SBA

Where has all the New Tech gone?

(Long time passing…)

One of my desires for this column is that I write about exciting new IT / computing technology, but of late that hasn’t happened much. Personally, having been involved in the development of new tech since the beginning of the 80’s, I am not easy to impress but from my perspective I’m not seeing much exciting new tech coming out and many media pundits returning from IFA in Berlin last week, Europe’s premiere new-tech expo, are saying the same.

The Smartphone is now 21 years old, having debuted in 1994 with the IBM Simon. Similarly the Smartwatch dates back to 2000 with the IBM - Citizen Watchpad and the Sony Chrono-bit. What we have now is merely evolution of those pioneering innovations. We have made tech more energy efficient and powerful, created better batteries etc., but new tech? There really hasn’t been much. The recent fad of fitness trackers is doomed to die as their functions become incorporated into smartwatches, but their innovation is limited - I have a natty Polar fitness watch & chest strap from 2005 which is now an antique in technology terms. Google’s Glass spectacles product will, following its wobbly start in life, eventually hit mainstream but to be honest I’m struggling to think of any other recent tech innovations that are going to be big hit product genres. I wouldn’t be so crass as to suggest that we’ve invented it all, but maybe we’ve invented most of what can currently be conceived.

Whilst there may not be any obvious radical tech break-thoughs comparable to those which emerged in the last quarter of the 20th century, what we have seen is the evolution, commoditisation and application of that tech into affordable and useful mass-market products.

So what’s changed? Essentially we have conceived most of the things we might usefully do with microprocessor technology - smaller computers, embedded computers, arrays of processors etc. We have datacentres, desktop computers, handheld computers, wearable computers, smart homes, smart cities, self-driving cars, autonomous robots, medtech etc. to a greater or lesser degree. Some of these are very mature and highly evolved, others are taking their first faltering steps towards usefulness but all are on a trajectory of evolution, the big inventive steps from the birth of the silicon chip have already been taken. Evolution will continue as we improve our microprocessor technology - smaller, faster, cheaper enabling practical implementation of ideas that have already been conceived, but new inventions based upon microprocessor technology will be scarce. The future lies in application.

Over the past 15 years the story in tech has almost all been about new applications of technology rather than new inventions. Lower power consumption and improved batteries have enabled a raft of magical ideas from the 70’s, 80’s and 90’s to become a reality (the basic design of tablet computers such as the Kindle goes back to the Dynabook concept in 1972). Over the coming years almost all innovation will be around applications - doing things which are already possible but nobody’s got round to thinking of or doing them yet, or which will become practical as we further improve existing technology.

Air BnB, the global room rental web service, was invented in 2008. Uber, the controversial global leader in car sharing, came along in 2009. There were no technological barriers to either of these services in 1998, both were possible then, albeit that the market of Internet and Smartphone users was rather smaller. The only reason for delay was that nobody got around to implementing these ideas in a successful format until a decade later. Both are exemplars of the innovative application of cloud computing and the Internet. The popular online productivity suite Google Apps dates back to 2006, it took another 5 years for Microsoft to climb on the bandwagon with Office 365 in 2011 and bring online productivity apps into the mainstream. When you look around at the new tech products and services that have had real market impact in recent years almost all of them were possible years earlier and almost none involve the invention of new technology, the exciting new value streams are being created on top of technology platforms which we have had for years or decades.

So what? This is really good news for the Isle of Man, because creating new applications requires much less money and less science than developing new tech. Successfully bringing new tech to the market often costs millions of pounds, sometimes billions, and often the inventor is not the major beneficiary - IBM does not make a fortune from Smartphones, ITT is totally out of the telephony business, and Xerox doesn’t make money from Networking or Windows type operating systems. Successfully bringing a new class of application to the market can be achieved for thousands of pounds by a few inspired people without a decade of research and labs full of hugely expensive scientists and equipment. The evolution from invention to application levels the playing field in favour of smaller nations and smaller companies; new products and services can be trialled with massively lower investment and risk. As the source of new value streams swings from the creation of raw technology towards new ways of applying it brought about by little more than lateral thinking the opportunities for small players expand disproportionately. Big corporate are commonly not interested in developing small scale offerings so the niche player has the advantage and can “punch above his weight” - and sometimes the small scale offering catches the public imagination; Facebook, Uber, Air BnB and Twitter all started small.

Here on the Isle of Man we have exhibited a talent for innovation as a source of national advantage - in our tax system, in corporate law, in financial services, and in technology application. We’ve been slower to recognise and foster the latter but the island has a small but strong application economy in e-gaming services and software, online dating, online payments, digital currency and so on. Of these only one stands out as truly innovative - Microgaming effectively invented the online gambling industry in 1994. Our other successes are primarily taking what has already been conceived and giving them the opportunity to thrive, they are triumphs of application.

I mentioned the fitness tracker earlier, on the island we have a company that has successfully leveraged the fitness tracker by integrating it with gym and sports club membership to create both additional fitness incentive and value for the customer, and new revenue streams and promotion opportunities for the gyms and clubs. This win-win is a classic example of the power of new application, little new technology involved but a great new business concept born out of lateral thinking. Whilst the Fitbit or other fitness tracker of choice is almost guaranteed to be consigned to the dustbin the application that creates customer and business value will undoubtedly continue and grow as fitness tracker capabilities evolve in Smartwatches and other devices - it’s quite likely that one day the fitness application will be working with the embedded multi-purpose health monitoring chip that many of us will have implanted under the skin in the same way as we now have ID chips injected into our pets.

The future of the island’s ICT industry and the e-Business economy lies in application, in the lateral thinking that will take existing technologies off on a new tangent. As an economy our best bet is probably to foster many cheap small startups with immature and in some cases oddball ideas for new applications, give them what little support we can afford to go to market with a “minimum viable product” offering, and then get behind the ones which seem to catch the imagination of customers to help them all we can. Many of the start-ups will fall by the wayside but the successes will more than make up for them, a single Air BnB or Uber would outweigh all the failures.

If that sounds rather like gambling, it is, but as the Chief Minister commented recently “we have to take risks to grow the economy”. The difference between placing many small bets on new application start-ups and gambling is that the house doesn’t get a cut, as long as we place our bets intelligently the odds are even at worst.