Building Supply Chains and Ecosystems for Innovative Technologies
Cutting-edge innovation today is often characterised by technologies with the potential to affect many fields, to greater or lesser extents, simultaneously as they begin to mature. Artificial intelligence (AI), blockchain, Internet of Things (IoT), graphene, virtual reality (VR), robotics, quantum computing and nanotech are just some of the examples of innovations which are touted, with varying degrees of pessimism or hype depending on the source, as being able to change virtually every aspect of our lives.
The changes discussed are often described as wholesale ‘disruption’ or ‘revolution’, concepts that will always grab the most headlines, though it will likely be more incremental in many fields. And this iterative progress won’t take place in a vacuum; as different innovations develop they will also be deployed in combination (we’re already seeing how important some level of AI technology is to the success of IoT networks for example) spawning yet more new ideas, capabilities, products and businesses.
Realising the enormous potential of the cutting-edge technologies creeping closer to the mainstream requires a robust, stable and scalable supply of their fundamental units in the marketplace. This will be achieved through the development of supply chains or ecosystems that will lead to new efficiencies and cost-savings driven by commercial pressures.
In addition, when a stable supply exists, and is subject to market forces which drive down costs and increase performance, further leaps in progress can be catalysed. As an example just look at the spectacular results of industry’s access to a consistent source of consumer electronics subject to exponential improvement, characterised by the well-known Moore’s Law. In just a few decades commercially-driven development has led to $500 smartphones millions of times more powerful than the $3.5 million systems used by NASA during the Apollo missions. It is certainly possible that predictable and cost-effective access to other new technologies could generate similar leaps forward.
But how can this access be enabled in the first place? How do we go about building supply chains or ecosystems that will be able to reliably provide cutting-edge innovation for those ready and willing to pay for it? To try and find answers I asked experts in three different innovative sectors how they believe key challenges to achieving this in their field can be overcome.
Preparing to launch — going digital-first to build the global NewSpace sector
The history of the space sector is often described as a series of discrete, high-profile discovery missions that represent leaps forward in global capabilities. But in commercial terms exploration is only one part of the equation. Satellite technologies such as television networks, navigation, mobile phone signal provision and geographic imaging are burgeoning industries with large networks of suppliers and customers. However, as the private space sector continues to grow, companies all over the world are developing offers for the ‘NewSpace’ industry.
NewSpace companies are interested in the commercial opportunities that private spaceflight, eventually at scale, will bring to customers, as well as more immediate advancements such as low cost CubeSats. While many people are familiar with the standout examples of SpaceX and Virgin Galactic there are plenty of other businesses playing a role in the sector, and that number is set to grow in the near future.
In order for emerging startups and small businesses to be seen as viable participants in a NewSpace supply chain there are many challenges that the sector needs to address. These range from dealing with the legacy systems, procurement processes and standards that are a result of the public sector history of space exploration, to the typical growing pains of any emerging sector. These companies are trying to do something revolutionary in the harshest environment imaginable, so it’s no surprise that there is a lack of consensus and precedent on many issues.
In addition, the geographical distribution of suppliers and resources is more of a factor than in other sectors. In our hyper-connected world location is usually a non-issue when we think about the latest innovation (‘you can share pics from anywhere dewd!’) but it certainly matters for space companies dealing with large and heavy equipment that needs to be stored, assembled, tested and transported to remote places to launch safely.
Enhancing the ability of businesses with diverse, complex and globally-distributed products and services to find new suppliers or clients efficiently is no easy task. But that is exactly what the company satsearch, a startup being incubated at ESA BIC Noordwijk in the Netherlands, is trying to do.
Satsearch is aiming to democratise the NewSpace industry by opening up opportunities for businesses at all levels to locate new providers and collaborate more effectively on a commercial basis. Given this ambitious mission I asked co-founder Kartik Kumar what he saw as the major challenges in developing a supply chain for the space sector, and he explained:
“The space industry has grown rapidly over the last decade with NewSpace companies popping up all over the globe. In order to leverage this growth to drive the commercialization of space, digitalization of the global space supply chain is a core challenge to address.”
“As the global supply chain continues to grow and fragment, digitalization will enable organizations to rapidly discover, assess, and adopt new products, services, and technologies that will lead to shorter lead times, significantly lower costs, and more robust space missions.”
A key challenge that Kartik’s team has faced in this process is convincing companies to change aspects of their business processes. This is always difficult; businesses do things a certain way because it works, and in order to make a decision to change they need to believe that the new approach would not only bring more value, but that it would actually bring enough value to justify going through the, potentially painful, process of change itself.
This is a core consideration given the largely public sector history of the space industry. There are a number of legacy stakeholders with disproportionate influence in supplier contracts, standards development and other industry-wide issues. This isn’t necessarily negative by any means, but commercial competition strengthens supply chains and increases their efficiency over time, so movements toward a more open market (when effectively regulated) is likely to benefit end users and clients in the sector.
In addition, extracting value from space in new ways will rely on, at least in the short-term, the capabilities of NewSpace businesses to commercialise data. A digital-first supply chain has this capability baked in, and this is something that satsearch has recognised and supports with software integrations and its technology-focussed approach. Digital transformation of the space industry will also unlock global supply chain intelligence, enabling businesses to harness data to drive decision-making.
Ultimately, opening up the space industry is about more than increasing the number of potential clients that a set number of companies across the world might be able to access. It is actually about opening up the solar system for new research opportunities, commercial possibilities and even human travel. I for one hope that it continues!
Key takeaway — a truly effective supply chain for any innovative technology needs to be about more than a simple collection of companies with relevant products and services. It also needs to incorporate efficient methods to help those companies more easily find, understand, communicate to and work with each other. And in 2018 this means digitalisation as part of the chain’s core infrastructure.
The challenge of perspective — seeking successful commercialisation in the European AI ecosystem
Software innovations tend to result in the development of ecosystems rather than supply chains. Although the term is overused, it is a more fitting description when there is no clear-cut downstream and upstream for the product (i.e. in many situations company A is both a supplier and client to company B).
In addition, physical goods can only be in one place at a time (unless you’re shipping individual atoms of course), but copies of software, code and data can exist in several places simultaneously. They can also be rapidly passed back and forth between many stakeholders multiple times, sometimes on an automated or semi-automated basis, and be worked on by people around the world collaboratively.
Programs, algorithms and data relating to artificial intelligence are a perfect example of this, and in recent years this sector has grown dramatically, increasingly entering the public spotlight. Cost-effective access to greater computing power and network capabilities, advances in research and software development, and the entrance to the market of large stakeholders such as IBM have all combined to drive progress.
Such rapid advancement has challenged digital stakeholders across the globe to quickly develop support structures, capacity and operating environments that will help companies and users get the most out of AI in the future. But this is far from easy with such controversial innovation.
AI has always been a technology that seems to easily evoke emotions from dismissive scepticism to outright terror. Popular culture is full of examples of ‘AI gone bad’ and there are regularly predictions that the technology, along with robots and other advancements, could also have a dramatic negative impact on workplaces and jobs in the future.
But of course, these simple predictions offer nowhere near the full picture. I recently worked on this topic with Policy@Manchester, a department that facilitates and promotes contributions by University of Manchester researchers to public policy. In the project the questions of how AI and robotics could affect the future, in various different settings and in both positive and negative terms, were discussed by a range of researchers from several disciplines. The output (called On AI and Robotics) demonstrates the amount of nuance in this conversation.
So when it comes to the development of effective ecosystems for AI, how will these issues be dealt with? To find out more, I asked Cecilia Bonefeld-Dahl, senior member of the European Commission’s High-Level Expert Group on Artificial Intelligence and Director General of DIGITALEUROPE, what she believes are the biggest hurdles to overcome at a European level in this process. Here’s her response:
“The main challenge is the fear of the changes AI is and will be bringing to our jobs, to our understanding of the human being as the most intelligent unit on earth, to crime, to everything in life. It is a bit like when the internet and the PC came in to our lives …. Everyone was scared of impersonalised communication, alienation and isolation of humans, and the possible lack of human interaction.”
“The solution is to enlighten and educate people. AI is a tool, and we need to teach people how to use it, how to innovate with it, no matter if that is in the improvement of medical treatment, preventive care, or improved utilisation of resources.”
“Such education will require heavy investment and effort, so we need an extensive strategy and investment plan for Europe. Further it is of essence that we navigate by defining a clear set of ethical guidelines when using AI, not least is this important in an international and inter-governmental context.”
It is perfectly understandable that such far-reaching and deeply cross-cutting innovation as AI can cause the kind of anxieties that Cecilia mentions. But as she also states, there are many aspects of the technology that are poorly understood and helping people at all levels better appreciate what AI is and can do will be a core challenge in the near future.
Key takeaway — in today’s always-on, information-driven world perception is reality. A supply chain or ecosystem for an innovative technology perceived as risky or dangerous, no matter how inaccurate those perception are, will suffer without a serious attempt to build a positive public image for the fundamental innovation.
Building a ‘science supply chain’ — accelerating industrial R&D to bring graphene to market
Graphene has been described as revolutionary for many future applications since it was first discovered. The advanced ‘2D material’ is a sheet of carbon atoms arranged in a honeycomb lattice and was first isolated from a larger sample of graphite by Professor Sir Andre Geim and Professor Sir Kostya Novoselov of the University of Manchester in 2004, who subsequently won the 2010 Nobel Prize in Physics for the achievement.
Although just one atom thick the sheets are incredibly light and strong (being 200 times stronger than steel) and also exhibit very interesting electrical properties. In fact, it has been described as the world’s strongest, thinnest, and most conductive material.
Some of the applications, such as space elevators, are straight out of science fiction (which is not to say they will never be built of course) but there are a huge range of other uses closer to home. Companies are exploring the possibilities of using graphene in bulletproof armour, medicine production, energy storage, circuitry, flexible smartphone screens, sports equipment, nuclear waste cleanup, water filtration and more.
The aerospace industry is also a fertile area for development where graphene’s use in strong, lightweight components could increase aeroplane efficiency. In April last year Richard Branson published a blog on Virgin.com in which he discussed how aeroplane components incorporating graphene could dramatically alter air travel in the future.
The same principle can be applied for electric vehicles. Larger batteries and electrically-driven engines are often heavier than traditional internal combustion components. This means that weight needs to be saved elsewhere on the vehicle in order to maintain efficiency, while also ensuring that the lighter components are still safe. Graphene energy storage solutions (in the form of supercapacitors) could play a role in replacing batteries with lighter alternatives, and graphene body parts would help save weight while maintaining safety and structural integrity.
With the amazing potential of graphene there is often a lot of hype around these possible uses, and even some rumblings of discontent because no high-profile examples have quite made it through into the public eye at a large-scale yet. However, this material is just 14 years old, and it takes time to develop both scalable commercial applications and a dedicated supply chain for entire product lifecycles.
One organisation working to fix this is the very institution where graphene was first discovered, the University of Manchester. Unsurprisingly, developing a robust supply chain for a relatively new material just one atom thick heavily involves academia, and various teams at the university are embedded in the commercial development process, managing many aspects of product research, design and production.
James Baker, CEO of Graphene@Manchester, calls this approach the ‘science supply chain’ and believes that it can speed up commercialisation, corporate R&D and product development. James is also Director of the Graphene Engineering and Innovation Centre (GEIC) which will open in 2018. Through these initiatives the University of Manchester is building a complete end-to-end support framework for commercial graphene applications, from standards to scalable mass production; a true graphene supply chain.
I got in touch with James to ask him a bit more about this work and he explained;
“A big challenge in building a successful science supply chain can be in the different “motivations” of the various parties. For example, academia might be motivated by producing papers or publications, but industry is motivated by keeping details of research confidential and maintaining competitive advantage. While these can be overcome it is important that individual motivations are understood and managed in any successful supply chain or project.”
“A further consideration is ‘risk’ — if timescales are long before results are known then this can also cause projects to be slow to happen as commitments might be long-term or multi-year. The GEIC business model is looking to address this through a “make or break” methodology — undertaking rapid experimentation and getting quick feedback so projects can proceed or be stopped quickly if results show a fundamental reason why something is not going to work.”
Reconciling the priorities of academics with those of R&D professionals in the private sector is a well-known issue and is no easy task. However, when companies are clear and open in their intentions to fairly commercialise a new innovation, and researchers are able to participate in a way that benefits their career (whether that means publishing, demonstrating impact or furthering their research), both can work in harmony to bring new technology to market.
Key takeaway — for truly cutting-edge advancements the innovation chain (drastically simplified as; fundamental research > applied research > commercialisation/corporate R&D > marketable product) is the product supply chain. When a business is working on something so new that no companies can yet provide the materials, components or services needed, these will have to come from academia. And the teams supplying them will not have the same commercial sensibilities or pressures that the business will face, so it is important for both sides to be open and understanding as they develop their working relationships.
Market forces are incredibly powerful and will affect almost every aspect of how new innovations will ultimately be used in everyday life. But as we can see from the approaches being taken in the space, AI and graphene industries, conscious decisions are also needed in order to design seamless supply chain processes and structures for the future.