Future City - Technology and Innovation in London

On Thursday the London Future City series of lectures is looking at the impact of Technology in re-innovating and reshaping London. The aim of the debate is interesting:

London has historically been the home of great innovations, and now the potential is even greater than ever with the development of digital technology. But can we recognise the real innovations hidden around us or are we distracted and dazzled by the short-term allure of shiny new technologies? Does London have the ambition and vision to use innovation to transform the city or will we stick with the status quo?

That bit about the ephemera vs the real innovations caught my eye (and that fellow S. African and Big Pototo Norman Lewis is speaking), as it is something we often puzzle over at Broadsight, to wit:

- Which are the real, lasting innovations and how do you see them early

- Why do so many people seem to be lured by the ephemera, even when they are fairly obviously snake oil.

So, as a way of getting my non-talk in first, as it were, here are some takes:


How do you tell lasting Inovation early on?


Over the last 5 years at Broadsight we have been doing quite a lot of this sort of work, either for startups, VCs, or large organisations wishing to understand or launch or defend in a market space, and we have over that time developed an approach which seems to be quite useful.

Firstly, our experience leads us to believe that any Innovative technology will only have impact if it can drive some form of arbitrage on what exists today. In other words you have to look at its economic impact.

Secondly, this economic impact is dynamic - ie it is not enough to say "X gives Y benefit" as the other players in the space will then react to it, and thus any modelling has to be dynamic not a simple linear progression

Thirdly, even if there is a potential economic arbitrage, it does not follow that there will be uptake unless there are social vectors that will drive it (Porn being a fairly frequent early social vector for new media formats for example)

Fourthly, even if there is a social vector, there are often legal or regulatory barriers that can come into play (for example, the "digitisation" of the legal servies industry is far harder than in other professional services as it has a lot of arcane regulations around licencing, secure documents etc)

For a bigger example, take Location Based Services. Our research into Generation One services, done about 3 years ago, predicted that they would largely fail as there was just not a sufficient economic arbitrage from the technology at the time, nor a large enough social vector (aka "jumping the chasm" in their case) for them to prosper on. They by and large failed. What is thus interesting is that the 2nd generation have used Gaming mechanisms to create a different social vector, and by and large are using prize-fuelled datamining to create a bigger economic arbitrage. So far so good, but our analysis now predicts that they will start to fall foul of regulations around data protection, in Europe at any rate.

Thus, we believe that as private companies, Location Based services are still a risky investment. However, for any Future City project they will clearly be every powerful, so we believe the optimal outcome - for a city like London - is for the city's public services to make some of their data available for innovatve servie providers to build services, and ensure the economic climate is such that datamining is not necessary for these services to succeed as an economic model

Why are most people lured by Snake Oil?

We have done no empirical research on this, but in a way watching the evolution of social media - and the behaviors on social media - allows me to make some hypotheses.

Firstly, just as the devil has all the good songs, most Snake Oil is based around overpromising an impossible dream. The Gartner hype curve describes this in graphical form, and against this the rational, fact based analysis looks boring, hard and stuffy.

Secondly, you cannot fool all the people all the time, but you can fool a significant number for a period of time, and this time period - typically characterised by words such as "New X" during and "Bubble" after the event - is the period in which a fever pitch can be whipped up, excited new entrant fools parted from their dumb money, and those promoting it can make out like Ponzi bandits (Such as appears to be happening in Silicon valley startup valuations right now). "You just don't get it" is the cry to every criticism.

Thirdly and thusly, the Press/PR machine is just not interesed in The Truth during The New X event. The speculative money is going into fuelling the story and no-one likes a grumpy nay-sayer, nor does it shift copy (unless they can do it really well, like Andrew Keen). As an aside, I could name a number of "Tech Journalists" from quality UK newspapers who interviewed us on the fate of Location Based Services in 2007/8, who didn't like our message of caution, and thus didn't even bother to mention our cautionary tale in their breathless praises of Dopplr et al at the time (but I won't, so long as the requisite marked 20 pound notes find their way to Broadstuff Towers )

My point here is that London needs to be careful - there has been, and is, quite a lot of government funding being thrown at "technology innovation" projects right now, and here is a strong risk that they are hijacked by popular snake oil merchants rather than boring, useful and economically viable projects.

So, to the various committees making the innovation spending decisions we would recommend:

(i) Firstly, using some sort of analysis like we do above - what services would create economic arbitarge for Londoners and what do you have to do to drive organic adoption.

(ii) Secondly, if it looks or smells like something ascending a hype curve, run a mile. This is territory for VC investors, not government co-investment.

(iii) Thirdly, make sure your advisory bodies are composed of the grumpies as well as those leading the New X charge from the barricades. If you look round those bodies and can't see the dumb money, its you

Here endeth the lecture Now go to the real lecture.....

Speakers:
Iain Gray, chief executive, Technology Strategy Board
Adam Hart-Davis, writer and broadcaster
Dr Hermann Hauser, co-founder, Amadeus Capital Partners
Dr Norman Lewis, chief innovation officer and managing partner, Open-Knowledge UK
Oliver Morton, Energy and Environment Editor, The Economist and author of Eating the Sun
Chair: David Rowan, editor, Wired UK

Update - to the above point, I see that 4IP has been shuttered..... suffered from buying into a market awash with snake oil and high prices, perversely now is a better time to invest as the game is better understood and the customer base is larger.