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How to arm yourself in the new-tech wild west

Jake Pincombe

Head of Open Innovation

The Wright stuff – A (very) short history of flying

Human civilisation as we know it has existed for around 6,000 years. From that starting point it took us around 5900 years to learn how to leave the ground and fly. We needed only another 60 years to leave the planet entirely, and just 60 years after that we’ve managed to achieve powered flight on a completely new planet, 140 million miles away from our own.

The cosmic scale of this achievement is practically incomprehensible, but it serves as demonstration that when thinking about the pace of change, it’s better to think on a log scale. It’s especially obvious these days that the shifting of the ground beneath our feet is more noticeable than it ever has been before. The Covid-19 pandemic has rearranged the world over the course of a year, but the real force of change in recent memory has been the exponential acceleration of human progress, powered by incremental advances in technology.

Had you told the Wright brothers after their maiden flight that we as a species would accomplish so much in such a short space of time, no doubt they wouldn’t have believed it. This though is unsurprising, given that a good deal of the progress in those last 100-odd years has been possible due to extraordinary and unforeseen advances in computing and computational power, that have in turn defined our era.

When it comes to semiconductors, less is not Moore

1965 saw Gordon Moore make the first iteration of his now famous prediction, Moore’s Law. Moore was then the director of R&D for Fairchild Semiconductors and would later become President of Intel. He believed that the number of transistors on integrated circuits would double every two years. This would allow, among other things, for faster and more powerful computers and a growing rate of advancement in computer technology. Moore’s Law proved accurate, not only forecasting the increase in speed and power of computing but also providing a general description for the trends in numerous other technological advancements, from hard-drive storage to DNA sequencing.

For a demonstration of Moore’s Law in action look no further than your smartphone (more ‘Smart’ than ‘Phone’ these days). If you are lucky enough to own a new iPhone you’ll have access to over a hundred and fifty thousand times the processing power, and one and a half million times the RAM than the guidance computer that landed Apollo 11 on the Moon [1] [2]

That alone is a remarkable example of the technological achievements in modern personal computing. The scale of advancement is staggering. However, arguably more remarkable is to consider that nearly half of the world are estimated to own a smartphone of some sort. In addition to the capability improvements, technological progress has commercialised and democratised personal computing to a level where access to top end technology is higher than it ever has been. This has contributed to the proliferation of ideas that previously would not have had a platform. This unprecedented increase in the capabilities of technology, and crucially the access to it, has underpinned the prosperity of the last 50-60 years.

On the back of these advancements the tech startup scene has thrived. Between 2007 and 2016 alone the number of tech startups increased by up to 47% [3]. This rate has slowed in the last few years but still remains high, with the third quarter of 2020 seeing the incorporation of 3,641 tech startups, a 15.5% rise compared to the first quarter of 2020 [4]. To complement the rise of new technologies, the ease of communication which has been fostered by the internet and smartphones has made the sharing of ideas and information easier than it ever has been. New ideas can now grow multinationally and benefit from a diversity of experience, culture and capabilities.

Hard Times & Great Expectations

All of this has had a number of consequences for businesses which has left them in a uniquely precarious position.

Firstly, there are more technologies available than there ever have been. Many of them are increasingly complex and require specialised experience. The rise of these technologies has been dubbed Industry 4.0 and they are characterised by the exponential rise in their data volumes, computational power and connectivity. These technologies, which have been enabled by the miniaturisation of transistor technology, includes AI, machine learning, NLP and blockchain. The value of these technologies has seen them proliferate and catapulted them into the mainstream. Currently, 95% [5] of firms across all industries have adopted at least one of the Industry 4.0 technologies, with cloud computing, internet of things (IOT) and big data being the most popular.

For one organisation to have expertise in machine learning, natural language processing, geospatial imaging, blockchain and the myriad other established or emerging technologies is nigh on impossible. Far from just one technology in use, the average organisation runs over 800 applications. What’s more less than a third of these (29%) are currently integrated [6], with organisations finding it difficult to introduce new technologies or make changes to existing ones. Breadth and depth on this scale is so resource and expertise intensive that it is surely only achievable for the few biggest corporations in the world.

Secondly, this explosion of possibilities has in turn raised the expectations of consumers. 62% of consumers say it takes more for a company to impress them with new products/services than ever before [7]. A massive 73% of customers now also say that one extraordinary experience raises their expectations of other companies [8]. Products and services must be easy to access, price competitive, secure and fault free. Because we can do more, consumers want more. This is challenging enough on it’s own, but it’s now expected that 70% of these customer interactions will involve emerging technologies by 2022, up from only 15% in 2018 [9]. With increasingly complex offerings leveraging multiple technologies it is becoming increasingly difficult for organisations to meet the creep of consumer expectations.

Meditations in an Emergency

Troubling also is the fact that we might not be able to rely on the increasing computational power that has underpinned the progress of the last century for much longer. Moore’s law, it appears, is ending (at least in its traditional sense). Advances in computational technology as a result of denser integrated circuits are beginning to run up against some of the fundamental limits of physics. Today the most advanced circuits features can be laser printed to below 10 nanometers in width, approximately the length a fingernail grows in 10 seconds. As these features approach a hard limit of atom length [10], further advances become prohibitively expensive and performance gains diminish. The final must-read International Technology Roadmap for Semiconductors report (ITRS) predicted that transistors could reach their physical limits as early as this year [11].

So all this leaves businesses in a tough spot. How do you navigate a market with the broadest range of  complex and esoteric technologies there ever has been, all the while meeting the needs of a customer base that has never demanded more? How do we continue to grow and innovate if tech capability growth slows or stagnates?

Steal a little and they throw you in jail, steal a lot and they make you king

Luckily the answer lies within the problem. There are 1000-odd new startups being founded in Britain alone every month. All have innovative ideas and a unique offering or skillset.

The fit is a natural one. Startups need established organisations as much as organisations need their skill sets. Startups are often founded on a single idea. One of the most important areas for the development of a startup is being able to leverage the collective industry experience of a large organisation and shape that idea with their input. This effectively means that organisations can rely on a near unlimited selection of solutions and technologies to experiment with by engaging in pilots and trials. Partnerships allow organisations to be experts in all technologies at once and deliver for their customers the highest quality experience at the frontier of innovation.

It doesn’t end there. Partnering with early stage startups allows companies to take an active role in the development of their technologies. Rather than buying a one-size-fits-all solution off the shelf they can develop a solution that meets the specific needs and pain points of their business, increasing efficiency and reducing onerous implementation requirements. And the earlier the better. Early adopters of emerging technologies have long enjoyed the biggest benefits. For cloud computing it’s been estimated that the Innovators, the first 2.5% of cumulative adopters, enjoyed a staggering 15 years of competitive advantage. The advantage was 10 years for early adopters (16%) and was still 5 years for the relative late-comers, the early majority (50%) [12].This surely also makes a compelling case for looking at emerging technologies even if you think you might have missed the early rush. It’s never too late to be in early.

As for Moore’s Law, it’s slowing means that simple but compute-intensive technologies, like machine learning will have to make way for more architecturally inventive technologies. There’s no prize for guessing who will be the fountainhead for innovation and ingenuity in computational thinking (spoiler alert: it’s startups). The end of the Moore era may also be a blessing, forcing us to reflect more on our dependence on computing in innovation. Being able to do more will always be beneficial to innovation but the best ideas are most often the simplest. There will always be an importance for genuine innovation of concepts, and this will only become more keenly felt as the pursuit of technological advancement by volume slows.

Your Old Road Is Rapidly Agein’

Partnering with startups presents an answer to many of the problems developing in the modern marketplace, but it also presents an opportunity. The biggest gains are always reserved for the early adopters of new ideas. As we move out of the era of the last half-century, characterised by rapid technological developments and into whatever comes next, the potential for first mover advantages will be enormous. In the wild west of post-Moore innovation, there is no catch up, only get left behind.

“Come Senators, Congressman
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled”

One of Bob Dylan’s greatest gifts was being able to nail the simple universal truths (and to write beautiful songs complaining about prostitutes). He was 22 when he recorded The Times They Are A-Changin’ and younger still when he wrote it. Dylan turned 80 this year and the message from all those years ago is as relevant now as it’s ever been. In sort of his words, it’s time to admit that the waters around you have grown. Better start swimming.

Innovation Blueprint: Insurance

The Lloyd’s of London insurance marketplace (note the apostrophe and lack of a horse) provides a great demonstration of how to move with the currents of change. Founded in 1688 it has stood in the same part of London now for 333 years. But that is about the only thing about it that has stood still. Starting as a coffee house, Edward Lloyd used the shipping information he gathered there to build an insurance empire that has seen no less than 14 monarchs rise and fall during its operation. Lloyd’s survival owes much to it’s ongoing commitment to innovating over the course of three centuries. Lloyd’s has a proud history of firsts when it comes to inventive insurance policies, from the innovations that moved our species forward, to the weird and wonderful. They hold the distinction of issuing the first ever motor policy in 1904 (described as a ship on land), the first flight policy in 1911 and the first satellite insurance in 1965. As the world has taken flight, they have taken risks and flown with it. This willingness to adapt has allowed them to weather numerous existential crises, including the asbestos crisis in the 1990’s to Covid-19.

In many ways you might expect such a historic institution to be stuck in it’s ways, but change is a part and parcel of the marketplace. It may not come as a surprise that being directly tied to some of the most ruinous events in human history has meant that the need to adapt is more keenly felt by the insurance industry. 92% of insurance executives either fully agree (56%) or partly agree (36%) that the Covid-19 crisis will accelerate innovation. Furthermore 96% of European insurance companies are already implementing (59%) or planning to implement (37%) enhancements to their digital capabilities over the next 6-12 months to maintain resilience [14].

The Lloyd’s corporation themselves are currently engaged in the ambitious Future at Lloyd’s project, redesigning and building the world’s most technologically advanced insurance marketplace. Not content with just that, there is the Product Innovation Facility, where Lloyd’s underwriters are offering over £100m in capacity to speed up product development for new and emerging risks. and this month Lloyd’s launched the seventh cohort of the celebrated Lloyd’s Lab, where Lloyd’s invites the most promising InsurTechs to test and develop their solution with expert input from the market.

Lloyd’s has flourished over 333 years by recognising the ever changing needs of its customers and it has met those needs by building continuous innovation into its foundations. This alone remains unchanged after all this time and will likely ensure it endures whatever may come.

[3] Wu, John, and Robert D. Atkinson. “How Technology-Based Start-Ups Support U.S. Economic Growth.” Information Technology & Innovation Foundation, (2017), Accessed 04 05 2021.
[5] Chartered Institute of Procurement & Supply (CIPS), “Future Technologies in Supply Chain and Logistics Report 2020”, (2020)
[6] Mulesoft Research, “2021 Connectivity Benchmark Report”, (2021)
[7] Salesforce, “Salesforce 2020 State of Connected Customer Report”, (2020)
[8] Salesforce, “Salesforce 2019 State of Connected Customer Report”, (2019)
[10] J. A. Mol, J. Verduijn, R. D. Levine, F. Remacle, and S. Rogge, “Integrated logic circuits using single-atom transistors”, (2011),
[11] Semiconductor Industry Association, “2015 International Technology Roadmap for Semiconductors (ITRS)”, (2015),
[12] Stratopoulos, Theophanis, “Emerging Technology Adoption And Competitive Advantage”, (2015), SSRN Electronic Journal. 10.2139/ssrn.2695858. 
[13] Johanna von Geyr and Bryn Barlow, “COVID-19 Pulse Check: State of the EMEA Insurance Industry”, (2020)
[14] Gary Shaw and Neil Baumann, “2021 insurance outlook: Accelerating recovery from the pandemic while pivoting to thrive”, (2020)