Inside Enterprise Issue 8: "Breakthrough" by Inside Enterprise

EDITOR'S MESSAGE Editor-in-chief Edmund Zhang Deputy Editor-in-chief Polina Nesterova General Editor Sophie Cullen Editors Alex Chan Alexei Moore Annie Wang Cameron Bestwick Eeshaa Batra Emma Cleary Designers Garnet Chan Grace Zhong Kate Xu UNSW President Doron Haifer UNSW Vice President Kate Xu Board of Advisors Jenny Chen Erica Liu

or many years to come, 2017 will be regarded as a year of disruption and evolution, as old power structures are increasingly replaced by an emergent new world order. The eighth issue of Inside Enterprise explores several major breakthroughs that have been made by disruptors and innovators within our economic, political and social environment over the last year. Our writers explore how technological innovation underpins modern society, giving earthquake prediction technology unprecedented accuracy, revolutionising the classroom experience and fuelling the rise of artificial intelligence. Articles also explore how breakthroughs often cascade together to fundamentally overhaul the customer experience, with advancements in mobile payments driving the WeChat revolution and pushing consumers towards a cashless society. Read as a whole, this issue conveys not a sense of disruption but of opportunity, with writers keen to highlight examples of emerging economies, cobalt miners and management consultants all breaking boundaries and establishing new ground. The interviews in this issue reveal how personal breakthroughs are defined not only by sheer effort and determination, but also by going against the grain and experiencing the full range of diverse career possibilities. Elliot Cousins, Strategic Partnerships and Ecosystems Lead at Commonwealth Bank, emphasises that success is not a destination but a journey, one that students should make as diverse as possible. Nick Dunford, General Manager of CoVentured, and Wade Tink, General Manager at Project Everest, both exemplify this idea, using their sporting and military backgrounds to break through in their entrepreneurial careers. The Student Story follows four student entrepreneurs along their Hult Prize journey, breaking through their own tensions to deliver creative solutions to the worldâ&#x20AC;&#x2122;s refugee crisis. Finally, we celebrate the achievements and opportunities of student societies including UNIT, FINSOC and UNSW Alternative Investments Society. As always, Inside Enterprise is a labour of passion, enthusiasm and the tireless efforts of an extremely dedicated team. I would like to sincerely thank all our writers, editors, designers and executive team members for their commitment. I would also like to thank our sponsors, both new and old, for offering their support to this publication. We deeply appreciate your generosity. 2017 marks the fourth year of Inside Enterprise and Issue 8 is our biggest issue yet. We are continuing to grow across New South Wales and reach out to more students than ever before. We look forward to hearing from all students interested in getting involved in writing, editing, or being part of the executive team. Information on how to apply is available on our website or Facebook page.

Edmund Zhang Editor-in-chief

For advertising and sponsorship opportunities, please contact editor@insideenterprise.org COPYRIGHT AND DISCLAIMER ÂŠ 2017 Inside Enterprise. All rights reserved. The views expressed in Inside Enterprise are those of its contributors alone. Neither Inside Enterprise nor its Board of Advisors take responsibility for any material published. All pictures remain the properties of their respective copyright owners. www.insideenterprise.org | 3

C ON TENTS ISSUE 8 | SEMESTER 2, 2017

I N T E R E ST S 32 Learning to Learn CHERITA ZHU

REGULARS

34 Consulting on the Cusp MARK JEYARAJ

NEW IDEAS

37 Australia in a Trump World DAVID HOGAN

06 Cutting the Umbilical Cord

40 Cobalt - Overhyped or Breakthrough?

JASNEIL SINGH

08 A Missed Opportunity

SAM PHAM

BIKASH LALANI

43 Unlocking Global Growth

STUDENT STORY

ALEXEI MOORE

10 Hope and Hard Work

46 Mobile Payments - The Good, The Bad and What's Next

BILL CHAN, HARRISON JIN, TOM LUO AND WILLIAM ZHANG

LINLI GE

F E AT U R E S 13 Here's to the Crazy Ones DENNY CHEN

16 The Big Quake in Data KENNY NGO

20 Our Companies, Dying Younger HARLAN IKIN

24 The Marriage Between Artificial Intelligence and Finance CHLOE WILLIAM

28 Is a Cashless Society the New Reality? POLINA NESTEROVA

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S T U DE N T R O OM 58 University Network for Investment and Trading (UNIT) VICTOR LI

59 UNSW Alternative Investments Society DORON HAIFER

60 Finance and Banking Society (FINSOC) CATHERIN CHEN

ON L I N E For many more articles and to contribute your own, visit www.insideenterprise.org

St ay conne c te d www.facebook.com/insideenterprisejournal

I N T E RV I E WS 48 Team Work Makes the Dream Work: An Interview with Elliot Cousins ANNIE WANG

51 The Future of Entrepreneurship: An Interview with Nicholas Dunford EDMUND ZHANG

54 Business: An Unexpected Solution to Social Inequality: An Interview with Wade Tink GARNET CHAN

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NEW IDEAS

A Missed Opportunity: WeChat

“ gnorance is bliss” seems to dictate the outlook of many Australian businesses that for too long have neglected customers and ignored marketing and promotional platforms in the world’s second largest economy – China. As Australian companies slowly become aware of the need to establish themselves in the Chinese market and avoid losing customers to their more internationally-minded competitors, why haven’t social media opportunities such as WeChat been taken up more broadly by industry? What is WeChat? WeChat is the super-app of China, a one-stop shop for everyday needs that most resembles a mobile personal concierge service. WeChat’s main competitive advantage lies in its enormous functionality: it is a messaging platform like WhatsApp, a social information sharing platform like Facebook, a marketplace like Amazon, a trading app like eBay, and a taxi 6 | www.insideenterprise.org

ordering service like Uber. In China alone, WeChat has a staggering 700 million users and growing. Apart from its incredibly diverse functionality, WeChat’s best feature is that customers can pay for all these services through an in-built payment platform that doubles as an electronic wallet. Recently, WeChat has expanded its service by allowing users to make payments in international currency when using the app outside of China. This recent initiative is part of a strategic play by WeChat to broaden its international presence. Compared to 700 million users within China, WeChat has only 100 million users outside of China. This may be partially attributed to WeChat’s reduced functionality outside of China, with platforms in the UK, US and Australia not including some of WeChat’s most popular features. Furthermore, in most Western economies WeChat must compete with established social media platforms such as Facebook,

Bikash Lalani

WhatsApp, Twitter and Instagram, the majority of which are banned within the Chinese market, for which WeChat was specifically developed for. Nevertheless, any future removal of these limitations will expose WeChat to unfathomable market opportunities. Chinese consumers and the opportunities for Australian businesses Chinese consumers represent an enormous market opportunity for Australian businesses. As Chinese consumers become more affluent, their belief in the superiority of foreign goods, due in part to higher production quality and stronger consumer protection laws, has driven unprecedented appetite for high-quality Australian, American and European products. Chinese millennials in particular are a uniquely placed consumer group. The former One-Child Policy has left many single-child generations with an abundance of wealth as the sole heir to

their family’s inheritance. Furthermore, millennial Chinese customers are very digitally engaged, and gaining the brand loyalty of this growing demographic is generally cheaper and more durable than attracting new customers. This makes WeChat a perfect platform for global brands to reach this wealthy and disproportionately loyal consumer group. Some Australian companies, including real estate agents and Australian cosmetic and health food brands such as Bellamy’s Organic, a2 Milk and Capilano Honey, have recognised this opportunity and launched campaigns to promote their products through WeChat. However, these products are usually promoted in a completely different way to normal social media advertising. Agents called “daigou” are used as the middleman, earning hefty commissions by promoting and selling Australian goods in China via platforms including WeChat. The ability of “diagou” to thrive is partially due to the lack of effort by many Australian businesses to woo Chinese consumers, and Chinese customers have no issue paying the markup to access highquality Australian products. To use WeChat effectively, Australian businesses should maintain a healthy online presence on the platform and dedicate adequate resources to supporting two-way conversations with users as well as conduct sale transactions. Australian businesses must be mindful of the commercial and cultural nuances of selling goods to Chinese consumers on social media via a third-party “diagou”, which can be ruinous if not conducted sensitively but can set the business apart from its competitors if navigated successfully. Universities are also beginning to appreciate the marketing opportunities presented by WeChat. With education being one of Australia’s largest exports,

Australian universities were amongst the first to establish a virtual presence in WeChat, allowing universities to connect and engage with a large number of prospective students. The University of Sydney and University of Sydney Union have both integrated WeChat into its student programs, resulting in a significantly rise in international student engagement. This style of outreach builds faith among Chinese students that universities care about their needs and that representative student bodies are willing to engage with them through social media platforms familiar to them. These students in turn become advocates for Australian universities when they advise their friends, relatives and colleagues about where to pursue higher education. Opportunity or necessity? The benefits of using WeChat are limited only by the extent of the business’s dedication. To a large extent, the direct benefits of a robust marketing presence on WeChat are obvious. Increased customer engagement will drive greater customers and stronger revenue growth, whilst maximising name recognition amongst Chinese consumers, who clearly see that overseas companies value them as individuals. Sensitivity to cultural marketing strategies also help the company to improve its image, foster customer loyalty and bolster long-term retention. With WeChat providing Australian businesses with vast opportunities to tap into the Chinese market, Australian businesses ignore WeChat at their own peril, and risk losing potential customers to international competitors in their own backyards. Now is the time for businesses to act, before they get crowded out of an increasingly competitive market. n

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Cutting the Umbilical Cord: How Research Restrictions are Crippling Medical Innovation

he selection of Professor Alan Mackay-Sim as Australian of the Year for 2017 for his breakthroughs in spinal cord treatment is testament to the increasing importance of medical research in Australia. Professor Mackay-Sim’s acceptance speech focused on the necessity for increased funding in medical research, and for further support in helping young Australian scientists enter the field. Is a lack of government-funded opportunities for prospective PhD candidates yet to receive research fellowships limiting Australia’s ability to lead the world in medical breakthroughs? Why does medical research matter? Australia has a proud tradition in leading the world in medical research, with Howard Florey’s discovery of massproduced penicillin and Dr Graeme Clark’s pioneering of the world’s first bionic ear; just two examples of where Australians have led important breakthroughs in medicine. Despite comprising 0.3% of the world’s populations, Australia punches well above its weight in medical research, with Australian scientists responsible for 3.8% of global scientific research output. Current medical research is breaking new grounds in our ability to understand and treat complex diseases. Scientists

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at Macquarie University have recently discovered a blood biomarker for each type of Multiple Sclerosis (MS), and are collaborating with private institutions to create a blood test that can determine the type of MS with 85-90% accuracy. This research, like most medical innovations, relied on government funding through the National Health and Medical Research Council (NHMRC), as well as collaboration with universities, private sector companies and non-for-profit charities such as MS Research Australia. Similarly, Professor Mackay-Sim’s research into stem cells allowed him to discover that nerve cells within the nose die and are regenerated daily. With government funding, Professor Mackay-Sim was able to repair damaged spinal cord cells and restore mobility to a Polish paraplegic man, achieving a world-first that was heralded worldwide as a medical miracle. These examples of Australian medical research are just a few of a proud legacy of medical innovation, and stand testament to the incredible work conducted by Australian scientists when given the ability to flourish. Research fellowships and the brain drain plaguing Australia However, this legacy is currently under threat. Although the idea of saving millions of lives with an innovative medical

Jasneil Singh

breakthrough attracts many promising PhD candidates, there are simply not enough research fellowships to support these student scientists in pursuing the next life-changing medical breakthrough. This has resulted in a decline in the number of young researchers applying for scholarships with the NHMRC, a worrying trend which poses great challenges for Australian medical innovation. Furthermore, the Australian Society for Medical Research (ASMR) found that 25% of researchers felt uncertain about their future employment. This is largely due to insufficient amounts of government funding towards medical research, and is exacerbated by this limited funding being distributed amongst a greater number of emerging medical fields than ever before. For example, only 17.9% of funding applications were approved by the NHMRC in 2016, down from 20.6% just three years ago. Although small, the sustained decrease in the proportion of successful applications has led many Australian scientists and researchers to migrate overseas in order to obtain the necessary funding to conduct their research, with some leaving the medical research industry entirely. Funding is also somewhat skewed against women, who have a 16.2% success rate compared to 19.0% for men. Overall, more and

more failed applications have entered what researchers refer to as the ‘valley of death’, where potentially life-changing projects are unfunded and simply unable to come to fruition. The debate surrounding medical research funding Industry experts and government leaders are divided in their views regarding medical research funding. Many stakeholders, including government departments and politicians, argue that medical research is not a worthwhile investment given the Australian government’s current budget deficit. They suggest that medical research is a risky multimillion dollar investment that may achieve no practical outcome, and that any benefits derived are only realised many years into the future. Furthermore, opponents suggest that research grants come at the expense of improved hospital services and increasing access to healthcare, both of which are more immediate initiatives that provide direct, tangible benefits to sick patients. However, proponents of medical research funding, including Professor Mackay-Sim, focus on the improvements in quality of life caused by medical research, and argue that such innovations in cancer treatment and other areas of medicine are especially important given Australia’s ageing population. From a financial perspective, medical research is an especially sound

investment, with ASMR suggesting that every dollar invested in medical research generates $2.17 of economic benefit through reduced hospital visits and treatments for chronic illnesses. In fact, the Human Genome Project returns $178 per dollar of funding invested – a significant reward even when accounting for the longevity of the project. Medical research is not just wasted money, but instead generates highly positive economic outcomes. The future of medical research funding At first glance, it appears that the future of the medical research industry is bright. The introduction of the $20 billion Medical Research Future Fund (MRFF) will provide a lifeline for many researchers, with $1 billion annual grants providing researchers with the funding required to undertake clinical trials, research training and collaboration between medical fields. According to Professor Mackay-Sim, the MRFF will provide a two-fold benefit. Firstly, the MRFF is a strong step towards supporting long-term medical research by providing a continuous stream of funding instead of annual grants that must be reapplied for every year, as is currently the case. Secondly, the MRFF will benefit the government in the long-term by reducing illness and hence decreasing government expenditure on hospitals. Despite the current optimism in the

Australian medical research industry, it must be remembered that simply providing more funding is only the first step in providing the necessary support to help researchers achieve the next life-changing medical breakthrough. Investing more money into medical research by itself does not produce great outcomes if there are not enough researchers in the industry. Professor Mackay-Sim’s observation that many young scientists are not being provided with the required platform to develop into worldclass researchers is therefore critical. It is only by fostering a supportive research environment that utilises Australia’s worldclass research and education facilities that Australian medical researchers can fully achieve their potential to save millions of lives and produce a lasting legacy. n

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Student story

HOPE AND HARD WORK

How the Hult Prize Nurtures Student Social Enterprise BY BILL CHAN, HARRISON JIN, TOM LUO AND WILLIAM ZHANG

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In a world defined by social issues, such as the Syrian refugee crisis, persistent homelessness in global metropolitan cities, or the challenges posed by climate change, millennials must be empowered to address the complex challenges that affect their lives the most. The Hult Prize is an international competition that aims to unleash the next wave of social entrepreneurship, providing a mouthpiece for student entrepreneurs and aspiring social leaders to change the world and gain support to do so. Bill, Harrison, Tom and William were fortunate enough to be selected to represent the University of Sydney in the International Finals, held in San Francisco in March, and found the experience both empowering and inspirational. THE HULT PRIZE he Hult Prize is an international competition that harnesses the innovative power of university students from around the globe to tackle the world's largest problems. The Hult Prize is dedicated to helping millennials discover the power they hold in shaping the future, and actively seeks to develop socially-minded students into entrepreneurs by building exciting social enterprises. Social enterprises are a new way of thinking which takes marketbased solutions and applies them to social causes, redirecting the power of the for-profit business model to the most pressing social and economic issues plaguing our global community. The competition this year set the challenge of creating a social enterprise which could help 10 million refugees by 2022, with the winning team receiving US$1 million to implement their idea. Using social enterprise to ease the ongoing inequalities and suffering in our society was something unique the Hult Prize, and distinguishes it from other innovation-based competitions. The team that represented the University of Sydney launched the start-up, Footbridge Standards, which aims to make a longlasting difference to the refugee crisis by awarding a 'seal of approval' to businesses that assist refugees fleeing their homeland. This incentivises businesses to act in socially responsible ways, certifies businesses that are acting responsibly and rewards these companies by allowing them to use the seal’s logo in branding and marketing, thereby creating brand value. Furthermore, this seal of approval also allows consumers to signal the importance they place on upholding ethical standards and assisting in social causes, by switching from brands without the seal of approval to brands that

they know are actively making a positive difference to the world. We aim to be to refugees what free trade is for exploited workers – a vehicle to raise global awareness, make the refugee crisis in Syria and other countries more tangible, and to drive social change from the customer all the way up to the CEO. Without a doubt, the most enjoyable part of the whole Hult Prize experience was travelling with friends to represent the University of Sydney and competing at the San Francisco Regional Finals. he team suffered through the jetlag to pull some all-nighters and put the final touches of their pitch, with everyone putting in their total commitment to deliver the best possible presentation. Nevertheless, on the day of the pitch itself, the team was petrified, with three months of hard work and long nights coming down to just six minutes. One on the most rewarding parts, however, was having other teams come up to congratulate Footbridge Standards on its solution and pitch. The team was also inspired from meeting other teams from around the world, and hearing all the different solutions other students had developed. It was amazing to see the motivation of the other university students; the feeling of innovating towards a united, common goal – restoring the dignity and humanity of refugees – was truly incredible. Although Footbridge Standards did not progress to the next round of the competition, the experience of just being there and seeing what other teams had done made all the hard work worthwhile. For the remainder of the trip the team played tourist in San Francisco, visiting famous sites like the Golden Gate Bridge, Union Square and Pier 39, all the while taking selfies and munching on

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In-n-Out Burgers. It was an amazing cultural experience all on its own, and the real reason why we came to San Francisco! MIXING BUSINESS AND FRIENDS: HOW WE KEPT THINGS STRICTLY BUSINESS Coming into the competition as a group of friends was an interesting experience, to say the least. Working closely together over the three-month incubation period meant that the team spent every available minute developing the idea, and everyone got to know each other’s strengths and weaknesses very well. This need for teamwork proved to be a major challenge for Footbridget Standards. As a team, they disagreed on a number of issues, ranging from petty issues like what to eat for lunch, to substantial problems such as the wording of a critical email or the the approach they would use to sign their first customers. It would

be unrealistic to say that friendships weren’t put to the test, especially when it came to receiving negative feedback after the practice pitches. Having one member half-way around the world for the entirety of the program certainly didn’t make things any easier, especially when it meant using Facebook Messenger to discuss how they would expand the reach of their certification seal. However, the team came to realise the importance of keeping things, as cliché as it sounds, ‘strictly business’. Ultimately, the main driver that united them was their common desire to derive the best possible outcome for the start-up, and their drive to do the best that they could fostered their drive for success, which ultimately helped them to overcome these challenges. This delicate balance between personal relationships and professional goals was a lesson in maturity for all of the team members, and it truly drove home the value of effective communication and trust. 12 | www.insideenterprise.org

LESSONS LEARNT AND OPPORTUNITIES EXPOSED The refugee crisis is an ongoing challenge, with millions of people left with an uncertain future. Sadly, this increase in refugees fleeing their homeland is expected to increase as long as the Middle East and Sub-Saharan Africa remain marred by conflict. Finding a lasting solution is difficult; even governments collectively struggle to find an appropriate course of action. Footbridge Standards hopes to draw upon the collective goodwill of the private sector to bridge the gap between businesses and giving back to society. The team hopes to continue incubating this idea with the University of Sydney Innovation Hub, either through the Sydney Genesis program or Hatchlab. It is safe to say that for the team, the Hult Prize has been one of the highlights of their university experience, and one that they will cherish and never forget. They were awakened

to the realities of an enormous humanitarian crisis, and tackled the challenges headon. They engaged our entrepreneurial skills and built their own social enterprise from the ground up. Footbridge Standards is particularly grateful to have worked with amazing mentors from Nous Group, Venturetec and the Sydney Social Innovation Hub, who offered invaluable guidance for growing the business. But most importantly, as a team and as friends, they have truly bonded over the highs and lows of the past three months. Students with a passion for social causes or who are just curious to give things a try, should compete in the Hult Prize regardless of experience. It is a truly innovative and meaningful competition. For more information on the Hult Prize, visit their website at http:// www.hultprize.org/. n

Here's to the Cra z y Ones By Denny Chen

Start-ups. Entrepreneurs. Words that evoke images of success, innovation and intrigue. The start-up industry is a business landscape like no other, where the next creative idea can become the next billion dollar business. Within this innovative environment, disruption and the breaking up of established industry practices is encouraged, contrary to traditional business norms of stability and risk-aversion. But this kaleidoscope-eyed view of start-ups does not accurately reflect the real-world experience of most entrepreneurs. Forbes magazine found that 90% of all start-ups fail, and behind every successful start-up is an entrepreneurial team that has failed many times before making their big break. So how can you turn your business idea into the next Uber, Airbnb or Snapchat? What lessons do these three success stories provide, and how can they guide you through the different stages of a start-up life-cycle? In short, how do you make it big? Birth t the crux of any successful start-up is an idea that innovates and increases the efficiency of an industry’s current processes. Successful entrepreneurs are able to identify gaps and opportunities in the market, often through subpar industry practices, and use their industry experience to develop new technologies and processes that address these deficiencies in the status quo. Visionary entrepreneurs are able to picture how consumers will use the firm’s innovation in the future, and how the technology could shape the industry’s trajectory in the future, and then tailor their solutions to this future customer

demand. The formation of Uber exemplifies the inception of a startup. On one fateful Christmas Eve, co-founder Garrett Camp found that hiring a black car private driver in San Francisco was prohibitively expensive. Sensing a gap in the heavily regulated taxi industry, Garrett developed UberCab, an app for black car services that offers taxi services at a price considerably lower than other traditional black car services. In 2012, Uber launched 'UberX', which remains the cornerstone of Uber’s service offerings today. UberX achieves its competitive advantage of lower prices through a highly flexible business model, where registered

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Uber drivers act as taxi drivers and use their private cars as taxis, removing the need to pay licensing or overhead fees and hence greatly reducing costs. Furthermore, Uber recognised and took advantage of loopholes in Californian limousine laws that allowed UberX to quality as a limousine service while operating as a quasi-taxi service. Therefore, contrary to popular opinion, the competitive advantage underlying Uber’s success is not its ability to utilise smartphone technology or its ability to call up a taxi almost instantaneously, but rather its ability to deliver the exact same service as a traditional taxi at a significantly lower price. Uber’s core success in singlehandedly disrupting the taxi industry is therefore caused by its founders’ ability to identify market opportunities, and then use technology to develop a cheaper and more efficient taxi system that resolves the high price deficiencies of the industry.

improving its products and services to better meet continually evolving customer needs. In fact, successful entrepreneurs are differentiated by their ability to understand the competitiveness of the industry and the legal and operational issues of innovation. They attempt to continue pioneering unchartered territory as a product innovator and maintain their first moveradvantage within the market. In this space, Airbnb provides a great example of an entrepreneurial

Adolescence However, having a single innovative idea is insufficient to take the startup up to the next level of explosive growth. The adage ‘adapt or die’ becomes particularly pertinent in this adolescence stage. It is imperative for start-ups to continue

business constantly looking to improve upon its initial produce to accommodate emerging product issues. Airbnb began as a relatively simple idea of allowing homeowners to sublet vacant rooms or houses for rent. Whilst originally catering to

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"VISIONARY ENTREPRENEURS ARE ABLE TO PICTURE HOW CONSUMERS WILL USE THE FIRM’S INNOVATION IN THE FUTURE, AND HOW THE TECHNOLOGY COULD SHAPE THE INDUSTRY’S TRAJECTORY IN THE FUTURE, AND THEN TAILOR THEIR SOLUTIONS TO THIS FUTURE CUSTOMER DEMAND."

"THE GREATEST START-UP COMPANIES AND INNOVATIONS WERE OFTEN CREATED BY EVERYDAY PEOPLE WHO SAW DEFICIENCIES IN MANY MUNDANE, DAILY ACTIVITIES AND INDUSTRIES." sharing rooms, Airbnb now offers a variety of properties, including entire homes and apartments, castles, islands and even igloos. A considerable obstacle faced by the company was the apprehension of many house owners towards allowing strangers to temporarily live in their homes and vice versa. In response, Airbnb introduced several safety mechanisms to protect homeowners, such as license identification, rating and review systems, 24-hour customer service and a task force that caters to both lessors and lessees. These safety mechanisms have allowed Airbnb to appeal to mainstream homeowners, as innovation and adaptability ensure that Airbnb becomes safer and more desirable for homeowners. Continued innovation during a start-up’s growth stage is not only necessary internally but also externally. Competition from clone companies is a big risk for start-ups since the market for start-up technology is volatile and

highly competitive. Groundbreaking, first-mover innovators can easily be superseded by niche start-ups and innovators. For example, Uber was recently forced to leave the Chinese market as it was unable to compete with ‘Didi Chuxing’ and their ability to cater specifically to the needs of Chinese customers. Similarly, after its initial release, numerous clones of Airbnb have appeared, targeting both specific geographic regions like ‘Accoleo’ in Germany, or targeting specific markets like ‘Luxury Retreats’. In response, "THE ADAGE ‘ADAPT OR DIE’ BECOMES PARTICULARLY PERTINENT IN THIS ADOLESCENCE STAGE."

Airbnb has recently acquired several of its overseas and market-specific competitors in a bid to protect market share and gain the innovations of these copycat businesses. However, such a strategy is unsustainable in the longterm as the number of competitors inevitably increase and become more expensive. Maturity The initial idea for a start-up has been developed, company growth has stabilised and the start-up has now established itself within the industry – so what happens next? The mature start-up now faces two paths. It can either make itself attractive enough to be sold to a major industry player, or else attempt to establish itself as a major incumbent and transition away from a pure-play start-up. Larger companies often purchase start-ups for a wide variety of reasons, but the two core incentives are to

either expand into non-traditional markets, such as Facebook’s acquisition of WhatsApp in 2014, or to purchase the talent and unique resources offered by the start-up, which was the driver behind Facebook's 2014 acquisition of Oculus VR. Start-ups also have good reason to sell themselves to a large company. Firstly, the founders may recognise that the start-up’s business model may not be rigid enough to remain relevant in the long-term, and so requires the rigidity of a corporate hierarchy. Secondly, serial entrepreneurs may also wish to cash out of their hard work and invest in a new business idea. Thirdly, the founders may wish for their fledgling idea to blossom and become the industry standard. They may recognise that the market expertise and broader customer base of large companies is the best method of achieving this longterm impactful goals. The other option start-ups have is to grow organically into a corporate giant. As expected, this process is considerably more difficult, given the company requires increasingly larger rounds of funding as it grows in size. For example, Snapchat's recent IPO was driven by its exhaustion of all venture capital and cash flow financing facilities. Snapchat’s IPO was highly successful, generating 44% returns on its first day of trading and hence reflecting the underlying market excitement about start-up innovations. IPOs can also be attractive to entrepreneurs for a variety of other factors. IPOs provided Snapchat with an additional sense of credibility, and allowed Snapchat to attract better talent and board members to help steer the company over the long-term. Exit IPOs also act as an exit strategy for initial founders and initial investors

in the firm, especially venture capital and private equity. Ultimately, the maturity phase depends most explicitly on the entrepreneur’s own personal preferences, with each business providing a unique set of market and business circumstances in which to potentially launch an IPO. Your turn An examination of Uber, Airbnb and Snapchat illustrates how the greatest start-up companies and innovations were often created by everyday people who saw deficiencies in many mundane, daily activities and industries. Without risking everything and giving their ideas a go, we would not have any of the start-up companies that we have today, nor the innovative technologies and services that consumers are blessed with in today’s modern age. So why not give it a go? If you fail, be comforted in the knowledge that you are part of the vast majority, and there is no sense of shame in having put yourself out there and being adventurous. If you succeed, the possibilities are virtually limitless. The ball is in your court. n

"SERIAL ENTREPRENEURS MAY ALSO WISH TO CASH OUT OF THEIR HARD WORK AND INVEST IN A NEW BUSINESS IDEA."

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KENNY NGO

THE QUAKE IN BIG DATA

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Despite society’s many technological advancements, humans have always been vulnerable to the unpredictability of Mother Nature. The 2011 Tohoku Earthquake killed over 15,700 Japanese civilians, inflicted an estimated US$235 billion in economic damage and caused a tsunami that destabilised the Fukushima Nuclear Power Plant and almost created a nuclear catastrophe. Closer to home, the 7.9 magnitude earthquake in Papua New Guinea in January 2017 cost three lives and left locals with an abiding fear of the trembling ground. Both of these disasters share a common thread – governments and civilians were given little chance to evacuate. What if technology could help us predict such catastrophes and avoid widespread loss of life and property?

redicting earthquakes was once thought impossible, due to the myriad of parameters that needed to be considered and the loss of accuracy that resulted from excessive data noise. However, Terra Seismic, a promising New Jersey-based company, may be on the verge of transforming the global outlook on earthquake forecasting. Terra Seismic combines existing earthquake prediction data analytics, primarily collected through satellite imaging, with the use of Big Data analytical and visualisation techniques. By synthesising an unprecedented amount of data, Terra Seismic can help forecasters arrive at more accurate conclusions faster than ever before.

DATA DISCOVERY: PIONEERING FOR PREDICTIONS

Earthquake prediction has undoubtedly evolved greatly over the last few decades, moving from simple observations of ground-dwelling animals like snakes and birds to sophisticated data discovery techniques. These techniques involve using Big Data analytics to process and integrate large amounts of incomprehensible raw data into simpler and more interpretable sets and trends. By converting this structured data into geographical probability maps that indicate high-risk areas of earthquake activity, analysts can visualise the interpreted data more readily. For example, the association method is a data discovery tool that collects an extensive dataset of historical observations, consisting of all known major earthquakes in a particular region. This data is then analysed for statistically significant factors, allowing analysts to project the possibility of another event occurring in a similar region in the near-future. This association method essentially states that if an earthquake occurred within the last 100 years, it is likely to occur again in the next 50 years. This method proved itself during a January 2015 Vanuatu earthquake.

Information about an earthquake in nearby Fiji was combined with local geological data from the previous five days to establish a pattern of local activity. Analysts were able to note the increased likelihood of a subsequent earthquake, which played an important role in giving the Vanuatuan government enough time to prepare emergency response plans. Nevertheless, this method cannot fully predict the occurrence of earthquakes as no current model can account for the influence of chaotic real-world variables, such as surface temperature, that do not follow mathematical laws and hence cannot be modelled. Therefore, an ideal model would both account for outliers and accurately incorporate trends shown by previous earthquakes. Nonetheless, this Big Data process is still invaluable as a building block to inspire the next generation of predictive models, and to begin the process of saving lives.

TERRA SEISMIC: PRACTICE MAKES PERFECT

Launching themselves off this building block are companies like Terra Seismic. Terra Seismic has attempted to bring earthquake prediction into a new technological era, radically claiming that they can predict earthquakes with 90% accuracy. The overarching difference between the methods used by Terra Seismic and the association method is the introduction of ground-based sensors. The ground-breaking company can access real-time ground data by utilizing both satellite data and gas monitors placed along fault lines. This is important because abnormal releases of gas along fault lines are often triggered by a massive release of energy deep beneath the Earth’s crust, and hence act as a precursor

"Arguably, these predictive models are already accurate enough to effectively predict and warn governments of impending earthquakes."

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to an earthquake. By compiling multiple observations, including seismic activity, gas emissions and satellite images, Terra Seismic produces multidimensional raw data sets for analysis, often with tens or hundreds of potential factors. These datasets are then analysed through Apache web servers and Python algorithms â&#x20AC;&#x201C; a programming language widely used for general coding purposes â&#x20AC;&#x201C; to extrapolate the probability of the next event occurring

for analysts to test the effectiveness of their prediction models in forecasting earthquakes. With every correct prediction, analysts can pinpoint which parameters are determinative in forecasting probabilities and adjust future models accordingly for better accuracy. Exposure to more variables like location and the use of ground sensors along more fault lines will only increase the reliability and accuracy of these models. Arguably, these predictive models are already accurate enough to effectively predict and warn governments of impending earthquakes. Terra Seismic claims that they predicted both the April 2014 Inquique earthquake, which was an 8.1 magnitude earthquake off the coast of Chile, and a 7.1 magnitude quake off the Mexican coast just weeks later. More recently, Terra Seismic claims to have predicted the December 2016 Sumatra Island earthquake nine days in advance. At 6.5 magnitude on the Richter Scale, residents experienced violent shaking and widespread property damage, even to reinforced structures.

"Investing more into earthquake forecasting organisations like Terra Seismic could reduce both the human cost of earthquakes and the financial losses involved in rebuilding."

within a certain timeframe. These predictions require a consideration of a very large number of variables, including location rank, which is a numerical ordering of the region based on the historical frequency of earthquakes. Other variables considered include gas emission, ground temperature and nearby seismic activity. Although this analysis is a lengthy process, the more data used, the more sensitive the forecast. It is Big Data analysis that secures the precision, accuracy and ultimate success of Terra Seismicâ&#x20AC;&#x2122;s forecasts. Terra Seismic focuses its study on modelling activity along highly active fault lines such as the Nazca plate, which is responsible for creating the Andes mountain ranges in South America. Active fault lines such as the Nazca fault line provide a readily available location

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Due to their success, Terra Seismic has been able to draw clients ranging from governments to insurers. Governments seek to enable early evacuation and to prepare response plans for the aftermath, saving lives and millions of dollars in the process. Insurance companies are also interested in being able to forecast the probability of large insurance payouts stemming from earthquake damage. However, as public and private interest in earthquake detection grows, key market players find themselves at a crossroad in determining whether or not to invest in earthquake prediction technology.

THE DILEMMA: PREDICTION OR EVACUATION? A CASE STUDY OF INDIA

In considering potential investment in predictive earthquake technologies, governments must weigh its costs and benefits against the benefits of having better evacuation and recovery systems. Although gaining a better warning of potential earthquakes is a clear positive, these benefits can only be maximised

if governments invest in on-the-ground facilities and implement strong evacuation procedures, including the ability to temporarily relocate thousands of citizens. Predictive technologies must therefore supplement and not replace robust disaster recovery operations. This is an especially relevant consideration in developing nations like India, where evacuation procedures are cheaper and easier to implement than the investment required by Terra Seismic to develop country-specific predictive technologies. India is bound to the north by the Himalayas and hence exposed to frequent earthquakes in its poorest rural areas. In April 2015, a 7.8 magnitude earthquake devastated Nepal and India, killing almost 9,000 civilians, injuring around 20,000 and resulting in widespread property damage and homelessness. India’s government is constantly grappling with the need to develop the evacuation and recovery strategies necessary to protect the livelihoods of its poorest citizens. At the same time, India’s Big Data industry is growing

"With private sector interest, India may become an unexpected leader in developing earthquake prediction technologies." exponentially. There were 500 more analytics firms operating in the public sector in 2016 than there were in 2015. Indeed, India’s current Big Data market is estimated to increase by as much as $2.3 billion rupees by the end of 2018. India’s banking sector in particular is catching up to its international counterparts in the arena of Big Data research, making innovative progress in consumer segmentation, consumer profiling and the tracking of spending patterns. The projected growth of India’s Big Data market size is equivalent to approximately 10-25% of the estimated cost of rebuilding caused by the April 2014 Indian-Nepalese earthquake alone. It may therefore be sensible for countries such as India to shift investment from business uses of Big Data to earthquake prediction. Investing more into earthquake forecasting organisations like Terra Seismic could reduce both the human cost of earthquakes and the financial losses involved in rebuilding. India’s access to major satellites via its multibillion dollar space program means that India can easily gain direct access to satellite images of earthquake fault lines, removing a major implementation hurdle.

Even accounting for expenses for gas monitors and other equipment, India is highly capable of empowering Terra Seismic’s research. Not only could these expenditures benefit civilians and save countless lives, they could stimulate global interest in earthquake forecasting once successful predictions become increasingly prevalent. With private sector interest, India may become an unexpected leader in developing earthquake prediction technologies.

OUTLOOK

The future of disaster relief starts with just a few accurate predictions. Proof of the success of predictive technology will encourage global efforts towards all-inclusive global earthquake prediction, collaboration and informationsharing. As accuracy and consistency become increasingly within reach, governments are being offered a real opportunity to protect their citizens and minimise the economic costs associated with rebuilding. To prompt this progress, unity from the international community is needed to increase the availability of earthquake monitoring equipment and satellite imaging. Only when we as a society stop accepting deaths and loss as inevitable can we start looking for a solution and initiate change. n

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Our companies, dying younger By Harlan Ikin

In the face of disruptive technology and industry-wide revolutions, ASX companies are delisting at younger ages and companies now die out twice as fast as they did 40 years ago. At first glance, this suggests that Australian companies are not rising to the challenges of disruptive technology and failing to innovate and produce resilient, adaptable business models. However, it is not all doom and gloom – many companies are taking steps to achieve longevity and remain relevant in a commercial world defined by heightened uncertainty. But what are these companies doing, and how can they show the way forward for other companies?

n a world defined by disruption and innovation, Australians are living longer, safer lives than ever before. The Australian Institute of Health and Welfare recently found that between 2013–2015, life expectancy in Australia is 80.4 years for boys and 84.5 years for girls. When compared to life expectancies of just 47.2 and 50.8 years respectively in the late nineteenth century, it is apt for us to say that advances in medicine and technology are causing us to live much fuller lives than our ancestors. The same trend cannot be said of businesses. Advances in technology are not promoting company life expectancy, but are instead cutting it short like never before. Before we examine the causes of this trend, we must examine the reasons why companies die in the first place. How do companies die? Under a most basic approach to measuring longevity, there are two definitions of company death: the company ceases to exist or the company falls into liquidation. There are, however, two problems with this basic definition. Firstly, dead companies don’t advertise their death – scanning the ‘obituaries’ that list recently deregistered companies is both difficult and counterproductive. Secondly and more importantly, this approach often misclassifies family businesses. Family businesses often go into liquidation voluntarily for reasons completely unrelated to the performance of the company.

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Family Business Australia found that nearly 60% of family business owners do not intend to pass the business to their family members, mainly due to children choosing different career paths and other factors including divorce. With approximately 70% of Australian businesses being family businesses, this would mean that a significant number of voluntarily-closed businesses are being misclassified. Instead, a better proxy for the death of a company is the age of delisted companies when they were delisted as a publicly traded company from the ASX. Although this does exclude a few large privately-owned businesses, this proxy is not distorted by family businesses since they are generally not publicly listed. Ignoring name changes and other ‘technical’ delisting, there are four main explanations why companies delist. Firstly, delisting may occur if the equity capital failed to induce higher growth and profitability, or secondly, if the company has no more market opportunities left to invest into. Thirdly, companies may delist if bought out by a venture capital firm, which buys out distressed companies and takes them private in order to facilitate restructuring. Lastly, companies may delist after being taken

over by a larger competitor via a merger or acquisition. All four core reasons for delisting therefore indicate significant business declines with low growth potential and low profitability. How quickly do companies die? The hard facts speak for themselves. Excluding technical delistings (such as company name changes), the average lifespan of companies on the ASX between 1975-1984 was 36.9 years. Between 2005-2015, it was 15.2 years. This means, that in just 40 years, company lifespans have decreased nearly 60%. If this rate of decline does not slow down, by 2055 our largest companies will last only 6 years. A closer look of the statistics suggests an even more alarming situation. Between 1975-2015 the average age at delisting was 18.6 years, yet the median was only 11 years. This suggests that the results are being skewed by a few very old companies. For example, an average of 18.6 suggests that for every Westpac, a bank celebrating its 200th anniversary this year, there are 20 companies that delisted within 9 years of being floated. Such heavily skewed data may explain why 90% of the biggest companies delist within one generation, and why 45% of companies delist within 5 years. Why are companies delisting so young? To understand why Australian companies are dying younger and what companies can do to mitigate this, we need to understand whether this phenomenon is specific to Australia, or is in fact global. If this phenomenon is unique to Australia, it would likely occur due to changes in domestic regulation, such that we would expect corporate law reforms to increase the rate of delisting. However, The Centre for Corporate Law and Securities Regulation has found no significant evidence that corporate law reforms have caused companies to delist. In a sample of 2,397 companies, not a single delisting was

due directly to regulatory changes. At best, the authors established that about 1% of companies found the costs of listing to outweigh the benefits. In this case, although regulation may have formed part of the reason for delisting, caution should be taken before blaming regulation for company failure. In Australiaâ&#x20AC;&#x2122;s financial reporting context, the cost savings of

"IN JUST 40 YEARS, COMPANY LIFESPANS HAVE DECREASED NEARLY 60%." delisting are minimal. Furthermore, although US publicly listed companies can suspend otherwise mandatory SEC filings by deregistering, delisted Australian companies only avoid compliance with the listing rules and a few specific requirements of the Corporations Act, and cannot avoid the obligation to prepare and lodge financial reports by delisting. Instead, the decreasing age of delisting is a global phenomenon, with consulting firm BCG finding that US companies are delisting younger at a similar rate to Australia. Instead of domestic regulation, this global phenomenon can therefore be attributed to companies operating in an increasingly complex world that is more dynamic, interconnected and unpredictable than ever before. Macroeconomic and geopolitical instability create rapid changes in the economic environment, creating opportunities for companies to create and seize competitive advantage. Simultaneously, new technology continues to reduce the costs of doing business, and allows companies to compete across traditional boundaries. In the face of these threats, companies are struggling to adapt. Increased volatility combined with a greater number of competitors means that competitive advantages

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are eroding faster than ever before. To maintain advantage companies need to innovate, but the problem is that Australian firms aren’t innovating. The Australian Government’s Office of the Chief Economist December 2016 report into innovation found that “Australia is not an innovation leader but an innovation follower.” Corporate Australia in particular is struggling in a marketplace increasingly defined by disruption, with large Australian businesses of more than 250 employees ranking 29th out of 30 OECD countries for new-to-market innovation. Small to medium enterprises were not much better, ranking 23rd. The causes of Australian delisting are very simple: the business environment is changing, yet companies are not changing with it. As such, companies are being outcompeted by both domestic and international competitors, and are collapsing faster than ever before.

"TO MAINTAIN ADVANTAGE COMPANIES NEED TO INNOVATE, BUT THE PROBLEM IS THAT AUSTRALIAN FIRMS AREN’T INNOVATING."

What does this mean? Faced with this trend, Australian business leaders have a choice. They can ignore the trend towards increased volatility and focus on their current business operations. Or, they can re-evaluate their business strategy to align with trends in the business environment. Unfortunately for business leaders, there is only one long-term option: adapt. Nearly 45% of listed companies currently standing in the warm sunlight of profitability will delist within 5 years – these are the companies which do not adapt. First there will be a cool breeze to herald autumn, as shareholders divest shares and invest in new, promising alternatives, causing the share price to decline and reducing the capacity to raise finance and pursue growth projects. Initially, loyal customers may hesitate to change due to inertia or switching costs. But just as autumn inevitably passes into winter, the products and services of companies that fail to innovate will eventually become unmistakably inferior. Falling operating revenue will thereby force the company to lay off employees and delist, or alternatively

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make itself vulnerable to being acquired by a stronger competitor. Responding to change The alternative is to adapt. Wise business leaders should instead reappraise the ever-changing environment. On face value, a volatile, unpredictable world may suggest that companies need to be agile and respond faster than ever. However, firms that focus on improving current product and operational efficiency at the expense of investing in disruptive technologies will inevitably fall behind. This is because business model innovation, not product innovation, is where sustained long-term competitive advantage lies. This tendency within Australian businesses to pursue efficiency innovation rather than disruptive innovation may explain why Australian companies ranks second-last out of all OECD countries for new-to-market innovation, despite spending 2.1% of gross expenditure on R&D, above the OECD average of 2%. Product innovation is temporary; business model innovation is transformative. Improving call centre efficiency in taxi services is nice. Creating a ridesharing platform is disruptive. Innovators and business leaders instead need to respond to rapid change by adopting a long term view. Like the changing of the seasons, business trends are observable and hence can be responded to as they emerge. Business leaders must appreciate that a company’s advantage will always become obsolete in the long-term, but that companies can control what innovation they produce, and who produces the next market-changing product or service. Incumbent firms have the advantages of size and resources, and hence have the capacity to experiment more with and invest more in alternatively business models. Theoretically, incumbent firms should therefore be the main drivers of innovation, as iterative experimentation holds the key to disruption.

"THE CAUSES OF AUSTRALIAN DELISTING ARE VERY SIMPLE: THE BUSINESS ENVIRONMENT IS CHANGING, YET COMPANIES ARE NOT CHANGING WITH IT."

"PRODUCT INNOVATION IS TEMPORARY; BUSINESS MODEL INNOVATION IS TRANSFORMATIVE. IMPROVING CALL CENTRE EFFICIENCY IN TAXI SERVICES IS NICE. CREATING A RIDE-SHARING PLATFORM IS DISRUPTIVE." Rapid testing of new and better business models is the key to sustaining competitiveness. Incumbents should view their businesses as complex adaptive systems, and adapt as a biological organism would. But what does this look like in practice? The secrets to long life In their February 2016 Harvard Business Review journal article ‘The Biology of Corporate Survival’, Martin Reeves, Simon Levin and Daichi Ueda list several key factors that can help businesses thrive in the long-term. Firstly, business leaders must pursue diversity in their people, practices and activities. Like in an organism, diversity may come at the expense of short-term efficiency. But diversity almost always generates long-term returns by increasing the breadth of ideas and hence increasing the likelihood of generating transformative ideas. Such diversity must not be tokenistic or superficial, but must involve a wide range of personality types, educational backgrounds and working styles. As James Surowiecki discusses in his book The Wisdom of Crowds, groups of employees work optimally when opinions are diverse and independent. A bank that only hires finance and accounting majors is not smart, it’s fragile. Secondly, businesses must preserve redundancy and modularity in their businesses. Businesses often deride redundancy as the antithesis of efficiency, but this is a short-termist viewpoint. Businesses without redundancies are efficient, but are extremely exposed to volatility. In today’s dynamic environments where adverse shocks are frequent, the cost of eliminating redundancy is high. For example, in the 1990s phone telecommunications company Ericsson adopted a single source procurement strategy, with each key phone component sourced from one factory only. In 2000 Ericsson’s sole microchip factory was engulfed by fire, leaving Ericsson without a backup supplier and resulting in a $1.7 billion loss and months of lost production. By contrast, systems with redundancy allow multiple components to play overlapping roles. Hence, if one component fails, other components can adapt and minimise any disruption caused. Business leaders should begin preserving redundancy

and modularity by identifying the suppliers and innovation partners which they depend on most, and determine the feasibility of adding redundancy to manage risk. Managers must be aware that the benefits of risk mitigation are subtle and slow, whereas efficiency gains are immediate, and guard against this. Managers also need to improve their workplace culture. As a collection of individuals, a company represents the classic collective action problem – individuals lack the incentives to act in ways that benefit the company unless they benefit themselves. No matter how diverse the employees are or how good their analysis is, innovation won’t occur if management stifles critical thinking and discussion. Management needs to create an atmosphere of trust and reciprocity that allows the correct decisions to be made. Before the Columbia space shuttle exploded on February 1 2003, NASA’s Mission Management Team had met on January 24 to discuss a report from their engineering team that very tentatively stated that the space shuttle would not explode, based on several uncertain, and in hindsight questionable, assumptions. However, although discussion was expected, it did not "MANAGERS MUST BE AWARE THAT THE BENEFITS OF RISK MITIGATION ARE SUBTLE AND SLOW, WHEREAS EFFICIENCY GAINS ARE IMMEDIATE, AND GUARD AGAINST THIS." happen: the report was summarised but the uncertainty was not discussed, reviewed or questioned by any members present. The Columbia later exploded, killing all on board. Company leaders need to ensure their culture doesn’t lead to a similar fate. Like the passing of summer to winter, companies cannot escape change in their environment. The challenge for companies today is to adapt to a new environment and avoid an early death. n

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THE MARRIAGE BETWEEN ARTIFICIAL INTELLIGENCE AND FINANCE by Chloe William us … as an to look back on g in go e ar s AI tion.” “One day the l set for extinc al … st du in ng upright ape livi Alex Garland’s 2015 thriller Ex Machina reflects the age-old anxiety that the development of Artificial Intelligence (commonly abbreviated as AI) will eventually leave us behind. Although such a sentiment may seem fatalistic, rapid developments in deep learning and automation have led many industries to embrace AI. In particular, the finance community has set its eyes on utilising AI to drive new innovation in market trading and banking. This rush towards AI begs the question: what does AI bring to the table, and what does its adoption mean for the future of the finance industry?

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he hype around Artificial Intelligence is nothing new. Yet again, 2017 is being proclaimed as the year that AI revolutionises the business environment. Although such a dramatic singular turning point is unlikely, the growth of proliferated data platforms and increased access to powerful computing systems such as graphic processing units make it undeniable that society is approaching a turning point. The integration of AI into non-traditional projects, including Google’s self-driving cars, Facebook’s chatbots and IBM’s Watson, clearly hints at a more artificially-driven future in all aspects of our lives. Although it remains unlikely that Alex Garland’s vision of human hedge fund managers being driven to extinction will come to pass, key questions must be asked about the role of AI in finance. Managers usually ask how they can integrate AI into firm processes and products. However, the more important question to ask is: why should they be integrating AI at all?

SO WHAT IS AI? AI aims to create machines and computer systems that process and respond to information in ways that closely resemble human decision making. In particular, recent innovations in AI have helped computers develop strategic reasoning and logic, with modern programs able to beat world champions at chess, defeat contestants in US game show Jeopardy!, and operate drones from halfway around the world. To achieve these feats, AI encompasses a multitude of related technologies like machine learning, expert systems and natural language processing. Although the two are often used interchangeably, there is a small but significant distinction between AI and cognitive computing. Cognitive computing uses self-learning systems

that involve data analytics and pattern recognition to assist in the decision-making process. AI builds on this foundation by essentially removing the human element and making the decision autonomously. In AI programs, human experience and judgment are rendered less important – at least on the surface.

COST CUTTING MADE SIMPLE Recently, early movers have seen the seeds of their investments in AI come to fruition. JPMorgan’s adoption of COIN, a Contract Intelligence system, has transformed how the firm appraises its contract documentation. What used to take 360,000 human hours per year to complete now takes mere seconds using machine learning. Likewise, Google saw a 15% improvement in power usage efficiency after implementing their AI unit ‘DeepMind’ to manage power-usage in data centers. This improvement translates to hundreds of millions in dollar savings for the firm over the coming years, while also reducing wasteful energy production and benefiting the environment.

DEEP LEARNING: WHY IT’S DIFFERENT THIS TIME Despite all the flashy applications of AI in robotics, the most promising emerging area of AI is known as ‘deep learning’. According to Matt Kiser, Product Manager at Algorithmia, a platform that allows users to develop and share their own algorithms, deep learning allows developers to “feed massive amounts of data into deep neural nets, sit back, and let the algorithms learn to recognise various patterns contained within.” This essentially means that a programmer can input the necessary data, and then let the program recognise trends on its own.

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The most promising application of deep learning technology is expected to be in regulation and compliance. Although perhaps not the most exciting application of AI, the market opportunity is extremely lucrative, with professional service firms devoting $270 billion annually to compliance. IBM’s Watson, a ‘question-answering’ program which regularly makes headlines for breaking new grounds in AI, recently merged with Promontory Financial Group to form the Watson Financial Services Unit. Promontory traditionally offered consultancy services and over the years had amassed a substantial collection of compliance and regulatory data. By merging with Promontory, IBM hopes that this compliance data will augment the Watson program, and allow Watson to assist banks to adapt to a rapidly evolving regulatory environment.

MONEY, MONEY, MONEY A more interesting and contentious debate focuses on the application of AI to Wall Street. Training large neural networks to recognise and take advantage of currently undiscovered patterns in stock market data is clearly of enormous interest to investors, hedge funds and trading firms, allowing traders to extract greater profits from new trading strategies. Both AI and deep learning require significant amounts of data to enable effective learning, and Wall Street traders and banks produce enormous amounts of data every day, including market prices, news alerts, macroeconomic movements, accounting statements and even social media activity. Therefore, the high-volume nature of information flows make Wall Street the perfect home for AI programs. Financial markets and trading is already a field in which algorithms play a key role. Statistical algorithms are crucial in

“The promise of AI lies in its ability to compute large and disparate mines of unstructured natural language data and draw inferences about a firm’s financial state that human traders are simply unable to identify.”

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helping investors identify and exploit the smallest temporary market mispricings, a strategy commonly known as ‘statistical arbitrage’. AI can extend this statistical trading by providing the opportunity to mine market data and conduct financial decision-making, including trading securities and conducting due diligence, without the traditional restrictions of a rulesbased model. “Financial trading is a really messy problem,” according to Adam Chalmers, a programmer based in Austin, Texas. Adam is fiercely optimistic about the impact AI will have on how business is conducted in the financial world. “It is hard to generalise trends from messy financial data,” he says. “Yet generalising trends from messy data is exactly what AI is good for.” As Adam argues, the marriage between AI and finance would be a perfect union because the goal of hedge funds is so clear and specific: to maximise returns. This objective provides a structured backdrop for performance analysis that is often missing from other applications of AI (such as trying to determine emotional sentiment in tweets). Adam reasons that “given how incredibly competitive the world of [quantitative trading] is, it should be worth the research and investment.” Industry leaders appear to agree. Quantenstein is a wealth management platform based in Germany which employs deep learning techniques to create client portfolios. After establishing a set of rules and parameters such as the investment universe and portfolio size, the firm has been able to interact vast amounts of financial data with deep learning technology to enhance long-term investment decisionmaking. For trading firms, the promise of AI lies in its ability to compute large and disparate mines of unstructured natural language data and draw inferences about a firm’s financial state that human traders are simply unable to identify. Aidyia, a Hong Kong-based trading firm, builds its trading strategy around an AI codebase and employs an eclectic

mix of seasoned AI researchers and financial market experts. Ideally, Aidyia’s AI codebase provides a competitive advantage over automated quantitative algorithms through its ability to evolve its algorithms in response to real-time changes in data. This promises that, unlike traditional algo-trading, Aidyia’s algorithms will not become obsolete with time. The firm hopes that, “without the human limitations of memory, emotion, bias and mood,” their approach will more consistently and objectively capitalise upon market opportunities.

HOW REVOLUTIONARY IS AI REALLY? At present it remains unclear exactly how useful AI can be to firms competing in the financial landscape. Deep learning is undoubtedly helpful in extracting relationships buried far within datasets. At this point in time, however, AI arguably remains too immature to cope with the uncertainty and noise naturally embedded within financial data to make substantial contributions to profitability. Despite recent advancements, it remains easier for AI to determine and apply rules in a structured dataset than in the relative chaos of financial markets. There is also concern that some of the more celebrated applications of AI are neither ground-breaking nor revolutionary, but rather simply a rebranding of decades-old quantitative algorithms as ‘machine learning’. Adam sees the validity in these arguments but he ultimately disagrees with their verdict. “It’s definitely just more statistical learning,” he notes, “but also that’s literally what finance is about. It’s a statistical game, isn’t it?”

“The marriage between AI and finance would be a perfect union because the goal of hedge funds is so clear and specific: to maximise returns.” WHO TO BLAME WHEN THE GOING GETS TOUGH A major issue that AI purists are forced to reckon with surrounds the prickly issue of responsibility: who bears the blame when the machines fail? In an industry where fund managers can be quickly turned upon by once-loyal

investors, how can fund managers justify their investment strategy to investors when strategies are extracted using deep learning techniques and decision-making processes that they themselves do not understand? By definition the main benefit of deep learning is gained once the AI has taken time to understand the data and recognise the optimal trading strategy. According to Ewan Kirk, CEO of Cantab Capital Partners, AI-developed strategies are therefore likely to “go through a lot of bad trades” and incur losses over significant periods of time before becoming profitable. Knight Capital Group’s meltdown in 2012 illustrated the danger of believing that machines can do all the work, with little room left for basic common sense. “There’s definitely a tension there,” agrees Adam, “and for that reason, with regulatory concerns and accountability … you might want to use a more transparent system.” AI, he explains, can be likened to the old story of The Monkey’s Paw: a man is bestowed with a mummified monkey’s paw that has been imbued with the power of granting its owner three wishes. The catch is that the wishes are granted in a cursed way. With AI, “you have to carefully formalise your goals,” Adam warns, “otherwise it will find a way of meeting them that you really didn’t anticipate.”

IF THE SOLUTION WERE THIS EASY, WE’D ALL BE MILLIONAIRES In finance it often seems like we are continuously searching for the Holy Grail, an exciting technology or tool that provides a miracle answer to all of our investment decisions. AI, of course, is not going to be this answer. Even so, developments in techniques such as deep learning and the expansion of available data and smarter computing systems have made the exploration of AI’s role in finance far more important. For now, students shouldn’t rely on AI to eliminate the need for financial knowledge and understanding. Revolutions take time, and there are still many questions that AI needs to answer before it completely takes over the financial world and replaces the need for human-backed trading. No matter the immediate outcome, it will be exciting to see where this ground-breaking technology takes the industry over the coming years. n

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Is a Cashless Society the New Reality? By Toptal Financial Editor Melissa Lin, revised by Polina Nesterova If you opened your wallet right now, how much cash would you find? Cash, notes and coins have formed the bedrock of the economy ever since the Roman Empire, facilitating trades, debts and the payment of wages. However, over the past 20 years technological developments such as online bank accounts and credit cards have dramatically reduced the need for individuals to hold physical cash. As consumers embrace digital currency and cryptocurrencies in place of physical currency, will society transition towards an economy that relies on digital currency but still utilises physical currency, or are we seeing the beginnings of a completely cashless society?

Critical Thinking – Defined and in Decline rom barter to cash to cheques to online banking, money is an evolving technology that has been part of human history for thousands of years. While cash is expected to remain a significant payment instrument in the near future, factors such as contactless pay systems, increasing mobile penetration, and high costs of cash (ATM fees for individuals, vault storage costs for businesses, currency printing for governments) are prompting society to reconsider its ubiquity. Migrating to a cashless economy requires the consideration of both financial and social impacts. Consequently, a country’s specific technological, financial, and social situations will inform its specific benefits, drawbacks, and approach to such a transition. A cashless society has its pros and cons, made apparent by the readiness of India and Sweden to adapt a cashless approach to operations.

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What has prompted the shift? Services based on immediate payments are more efficient and hence are expected to accelerate the move to digital payments. Among established alternatives to cash, cards – debit cards in particular – have been the fastest growing payment instrument since 2010. Meanwhile, cheque usage has declined consistently for the past thirteen years. A cashless society increases the scope for monetary policy – governments gain the ability to stimulate economic growth during financial downturns, where the inability of consumers to withdraw money from the financial system and store it in physical cash provides governments and central banks with greater control. The greater amount of cash stored in the country’s financial institutions, the greater the ability of governments to implement fiscal policy changes, such as negative interest rates, much more efficiently. Furthermore, less cash in circulation reduces tax evasion. Digital money

services bring increased transparency to commercial transactions, providing governments with enhanced ability to track and analyse a company’s financial activities and tax businesses accordingly. Similarly, a cashless approach assists in reducing black market crime, since the anonymity and untraceability of paper currency facilitates corruption. The size of the black market, or shadow economy, is substantial. The US black market is estimated to be valued around 8% of GDP, whilst in Europe, where taxes are higher and regulation more onerous, estimates of the size of the underground economy are considerably larger still. Nations can further benefit from the shift to cashless transactions by saving on the costs of cash – ATM fees for individuals and cash storage and transportation costs for businesses. Proponents claim that cashless transactions and the elimination of cash costs can be advantageous for poor individuals and small businesses, who disproportionately bear the costs of cash.

For individuals, cash imposes a regressive tax and impacts those without bank accounts the most. Unbanked individuals pay four times more in fees to access their money than those with bank accounts, and are at five times higher risk of paying cash access fees on payroll and EBT cards. For businesses, paper currency must be stored, guarded, and accounted for, creating a cost that can be avoided with a cashless approach to operations. Lastly, a cashless society could accelerate the path to digitisation, pushing those who might otherwise be reluctant – or previously had no need to digitalise – to modernise. Financial services providers would also benefit from a shift from traditional to

digital accounts, potentially saving $400 billion annually in servicing fees. What has slowed the shift? Despite adoption of digital payment methods, global cash use remains high, accounting for 85% of all consumer transactions globally. Cash’s perseverance as a trading currency is mainly because it provides anonymity and universality to the payer. In a cashless society where all money, payments, and money services are digitised, there are major concerns around ‘big brother’ surveillance activities by the government and organisations seeking to profit from the traceable data. Moreover, a cashless approach may bring about

increased risks to personal security. The risks we already experience when we lose credit cards or phones would only be exacerbated, since becoming a victim of digital hackers can lead to denied payments, identity theft, account takeover, fraudulent transactions and data breaches. Additionally, a cashless society may be a less financially inclusive. In developing countries, 2.5 billion people do not have access to traditional financial services. Traditional banking infrastructure struggles to serve low-income customers, particularly in rural areas. The same is true of the developed world: in the US and Western Europe, nearly 70 million and 100 million are unbanked, respectively. A www.insideenterprise.org | 29

"A cashless society could accelerate the path to digitisation, pushing those who might otherwise be reluctant – or previously had no need to digitalise – to modernise" method of combatting these effects is the promotion of mobile connectivity. According to research published by GSMA, mobile phones and mobile banking have been powerful tools for bringing access to payments, transfers, credit, and savings to unbanked people. Which countries are best positioned to go cashless? The Harvard Business Review considers the aggregate cost of cash as the factor that identifies the countries with the most to gain from evolving into a cashless society change. ATM maintenance costs borne by banking institutions are disproportionately high in many parts of the developing world, such as sub-Saharan Africa and Latin America, as well as in geographically large, sparsely populated countries, such as Canada, Russia, and Australia. The absolute cost of cash to consumers is also high in some of the world’s most populous countries, including Indonesia, Nigeria, Bangladesh, India, China, and the United States. However, costs are lower in several

Scandinavian countries with relatively entrenched mobile payments systems, such as Sweden, Finland, and Denmark, as well as countries with rapidly evolving mobile payment systems, like South Korea and Kenya. Furthermore, the loss in tax revenue, which is a cost to government, tends to be higher in emerging markets, where shadow economies are generally larger. In India, for example, the tax gap could be as large as two-thirds of overall taxes owed. The larger the tax gap, the more the country has to gain from a migration to a cashless economy. The second major consideration in determining a country’s readiness is its level of digital advancement and infrastructure. Developing countries in Asia and Latin America are leading in momentum and also benefit from ongoing investment, remaining attractive destinations for startups, private equity and venture capital. Based upon these factors, countries including the US, Netherlands, Japan, Germany, France, Belgium, Spain, Czech Republic, China, and Brazil have the greatest potential for unlocking value by

"Cash’s perseverance as a trading currency is mainly because it provides anonymity and universality to the payer"

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policy and innovation-led migration to a cashless society. Spotlight on India’s demonetisation campaign While historically India is known to rely on cash, the adoption of a cashless approach in India has the potential to encourage financial inclusion, remedy corruption and counter the relatively high costs of cash. In November 2016, India’s Prime Minister Narendra Modi made a surprise public address on live television announcing that after 50 days, all 500 ($7.50) and 1,000 ($15) rupee notes, representing 86% of the currency in circulation, would cease to be legal tender. Citizens were permitted to exchange 500 and 1,000 rupee notes for higher denominations, but the government prohibited individuals from exchanging more than 4,000 rupees ($60) at a time. Prior to the announcement, over 95% of India’s transactions were cash, 90% of vendors could not accept electronic payment, and nearly half of the population did not have bank accounts. Modi’s ostensible motivation was to

"It is clear that there is no ‘one size fits all’ blanket solution for such a major shift"

reduce corruption, believing that these high denomination notes were used to finance terrorism, fund illegal drug sales, fuel the black market, drive counterfeiting, and pay bribes. Additionally since the announcement, the claimed objective of the exercise has transitioned from rooting out black money to modernising the Indian economy. Spotlight on Sweden Unlike India, the lower costs of cash and advanced digital infrastructure in Sweden largely dictated the transition to a cashless society. The Swedes are notorious for their embrace of technology and cashless transactions – buses and the Stockholm metro do not accept cash, retailers are legally entitled to refuse coins and notes, street vendors and even churches increasingly prefer electronic payment. Often opting to

pay digitally, Swedes have low demand for cash – as a result, around 900 of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits. While the move to a cashless society in Sweden has embraced technological change, it has also led to some critical issues, including an exponential rise in the number of electronic fraud cases and soaring debt burdens driven by the ease of electronic payment and negative interest rates. Swedish pensioners have not embraced the transition as well as the rest of the society, with 50% preferring to use cash for payments. A cashless society is no longer just a figment of the imagination. While cash still reigns globally on aggregate, progress towards ‘cashlessness’ is particularly pronounced in specific countries. It is clear that there is no ‘one size fits all’ blanket

solution for such a major shift. Because the migration involves technological, financial, and social considerations, we can’t expect each country to adopt the same approach, as economies will select an approach according to their unique positioning and capabilities. What we can expect, however, is that money will still serve as a unit of account and a store of value over the near-term, but no longer remain viable as a physical medium of exchange over the long-term. Article reproduced and edited with permission from Melissa Lin, Finance Editor at Toptal. Toptal is a leading network of top freelance professionals, including software developers, designers and finance experts. To find out more about Toptal, visit their website at https://www.toptal.com/. n

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Cherita Zhu

Learning to Learn Technology has an undeniable influence on our daily lives, especially in the area of education. The increasing digitalisation of information and education facilitates greater access to libraries of information, forges deeper connections with others, and allows for innovations in online learning such as Massive Online Open Courses (MOOCs). Yet bringing technology into education is a double-edged sword. The rise of the digital era has led to decreased attention spans, less reading for pleasure, and a default tendency to search the internet for answers rather than thinking critically. If creativity, innovation and collaboration are the hallmarks of tomorrow’s workforce, how can the education system, and ironically technology itself, reverse this trend and encourage the development of critical thinking skills?

Critical Thinking – Defined and in Decline ritical thinking is the rational and reflective process of gathering, analysing, and evaluating information – such as personal experiences, one’s own strengths and weaknesses, and the perspectives of others – to assess the validity, causes and impacts of different courses of action and to make the best decision for a possible problem scenario. People have been problem solving and making decisions since the dawn of time. Over 2500 years ago, Socrates first introduced critical thinking as a structure analytical framework with his pedagogical Socratic method. Socrates recognised that ideas depend on the assumptions from which they emerge. His method emphasises an evaluation of these underlying assumptions before accepting any idea as worthy of belief. Such a fundamental approach is arguably being lost in the digital era. A 2016 study conducted by UCLA found a negative correlation between advances in technology and an individual’s critical evaluation skills. This in turn produces the self-conscious tendency to avoid forming unique ideas. These studies also show that millennials in particular choose to unquestioningly share

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mainstream ideas and accept the status quo at face value rather than depend on their own originality. Why Critical Thinking is Critical? Although critical thinking skills within the broader population are in decline, they have never been in more demand by employers. The ability to analyse data, assess business ideas, adapt to the perspectives of others and become a life-long learner have become valuable traits in the workplace. This is especially true in the modern, digital, services-based economy, with the World Economic Forum arguing that “in many industries and countries, the most indemand occupations or specialities did not exist 10 years ago.” ALTHOUGH CRITICAL THINKING SKILLS WITHIN THE BROADER POPULATION ARE IN DECLINE, THEY HAVE NEVER BEEN IN MORE DEMAND BY EMPLOYERS The digitisation of the employment landscape promises the gradual automation of repetitive and menial tasks, especially in professional jobs such as junior accountants and medical professionals. In the future,

professionals will therefore need to equip themselves with higher-level thinking in forming and assessing strategies within dynamic business scenarios – skills which cannot be replicated by automation. The Foundation of Young Australians’ recent report The New Basics highlights that job advertisements asking for enterprising skills like critical thinking offer significantly higher pay, and demand is almost on-par with role-specific technical skills. Demand for critical thinking has grown 158% in the three years to 2015, just behind digital literacy at 212% over the same period. Not only is critical thinking in high demand, but it is considered as the foundation of other sought-after skill-sets. Notably, strong critical thinking skills enhance complex problem-solving abilities, boost creativity, indicate flexibility and adaptability, and often go hand-in-hand with high-level communication skills. Moreover, critical thinking improves people management and HR skills. As managers gains a stronger understanding of an entire organisation, they are better placed to critique organisational structure and employee performance, making for better use of business networks.

The role of teachers in Critical Thinking So what is the role of educators in reconciling the glut of critical thinking skills? As technology makes it easier to access information online, it is the modern role of educators to teach students how to think, rather than simply what to think. Educators have the opportunity to examine how methods and curriculum reflect competencies in critical thinking skills, and to develop courses and programs that provide practical experiences in researching, analysing and critiquing information. Tertiary institutions have taken notable steps in promoting critical thinking skills, including changes in university curriculum. The University of Technology Sydney has recently introduced a Bachelor of Creative Intelligence and Innovation, which includes an entrepreneurial component that involves innovative projects, collaborative learning, and real-case studies. Californian educational start-up Minerva Schools has also challenged the normative format of tertiary study with their unique curriculum. Minerva’s students undertake an initial NOT ONLY IS CRITICAL THINKING IN HIGH DEMAND, BUT IT IS CONSIDERED AS THE FOUNDATION OF OTHER SOUGHT-AFTER SKILL-SETS formative year focused on critical thinking, creativity and communication, followed by four years of international travel where students gain real-world life and work experience applying their recently-learned critical thinking skills. Institutions such as The University of Sydney Business School do not just hope to create critically-thinking graduates, but rather actively push students to become strong critical thinkers during their study.

Mandatory introductory and capstone courses encourage students to develop the necessary skill-sets, tool-sets and mind-sets through both analytical coursework and high-impact assessments. IT IS THE MODERN ROLE OF EDUCATORS TO TEACH STUDENTS HOW TO THINK, RATHER THAN SIMPLY WHAT TO THINK The University of Sydney’s Masters of Commerce program in particular helps students move beyond passive reception of knowledge towards active inquiry, through real-life case study assessments and hands-on research projects. By graduation, students have already been exposed to guided inquiry, case studies, debates, company challenges, design quests, industry placements, entrepreneurial ventures and other forms of problem or projectbased learning. These types of skills-based degrees may be more difficult for students to initially master, but are certainly more exciting, rewarding and relevant to the modern workplace. Online educational technologies: complement or substitute? Online educational technologies such as Massive Open Online Courses (MOOCs) have become increasingly important and popular in teaching critical thinking skills. MOOCs allow students to learn course content remotely whilst gaining a full interactive experience with course material. This technology dramatically increases the accessibility of tertiary education, especially in remote areas and less developed economies. Coursera, for example, takes “the best courses from the best instructors at the best universities”, including Stanford

and Princeton, and allows educators to deliver an online university-course experience that reaches millions of students. MOOCs are expected to revolutionise education, shifting it away from a physical classroom-based setting into a virtual, easily accessible setting, allowing students in rural China to receive the same education as students in metropolitan America. MOOCs and the rise of the digital classroom will also provide students with a far more interactive and project-based education, providing the flexibility to learn skills and knowledge online ranging from coding to chemistry. In fact, some MOOC providers have even enabled ordinary homeusers and those in developing countries MOOCS ARE EXPECTED TO REVOLUTIONISE EDUCATION, SHIFTING IT AWAY FROM A PHYSICAL CLASSROOM-BASED SETTING INTO A VIRTUAL, EASILY ACCESSIBLE SETTING to gain online certified qualifications. Specifically, Udemy offers an online userpowered platform to “own your future by learning new skills online” ranging from coding to public speaking to coaching lessons by tennis great Andre Agassi. With breakthroughs in technology, automation and machine-learning threatening the existence of low-skilled employment, critical thinking is becoming rapidly more important as a dynamic skillset. Significant challenges in the education system and in the broader workplace must be overcome by updating curriculum and educational technologies to encourage individuals to both develop their critical thinking skills, and to entrench the application of critical thinking skills in workplace situations. n www.insideenterprise.org | 33

Mark Jeyaraj

Consulting on the Cusp: Disruption in a New Era In recent years, the consulting industry has experienced several waves of change, including shifts from a generalist to a functional focus, from local to global structures, and from tightly structured teams to interconnected webs of remote experts. In the face of such broad-based change, consulting firms who chose not to hedge their options stand the risk of losing out to potential disruption. From a company perspective, this means further developing value-add capabilities, including data analytics, digital and technology arms. From a student perspective, this means that students with the capability to deliver technical expertise, including those in STEM degrees, are valued by employers more than ever before. In order to understand how students can use their strengths to find the right firm and career path, we just first examine just where exactly the consulting industry is headed.

Why firms hire consultants client firm’s motivation for hiring an external consultant is always two-fold – to transfer knowledge and to legitimise internal activities. In the case of the former, consultants bring a level of expertise to solve a specific problem that cannot be solved in-house. In the case of the latter, the consultant presents an unbiased perspective, and hence provides legitimacy to difficult strategic decisions made in combination with management, such as company restructuring. Client firms rely on external strategy consultants to provide multiple capabilities that in-house management simply cannot provide. Firstly, the consultant’s domain expertise and their ability to synthesise their previous experiences in other firms is invaluable in helping management better understand the wider strategic environment and form a more cohesive strategic direction. Secondly, external strategy consultants create credible issue-response measures and contingency-planning solutions and can quantitatively structure their strategic decisions. Consultants can take a bird's-eye long-term view that operational managers often cannot replicate, and hence can effectively provide comprehensive bestpractice recommendations. Lastly, external consultants can help management identify

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and justify controversial or difficult restructuring or strategic decisions more easily due to their role as independent ‘experts’. What’s happening in the market As sophisticated, non-traditional competitors enter the market, strategy consulting firms are being pushed away from their traditional role as a strategic advisors. In fact, only 30% of a consultant’s time is spent doing classic strategy work, down from 70% some 30 years ago. Until recently, the fundamental business model of management consulting firms has proven immune to disruption, due primarily to two main factors – opacity and agility. Like many other professional services, consulting services seem to occur within a black box, where recommendations are formed without any indication of the consulting process. Furthermore, the consultant provides specialised knowledge and capability that they themselves lack, making it very difficult for firms to evaluate the consultant’s ability and judge performance. Instead, price is often used as a proxy for consultant quality. In terms of agility, the ability for consultants to move smoothly from one idea to the next with minimal disruptions to resource allocation allows consulting firms to remain flexible in

the face of industry changes. However, opacity, agility and the historical stability of the consulting industry has all come under fire in a decentralised, modern-day consultancy landscape. The rapid democratisation of information has allowed new players to enter the market and for client firms to establish their own internal strategy groups. Cost pressures have prompted clients to abandon the assumption that price is a proxy for quality, whilst growing sophistication has lead clients to disaggregate consulting services worldwide. As knowledge is increasingly democratised, opacity faces and agility is no longer unique to consulting services. Traditional firms have therefore moved from an integrated solution shop to modular providers, a term that refers to the separation of specialisations or the supply of just one specific link in the value chain. A natural shift borne of this change is the move from charging clients by the number of hours worked to value-based pricing. How firms pivot Modularisation has been used by McKinsey Solutions – a division of McKinsey that provides enterprise software and analytical solutions. On face value, it seems illogical that the world’s most successful strategy consulting firm, whose primary value

is bespoke diagnoses and advice, would diverge from its core strengths and provide enterprise software and data. This is true especially as to sell itself out of the market by providing long-term solutions that prevent customer retention. But that is not necessarily the case. McKinsey Solutions enables McKinsey to engage in shorter projects that provide clear return on investment, and protects McKinsey’s revenue and market share during economic downturns. Proprietary analytics help McKinsey remain relevant in the minds of potential and existing clients, helping the firm line up future consulting contracts. McKinsey’s success in branching out into digital has resulted in further diversification, including Periscope for marketing and sales optimisation, McKinsey Digital for digital capabilities, New Ventures to foster innovation and Horizon360 for technology management. Modularisation has also fostered data and analytics-enabled consulting. Competitors including Oliver Wyman have moved into this digital innovation space, with the introduction of Oliver Wyman Labs in 2012 and the acquisition of digital companies such as LShift. Rather than human intervention and customisation, these digital arms package ideas, processes, frameworks, analytics and other intellectual

property for optimal delivery through software and technology. This software allows manufacturers to purchase access to product APIs and utilise real-time pricing through a customised 24/7 dynamic pricing engine. Furthermore, such technology replaces the traditional means of extracting data from market reports – data which is limited, out-of-date, subject to bias and often itself secondary data. THESE DIGITAL ARMS PACKAGE IDEAS, PROCESSES, FRAMEWORKS, ANALYTICS AND OTHER INTELLECTUAL PROPERTY FOR OPTIMAL DELIVERY THROUGH SOFTWARE AND TECHNOLOGY. Change is occurring throughout the industry. Firms like PwC and Accenture are getting their hands dirty in the advertising, creative and digital space. PwC in December 2016 hired media, brand and marketing expert Russel Howcroft in the newly created role of Chief Creative Officer, leading their digital and creative services. In May 2017, Accenture acquired creative and design agencies The Monkeys and Maud as part of its strategy to boost its marketing agency reach. The firm had

previously directed Telstra’s Thrive On, Meat and Livestock Australia’s You Never Lamb Alone campaigns. Even smaller firms like Nous Group have started to diversify, advising clients on how to craft a culture that thrives in disruption. Driving personal development: What I wish I knew back then This rapid change in the consulting industry has a very large impact on students, who are pressured to adapt comfortably to shifts in technology and a constantly evolving industry. Faced with this rapid change, a simple answer is for graduates to attain more experience in technology-related fields that align to new industry developments. The better alternative, however, is to understand what it takes to become a consultant. Tsing Lee is a Business Analyst at McKinsey & Company, having completed a Bachelor Degree in Mechanical Engineering and a Masters in Biomedical Engineering. Tsing has had a range of experiences, ranging from a Director in the Global Leadership Team at 180 Degrees Consulting to an Associate at Venturetec, a venture capital firm that bridges the gap between corporates and start-ups. Tsing began her university degree intending to enter academia, and viewed research and teaching both enjoyable and www.insideenterprise.org | 35

exciting. However, after completing her Masters’ thesis, Tsing realised that while she loved its autonomy, she also found the field isolating due to the push towards specialisation. The hypothesis-driven nature of consulting, and the chance to explore multiple industries through several different consulting projects naturally led Tsing to utilise her research skills in a consulting career. “The landscape in which consultancies serve clients is shifting due to changing client demands,” said Tsing. “GRADUATES WILL NOT ONLY HAVE THE OPPORTUNITY TO BUILD THE TRADITIONAL CONSULTING SKILLSET, BUT ALSO EXPLORE NEW FRONTIERS SUCH AS DESIGN THINKING AND IMPLEMENTATION.” – TSING LEE Tsing believes there are two core mindsets vital to success in any line of work: curiosity and ownership. Curiosity means the desire to constantly learn more and push further into topics you come across. Ownership encompasses the idea that you are the owner of the work and are responsible for its success. Rather than merely completing a task, you should go out of your way to call on the right resources, seek the most valuable advice and make the most effort to create the best possible outcome. For students entering into consulting, Tsing believes that the main challenge faced by intern and graduate consultants alike is the extremely steep learning curve. Due to the project-based nature of the field, graduates are inevitably expected to switch

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between topic areas and quickly become an expert in completely new fields. Faced with such mounting pressure, Tsing advises students to “give everything a go, but don’t be afraid to ask for help.” She is constantly reminded by her mentors that this challenge is something that every graduate must go through, and that if you do not feel like you’re barely staying afloat, then you are not being challenged enough. Lastly, consulting is underpinned by several core principles. The first core principle is that all suggestions and recommendations are backed up by an initial hypothesis. All underlying assumptions of the business’s current operations should be tested on a case-by-case basis, ensuring that very little activity remains ‘business as usual’. Secondly, thought processes must be conducted through structured thinking and comprehensive frameworks that are supported by information, whether it be historical data, financial model or market survey. Thirdly, consultants generally should be finding best practice and tailoring it to the client, keeping in mind the need to create bespoke and coherent recommendations. Lastly, keep in mind the Pareto principle – 80% of the work is done in 20% of the time. Find the largest, most important or most urgent issues, and resolve them first. Pursuing a consulting career Many students struggle to understand that there is more than one avenue into consulting. Ideally, there are 5 career paths that generally follow the consulting field. Firstly, students can start a graduate role straight after completing their

undergraduate studies. Many students who take this path later return to university to complete a Masters of Business Administration (MBA), often paid for by the firm. However, this has arguably developed a culture of graduates waiting for the firm to pay for their MBA before leaving the firm upon graduating, and many firms are shifting away from funding employee’s MBAs. Secondly, many consultants began their careers in a corporate environment, gaining relevant industry experiences, often at the low-level, hands-on level. These employees are in very high demand if they gain experience in a ‘hot’ market sector, such as technology. These consultants usually enter the firm as experienced hire, often at associate or director levels. Thirdly, many consultants begin their careers by starting their own business or start-up, often for good reasons. Operating your own business teaches students the importance of having a solid business model, and forces the students to consider multiple factors such as short-term and long-term growth, risk appetite and the importance of customer acquisition. Ultimately, just how there is no single measure of success, there is no single path towards a successful career in consulting. Students should pursue their own passions and strengths, and remain adaptable in setting goals within this rapidly-evolving industry. The views and opinions expressed in this article are those of the authors and interviewee, and do not necessarily reflect the official policy or position of any organisation. n

David Hogan

Indomitable: Reflections on Australia-U.S. Relations The recent election of Donald Trump as President of the United States of America has led some to question the viability of the Australia–U.S. relationship, with former Prime Minister Paul Keating even calling for Australia to cut ties with the superpower. Already, there have certainly been signs of a major shift in U.S. foreign and trade policies from the Obama era, especially in the prospect of a harder stance on China but a softer stance on Russia, and the threat of increased tariffs on imports. Given these dramatic shifts in the political landscape, how will the change in U.S. administration impact Australia? More importantly, how should Australia react? Make America Great Again conomically, the Trump administration’s initial policies signal a decided shift towards a staunchly protectionist, ‘America First’ stance. Already, the U.S. has left the Trans-Pacific Partnership, an Asia-Pacific wide free trade agreement which Prime Minister Malcolm

ANY SHIFTS TO SEVER OR RESTRICT TRADE TIES BETWEEN THE TWO COUNTRIES WILL THEREFORE HAVE DEVASTATING CONSEQUENCES ON AUSTRALIA’S EMPLOYMENT AND PRODUCTIVE CAPACITY Turnbull had previously described as “a very important element in continuing to build those open markets of trade in our regions.” Tyler Cowen, writing in the Australian Financial Review, has described President Trump as pursuing a “protectionist” policy of tariffs and restrictions on American companies looking to move offshore. Cowen argues that this departure from the classic American free-market approach that has dominated post-World War II trade policy could potentially reduce inflows of American capital, harming Australia

and damaging U.S. influence in the AsiaPacific. However, it is important to recognise that international trade deals should not be pursued or implemented for the sake of free trade alone, and that the promotion of “fair trade, not free trade” is a legitimate avenue for governments to promote their own country’s manufacturing industries. President Trump’s pledge to negotiate superior trade deals with individual countries represents an arguably pragmatic move that lies within America’s own self-interest. By prioritising American manufacturing and innovation, Trump arguably empowers the American economy to generate the strong economic and technological capacity necessary for future domestic and international prosperity. The double-edged sword of protectionism However, President Trump’s protectionist, less globally-orientated America is on face value a serious concern for the Australian economy. Australia relies considerably on both American imports and American investment to meet the consistent shortage of capital in the Australian market. U.S. companies with retail stores or manufacturing plants based in Australia

employ thousands of local workers. Any shifts to sever or restrict trade ties between the two countries will therefore have devastating consequences on Australia’s employment and productive capacity. However, from a different perspective, America’s new economic position presents Australia with a number of opportunities. President Trump has outlined a number of policies designed to boost the U.S. economy and tackle the issue of budget repair. This is primarily being done by reducing regulatory red-tape in the financial sector and cutting the corporate tax rate to 15%, which are growth and investment strategies that mirror those of the Reagan administration. For example, Republicans in the U.S. House of Representatives introduced the Financial CHOICE Act, which repealed the controversial Dodd-Frank regulations introduced under the Obama administration. These laws imposed cumbersome financial risk regulations on banks and established a number of new government agencies charged with financial oversight, and its repeal echoes the pro-growth mantra of the Trump administration. In the early days of the Trump administration, U.S. financial markets www.insideenterprise.org | 37

have rebounded strongly, reaching record highs off the back of the President’s probusiness message. Should this bull market continue, it is likely that U.S. companies, especially American banks, will be in a stronger position to invest capital in overseas markets. Given that Australia is already home to numerous American banking monoliths such as JPMorgan and Goldman Sachs, there is hope that such companies will expand operations in Australia by employing more Australians and encouraging investment on our shores. The U.S. and Australian economies are inextricably intertwined. Recent A STRENGTHENED U.S. ECONOMY IS GOOD NEWS FOR AUSTRALIA DFAT reports rank America as Australia’s second-largest two-way trading partner in goods and services, with total trade worth A$70.2 billion. A strengthened U.S. economy is good news for Australia, as Australian businesses can expect increased capital flows into investmentdriven industries like science and financial

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services. This increased investment inflow into innovation programs, particularly in science and research, can help create what Prime Minister Turnbull dubs “the jobs of the future”, whilst also helping Australian industry adopt innovative technologies and hence maintain its global competitiveness and adaptability. Australia-China relations, and the Trump effect Much has also been made of Australia’s relationship with China and the risks to Australia’s economic recovery posed by a slowdown in the Chinese economy. This is particularly true in Australia’s mining industry, which heavily relies on Chinese demand for iron ore, coal and other minerals produced in abundance in Australia. Such a reliance on one single trading partner is inherently risky, especially as China’s growth rate declines to more normal levels. Hence, spreading Australia’s economic reliance more between China and the U.S. could prove a wise move for Australia. However, it could also be argued that the strength of the U.S–China trading relationship means that any significant

Chinese downturn would negatively impact the U.S. and in turn affect Australia, a phenomenon known as contagion. Recent figures by the US-China Business Council IN TIMES OF SUCH GLOBAL UNCERTAINTY, IT IS CRUCIAL THAT AUSTRALIAN GOVERNMENTS REMEMBER THE CORNERSTONES OF OUR SOCIETY AND HISTORY state that exports to China represents 7.3% of all U.S. exports and approximately 1% of total U.S. GDP, suggesting that a greater economic focus on America may fail to insulate Australia from any downturn in Chinese growth. How Australia’s past can guide its future In times of such global uncertainty, it is crucial that Australian governments remember the cornerstones of our society and history. Democratic process, individual liberalism and the upholding of the rule of law are only a few of the common threads

that have helped foster historically close ties between Australia and the U.S. Whether it be the fight against Imperial Japan in the Pacific or Soviet Russia during the Cold AUSTRALIA-U.S. ALLIANCE IS BIGGER THAN ANY ONE LEADER OR ANY ONE SCANDAL, AND WILL ENDURE FOR THE COMMON GOOD OF BOTH NATIONS War, the two nations have a proud history of cooperation. The status of the U.S. as a world superpower has also given Australia and the Asian region room to prosper, with America’s protection over Australia allowing successive governments to invest in economic growth rather than military

defence. Amongst the Western world, Foreign Minister Julie Bishop is not alone in suggesting that “most nations wish to see more U.S. leadership, not less.” For those concerned by the allegedly “angry phone call” between President Trump and Prime Minister Turnbull, one need only reflect on the 1972 ‘spat’ between President Nixon and Prime Minister Whitlam regarding Australia’s level of involvement in the Vietnam War. James Curran’s Unholy Fury: Whitlam and Nixon’s Alliance Crisis suggests that Whitlam’s frequent and occasionally belligerent criticism of U.S. foreign policy led Nixon to seriously consider cutting all intelligence-sharing operations with Australia – a dramatic move against a wartime ally.

The ability of the Australia-U.S. alliance to survive this fierce clash of headstrong, abrasive personalities, and also remain unaffected by both the Whitlam Dismissal and the Watergate scandal, indicates that the Australia-U.S. alliance is bigger than any one leader or any one scandal, and will endure for the common good of both nations. As Prime Minister Turnbull noted, “our shared common interests, our shared national interests, are so strong.” In a time of international uncertainty and tension, whether it be global economic conditions or political upheaval, it is imperative that governments on both sides of the Pacific stay true to these common ideals and the prosperity that is built upon them. n

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Sam Pham

Cobalt: Overhyped or Breakthrough? A lustrous, silver-grey metal, cobalt has traditionally been a key component used in ‘superalloys’ designed to withstand extreme heat and pressure conditions. Superalloys are therefore indispensable in a range of technologies including jet engine, space vehicles and power plants. As technology improves and innovators try to find the new applications of superalloys, media attention on the ‘battery revolution’ has led the market to believe that cobalt will become a key metal in developing large-scale battery technology. With cobalt mining stocks skyrocketing and some predicting cobalt and lithium to surpass copper in its economic importance, a difficult question must be asked: is the cobalt industry overhyped, or does the development of green technology represent a breakthrough? The Spark he historical market price of cobalt has been unstable at best, reflecting the fact that demand has been highly volatile and greatly influenced by media hype. After reaching highs of USD$50/lb in 2007, cobalt subsequently languished in the US$10-15/lb price range. However, cobalt prices have experienced a strong resurgence, with prices almost doubling to $27/lb by July 2017.

IT IS COBALT THAT IS MORE EFFICIENT AND HENCE LIKELY TO EXPERIENCE A GREATER RESURGENCE IN DEMAND FROM ELECTRICITY PROVIDERS AND LARGE-SCALE BATTERY PROVIDERS IN THE FUTURE. This abrupt surge in price can be attributed to several catalysts. Firstly, surging demand may be caused by commodities traders and speculators, who increasingly view cobalt as the natural successor to lithium. Lithium is currently used in many smallscale batteries and is being developed for large-scale battery systems with relative success. The surge of interest in lithium 40 | www.insideenterprise.org

that occurred in 2016 has diminished significantly in favour of its more powerful successor, cobalt. Secondly, prices may have surged due to supply-side factors. Increased international scrutiny and allegations of human rights abuses by cobalt producers in the Democratic Republic of Congo (DRC), which supplies 63% of the world’s cobalt supply, have fueled speculation of humanitarian or government intervention, fuelling speculation of a tightening in short-term supply. Demand Surge Cobalt is becoming an increasingly important component of lithium-ion batteries, and may stand to entirely replace lithium as a core component in large-scale electric batteries. Both lithium and cobalt superalloys are used in the formation of electrodes, although cobalt-based electrodes are more efficient by weight and hence improve energy density in the battery. This makes cobalt-based batteries extremely important for energy-intensive end products such as electric vehicles (EVs), and demand for cobalt is therefore somewhat derived from demand for EVs and other high-end products. Despite investor attention in 2015 and 2016 being focused on lithium and its uses in largescale batteries, it is cobalt that is more

efficient and hence likely to experience a greater resurgence in demand from electricity providers and large-scale battery providers in the future. Although the high market penetration of smartphones and tablets suggest that there is little room for growth, especially in developed countries, battery demand is not expected to slow with EVs offering the next significant leg-up. Quite clearly, EVs present the greatest opportunity for the cobalt industry given that larger quantities of cobalt are required for their production, especially when compared to smaller portable electronics. Increasing consumer awareness of environmental issues and cheaper production costs could drive the demand from EVs even higher, hence providing an enormous market opportunity for cobalt producers to increase output and generate greater revenue. This expectation of exponential growth has been reflected in the market. Tesla recently surpassed Ford as the largest car-making company in terms of market capitalisation when it received 400,000 pre-orders for its Model 3. However, amidst a low oil-price environment, EVs and hybrid vehicles sales have been subdued, with US sales for the alternative car sales segment declining by 19% according to the Automotive News Data Center.

Nevertheless, the outlook for the EV market, and hence for cobalt-powered car batteries, looks bright. China’s promotion of EVs will drive near-term battery demand, with the Chinese government introducing subsidies for EVs targeted at reducing carbon emissions and SHORT-TERM SCARCITY IS ANTICIPATED SINCE VERY FEW PURE COBALT PLAYS EXIST OUTSIDE THE DEMOCRATIC REPUBLIC OF CONGO (DRC) – OUTSIDE THE DRC, COBALT IS GENERALLY MANUFACTURED AS A PRODUCT WHEN COPPER AND NICKEL ORE ARE REFINED correcting the economy’s historically poor environmental image. While alternatives to cobalt cathodes are available and research is underway to develop cobalt substitutes, Benchmark Mineral Intelligence analyst Caspar Rawles claims these alternatives face significant safety and life cycle issues.

Supply Shortage In order to meet this exponential rise in demand, new supply must emerge within the next 5-10 years. However, short-term scarcity is anticipated since very few pure cobalt plays exist outside the Democratic Republic of Congo (DRC) – outside the DRC, cobalt is generally manufactured as a product when copper and nickel ore are refined. Thus, cobalt production is heavily dependent on supply-side economics, and is sensitive to volatility in copper and nickel markets. Both copper and nickel prices have deflated significantly over the last 10 years, resulting in the closure of mines. For example, Glencore’s decision to shutter its Kamoto copper mine has created a 3000 tonne gap in cobalt supply, leading Macquarie Research to forecast deficits of 885t in 2017, 3205t in 2019 and 5340t in 2020. Cobalt has a much less stable and fragmented supply chain due to the presence of artisanal miners and the extremely low concentration of cobalt in ore (approximately 0.002). This makes economically viable deposits extremely rare and mining operations difficult to run, although Australia does possess cobalt

deposits and is poised to become a major cobalt producer. This decline in supply is a key factor in Reuters’ decision to project cobalt prices increasing by 45% by 2020. To capitalise on these trends, fund COBALT HAS A MUCH LESS STABLE AND FRAGMENTED SUPPLY CHAIN DUE TO THE PRESENCE OF ARTISANAL MINERS AND THE EXTREMELY LOW CONCENTRATION OF COBALT IN ORE managers like Switzerland’s Pala Investments and China’s Shanghai Chaos Investments have started stockpiling physical stores of cobalt ore, further exacerbating the short-term squeeze. Given the limited number of cobalt pure-plays, physical stockpiling remains the preferred investment avenue for investing in cobalt. Physical stockpiling is also desirable as the cobalt market is relatively illiquid and exposed to market risk – the LME futures market only averages 162 trades a day, compared to 140,000 trades on the copper futures market.

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However, the supply-side has recently begun responding to the threat of supply shortage. A number of potential new sources of cobalt have recently come online. This has most visibly manifested through the recent slew of junior miner DEMAND FOR COBALT IS ROBUST EVEN IF HYPE OVER LARGE-SCALE BATTERIES TURNS OUT TO BE MEANINGLESS; SIMULTANEOUSLY, EXTREMELY VOLATILE POLITICAL ENVIRONMENTS WILL KEEP SUPPLY TIGHT AND HENCE SQUEEZE MARKET PRICES HIGHER IPO’s in Australia such as Cobalt Blue, Ardea Resources and Alloy Resources. Furthermore, to capitalise on the rising cobalt price, existing explorers have switched their focus and begun seeking out cobalt-rich tenements in a scramble that resembles the lithium land-grab of 2015 and early 2016. However, the unstable situation in DRC will continue to drive short-term cobalt shortages. Ethical concerns continue to be raised regarding the prominence of DRC’s small-scale artisan mining operations, which make up 20% of its production. Recent investigations from The Washington Post and Sky News have exposed allegations of child labour, which has significantly damaged the artisan mining industry. Public pressure for manufacturers to make supplier changes has caused several manufacturers, including Apple, to halt all artisanal mine orders, greatly reducing supply and sending prices skywards. Furthermore, a number of human rights groups such as Amnesty International have advocated making cobalt a ‘conflict-mineral’ in the same vein as conflict diamonds. This would impose greatly regulation and monitoring by international agencies and watchdogs, thus causing supply to fall as illegal producers are forced out of the market. Although the devastating Second Congo Wars occurred over a decade ago, the country continues to suffer residual unrest in violent conflict zones. The region’s 42 | www.insideenterprise.org

mineral-rich land, which is also abundant in tungsten, gold and tin, has been a strong contributor to this ongoing conflict, with the UN believing that 50% of mines are controlled by armed forces and are being used to finance continued violence. There are fears that the current situation could morph into a repeat of conflict of early 2000s, during which a spike in the price of coltan, a tantalum ore, and the subsequent mass mining rush was exploited by Rwandabacked rebels to finance insurgent armies. Even though an international intervention could prevent such a situation from arising, the possibilities of this occurring are slim and far-fetched. Therefore, over the shortto-medium term, political conflict and humanitarian intervention are likely to drive heightened volatility in DRC supply and hence drive volatility in cobalt prices. The Big Question Regardless of these demand and supply forces, we are yet to see whether cobalt will successfully replace lithium as the core component in large-scale batteries, and whether the increased demand that will result will cause cobalt to experience a similar whipsaw in price. Some analysts have compared the recent build-up of hype in the cobalt market to the pump-anddump price action of lithium, which saw an overestimation of a supply deficit and a cascade of favourable lithium drilling results from junior explorers create an overcrowded marketplace. This in turn fuelled a rapidly expanding bubble, which burst also instantaneously when the true capabilities of lithium did not need speculators’ grandiose expectations. However, there is a strong argument to suggest that the cobalt story will be different. The long-term potential for greater applications of cobalt is underpinned by already diverse applications of cobalt. This means that demand for cobalt is robust even if hype over large-scale batteries turns out to be meaningless; simultaneously, extremely volatile political environments will keep supply tight and hence squeeze market prices higher. In the face of this combination of structural factors, it is unlikely that the cobalt market will suffer the same fate as lithium. The future looks bright. n

Alexei Moore

Emerging Economies: Unlocking Global Growth As the forces of globalisation push economies all over the world towards a single integrated global market, the landscape of global finance continues to reconstruct itself. Dramatic global shifts caused by free trade agreements and technological developments bring about a variety of challenges but also opportunities, especially for emerging economies that have greatly benefited from increased trade and investment flows. The examples of Ethiopia and Uzbekistan highlight the shift in economic power from developed to developing countries, transforming developing countries from laggers to leaders in the global economy. So how have these countries achieved this change, and what does the future hold for these rapidly evolving countries?

ver the past few decades, the global economy has become smaller and more integrated than ever before. An increased focus on comparative advantage and a new global normative movement towards free and unrestricted trade has enabled many emerging economies to grow at unprecedented rates. However, the dawn of a new era for developing economies has not occurred identically across all developing countries, with Ethiopia and Uzbekistan’s success in harnessing the opportunities of global integration coming from very different pathways and very different government approaches. Nevertheless, an examination of these different yet markedly successful strategies gives insight into what approaches are most successful in achieving progress in the 21st century commercial landscape. DECADES OF RELATIVELY STABLE GOVERNANCE HAS LED TO INCREASED CONFIDENCE BY FOREIGN INVESTORS IN THE SECURITY OF THE ETHIOPIAN ECONOMY, RESULTING IN SIGNIFICANT INCREASES IN FOREIGN DIRECT INVESTMENT

Ethiopia For decades, Ethiopia has been often associated with poverty, drought and foreign aid by many members of the international community. Ravaged by civil war and famine from 1983-85, which collectively claimed more than 400,000 lives, Ethiopia’s recovery has been slow, difficult but ultimately highly rewarding. The IMF highlight Ethiopia as the world’s fastest growing economy since 2010, with 10.2% growth in 2016, and this title as the fastest-growing economy is projected to continue until at least 2020, with growth rates projected to reach 11.5% per annum. Furthermore, Ethiopia’s development has not been purely economic: according to the World Bank, life expectancy has risen from 45 to 65 over 25 years, and the proportion of the population living in poverty has reduced from 44% to 30% between 2000 and 2011. Ethiopia’s economic turnaround has been largely due to political stability allowing for the development of large-scale economic reform. Decades of relatively stable governance has led to increased confidence by foreign investors in the security of the Ethiopian economy, resulting in significant increases in foreign direct investment. The Financial Times reports that foreign direct

investment into Ethiopia increased from US$108.5 million in 2008 to US$1.5 billion in 2015, a phenomenal growth in investment inflows. Such foreign ETHIOPIA’S SURGING YET SUSTAINED ECONOMIC GROWTH ILLUSTRATES THAT GOVERNMENTS MUST PLAY A KEY ROLE IN ECONOMIC GROWTH investment has proved a core driver of Ethiopia’s economic transformation, with investment in new infrastructure projects resulting in the establishment of SubSaharan Africa’s first light rail in Addis Ababa. Such investment in infrastructure not only creates thousands of jobs, but more importantly lays the foundation for further economic growth as public transportation becomes easier, cheaper and more accessible. Secondly, Ethiopia’s underlying economic ideology have also shifted over time. Once a proud socialist closed-market economy, successive Ethiopian governments have seen the opportunities presented by a globalised economy, and hence opened up the domestic economy through deregulation www.insideenterprise.org | 43

and relaxations of trade restrictions. This has led to significant increases in property investment and development, increased manufacturing competitiveness and a more efficient and effective agricultural sector, which accounts for 83.9% of exports and 46.3% of GDP. Lastly, Ethiopia has experienced significant improvements in health, with life expectancy rising from 45 to 65 over the last 25 years. In particular, the Health Sector Development Plan (HSDP) and Health IT IS THE LIBERATION OF UZBEKISTAN’S RICH RESERVES OF NATURAL RESOURCES THAT IS THE PRIMARY DRIVER OF ITS ECONOMIC EXPANSION AND FORMS THE BACKBONE OF ITS CONTEMPORARY ECONOMY Extension Program (HEP) has resulted in very significant improvements in health standards, especially as the government prioritises fighting communicable diseases such as Ebola, reducing the prevalence of STDs and eliminating malnutrition

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amongst children. This last initiative in particular has been very effective, with the under-five mortality rate dropping from 204 children per 1000 in 1990 to just 68 in 2012. HSDPs operate by significantly decentralising the healthcare sector, establishing thousands of healthcare clinics in remote and rural areas and dramatically increasing accessibility to hospitals and nurses. Such initiatives have been crucial in Ethiopia’s economic development, and has resulted in significant improvements in the lives of many Ethiopians. Ethiopia’s surging yet sustained economic growth illustrates that governments must play a key role in economic growth. Political stability, open trade policy and investments in the population’s well-being all pay dividends, allowing Ethiopia to become a shining light in the African economy. Ethiopia therefore acts as an example to other emerging economies of the enormous growth potential that governments can unlock, and many other economies are already following Ethiopia’s successful footsteps. Uzbekistan A former state of the Soviet Union, the Uzbek economy was shut off completely

from the world market until 1991 when the USSR collapsed and Uzbekistan became an independent nation. An agricultural hotspot during the Soviet era, the Uzbek economy has continued investing in cash crops and developing a hugely productive agricultural sector. Uzbekistan has also seen a dramatic increase in the mining and minerals industry, exporting most of its natural resources. The IMF suggests that the combination of these two factors has seen Uzbekistan’s economic growth accelerate from 2% in 1995 to 7% in 2007 and 8.5% in 2015 – the 4th highest in the world. Uzbekistan is forecast to achieve 7.8% growth in 2017, with growth only falling to 6.8% by 2020, far above most developed economies. Although this ground-breaking economic development is generated by multiple factors, it is the liberation of Uzbekistan’s rich reserves of natural resources that is the primary driver of its economic expansion and forms the backbone of its contemporary economy. Uzbekistan is the world’s 5th largest cotton exporter, the 25th largest copper producer, holds the 19th largest gas reserves and also has the world’s largest open pit gold mine in the Kyzyl Kum Desert. This abundance of resources for a country

with a relatively small population of 30 million has allowed Uzbekistan to establish a unique place in the global economy as a major player in global community markets despite its geopolitical insignificance and small population. AS COMMODITY PRICES STALL, JOB CREATION AND SUSTAINABLE ECONOMIC GROWTH WILL NEED TO COME FROM A BROADER ECONOMIC BASE RELIANT MORE ON SERVICES AND MANUFACTURING SECTORS AND LESS ON RESOURCES Furthermore, Uzbekistan has signed several free trade agreements with regional trade partners, most notably with Russia in 1993. The relaxation of trade restrictions between Uzbekistan and its trade partners have allowed Uzbek businesses to find a reliable market for its agricultural and mineral resources, whilst also bringing in cheaper products and improving the quality of life of its citizens. Furthermore, increased productivity and efficiency, particularly in the agriculture

and manufacturing sectors, have reinforced revenue inflows and allowed Uzbekistan’s economy to vastly outperform other natural resource-dominant economies. Consistent upskilling in the market, especially in government programs increasing access to education, and high population growth has resulted in a 25% increase in the labour force between 1995 and 2011. This has fuelled a 64% increase in GDP over the same period and highlights the increased efficiency and effectiveness of Uzbekistan’s labour force. As commodity prices stall, job creation and sustainable economic growth will need to come from a broader economic base reliant more on services and manufacturing sectors and less on resources. A broader economic base will also help strengthen and diversify Uzbekistan’s economy, leading to long-term prosperity. Uzbekistan has already shown that simply having resources does not guarantee growth and development, and the continued restructuring of the labour force highlights the importance of a broad-based economy in guaranteeing growth and development in both the shorter and longer terms. n

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Linle Ge

Mobile Payments: The Good, the Bad and… What’s Next? As technological advancements accelerate at a monumental – if not exponential – rate of growth, mobile payment systems are taking the world by storm. The shift to contactless payment methods, including Tap-and-Pay technologies, have made paying for purchases faster, easier and simpler for everyday consumers. But are mobile payments fully-developed, or is there still a long way to go? A brief history of mobile payments he first innovation in mobile payments occurred in 1997, which Coca-Cola introducing vending machine technology that allowed customers to purchase drinks via text message. However, mobile payment technology did not truly escalate until the introduction of the iPhone and other similar multi-purpose touch screen phones in 2007. In recent years, the rise of Near-Field Communication (NFC) technology has seen further expansion in mobile payments, allowing for phones to replicate the contactless PayPass technology currently used in credit cards. NFC involves the use of radio waves to transmit information between two devices that are close but not touching, removing the need to manually insert a credit card chip to conduct a transaction. With many tech companies focusing on simplicity and efficiency, mobile payments and contactless technology have changed the way consumers and companies interact, and is increasingly prevalent in retail shops, supermarkets and cafes.

A quicker, simpler and easier way to pay One of the core aspects behind the appeal of mobile payments is its speed and efficiency. Instead of having to take out your wallet 46 | www.insideenterprise.org

and search for the correct credit card or the correct cash, customers can now complete a purchase in mere seconds. These advantages of speed, convenience and simplicity have led mobile payments to begin replacing traditional cash payments as the preferred method of payment. In fact, according to a report by Accenture in 2014, the use of cash in customer transactions will fall from 67% to 58% by the end of the decade. Mobile payments is also being driven by millennials, with 23% WITH MANY TECH COMPANIES FOCUSING ON SIMPLICITY AND EFFICIENCY, MOBILE PAYMENTS AND CONTACTLESS TECHNOLOGY HAVE CHANGED THE WAY CONSUMERS AND COMPANIES INTERACT of millennials making a mobile payment transaction on a weekly basis, compared to an average of 18% for the entire population. For many millennials today, mobile payments go hand-in-hand with their busy and fast-paced lifestyles. This bodes well for the future of mobile payments, as this younger demographic will drive increased uptake in future. Furthermore, the revolution in mobile

payments is being primarily driven by large corporate retailers, and not by startups, as is traditionally the case for digital innovation. For example, according to Dave DeFazio, a partner of StrategyCorps, the Starbucks mobile app is one of the “best mobile payments company in the world.” The mobile app lets its users make payments, pre-order coffee and send gift cards to friends. “They really have become the standard experience for mobile payments,” says DeFazio. The recognition of mobile payments is also at a rise, with Accenture noting that the percentage of customers who are aware of mobile payments as risen from 43% in 2013 to 52% in 2014 – an increase of 9% in one year. Although this change may not seem dramatic, aggregated sales data compiled by Custora shows that this increased awareness helped sales revenue conducted via mobile payments climb from $2.2 billion in 2010 to $42.8 billion in 2013. Apple and other major phone companies have also been able to develop their mobile payments applications, such as Apple Pay, with the help of credit card companies such as MasterCard, Visa and American Express. These partnerships expand the potential capabilities of mobile payments to be on par with current tap-and-go credit card

technology, allowing mobile phones to act as substitutes not only for cash, but also for credit cards. The success of these mobile payment businesses therefore paves the way forward for an increasingly contactless future. Limitations to mobile payments Although mobile payments are expected to become one of the major preferred payment options, especially for everyday transactions, the complete implementation of mobile payments in businesses is still greatly restricted. The current lack of mobile payment support in many stores can be attributed to the large capital that stores must expend in order to generate mobile payment capabilities. According to Computerworld, Starbucks has invested more than US$25 million into their mobile payment technology, a cost which is far beyond the scope of smaller retail businesses. FOR MANY MILLENNIALS TODAY, MOBILE PAYMENTS GO HAND-IN-HAND WITH THEIR BUSY AND FAST-PACED LIFESTYLES This means that smaller businesses must still rely on cheaper and more traditional tap-and-go card and cash payment systems, and may not be able to develop complete mobile payment capabilities. Accenture also found that 67% of consumers still preferred to use traditional card providers over other providers. This is mainly due to the belief that traditional card providers are more reliable and cheaper as they are longer-standing entities and therefore safer. This is an especially important consideration as customers recognise that they are entrusting the card provider with their bank account details and other important information, making personal security a primary concern for customers. Users are also searching for

bigger incentives to transition to mobile payments, such as discount pricing or coupons. This encourages mobile payment providers to “redefine how they build customer loyalty”, but many providers have so far been reluctant to implement such incentive schemes. Another major drawback to mobile payments is compatibility. With Google THE CURRENT LACK OF MOBILE PAYMENT SUPPORT IN MANY STORES, CAN BE ATTRIBUTED TO THE LARGE CAPITAL THAT STORES MUST EXPEND IN ORDER TO GENERATE MOBILE PAYMENT CAPABILITIES Wallet and Android Pay available to Android devices and Apple Pay being exclusive to Apple devices, it is difficult to transfer information between phones without sacrificing time and effort. As of early 2016, Apple Pay had 12 million monthly users, whilst Google Wallet had approximately 16 million users in total. This separation between two of the biggest contenders in the mobile payment industry creates doubt in consumer decisions. The inability for Android users to use Apple Wallet and vice versa is a major disincentive to innovation and competition, as they are targeting slightly different customer bases on which there is little overlap (i.e. Android users and Apple users) and hence little need to fight for market share. It is currently unclear what technological advancements will emerge to bridge the gap between these mobile payment providers. Until then, mobile payments will continue to fall short of being the ideal payment method.

mobile and NFC technology. In the current landscape, mobile payment providers need to integrate their systems more seamlessly and ensure they meets customer needs without sacrificing efficiency. Mobile payment providers also rely on banks to integrate mobile payment technology into their banking services, often through a mobile app. Greater integration with the customers’ own personal banking services will be a key driver of further growth in mobile payments. According to Forbes, such a shift has already begun to occur, with the number of banks with mobile payment capabilities rising from 7 in 2014 to over 50 in 2016. Mobile payment providers should also focus more on meeting customer needs, especially in the area of information security and data privacy. The drive to meet consumer needs will likely result in better security measures and further innovations in data encryption, anti-malware technology and anti-fraud technologies. Such innovations may not only be used in mobile payments, but also may find a home THE FUTURE OF MOBILE PAYMENTS TECHNOLOGY WILL NOT BE DRIVEN BY THE TECHNOLOGY PROVIDERS OR LARGE BANKS, BUT INSTEAD ON CONSUMERS AND MEETING CUSTOMER NEEDS in wearable technologies. With consumer needs and preferences already having redefined internet banking and online retail, what is ultimately clear is that the future of mobile payments technology will not be driven by the technology providers or large banks, but instead on consumers and meeting customer needs. n

The Future As is the case with most digital innovation, it is difficult to predict the exact changes that might occur given the rapid evolution of

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Team Work Makes the Dream Work: An Interview with

El l iot C ou s i n s By Annie Wang

s the Strategic Partnerships and Ecosystems lead in the Commonwealth Bank of Australia’s Business and Private Banking division, Elliot Cousins is at the forefront of the digital transformation revolutionising the financial services industry. Elliot’s outlook on life is a reflection of his own diverse career in the fast-paced start-up and digital industries, and has driven his unique perspectives on finding the ideal career path and his definition of success.

Start-ups: It’s about more than just the idea

Elliot graduated from the University of New South Wales with a degree in Commerce, majoring in Finance and Commercial Law. He began his career as a graduate at an investment bank before shifting to a non-bank foreign exchange provider that used digital channels to disrupt the banking sector. It was here that he noticed a niche, yet genuine customer need for a personalised digital postcard platform, where smartphone photos could be adapted into cards and sent to friends and family worldwide. Taking full advantage of his entrepreneurial drive and willingness to follow divergent opportunities to fruition, Elliot co-founded

“LIFE’S A RICH TAPESTRY. BE FLEXIBLE AND TRY DIFFERENT THINGS. DON’T BE AFRAID OF HAVING A FEW CAREER CHANGES.” 48 | www.insideenterprise.org

ScribblePics with a friend in 2009, and successfully gained residency within the Fishburners co-working space. When it comes to launching a start-up business, Elliot firmly believes that “it’s all about the team.” He says that when it comes to delivering on a vision or idea, “ultimately, your idea is only 0.1% of the solution – it’s 99.9% about execution.” In Elliot’s eyes, a successful start-up is not defined by the end product or service it provides customers, but is instead “heavily dependent on bringing together a diverse and intelligent group of people to bring the idea to life.” He suggests that the execution is all about sharing one’s ideas with numerous people from a wide range of different backgrounds, experiences and industries. Elliot speaks fondly of his diverse career, and attributes his broad skill set to his work in various commercial fields. After exploring the world of start-ups and digital postcards, Elliot’s expertise drew him back to the financial services industry, and to what he knew best – banking. His current role at Commonwealth Bank requires him to navigate and innovate in a constantly evolving digital banking sphere; one Elliot believes combines his digital expertise gained through ScribblePics with his unique global perspective on digital disruption in financial services.

The advent of digital & its impact on Commonwealth Bank For Elliot, leading the Strategic Partnerships and Ecosystems

team in CommBank’s business division the value that Commonwealth Bank involves a team focus on the way provides customers by ensuring that “BE OPEN TO EXPLORING Commonwealth digital technology DIVERGENT CAREER advancements have “ULTIMATELY, YOUR IDEA Bank is kept up to PATHS AND DEVELOPMENT caused commercial IS ONLY 0.1% OF THE date with emerging OPPORTUNITIES THAT MAY and financial SOLUTION – IT’S 99.9% trends and partnership service industries to ABOUT EXECUTION.” o p p o r t u n i t i e s NOT BE IN YOUR CURRENT with innovative revolutionise approaches FLIGHT PLAN." to customer needs. The exponential entrepreneurs. This involves a large focus growth and popularity of technologies on interviewing and engaging with the years: “Moving forwards, increasing like blockchain, cryptocurrencies and bank’s front-line customer relationship partnerships between big corporates e-commerce platforms affect the banking teams, as this makes for a better and technology-driven start-ups will industry in particular. Traditional players understanding of emerging customer revolutionise the customer experience, in the field are forced to adapt their needs. allowing financial institutions to better services offered to customers, meet the evolving needs of their whilst new firms are given more customers.” Recent technology“MOVING FORWARDS, INCREASING and more room to disrupt the driven initiatives such as the PARTNERSHIPS BETWEEN BIG CORPORATES Commonwealth Bank online sector. Elliot’s role involves engaging AND TECHNOLOGY-DRIVEN START-UPS banking app and the roll-out of externally with broad customer WILL REVOLUTIONISE THE CUSTOMER Tap&Pay credit functions across and business networks that all major banks have proved EXPERIENCE, ALLOWING FINANCIAL fall outside the scope of immensely popular, driving INSTITUTIONS TO BETTER MEET THE Commonwealth Bank’s direct continual, rapid growth in digital value chain, including fintech EVOLVING NEEDS OF THEIR CUSTOMERS.” banking while meeting customer (financial technology) start-ups needs in greater accessibility. and entrepreneurs, incubators, These innovative technological accelerators, technology hubs and agtech Elliot sees collaboration between start- offerings seem to be making customers (agricultural technology) innovators. ups and corporate firms as a driving happy, and Commonwealth Bank has These relationships seek to improve force of innovation in the next few consistently maintained market-leading

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customer satisfaction ratings. Two-thirds of Commonwealth Bank customers are now engaged in digital banking and half of them log on each month, making Commonwealth Bank customers the driving force behind the digital experience of the 13.1 million bank users across Australia. Arguably the largest potential benefits of bringing technological innovation into banking are gained by business customers, with an explosion of B2B technology solutions provided by Commonwealth Bank and other financial institutions providing much-needed accessibility to time-poor businesses. One such innovative example is Albert, the new EFTPOS tablet introduced in 2015. As the next generation portable payment terminal that also integrates with business customers’ ERP (enterprise resource planning) systems, Albert will help assist businesses with stock management and other tasks. This new device will compete with traditional EFTPOS terminals and create a new platform for stronger merchant-customer interaction, thus making businesses more efficient and improving customer experience. Elliot regards technology as a key instigator of a more cost-efficient and seamless banking experience for the business customer, but also a method to innovate and increase productivity internally.

Advice to students: Don’t be afraid to try something different

Having himself experienced no clear direction when trying to find the ideal career path to pursue during university, Elliot is eager to provide some gems of wisdom. “Be open to exploring divergent career paths and development opportunities that may not be in your current flight plan. Not only does it help you build out a broader set of skills, but it also helps you work out what it is you actually enjoy working on.” As someone who has experienced the full range of experiences in the financial services industry, Elliot stands testament to the skills and lessons learnt from this mindset. It therefore comes as no surprise that Elliot’s definition of success is centred on reflection and growth. “For me, success is not about an end state – success is not a ‘place’ that you reach. Instead, success is more reflective of the journey you go on and the things you invest your efforts in to improve.” For more information on Commonwealth Bank, visit their website at https://www.commbank.com.au. n

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“FOR ME, SUCCESS IS NOT ABOUT AN END STATE – SUCCESS IS NOT A ‘PLACE’ THAT YOU REACH. INSTEAD, SUCCESS IS MORE REFLECTIVE OF THE JOURNEY YOU GO ON AND THE THINGS YOU INVEST YOUR EFFORTS IN TO IMPROVE.”

The Future of Entrepreneurship:

An Interview with

Nicholas Dunford By Edmund Zhang “Put yourself in a position where you can be lucky. And that actually takes a lot of hard work. The more people you meet outside your immediate circle, the more likely it is that they will unlock the next opportunity for you.” Nicholas Dunford’s ‘go-getter’ attitude has served him well in life and in his current role as General Manager of CoVentured, a business owned by the Slingshot Accelerator – a corporate accelerator bringing together large firms seeking unique and innovative strategies with start-ups looking to scale up their operations. “The market is ripe for innovation,” Nick says, “and corporate accelerators help bridge the gap between successful early-stage firms and mature corporations.” By providing funding and support networks, accelerators form a backbone of the start-up infrastructure, and Nick’s personal journey as an entrepreneur and innovator is a useful lesson in how students can stand out in an increasingly crowded field.

efining the role of an accelerator is difficult as the industry became apparent very early on when he left his graduate is in a constant state of flux. Nick notes that accelerators accounting position to spend six months in England as a semitypically revolve around four core pillars. First, accelerators professional cricketer. Although careful not to overstate the usually provide strong investment into the resident start-up. benefits, Nick still sees this decision as an important one in his Secondly, they are usually time-bound with a selected cohort career development. “What I learnt was not only the obvious residing within the accelerator from a fixed start to end date. things like building teamwork, but also just to be okay with Thirdly, accelerators connect start-ups to industry-relevant both winning and losing – sometimes you might do really well mentors. The final element and the core of the accelerator is the and your team will still lose. Learning to deal with losing still curriculum. The accelerator assists the start-up in building its remains one of the great challenges of working in a modern business environment.” infrastructure as much as possible Upon his return to Sydney, within the limited timeframe, "LEARNING TO DEAL WITH LOSING STILL usually in process-driven REMAINS ONE OF THE GREAT CHALLENGES the opportunity arose in 2007 for Nick to co-found ‘Locol’, a technical areas such as product OF WORKING IN A MODERN BUSINESS start-up in the pre-iPhone era development, market fit or ENVIRONMENT.” which provided an alternative to customer engagement. This then provides the start-up with the complete package necessary to taxi services by allowing customers to pre-book car trips with a bridge the gap between start-ups and corporates by partnering fixed fare. Despite securing $400,000 of angel investment and with large corporates or achieving its own explosive growth. generating over $100,000 of revenue in the first three months, Locol ceased operations within a year of launching. Cricket and start-ups: an unconventional start and lessons Considerable market potential for a taxi alternative had been learnt proven (Uber was founded in San Francisco only two years Having graduated from the University of Sydney with later), so Nick attributes Locol’s demise to a flawed business a Bachelor of Commerce (with First Class Honours in model. A combination of leasing the vehicles, running the International Business), Nick’s thirst for the unconventional booking process through a call centre, and paying drivers

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as employees instead of contractors all prevented Locol from achieving scale. However, Nick learnt very important lessons from his first attempt at being an entrepreneur, namely the importance of sales. In discussing the underappreciation by universities and students for sales, Nick notes that being a good salesperson stems from being a strong people-person, who understands what is important to their audience. “Not many people realise this, but everyone is in sales, whether you’re a student, manager or entrepreneur. Students are selling themselves to potential employers, managers are constantly selling business ideas, and businesses live or die on the entrepreneur’s ability to sell product and generate revenue.” The ability to sell ideas and products is therefore one of the most important skillsets any student or businessperson can have.

model and pushed it even further start-ups and help start-ups understand by running accelerators for a specific where opportunities lie within the corporate partner, who pay money to corporate industry. CoVentured completes access start-up innovation and can specify the final link in the chain of support the business themes or strategic areas of that start-ups often need to reach large the accelerator. Recent customer bases accelerators with Qantas and revolutionise "SLINGSHOT IS ABLE TO and HCF have provided IDENTIFY START-UPS MUCH industry practices. mutual benefits to both MORE EFFICIENTLY THAN the corporate and the The start-up THE CORPORATE COULD, start-up. “By casting a space: Where to wide net, conducting a PROVIDE EASIER ACCESS TO from here? pitch day and selecting THESE START-UPS, AND ALSO Nick is quietly the best 10 or so startoptimistic about PROVIDES A REASONABLE ups, Slingshot is able to the future of the ASSURANCE OF DUE identify start-ups much start-up industry DILIGENCE." more efficiently than and sees enormous the corporate could, potential for even provide easier access to these start-ups, greater collaboration between industry and also provides a reasonable assurance and start-ups. He believes resistance by of due diligence to the corporate through both corporates and start-ups to work filtering out the noise.” with each other is a thing of the past, For the start-up, Slingshot provides as start-ups begin to embrace large Slingshot and CoVentured: A mission entrepreneurs with direct access to corporations as allies and opportunities, to connect corporates with start-ups large corporates. It creates unparalleled not as potential competitors. “At the end Nick joined Slingshot in September 2016 opportunities for start-ups to differentiate of the day, the corporate is the quickest to head CoVentured, which launched themselves in an increasingly crowded way to growth. It has deep domain in May 2017. CoVentured attempts market by building their business, expertise, a broad network and most to link-up large corporate firms with generating brand exposure and importantly a customer base.” Australian start-ups establishing potential On the other side, any temptation by and entrepreneurs. As funding networks. “It corporates to simply buy-out a start-up “NOT MANY PEOPLE a corporate accelerator, is almost impossible and prevent their product becoming a REALISE THIS, BUT Slingshot combines the EVERYONE IS IN SALES, to secure the attention threat to the market has been overtaken by traditional advantages of of executives, the realisation that start-ups provide lowWHETHER YOU’RE A a start-up accelerator with particularly for large risk exposure to innovation and new ideas. the benefits of being linked STUDENT, MANAGER OR corporates,” Nick says. “Corporates are always asking ‘Where is ENTREPRENEUR." to a specific corporate “There is usually a my next source of growth?’ Increasingly, firm. lot of good intention companies are realising that it is really With Gust reporting that 387 on both sides, but start-ups tend to hard to answer this question through just accelerators invested almost $200 million be overlooked, whether it be due to a internal solutions, especially in mature, in 9,000 start-ups in 2015, accelerators mismatch in business areas, time frame now play a pivotal role in helping the or risk appetite. For the entrepreneur, the transition from successful start-up to start-up is their life, and it’s very difficult successful corporate. A significant shift to replicate this within a KPI-driven has seen growing numbers of accelerators corporate environment.” appear not in the traditional start-up Such insight drives CoVentured, which capitals in America (Silicon Valley) and is designed as a platform portal to connect Europe (London), but rather in emerging corporate Australia with start-ups. As centres in the Asia-Pacific (Hong Kong) more managers leave corporate positions and Middle East (Tel Aviv). This is because to launch their own start-up, Nick the benefits provided by an accelerator, observes that “almost every corporate including mentorship, support networks wants to know what start-ups are out and accelerated product development, are there and what they are doing.” With in increasing demand in these emerging many corporates failing to understand the markets as more start-ups dream of start-up ecosystem, CoVentured is poised becoming the next Facebook or Snapchat. to bridge this gap: it can help corporates Slingshot had taken this successful search, identify, research and engage with 52 | www.insideenterprise.org

“I AM INCREASINGLY BELIEVING THAT IT IS ALL ABOUT THE PEOPLE – IT’S ALL ABOUT THE TEAM." competitive industries.” Nick sees corporates both integrating start-up innovations into their existing offerings and investing in start-ups to “gain broad exposure to innovation without having to stretch the brand and confuse customers.” However, Nick cautions that corporates cannot be halfhearted and must mirror the commitment of the start-up founders in fully believing in the particular innovation. An entrepreneur himself, Nick sees a continuing drive for opportunities to satisfy unmet customer needs as the future of start-up innovation. Nick is careful to emphasise that technology and digital processes is not innovation in itself. “Rarely is technology the core product itself. Most of the time you start with an unmet customer need, and technology just forms part of the execution strategy and how you deliver solutions to that unmet need in a better way.” For example, Uber’s core value proposition is the ability to meet unmet customer needs in cheaper taxi services, and smartphone technology merely provides a more efficient way of delivering this service.

team.” Nick has seen first-hand how great Nick encourages female students to gain teams will come to refine and shift their the confidence to take the plunge, and business ideas, and believes that balancing to grasp the many business opportunities strengths and weaknesses within a team is for female entrepreneurship and a key to success that is often overlooked. leadership. “Studies have shown that in “Work out what you bring to the table – general women tend to understate their you can’t have a team full of ideas people, capabilities. I believe that it is quite the best teams are composed of people powerful if aspiring female leaders can with a whole range of different skillsets recognise that and gain the confidence and self-belief to just go out there.” and experiences.” Nick highlights that the quality Nick’s own experiences with Locol has imprinted on him the importance of a and breadth of your network is more strong business model and in identifying important than its size. “What matters is unmet customer needs. For this reason, not the number of LinkedIn connections Nick advises budding entrepreneurs you have, but rather your relationships to first gain corporate experience in an with your network and the number industry and become fluent in a particular of connections within your network. The most valuable market. “Zuckerberg networks are broad is not the norm. Most "THE MOST VALUABLE networks, scattered entrepreneurs are in NETWORKS ARE BROAD across many different their 30s to 40s, know NETWORKS, SCATTERED industries and stages an industry very well and have spotted a market ACROSS MANY DIFFERENT of their careers.” As a opportunity. It is really INDUSTRIES AND STAGES graduate accountant OF THEIR CAREERS.” and cricketer turned hard to spot a market corporate accelerator need and create a strong business model without knowing the and entrepreneur, Nick stands testament market through working in and around to the opportunities presented by this it.” Industry or market experience is a key attitude. attribute that investors and accelerators For more information on Slingshot, visit often look for in a founder. Nick encourages students to broaden their website at www.slingshotters.com. their networks and meet new people For more information on CoVentured, visit with different backgrounds, degrees their website at www.coventured.com. n and industry experiences. He is a strong advocate of gender balance in the workplace – “It just leads to better outcomes and better business decisions.”

Students and the next generation of business leaders: Setting yourself up for the future Nick’s advice to budding entrepreneurs is quite simple. “I am increasingly believing that it is all about the people – it’s all about the team. I would actually rather see a really great team with an average idea than a great idea with an average www.insideenterprise.org | 53

BUSINESS: AN UNEXPECTED SOLUTION TO SOCIAL INEQUALITY

An interview with Wade Tink by Garnet Chan

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In an era defined by economic and social progress, the startling differences between the prosperity of developed and developing nations should no longer exist. The complex challenges undermining the achievement of economic and social equality require solutions that are both pertinent and innovative, extending beyond the standard model of charity and government support. This has led to the rise of businesses such as Project Everest, which creates long-lasting social change through building initiatives with local communities in developing countries. Project Everest General Manager Wade Tink’s personal ethos and professional drive are a testament to the power of social entrepreneurship, and are an inspiration for students seeking to generate meaningful positive social change.

ver since their implementation in September 2000, the United Nations’ Millennium Development Goals (MDGs), and later the Sustainable Development Goals (SDGs), have aimed to ensure that every human being can live in dignity by meeting basic needs and rights including shelter, food and education. Inspired by the concrete objectives set by MDGs (for example, aiming to halve by 2015 the proportion of people living on less than $1.25 a day), entrepreneurs such as Wade Tink are stepping in to bridge the resource gap many not-for-profit organisations face, whilst avoiding the bureaucratic labyrinths into which government organisations often fall. Project Everest draws its social imperative from other successful social enterprises like 40K Globe, an organisation that operates on a similar model of creating social impact through empowering local businesses. With the entrepreneurial drive of a start-up looking to be

a game-changer, General Manager Wade Tink envisions Project Everest “to be an incubator and accelerator that empowers local business ventures to bring economic prosperity to their communities and generate positive social impact." Project Everest operates on a unique, high-interaction and high-impact business model, drawing from strong entrepreneurial flair and student creativity. During university semester breaks, students are deployed to developing countries in teams to intensively build and develop existing business initiatives, usually owned and managed by locals.

FarmEd: Using data to improve the lives of impoverished farmers One such innovative student-driven program is FarmEd, which Wade believes “provides agricultural expertise through real-time tabletbased data.” Conceived in Fiji as a pilot idea by

An incubator and accelerator that empowers local business ventures to bring economic prosperity to their communities and generate positive social impact

As long as you learn from your mistakes, you can never really fail, because you are always learning and improving yourself as a person

student alumni of Project Everest, the program collects information from local farms and processes the data in order to offer accessible, on-demand agricultural consulting. Farmers in developing countries are provided with tailored advice on how best to improve agricultural efficiency, such as ideal crops to plant or ways to optimise supply chains. “Our hope is to increase their outputs by 20-50%,” Wade says. “This directly impacts their income, improves their livelihoods and increases their family’s ability to access further opportunities such as education and technology.” With 70% of the world’s food created by small landholders such as farmers, programs such as FarmEd can also dramatically increase global food security, especially in remote and rural areas. With programs currently under development in both Fiji and Cambodia, FarmEd has been received well by the rural communities involved and by venture capitalists. FarmEd is not without its challenges, especially due to the iterative nature of Project Everest’s undertakings. Wade explains, “It’s actually a problem raising money because it’s all about investment and putting a face to the initiative. Not having a visible face of the project makes it that much harder to market the benefits FarmEd brings to both investors and farmers.” Nevertheless, as FarmEd navigates such challenges, Wade expects new opportunities to emerge. He envisages the adoption of drones, cognitive computing and more intelligent and exponential technologies designed to maximise FarmEd’s relevance in the modern world and further improve the lives of millions of impoverished farmers. In Wade’s eyes, this flexibility and dynamism is necessary for the venture’s survival in today’s highly innovative and globalised world.

Lessons in leadership: How failure drove Wade to success

Like FarmEd, Project Everest prioritises adaptability as a key tool for survival. According to Wade, failure has ironically been a crucial foundation for Project Everest’s

success. “You’ve got to embrace failure. Failure doesn’t mean the end, it just means the end of that particular play: as long as you learn from your mistakes, you can never really fail, because you are always learning and improving yourself as a person.” Resilience is the undeniable bedrock of the organisation’s ethos, and is demonstrated and expected at all levels. By analogising the uncertainties start-ups face to a “longer-term war”, Wade also illustrates his belief that “leadership is borne out of uncertainty, as long as you keep pushing to win the longer-term battle.” This emphasis on leadership is perhaps what makes Project Everest different to other social enterprises. Wade’s unique journey into social enterprise has driven the idiosyncrasies that make Project Everest a powerhouse for change. After graduating from the University of Sydney with a Bachelor of Commerce majoring in Finance, Wade was at a major crossroad in his life. “I got to the end and realised everyone was going for the grad roles, everyone was going down a path which wasn’t right for me. Personally, making the decision to go into the army was a watershed moment.” In a highly competitive employment market, five years in the army is an eternity for a young university graduate. Yet, guided by an overarching vision of eventually establishing a business, Wade knew leadership was a crucial element of entrepreneurial success and dedicated himself to the army, much to the dismay of his family. “It was not a positive thing to tell them but I really felt that when I am 90, I would look back and kick myself if I hadn’t done it.” Wade’s gruelling commitment eventually paid off, developing an array of soft skills in leadership and communication that would prove indispensable in his later career. Indeed, Wade attributes his drive to his formative years with the military, and notes that he gained “self-discipline and the ability to work consistently harder than the vast majority of other people.” Wade recognises that it was his experience with the military that embedded in him the strategic mindset

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Most of the juice can be gained at the edges – it’s the experiences you get outside of studying that are key and will be useful in helping you stand out

needed to manage people and strive towards longterm and short-term goals. Gaining a position in a top-tier investment banking firm is further proof of Wade’s departure from the canonical graduate narrative. “I wasn’t the best student in university. I should have never gotten into investment banking based on my marks, but the only reason I did was because I hustled so hard.” Encouraged to head a leadership workshop for 40K Globe, Wade’s introduction to social enterprise planted the seed of interest in social enterprise that has thrived as Project Everest. The concoction of soft skills and resilience that Wade has learnt throughout his life journey have morphed over time into Project Everest’s own philosophy, particularly in the style of leadership encouraged in both student participants and the core organisational team. As a result, Project Everest is an organisation whose ability to thrive is grounded in the people: “I feel like if you were to claim Project Everest as a success, then the success would be due to the team and the amazing effort that they have put in the whole way.”

Words of students

wisdom

university

As parting words of wisdom, Wade encourages students to be intrepid – especially when searching for “opportunities in the fringes.” Whilst he acknowledges the necessity of academic development at university, he reassures students that “most of the juice can be gained at the edges – it’s the experiences you get outside of studying that are key and will be useful in helping you stand out.” Wade suggests that students should not only diversify their activities beyond the classroom, but that they also need to take initiative and relinquish their fear of failure. Despite the abundance of resources available to employers and students seeking to bridge social disparities and promote equality, Wade pins continued social disparity as stemming from personality. “There are just not enough people who step up and do crazy things. We like people to make things move forward, who get out there and make it happen. Just do it.” For more information on Project Everest and to get involved, visit their website at https://www. projecteverest.ventures. n

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Student Room University Network for Investing and Trading (UNIT) By Victor Li A major calendar event to highlight is UNIT’s Industry Insights Evening, held in Semester 2. Students are given the opportunity to submit their own industry related questions beforehand. These questions are then answered by two separate panels – one each for Investment Banking and Markets – containing senior representatives from major firms. The event is structured in such a way that students can learn the insider information crucial to career progression directly from industry leaders. Some questions from last year’s event included “How do ‘bulge bracket’ and ‘boutique’ firms differ in practice?” and “What was the office like during the day of Brexit?” Attending students are also given opportunities to network with industry representatives before and after the panel discussion.

he modern world of finance is unfathomably large. From buy-side to sell-side and everything in between, there exists an endless number of financial services, instruments and industries. Underpinning all of this are markets that dynamically reflect market sentiment and information on a global scale. It’s no wonder that students are a bit overwhelmed by it all. While tertiary education does equip students with a solid foundation through a range of electives and academic perspectives, there still exists a gap between classroom theory and workplace reality that textbooks cannot adequately fill. Enter UNIT – the University Network of Investing and Trading. Founded in 2007 by Matthew Fitzpatrick (of Investing for Charity fame) at the University of Sydney, the student-run society sets out to bridge the divide between academia and practice to make the world of finance more accessible to students. As UNIT celebrates its 10th anniversary, our member base has grown to over 10,000, and now covers 6 university branches across Australia with ambitions to expand abroad. We are sponsored by 23 major firms in a wide variety of industries – proprietary trading, commercial banking and asset management to name a few – who have all bought into a shared vision to deliver accessible financial education to students of all different academic disciplines and skill levels. Events UNIT accomplishes the vision of accessible financial education in a variety of ways. First of all, UNIT holds seminars that are delivered by both firm representatives and accomplished students to focus on what it takes to break into the industry, and what to expect once you get there. Members can also learn relevant skills such as stock pitching and excel modelling through workshops and then apply them through competitions including the Citi Global Markets Challenge. Finally, students can keep up to date with the latest market trends and insights through the UNIT online blog and weekly Facebook Market Wraps – completely authored by students for students.

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Technology and opportunities for STEM students One of the most prominent drivers and changers of modern finance lies in rapid improvements in technology. Traditional industry structure and roles have been and will continue to be disrupted, with Finance being no exception. As a result, UNIT is especially dedicated to keeping its members informed about this exciting new side of Finance. This is directly beneficial for STEM (Science, Technology, Engineering and Mathematics) students, which represent a quarter of UNIT’s current member base. STEM students can stay up to date about the latest STEMfocused career opportunities in finance such as proprietary and quantitative trading through events with industry leaders such as Susquehanna International Group and Akuna Capital. NonSTEM students can also derive great value from staying aware of the latest technological trends and developments through events such as last year’s ‘FinTech CEOs on the Future of Finance’ panel discussion. For more information on UNIT, visit our website at http://www. unit.org.au/, or visit our Facebook page at https://www.facebook. com/UNITsydney (Usyd) or https://www.facebook.com/unit.unsw (UNSW). n

UNSW Alternative Investments Society By Doron Haifer What are alternative investments and why are they important? lternative Investments are generally regarded as a class of less â&#x20AC;&#x2DC;mainstreamâ&#x20AC;&#x2122; investments, typically characterised by low correlation to public markets, low liquidity and less publically available information. In other words, an alternative investment is essentially any type of investment that is not stocks, bonds, real estate or cash. Well-known examples of alternative investments include private equity, venture capital, hedge funds and cryptocurrency. In modern financial markets, alternative investments are becoming increasingly popular. Research by McKinsey found that alternative investments grew almost twice as fast between 2005 and 2013 as traditional investments. Not only do alternative assets comprise a larger portion of overall invested funds than ever before, but alternative assets by definition have some of the highest returns of all asset classes, often exhibiting countercyclical behaviour. For example, in September 2008 Australian public equity markets fell 17.1% over the last 12 months, but Australia private equity returns grew 0.8% over the same period. Alternative investments therefore provide strong portfolio diversification for managed funds, especially superannuation and pension funds. It is therefore highly likely that current university students will come into contact with alternative asset classes throughout their careers, either as investors, analysts or superannuation holders. Investment banks regularly underwrite IPOs conducted by private equity and venture capital firms as they look to exit their investment. Furthermore, super and pension funds will continue increasing their private equity and venture capital allocations in the future as they seek greater diversification and stronger longterm returns.

UNSW Alternative Investment Society Founded in 2017, UNSW Alternative Investment Society (AISOC) aims to fill the gap between the increasing prominence of alternative investments in the financial world and the lack of knowledge and experience about them within university settings. AISOC endeavours to educate students about alternative investments and the careers they offer, allowing students to make more informed decisions with regards to their career choice. Beyond this, AISOC offers its members exclusive networking opportunities, enabling them to forge connections with, and learn from, professionals currently working in the alternative investment space. Although the term alternative investment is very broad, the society focuses on the three most common types of alternative investments: private equity, venture capital and hedge funds. This is due to the fact that whilst many business students aspire to work in investment banks or consulting firms, many employees in these industries actually end up moving into hedge funds, private equity firms or venture capital firms. AISOC therefore allows students to learn about these long-term career paths earlier on in their lives, empowering them to make more informed decisions when applying for graduate roles.

Australiaâ&#x20AC;&#x2122;s first student-run hedge fund An increasingly popular phenomenon across the United States is the formation of university hedge funds. These student-run hedge funds allow university students to manage the fund themselves with oversight and guidance from a board or faculty member. This provides budding professionals with real-world practical experiencing in portfolio management, teaching them invaluable industry skills and knowledge. UNSW Alternative Investment Society is proud to announce that in the second half of 2017, it will be launching a studentrun fund within the University of New South Wales, based off this highly-successful and proven model. Students will undergo a rigorous application process to secure an analyst position within the fund, similar to what they can expect from a real hedge fund. Under guidance from mentors, analysts within the fund will then research investment opportunities and present their findings to the board of industry professionals. The goal of the fund is to give students a real taste of working in a hedge fund, while also allowing them to develop their quantitative skills and gain realworld industry knowledge that extends the concepts learnt in the classroom. Educational events AISOC hosts a number of educational events throughout the year, the majority of which are presented by industry professionals. From a general overview of the industry to deep-dive seminars and everything in between, all business students will find something of interest to them. Not only does AISOC inform its members about alternative investments, but it also aims to upskill these members through a number of workshops. While these workshops are angled towards alternative investments, the skills taught, such as research and quantitative skills, are widely applicable to a wide range of different careers. To ensure we stay at the forefront of alternative investment education, we are constantly reaching out to industry organisations to collaborate with us for these events. For more information on UNSW Alternative Investment Society, visit our Facebook page at https://www.facebook.com/unswaisoc. n

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Finance & Banking Society (FINSOC) By Catherin Chen

Financial Society, ANU later joined the FINSOC network to form the current intervarsity society network. Over the past few years, FINSOC has expanded beyond its primary academic platform into a vital destination for financefocused students by delivering both academic support and career insight services. This is achieved through providing both valuable academic and career support.

he University of Sydney prides itself on being ranked #1 in Australia and #4 in the world for graduate employability. Despite these reputable accolades, the future of the Australian job market is dynamic and unpredictable. A report conducted by the Foundation for Young Australians suggests that “future jobs will demand transferable enterprise skills such as communication, critical thinking and presentation skills 70% more than jobs of the past.” So how does that affect you? This trend towards transferable ‘soft’ skills affects you because it is the exact types of skills that modern employers demand. Firms are no longer seeking longwinded resumes from graduates detailing their technical expertise. Open-plan workspaces designed to increase interaction and collaboration across organisational structures highlight the priority of many large corporates in enhancing the soft skills of current and future employees, especially communication skills. As companies become more dynamic, interconnected and flexible, interpersonal and influencing skills such as adaptability and leadership become more important than ever. The reality is that students need to take initiative to equip themselves with unquantifiable soft skills in preparation for future jobs. The development of these soft skills requires the input of educators and industry experts alike.

Providing a solution University students are often exposed to copious networking events for career development. Although perhaps beneficial for some, these events only offers superficial insights and guidance, communicated via words and not actions. Here at FINSOC, we go beyond mere verbal insights to bring interactive workshops which provide personalised career support through high levels of engagement between you and mentors or speakers. The good news is that soft skills are learnable outside of the classroom, and FINSOC events effectively achieve this by putting skills such as active listening, teamwork and effective communication into action. Who we are FINSOC is part of a regional network which was proudly founded at the University of Sydney. After an original merger with UNSW’s 60 | www.insideenterprise.org

Academic support At FINSOC’s heart lies the interests of its student members. FINSOC is known for its exceptional and unique academic support services. We host flagship assignment workshops by top ranking students every semester, providing insightful tips into a range of units including BUSS1040, FINC2011, FINC2012, FINC3017 and more. Other resources, including subject review guides for all core Business School Units and Finance electives, provide an outline of course content and useful assessment detail. To improve our connectivity with members, FINSOC mails out weekly financial highlights providing digestible summaries of the latest economic and market insights. These are designed to help build the business knowledge of our student members, something which is essential in job interviews and in real-world workplaces. Career support A primary focus central to FINSOC’s vision is to provide skill development opportunities to members. Recent events such as ‘The Reverse Interview’, in collaboration with Austern International, focus particularly on the development of essential soft skills by having mentors share their stories with 60+ students, bringing together students from a diverse range of commerce backgrounds to engage and actively learn from the experiences of industry leaders. FINSOC’s wide range of industry sponsors (Qnect, Zookal, BNP PARIBAS, Flow Traders) and industry partners (Austern International, FPSG) enhance the scope for collaborative events with other societies. FINSOC also has a unique focus within USYD through providing career events that showcase industry professionals from Venture Capital, Financial Planning and Startups. ‘Life of Professional Roundtable’ is an upcoming innovative career event in collaboration with Business One focused on ‘roundtables’, giving speakers a chance to engage in in-depth discussions with small groups of students. To keep all members updated, weekly email newsletters showcase the latest graduate and internship opportunities, case competitions and career events. For further insights regarding our career guides and to gain useful information regarding interview tips and more, refer to the website below. FINSOC provides a wide range of resources beneficial to anyone interested in the disciplines of finance. To find out more information, visit: http://www.finsocsydney.org.au/about/ or https://www.facebook. com/finsoc.usyd/ n

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Image Sources Links to full terms of licenses Attribution 2.0. http://creativecommons.org/licenses/by/2.0 Attribution-NonCommercial 2.0 Generic https://creativecommons.org/licenses/by-nc/2.0/ Attribution-NonCommercial-NoDerivs 2.0 Generic https://creativecommons.org/licenses/by-nc-nd/2.0/ Attribution-ShareAlike 2.0 Generic https://creativecommons.org/licenses/by-sa/2.0/ Attribution 3.0 Unported https://creativecommons.org/licenses/by/3.0/deed.en Cover “Lampa” https://www.flickr.com/photos/78102010@ N05/11991604645 Attribution 2.0 Generic Page 4 Jason Tong “Ascension” https://www.flickr.com/photos/sidneiensis/14791819684/ Attribution-NonCommercial-NoDerivs 2.0 Generic Scott Beale “Trading Floor at the New York Stock Exchange During the Zendesk IPO” https://www.flickr.com/photos/laughingsquid/14313066998/ Attribution-NonCommercial-NoDerivs 2.0 Generic Mariusz Kluzniak “Ethiopia desert landscape” http://www.gettyimages.com.au/detail/photo/ethiopiadesert-landscape-royalty-free-image/500862617 Attribution 2.0 Generic Page 6 Jason Howie “Social media apps” https://www.flickr.com/photos/jasonahowie/8583949219/ in/photostream/ Attribution 2.0 Generic Page 7 Keso S “WeChat Open Classes Pro” https://www.flickr.com/photos/keso/31790837222/ Attribution-NonCommercial-NoDerivs 2.0 Generic Blue Coat Photos “Online Shopping Security” https://www.flickr.com/photos/111692634@ N04/11406965045/ Attribution-ShareAlike 2.0 Generic German Convention Bureau “DigiDay 2016” https://www.flickr.com/photos/germanconventionbureau/30851384263/ Attribution-NonCommercial- 2.0 Generic Page 8 AIDSVaccine “IAVI Design and Development Lab” https://www.flickr.com/photos/iavi_flickr/9314255563 Attribution-NonCommercial-NoDerivs 2.0 Generic Page 9 JMacPherson “March for Science – Calgary” https://www.flickr.com/photos/lipstickproject/34163962616/ Attribution 2.0 Generic Monash University “Surgery Workshop 2012” https://www.flickr.com/photos/monashuni/8229073846 Attribution-NonCommercial- 2.0 Generic Page 10 Elisa Finocchiaro “Refugee camp” https://www.flickr.com/photos/elisafinocchiaro/6461943319/ Attribution-NonCommercial- 2.0 Generic

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Page 12 Trocaire “DSC_8654” https://www.flickr.com/photos/trocaire/32915019302/ Attribution 2.0 Generic

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Page 14 ThoroughlyReviewed “Dreamer Vision Entrepreneur” https://www.flickr.com/photos/143842337@ N03/32743904085/ Attribution 2.0 Generic Page 18 luckey_sun “big-data_conew1” https://www.flickr.com/photos/75279887@ N05/6914441342/ Attribution 2.0 Generic Page 21 CCØ Bay “Blue and Yellow Graph on Stock Market Monitor” https://www.flickr.com/photos/cc0bay/31572531694/ Public Domain Page 22 Hazma Butt “tax” https://www.flickr.com/photos/149902454@ N08/34131692754/ Attribution 2.0 Generic Page 24 A Health Blog “Exercise Plays Vital Role Maintaining Brain Health” https://www.flickr.com/photos/healthblog/8384110298/ Attribution 2.0 Generic Page 25 CommScope “Finance” https://www.flickr.com/photos/commscope/34628326030/ Attribution-NonCommercial-NoDerivs 2.0 Generic Page 26 CommScope “5G_Woman” https://www.flickr.com/photos/commscope/34847585182/ Attribution-NonCommercial-NoDerivs 2.0 Generic Page 29 Sean MacEntee “Credit Cards and Cash” https://www.flickr.com/photos/smemon/12696360474 Attribution 2.0 Generic Ning Ham “ATMs” https://www.flickr.com/photos/ningham/525770546 Attribution-NonCommercial-NoDerivs 2.0 Generic Page 31 Wayman Alridge “Paying” https://www.flickr.com/photos/55066765@ N03/5105896027/ All Rights Reserved Page 33 Frank Dai “The Tank Man” https://www.flickr.com/photos/undersound/16162874/ Attribution-NonCommercial-NoDerivs 2.0 Generic NYIT NYIT “Distance Learning Technology” https://www.flickr.com/photos/nyitphotos/12973697683/ All Rights Reserved aaugh! “recording” https://www.flickr.com/photos/aaugh/5883971648/ All Rights Reserved

energepic.com https://www.pexels.com/photo/adult-blur-boss-business-288477/ Page 38 Michael Vadon “President of the United States Donald J. Trump at CPAC 2017 February 24th 2017 by Michael Vadon” https://www.flickr.com/photos/80038275@ N00/32744150430/ Attribution 2.0 Generic Page 39 garycycles8 “aUStrailer” https://www.flickr.com/photos/garycycles8/24160371703/ Attribution 2.0 Generic DVIDSHUB “Final homecoming flights for 4th SBCT bring home 600 troops, brigade leadership” https://www.flickr.com/photos/dvids/9403821976/ Attribution 2.0 Generic Page 41 United Nations Photo “Aerial View of Camps for People Displaced by Conflict” https://www.flickr.com/photos/un_photo/5737272258/ Attribution-NonCommercial-NoDerivs 2.0 Generic Steve Jurvetson “Tesla Autobots” https://www.flickr.com/photos/jurvetson/6219463656/ Attribution 2.0 Generic Page 42 Julien Harenis “Moulding the earth” https://www.flickr.com/photos/julien_harneis/580510493/ Attribution 2.0 Generic Fairphone “Cobalt everywhere” https://www.flickr.com/photos/fairphone/5504042222/ Attribution-NonCommercial-NoDerivs 2.0 Generic Page 45 DFID “Cementing Ethiopia’s Progress” https://www.flickr.com/photos/dfid/8757865770/ Attribution 2.0 Generic Eric Haglund “Chorsu Bazaar in Tashkent” https://www.flickr.com/photos/erh1103/8219419962 Attribution 2.0 Generic Asian Development Bank “Hairatan to Mazar-e-Sharif Railway Project in Afghanistan” https://www.flickr.com/photos/asiandevelopmentbank/8426601148/ Attribution-NonCommercial-NoDerivs 2.0 Generic Page 47 Håkan Dahlström “iZettle Mobile Payments” https://www.flickr.com/photos/dahlstroms/6521999691/ Attribution 2.0 Generic Vodafone Medien “Mobiles Bezahlen mit Vodafone SmartPass” https://www.flickr.com/photos/vodafone_de/19579727715/ Attribution 2.0 Generic person seo “Entrepreneur working on his macbook” https://www.flickr.com/photos/148114704@ N05/33190744301/ Attribution 2.0 Generic

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