Digital economy and law keynote by Jude Umeh

Digital Economy and Law Conference
Setting the scene: “big issues and big trends”
Lisbon, 19-Nov-2013, Jude Umeh

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Copyright © Capgemini 2013. All Rights Reserved
Digital Economy and Law | November 2013
Content
Introduction
Digital overview
Key trends & indicators
•Social / Economic trends
•Law and regulation
•Social trends
•Technology trends
Digital transformation
The way forward

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A mind map of this keynote presentation

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What is a wicked problem?
Definition: “A wicked problem is a complex problem for which there is no simple method of solution” –Financial Times Lexicon*
Key characteristics of wicked problems**:
No clear boundaries -Wicked problems are hard to define, they lack clear boundaries, and interconnected such that they often manifest as symptoms of other problems
No stopping rule -Wicked problems are ones for which there is no clear stopping rule – you cannot say for sure that you are done with the problem.
No solution -These problems cannot be solved, only resolved, because working on it more might well bring forth a better solution.
No right or wrong answer -There is no single right answer and every attempt can affect and change problem context, therefore each problem is unique.
Digital economy and law presents a particularly wicked problem
*Source: http://lexicon.ft.com/Term?term=wicked-problem
**Source: http://www.uctc.net/mwebber/Rittel+Webber+Dilemmas+General_Theory_of_Planning.pdf

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Content
Introduction
Digital overview
•Economic trends
•Social trends
The way forward

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Humans are social beings, and this characteristic drives the evolution of our biology and technology
Source: Adapted from “The World Beyond Digital Rights Management”

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In order to understand digital ecosystem we need to understand the key stakeholder groups & concerns

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And how they combine and fit into a digital content ecosystem -an example from so long ago, in 2007

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Content
Introduction
Digital overview
•Economic trends
•Social trends
The way forward

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Trends that still matterSocietal & Economic Trends
•Sustainability and Green agenda
•Aging population & implications for workforce, healthcare, services & products
•IT spend follows the economy
•Redefining working patterns and changing employment models
•Home & mobile health monitoring
•Shift in Global Consumer Spending
•Attention Deficit Disorder Society
•Global demand for investment capital
•Impact of Social Media on global politics
•Diminishing expectations of privacyin a connected world
•LifeloggingTechnology Trends
•Big Data –exponential growth in digital data, and need for scale, speed & access
•Cloud Computing
•Activity Streams & Near Field Communications
•4G/5G Pervasive bandwidth –drives other trends e.g. Mobile transactions & Internet of Things
•Predictive Analytics –delivering insight on consumer behaviour
•Social media –leveraging the power of the community
•3D Printing & personal manufacturing
•Audio & video analytics & image recognition
•Augmented Reality
•Media TabletsBusiness & Management Trends
•Business Model Innovation –enabled by technology e.g. social & mobile business
•Consumerisation –impact of consumer technology in the enterprise (BYOD)
•Crowd Sourcing
•Dynamic BPM & Dynamic Pricing – changing processes or prices on the fly
•Platforms for Business Apps
•Intellectual Property Landscape
•Trust & Reputation Economics –related to trend for more transparency
•Service Digitalisation –the drive for digital transformation
•Social Commerce
•Mobile Business
Source: Trends That Matter: 84 Technology, Societal and Business Trends -Gartner Research -June 2011

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Gartner’s macro trends for 2013
Over 7 Billion People Living Longer
Challenges to health / medicine / waste, especially in developing countries
Constrained Resources
Energy, water and other natural resources
Technology Ubiquity
Technology for commerce, growth and opportunity, especially mobile / wireless.
Human Mobility
The global citizen, new migration patterns for opportunities
Relocation of Capital
Flowing away from developed economies towards Asia Pacific
Social Reform
social causes, political upheavals, philanthropy and instant news.
Source: Trends That Matter in 2013 -Gartner
Acting along with the Nexus of Forces (Cloud, Social, Mobile& Information).

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Gartner’s Nexus of forces meets IP
Source: Intellectual property in the era of big and open data -TWENTY:13 ENHANCE YOUR IT STRATEGY

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Dissolving traditional boundaries
Source: Intellectual property in the era of big and open data -TWENTY:13 ENHANCE YOUR IT STRATEGY

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Should CIO/CTOs worry about their role in the future? Traditional IT leader roles are flat or declining while innovation is up and.. 2 new information & tech CxO roles will grow to help achieve digital transformation.
Source: How are CEOs thinking about business, IT and digital? By Mark Raskino –VP Gartner

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Content
Introduction
Digital overview
•Economic trends
•Social trends
The way forward

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The CG industry relies on marketing productsto customers via multiple channels (incl. digital)
Digital marketing spend in Consumer Goods has reached over 20% and looking to double again in 5 years
Consumer on-line demands (personalisation), innovation, standards & trends will drive centralisation, volume and complexity
Channel partners require support in their fastest growing channel.
Digitising off-line physical media reduces the impact on the environment
Digitisation of off-line TV media, automation in process and convergence with on-line
The above trends are driving the need for Digital Asset ManagementConsumer goods

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DAM ecosystem for a global CG company; leveraging full media industry capability
Existing Systems / Repositories / Workflows (to be migrated or integrated)
ArtworksVideo
Adverts
Catalogues
Consumer goods

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The aviation industry operates in a complex ecosystem
analysis
Route / pricing
options
diagnostics
passenger
records
search
viral
marketing
social media engagementitinerary and documentation
purchase and payment
travel
choice
personalisation
marketing
sales
immigration services
emergencyservices
diagnostics
A-CDM
facilities management
performance
monitoring
analysis
new product
development
Baggage
situational awarenessdiscovery
trials
logistics services
regulatory
compliance
aviation industry
guidelines
Customs and Immigration
Passengers
Airlines
Airports
Regulators
Ground Handling
Security
Aviation Community ValueNetwork
commercial
management
partner and customer
mgmt
strategic
management
delivery
management
business
architecture
safety
management
product and service portfolio
mgmt
offer management
loyalty
intelligence
statistical analysis
protocol
Incident management
logistics
Aviation
Business
Air TrafficControl
Retail
Distributors
new product development
Info
Aviation industry
Adapted from MIT Sloan Management Review

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But key trends indicate a move towards product and service innovation
“Historically, the most important revenue drivers came from innovations surrounding airline networks, fleet and airport facilities. These included the achievement of trans-oceanic capability, the introduction of jets and wide body aircraft and hub networks.
The incremental impact of innovations of this nature is now slowing, while the importance of product and service innovation to revenues is gaining pace. Product and service innovations began with the CRS and GDS and developed through revenue management, e- ticketing and the internet and fee- based services. The next phase of such innovations will consist of new intermediaries, better coordination within the aviation ecosystem and value-based options.”
Sou r ce: Na w a l T a n eja / Date: 26th April, 2013 / Title: Airlines in Transition 5. Lighting Candles: Innovating to make profits: Big Data, Advanced Analytics CAPA Centre for Aviation
URL: centreforaviation.com/analysis/airlines-in-transition-5-lighting-candles-innovating-to-make-profits-big-data-advanced-analytics-106849
Aviation industry

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3D Printing: the impact on manufacturing
3D Printed Rocket Injector -http://mashable.com/2013/08/29/nasa-3d-printed-rocket-test/
3D Printed Rocket Injector
3D Printed Bionics
•NASA Test at Marshall Flight Centre, Alabama
•Injector produced using laser fusing
•of nickel-chromium alloy deposited by 3D printing
•Test was very successful
•Only two parts needed to make the injector - previous technologies required 115 parts machined conventionally
•A cartilaginous ear with embedded silver antenna capable of receiving radio waves
•Produced at Princeton
•Structure printed on $1000 3D printer
•Cells cultured in vitrio over 10 weeks to cover
3D Printed Bionics -http://mashable.com/2013/05/24/3d-printed-ear-princeton/
Source: New Technology => Architecture Opportunity by Gavin Mcleod at the Open Group London Conference 2013

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Will likely result in a seismic shift to the value chain
Source: New Technology => Architecture Opportunityby Gavin Mcleod at the Open Group London Conference 2013
Design
Source
Manufacture
DistributeRetail
Collect / DeliverDesignSell
“Print”
Sell
Design
“Print”
The impact on IP rights may be even more profound…

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Content
Introduction
Digital overview
•Economic trends
•Social trends
The way forward

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Big issues: BD, PP, IP
The perfect storm and core of a wicked problem
Firms have 125TB of data but only utilise 12% of it –Forrester Research
Big data –> 4 Vs + complexity, analytics and BI
Personal Privacy –setting expectation of transparency, generation perspectives (e.g. post millenials vs. Gen X/Y/Z), data entrepreneurship
Intellectual Property –fundamental questions e.g.: who owns the input data companies are using in their analysis, and who owns the output?
The holy grail for big data -The right information, at the right time, to the right person.
Source: http://www.bcs.org/content/conBlogPost/2244

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Taxation: EC sets up digital economy taxation group
Announced on 22/10/2013
“set up a group of experts in the field of taxation of the digital economy …[to] help to develop a comprehensive Union position on tax issues in the digital economy by analysing the issues at stake and providing the commission with a range of solutions to address the following issues:
assist the Commission in the preparation of legislative proposals or other policy initiatives;
monitor the evolution of taxation policy related to the digital economy;
bring about an exchange of experience and good practice in the field of taxing the digital economy;
contribute ideas for the taxation of the digital economy and review possible alternative bases for taxation to those currently in place, taking into account the specifics of the EU, but also taking into account developing global policy responses;
provide a comprehensive analysis of the relation between the operations of companies active in the digital economy within the EU and their direct or indirect contribution to the tax revenues of Member States, and of any deficiencies in the adaptation of current international tax rules to the digital economy;
provide the Commission with a range of possible solutions to address the most important issues identified during the analysis referred to in the point above
state the risks, possible consequences and economic and financial impact for the EU of each of the solutions
Source: www.ip-tax.com/2013/10/ec-sets-up-digital-economy-taxation-group/
Taxing the digital economy won’t be easy without rethinking basic assumptions

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The USA -Copyright Policy, Creativity, and Innovation in the Digital Economy
Issued 31/July/2013 by the Department of Commerce Internet Policy Task Force
The Green Paper outlines current major copyright issues e.g.:
digital performance rights / technology protection measures / mass digitization projects, and fair use
Also makes recommendations covering three broad categories, i.e.: update the balance of rights and exceptions; improving enforcement tools to combat online infringement; and developing the Internet as a legitimate marketplace for copyrighted works and streamlined licensing.
Fair use cuts both ways.
Promoting easy / free / fair reuse of works e.g. for editorial, parody, educational purposes, whilst protecting the IPR and revenue streams for content owners.
With the advancement of digital technologies comes the need to create new exceptions to copyright, including updates to the fair use doctrine.
The Green Paper concludes by acknowledging that continued input from all stakeholders will be critical to evaluating and refining our national copyright policy.
Source from: Task force releases green paper on copyright policy in the digital economy -BY JOHNMCELWAINE September 17, 2013
Googlewins legal fight over plan toscanworld'sbooks; Judge cites Fair Use

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United Kingdom –The Copyright Hub
The primary focus of the Copyright Hub is to enable high volume –low value transactions, (e.g. to search, license and use copyright works legally) by individuals and SMEs.
The top tier content players already have dedicated resources for such activities hence they’re not a primary target of the Copyright Hub, but they’ll also benefit by removing the need to deal with trivial requests for licensing individual items (e.g. to use popular songs for wedding videos on YouTube).
Next phase, and other challenges, for the Copyright Hub include: enabling consumer reuse of content, architectures for federated search, machine to machine transactions, orphan works registry & mass digitisation (collective licensing), multi licensing for multimedia content, as well as the need for global licensing.
Key messages and quotes from Sir Richard Hooper (Chairman of the Copyright Hub) :
“user-centricity is key.People are happy not to infringe if easy / cheap to be legal”
“data accuracy is vital, so Copyright Hub is looking at efforts from Linked Content Coalition and Global Repertoire Database”
“Metadata is intrinsic to machine to Machine transactions –do you know it is a crime to strip metadata from content?”
“Moral rights may add to overall complexity”
Source: http://judeumeh.wordpress.com/2013/11/18/copyright-and-technology-in-2013/
“the Internet is inherently borderless and we must think global licensing, but we need to walk before we can run” –Sir Richard Hooper

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Korea –Government backed copyright protection
The Korean government operates the Copyright Protection Centre (CPC), part of the Korean Federation of Copyright Organizations (KFCO).
The CPC runs a piracy monitoring system called ICOP (i.e. Illegal Copyright Obstruction Program), whichmonitors various types of online services, including P2P file-sharing sites, web portals, “web-hard” (Korea’s equivalent to “cloud storage”) services, torrent sites etc.
It is analogous to private-sector piracy monitoring services such as MarkMonitor, Irdeto/BayTSP, Muso, Ayatii, etc.
ICOP gathers data in real time and sends takedown notices to the sites, which remove the content to avoid action from Korean law enforcement.
The fingerprinting technology used comes from the Electronics Telecommunications Research Institute (ETRI), a government-funded research lab.
ICOP is arguably more effective than monitoring efforts elsewhere because it’s better integrated with law enforcement.
CPC gets 90% of its funding from the Korean government.
Although much of the system is automated, the CPC employs 110 people to monitor and report on illegal content on targeted online services. The employees are disabled citizens who work from their homes!
Source: http://copyrightandtechnology.com/2013/11/07/copyright-technology-gangnam-style/
Korea ranked first in UN’se-government index Mar 08, 2012

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Content
Introduction
Digital overview
•Economic trends
•Social trends
The way forward

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Digital Transformation: Research Report
MIT Sloan Management Review and Capgemini Consulting conducted a survey in 2013 that garnered responses from 1,559 executives and managers in a wide range of industries.
Key findings:
According to 78% of respondents, achieving digital transformation will become critical to their organizations within the next two years.
However, 63% said the pace of technology change in their organization is too slow.
The most frequently cited obstacle to digital transformation was “lack of urgency.”
Only 38% of respondents said that digital transformation was a permanent fixture on their CEO’s agenda.
Where CEOs have shared their vision for digital transformation, 93% of employees feel that it is the right thing for the organization. But, a mere 36% of CEOs have shared such a vision.
Source: Embracing Digital Technology A New Strategic Imperative –MIT Sloan Management Review & Capgemini Consulting Research Report 2013

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Key challenges of digital transformation
Leadership -Many managers feel no urgencyto achieve digital transformation. This may be because so few leaders offer a visionand a road map for digital transformation, leaving managers with no motivation for achieving it.
Business Model Transformation -Companies that effectively manage digital technology can expect to gain in one or more of three areas: better customer experiences and engagement, streamlined operations and new lines of business or business models.
Though innovative new business models are what every CEO dreams of, companies more often see digital technologies help transform their customer experience or operations. Business model transformation is difficult, and far less prevalent, according to survey respondents.
Return on Investment -It can be hard to gauge a return on investment for emerging technologies. “It is still difficult to compute ROI on many social media activities (at least to the satisfaction of the executive board)” said one survey respondent.
Institutional Challenges –attitudes of older workers (resistive to change), legacy technology and innovation fatigue (too much, too new, too fast)
Source: Embracing Digital Technology A New Strategic Imperative –MIT Sloan Management Review & Capgemini Consulting Research Report 2013

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Content
Introduction
Digital overview
•Economic trends
•Social trends
The way forward

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Looking to business model innovation
Source: https://www.capgemini.com/blog/capping-it-off/2013/08/how-to-implement-innovative-business-models
The role of architecture, as custodian of enterprise principles and governance, is even more relevant in a highly disruptive digital business environment

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And harness true platform economics
Platform firms are networked ecosystems that connect multiple players, provide tools for them to contribute and interact, and rules that govern participation.
They aide the creation of new markets by connecting producers and consumers with each other. In such markets, consumers can become producers.
3 factors transforming industry:
Firms that leverage user capabilities outside their business to complement their experts, are poised to scale faster than those that don’t.
Firms that connect consumers to their best product options through data-driven matchmaking generate more transaction revenue.
Finally, firms that can leverage external capacity are poised for tremendous return on assets.
Source: http://digitalcommunity.mit.edu/community/featured_content/platform-economics/blog/2013/10/28/the-rise-of-the-platform-how-today-s-connected- users-are-powering-a-seismic-shift-in-business-models
The multi-sided platform approach enables distinct user segments to create and obtain value from each other, with minimal
intervention by the platform provider.
Scale and velocity of platform growth is a function of the number of users, and consequently the network effect.
Source: http://www.businessmodelgeneration.com/

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Questions? Jude Umeh (FBCS, CITP) Snr. Consultant & Enterprise ArchitectEmail: jude.umeh@capgemini.comPhone: +44 (0)870 238 8529Blogs: http://www.bcs.org/server.php?show=ConBlog.8http://www.capgemini.com/technology-bloghttp://judeumeh.wordpress.comTwitter: @judeumeh

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