is helpinggovernments establishbest practiceswhenprocuringAI technology. “Anythingthey buy in will be measured against best practice standards. The idea isto draw a line in the sand so everyone will know this is the standard ofyour government in your jurisdiction,” says Firth-Butterfield. “Companieswill be aware of this and effectively conform to best practices.” The UK isstarting to test such a system.

Mobile as the TargetUntil things become more clear worldwide, companies looking to use

machine learning shoulduse four guiding principles to ensure discriminatorypractices are not baked in: active inclusion; fairness; right to understanding;and access to redress, according to awhite paper, entitled “How to PreventDiscriminatory Outcomes in Machine Learning,” published in March bythe World Economic Forum’s Global Future Council on Human Rights.In June theWorld Economic Forum plans to release an AI tool kit “to helpboards to ask the right questions so that they don’t end up doing it wrongand negatively impact their brand value and have a potentially catastrophicimpact on the way the world operates,” says Butterfield.“Andrew Ng [a globally recognized AI expert] has said every companyshould be thinking about AI and every company should have a chief AIofficer in the C-Suite,” she adds. “He sees it from scientific perspective.I see a need for a person with an ethical perspective to drive what is safefor the company and humanity, what I would call a chief values officer.”There are no simple answers but “if I were running a company I wouldmake sure somebody, maybe the CTO, read all of the guidelines that havebeen created – the IEEE guidelines and standards in the pipeline – andconsider creating an ethics advisory panel or some kind of review panel,”she says. “The important thing is to think ‘let’s get it right at the beginning,where we might trip up?’ and ‘what are we going to do about it?’ ”J.L.S.

ACTION IMPACTUncover whether certain data sets fit widely accepted standards of ”fair” and ”representative” data(looking to both quantitative and qualitative metrics)

Bring different perspectives together ; afford insights into whether certain populations areadequately included and represented in training data

Have a sense of what could go wrong in order to be able to course correct (either by expanding thedata set or changing the way the machine learning system is designed an deployed) if necessary

Better understand and monitor issues of potential bias and biases that may already be at work

Better identify the entire range of data types necessary to adequately train an ML system for a givencontext; better understand how to appropria tely source the data needed

Equip technical teams with the knowledge and ability to translate human rights responsibilities intocode, making it easier to avoid discriminatory outcomes

Alllow domain experts to have a say in what data sets might be inadequate or invasive to pull from.Provide a mechanism for a safe feeback from the audience to which AI is delivered

Organize research

Ensure diversity inML development teams

Map out risks

Develop standards to trackthe provenance, development, and useof training data sets throughouttheir life cycle

Engage stakeholders and domain expertsin participatory manner

Train ML designers/developers and AIleaders on human rights responsibilities

Promote transparency andunderstandability in ML systems/applications

WHAT COMPANIES CANDO TO AVOID ISSUESWITH BIASED DATA

Source:AI Now Institute 2017 Report


WhatEveryExecutiveNeedstoKnowAboutQuantumComputing— Corporate giants such as Airbus and Volkswagenare testing the technology’s potential.

By Chris O’Brien

Computing power has been doubling every 18-24 months forthepast50years,but industry experts saywe are rapidly reaching the limitsof what is possible. The timing couldn’t beworse, because promising newtechnologies ranging fromautonomous vehicles to personalizedmedicinedemandhuge leaps incomputingpower toprocessdata sets thataregrowingexponentially, says Ashish Nadkarni, program vice president and analystfor computing platforms at the research firm IDC.That is why financial services companies and corporations manufacturingeverything from autos to airplanes are starting to test quantum computing- a rapidly developing technology that manipulates atoms to performimmensely complex calculations that today’s computers can’t handle.While the prospect of a massive leap in computing power is welcome,for corporate chieftains the new technology also represents a cloud ofuncertainty and anxiety.Nobody wants to fall behind when a technology shift transforms industry.Yet, there are enough unknowns about quantum computing and enoughfundamental scientific riddles to solve that no one can say for certainwhen it might be ready to make an impact. Also of concern is that the

Credit: Jens Oellermann for Volkswagen

— P.53

power of quantum computing could easily crack current encryptionstandards, which are too complex to be broken by today’s computers.Beyond potentially exposing everything from health and financial recordsto military secrets, the fear is that such immense computing power couldbring about other unintended consequences.Against this backdrop corporate giants such as Airbus and Volkswagenare gingerly wading into unchartered territory, investing at the marginsto experiment and understand the potential. The challenge is to try tofind the right balance between financing exploratory projects that helpthem stay current in this emerging fieldwithout feeling like they’re flushingmoney into a speculative exercise they can’t be sure will ever pay off.Martin Hofmann, CIO for Volkswagen Group and a scheduled speaker atViva Technology, says the company recently ran a traffic-flow analysis inBeijing using data gathered from taxis. Using that limited data set, thecompany wanted to understand how that data had to be organized fora quantum computer, and how to write the applications and algorithms.It wasn’t anything the company couldn’t do with standard computingsystems, says Hofmann, but it was a chance to start learning how todevelop for quantum computers in anticipation of a time when such datasets will become exponentially larger.“We’re interested in how we can use it and how we can solve real worldproblems, such as traffic optimization,” Hofmann says. “We are amongthe first doing this. It’s really pioneering work.”

A Computing Revolution?It’s almost impossible to overstate how revolutionary quantum computingwould be if it eventually replaces the current computing architecture.Computers today process information using bits, either zeros or ones,stored in electrical circuits made up of transistors. Quantum computersharness the power of quantum systems such as atoms or superconductingcircuits in a quantum state. These systems can simultaneously exist inmultiple states and can be used as “quantum bits” or “qubits,” which canhandle far more complex calculations.Researchers believe such power and complexity will enable the creationof more detailed molecular models that could lead to radical advancesin medicine and material science. They also promise to be able to handlelarge optimization issues, such as simultaneously charting the best routefor every autonomous vehicle in a city, a puzzle that would be too toughfor current computers. But we are not there yet. The scientific knowledgearound quantum mechanics and quantum computing has advanceddramatically but major limitations must still be overcome. Qubits onlyexist for brief periods of time, before losing their power and the information

QUANTUM COMPUTING

they were processing. Researchers need to extend those lifespans whilealso figuring out how to get a much larger number of qubits to work inunison.Like many basic scientific problems, it’s next to impossible to predictwhen enough breakthroughs will happen to make quantum computingready for prime time. “We’re somewhere at a pointwhere classical computingwas 50 or 60 years ago,” says Marc Ganzhorn, a postdoctoral researcherat IBM’s Zurich Research Laboratory. “Back then, it was difficult to predictwhat would happen in the next 10 years. Or that one day we’d havesmartphones.”Companies like IBM, along with Google and Microsoft, are investingheavily to solve the basic physics issues and have been announcing asteady stream of new milestones over the past couple of years. They’vemade enoughprogress that they’ve started to lay out somegeneral timetablesand roadmaps for quantum computing that range from a few years to adecade. To progress faster, they’ve also started reaching out to corporatepartners to get them to start playing with the technology. For instance,

QUANTUM COMPUTINGAT A GLANCEWHAT: A form of computing that taps into the unusual behavior ofatomic and sub-atomic particles to perform far more complexcalculations at a massively increased speed compared to today’scomputers.

Pros: Promises to allow computers to run thousands of times faster,enabling new applications that deliver things like more sophisti-cated molecular simulations for drug development, models of trafficpatterns for optimizing transportation, or richer artificial intelligence.

Cons: Could make present-day encryption obsolete, creatingcybersecurity issues; will require investments in new skill sets andthe development of new algorithms and software processes.

Why Is It Needed? We are reaching the limits of the processingpower of present-day computers just as new technologies enablingautonomous vehicles and personalized medicine are within reach.

When Will It Be Ready For Prime Time?: Anywhere from twoto ten years from now.

What Should Companies Be Doing To Prepare?:Experts recommend that companies develop potential use casesand start experimenting with the technology now, becausequantum computing will require an overhaul of the entire setof digital tools, software applications and algorithmsthat corporations are using today.

Which Companies Are Testing The Technology Now?Airbus, Volkswagen, JPMorgan Chase, Daimler AG, Samsung, Google,NASA, Amgen

Martin Hofmann,CIO for Volkswagen Group and a scheduledspeaker at Viva Technology


QUANTUM COMPUTING

in December IBMannounced IBMQ, a program that lets corporate partnersand researcher institutions have access to the company’s online quantumcomputing system. Initial participants included JPMorgan Chase, DaimlerAG, Samsung and Oxford University.IBM wants these partners to start imagining the use cases and beginlaying the groundwork for creating the tools and services that mighteventually harness quantum computing. “We’re trying to build up thiswhole quantum ecosystem,” says Daniel Egger, also an IBM postdoctoralresearcher in Zurich. “Sometimes people do things with the setup thatmaybe you might not have thought of.”

The Interest for CorporatesQuantum computing represents a steep learning curve for corporations.The entire set of digital tools, software applications and algorithms usedevery day would have to be completely rewritten for quantum computing.This is one of the reasons Airbus started investing in quantum computingresearch and development, says Vincent Galinier, enterprise informationtechnology architect for the aviation giant Airbus.“Our philosophy is to not go too fast and not get in front of the technology,”say Galinier. “What is key to us is to focus on the now and our keychallenges, which are to design and build aircraft that are more secureand powerful and green but at the same time, we must prepare for thefuture.” In one experiment, Airbus used quantum computing to mapabout all the possible interactions a single component in a plane mighthave. “We had to start with a little use case because currently there isnot enough quantum computing power,” he says.For its project, Volkswagen partnered with Google and the CanadiancompanyD-Wave Systems, one of the only companies selling commerciallyavailable quantum computers.With both partners, Volkswagen is engagedin several research projects, such as the simulation of powerful EV-batteriesor quantum-boostedmachine learning. Founded almost two decades ago,D-Wave has raised $194.7 million in venture capital, an indication of justhow capitally intensive research and development of the technologyremains. In addition to the traffic project, D-Wave is also working withVolkswagen onmodeling new types of batteries. Meanwhile, Google andNASAareusingD-Wave’s computing to explore things likemore sophisticatedtransportation traffic management systems.D-Wave president Bo Ewald, a scheduled speaker at VivaTechnology,says he believes the technology will hit an inflection point this year, withthe company on track to release a new quantum computer that morethan doubles the power of the previous one. Ewald says this next versionwill allow, in some limited cases, users to perform calculations not possible

with current computers. Soon, quantum computing will “be able to solvereal-world problems,” he says. ”I do think by the end of this year, and thenext couple of years, there will be a set of problems where quantum isbetter. For companies who want to be leaders in computing the time toget started is now.”Still, even committed partners like Volkswagen say they are trying totake a balanced approach. At the same time that quantum computing isemerging, so are several other potentially revolutionary technologies thatcould disrupt businesses and markets. In the case of Volkswagen, thecompany is also investing heavily in things like artificial intelligence androbotics. And it’s monitoring closely the roll out of 5G wireless networks,which could fundamentally change the connectivity in vehicles as wellas the use of data in the manufacturing process.“All this technology is coming at the same time,” says Hofmann. “So youget this exponential effect. It’s a tremendous challenge because we arean operating company that is building and selling cars every day. We haveto do that well. And yet, tomorrow is more and more complex and it’simpossible to be in lock step with so many changes.”

The inside of an IBM quantumcomputer.IBM

— P.55

BLOCKCHAIN

Blockchain: BeyondtheHype


A. Are youtrying to removeintermediariesor brokers?

Do not use blockchain

Strong casefor blockchain(private/permissionedledger)*

Blockchain may work —further research is needed

Blockchaincan’t do thisefficiently yet,but solutionsare indevelopment

B. Are youworking withdigital assets(versus physicalassets )?

C. Can you createa permanentauthoritativerecord of the digitalasset in question?

D. Do you requirehigh performancerapid(millisecond )transactions?

E. Do you intend tostore large amountsof non-transac-tionaldata as part of

F. Do you want/need to rely on atrusted party(e.g ., for complianceor liability reasons)?

G. Are youmanagingcontractualrelationships orvalue exchange?

H. Do you requiresharedwrite access?

I. Do contributorsknow and trusteach other?

K. Should thetransaction bepublic?

Seehttp://wef.ch/blockchainhypefor accompanyingtext that furtherexplains thequestions

J. Do youneed to beable tocontrolfunctionality?

START

Arecontributors’interests unifiedor well-aligned?

Strong casefor blockchain(public ledger)*

chain problems and enabling peopleto sell their houses without needinga real estate agent,” notes an Aprilwhite paper published by the Forum.“It has started to seem that themostintractable of the world’s problemshavemerelybeenwaitingforblockchainto arrive.” This is not onlymisleadinganduntruebut alsobecomesabarriertodecision-makers intakingabalancedperspective on the technology, thereport concludes. Through researchand analysis of the technology’s

Blockchain, a digitalledger technology, “is an innovativesolution, but it is not the solution toall problems,” says Sheila Warren,head of the Blockchain andDistributed Ledger Technologyprojectat theWorldEconomicForumCenter for the Fourth IndustrialRevolution. She andmembers of theForum’s Global Future Council OnBlockchain think there is entirely toomuch hype around the technology.“Busting the blockchain hype isnecessary tomakesurebusinessesareusing it in the right way and notdamaging the long-termprospects ofthe technology,” Warren said in astatement.“One of the most unique aspects ofblockchain is its high number ofevangelists – people who believeblockchain can solve everything fromglobal financial inequality to accesstofinancing for startups, theprovisionof ID for refugees, to solving supply

capabilities and the ways it is usedaround theworld, the Forumdrafted11questions for executives to answerto determine if blockchain is anappropriate solution. The questionswere developed and then testedwithchief executive officers at aworkshopat the Forum’s AnnualMeeting 2018inDavos last January.We’ve includedthe visual toolkit to help readers ofThe Innovatormake the rightdecisionfor their companies.J.L.S.

INNOVATION

Airbus innovation outposts in Silicon Valley and Shenzhen,China, are working on moon-shot projects such as Vahana, a single-passenger, self-piloted electric vertical take-off and landing aircraft, tohelp the company keep up with the pace of change in the transportationsector. And the aeronautics giant is sourcing new technologies and businessmodels through its interactions with startups. But these efforts aloneare not sufficient to radically transform a large organization like Airbus,one of a number of big corporates participating in VivaTechnology, aParis conference taking place May 24-26. Innovation requires changemanagement, and that is whereMarkus Durstewitz, head of innovationmethods and tools at Airbus, comes in. Durstewitz, who earned a PhDin human-machine systems and cognitive engineering, has nearly 25years of experience in the aerospace industry, holding key positions along

the complete product lifecycle fromadvanced research, systems engineering,program management, customer service and operations to corporatestrategy and business development. He is also a founding member ofthe faculty at futur/io, a new European education and research institutefocused on exponential technologies and desirable futures. He recentlyspoke to The Innovator’s editor-in-chief, Jennifer L. Schenker, aboutwhat is needed to transform a large corporation.

How does a corporation implement the right mindset and skill sets neededto build an innovation ecosystem?MD: Innovation thrives with collaboration. It is about connecting peopleand ideas. You need to engage people in experimentation and collaborationand you need to enable fast decision-making and learning in an organization.One problem in large organizations is that over time administrative processeslive for the process, not for the purpose. But the most important thing isthe purpose, the vision of where youwant to go, with clear concrete targets.For this, you may define strategic innovation areas and launch associatedmoon-shot projects, creating the necessary momentum to drive changeand to embark the ecosystem on your transformation journey toward theNext Big Thing. To build an innovation ecosystem you need to have theright mindset and skill sets in place for an effective —not only efficient —process that generates impact and value, and that is fast enough to meetpotential opportunity windows. This seems very obvious but in general, ifyou do not understand very well the complete business context, you mightbe too slow and you miss the opportunity.

How does Airbus work with startups?MD: Airbus Bizlab, a global aerospace accelerator program, is a natural entrypoint as it aims to speed-up innovation by on-boarding and learning fromstartups. Our venture arm, with offices in Silicon Valley and Paris, is another.The major task is to map the startup idea with a specific business need andconnect the startup with the Airbus ecosystem, more precisely with therespective product owner and the supply chain – i.e. the potential internalcustomer and/or investor. Finally, it is about connecting people and ideas.What sort of building blocks have been put in place to make sureinnovation thrives?MD:Mymission is to build and maintain an effective corporate innovationculture, opening up the organization for exploring the newand implementingcapabilities enabling innovation: namely entrepreneurship, experimentation

HelpingChangeManagementTakeFlight— Airbus, like all big corporates, is tryingto develop an effective corporate innovation culture.Markus Durstewitz explains the aeronauticgiant’s approach


How does Airbus Leadership University fit in?MD:Recently, we extended the open innovation approach to all divisions,reaching out to over 130,000 employees at group level. Under the leadof Airbus Leadership University we run a global challenge called “DreamBig,” inspired by the X-Prize Foundation as a companywide contest forideas and solutions to the organization’s biggest future challenges. We gotover 700 ideas from employees all over the world. Each idea was presentedin a one-minute video. And, we selected 150 finalists who were invitedto join a two-day co-creation session where they worked in teams of fiveon future scenarios and solutions. Actually, the teams are in a three-monthincubation phase to prepare for the implementation of their ideas.What important lessons have you learned on the job?MD: In the beginning, we said “let’s collect ideas” but this approach doesnot work. You end up with thousands of ideas without a target andimplementation channel. You need to define the challenge first. If you focusaround a challenge with a clear need from business you have a chance tosucceed.What is important is to have clear sponsorship behind the challenge— someone willing to spend money to solve his/her problem.Another lesson is that creativity and structure go together. For example,we base ourmethods on Design Thinking; some peoplemay think it is onlyabout creativity but in fact, it provides you with a structure, a process, tocreate the right framework and to guide people on their innovation journey.What is the most challenging part of your job?MD: Innovation is about managing change. So the most difficult part is toovercome the resistance to change. A company is optimized to perform

and excel in its operations and to deliver what is defined. But innovationasks for doing things differently; it disturbs; it triggers the immune systemof the organization, which in response is trying to kill the innovation virus.Finally, the standard corporate processes do not work for innovation. Youmay need to break the rules and use a fast-track process instead. For this,you need top management support and allowance for experimentation –if only in a controlled secured area or a parallel dedicated innovationecosystem. My job is to ensure that the organization learns not just to livewith change but to embrace it.J.L.S.

and fast learning. The focus is on delivering value to customers and usersof our products and services, along the complete value chain. For this,we build on a continuously growing innovation community and haveinstalled a network of innovation catalysts at all major sites and functions.We have defined a set of relevant innovation methods and tools basedon the principles of Design Thinking; packaged them into formats, innovationcampaigns, sprints, boot camps, or a complete acceleration program. Inaddition, we see the need for dedicated innovation spaces as physicalanchor points for the innovation community, a home for innovation.In general, innovation always starts with a challenge. Strategic innovationareas help to frame the challenges and to give direction. Awarenesssessions and training, managed by a dedicated innovation academy, helpto develop the people in terms of mindset and skill set. The key for successremains the right teaming for cross-functional and eventual cross-industrycollaboration. For this we count on communities. Thus, the first thing Idid was to roll out an online community platform designed to run focusedinnovation campaigns connecting people and ideas across functions andorganizational boundaries.This community platform is called IdeaSpace and is the backbone forinnovation at Airbus. Here, business owners publish their challenges andemployees share their ideas, discuss, comment and vote for the best ideas.Today, 40,000 employees are registered on the platform, so if you launchan innovation challenge you have a very good reach within the company.IdeaSpace gives us a structured, more efficient way to collect ideas whileensuring that the focus is set on specific challenges. Secondly, and more

importantly, it helps us identify people interested in the problem areaindependent of their departments of origin.Can you give an example of how this has worked in practice?MD: In 2013, we launched our first IdeaSpace campaign focusing on 3Dprinting. With IdeaSpace it was easy to reach out to more than 10,000engineers and we got several hundred submissions in return. Many verygood ideas made it into our products, but more importantly we had laidthe baseline for a 3D printing community and later a 3D printing plateau—across-functional organization. This virtual community is the real successstory. Dedicated challenges represent a great way to create awareness, toengage the people in the community, and eventually to collect some goodideas. IdeaSpace campaigns are a really powerful tool for promoting aspecific technology and leveraging its potential.

— P.57


POUR NOS LECTEURS FRANCOPHONES

LE “BRIEF”

A LA UNE -AFRIQUE : LE NOUVEL ELDORADO DE LA TECHLa combinaison de talents locaux, de nouvelles technologies et definancementenCapital-risque, associés à l’expertise desgrandesentreprisesetà leurcapacitéàcroîtrerapidementa lepotentieldetransformer en profondeur la vie sur le continent

LAFINTECHQUIACCELERELACROISSANCEDESPMEAFRICAINESOvamba Solutions utilise des technologies mobiles et deschatbots qui comprennent les dialectes locaux pour faciliterl’accès au crédit

COMMENT LA TECH PEUT AIDER A RESOUDRE LES PROBLEMESDE SANTE EN AFRIQUESanofi cherche à travailler avec des startups pour déployer lesmeilleures initiatives à grande échelle

DE L’ENERGIE POUR L’AFRIQUEDes startups travaillent avec les géants français de l’énergie TotaletVINCIEnergiespourexpérimenterdenouveauxbusinessmodels,et lancer des initiatives dans les énergies renouvelables et lablockchain

L’ETAT DES LIEUX DE LA FRENCH TECHUne enquête menée auprès de 20 figures de l’écosystème«tech» hexagonal pour dresser le bilan des efforts mis en placepar la France pour dynamiser le secteur des nouvelles technolo-gies.

LES AMBITIONS DE LA FRANCE DANS L’IA

LES 25 STARTUPS À NE PAS RATER À VIVATECHNOLOGY 2018

INTERVIEW DE IAN ROGERS - CHIEF DIGITAL OFFICER DE LVMH

REINVENTER L’EXPERIENCE DU LUXELes nouvelles technologies transforment profondémentl’expérience client, en magasin comme en ligne.

REBATIR INTERNETCommentutliser l’Intelligenceartificielleet lablockchainpourpro-téger les données des utilisateurs.

VIVRE DANS L’INCERTITUDELes entreprises peinent à s’adapter à la nouvelle réglementationeuropéenne sur la protection des données.

INTERVIEWDEJACQUESASCHENBROICH-PRESIDENTDIRECTEURGENERAL DE VALEO

COMMENTEMPECHERLESBIAISDEL’INTELLIGENCEARTIFICIELLE

CE QUE TOUS LES DIRIGEANTS DEVRAIENT SAVOIR SUR L’ORDI-NATEUR QUANTIQUEDes grandes entreprises comme Airbus ou Volkswagen testentle potentiel de la technologie

LA BLOCKCHAIN - PLUS QU’UN EFFET DE MODE

FAIRE DECOLLER LA GESTION DU CHANGEMENTAirbus, comme beaucoup d’autres grandes entreprises essayede mettre en place une culture organisationnelle de l’innovation.

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Directeur de la publication,président de laSAS Les ÉchosPierre LouetteDirecteur des rédactionsNicolas BarréDirecteur desdéveloppements éditoriauxdu pôle Les ÉchosHenri GibierEditriceBérénice LajouanieDirecteur de créationFabien Laborde

Editor-in-ChiefJennifer L. [email protected] [email protected] & LayoutStudio L’Eclaireurwww.les-eclaireurs.comContributing EditorKimberly Conniff TaberContributing JournalistChris O’Brien, Leila Abboud,David Pringle

Head of Marketingand DistributionÉtienne PorteauxHead of Strategy andCommunicationFabrice FévrierPress relationsKarine [email protected](+33 1 87 39 73 92)

PUBLICITÉ / ADVERTISINGPrésidente Corinne MrejenDirectrice généraleCécile [email protected](+33 1 87 39 75 08)Directeur du pôle Réseaux,International et RégionsNicolas [email protected](+33 1 87 39 75 26)Directeur commercialdu pôle BtoBNicolas [email protected](+33 1 87 39 75 10)Directrice commercialepôle Lifestyle & CultureAnne-Valérie Oesterlé[email protected](+33 1 87 39 75 45)

SERVICE ABONNEMENTSLES ÉCHOS4, rue de Mouchy 60438Noailles CedexDu lundi au vendredi, de9h à 17 h 30, au01 70 37 61 [email protected]

FABRICATIONDirecteur Jérôme MancellonResponsable fabricationgroupe Sandrine LebretonDirecteur de ProductionBruno SantinChargés de productionNaima MansouriImpressionNewsPrint, France

Origine du papier : SuèdeTaux de fibres recyclées 0%Le papier de ce magazineprovient de forêts géréesdurablement et est porteur del’Ecolabel européen FI/11/007Ptot : 0,009Kg/tonne

The Innovator est unepublication éditée parLes Échos, SAS au capital de794240 euros RCS Paris582 071 437ISSN en cours d’obtentionCPPAP: 04 21 C 83 015Dépôt légal : novembre 201710 boulevard de GrenelleCS 1081775738 Paris Cedex 15Tél. : +33 1 87 39 70 00

Principal associé Ufipar(LVMH)Président-directeur généralPierre LouetteDirecteur général déléguéChristophe VictorDirecteur déléguéBernard Villeneuve

Credits photo :Getty Images / Thinkstock

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OPENCLASSROOMS,Premier site d’e-Éducation en Europequi rend l’éducation accessible à tous

et propose des formations à forts

débouchés professionnels.

« Grâce à l’aide PM’up de la Région, nousavons pu lancer le premier Centre de Formationd’Apprentis en ligne de France, dédié auxmétiers du numérique. Nous allons pouvoirproposer des formations à distance aux métiersde demain. »

Et la liste des meilleurs évènements tech de votre Régionsmartweeks.info

Découvrez toutes les mesures en faveur des entreprisesqui innovent sur iledefrance.fr/startup

Pierre Dubuc, Co-founderet CEO d’OpenClassrooms

* Sécuriser l’Internet des Objets **WISeKey fournit une solution de sécurité complète et scalable à intégrer aux plateformes IoT. Basée sur la technologie PKI, elle protège lesobjets connectés et leurs données lors de leur stockage ou de leur transfert.WISeKey est un fournisseur de clé-racines cryptographiques et propose des produits et des servicespour gérer l’utilisation de certificats digitaux et autres systèmes de sécurité au sein d’objets connectés qui sont vulnérables quand ils en sont dépourvus.

lvmh’s digital la french tech on themove … 3-africaliving lab aca 4-mobilesenegal hy...

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