2015 GIS: Panel Discussion On 21st Century Infrastructures

2015 GIS: Panel Discussion On 21st Century Infrastructures Panelists: Dr. Fahib Mushayt, Vice President of Business Development and Enterprise BU, Saudi Telecom Dr. Kandeh Yumkella, distinguished fellow, GFCC and the former Director General of the United Nations Industrial Development Organization Dr. Keoki Jackson, Vice President and Chief Technology Officer, Lockheed Martin His Excellency Zakri Abdul Hamid, Science Advisor to the Prime Minister of Malaysia. Moderated by Dr. Roberto Alvarez, Executive director, GFCC Dr. Keoki Jackson “Systems that lack security and resilience are certain to disappoint and fail in the face of an uncertain future and fall prey to disasters whether they are natural or manmade.” Zakri Abdul Hamid “The investment in R & D in developing countries is very low about 1% of GDP. In developed countries it is about 2.5-3.5% of the GDP.” Roberto Alvarez: We are 7 billion inhabitants in the world today but in a few years from now, in 2020, we are expected to have 50 billion devices connect to the Internet. So, beyond a transformation in life, the digital age is really transforming the world around us. We are here to explore how the trends and transitions that are happening will really reshape society, business and what we need to do as society to lay the foundations that will really enable us to take advantage of those things. What type of developments, challenges and opportunities do you see going forward for the deploying of digital infrastructures? Fahib Mushayt: Talking about digital economy, knowledge base economy, digital world, digitization efforts, different verticals in economy, education; health; transportation etc. all these efforts require massive infrastructure. Innovative models like the PPP, JV’s etc. would really be needed in order to build the right infrastructure especially in remote areas. Private sector will not really go and build in unfeasible areas; the right infrastructure that is required to cope up with the demand of the citizens. So, we are talking to the policy makers in order to build the required broadband especially in rural areas and the regulators are also making efforts. Connectivity is becoming really a utility, a need, a necessity. Collectively we have to provide the right infrastructure, which include massive investment in data centers, Cloud surfaces etc. On top of Cloud surfaces, we have to have the right Cyber security surfaces, and the right environment that helps things to flourish. Roberto Alvarez: The 2 perspectives that we would discuss are: Firstly, the idea of connectivity which is more than a need and secondly, how to make infrastructures available in remote areas not in terms of technology but in terms of the business models that will make those things possible. What are the opportunities and challenges that are being created by the Digital Age? Kandeh Yumkella: Firstly, globally about 2.5-3.0 billion more people will move into the middle class. These people want more televisions, more cars, more of everything. The energy demand is growing to grow by 30-40% by 2030 to power all the telecoms and cars. This creates an investment opportunity. We estimate roughly $3 trillion investment every year over the next 15 years to meet that demand for energy and that is probably about 50% of all infrastructure investment. Secondly, conversions of energy systems and ICT. We observe digitization of energy supply systems on the one hand in the rich countries move into smart grids, smart metering within households but we also see consumers in rich countries being more interested in controlling services on applications. The consumers want to have their own solar panels and storage systems. We also see even bigger energy demand centers, e.g. retailers, like Walmart, E-care want more control over the energy services, so they are putting solar panels on their warehouses. Recently, we were surprised to know that Walmart was one of the largest distributors of solar panels and they started from just their own rooftops on their warehouses. But now they are going into distributing it and selling it for consumers. Again giving consumers some of the independence to choose their source of energy using the applications. We still have about billion people in Africa without electricity. But yet, there is an opportunity with the convergence of digital mobile in East Africa (in Kenya, Rwanda, Tanzania) where people are able to pay for simple solar household systems with their mobile phones because of mobile payment systems. So, again, convergence of mobile technology and renewable energy is creating an opportunity of distributive decentralized energy systems. Roberto Alvarez: I would like to invite Prof. Zakri to talk a bit about what they are doing in Malaysia to address not just the Digital Divide in general but also to create the research and the capabilities that are needed to succeed in this Digital Age? Zakri Abdul Hamid: What we are trying to do in Malaysia is to position science, technology and innovation as an engine for economic development. At the present moment, the ICT contribution to GDP in Malaysia is around 9.8% and trying to target 17% by 2020. At the current moment in the World Competitiveness Scoreboard, Malaysia, by IMD standards is no. 16 and we tend to be in the top ten by 2020. Similarly, in the digital economy rankings, we are no. 36 at present and we hope to be in the top 20 by 2020. It is very constructive to have some target and that target should be championed by a strong political leadership. Roberto Alvarez: How do you see and what are the impacts for industry in manufacturing in this digital age and transformation? Keoki Jackson: When we think about infrastructure and industry, it’s about increasing productivity. A lot of times one has to look at what’s going to make that greatest difference in productivity. We have to think about what are the infrastructures behind the infrastructure. At Lockheed Martin, we prioritize our investments in infrastructure with that mantra of where are we going to make the biggest increases in productivity. Digital Tap History or our Digital Environment is fundamentally reshaping the way we do business and the way we produce products within Lockheed Martin. The three key lessons that we have learned during that transformation are: Firstly, one has to embrace complexity. Today's modern infrastructures, are interconnected, layered, complex and not only require sophisticated elements in interplay between the infrastructure, the tools, the processes; but there should be talent infrastructure behind that to deal with that complexity in the interconnectedness. The second key lesson is you get what you measure. It is becoming increasingly important as you look at 21st century infrastructures. We have ubiquitous and cheap sensors, which you have to be very thoughtful about how to use. So being thoughtful in infrastructure about what you measure is critically important. Thirdly, the themes of resilience and of security are fundamental aspects of any infrastructure that we develop today. They have to be considered from the very beginning, the very outset of development. Systems that lack security and resilience are certain to disappoint and fail in the face of an uncertain future and fall prey to disasters whether they are natural or manmade. Roberto Alvarez: There is a need for new models to understand how infrastructures are designed, configured in terms of complex systems. The point of accessibility is not just as a need but also as a right and an imperative for competitiveness. Could you share some of the developments that you are doing in terms of experimenting the new models to increase access to digital infrastructure here in the Kingdom? Fahib Mushayt: As a private sector we have inherited massive network that was built by the government prior to 1998 when the telecom business was owned by the Ministry of Telecom. After 1998 the telecom sector was digitized and privatized. So in terms of access or accessibility to telecom, we today have reached almost to more than 90% of the Kingdom, covered by 2G and 3G services. In terms of 2G, we are almost 98% coverage, Kingdom wide. Even if you go to the broadest areas, the middle of mountains, you will have no issue with coverage. In 3G technologies we have covered almost more than 70-80% of the Kingdom and especially with the major cities. The broadband coverage with fiber is still around 25%. The private sector including our company will not go and build a broadband infrastructure with fiber connectivity in unfeasible areas i.e. remote areas. Globally, governments are intervening with a creative business model to ensure the right speed. Roberto Alvarez: What else have you seen in terms of new models that are being created to address the issue of accessibility but also to create opportunities and to create economic value through digital infrastructures? Kandeh Yumkella: Energy and long-term infrastructure investments are still risky in some neighborhoods. There is a lot of call for new business models particularly bankers talk about de-risking models. In the United States, US OPIC and MIGA have put over a billion dollars into just de-risking investments in developing countries to enhance access to various kinds of services. The question is, how do we do financial modelling if we are planning the infrastructure to pay for the incremental cost of climate proofing it or making it more resilient? An extreme weather calamity can wipe out 20 years of infrastructure. So in the business modelling, to attract private investment to come in, how do you provide new financial tools to help them mitigate the risk? There are immense opportunities for the investors in country like India where energy is a big issue. We have to leap frog into new technologies to create a business opportunity. We would need new algorithms to begin to do new modelling where we are building the risk scenarios in the infrastructure planning for the future. Roberto Alvarez: Could you give your perspective on the implications for manufacturing and what is needed? Keoki Jackson: Lockheed Martin develops and produces products and it’s disruptive in a very exciting way. So, starting from basic things, requirements and architecture formed by modeling and simulation through detailed design; then getting into the actual production and manufacturing whether its additive manufacturing, robotic manufacturing and ultimately into integration into test, certification, delivery and then post-delivery sustainment logistics. So, now, this gives us the opportunity to remove mistakes, to do quality control almost as a matter of design rather than a matter of inspection to improve productivity throughout. Roberto Alvarez: Prof. Zakri, how are you with your current role working to create the layer of infrastructure or soft infrastructures that are needed today? Zakri Abdul Hamid: Firstly, it is very challenging developing entrepreneurs. The investment in R & D in developing countries is very low about 1% of GDP. In developed countries it is about 2.5-3.5% of the GDP. Secondly, there is no R&D in the SME's in developing countries so they don’t have that knowledge base. Thirdly, we are relying on academic researchers in the Universities but in the main Universities, professors are interested in publishing in pure review journals, getting citations and their promotion. It is a challenge to link their research output to real products. The academics are not really innovative in trying to produce products for the market. We have tried Public Private Research Network where we try to link the needs of the industry, the needs of the SME's with Academics in the Universities. We need to encourage collaborations/partnership between the various stakeholders.

Sharing Responsibilities to Create Shared Value

Riding the Tiger

In Conversation with Linda Hill

Liberating Innovation

Book Extract: The Base of the Pyramid Promise

Be a ‘giver’ in business, instead of a ‘taker’

Conscious Capitalism

Big Idea by Richard Rumelt

2015 GIS: Panel Discussion On 21st Century Infrastructures

Error thrown