Management of Technology

and Innovation

Lecture 3: Emerging Digital

Technologies
 How did we get to the digital
economy?
• The US Department of Defence developed The Advanced
Research Projects Administration (ARPANET) in 1960s; in 1990,
computer scientist Tim Berners-Lee invented the World Wide
Web at CERN in Switzerland

• Moore’s Law (founder on Intel, and originated in 1970): power of

computing will double every 18 months - has remained true for
close to 50 years - computer chips from 1971 to today: 3500X
more performance, 90000X more energy efficient, 60000X lower
in cost
• Example: If 1971 VW Beetle followed Moore’s Law- today:
➢ 500000km per hour
➢ Cost of 4 cents
➢ 1 million Km per litre
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RMIT University© 2018
Tipping point was 2006/7
• 1 billion internet users
• Intel introduce non-silica materials into microchips for the first time
to overcome barriers to Moore’s Law

• Steve Jobs announces reinvention of the ‘smart’ mobile phone-

iPhone

• Big data analysis made possible (Hadoop)

• Facebook opened to all

• Twitter scaled up globally

• Google bought YouTube and launched Android

• Amazon released Kindle

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Tipping point was 2006/7

• Airbnb conceived

• IBM start building a cognitive computer (Watson): self-learning

systems that use data mining, pattern recognition and natural
language processing to mimic the way the human brain works

• Cost of DNA sequencing begins to fall dramatically (<$1000 to

sequence entire genome

In the past 10 years, new companies and innovations have reshaped

how people and machines communicate, create, collaborate and
think, and created a digital

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Tipping point was 2006/7

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Blockchain Technology

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Blockchain Technology

Definition:

• “The blockchain is an incorruptible digital ledger of

economic transactions that can be programmed to record
not just financial transactions but virtually everything of
value.”

Don & Alex Tapscott, authors Blockchain Revolution (2016)

https://www.youtube.com/watch?v=SSo_EIwHSd4

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Blockchain Attributes
• A distributed database, owned and managed by everyone
on the network
• Not controlled by any single entity or has a single point of
failure
• Records are public and easily verifiable
• Records can only be added, not altered or deleted
• System automatically checks itself for consensus every ten
minutes
• Using private key/public key infrastructure to maintain its
integrity

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Blockchain Potential Uses

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Bitcoin – How it works?

https://www.youtube.com/watch?v=s4g1XFU8Gto 11
Internet of Things (IoT)

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Internet of Things (IoT)

 What is the definition of IoT?

 Example of how it works
 Examples of IoT
 Why is this important?
 At what stage of adoption is IoT?
 What strategies are adopted by organisations?
 What capabilities do companies need?

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Internet of Things (IoT)
Definition:
• “Network of physical objects embedded with electronics, software,
sensors, and network connectivity, which enables these objects to
collect and exchange data” (Internet of Things Global Standards
Initiative)
• “Networking of physical objects through the use of embedded sensors,
actuators, and other devices that can collect or transmit information
about the objects” (McKinsey)
• Network of smart devices generate data about activities, events, and
influencing factors that provide visibility into performance and support
decision processes across a variety of industries and consumer
channels
• IoT brings together sensors, connectivity, cloud storage, processing,
analytics, and machine learning
https://www.youtube.com/watch?v=QSIPNhOiMoE 14
https://www.youtube.com/watch?v=lzgUVvCUEt8
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Internet of Things (IoT)
Examples of how IoT works:

• Smart meters could be combined with demand-response

applications to reduce CO2 emissions

• Real-time machine-to-machine technology between vehicles

could facilitate more fuel-efficient route optimisation

• With the use of installed sensors, mobile apps, and real-time

web applications, cities can optimise revenue, parking space
availability and enable drivers to save time and reduce their
environmental impact (e.g. using less petrol) by helping them
quickly find an open spot for their cars
https://www.youtube.com/watch?v=afk5u9EdRVc
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Internet of Things (IoT)
Why is IoT important for business:
• By 2020 about 50 billion devices globally will be connected to the
internet; a third will be computers, smartphones, tablets, TVs; two
thirds will be ‘things’- sensors, actuators, and newly invented
intelligent devices that monitor, control, analyse, and optimise our
world
• When physical assets equipped with sensors give an information
system the ability to capture, communicate, and process data—and
even to collaborate—they create game-changing opportunities:
production efficiency, distribution, and innovation all stand to benefit
immensely
• Research from the McKinsey Global Institute suggests that the
operational efficiencies and greater market reach IoT affords will
create substantial value in many industries

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Internet of Things (IoT)
At what stage of adoption is IoT:
 IoT at ‘early adopter stage’ and still needs to ‘cross the chasm’
 ‘Majority’ don’t understand benefits/potential, strategy to
pursue, don’t have capabilities, require facts and a proven
track record before committing to IoT
 Early work is likely to focus on boosting efficiency and cutting
costs, but the greatest long term business value of IoT will be
getting to know customers intimately, and providing new digital
services and experiences to them

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 Internet of Things (IoT)
At what stage of adoption is IoT:
 Most still focus on services that ‘monitor and control’ using single-
function sensors that gather and analyse data from the environment
and reach out through the internet to control objects (e.g. simple
thermostats, motion sensors)
 Most of the data from IoT devices is currently unused - information is
used mainly to detect and control anomalies, not for optimisation and
prediction, which provide the greatest value (McKinsey)
 “The ultimate goal of IoT is to ultimately integrate intelligent devices
with network systems that are self-sensing, self-controlling, and self-
optimising, all automatically, all without human intervention” (Harvard
University)

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IoT Strategies

The IoT also opens a range of new business opportunities for a variety of
players.

These opportunities tend to fall into three broad strategic categories,

each reflecting a different type of enterprise:

• “Enablers” that develop and implement the underlying technology

• “Engagers” that design, create, integrate, and deliver IoT services to
customers
• “Enhancers” that devise their own value-added services, on top of the
services provided by Engagers, that are unique to the Internet of
Things

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IoT Strategies

From a business perspective, need to understand how IoT can

transform the business by:

 Managing: how can IoT help me manage my assets more

effectively, become more operationally efficient, reduce my costs,
and/or increase my throughput?
 Monetising: How can IoT help me generate additional revenues
from the assets that are already in the business, or help me uncover
new product/service opportunities?
 Extending: How can IoT help me transform my business into a
service business - one where I can develop meaningful product
oriented and customer oriented relationships, increase customer
loyalty, and generate additional service-related revenues?

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Capabilities Required

 Taking advantage of IoT requires different ways of thinking – about

how data is used, how much of it we can handle, how fast we can
process and analyse it, and ultimately where and how decisions are
made
 The biggest blind spot is thinking about IoT as predominantly a data
management initiative – how to access and store all the data

 Access and storage is important, but the value comes from the
insights generated from the data
 Any complete IoT solution also needs to provide an environment for
data analysis, model development, and model maintenance

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Cognitive Computing
What is cognitive-computing?
• Fusion of cognitive science – the study of thought and learning;
and computer science
• Cognitive-computing simulates the function of the human
thought process through computerised systems. These systems
learn and reason from interacting with humans and from their
environment
• Different elements are needed to utilise the technology:
➢ IoT making it possible for devices to be networked
➢ Cloud computing to store and process large volumes of data
➢ Miniaturisation of sensors and communications chips transmitting
data
• Cognitive computing is providing the means by which data from
many sources can augment decision making process
https://www.youtube.com/watch?v=-8p3jf0t7w0 25
Example – Watson (IBM)
• Mayo Clinic is using IBM’s Watson to match patients with appropriate
health trials
• Pathway Genomics has been developing a blood test to determine if
early detection or prediction of certain cancers is possible
• Johnson & Johnson is teaching Watson to read and understand
scientific papers that detail clinical trial outcomes used to develop and
evaluate medications and other treatments. With this knowledge,
Watson Discovery Advisor can help scientists identify genetic profiles
that respond to drug samples without any adverse side effects

1. IBM Watson: How it works

https://www.youtube.com/watch?v=_Xcmh1LQB9I
2. Watson plays Jeopardy
https://www.youtube.com/watch?v=WFR3lOm_xhE
3. The rise of cognitive computing and IoT
https://www.youtube.com/watch?v=kG0jEj6kyMk

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Big Data

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Big Data
• Big data is comprised of datasets too large to be handled by traditional
database systems
• Consists of structured, semi-structured, unstructured data:
➢ Structured - data formatted for use in a database management system
➢ Semi-structured and unstructured - unformatted data such as social
media content
• Also consists of data embedded in physical objects such as sensors
and actuators

Big Data Analytics (Video)

https://www.youtube.com/watch?v=LrNlZ7-SMPk

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Big Data

Big data is defined by Volume, Variety, Velocity and Value:

• Volume - increasing due to e.g. social media, ‘internet of
things’
• Variety - 85% is unstructured, and this is increasing
• Velocity - need to analyse in real-time and react quickly
• Variability - data flows can be highly variable e.g. peaks
• Value - not all data is valuable - must be able to separate
‘wheat from chaff’

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Big Data Analytics
• The use of data-driven insight to generate value. It does so by
requiring business relevancy, the use of actionable insight, and
performance measurement and value measurement

• Data-driven insight includes: data manipulation; reporting and

business intelligence; data mining, optimisation, forecasting

• Includes techniques that help understand:

o what happened;
o what will happen,
o why it happened,
o what is the best one could possibly do

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Important Emerging Technology to
the Business World
• Can now collect both structured and unstructured data,
including from social media and ‘the internet of things’

• Contributions that big data can make to business: performance

improvement, population segmentation, decision making
support, and innovative business models, products and
services (McKinsey)

• “Big data technologies not only support the ability to collect

large amounts, but more importantly, the ability to understand
and take full advantage of its value” (SAS)

• Business has always wanted to derive insights from

information in order to make better, smarter, real-time, fact-
based decisions” (E&Y)

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Important Emerging Technology to
the Business World
• Among businesses, big data is increasingly being seen as
important, but uncertainty about what it is, its potential benefits
and risks - respondents saw big data technology as ‘around the
corner’ (E&Y)

• Result is that many companies are not yet taking advantage of

new big data technologies despite its potential to make better
data-driven decisions; however, analytical tools and techniques
need to be leveraged by people asking the right questions if big
data, emerging storage technology platforms, and the latest
analytical algorithms are to lead to business success (E&Y)

• Companies need to invest in training managers and end-users

to fulfill data’s vast potential (McKinsey)

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Big Data & Innovation
Data and analytics is creating disruptive business models. Examples
include radical personalisation through the use of Hyperscale digital
platforms to match buyers and sellers in real time; granular data can be
used to personalise products and services:

• Health: ability to capture every patient touch point has created new
data sources which can be integrated and provide new insights which
improve clinical care. Integration of disease registries, genomic
information, and tissue registries will provide a complete view of the
patient, and provide new focused patient care

• Retail: shoppers directed to the right products for them at the right
time

• Advertising: ads targeted by time, location, and person to maximise

sales

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Big Data & Innovation

Data and analytics can improve the innovation process. Examples

include:

• Vast amounts of data such as email, calendar, locational data etc.

provide insights on how people communicate and work together, and
lead to improved decisions about setting up teams, workflow, and
resourcing

• R&D can be improved, e.g. drug discovery can be made more efficient
by sorting through vast amounts of data, and suggesting chemical
compounds which could be effective in disease treatment

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Class Discussion

1. In a team of 3-4, identify one emerging technology covered in this

session that can have a great impact in your business in near future
2. Take an idea for an innovation and working in groups develop a
Business Model Canvas for it as the basis for a presentation to a group of
potential sponsors.

• Refer to Day 1.2: “Value captures from Innovation”

• Refer to Day 1.3: “Exploring Business Model Innovation Using

The Business Model Canvas”

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Summary

• The Explainer Big Data and Analytics HBR Video

https://www.youtube.com/watch?v=jUFPFtU-564 (2:45)

• Big Data - Tim Smith

https://www.youtube.com/watch?v=j-0cUmUyb-Y (6:07)

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