TECHONOMY MEDIA · shape our global future. Josh Kampel Chief Strategy offiCer LAunching my first...

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Techonomy Media, Inc.

670 Broadway, 2nd Floor

New York, NY 10012

[email protected]

W W W. T E C H O N O M Y. C O M

A Report from Techonomy Media

Spring 2013

TECH

ON

OM

Y MED

IASPR

ING

2013

n a i L e e L u m D e S i G n

photography Braschler/Fischer: p. 17 Marsha Ericks: p. 14 David Kirkpatrick: p. 3, 44 Jeff Kowalsky: p. 48-50, 53, 56, 57 (top left and top right), 58, 59

Adam Ludwig: p. 8, 9 Asa Mathat: p. 2-6, 20, 22-24, 27, 28, 30-32, 34-40, 42-46, 60 Alana Range: p. 2, 3 (team portraits) Brad Ziegler: p. 1, 54, 55, 57 (bottom)

42149_Cover.indd 2 2/28/13 8:05 AM

M a r c h 2 0 1 3

The world is being transformed by technology, and

quickly. companies, jobs, institutions, governments,

the way we shop, our personal lives—even friendships—are

being irrevocably altered by connectedness, software, and the

innumerable innovations emerging from the planet's

growing creative class.

at Techonomy we see a world getting better. Massive

challenges remain. But opportunities are emerging to

address, even solve, age-old problems like hunger, disease,

poverty, and chronic disenfranchisement. We believe

business is the best engine for progress in most areas.

Meanwhile business itself is being transformed at a startling pace and in every industry.

Our mission is to document and celebrate technology’s impact on business and social progress,

in hopes of quickening it. It’s also to educate, to help more people understand tech-driven change.

Since early 2009 we’ve organized four major conferences—three flagship Techonomy events,

most recently in November at the ritz-carlton Dove Mountain resort near Tucson, as well as our

U.S.-centric Techonomy Detroit last September; we’ve built a gorgeous website, then completely

rebuilt it again to be suitable for publishing as well as conference info; hosted 8 dinners in 6

cities; and published innumerable articles and videos.

This book surveys our work in 2012 and points to our plans for 2013. In addition to edited

excerpts from sessions in Tucson and Detroit, you’ll find five original articles. We've strengthened

our company, our team, and our partnerships. TE13 takes place again at Dove Mountain Novem-

ber 11th to 13th, and Techonomy Detroit September 17th. We also plan dinners this year on three

continents. We look towards international expansion, especially in asia. Our publishing and

video operations will grow.

Thanks to Dell for its support. We don’t think print is dead, despite all. The evidence is in your

hands. I hope you enjoy it.

With Enthusiasm,

David Kirkpatrickc h I E F T E c h O N O M I S T

02

Simone Ross

Co-founder, Coo, and Chief Progr am offiCer

A Te ch o n om i s T since

my days with the

computerworld Smithson-

ian awards, I've long been

an inquisitive observer of

the companies, individu-

als, and ideas at the

intersection of tech, the

economy and society. I’ve

worked with IT innovators

and leaders to create

programs and contexts

that meet the exacting

intellectual, practical, and

inquisitive requirements

of leaders across indus-

tries, function, and

titles. It's not so much the

bells and whistles of tech

itself that interest me. It’s

the application of that

tech for productivity

and progress that excites

me and makes me a

Techonomist.

TEchonomy The Team

Adam Ludwig

Content and Communit y manager

A s A Te ch o n om i s T,

and a Brooklynite, I’m

excited about how

crowdsourcing and social

design can help stimulate

manufacturing, create

jobs, and grow a vital DIY

economy. Each morning

I listen to the radio and

browse my favorite online

news channels, hoping,

maybe even expecting, to

hear or read the word

“techonomic” used to

describe an important

development in business

or public policy. It’s

bound to happen soon.

I believe that more and

more people will look at

the world through a

techonomic lens as

a way to understand the

trends that increasingly

shape our global future.

Josh Kampel

Chief Str ategy offiCer

L Au n ch in g my first

scrappy Internet

business in 1996 from a

dorm room outside of

Boston was the first step

on my path to becoming

an official Techono-

mist. having helped

build technology

companies that force

conventional industries

to rethink established

business models, I

consider myself one of

those restless entrepre-

neurs who always think

there must be a better

way. Now, as a part of

Techonomy, I am

excited to have a

front-row seat to study

how the accelerating

change enabled

by faster and cheaper

technological

development will

impact our world. 03

Flying our f lag above the Ritz-carlton

Dove mountain

conTenTS T E c h o n o m y S p R i n g 2 0 1 3

06 Why I Am a Techonomist

» marcbenioff,jackdorsey,davemorgan, danschulman,padmasreewarrior

08 content and community

» The View from Broadway and Bond St. bydavidkirkpatrick

» Entrepreneur? No. Street Fighter byjoshlinkner » What’s Next in the Techonomy? byjohnhagel&johnseelybrown » Welcome to Little Big Inc. bytimweber

» The Industrial Internet bybillruh


» jeancase,jeffgoodell,davidkeith, jamesmanyika,richardthompson

22 Techonomy 2012

» When Everybody’s Online

» The Internet’s Fantastic Four

» Forest, Trees, Data

» The Facebook Effect, continued

» Geo-Engineering

» africa: The Final Frontier

» EMc’s Joe Tucci

» a changing china

» The Madness of crowds

» Shopping: Data and Dollars

» robots, Factories, Jobs, and Life

» ray Kurzweil: Enhancing humanity


» gordonbell,edenfull,johnhagel, stephenhoover,petervanderauwera

48 Techonomy Detroit

» The DIY Economy

» Entrepreneurship and american relevance

» an Era of Global competition

» how Far can Innovation Take Our cities

» Jack Dorsey on the city as Inspiration

» Entrepreneurship and Tech

60 Moving Forward in 2013

Opening Night Dinner, Techonomy 2012

06

TEchonomy

Why I Am a Techonomist

Jack Dorsey

Chairman,

twitter, and

Ceo, Square

The best ideas can come from anywhere, and Technonomy has proven to be an incredible gathering place for Techono-mists to have real meaningful discus-sion that propels learning, growth, and change.

Dan Schulman

grouP PreSi-

dent, enter-

PriSe growth,

ameriC an

exPreSS

Whether you’re running a startup or driving innovation within a large company, new technologies have the potential to fundamentally better the lives of people, and that’s what inspires and motivates me to dream big and create change. The path to change can be frustrat-ing, and it is never a straight line, but true Techonomists can imagine beyond today, focusing on what could be, and not what is.

Marc Benioff

Ceo,

SaleSforCe.Com

i’m a Techonomist because we are seeing the most profound shift in the history of our industry. But tech is not a silo, and Techonomy puts what’s happening into the context of how it will affect business, economics, and social progress so we can change the world. We all have an incredible opportunity—as well as a responsi-bility—to transform our businesses to be more competitive, more innovative, and more successful than ever before possible.

Padmasree

Warrior

Chief teChnol-

ogy and Strategy

offiCer, CiSCo

Technology is changing the world around us at an unprecedented pace. Today there are roughly 6 billion people connected. We have not even begun to imagine the economic and social implications as 50 billion things get connected by 2020. Techonomy brings together the people who can not only imagine but make possible the exciting transforma-tions at the intersection of technology, econ-omy and society. cheers to human-ity as we wake up 99% of our world!

Dave Morgan

Ceo,

Simulmedia

it is virtually impossible to overestimate how much technology will transform us, our lives, and the world over the next 25 years. But, it won’t happen on its own. i’m a Techonomist because i believe we all have a responsibility to help shape our future.

content & community » Techonomy 2012

Techonomy Detroit

08

TEchonomy content & community

Techonomic TablesTh ro u g h o u T Th e y e A r , Techonomy organizes dinners at stunning venues around

the world. But while we eat delicious food we also facilitate wide-ranging conversa-

tions about local and global technology progress. These gatherings, typically 20-25

people and often presented in partnership with sponsors, are mini-Techonomy con-

ferences that serve to introduce new people to our community. Insights we gain

there help us plan our conference programs and editorial direction.

In 2012 we hosted Techonomy dinners in London, Menlo Park, chicago, and Wash-

ington, Dc. We convened multidisciplinary groups of business leaders, intellectuals,

diplomats, economists, policy experts, entrepreneurs, dreamers and doers. Guests

included senior executives from a cross section of sectors and companies, including

accenture, alcatel-Lucent, capital One, the carlyle Group, cisco, Electronic arts,

Facebook, Groupon, Intuit, McKinsey, Nielsen, Thomson reuters, TUI Travel plc, the

Wellcome Trust, the White house and WPP, plus top professors at Oxford and Stan-

ford. Topics included how nation-states use technology and the Internet; the shift in

power from hierarchies to networks of people; and the civic and corporate responsi-

bility of tech leaders to the vast communities they impact.

In 2013 we plan even more dinners, in additional US cities as well as in china,

Israel, and elsewhere.

Photos from our dinner at Washington’shay-Adams rooftopAbove Swedish Ambassador h.E. Jonas hafström (l) talks with Alec Ross, Senior Advisor on innovation to Secretary of State hillary clintonRight guests take their places for dinnerOpposite top KaBoom! cEo Darell hammond and Techonomy’s Simone Ross on the hay-Adams terraceOpposite bottommarne Levine, Facebook’s Vice president of global public policy

09

Techonomic Talksi n JA n uA ry we organized a standing-room-only

“SuperSession” at the consumer Electronics Show

in Las Vegas, hoping to add a little techonomic

thinking. David Kirkpatrick moderated “The New

Network Effect changes Everything” with rethink

robotics founder rodney Brooks, Ford cTO Paul

Mascarenas, and Ericsson cEO hans Vestberg. The

session addressed the business implications of ubiq-

uitous connectivity, but these experts on robotics,

transportation, and wireless telecommunications

expanded beyond business and manufacturing to

social issues like privacy and potential impacts on

agriculture and water consumption.

at the World Economic Forum 2013 annual

meeting in Davos, Techonomy hosted a reception

with General Electric and a dinner on climate

change with the Environmental Defense Fund

(EDF) and the Weather channel. Weather channel

cEO David Kenny and meteorologist Jim cantore

joined EDF President Fred Krupp in a dialogue

moderated by David Kirkpatrick. The group dis-

cussed how melting arctic ice on the atmosphere

is an underlying factor in extreme weather, how

data enables better climate modeling, and how

public attitudes are changing.

Above right After the Techonomy panel at

cES 2013: (from left) Ford cTo paul mascarenas, Rethink

Robotics founder Rodney Brooks, Ericsson cEo hans Vestberg, and Techonomy’s

David Kirkpatrick

10

Techonomics online A s D e Lo iT Te ’ s John hagel and John Seely Brown point-

ed out in a recent article on Techonomy.com, the di-

rect human interaction that happens at live events

like Techonomy conferences “strengthens trust, cre-

ates serendipity, and fosters community in an irre-

placeable way.” We couldn’t agree more. But we also

know that more than ever we get our information,

form our opinions, and build our social and profes-

sional networks via the Internet.

Techonomy Media aims to curate discussions

about how tech can help us solve our most urgent

problems. When we launched our editorial Website

in 2012, we invited a new group of Techonomists

to join our community. Techonomy.com provides a

forum to expand on conversations that begin at our

physical events and to initiate new dialogue with a broader virtual audience.

contributors have included conference participants like TIBcO’s Vivek ranadivé,

Edward alden of the council on Foreign relations, harvard’s Perry hewitt, Stephen

hoover of Parc, SWIFT’s Peter Vander auwera, Justin Fox of The harvard Business

review, Kaplan’s David Dehaven, and hannes van rensberg of Visa.

We’ve also assembled a lively ecosystem of contributing writers, from seasoned

journalists like Erick Schonfeld to emerging ones who tackle topics ranging from

bioscience and genomics to digital photography, social product development, and

the app economy. as we increase our global coverage, we have tapped specialists on

chinese business, North Korean technology, and russian social media.

Longterm, big opportunities lie with video. We have shot and hosted original ones

on Occupy Wall Street and ray Kurzweil's futurism, among other topics. We host a

comprehensive archive of conference session videos, plus selected highlights. We'll

increasingly augment those with interviews, panels, and other video material gath-

ered year-round.

We welcome techonomic story ideas from writers both established and aspiring,

and from professionals with stories about how tech is transforming their industry.


Techonomy.com’s original articles cover management, internet, genomics, geopolitics, and beyond.

11

98,273unique

visiTors To Techonomy.com

since iTs Aug. 27

reLAunch(AnD 278,006

pAgeviews, As of feb. 22)

»

s om e o f Th e e xcLu s i v e A r Ti cLe s o n Te ch o n omy.com

MANAGEMENT

It’s Time to Find the Women in Tech By Perry hewitt

Sheryl Sandberg’s commencement address at harvard Business School spurreddebates about whether women are setting their sights too low.

+ more at Techonomy.com/womenintech

MANUFACTURING

Will the Quirky Model Be Replicated By adam ludwig and Sar ah e ve lyn harvey

Just as Quirky allows shockingly rapid product development, companies themselves can be created in short order.

+ more at Techonomy.com/quirky

LEARNING

$97,500 for an online Degree? 2U Is Worth It, Say Students By adrienne Burke

It offers weekly live online classes and a sophisticated social networking platform that lets students and instructors interact.

+ more at Techonomy.com/2u

THE ARTS

Is curating as Good as Photographing? By eugene reznik

Doug rickard’s A New American Picture, published by aperture, is a collection of “street-photography” gathered exclusively with Google’s Street View.

+ more at Techonomy.com/photography

BUSINESS

Why Gangnam Style Marks a Triumph of South Korean Tech By g aBriel mizr ahi

While Korean technology had already penetrated american homes and offices, PSY’s iconic horse trot lassoed U.S. culture closer to the republic of Korea.

+ more at Techonomy.com/gangnam

MEDIA & MARKETING

Real or Rendered? How 3D Imagery Is changing the Way You ShopBy alex Southern

+ more at Techonomy.com/realorrendered

LIFE SCIENCE

Why Drug Development Is Failing and How to Fix It By C atherine arnS t

12


from o ur Lo c ATio n in lower Manhattan’s Noho

neighborhood, Techonomy positions itself as a bell-

wether of technological change. These days it’s a role

both satisfying and daunting. We feel confident we

are at the right juncture–where technology and busi-

ness intersect. That’s where you must look to under-

stand where the economy is moving.

But the headlong transitions that surround us are

truly astonishing. Many feel more and more scary. To

really understand it all is probably impossible. Even

Facebook’s Zuckerberg was late to appreciate the cen-

trality of mobile tech to the Internet. So how will we

figure out what will happen to jobs? To countries? To

privacy? To our focus, and our patience?

Will the global divide between rich and poor di-

minish, or simply get reinforced? Those at the bot-

tom may achieve economic, nutritional, and educa-

tional improvement even as the richest soar further

into the stratosphere. To further complicate that

equation, even many of those left behind economi-

cally will likely keep pace informationally. and what

will that mean for social, political, and international

harmony? People who are well-informed about being

left out are unlikely to be complacent.

Technology is forcing businesspeople, politicians,

and ordinary people to confront ever-more-funda-

mental issues. It's becoming difficult to separate the

The view from broADwAy

AnD bonD sT. by DAv iD KirKpATricK

consideration of technology from the way we talk

about basic issues of society. at Techonomy we like

that. It gives us ideas and themes. here’s a recent ex-

ample: education. It’s routine for us in the United

States to wring our hands about our national failures

in education for Science, Technology, Engineering

and Math, the so-called STEM disciplines. But as tech

is getting more deeply integrated into the transfor-

mation of every field, even that lament is outdated.

Now smart leaders are recognizing that we omit lib-

eral arts from that equation at our peril. To catalyze

technological societal transformation, the leaders of

tomorrow are going to need an understanding of so-

ciety. after all, Zuckerberg was not just majoring in

computer science back at harvard in 2003-2004. he

also studied psychology.

In the early weeks of 2013 we noticed a sudden in-

crease in people talking not about STEM but STEaM--

incorporating arts into the mix. Yes, they always

should have been. We didn’t include richard Thomp-

son and Lyle Lovett into the past two Techonomy con-

ferences only for entertainment. The perspective of

artists helps us sharpen our own. You’ll see more dis-

cussion of STEaM in upcoming events.

here are other things we’re watching for our pro-

grams and journalism:

» a proliferation of robots and what it means for

13

work and jobs (continuing a 2012 theme—see p. 44)

» The rapid evolution of biotech and the growing

importance of genomics

» The global dispersion of entrepreneurship and

innovation, as Silicon Valley’s role as a central hub

diminishes

» The near-overnight emergence of concerns about

drones, both military ones in far-off places and inex-

pensive ones flying over our neighborhoods

» a ubiquitous unfolding of e-commercialization

as more and more selling and dealmaking of all sorts

moves online across the globe

» The growing importance of chinese Internet

companies, even outside china (especially Tencent

and alibaba)

» The continued jockeying for influence on the In-

ternet, not just among the fantastic four (see p. 26),

but including surging players like LinkedIn, Pinter-

est, Snapchat, and Twitter.

Few processes, products, or industries are not be-

ing altered by that intertwined quartet of tech forces

some are starting to refer to with the acronym SMac:

social (see p. 29), mobile, analytics (also known as big

data—see p. 38) and cloud. It means that the shape,

structure, and even mission of many businesses and

other institutions central to the modern economy

must be remade. John hagel and John Seely Brown

explain this on p. 15. There’s no certainty, they note,

that this transformation will occur. It’s one of many

uncertainties we’re finding as the pace of change ac-

celerates. But one thing is certain: a plethora of new

companies and institutions are percolating at the

economy’s entrepreneurial margins. Should today’s

leaders falter, they’re ready to take over.

Techonomy’s team: (foreground, from left) Seana Quental, Simone Ross, Adam Ludwig, and Josh Kampel on the second floor at 670 Broadway, new york. Techonomy shares a co-working office

operated by targeted TV-ad company Simulmedia.

14

h Av ing buiLT fo ur s TA r Tup s from scratch and

now investing full-time, you could say I’m in the busi-

ness of “entrepreneurship.” But I don’t think that’s

the right term anymore. at all.

The word entrepreneur is borrowed from French

and implies an aristocratic polish. It conjures up im-

ages of backroom deals with white men in three-

piece suits, perhaps even wearing top hats, neatly

manicured and coddled, issuing orders from afar to

sweaty and tattered workers.

But that just ain’t the way you win today.

Successful company-builders today don’t ring a sil-

ver bell to have afternoon tea delivered by white-

gloved attendants. Instead, they wake at 5am and eat

nails for breakfast.

Both the term and the notion of entrepreneur-

ship are outdated. If you believe that your idea to

conquer Facebook is so good that eager investors

will whisk you away in a limo to riches and stardom,

you may want to consider playing the lottery or buy-

ing a bridge instead.

Building a company is hard work. To me, a more

fitting metaphor is that of a street fighter. It suggests

what it actually takes to win. here are eight lessons

company-makers can learn from street fighters:

1. rely on grit and determination. Be willing to get

your hands dirty and do whatever it takes to succeed.

2. get scrappy. adapt in real-time and figure out how

to do more with less.

3. ignore tradition. Find fresh new approaches and

disregard dogma.

4. use what you’ve got. Lacking formal training or

fancy tools, street fighters use whatever is at their dis-

posal. Often, these are internal and personal tools

(heart, passion, courage) instead of formal ones (fancy

tech, academic degrees, social connections).

5. Prepare to engage on a moment’s notice. Make

sure you’re ready for battle and prepared for competi-

tive attacks from any direction.

6. have a chip on your shoulder. have a healthy dis

regard for the status quo and be willing to stick your

finger in the eye of leaders.

7. learn and grow from adversity. Your most impor-

tant areas of growth are just outside your comfort zone.

8. fight from behind. have an underdog’s sense of

urgency. Outwork your competition ten-to-one.

Let's return the word “entrepreneur” to the French

and apply new language to the adventurous journey of

creating something out of nothing. Ditch the polish

and get scrappy. It’s time to let your inner street fight-

er out of the cage.

Josh Linkner is The New York Times bestselling author of Disciplined Dreaming: a Proven System to Drive Breakthrough creativity. He is CEO and Managing Partner of Detroit Venture Partners, focused on rebuilding urban areas through technology and entrepreneurship. More at www.joshlinkner.com

enTrepreneur? no. sTreeT fighTer by J os h LinKne r


15

i n Th e L A s T f e w D e c A D e s , we have witnessed a

steady doubling in the price performance of digi-

tal technologies. however, we are reaching a tip-

ping point of this exponential growth, and it is

unclear how the cumulative effects of technology

will reshape our economy, political systems, and

collective future. One thing is clear: in the hands

of existing institutions—firms, schools, non-prof-

its, civic institutions and governments—this awe-

some technology will achieve only a fraction of

its potential.

Unfortunately, we haven’t seen the same expo-

nential rate of change in institutions as we have

in technology. (Unlike computer chips, govern-

ment and business structures don’t predictably

get faster and less expensive). Managerial fief-

doms, rigid hierarchies and tightly scripted proce-

dures remain from the industrial revolution era

like vestigial structures; they were important at

some point, but it’s unclear what purpose they

serve now. In fact, mounting evidence suggests

they’re becoming more dysfunctional—witness

the significant erosion in return on assets for U.S.

public companies since 1965—a trend document-

ed in Deloitte’s Shift Index.

as technological innovation continues to out-

pace institutional innovation, the greatest deter-

minant of our future may be whether we can close

the widening gap. We celebrate individuals who

rise to the occasion and innovate to solve prob-

lems, but to unlock human potential en masse

may require innovating our institutions.

We should go back to the roots and reassess

the rationale for institutions. In the 20th centu-

ry, the rationale was scalable efficiency. But

what role do they serve in a world driven by ex-

ponentially improving technology infrastruc-

tures? Perhaps now it’s time to shift to scalable

learning. The answer matters—it can shape choic-

es regarding the architecture of relationships

both within and across institutions necessary to

support that rationale. The institutional forms

we evolve will likely differ significantly from the

ones surrounding us today.

The rewards of institutional innovation can be

enormous—we may for the first time be able to

move from a world of diminishing returns to one

of increasing returns. The wealth created from in-

stitutional innovation may ultimately trump any

rewards from technological innovation. Doubt it?

What single innovation generated the most eco-

nomic value over the past 500 years? It was the

development of the limited liability corporation.

Of course the next version of such a landscape-

altering institutional form doesn't yet exist. We

have to collectively want it, and create it.

New technologies allow us to leverage our

individual capabilities so that even small moves,

smartly made, have the power to set very big things

in motion. To get to the next level of our techonom-

ic potential, we must create institutions worthy of

the technologies changing our world.

John Hagel III, a director of Deloitte Consulting LLP, is the co-chairman of the Deloitte Center for the Edge, based in Silicon Valley. John Seely Brown is the independent co-chairman of the Deloitte Center for the Edge.

we neeD insTiTuTions As gooD As our Techby J o hn h Ag e L A nD J o hn s e e Ly b rown


16

yo u ’ v e g oT A g re AT iDe A . You’ve assembled a team of four

or five people, all enthusiastic, all

raring to go. That’s it. You’re

ready to take on the giants.

This is not the familiar story of

online start-ups and one-app won-

ders, where the business model is a

quick sell-out to Facebook, Google,

Microsoft or apple. Instead it’s the

story of companies like Jimdo, a small German busi-

ness that makes it easy to build and run websites—

whether you want to run a blog, create a personal site

to show off your fly-fishing prowess, or create an on-

line presence for your small business. Jimdo started as

the side project of an online marketing team that

didn’t like the software available at the time to build

websites. So they built their own easy-to-use, browser-

based tools.

Today Jimdo is a global company, with a webhost-

ing service rivalling established competitors. It used

the power of the cloud to go global. Launched six

years ago, run on a shoestring, and driven by passion

and weekends of intense coding at a farmhouse in

rural Northern Germany, founders christian Spring-

ub, Fridtjof Detzner and Matthias henze are turning

Jimdo into an online powerhouse, with offices in

hamburg, San Francisco, Tokyo and Shanghai.

Jimdo now hosts more than seven million web-

weLcome To LiT TLe big inc .

SM A LL COMPA NIES N Ow TA KE O N G LO BA L G I A NT S , A S TECH CH A N G ES THE BA L A N CE O F P OwE R . by Tim we be r

sites, and makes money on a Free-

mium model: personal websites

are free, “pro” and “business” ser-

vices and functionalities cost ex-

tra. The website supports 11 lan-

guages.

So far, so obvious, you’ll say.

after all, Jimdo is an online ser-

vice, that’s what the internet was

made for.

Wrong. For small companies, the internet is more

than a platform to run web services and reach custom-

ers worldwide.

here is the real power of online: it allows small com-

panies to create a virtual corporate infrastructure that

allows them to rival global giants. Technology helps

businesses to source and outsource everything—from

design to product development to materials to finance

to logistics to customer service.

Take On. This small Swiss firm makes high-end run-

ning shoes, competing with giants like Nike, adidas

and asics. The shoes’ unique selling point is based on an

idea by Olivier Bernhard, a six-times Ironman winner:

the soles sport circular pieces of a special rubber to com-

bine a cushioned landing while running with the bare-

foot feeling of a natural push-off. On’s cloudTec shoes

are rapidly gaining fans among running enthusiasts,

especially triathletes, who are always on the lookout for

innovation that provides that little bit of edge.


Jimdo got its start at this farmhouse in northern germany

17

Technology helped the Swiss team go global quick-

ly. rapid prototyping was done in china; once the

concept was proven to work, and the company want-

ed to scale (and improve quality), it moved manufac-

turing to Vietnam. Using technology, just 18 months

after launch On had built a virtual global supply

chain covering 18 countries across Europe, asia-Pacif-

ic and North america. The days are over when a com-

pany had to reach scale in its domestic market first

before it could make it big abroad.

It’s a similar story for Bulldog, a British firm mak-

ing “natural” male grooming products. Founded by a

group of friends, the company is thriving in a market

dominated by multi-brand giants like L’Oreal, Unile-

ver, Procter & Gamble and Shiseido.

how can Bulldog, with less than a dozen staff,

make and distribute its “natural moisturizer,” lemon-

scent shower gel, and “anti-aging” wrinkle cream?

Once again, technology allows Bulldog to run a

global supply chain that links its outsourced produc-

tion facilities with premium retailers from the Unit-

ed States to australia and South Korea.

The product ideas come from the Bulldog team, but

are developed under contract in the UK. Ingredients

and packaging are sourced online and the supply chain

is virtual and global. heavy use of social media and viral

marketing help to create a strong brand identity.

These three firms prove that digital technology is

not just about pretty apps. rather, it gives small com-

panies global power, allows them to enter tough in-

dustries and challenge giants. They may be little, but

they can act like Big Inc.

Tim Weber is senior vice president at Edelman, a global public relations company, based in London. A content and social media specialist, he focuses on technology and energy. Until last year he was business and technology editor for BBC News Interactive. On Twitter: @tim_weber

The three founders of running-shoe maker on: (from left) David Allemann, caspar coppetti, and olivier Bernhard

18

The wo rLD i s o n The Thre s ho LD of the next

frontier of innovation with the rise of the Industrial

Internet. Brilliant machines are converging with the

power of advanced analytics, low-cost sensing and

new levels of Internet connectivity. The next decade

will bring a software and services-driven movement

that will be nothing short of breathtaking: analytics

that learn from experience and constantly improve

machine intelligence that blends digital output and

human insight to deliver better outcomes. It will help

eliminate waste across every major industry.

In the U.S. alone, the Industrial Internet could raise

average individual incomes by an impressive 25-40%

over the next 20 years and lift growth back to 1990s

levels. To capture this value, leaders will need to adapt

to new rules of business in five critical areas:

1. intelligent devices, Systems and decision-making

Increased intelligence in devices and systems is lead-

ing to distributed analysis and decision-making clos-

er to the machine. Machines are brilliantly handling

issues while also escalating as appropriate.

2. machine-based real-time data analysis

real-time analysis of events and messages can be cou-

pled and correlated with existing knowledge through

advanced software. This analysis is often done with-

out human intervention.

3. Simple Presentation of Complex data as

actionable knowledge

To handle quick right-brained (creative) thinking, com-

plex data needs to be summarized into actionable

knowledge and presented using an innovative user ex-

perience. access to the detailed data for left-brained

(analytical) thinking needs to be easily available.

4. Closed-looped data Sharing with the right

People and machines

The right people and machines need to collaborate in

a closed-loop manner to achieve greater productivity.

Only through the synthesis of different data from

normally isolated sources can truly breakthrough in-

sights be uncovered and automated.

The inDusTriAL inTerneT wiLL rewriTe The ruLes of businessby biLL ruh


19

5. accelerated learning System through

network effect

When the top four are accomplished correctly, we can

create a distributed accelerated learning system using

the network effect. The insights from this data can lead

to action and make the entire system intelligent, driving

a continuous process of knowledge accumulation and

insight implementation. as more machines are connect-

ed within a system, the continuously expanding, self-

learning system grows more intelligent over time.

By combining on-board control systems along with

software and analytics, technology will be connecting

machines to machines, machines to people, and ma-

chines to business operations. This will allow industries

such as airlines, railroads, hospitals, manufacturing and

energy to operate more efficiently and reduce costs – po-

tentially eliminating as much as $150 billion in waste

across major industries. airline flight delays costing $40

billion every year could be reduced by using proprietary

algorithms to monitor data from aircraft equipment, di-

agnosing and predicting maintenance issues before they

occur. analytics and real-time access to critical informa-

tion can enable railroads to move freight faster. Utilities

can monitor, manage and control their energy grids

more intelligently. hospitals can integrate bed assign-

ments, departmental workflow, patient flow, transport,

and equipment management in order to reduce wait

times, better manage available resources, and enable

higher quality care. The Mt. Sinai hospital in New York

city is already deploying such a solution.

The promise of the Industrial Internet is that it can

turn every interconnected object into a potential sen-

sor for observing the world and its environment, and

for sharing and assimilating the information it

gleans. The Industrial Internet will have a profound

impact on business, unleashing a productivity revo-

lution to build, power, move and cure the world.

Bill Ruh is Vice President and Global Technology Director at General Electric, responsible for leading the advanced services and solutions portfolio strategy, development, and operations at GE.

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20

James Manyika

Senior Partner,

mCkinSey &

ComPany

The most exciting innovations and ex-periences that are likely to transform our daily lives and those of the rest of humanity lie at the intersection of technology and the economy. it’s at this intersection that ideas meet the real world and have the potential to change quality of life, create op-portunities to learn, work, play and prosper. Techono-my brings together some of the best scientists, econo-mists, entrepre-neurs, technologists and innovators and those obsessed with making the world a better place.

David Keith

ProfeSSor of

aPPlied

PhySiCS and

PuBliC PoliCy,

harvard ken-

nedy SChool

Techonomy does a great job balanc-ing techno-hype against critical thinking and linking both the grand policy and econom-ic challenges of this new century.

Richard

Thompson

muSiCian

i was invited to per-form at Techonomy, and i wasn’t quite sure what to expect. i use a lot of tech tools in my music, but i’m hardly at the cutting edge. But as much as anyone else, i want to know the future, and i thought that this would be the place to find it. Well, i was right about that. i had a fascinating time, met amazing people, attended every talk and symposium i could get to, and glimpsed the world ahead of us, and it wasn’t too scary. i played a little music and was made to feel included in this rarified world of Techonomy.

Jef f Goodell

ContriButing

editor,

rolling Stone

Every time i attend a Techon-omy conference, my brain lights up. i like bumping into people who are doing things that i’d never imagined possible, whether it's in medicine or social media or energy. i like the unpredictability of the conference —i never know what i’m going to discover until i get there. And i like that it's all very unpretentious, open, and un-Davos-like, but at the same time, mind-blowingly interesting and alive.

TEchonomy


Jean case

Ceo, the C aSefoundation

i’m a Techonomist because i believe that technology can democratize access to information, empower people and ignite ideas and movements that can change the world.

content & community Techonomy 2012 »

Techonomy Detroit

22

Herman Miller provided beautiful furniture for Techonomy 2012, inlcuding here, in the lobby outside the main ballroom.

TEchonomy TE12

23

Techonomy 2012: our Window to the FutureT e c h o n o my s TA r T e D w i T h A s p L A s h y c o n f e r e n c e back in 2010, and Techonomy

2012 continued the tradition in style. Each year we gather a critical mass of global

thought leaders and businesspeople to advance our understanding of the many

ways technology intersects with the economy, and thus illustrate the rationale be-

hind our name. It’s a retreat from the day to day, where we immerse guests in the

complex and exciting transformations underway in business, social life, science, ed-

ucation, health, government, politics, and international relations.

The aim is to create interaction and dialogue around themes and thinkers we

spend the entire year selecting and refining, so attendees return to work invigo-

rated with new ideas for keeping their organizations and themselves relevant and

impactful. For us it’s live journalism.

Our third annual conference brought together participants from asia, africa, Eu-

rope, and the U.S. at the ritz-carlton Dove Mountain resort in the arizona desert,

surrounded by soaring Saguaro cactuses. Their ages ranged from 11 to 78. Over two-

and-a-half days we talked, argued, listened, learned, and laughed. One evening we

dined in the hotel’s great lobby, hogwarts-style, and afterward gathered in the recon-

figured ballroom to listen to one of the world's great guitarists and songwriters,

richard Thompson. he talked of his music and about how tech is changing it, and

played a stunning group of songs.

conversations began in sessions and continued at meals, on patios, in hallways

and even on morning bike trips we organized through the spectacular surrounding

Sonoran Desert. happily, this year no one flew off, at least that we know of. We re-

corded and live streamed the whole conference, and the press was there in force,

blogging, tweeting, and writing articles prompted by our amazing speakers and

audience.

conference highlights are on the pages following. Qr codes lead to session videos.

at Techonomy.com you can find video and transcripts of other eye-opening sessions,

including with Gordon Bell, ultra-young entrepreneurs Sujay and Sheel Tyle, talks by

McKinsey’s James Manyika and MIT’s Erik Brynjolfsson, and more panels on food,

media, and 3D printing. We take it all seriously, but not too. Don’t miss richard

Thompson’s rendition of “Oops!... I Did It again.”

We’ll do it again at Dove Mountain this coming November 11th through 13th.

S P e A K e R S

Susan Athey

chief Economist,

Microsoft

Douglas L. Gilstrap

Senior Vice President,

Ericsson

Robert D. Hormats

U.S. Under

Secretary of State

David Sze

Partner, Greylock

Partners

M o D e R A T o R

David Kirkpatrick

Techonomy

When everybody’s onlineg iL s Tr A p : In fixed broadband, we have about 650 million subscribers today. Just by

2018, mobile broadband will have 6.5 billion subscribers.

Kir KpATr i cK : What will be the social consequences of all that connectedness?

g iL s Tr A p : It’s access to information. healthcare. Education. Those are the primary

drivers. Then you have the economic benefit of trade and transportation in develop-

ing countries.

h o rm AT s: It empowers people politically. Even if they can’t vote, they now have the

opportunity to use cell phones and other technologies to put pressure to hold their

leaders accountable. Leaders cannot fail to pay attention to what these people do. It's

not just tweeting. There are a whole series of interconnections that enable people in

various countries, not just to communicate with one another, but to constantly send

large amounts of information to their government and put pressure on them.

It’s bringing people in developing countries more and more into the game. We

utilize satellites that we put up with India to provide information that's downloaded

to individual cell phones that tell farmers what the weather is going to be, when you

put your fertilizer on, when you should harvest your crop.

Foreign policy almost entirely used to be intermediated by the State Department

for foreign offices around the world. Now, every agency of every government has its 24

A bove (from left) David Kirkpatrick, Susan Athey, Douglas gilstrap, Robert hormats, David Sze

TEchonomy TE12

S can for v ideo, o r v i s i t w w w.Techonomy.com/endofof f l ine

25

own state department, and they are emailing one another on a constant basis.

ATh e y : I wouldn’t say I’m pessimistic. I just have some nuances. We can think of mo-

bile devices and online as just democratizing everything. But there are a few key

bottlenecks that remain and those concern me, especially from a business and indus-

try structure perspective.

a mobile platform is going to have a lot of control over how you find your infor-

mation. In mobile search, 97% of searches today in the U.S. come through Google.

If only one company, or maybe two companies, have access to that data, then we

don’t necessarily expect that the benefits from that data will get shared with the

ecosystem.

competition between players is what forces you to provide information in an

unbiased way. It’s also what keeps advertising prices down. In some ways mobile

devices have really democratized information. They allow peer-to-peer sharing of

information. On the other hand, somebody is choosing. Facebook is ranking your

news feed. It’s choosing what comes first. It’s demoting some of your friends whose

posts aren’t popular and promoting other friends based on their algorithms. and

how you rank makes an enormous difference. Facebook can decide whether they

want to put ads in your news feed. If companies don't have competition, they are

going to be very tempted to do the thing that will maximize revenue or promote

their own products over what the users want.

Kir KpATr i cK : Will the impact of this pervasive infrastructure help us get along

better, on balance?

g iL s Tr A p : My gut feeling is yes. It gives so many people access to information.

From that there’s certainly a chance for misinformation. But I think people are

smart enough to look at different sources and understand where the world is and

try to understand where they are in that world.

sz e : Technology doesn’t have a mind, right? What technology tries to do is to

spread, scale, and reduce friction. The interesting thing we’re confronting isn’t

whether technology is good or bad. The question we’re asking is, what are human

beings like when they can interact at much bigger scale with low friction?

In general, a lot of us believe that the conflict, the interaction, the learning, the

stress that comes from that engagement at scale actually causes really great things

to happen that are important for humans over the long run. and technology is just

pushing us there very quickly. I think it will cause stress. It’s already causing stress.

arab Spring is an example of that. But do I believe in the end it’s going to be better?

I do. I’m a technology optimist.

ASI

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s u b s cr ip Ti o n s

Q3 2012( i n m i l l i o n s)

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26

TEchonomy TE12

The Internet’s Fantastic Fours Av iT z: Four companies are increasingly in each other’s business: amazon, apple,

Facebook, and Google. What makes these four unique?

e LLi s o n : They are all four truly platform companies. To varying degrees they are

playing in commerce, they are playing in media, they are playing in Web services.

Most of them either have or are rumored to have a hardware product, either a smart-

phone or tablet to deliver media and commerce capability. and they have in most

cases a platform for developing applications. So that gives them a defensibility and

also an offensive capability to continue to expand into other areas.

m A h A n e y : at least three of them, probably apple too, have established very deep

competitive moats around their business. The ability for a new company to start up

now and go through multiple years of losing money to establish a distribution and

retail network like amazon has, it’s very hard to see today. Facebook is a network ef-

fects company. People may start trailing off of Facebook. But it’s very hard to see a

social network with a billion people recreated in the next five years. and Google, the

amount of money they spent developing search, perfecting and improving their

search algorithms—yes, a user could jump away from them with a click. But for some-

body to come up with those kind of algorithms, it would take in excess of $20 billion.

Maybe Microsoft could do it. They haven't had much success to date.

So those three companies have established themselves at least for the next five

years, which is as long as anybody on Wall Street can think. It’s very hard to see them

undermined.

h A s Ke r: Who will own the consumer? Does it need to be one of the players, or can

all four continue to stake out significant territory against consumer time and atten-

tion? at Nielsen we look at video. In digital advertising and digital business models,

video is almost always the most compelling experience. So whoever ends up owning

the video experience will have a very strong position.

The most important video content is what the hardest-to-reach, most valuable au-

diences find compelling—like the sort of programming from hBO and Showtime and

the broadcast networks and the cable networks. Sports is an example. One of the

things we watch is—what kind of access are they getting to that content?

m A h A n e y : Who’s got the most interesting data? Who’s got the largest set of data? I

think the answer is Google. Facebook may come in second. But then who’s got the

most commercially useful data, from a Wall Street perspective? People who know

what you’ve searched for and what you purchase. Google has always tried to close

that loop. They’ve never really been able to do that. Facebook is far, far from closing

that loop. amazon gets you at the top of the funnel, they’re watching you the whole

way down, and then they understand you at the end. They’re going to have the rich-

est set of commercial data on consumers of the four.

e LLi s o n : If you add the four together, depending on the week, you’re talking 6%, give

or take, of the entire market cap of U.S. companies.

S P e A K e R S

Alec ellison

Vice chairman, Jefferies

Steve Hasker

President, Global

Media Products and

advertiser Solutions,

Nielsen

Mark Mahaney

Managing Director,

rBc capital Markets

M o D e R A T o R

eric Savitz

San Francisco Bureau

chief, Forbes

SOU

RC

E: N

IELS

EN

com pe Ti n g

fo r yo u r Tim e

A ve r a g e t i m e s p e nt p e r p e r s o n i n

n ove m b e r 2012 o n Fa nt a s t i c Fo u r w e b s i te s

FACEBOOK

6 :12:05

GOOGLE

3:49:4 4

APPLE

1:48:10

A M A zON

1:3 4:37

27

S P e A K e R S

Lars Björk

cEO, QlikTech

International

Gil elbaz

Founder and cEO,

Factual

Vivek Ranadivé

Founder, chairman, and

cEO, TIBcO Software, Inc.

Rick Smolan

President and cEO,

against all Odds

Productions

M o D e R A T o R

Justin Fox

Editorial Director,

harvard Business

review Group

Forests, Trees, and Datar A n A D i v é : Math is starting to trump science. You don’t really need to know the why,

you just need to know the what. If a and B happen, then c will happen. For years

aIDS researchers couldn’t find how the aIDS virus mutated. about a year ago they

converted it into a math problem and within one week gamers solved the problem.

e Lb A z : The key opportunity is better decisions, and increasingly these better deci-

sions are automated in real-time. We’re trusting these automated systems with more

and more of our lives. and the more data you have, the better the model you will be

able to build. Whoever has the most data will win.

b J ö r K : In this big data discussion, most of the information is noise. how do you filter

out the stuff that’s not relevant to the decision you want to make right now?

fox : There’s a big business opportunity out there for a middleman, basically, be-

tween consumers and all of these people who want our data.

b J ö r K : Most of the things that we solve in this area have nothing to do with personal-

ized information. Most people don’t even have access to relevant data in their day-to-

day life to make good decisions.

e Lb A z : I think people in the future will make a living just selling their data exhaust.

s mo L A n : Drug companies spend billions of dollars looking for cures for diseases. as

they do clinical trials, some drugs have harmful side effects. If .001 percent of the

people taking the drugs will die, the drug is never released. Now, because we are able

to do genetic sequencing and affordably decode individual DNa, in five years your

local drugstore will tell you which drugs work for you and which ones don’t.

Less ThAn 1% of The worLD’s DATA is AnALyzeD ToDAy.S O U R C E : I D C D I G I TA L U N I V E R S E S T U DY S P O N S O R E D BY E M C

A bove (from left) Justin Fox, Lars Björk, gil Elbaz, Vivek Ranadivé, Rick Smolan

Sam W. Lessin

29

S P e A K e R S

David Fischer

VP, Business and Mar-

keting Partnerships,

Facebook

Sam W. Lessin Project Manager (and

inventor of Timeline),

Facebook

I n T e R V I e W e R

David Kirkpatrick

author, The Facebook Effect

The Facebook effect, continued Kir KpATr i cK : Facebook seems to focus more on revenue since the IPO. Is figuring

out how to make money now part of the product design process?

f i s ch e r: We think about the user experience and the monetization opportunities

as either side of the same coin. In the world we’re moving into, we have opportuni-

ties to bring out new forms of marketing that are really effective.

Le s s in : You pick up a newspaper in the morning. What if it was perfectly custom-

ized just for you? What would you see? The answer is: the content coming from

your friends, the people you have asserted are important in your life, is a huge

percentage of it. But it’s not the whole story. There are plenty of brands and com-

panies I want to interact with that are part of the conversations I want to be hav-

ing. So how do we take that whole equation of the ideal newspaper and then intro-

duce the economic component? People in the world looking at their News Feeds

want to know what are the most important, exciting things to know. Knowing

there’s a great new product for them to buy is a huge deal.

f i s ch e r: It’s no secret that mobile is the critical growth area. We’ve certainly in-

vested in a heavy way this year in mobile. If you just look at the engagement rates of

people, passing a billion is a great milestone. There’s a lot more people to get to. But

are those people engaged? What we’re seeing is that people on their mobile devices

are more engaged. One of the five values of the company is being able to move fast.

We pride ourselves on how quickly we can move to seize opportunities. So over the

course of this year, we’ve introduced ads into News Feed and mobile and gone from

no mobile revenue to 14% of ad revenue in Q3.

Kir KpATr i cK : Given that almost everything that you’re selling depends on the per-

formance of the News Feed in some fashion, isn’t it going to be necessary to intro-

duce more transparency into how it works?

f i s ch e r: You’ve put your finger on a really important challenge for us, which is

making sure that people understand the value they are deriving. Our belief is you

should have all that information available to you.

Kir KpATr i cK : Over time does the News Feed and what you get from a search engine

in some sense converge?

Le s s in : Long-term I cannot overemphasize how much it matters what that first lens

you bring to the world is. There’s a very big difference in my mind in starting by de-

signing around human networks, around people. It’s all about connecting, express-

ing things to people, understanding things through people, and using your net-

S can for v ideo, o r v i s i t w w w.Techonomy.com/facebookef fect

TEchonomy TE12

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TEchonomy TE12

31

works, the people you trust, to

help filter information and live a

better life. We’re using machines

as intermediates to people, rather

than thinking of machines as the

terminus in and of themselves.

Kir KpATr i cK : If Facebook gets

into the multi-billions globally,

does economic behavior at a mac-

ro level happen in a different way?

Le s s in : Eventually we’re going to

see a world with completely vari-

ablized cost structures. Go back to

the three fundamental shifting

variables of infinite storage and

processing, and instant communi-

cation. You could go crazy far out.

It’s like, why own anything? Look

at examples like airbnb that’s

built on Facebook’s platform. The

sharing economy is part of it. More

fundamentally, we built over the

last several hundred years an en-

tire way of doing business and liv-

ing, based on certain limitations

in how we can communicate with

each other. Those limitations have

been fundamentally lifted. Over

the coming decades, everything is

going to change.

f i s ch e r: It’s hugely exciting to

travel around the world and see

these growth markets. We didn’t

have a strong base in Brazil, for in-

stance, and now we’re far and

away the leading player. The expe-

riences of people around the

world are going to have a lot more

in common.

From lef t David Kirkpatrick, David Fischer, Sam W. Lessin

S P e A K e R S

David Keith

Professor of applied

Physics and Public

Policy, harvard

University

Andrew Parker

research Fellow,

harvard Kennedy

School

M o D e R A T o R

Jeff Goodell rolling Stone

Geo-engineering: Who Decides, and Who Benefits?g o o D e L L : hurricane Sandy just hit. In two weeks hurricane Sandy II comes and ev-

eryone says, “Oh, my God, let’s cool this off. We've got to do something now.” What

do we do?

Ke iTh : So let’s say you wanted to cut in half the rate of warming starting in 2020.

What you’d do is start in 2020 with about two or three Gulfstream G650 aircraft, re-

engined with a military low-bypass engine. That’s a stock commercial airplane. and

you’d put about 20,000 tons of sulfur into the stratosphere, the upper atmosphere,

every year. and 20,000 tons may seem like a meaninglessly big or small number, but

that’s something like two or three hundred times less than the amount of sulfur we

now pump into the lower atmosphere in pollution, which, by the way, kills some-

thing like a million people around the world a year.

So 10 years out, in 2030, you’d have maybe 10 aircraft running. It would cost you a

couple of hundred million a year, all up. and this is a horrifyingly tiny amount of

money. We spent, the year before last, roughly $300 billion globally on clean tech.

The kind of numbers people talk about as the cost of climate impacts, or the cost

of managing the problem, are trillion numbers, sort of one percent of global GDP

class numbers. [In comparison,] numbers at the level of a couple of hundred million

A bove (from left) Jeff goodell, David Keith, Andrew parker

S can for v ideo, o r v i s i t w w w.Techonomy.com/geo-engineer ing

32

TEchonomy TE12

33

are basically zero. So at a cost that’s tiny, that essentially any country in the world

could do, certainly any G20 country, you could cut the rate of warming in half. Is it

perfect? No. Does it remove all climate problems? No. Does it cause its own risks? Of

course, it does. But whether you think this is a completely nutty idea or a perhaps

good idea, what’s clear is it is frighteningly doable.

If you want to reduce the risks to many of the people who will suffer real climate

impacts in the next decades, including some of the poorest people in the world, this

is essentially the only thing you could do, because nothing you do to cut emissions

has any real impact over the next few decades because of long inertia. I don’t think

we’re actually quite ready to commit to do it in 2020. I would not advocate that, but

I’d come pretty close.

g o o D e LL : The conventional scenario is something like the United States would do

some sort of well-run program. But you were talking about how it’s equally likely or

even more likely that the developing world could really push for this.

pA r Ke r: Two large groups might be interested in deployment in 15 years: the elites in

the developed world who don’t want to do anything about mitigation and see this as a

way of stalling action on our emissions, or people who are feeling the effects most

keenly, and those are the people in the developing world. Take, for example, the Pacific

Islands or the african equatorial states that are projected to suffer climate change

impacts far more keenly than Europe or the United States. What terrifies me most

about this idea is more the political ramifications of that than the physical ones.

Unfortunately, when it comes to peaceful uses, i.e., trying to treat climate change,

there’s very little international regulation out there to stop us here going out to do

it tomorrow.

Ke iTh : None of the current treaties, not the climate treaty, not other environmental

treaties, even control doing this. So it is in principle legal to engineer the whole

planet this way today, under international law, which is crazy.

The biggest single fear is that this takes away the incentive to get serious about

cutting emissions. That this provides a kind of technical fix, get-out-of-jail-free

card, or appears to provide one and perhaps actually does not, that will then lead

us further down a pathway where we put more carbon in the atmosphere and

increase our risk without actually managing the root problem, which is the

buildup of carbon.

I think this is, in the grandest sense, a challenge for international institutions and

innovation that we are not meeting. This idea actually goes back to the ’60s. This idea

is in the report that President Johnson got about climate change in 1965.

57ArTicLes

pubLisheDAbouT The

conference, in bLoomberg,

bLoomberg businessweeK,

cneT, The economisT,

forbes, huffingTon posT, The L.A. Times, mAsh-

AbLe, AnDTechcrunch

34

TEchonomy TE12

35

Top row (left) Steve Forbes of Forbes media and Revolution’s Steve case, with a cardboard Barack obama looking on; (middle) guitar leg-end Richard Thompson; (right) international guests: globant's guib-ert Englebienne (Ar-gentina), Jenny Dahl of memoto (Sweden), and Dominique Turcq of the Boostzone institute (France)Bottom row (left) ping Fu of geo-magic with some of her company’s 3D printed wares; (middle) U.S. Under Secretary of State Bob hormats; (right) Kennedy Shine (13), the conference’s youngest Techonomist

3D printed body parts, a 13-year-oldTechono-mist, Rock n’ Roll, Steve Forbes, and a cardboard obama

PA R T I c I PA n T S

Bhaskar chakravorti

Sr. associate Dean,

Tufts University

'Tokunboh Ishmael

co-founder and

Managing Director,

alitheia capital

nmachi Jidenma

Founder, cP-africa

Gary Rieschel

Founder, Qiming

Venture Partners

Hannes van Rensburg

cEO, Fundamo,

Visa, Inc.

M o D e R A T o R

James Manyika

Senior Partner,

McKinsey & company

Africa: The Final Frontierm A n y iK A : There now are a billion people living in africa. It was the second-fastest-

growing region in the global economy in the last decade—faster than Western Eu-

rope, Latin america, or the United States. If you look at the ability to consume, at

things like internet connections or access to technology, it’s also one of the fastest-

growing regions.

J iD e n m A : Young people in africa are passionate about social. Facebook grew there

50% since February of last year. Nigeria, which is where I’m from, has the second

highest mobile penetration rate for Facebook globally. There are local social plat-

forms like Mxit, with over 20 million users, and 2go in Nigeria. These platforms

are helping young people express themselves politically, using platforms like

blogs as a means of social expression, but also as a means of gaining employ-

ment for themselves. Seventy percent of africans are under the age of 35. Even

if they can’t afford to go to a certain kind of school, they can still take a course

at udacity.com.

r ie s ch e L : We’ve been watching the capital flows and the investments that china

has been making in africa, building out the physical infrastructure for the entire

continent at a rapid rate. There are now about 1.3 to 1.4 million chinese nationals

living in africa.

i s h m A e L : The chinese are bringing in drivers and construction workers and displac-

ing people on the ground, so amongst my peers there’s a debate about whether this

is the second colonization of africa. have we properly prepared ourselves to engage

with the chinese?

ch A Kr Avo r Ti: There are different china stories in different parts of the continent.

In rwanda they take the attitude that the West had its chance: the chinese are here,

and the chinese don’t bring attitude, like the West did. The chinese have a purely

mercantilist approach: “We want your materials, your commodities, and so on, and

we’ll build some roads and highways and we don’t want to impose our culture or

values on you.” In other parts of africa, like Ghana, africans are developing leverage

to negotiate with the chinese on an equal footing. They have insisted they employ

Ghanaians and not bring chinese workers over.

vA n r e n s b u rg : If you look at the best-known brand in africa, it’s coca-cola. If you stay

in hotels, it’s hiltons or holiday Inns. Wal-Mart just bought [South africa's] Massmart.

Visa bought my company, Fundamo, and they’re still investing heavily in africa. Many,

many africans are employed by U.S. companies. I think the relationship with the U.S. 36

TEchonomy TE12

S can for v ideo, o r v i s i t w w w.Techonomy.com/afr ica

37

From lef t James manyika, Bhaskar chakravorti, hannes van Rensburg, 'Tokunboh ishmael, nmachi Jidenma, gary Rieschel

has come of age. Let’s see where there’s the opportunity to make money together. The

chinese are kind of still trying to figure out what the relationship is with us.

r ie s ch e L : Looking out 20 years, I am far more positive about africa than about In-

dia, from the standpoint of infrastructure, entrepreneurship, and a much more open

attitude. The West is starting to get the right idea about the investing opportunity.

carnegie Mellon setting up a campus in rwanda—who could have possibly seen that

10 or 15 years ago? That type of investment in the people can give africa a huge ad-

vantage if it gets its governance in order.

i s h m A e L : Our investment firm based in Lagos, Nigeria invests in initiatives that

broaden access to finance, for households or for small businesses.

People in the diaspora are going back to africa. You have a lot of entrepreneurship

springing up from that. I can live outside of africa. I’ve chosen to live in Nigeria. and

I want to do something meaningful.

38

TEchonomy TE12

An Interview with eMc’s Joseph TucciKir KpATr i cK : how much will this data analytics thing change the world, from your

view leading one of the main companies enabling it? Is any industry exempt from

the transformation?

Tu cci : You used the word will, and I use the word is changing the world. You heard

about the decoding of the human genome. That was a big data problem, and it hap-

pened several years ago. I absolutely believe that every single industry will be totally

revolutionized by big data.

Kir KpATr i cK : You spend a lot of time with the biggest cEOs. Do they get it?

Tu cci : Most cEOs think in terms of What are my key lasting assets? First, your brand

is incredibly valuable and it lasts beyond any cEO, in many cases for well over 100

years. Second, you have your people . any cEO knows people are their greatest as-

set. The way you get those people to work together is you have a whole set of

processes that support your business. and those processes are enabled by applica-

tions. So I would say your processes and your application is a lasting asset. and

then your information is a lasting asset. So any good cEO knows that they’ve got

to make sure they protect all four of those assets and utilize them to the benefit

of their business.

Kir KpATr i cK : What was in your mind when you made the decision to buy VMware?

That was a fundamental shift for your company, which formerly was focused mostly

on hardware. are there lessons for leaders that you’ve taken away from having made

some big gambles that have paid off for EMc, especially with acquisitions?

Tu cci : We were basically a leader in high-end storage, period. and that’s not a

strong enough foundation for a company. Because if you can attack that one thing

that we did well, you could really hurt the company. So you want to broaden your

base. So we went from high-end storage to mid-tier storage to low-end storage. Basi-

cally if you’re storing information, you want to protect that information and make

sure it’s always available. You want to make sure that information is secure. That

brought us into security. and then, of course, you want to get intelligence from

that information, and that brought us into predictive analytics. and then we real-

ized there’s going to be a whole new way of processing in the data centers. That’s

what led us to virtualization.

Kir KpATr i cK : how do you see the U.S. and global economy right now?

Tu cci : I’ve never seen a time where the rest of the world was looking more to the U.S.

for leadership. They want the U.S. to be successful. They want leadership. We need a

grand compromise [on the budget]. This is not a Democratic or a republican solution.

We need to raise revenues. and we need to balance the budget over time.

I am spending my personal time on this, and encourage all of you to as well. This

is our country. We’ve got to make sure that it’s, “We the people, by the people, for the

people,” and live these words every day.

S P e A K e R

Joseph Tucci

cEO, EMc

I n T e R V I e W e R

David Kirkpatrick

Techonomy

Joseph Tucci

S can for v ideo, o r v i s i t w w w.Techonomy.com/tucci

39

At breakfast (above); Allen Blue of Linkedin (left); a morning bike trip in the desert hills

What you learn at Techonomy does not only come from the conference room.

S P e A K e R S

Robert D. Hormats U.S. Under

Secretary of State

Zachary Karabell

President, river Twice

research and author of

“Superfusion: How China and America Became One Economy”

Gary Rieschel

Founder, Qiming

Venture Partners

(based in Shanghai)

Making Sense of a changing chinaK A r A b e LL : a deceleration in the rate of china’s growth is not the absence of growth.

china growing at 7%, if it even is that low this year, will add more to global output

than china growing 11% or 12% did five years ago, because the economy has grown

larger. Its consumer market is chronically underemphasized as an emergent phe-

nomenon.

You probably have to go back to Great Britain and the United States prior to World

War II to find two economic systems that were as intertwined. The relationship be-

tween the United States and china has never been asymmetric the way trade figures

make it look. americans tend to focus largely on the trade deficit with china. But as

a market for U.S.-produced goods, china is the largest and fastest-growing in the

world, bar none. and a vast proportion of imports from china are american compa-

nies sourcing goods in china and essentially re-exporting them to the United States.

The way those things are valued creates an optic of a trade relationship that is nega-

tively impacting U.S. GDP, but it doesn’t necessarily represent where value is flowing.

This is a complicated system that we have chronically failed to understand.40

TEchonomy TE12

A bove (from left) Robert D. hormats, Zachary Karabell, gary Rieschel

S can for v ideo, o r v i s i t w w w.Techonomy.com/china

41

h o rm AT s: They need a very robust rate of growth, but the big difference is the qual-

ity of growth. What’s even more interesting is the notion of a harmonious society,

harmonious growth. They are now emphasizing growth in the middle part of china,

in Western china. They are emphasizing a Social Security system that lower income

people will have opportunity to access and to take advantage of. The regions, the

provinces, have enormous influence. They have cities springing up with 2, 3, 4, 5, 10

million people all over china. and it’s not a government that runs in a central way

anymore. a lot of power is in the hands of provincial authorities. You have a lot of

pressure for greater participation in the governance process. Now, don’t equate par-

ticipation with Jeffersonian democracy. But more and more there’s an understand-

ing that provincial leaders, city leaders, and other leaders have to listen to people.

There are numerous protests over environmental issues, over corruption, over poor

governance. and they are trying to do these little experiments in different parts of

china. They call them experiments, on greater participation in the system and how

you emphasize what one might call democracy with chinese characteristics.

r ie s ch e L : Last year Beijing said everyone has to pay this Social Security tax, includ-

ing all the foreigners. Shanghai said, we don’t really like that. Shanghai just refused

to implement it. Interesting, right? You think china has an autocratic government

structure, but everything in china is now in negotiation.

One of the grand experiments that china did 25 years ago was Shenzhen. When

they talk about doing experiments, sometimes they are small and sometimes they

actually change the entire economic structure of the country, which Shenzhen and

the special economic zones managed to do. This country is a huge teenager. It is

incredibly powerful. It is very proud of itself. and sometimes it has absolutely no

clue of what to do. and it doesn't like to be lectured to. You need to start to accept

that china is going to be a major player on the stage. china is going to have a huge

impact on innovation.

The vast majority of the companies we’re investing in now are being commercial-

ized in china. a lot of clean technology, a lot of healthcare technology, is being de-

veloped here [in the U.S.], but it’s being commercialized in china. and it will wind up

being the china product that will go around the world. a drug approved for use in

china is accepted by virtually every country. So if you commercialize in china, you

suddenly have a global product. That was not the case five years ago.

h o rm AT s: We want them to be less export dependent, more dependent on domestic

demand. They want to do the same thing. We want them to have better environmen-

tal policies because they are big polluters. They want to do the same thing. Not easy

to do, but quite do-able.

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42

companies confront the Madness of crowdss A r r A z i n : how do you see crowdsourcing and the tension between fine-tuned com-

pany processes and the chaos we encounter when we open up inside and outside the

company?

TA r Ko f f : Deloitte looked at the productivity of knowledge workers and found that

by a factor of two to one, the most passionate ones existed outside your organization.

They were not identified through the traditional means of hiring and bringing em-

ployees on. They were out there in your peer base and your customer base. On the

social Web there are entirely new classes of problems that are being invented that

only customers can solve. They are at the intersection between different products

and different platforms.

wA r r i o r : crowdsourcing and getting ideas, I would argue, is relatively easy. We

use different platforms at cisco. We post a problem globally, across 156 countries,

something that we feel needs to be solved. and, no strings attached, we pick the

best idea and give the person or people with that idea $250,000 to go commercial-

ize that technology.

What are the right mechanisms to screen these ideas? I would argue it’s the back

end of the process that’s harder than the sourcing of the processes. But having said

that, I think the fundamental model for innovation is changing. It’s becoming much

more of a collaborative model.

L J u n g : Our proposition to everybody who comes to Soundcloud is the community

and the whole crowd that is there. They are not just our customers and users. They

are actually part of our product as well. Thinking about large crowds and how peo-

ple do things together is at the core of what we do. We don’t create a product and sell

that to somebody, so the experience they have is something we made. One of the

most powerful things with having large crowds is not that people come up with the

solution for things, but that they spark this chaos and this ongoing conversation,

which over time leads you to a better solution.

wA r r i o r : regardless of how you define the community, whether it’s within the

walls of an enterprise or extending from the walls of the enterprise, how do you har-

ness the power of that community to being something meaningful versus something

that’s just creating a lot of noise?

s A r r A z i n : These communities are networks. and there’s a body of knowledge around

how networks self-regulate and whether they can arbitrage themself and come to an

outcome that is in the greater good. how do you create a value exchange that seems

fair with all the participants in this community?

TA r Ko f f : This is going to become the really important part of crowdsource value

creation—understanding the role and the place that each of these participants play

and how to use that to your advantage. and then we’ve got to build some sort of a

regulatory and legal structure around that.

S P e A K e R S

Alex Ljung

cEO, Soundcloud

Rob Tarkoff

cEO, Lithium

Technologies

Padmasree Warrior

cTO, cisco

M o D e R A T o R

Hugo Sarrazin

McKinsey & company

TEchonomy TE12

43

S P e A K e R S

James Barrese

cTO, PayPal

Dan Schulman

Group President,

Enterprise Growth,

american Express

Gibu Thomas

Senior Vice President,

Mobile and Digital,

Walmart

M o D e R A T o R

erick Schonfeld

Executive Producer,

DEMO

Shopping: Data and Dollarss ch o n fe LD: What technology is changing your business the fastest?

Th om A s: customers are coming into our stores with smartphones. E-commerce was

a big disruption in retail, which brought our stores to the Web. But mobile bringing

the Web to the store is incredibly disruptive. Mobile gives customers in a store the

same kind of tools that have been available to them online, whether that’s search or

recommendations or personalization.

s ch u L m A n : When you walk into the store, what you’re doing with your phone is basi-

cally, on an opt-in basis, exposing your personalized commerce identity, the brands you

like, the budget you have, the SKUs that you want. and we can now start to customize

deals, offers, digital couponing. That can change every aspect of retailing.

s ch o n fe LD: So what’s more valuable, the payments and transactions that go across

mobile, or the data?

s ch u L m A n : Data enables us to know whether advertising is effective, to track from

online to off-line, to create loyalty programs. If I had to make a choice, it would be

data for sure.

b A r r e s e : There’s a huge willingness within the industry to support these new tech-

nologies. Now we’re going to be able to create fantastic new experiences for the

customers.

at PayPal we have really adopted the mobile-first view, where for every single prod-

uct, every single customer experience, we’re looking at it for the consumer with the

mobile device or a tablet.

A bove (from left) Erick Schonfeld, James Barrese, Dan Schulman, gibu Thomas Opposite (from top) padmasree Warrior, Rob Tarkoff, Alex Ljung

S can for v ideo, o r v i s i t w w w.Techonomy.com/shopping

44

S can for v ideo, o r v i s i t w w w.Techonomy.com/robots

Robots, Factories, Jobs, and Lifem A r Ko f f : rod, you founded both irobot and rethink robotics. What is different

between the roomba era and the new Baxter generation of robots?

b ro o K s: Well, the roomba was the first cheap mass market robot. But it’s a special-

purpose robot. It just cleans the floor.

Baxter [from rethink robotics] is a robot to go into factories and do simple tasks

that people do right now but are boring. There are two important things about it.

The software is set up so that a line worker who doesn't even have a high school di-

ploma can learn to program it in less than five minutes and retask it for new things.

The other thing is, we’re coming out with an SDK early next year so that other people

can take this and program it to do all sorts of other stuff, beyond manufacturing.

mc A f e e : It’s a $22,000 robot. That's discretionary budget for any decent-sized manu-

facturing facility. You take it out of the box. You plug it into the electrical socket in

the wall. Your hourly worker trains it for half an hour.

When it comes to the impact of technology on the labor force, we ain’t seen noth-

ing yet. We’re just on the other side of a tipping point where computers and robots

and hardware and software are doing things that used to be, honestly, the domain of

science fiction. That’s going to have a lot of wonderful consequences for our society

and our economy. It’s going to have some very, very challenging consequences for the

labor force, and particularly for less-skilled, less-educated workers.

I see technology encroaching into human skills and abilities in a way that has

never, ever been the case before. When digital technology becomes better, employers

hire digital labor, not human labor.

S P e A K e R S

Rodney Brooks

Founder, rethink

robotics

Andrew McAfee

Principal research

Scientist, MIT

M o D e R A T o R

John Markoff

New York Times

TEchonomy TE12

Onstage above (from left) John markoff, Rodney Brooks, Andrew mcAfee

45

S can for v ideo, o r v i s i t w w w.Techonomy.com/kur z we i l

Ray Kurzweil: enhancing HumanityKir KpATr i cK : how optimistic are you about our ability to start solving problems at

scale over the next 5 or 10 years?

Ku r z we i L : Very optimistic, because there is a lot of evidence now that not only hard-

ware is progressing exponentially, but software.

The big innovation in homo sapiens is we have this big forehead to allow more

neocortex. That was the enabling factor for us to create language and music and art

and science and technology. But ultimately, we'll be able to expand it. We'll send

nanobots. These will be the size of blood cells in 2030. So go inside our brain and

basically expand our neocortex into the cloud.

as we get better models for how the brain does things, we'll do a better job of creat-

ing artificial intelligence to augment our own intelligence. It gives us greater insight

into ourselves.

We are creating computers in our own image to basically make ourselves more of what

we value in human intelligence. and we're going to be merging with that technology.

We are a human-machine civilization. artificial intelligence does not exist in a few

dark government intelligence laboratories. It's very widely distributed. a kid in afri-

ca with a smartphone has access to more intelligently searchable information than

the President of the United States did 15 years ago.

b ro o K s: This is not meant to replace people. It’s meant to make them more produc-

tive. That’swhy I made it so that ordinary line workers could program it.

m A r Ko f f : If china follows us and automates, do they have a cost advantage and

do jobs stay there?

mc A f e e : If you take labor costs out of the equation, it makes a lot more sense to do

your manufacturing close to your home market.

m A r Ko f f : What is the equivalent hourly labor cost for Baxter?

b ro o K s: We're saying it’s under $4 an hour.

m A r Ko f f : Should we automate everything we can automate?

b ro o K s: We will have people and machines working closely together. The computer

didn’t get rid of the office worker, but it changed the nature of the work.

mc A f e e : The great double-edged sword of technology is that it is going to let us im-

prove the quality of our lives. Let older people live more autonomous lives for longer,

for example. That’s fantastic. at the same time, what rod and his entrepreneurial

colleagues are doing is looking for expense and inefficiency out there in the econo-

my, and they are throwing all of their intelligence and all their might at it. That’s

going to mean the automation of a lot of the workforce.

Ray Kurzweil

author of The Singularity is Near, and now Director

of Engineering, Google

46

Peter Vander

Auwera

innovation

leader, Swift

i am a Techonomist because i am an optimist and believe in business and social progress. We don’t need “just” innovation; we need progress. i am a Te-chonomist because i deeply believe in technology as the enabler of a more healthy economy. Because i believe connection creates value. Because companies become movements. Be-cause we need to be united to confront the cambrian ex-plosion of every-thing. Because we embody change and transformation.

John Hagel

Co-Chairman,

deloitte

Center for

the edge

i am a Techono-mist because i am excited by the op-portunity to unlock more of our poten-tial as individuals, as institutions and as a society. it is in the interaction between technology and the economy where the real power and po-tential resides. my personal passion involves the explo-ration of institu-tions and platforms that will help us to scale potential and possibility. Rather than thinking of the world as having 7 billion mouths to feed, i prefer to think of it as having 7 billion minds to unleash.

Stephen

Hoover

Ceo, ParC, a

xerox ComPany

The most disrup-tive innovations come when the combination of breakthrough technologies and business model innovations encour-age social change. i am a Techonomist because tectonic shifts which change the world occur at the intersection of people, economies, and technology.

eden Full

founder,

roSeiColliS

teChnologieS

i love inventing and building technolo-gies, but none of that matters if the things i create sit in my basement gath-ering dust. having the opportunity to share my passion and creations with people who can benefit from them is what makes in-venting meaningful. The intersection of technology and the economy is what makes the shar-ing of innovations possible on a global scale.

TEchonomy


Gordon Bell

PrinCiPal

reSearCher,

miCroSoft

having spent the past 50+ years evangelizing scalable systems and their impact on organizations and society, i am humbled, honored, and overjoyed to be considered a Techonomist. Being part of the Techon-omy community is a memorable and stimulating learning experience.

content & community Techonomy 2012

Techonomy Detroit »

48

Techonomy Detroit's closing session: (from left) David Kirkpatrick, Jack Dorsey, Dan gilbert

TEchonomy Detroit

49

Techonomy Detroit: competitiveness, Jobs, Growth, and Urban Revival i n 2 012 we D e ci D e D To h om e i n o n Th e u. s . e co n omy. Techonomy Detroit was a

departure from our flagship November conference. That one takes a global view and

creates a retreat-like setting for 250 invited guests over two days. Detroit was one day

long and open to the public. We brought together top thinkers to explore what tech-

nology means for U.S. economic recovery and for american cities. Wayne State Uni-

versity in midtown Detroit was a perfect venue. Its vitality contradicts the standard

narrative of Detroit’s hopelessness.

But Detroit does symbolize challenges faced by the U.S. We think technology can

help address them. We aimed to impact thinking in Detroit and in the U.S. about

how tech can affect economic growth, empower citizens and workers, and create

jobs. as speaker Michael Littlejohn of IBM Smarter cities said, “Detroit is a test case

for what we should be and what we can be as americans.”

The audience included local entrepreneurs, senior executives from a cross section

of industries, and students from around Detroit. hosted by the Detroit Economic

club, and held in Wayne State’s stunning McGregor center, designed by Minoru

Yamasaki, the conference welcomed 550. Speakers included national and local busi-

ness leaders including revolution’s Steve case, Square and Twitter’s Jack Dorsey,

Quicken Loan’s Dan Gilbert, Detroit Venture Partners’ Josh Linkner, and former U.S.

cIO Vivek Kundra, now at salesforce.com. What unfolded was a great day of discus-

sion about the rapid pace of tech-driven change and how it can be harnessed to revive

U.S. industries, cities, and communities.

We kicked the conference off with a welcome reception on the roof of the slickly

renovated Madison Building, overlooking comerica Park, famed home of the Detroit

Tigers in downtown Detroit. The Madison Building is headquarters for Detroit Ven-

ture Partners and the epicenter of an energetic and burgeoning local start-up scene.

The following pages highlight top sessions. Qr codes on each page lead to videos

and transcripts at Techonomy.com. We’re already well underway planning the next

Techonomy Detroit for September 17, 2013.

50

S P e A K e R S

Grady Burnett

Vice President,

Global Sales and

Marketing, Facebook

Mark Hatch

cEO, TechShop

Danae Ringelmann

Founder, Indiegogo

David ten Have

cEO, Ponoko

M o D e R A T o R

erick Schonfeld Executive Producer,

DEMO

The DIY economy: Democratizing Finance, Design, Manufacturing, and Distributions ch o n fe LD: Who are the new manufacturers?

h AT c h : The cost of a computerized numerically controlled milling machine, or cNc

tool, has come down about 95%. Software companies like autodesk are making soft-

ware easier to use. We’ve had dozens of crowdfunded projects [at TechShop] that

spent only $10,000 to $100,000 to get all the way through prototyping to their first

run in manufacturing. That is new.

T e n h Av e : Ponoko enables distributed manufacturing. We help people reach out to

a global market. People use crowdfunding to determine the appropriateness of the

product. Is someone going to buy it? They do early prototypes at TechShop. and then

they can use a platform like ours to push their product out into the globe. That eco-

system didn’t exist five years ago.

s c h o n f e L D : Does that create jobs here or abroad?

T e n h Av e : We’re finding people are starting to think critically about everything in their

supply chain. That includes whether or not they can use local resources. People are bring-

ing jobs back locally. In many cases it’s less complex than sending stuff overseas.

h AT c h : Because robotic tools are so cheap, you're now able to manufacture things in

From lef t Erick Schonfeld, grady Burnett, mark hatch, Danae Ringelmann, David ten have

S can for v ideo, o r v i s i tw w w.Techonomy.com/diyeconomy

TEchonomy Detroit

51

short and moderate runs, better meet what the customer wants, and move a lot of

jobs back to the U.S.

r i n g e L m A n n : We’ve had campaigns raise money for 3D printers, or to raise money to

make a film. We had a campaign by two young women who wanted to create solar-

powered, environmentally-friendly inflatable lights that they could give away to the develop-

ing world. They ended up raising $60,000. We had a couple who couldn't afford in-vitro

fertilization treatment, so they went on Indiegogo and raised $10,000 to have a baby.

a few young entrepreneurs were passionate about keeping bugs away. So they put

their creative minds to work and they came up with this awesome contraption to, in

a very benign fashion, shoo away flies. They used Indiegogo, which leveraged Face-

book and social media, and ended up raising almost $600,000 by offering their prod-

uct as a way to raise the money.

s c h o n f e L D : The marketing starts with the core group of early adopters who will be

your most loyal customers. and they cheer you along. Once you have the product, a

lot of people find Facebook is a great distribution mechanism for connecting with

new customers and getting people to recommend their products.

b u r n e T T : That distribution is incredibly important. If you think about how we make

decisions, it’s influenced by what our friends, family, and co-workers do. Facebook

allows you to engage that community in a word-of-mouth and scaled way. So you can

activate those friendships and have them tell your story in their voice and augment

your marketing message. almost every business story on Facebook starts with a per-

son connecting with friends on their page, talking about a set of interests, and real-

izing, wow, maybe I have a business opportunity.

T e n h Av e : People are starting to build out the narrative around the product. Know-

ing who made the product is an important part of removing the opacity of informa-

tion around products. It’s about reinvigorating a social contract.

r i n g e L m A n n : We have a great example on our site. a young woman started a gluten-

free bakery and made gluten-free macaroons literally in the back of her garage. and

they started getting a little bit of traction. and then they had the opportunity to ex-

pand production, hire people, and get their product into a regional grocery store,

which was a huge opportunity. The only thing is, they needed to update their packag-

ing, which was going to cost $15,000. They went back to the bank and said, hey, we

have this huge opportunity to grow. It’s not that the bank didn’t want to. Their risk

return models just didn’t work. So the company went on Indiegogo and raised

$15,000 by preselling macaroons. Within three months, they were distributing their

product across 40 states. and now they are hiring people.

s c h o n f e L D : Barriers to entrepreneurship are going away, not just in the digital

realm, but in the physical one, too.

r i n g e L m A n n : all these ideas have just been repressed and never saw the light of day,

because the mechanisms to raise the money, design the products, distribute the

products, and market the products were never there. But now they are.

I think we’re going to see this rising middle class of entrepreneurs. It’s just a mat-

ter of you deciding, “Yes, I’m going to try.”

46ArTicLes

pubLisheD AbouT

Techonomy DeTroiT,

in The DeTroiT free press,

DeTroiT news, forbes,

huffingTon posT, Tech-

crunch, AnD venTurebeAT

S P e A K e R S

Steve case

cEO, revolution LLc

Josh Linkner

cEO, Detroit

Venture Partners

M o D e R A T o R

David Kirkpatrick Techonomy

entrepreneurship and American Relevancec A s e : I appreciate the fact that Techonomy is shining a spotlight on Detroit. In many

ways, Detroit was Silicon Valley 50 years ago. This was the epicenter of innovation.

It’s had a tough few decades. But it's fighting its way back.

It’s really the story of entrepreneurship in america and how it is spread more

broadly through the nation than we sometimes realize. Silicon Valley is the epicen-

ter of enormous innovation and tremendous companies. It’s something we’re all

proud of. But there are also a lot of companies across the nation that don’t get as

much attention. If we’re going to get our economy back as a nation and get our un-

employment down, the place to focus is entrepreneurship. We didn’t become the

leading economy by accident. It was the work of entrepreneurs creating companies

and industries throughout the nation. That is sort of a secret sauce that built the

american economy. We have to double down on entrepreneurship in Detroit and

cleveland and St. Louis and Denver and a lot of other places.

L i n K n e r : We have to scream from the mountaintops that Detroit is open for busi-

ness. This is a great place to build a tech company. We still have a lot of work to do to

get that message heard, both locally and certainly on a global basis.

Detroit specifically was born on the spirit of disruption. Folks like henry Ford put

us on the map. as a result, our city prospered. and then we stopped doing that. Es-

sentially, we built these stifling bureaucracies and became immersed in finger point-

ing and blame and our city crumbled. But today we’re in the midst of a new revolu-

tion, and once again entrepreneurship is alive and well. The digital age has taught us

you don’t need a Silicon Valley zip code to be successful.

We’ve got to stop apologizing for what we’re not and start celebrating what we are.

We’ve got an incredible university system here in Detroit. We’ve got beautiful tall build-

ings that are waiting to be filled up. We’ve got terrific roads, wonderful hospitals. We've

got water, a world-class airport, a talent base. So there are all these assets. We have to get

out of the trap of apologizing for yesterday and complaining about the past. Enough.

Time to move forward and focus on building great companies here in Detroit.

c A s e : There are huge sectors of the economy —education, healthcare, energy —that

haven’t really been disrupted that much in the last 25 years. What I think of as the

first Internet revolution—getting everybody to believe it was important and get con-

nected with multiple devices, multiple networks—that’s sort of been accomplished. 52

S can for v ideo, o r v i s i tw w w.Techonomy.com /entrepreneur sh ip

Opposite (from left) Steve case and Josh Linkner

TEchonomy Detroit

53

The second Internet revolution is how you use the ubiquity and now the mobility of

the Internet to transform other important aspects of life.

In some ways everything is now a technology company. But we don’t want people

to think we’re just trying to create another Facebook. a company like chipotle has

tens of thousands of employees. It's worth $10 billion. That’s not only possible be-

cause of a good burrito, but also because they use technology.

It’s important to recognize that manufacturing, for example, which is important

in this region, is being reinvented because of the juxtaposition of technology and

design and the ability to do things in nimbler ways with smaller teams.

Washington is fighting a battle around immigration to make sure the best and bright-

est don’t just come here for education and then get kicked out and forced to start com-

panies in other countries. But the battle for talent also happens at a regional level. how

do you get people who did leave Detroit to believe that now is the time to come back?

Getting network density around entrepreneurship is when regions really take off.

L i n K n e r : The other thing we really need to develop here that Silicon Valley has is the

culture of risk-taking. In Detroit, if you fail, that’s like a really negative thing. In Sili-

con Valley, it’s a badge of honor. What we need to start doing is celebrating creativity

and responsible risk-taking When someone stumbles, that's a learning opportunity.

c A s e : There are many countries that are being very aggressive in trying to make sure

it’s easier for people to move there from an immigration standpoint—easier incen-

tives around capital, making significant investments in basic research. The good

news is we are still the most entrepreneurial nation in the world. The bad news is

there’s a rise of the rest globally. If we don’t double down on entrepreneurship as a

nation, there is a risk we're going to lose our way.

10broADcAsT

reporTs from Techonomy DeTroiT, on

cnbc, c-spAn, AnD DeTroiT

fox, cbs, Abc, AnD npr

AffiLiATes

54

From lef t James p. Dougherty, Edward Alden, Vivek Kundra, paul mascarenas, michael S. Teitelbaum

S P e A K e R S

edward Alden

Director, renewing

america Program,

council on Foreign

relations

Vivek Kundra

EVP, Emerging Markets,

salesforce.com

Paul Mascarenas

cTO, Ford Motor

company

Michael S. Teitelbaum

Senior advisor,

alfred P. Sloan

Foundation

M o D e R A T o R

James P. Dougherty council on Foreign

relations

An era of Global competition D o u g h e r T y: Immigration, education, and infrastructure—is the United States com-

petitive on those issues?

K u n D r A : My view is that it is still the best country on the planet for starting up a

business. But immigration is broken. It makes no sense to educate people with ad-

vanced degrees and then ask them to leave and start up companies elsewhere. Why

aren’t we stapling a green card to their graduate diploma?

m A s c A r e n A s : We face a crisis in recruiting critical skills into the auto industry in

the STEM disciplines, particularly controls engineers and software engineers.

T e i T e L b Au m : at the university level, the U.S. is still the predominant science and engi-

neering producer in the world, though other countries are catching up. In K-12, things

are quite different. The U.S. has huge inequalities in its K-12 system. So its average per-

formance on all the indicators is medium among developed countries. Some would say

mediocre. We’re leaving behind the bottom quartile. That’s an equity issue.

A L D e n : For innovation, entrepreneurship, start-ups, the U.S. continues to be unparal-

leled. But in spreading economic benefits broadly throughout the economy, we have

not done well the last 30 years. We have to think strategically about how we do better

for more of our people in this next era of disruptive change.

K u n D r A : Talent and capital is going to flow where it's most welcome. We need to make

sure we’re advancing a public policy agenda that welcomes both. The big problem at

the base of this pyramid is fundamentally education. across the country, there are 3.6

million job openings today. We haven’t done enough in retooling the workforce.

TEchonomy Detroit

S can for v ideo, o r v i s i tw w w.Techonomy.com /compet it ion

55

Top row (left to right) Tim Dingman of Venture for America; indiegogo founder Danae Ringelmann; Stefan Ahee of Brys & Edgewood; Beth chap-pell, cEo of our host, the Detroit Economic club S econd rowWefunder co-founder and president mike norman; nathan Labenz and Jay gierak of Stik; Sharon Shebib of Detroit Venture partners; mike Finney of the michigan Eco-nomic Development corporation Third rownextEnergy’s Aniela Kuzon; Ramon Taylor of Quicken Loans; Tim and marcia Dorsey, parents of Jack L ast row Skidmore Studio cEo Tim Smith; Dominik Scholz (l) and David Woessner of p3 group; Bedrock Real Estate Relocation Ambassador Bruce Schwartz; TechShop cEo mark hatch

our first-ever Detroit conference attracted a bright array of Techono-mists

56

How Far can Innovation Take cities?K AT z: Technology and innovation drive cities, and cities drive national economies. If

cities don’t perform, the nation doesn't perform. The United States isn’t at the van-

guard.

LiT TLe J o h n : There is tremendous progress across the country, but it’s relatively siloed.

We can point to smarter water implementations and smarter transportation and

smarter public safety and smarter health care and smarter grid and smarter building

energy management, but that’s not necessarily a smarter city. a smarter city is really

taking advantage of the fact that a city is a complex system of systems. Why are we lag-

ging other countries? It’s the way we make decisions that gets in our way.

f e LLe r: chattanooga decided to make the investment in building out broadband to

every building in the city, and they are now seeing the economic benefits. a few cit-

ies have actually created an office of innovation attached to the mayor.

K AT z: What are the possibilities as Detroit wrestles with hard fiscal and economic

challenges?

A n D e r s o n : The many tax districts we have in Detroit create separate financial and

governance structures, so that as much as downtown looks better than I’ve ever seen

it, the benefits of that are not integrated into the old neighborhoods. One positive

thing is that we are in such a weakened position, it’s forced us to open ourselves to

any methods, be it outsourcing, be it complete privatization.

r AT Ti: Berlin 10 or 15 years ago had a lot of the issues Detroit has. But today it is one

of the magnets in Europe. People from the creative classes moved there. The city is

booming. One reason is it has been very cheap to live in Berlin. But the other point is

that the city became like an open platform. If you think about almost allowing peo-

ple to hack the city in a tech sense, so people use the city for experiments. That top-

down way of creating an office next to the mayor to promote innovation you can do,

but it requires a lot of investment.

g o r D o n f e LLe r : The city and key institutions have to get together and say we want

transparency around things like energy consumption in our buildings. What’s it go-

ing to take to have a dashboard that parents can access on their smartphones to see

which schools are cleaner and greener and smarter? Most city leaders don’t under-

stand that there has to be a way of engaging around the supercomputer we’re carry-

ing around in our pocket, that is a tool for transparency.

S P e A K e R S

Janet Anderson

Policy analyst,

city of Detroit

Gordon Feller

Urban Innovation, cisco

Michael Littlejohn

IBM Smarter cities

carlo Ratti

MIT SENSEable city Lab

M o D e R A T o R

Bruce Katz

Metropolitan Policy

Program, Brookings

Institution

michael Littlejohn

TEchonomy Detroit

S can for v ideo, o r v i s i tw w w.Techonomy.com /c i t ies

57

From Left post-conference reception in the mcgregor center, designed by architect minoru yamasaki Bottom Venture capitalist Tim Draper speaks at a breakout session

The Venue at Wayne State U. Showed off Detroit's Potential

58

Jack Dorsey

chairman,

Twitter, and cEO,

Square

Jack Dorsey on Twitter, Square, and the city as InspirationD o r s e y : My parents grew up in St. Louis and they love the city, and I naturally grew

a love for the city when I grew up there. I became obsessed with maps and taught

myself how to program so I could draw them on my computer. I eventually got into

the dispatch industry so I could actually see life in the city.

Kir KpATr i cK : Dispatch being systems that communicate with taxis and police cars

and ambulances. So Twitter aims to give individuals that same ability to broadcast

their location and whereabouts and ideas?

D o r s e y : Twitter was just an extension of that idea, giving those tools to citizens.

With Twitter, I can see the entire world, what the entire world is doing and also what

the entire world is caring about in real time.

Square is this tiny device that you plug into your phone, and it allows you to swipe

anyone's credit card, and that money goes into your bank account the next day. This

is important because the world has moved away from cash and checks, and it's pay-

ing with plastic everywhere.

Normally the small merchant, the independent contractor, was locked out of ac-

cepting credit cards. So we made it simple. If you have a garage sale or you are a per-

sonal trainer, golf instructor, tutor, or mowing grass, now you can accept credit

cards. a critical aspect of improving the U.S. economy is making it easier to start and

grow a small business. So now they can start something that they want to see in the

world immediately and get payments for it.

S can for v ideo, o r v i s i tw w w.Techonomy.com /dor sey

TEchonomy Detroit

59

S can for v ideo, o r v i s i tw w w.Techonomy.com /g i lber t

entrepreneurship and TechKir KpATr i cK : You’ve said Quicken Loans is a technology company that just happens

to do loans.

g iLb e r T : Technology has completely transformed our company. It has become

our company. We process and close loans in 3,000 counties and in 50 states

out of a centralized environment. Everything moves with technology and by

technology.

Kir KpATr i cK : Why have you made such a commitment to downtown Detroit?

g iLb e r T : The good news is there was a skyscraper sale going on. They were beautiful,

older buildings, built by some great architects that just needed a little bit of love. Every

day we’re just trying to improve things, trying to take advantage of opportunities.

There is a lot of capital around this area that really should be put to use for the

city’s good. It’s going to be a great return. You are going to make a lot of money by an

investment in the city. You can feel the energy. The companies are here now, and

there are more coming and jobs are coming. There are huge ingrained challenges—

education and the crime that comes from not having as good of an education system

as we need to. But these are being addressed. Without getting the city’s finances in

order first, none of that other stuff can start to happen and be addressed. Our mis-

sion is downtown, the heartbeat of the city. I don’t think neighborhoods can flourish

in any big city without a strong downtown.

Dan Gilbert

chairman, rock Ventures and

Quicken Loans

Kir KpATr i cK : You told me a year or so ago that you wanted to be mayor of New York

some day.

D o r s e y : I have to move to New York first, but it is a goal. I think mayors are the ones

to watch in the U.S. in terms of government innovation.

Kir KpATr i cK : What should Detroit do?

D o r s e y : What I find compelling about cities is the question of velocity. One way to

speed up the change is to overcommunicate and to make more available and more

transparent the data of how the government is running, what needs to change, why

it needs to change.

Kir KpATr i cK : You recently gave a speech in which you talked about being a revolu-

tionary.

D o r s e y : It was at a technology conference called Techcrunch Disrupt. The key word

is disrupt. I questioned this word because disruption to me is actually just moving

things around. It actually causes a lot of confusion. I don’t want to disrupt things.

What does have purpose, what does have strong beliefs and leadership and usually

recognizes a disruption happening or about to happen, are revolutions. My plea to

the audience was to rethink the concept of disruption and be more thoughtful about

how we approach technology and what we're trying to do in the world. There is risk.

You’re going to take big risk to move things forward.

60

TEchonomy moving Forward in 2013

We’re Just Getting StartedTh e wo r LD n e e Ds mo r e o p Tim i s m A n D u n D e r s TA n D i n g about how to embrace

tech to benefit society and economies. While Techonomy is best known for our an-

nual event, the addition of Techonomy Detroit, the launch of our editorial site, and

the book you are reading right now mark our transformation into a more integrated,

purpose-driven media company. additionally, in partnership with organizations like

Dell, Ericsson, the Environmental Defense Fund, and General Electric, we continue

to increase our reach through participation at events including the consumer Elec-

tronics Show and the World Economic Forum.

This year we plan to expand our audience both in the U.S. and internationally.

We’re eager to stimulate dialogue and thinking among a broader group who share

our interests and concerns about tech’s impact. To that end, we plan smaller events

in countries including Israel and china where we believe our message will reso-

nate. Our work with more diverse global thinkers should help us bring our U.S. com-

munity further insight. Techonomy.com will develop more original editorial content

and video, with new ways for visitors to engage and collaborate.

With an ambitious year ahead, we are grateful for the support of our extended

team, our partners, our sponsors, and our community.

up cominge v e nT s

Techo nomy De Tro iT

S e pte m b e r 17way n e

S t ate U n i ve r s i t y

D e t ro i t , M i c h .

Techo nomy 2013

N ove m b e r 11 -13T h e

Ri t z- C a r l to n

D ove M o u nt a i n

Tu c s o n , A r i z .

n a i L e e L u m D e S i G n

photography Braschler/Fischer: p. 17 Marsha Ericks: p. 14 David Kirkpatrick: p. 3, 44 Jeff Kowalsky: p. 48-50, 53, 56, 57 (top left and top right), 58, 59

Adam Ludwig: p. 8, 9 Asa Mathat: p. 2-6, 20, 22-24, 27, 28, 30-32, 34-40, 42-46, 60 Alana Range: p. 2, 3 (team portraits) Brad Ziegler: p. 1, 54, 55, 57 (bottom)

42149_Cover.indd 2 2/28/13 8:05 AM

Presented By:

Techonomy Media, Inc.

670 Broadway, 2nd Floor

New York, NY 10012

[email protected]

w w w. t e c h o n o m y. c o m

A Report from Techonomy Media

Spring 2013

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