This year in-store smartphone purchases worldwide will increase by more than 1,000 percent from last year. While the mobile wallet won’t replace the traditional wallet yet, 2015 will be a tipping point toward wider consumer adoption of in-store smartphone payments.
This is according to the 14th edition of Technology, Media & Telecommunications Predictions, a report by Deloitte Global. Additionally, Deloitte Global predicts that print books will continue to dominate the publishing industry and account for 80 percent of all book sales by dollars and units, and that 2015 will be the year where enterprise will be ahead of consumers for adoption of new technologies such as 3D printing, Internet of Things (IoT) and drones.
Also, counter to previous industry predictions around the smartphone reaching a plateau, Deloitte Global predicts there will be 1 billion upgrades in 2015, signaling that the market has not yet matured or stagnated.
“Smartphones are already being used to check balances, transfer funds and transact online, but they have not reached a ‘mobile wallet’ status globally,” said Jolyon Barker, Managing Director, Global TMT Industry, Deloitte Global. “We predict 2015 will be the first year that all mainstream mobile requirements will be addressed, making smartphone payment options easier, with user friendly security in place.”
Consumers don’t always lead the way: The pendulum swings back to enterprise innovation
Last year signaled a shift away from a decade-long trend of consumerization of Information Technology (IT), for example, with a modest consumer uptake of wearable technology like smart glasses. In 2015, however, Deloitte Global predicts the pendulum to swing further toward enterprise led adoption with wearables, 3D printing, drones and the IoT meeting more needs and generating higher sales for business than consumers.
Additional highlights and details of this year’s TMT predictions to impact the marketplace in 2015 include:
The end of the consumerization of IT? In 2015, the pendulum of technology adoption will begin to swing back to the enterprise market, reversing a decade long trend that went the other way – when mass adoption of technologies like large screen smartphones and tablets started with consumer adoption first.
The Internet of things really is things, not people – In 2015, over 60 percent of the one billion global wireless IoT devices will be bought, paid for and used by enterprises – despite media focus on consumers controlling their thermostats, lights, and appliances (ranging from washing machines to tea kettles). The IoT-specific hardware is predicted to be worth $10 billion, but the big story is the enterprise services enabled by the devices: about $70 billion.
Drones: high-profile and niche – In 2015, drones will have multiple industrial and civil government applications. Deloitte Global predicts sales of non-military drones (also known as unmanned aerial vehicles or UAVs), to be about 300,000 units, driving the installed base to over a million. Although consumers or prosumers will buy the majority, most of the real value will come from enterprise use.
3D printing is a revolution: Just not the revolution you think – In 2015 nearly 220,000 3D printers will be sold worldwide, with a dollar value of $1.6 billion, but it is unlikely that there will be a “factory in every home.” Deloitte Global estimates about 80 percent of the value of all 3D printers will be for companies instead of consumers, meaning the real revolution will be in the enterprise market.
Smartphone batteries: better but no breakthrough – Longer battery life is likely to remain a key factor for consumer’s choosing their next smartphone. The rechargeable, lithium ion (Li-Ion) battery technology used in all smartphones will improve only modestly in 2015, with no more than 5 percent greater unit charge or milliampere hours (mAh) compared to a 2014 model of the same dimensions and voltage.
Click and collect booms: a boon for the consumer, a challenge for retailers – The number of click and collect locations in Europe will reach half a million in 2015, a 20 percent increase on the previous year. Click and collect provides shoppers with the option to pick up items purchased online from locations such as a special section in a store, a shopping mall, or a secure locker located in a transit station.
Nanosats take off, but they don’t take over – By the end of 2015 over 500 nanosatellites (nanosats, under 10 kg in mass) will be in orbit. Nanosats are attractive for many reasons: they are cheaper than conventional satellites, lighter, easier to build and test, and easier to launch. Although increasingly capable of more complex tasks, they are likely to be additive to the existing large satellite market, and not replace it.
Short form video: a future, but not the future, of television – The total time spent watching online short-form video clips and other programming of less than 20 minutes in length, will represent less than 3 percent of all video seen in the year globally. Deloitte Global does not expect short-form online content to usurp long-form traditional television. It is a future, but not the future, of screen-based entertainment; and Deloitte Global predicts it is unlikely ever to be the predominant video format, as measured by hours watched or revenues.
The ‘generation that won’t spend’ is spending on TMT – North American Millennials will lead the way in 2015 and spend an average of $750 per person for content, both traditional and digital. What are Millennials spending on? Pay TV, music, computer games, books, live sports, streaming video, and even print newspapers.
Print is not dead, at least for print books – Sales from print books will be five times the sales of eBooks. eBooks have not substituted print books in the same way that sales of CDs, print newspapers and magazines have declined. Young people (age 18-34) are as attached to print books as their elders and read at about the same rate than older demographics, and they are willing to pay for them.
Contactless mobile payments (finally) gain momentum – The end of 2015 will mark the tipping point for the use of mobile phones for in-store payments around the world. It will be the first year in which the multiple prerequisites for mainstream adoption – satisfying financial institutions, merchants, consumers and device vendors – have been sufficiently addressed. In 2015, about 10 percent of the base of smartphones worldwide will be used to make an in-store payment at least once a month, compared to less than half a percent (led by early adopters in Japan) of about 450 million smartphones in mid-2014.
For the first time, the smartphone upgrade market will exceed one billion. 1.35 billion smartphones will sell worldwide in 2015, but over a billion of them will be upgrades – new phones for those who already have one. The upgrade cycle may be lengthening, but screen size, speed, storage, software and design will continue to drive growth for smartphone refreshes.
The connectivity chasm deepens as gigabit Internet adoption rockets – Globally, the number of homes with broadband Internet will grow by about 2 percent to 725 million, and average broadband speeds in most countries will increase by 20 percent. The gap between those with access to the fastest broadband speeds and those on basic speeds will continue to widen in 2015, providing a varied experience from home to home, especially for high bandwidth applications like streaming video. All broadband is equal…but some is more equal than others.
Busting the Blockchain Hype: How to Tell if Distributed Ledger Technology is Right for You
Blockchain has been hailed as the solution for everything, from resolving global financial inequality, providing IDs for refugees, to enabling people to sell their houses without an estate agent. However, the overwhelming hype surrounding this technology over the past year is misleading and untrue.
“We have been up and down on the blockchain roller coaster this past year,” said Sheila Warren, head of the Blockchain and Distributed Ledger Technology project at the World Economic Forum Center for the Fourth Industrial Revolution. “Blockchain is an innovative solution, but it is not the solution to all problems. Blockchain has to be the right solution for the right business problem. Busting the blockchain hype is necessary to make sure businesses are using it in the right way and not damaging the long-term prospects of the technology.”
Through research and analysis of the technology’s capabilities and the ways it is used around the world, the team found there were 11 questions (at most) to answer to determine if blockchain can be the solution.
“To bust some of the blockchain hype, we had to design a practical framework for people who knew nothing about the technology. We started with the premise that blockchain is like any other technology – a tool in a company’s toolbox,” said Cathy Mulligan, Visiting Researcher at Imperial College London and member of the Forum’s Global Future Council on Blockchain. “If you break down the kinds of problems blockchain technology is solving and its potential, clear paths emerge.”
The paths were incorporated into a framework of “yes” and “no” questions, which guide a business leader once a specific problem is articulated. “This framework cuts through the noise about blockchain and refocuses the technology into the way business leaders think,” said Jennifer Zhu Scott, Founding Partner of Radian and member of the Global Futures Council on Blockchain.
“These 11 questions were developed and then trialled with chief executive officers at a workshop at the World Economic Forum Annual Meeting 2018. The test group included C-suite executives from large corporations, most of whom said they were actively considering adopting blockchain technology in some manner,” said JP Rangaswami, Chief Data Officer, Deutsche Bank.
During the workshop, one publicly listed energy company discussed its plans for an initial coin offering (ICO) and a large bank shared how it was considering using blockchain-based crypto-tokens for transferring remittances. Even in the much-debated cryptocurrency space, 100% of the participants believed that even after the cryptocurrency bubble burst, the token economy would be here to stay.
The Artificial Intelligence Race: U.S. China and Russia
Artificial intelligence (AI), a subset of machine learning, has the potential to drastically impact a nation’s national security in various ways. Coined as the next space race, the race for AI dominance is both intense and necessary for nations to remain primary in an evolving global environment. As technology develops so does the amount of virtual information and the ability to operate at optimal levels when taking advantage of this data. Furthermore, the proper use and implementation of AI can facilitate a nation in the achievement of information, economic, and military superiority – all ingredients to maintaining a prominent place on the global stage. According to Paul Scharre, “AI today is a very powerful technology. Many people compare it to a new industrial revolution in its capacity to change things. It is poised to change not only the way we think about productivity but also elements of national power.”AI is not only the future for economic and commercial power, but also has various military applications with regard to national security for each and every aspiring global power.
While the U.S. is the birthplace of AI, other states have taken a serious approach to research and development considering the potential global gains. Three of the world’s biggest players, U.S., Russia, and China, are entrenched in non-kinetic battle to out-pace the other in AI development and implementation. Moreover, due to the considerable advantages artificial intelligence can provide it is now a race between these players to master AI and integrate this capability into military applications in order to assert power and influence globally. As AI becomes more ubiquitous, it is no longer a next-generation design of science fiction. Its potential to provide strategic advantage is clear. Thus, to capitalize on this potential strategic advantage, the U.S. is seeking to develop a deliberate strategy to position itself as the permanent top-tier of AI implementation.
The current AI reality is near-peer competitors are leading or closing the gap with the U.S. Of note, Allen and Husain indicate the problem is exacerbated by a lack of AI in the national agenda, diminishing funds for science and technology funding, and the public availability of AI research. The U.S. has enjoyed a technological edge that, at times, enabled military superiority against near-peers. However, there is argument that the U.S. is losing grasp of that advantage. As Flournoy and Lyons indicate, China and Russia are investing massively in research and development efforts to produce technologies and capabilities “specifically designed to blunt U.S. strengths and exploit U.S. vulnerabilities.”
The technological capabilities once unique to the U.S. are now proliferated across both nation-states and other non-state actors. As Allen and Chan indicate, “initially, technological progress will deliver the greatest advantages to large, well-funded, and technologically sophisticated militaries. As prices fall, states with budget-constrained and less technologically-advanced militaries will adopt the technology, as will non-state actors.” As an example, the American use of unmanned aerial vehicles in Iraq and Afghanistan provided a technological advantage in the battle space. But as prices for this technology drop, non-state actors like the Islamic State is making noteworthy use of remotely-controlled aerial drones in its military operations. While the aforementioned is part of the issue, more concerning is the fact that the Department of Defense (DoD) and U.S. defense industry are no longer the epicenter for the development of next-generation advancements. Rather, the most innovative development is occurring more with private commercial companies. Unlike China and Russia, the U.S. government cannot completely direct the activities of industry for purely governmental/military purposes. This has certainly been a major factor in closing the gap in the AI race.
Furthermore, the U.S. is falling short to China in the quantity of studies produced regarding AI, deep-learning, and big data. For example, the number of AI-related papers submitted to the International Joint Conferences on Artificial Intelligence (IJCAI) in 2017 indicated China totaled a majority 37 percent, whereas the U.S. took third position at only 18 percent. While quantity is not everything (U.S. researchers were awarded the most awards at IJCAI 2017, for example), China’s industry innovations were formally marked as “astonishing.”For these reasons, there are various strategic challenges the U.S. must seek to overcome to maintain its lead in the AI race.
Each of the three nations have taken divergent perspectives on how to approach and define this problem. However, one common theme among them is the understanding of AI’s importance as an instrument of international competitiveness as well as a matter of national security. Sadler writes, “failure to adapt and lead in this new reality risks the U.S. ability to effectively respond and control the future battlefield.” However, the U.S. can longer “spend its way ahead of these challenges.” The U.S. has developed what is termed the third offset, which Louth and Taylor defined as a policy shift that is a radical strategy to reform the way the U.S. delivers defense capabilities to meet the perceived challenges of a fundamentally changed threat environment. The continuous development and improvement of AI requires a comprehensive plan and partnership with industry and academia. To cage this issue two DOD-directed studies, the Defense Science Board Summer Study on Autonomy and the Long-Range Research and Development Planning Program, highlighted five critical areas for improvement: (1) autonomous deep-learning systems,(2) human-machine collaboration, (3) assisted human operations, (4) advanced human-machine combat teaming, and (5) network-enabled semi-autonomous weapons.
Similar to the U.S., Russian leadership has stated the importance of AI on the modern battlefield. Russian President Vladimir Putin commented, “Whoever becomes the leader in this sphere (AI) will become the ruler of the world.” Not merely rhetoric, Russia’s Chief of General Staff, General Valery Gerasimov, also predicted “a future battlefield populated with learning machines.” As a result of the Russian-Georgian war, Russia developed a comprehensive military modernization plan. Of note, a main staple in the 2008 modernization plan was the development of autonomous military technology and weapon systems. According to Renz, “The achievements of the 2008 modernization program have been well-documented and were demonstrated during the conflicts in Ukraine and Syria.”
China, understanding the global impact of this issue, has dedicated research, money, and education to a comprehensive state-sponsored plan. China’s State Council published a document in July of 2017 entitled, “New Generation Artificial Intelligence Development Plan.” It laid out a plan that takes a top-down approach to explicitly mapout the nation’s development of AI, including goals reaching all the way to 2030. Chinese leadership also highlights this priority as they indicate the necessity for AI development:
AI has become a new focus of international competition. AI is a strategic technology that will lead in the future; the world’s major developed countries are taking the development of AI as a major strategy to enhance national competitiveness and protect national security; intensifying the introduction of plans and strategies for this core technology, top talent, standards and regulations, etc.; and trying to seize the initiative in the new round of international science and technology competition. (China’s State Council 2017).
The plan addresses everything from building basic AI theory to partnerships with industry to fostering educational programs and building an AI-savvy society.
Recommendations to foster the U.S.’s AI advancement include focusing efforts on further proliferating Science, Technology, Engineering and Math (STEM)programs to develop the next generation of developers. This is similar to China’s AI development plan which calls to “accelerate the training and gathering of high-end AI talent.” This lofty goal creates sub-steps, one of which is to construct an AI academic discipline. While there are STEM programs in the U.S., according to the U.S. Department of Education, “The United States is falling behind internationally, ranking 29th in math and 22nd in science among industrialized nations.” To maintain the top position in AI, the U.S. must continue to develop and attract the top engineers and scientists. This requires both a deliberate plan for academic programs as well as funding and incentives to develop and maintain these programs across U.S. institutions. Perhaps most importantly, the United States needs to figure out a strategy to entice more top American students to invest their time and attention to this proposed new discipline. Chinese and Russian students easily outpace American students in this area, especially in terms of pure numbers.
Additionally, the U.S. must research and capitalize on the dual-use capabilities of AI. Leading companies such as Google and IBM have made enormous headway in the development of algorithms and machine-learning. The Department of Defense should levy these commercial advances to determine relevant defense applications. However, part of this partnership with industry must also consider the inherent national security risks that AI development can present, thus introducing a regulatory role for commercial AI development. Thus, the role of the U.S. government with AI industry cannot be merely as a consumer, but also as a regulatory agent. The dangerous risk, of course, is this effort to honor the principles of ethical and transparent development will not be mirrored in the competitor nations of Russia and China.
Due to the population of China and lax data protection laws, the U.S. has to develop innovative ways to overcome this challenge in terms of machine-learning and artificial intelligence. China’s large population creates a larger pool of people to develop as engineers as well as generates a massive volume of data to glean from its internet users. Part of this solution is investment. A White House report on AI indicated, “the entire U.S. government spent roughly $1.1 billion on unclassified AI research and development in 2015, while annual U.S. government spending on mathematics and computer science R&D is $3 billion.” If the U.S. government considers AI an instrument of national security, then it requires financial backing comparable to other fifth-generation weapon systems. Furthermore, innovative programs such as the DOD’s Project Maven must become a mainstay.
Project Maven, a pilot program implemented in April 2017, was mandated to produce algorithms to combat big data and provide machine-learning to eliminate the manual human burden of watching full-motion video feeds. The project was expected to provide algorithms to the battlefield by December of 2018 and required partnership with four unnamed startup companies. The U.S. must implement more programs like this that incite partnership with industry to develop or re-design current technology for military applications. To maintain its technological advantage far into the future the U.S. must facilitate expansive STEM programs, seek to capitalize on the dual-use of some AI technologies, provide fiscal support for AI research and development, and implement expansive, innovative partnership programs between industry and the defense sector. Unfortunately, at the moment, all of these aspects are being engaged and invested in only partially. Meanwhile, countries like Russia and China seem to be more successful in developing their own versions, unencumbered by ‘obstacles’ like democracy, the rule of law, and the unfettered free-market competition. The AI Race is upon us. And the future seems to be a wild one indeed.
Allen, Greg, and Taniel Chan. “Artificial Intelligence and National Security.” Publication. Belfer Center for Science and International Affairs, Harvard University. July 2017. Accessed April 9, 2018. https://www.belfercenter.org/sites/default/files/files/publication/AI%20NatSec%20-%20final.pdf
Allen, John R., and Amir Husain. “The Next Space Race is Artificial Intelligence.” Foreign Policy. November 03, 2017. Accessed April 09, 2018. http://foreignpolicy.com/2017/11/03/the-next-space-race-is-artificial-intelligence-and-america-is-losing-to-china/.
China. State Council. Council Notice on the Issuance of the Next Generation Artificial Intelligence Development Plan. July 20, 2017. Translated by RogierCreemers, Graham Webster, Paul, Paul Triolo and Elsa Kania.
Doubleday, Justin. 2017. “Project Maven’ Sending First FMV Algorithms to Warfighters in December.” Inside the Pentagon’s Inside the Army 29 (44). Accessed April 1, 2018.https://search-proquest-com.ezproxy2.apus.edu/docview/1960494552?accountid=8289.
Flournoy, Michèle A., and Robert P. Lyons. “Sustaining and Enhancing the US Military’s Technology Edge.” Strategic Studies Quarterly 10, no. 2 (2016): 3-13. Accessed April 12, 2018. http://www.jstor.org/stable/26271502.
Gams, Matjaz. 2017. “Editor-in-chief’s Introduction to the Special Issue on “Superintelligence”, AI and an Overview of IJCAI 2017.” Accessed April 14, 2018. Informatica 41 (4): 383-386.
Louth, John, and Trevor Taylor. 2016. “The US Third Offset Strategy.” RUSI Journal 161 (3): 66-71. DOI: 10.1080/03071847.2016.1193360.
Sadler, Brent D. 2016. “Fast Followers, Learning Machines, and the Third Offset Strategy.” JFQ: Joint Force Quarterly no. 83: 13-18. Accessed April 13, 2018. Academic Search Premier, EBSCOhost.
Scharre, Paul, and SSQ. “Highlighting Artificial Intelligence: An Interview with Paul Scharre Director, Technology and National Security Program Center for a New American Security Conducted 26 September 2017.” Strategic Studies Quarterly 11, no. 4 (2017): 15-22. Accessed April 10, 2018.http://www.jstor.org/stable/26271632.
“Science, Technology, Engineering and Math: Education for Global Leadership.” Science, Technology, Engineering and Math: Education for Global Leadership. U.S. Department of Education. Accessed April 15, 2018. https://www.ed.gov/stem.
Global anxiety deepens over online data and privacy protection
Internet users worldwide are becoming more worried about their privacy online and many question the protections offered by Internet and social media companies, a new United Nations survey has found.
This waning of confidence could imperil the spread of online shopping even as newcomers to the Internet may be especially vulnerable to abuses because they are unaware of the risks.
“Trust is essential for the successful expansion and use of e-commerce platforms and mobile payment systems in developing nations,” said Fen Osler Hampson, Director of Global Security and Politics at Centre for International Governance Innovation (CIGI), a think tank that helped conduct the study.
The survey was carried out by CIGI and Ipsos, in collaboration with the UN Conference for Trade and Development (UNCTAD) and the Internet Society.
Users in large emerging economies expressed the most “trust” in Internet firms with nine in ten expressing such faith in China, India and Indonesia and more than eight in ten doing so in Pakistan and Mexico.
To the contrary, fewer than 60 percent of consumers in Japan and Tunisia expressed such “trust.”
The evidence of mounting privacy concerns coincides with sharper public scrutiny of the protection policies of major Internet firms – over concerns fuelled by the revelation that a political data firm gained access to millions of Facebook users’ personal data without their consent.
“The survey underlines the importance of adopting and adapting policies to cope with the evolving digital economy” said Shamika Sirimanne, the Director of Technology and Logistics Division at the UN agency, which deals with the economics of globalization.
“The challenge for policymakers is to deal holistically with a number of areas – from connectivity and payment solutions to skills and regulations,” she explained.
Is technology worth the cost? Yes and No
As e-commerce soars, there is also a general increase in the number of people using mobile payments and non-traditional means of paying for services, such as tapping one’s smart phone to board trains or scanning it to pay for a cup of coffee.
The use of smart phones to make cashless purchases is in fact far higher in many developing countries than it is in the United States and much of Europe, the study noted.
In addition, many people, especially in the developing world, expressed the view that new technology is “worth what it costs.”
At the same time, some users in developed countries expressed views to the contrary. Their main worry, the survey found, is that technology will result in the loss of employment.
The launch of the survey coincides with UNCTAD’s E-Commerce Week – the leading forum for Governments, private sector, development banks, academia and the civil society to discuss development opportunities and challenges before the evolving digital economy.
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