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CONTENTS

39 Innovation at Glance

Exclusive Interview with Jake Schwartz CEO General Assembly

45 Tech Innovation

Four Reasons To Be Exhilarated About Tech Innovation

61 Ahead of the Game

Immortality

30 Switzerland’s biggest banks to face more stringent regulations

19 A Decisive Decade?

CEOs are in the spotlight, constantly

introduce tough new regulations.

67 MENTAL HEALTH

46 Insurance Industry

66 Eating a Healthy Diet May Reduce Brain Shrinkage

29 Raising Money To Support A Great Idea?

CEOs are in the spotlight, constantly scrutinized as they

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Switzerland to

23

BUSINESS 23

BUSINESS 11 Concept Of The Minimum Viable Product Your MVP isn't really viable until your potential customers say so

14 Astex Pharma Demonstrating Open Innovation Astex Pharmaceuticals believes that open innovation in the pharmaceutical industry can invigorate internal research groups and inspire more strategic collaborations

MANAGEMENT

TECHNOLOGY

INNOVATION

Seven ways to manage your most motivated and talented employees

Real-life 'Tractor Beam' can levitate objects using sound waves

What all companies must know about innovation, ( JAMA SOFTWARE)

20 Employees Management

FINANCE

30 Switzerland’s biggest banks to face more stringent regulations Reliance on the financial sector has led Switzerland to introduce tough new regulations.

35 Restructure Before It’s Too Late Many companies get bad press when they announce they are to restructure - but such reorganisation can be a very positive step

49 Tech & Science

52 Business Innovation

Q&A 61 AHEAD OF THE GAME Managed print services is increasingly becoming a full-service data industry. key player Konica Minolta is committed to leading the way...

HEALTH

65 Life Style

Chemicals in personal products may stimulate cancer more than thought LUMINARY | 06

The holiday season is a time for gratitude and, here at LUMINARY, our deepest thanks of all go out to you. After all, it’s your support that makes our work possible. Your input allows us to stay nimble and meet the evolving needs.

Despite worries about the global economy and volatile stock markets, US consumers appear more confident than analysts had expected, but industrial production in the country fell for the second month in a row.

Meanwhile hopes that the US Federal reserve would decide not to raise interest rates this year after all helped stock markets end the week on a positive note.

In the UK, Bank of England policy maker Kristin Forbes said in a speech in Brighton that fears about emerging markets were overdone, and the next move in UK interest rates was up - and not far off at that. Not all of her colleagues at the Bank agree, however.

Eurozone slumped back into negative inflation, putting more pressure on the European Central Bank - which meets next week - to extend its quantitative easing program. Tesla Motors delivered the first batch of its new Model x car to customers, two years behind schedule.

LUMINARY

Volkswagen's new chief executive, Matthias Muller, presented to a board commit-tee the first findings of an internal investigation into the carmaker's cheating of emissions tests.

EDITOR'S NOTE

It was also another bad week for Glencore, which saw its share price fall by a third after investment-bank analysts issued grim warnings about the mining and

WE ARE THANKFUL FOR YOU

commodity-trading company's balance-sheet if commodity prices do not rebound. Investors are worried by Glencore's high levels of debt. Its insistence that it is "operationally and financially robust" and has access to strong lines of credit sent its shares up again.

The oil industry absorbed Shell's decision to abandon plans to drill in Arctic seas off the Alaskan coast, because the results of initial tests were disappointing.

Ralph Lauren decided to call it a day as chief executive of the American fashion house he created in 1967, which is best known for Its Polo label.

Annika falkengren steps down as seb chief executive read on page 23. GA the world’s most innovative company of 2015 in the education sector, GA is recog-nized for teaching the skills workers need now based in New York with 13 campuses worldwide, find out more details about Jake Schwartz 36 year old Co-Founder and CEO of General Assembly (GA) Page 39

By Norka Manrique editor@luminary-magazine.com

LUMINARY | 09

THE ALL-NEW METRIS GIVES YOUR BUSINESS ENDLESS POSSABILITIES. Starting at only $28,950.*

Introducing Metris—the new mid-size commercial van from Mercedes-Benz. The spacious cargo model offers 186 cubic feet of storage space and an impressive 2,502-lb payload, while the passenger model seats up to eight people. Both are equipped with advanced safety features like ATTENTION ASSIST®1 and Crosswind Assist2 for industry-leading protectability. From customizeability to garageability to affordability, Metris gives your business endless possabilities. Visit MBVans.com

©2015 Mercedes-Benz USA, LLC. *Excludes all options, taxes, title, registration, transportation charge, and dealer prep fee. 1 Driving while drowsy or distracted is dangerous and must be avoided. ATTENTION ASSIST may be insufficient to alert a fatigued or distracted driver and cannot be relied on to avoid an accident or serious injury. 2 Crosswind Assist engages automatically when sensing dangerous wind gusts at highway speeds exceeding 50 mph. Performance is limited by wind severity and available traction, which snow, ice, and other conditions can affect. Always drive carefully, consistent with conditions.

BUSINESS

YOUR MVP ISN'T REALLY VIABLE UNTIL YOUR POTENTIAL CUSTOMERS SAY SO ANNA JOHANSSON CONTRIBUTOR

Eric Reis and Steve Blank’s concept of the minimum viable product (MVP) has become the philosophy thousands of entrepreneurs across the world subscribe to when developing products and ideas. The problem many of these entrepreneurs run into is they don’t effectively test the viability of their MVPs. THE IMPORTANCE OF STRINGENT TESTING Nine out of ten startups fail. That’s a 90 percent failure rate. Pretty sobering, eh?

Well, that number is a bit misleading.

Roughly 42 percent of startup founders claim their ventures failed as a result of “no market need” for their product or service. Nearly half of all failures are the direct result of learning their irrelevancy the hard way.

Reis and Blank are always quick to point out that failed startups “begin with an idea for a product that they think people want.” They then spend months perfecting the product without ever turning the “idea” into a tangible product that can be shown to customers, tested and refined.

Only when the startup fails do they realize the product was doomed from the start.

This can all be fixed with stringent testing and basic prototyping. The MVP is a basic version of the end product that can be tested. You can gauge whether the product is likely to succeed based on response from your target market.

A sloppy MVP may misrepresent your end product and skew the testing results. So, first and foremost, focus on creating an MVP that’s both “minimum” and “viable.”

3 WAYS TO TEST YOUR MVP Once you have a quality MVP you are confident to stand behind, it’s time to start testing. Here are some methods you’ll want to try: Interviews and focus groups: The more people you talk with, the more accurate your results will be. Start with interviews and focus groups. There’s a lot of value in using the Internet for quick feedback, but nothing beats face-to-face interactions. Every penny you spend on

interviews and focus groups will be well worth it in the long run.

Social monitoring: Social media is an excellent tool for gauging market receptiveness to your MVP. Run a social campaign and send out free prototypes, then follow up with users and listen to what they’re saying. You will get an accurate idea how the product will be received.

A/B split testing: If you’re finding resistance among your test groups, it’s important that you get to the bottom of the issue. While it’s possible users don’t like the entire product, it’s more likely they find a particular aspect or element undesirable. Use split testing to isolate these problems.

Testing is key to a successful MVP. In the end, accurate prototyping and thorough testing will help you determine whether your startup is headed for success, or in need of a pivot. Just leverage the tips mentioned in this article and you’ll be better off than 42 percent of startups.

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BUSINESS

ASTEX PHARMA DEMONSTRATING OPEN INNOVATION Astex Pharmaceuticals believes that open innovation in the pharmaceutical industry can invigorate internal research groups and inspire more strategic collaborations Used originally in the 1960s to describe a situation in which knowledge and expertise is imported and exported by a company to foster internal innovation and expand opportunities for its products, open innovation has made a return in recent times. Embraced, largely by R&D organizations, to foster transparent interactions between companies, the concept has done a great deal to inspire the very latest industry developments.

The role of open innovation within the pharmaceutical industry has been immense the industry has suffered a significant decline in productivity in the last 25 years, although recent data indicates an improvement in the last few years.

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One of the key reasons for this decline was that internal R&D groups were unable to deliver the same output of new medicines as during the golden decades of the 1970s and 80s.Many industry observers cited a lack of internal innovation as a contributory factor to this reduction in productivity, and encouraged large pharmaceutical companies to embrace the wider biotech and academic ecosystems. As a result, open innovation has now taken hold in the vast majority of pharmaceutical companies, and has invigorated internal research groups as well as providing significant opportunities for both biotech companies and academic institutions to establish strategic partnerships with big pharma.

In the first two rounds of funding Astex raised about £45m in total, one of the largest VC funding rounds in Europe at the time. Later on were also able to generate significant finance from a range of strategic partnerships that Astex established with major pharmaceutical companies, such as Johnson & Johnson, Novartis, AstraZeneca and GlaxoSmithKline, who wanted to access our technology platform. These deals typically involved multi-million dollar upfront payments, in addition to downstream milestones and royalties on future marketed products originating from the partnerships, also accessed smaller amounts of finance from research charities, foundations and organisations such as the Wellcome Trust.

Astex pioneered a novel approach called fragment-based drug discovery to discover new small-molecule medicines.

This approach has certain advantages over the conventional methods that most big pharma companies typically use to discover new drug candidates, but requires sophisticated biophysical techniques. One of key goals is to maintain Astex Better leadership position in this technology by developing new interactions methodology, as there are now many competitors in this between area. Furthermore, Astex also continue to focus on primary therapeutic area of oncology, in which we are discovering pharmaceutimultiple new drug candidates which one day may become cal companies effective medicines for patients with cancer. More recently, and third Astex have begun to work on neurodegenerative diseases parties have such as Alzheimer’s and dementia, a major challenge for our ageing society. In both oncology and neurodegenerative inspired some diseases, pursuing a strategy of trying first to understand of the latest the molecular basis of the disease and then developing a industry targeted therapy which can arrest its progression. This advances. approach is generally referred to as ‘precision medicine’.

Nowhere is this better

Historically it has been difficult to secure funding from public market; there has been limited investor appetite for biotech stock in the UK, given the size and sophistication of the London market. Some observers believe it is a legacy left over from the failure of some of the early UK biotech companies, such as British Biotech in the 1980s, and the resulting losses made by investors. However, others are of the opinion that London investors tend to have a lower appetite for risk compared with US investors, which explains a more general reluctance to fund technology companies. Whatever the reasons, it is clear that this has held back the development of UK biotech firms, and for now some of the most promising UK companies are choosing to launch their IPOs on US exchanges such as NASDAQ. However, in the last two years there has been some cause for optimism, as several biotech companies have successfully gone public in London, with one called Circassia raising a record amount of finance.

As a private company, Astex has turned to alternative financing means as funding from public sector is almost nil thus was largely financed by European and US-based life science venture capital firms, such as Abingworth, Astex founding investor.

The most exciting thing to come from this research so far is collaboration with Novartis, in which they have developed a drug candidate, called ribociclib that has shown significant promise in clinical trials of patients with breast cancer. Industry analysts speculate that this may be a future blockbuster drug, which could help many cancer patients. Clinical trials performed by Novartis have shown that ribociclib is a highly targeted anti-cancer agent, which has reduced tumors in patients with breast cancer when used in combination with other oncology drugs. Assuming the development of ribociclib continues well, Novartis is planning to file for market approval in 2016.

illustrated than in the case of Astex

Cancer is a disease that involves some normal cells in the body losing their ability to control their growth. Rapid growth and division of these cells results in tumors, which eventually damage the surrounding organs and often cause fatal outcomes. In the past, there was a very poor understanding of how and why these cells lose the ability to regulate their growth. However, in the last 30 years, fundamental research has provided answers to these questions and revealed the mechanisms that result in cancer.

Targeted therapies are designed specifically to block these mechanisms and have shown spectacular efficacy against some types of cancer, such as melanoma.

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BUSINESS Another area of great excitement in oncology drug development is immuno-oncology. Here, drugs are being developed that are designed to stimulate the body’s own immune system to fight cancer cells, and recent examples have shown very impressive results with some types of cancer.

One of the main advantages of targeted cancer therapies over traditional chemotherapy is that the side effects are significantly reduced. Chemotherapy is not designed to target only cancer cells and so often kills many healthy normal cells, which can result in devastating side effects for the patient. Chemotherapy can still be very effective against some cancer types, but the side-effects need to be carefully managed. There are also some side effects associated with targeted therapies, but these tend to be milder in comparison.

NEWS RELEASE 2015

Astex Pharmaceuticals Announces Orphan Drug Designation for Guadecitabine (SGI-110) in the Treatment of Acute Myeloid Leukemia

2015

Astex Pharmaceuticals Announces Publication of Key Clinical Data for Guadecitabine (SGI-110) in The Lancet Oncology

2014

Astex Pharmaceuticals Presents Final Results of Phase 2 Study of SGI-110 in Treatment Naive Elderly Acute Myeloid Leukemia at the European Hematology Association Meeting

2014

Astex Earns Milestone Payment on Initiation of Phase 3 Study

2013

Astex Pharmaceuticals to Present at AACR-NCI-EORTC

2013

Otsuka Pharmaceutical Completes Acquisition of Astex Pharmaceuticals

In 2013, Astex was acquired by Japanese pharmaceutical company Otsuka for $886m, which was the seventh-largest global M&A transaction in the biotech sector that year. The primary driver for Otsuka in this deal was Astex’s leading position as a drug discovery technology pioneer, in addition to portfolio of cancer drugs.

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Astex now operates as a wholly owned subsidiary and is a key component of the Otsuka organisation. Astex future is bright, as they begin to apply there leading fragment-based drug discovery technology to new therapeutic areas, such as neurodegeneration, in addition to ongoing commitment to oncology.

Astex Pharmaceuticals – structural biology revolutionises drug discovery

Furthermore, there location in Europe’s premier biomedical cluster, Cambridge, Astex will be able to play a central role in open innovation relationships with some the world’s leading academic institutions.

Open innovation has now taken hold in the vast majority of pharmaceutical companies, and has invigorated internal research groups as well as providing significant opportunities for both biotech companies and academic institutions

Breguet, the innovator.

Creation of a peerless style, 1775 With a particularly refined and timeless design, Breguet renewed the traditional horological aesthetic of the late 18 th century. Today, the Classique 7787 model, indicating the age and phases of the moon, is a contemporary interpretation of the Breguet style : white grand feu enamel dial, Breguet numerals, Breguet moon-tip hands and secret signature. History is still being written ...

A B U D H A B I B A L H A R B O U R B E I J I N G C A N N E S C H E N G D U D U B A I E K AT E R I N B U R G G E N E VA G S TA A D H O N G K O N G K U A L A L U M P U R L A S V E G A S L O N D O N LOS ANGELES MACAO MILAN MOSCOW NEW YORK NINGBO PARIS SEOUL SHANGHAI SINGAPORE TAIPEI TOKYO VIENNA ZURICH – WWW.BRE GUET.COM

MANAGEMENT

A DECISIVE DECADE? CEOs are in the spotlight, constantly scrutinized as they steer firms through significant transformations.

If this is what they face today, who knows what they can expect in 2020 What leadership styles, qualities, skills and approaches will successful CEOs need to take their companies into the next decade? These were the questions that a new global study – commissioned by Amdocs with strategy consultancy Telepresence – sought to answer.

In-depth interviews with CEOs and other senior management executives at the world’s top-tier service providers, including some of the largest in Europe, provided insights that uncovered views and forecasts for how CEOs will be running their organizations in 2020.The local industry believes collaborative styles will be needed to allow service providers to scale into the future.

Management styles are changing The typical CEO of today has worked in different countries, and has held at least three different roles at their current company. However, professional diversity may not be enough to be effective in 2020. The survey found that in Europe, 100 percent of respondents who expressed an opinion believe that current CEO management styles need to change for them to remain successful just five years from now.

The local industry believes collaborative styles will be needed to allow service providers to scale into the future. This means moving away from today’s favored styles of visionary and pacesetting leadership – in which the CEO is expected to know where the company is LUMINARY | 19

going and lead it there by example – to coaching and affiliative styles, which value the contribution of teamwork to end goals.The majority of the executives who took part (64 percent) also believe CEOs of European service providers should be driven, in 2020, by a passion for innovation, and would provid the most value to the organization through ideas and strategy (first) and innovation (second), ahead of financial governance (third), good corporate governance (seventh), and good operational management (ninth).

C-suite transformation In Europe it’s not just CEO leadership styles that will change. New areas of focus and lines of business are already opening new C-level opportunities. Respondents felt that today, the most commonly added roles hold responsibility for commercial activities (first), and customer experience, digital and people (tied second). Executives predicted that, in 2020, the most commonly added role will still be for customer experience (first), followed by big data (second), digital (third), and cloud (fourth).

Today’s C-suite team is likely to be the breeding ground for future CEOs. So it’s interesting that 64 percent of senior executives in Europe believe that the CEO in 2020 will most likely come from a CFO background, implying that the former is expected to drive innovation while keeping the numbers right.

Roadblocks to success The top barriers to Europe’s CEO success by 2020 will be ‘no clear strategy’ (first) and ‘lack of resources’ (second), ahead of lack of ideas (third), and competition a distant ninth. Reinforcing the need to overcome the challenge of executing innovative ideas, executives in Europe believe that, by 2020, the most important innovation skill the future CEO will have is the ability to create organizational structures that support innovation and change.

So, it’s unsurprising that the region’s senior executives plan to invest in outsourcing strategies to supplement internal resources in support of innovation investment imperatives. In 2020, CEOs in Europe are most likely to invest in customer experience (first) and cloud services and networks (tied second). To drive change, it is believed that a blended approach of both outsourcing and insourcing will be required. For example, more than half are expected to outsource at least some support for cloud services (82 percent) and digital services (64 percent).

In what has been termed ‘the new world of customer experience’, customers expect to be inspired and excited by a constant drum of new services, delivered in an intelligent manner through personalization and contextualization, and shaped by a dynamic quality of experience, regardless of device or network. All this needs to be accomplished in a manner that accelerates business value for the service provider, speeding up time to market, optimizing business processes, and reducing costs. As players continue to consolidate, innovation is increasingly challenged by back-end system complexity, impacting service providers ability to deliver on customer expectations.

Any manager who tells you that motivating the troops is the first thing on his mind is lying. That’s because managing people is never a job title and it’s rarely a priority. Like it or not, that’s just the way it is.

While managers do have direct reports, their job is to manage a function of some sort: marketing, finance, HR, product development, operations, whatever. And that’s usually the way their goals and priorities are written. Getting the job done is top of mind. Managing people is not.

Don’t get me wrong. The best managers figure out how to walk and chew gum at the same time. They know that the hands-down most effective way of accomplishing their goals is to figure out how to motivate their people to work together like a well-oiled machine, so that is a priority. It’s just not the priority.And while some do have a knack for getting their folks so fired up they’ll work tirelessly and ask for more, most don’t. They got promoted for their functional ability, not because they’re good managers. Don’t think of that as a bad thing; it’s just the way it is. Some learn in time, others not so much. It’s just the natural order of things.

In any case, if you manage talented people, or plan to someday, it’s a good idea to understand what really excites them about their work and what makes them proud to be part of a company. Granted, everyone’s different, but most achievement-minded folks get off on more or less the same things.

A CHANCE TO MAKE A REAL DIFFERENCE It’s funny to read about the importance of employee engagement and how Millennials want jobs where they can have a big impact, like those are new concepts. They’re not. Those same factors have motivated go-getters forever. I should know. I was once one of them.

A MERITOCRACY WHERE THEIR EFFORTS AND TALENTS ARE RECOGNIZED AND REWARDED Those who reach for the stars can’t have limits on how high they can climb. Nobody ever thinks about how former CEOs of Micron (Steve Appleton), Verizon (Ivan Seidenberg) and so many others literally started at the bottom and worked their way up. It inspires up-and-comers to know the opportunity is there.

EMPOWERMENT TO TAKE ON AS MUCH RESPONSIBILITY AS THEY CAN HANDLE AND THE TOOLS TO ACCOMPLISH THEIR LOFTY GOALS For overachievers, a little responsibility is a dangerous thing. It’s like a gateway drug. They always want more. If you want them to stick around and help your company to become wildly successful, be smart.

Don’t just give it to them; empower them to take the initiative and take responsibility.

AN ENVIRONMENT THAT CHALLENGES THEM TO REACH NEW HEIGHTS AND MENTORS TO HELP THEM DO IT Besides responsibility, everyone who wants to go places in life wants a challenge. Once the challenge is gone, they’ll be next. That’s why startups are such a big draw for success-oriented people. They get to be big fishes in little ponds and wear lots of new hats. If nothing else, startups are characterized by constant challenges.

EXCEPTIONALLY COMPETENT AND DRIVEN MANAGERS WHO WORK HARDER THAN THEY DO Few things are harder for hard-working employees to do than leaving the office while the boss is still there. Smart, ambitious people love working for like-minded bosses who walk the talk.

A SUCCESSFUL, GROWING COMPANY THAT MAKES KILLER PRODUCTS CUSTOMERS LOVE Everyone wants to work for a winner or at least a growing company with great prospects. Being the underdog is fine but you’ve got to at least have a shot at making it. Even when Apple was down, folks loved to work there, but I bet they love to work there even more now. There’s nothing like knowing you help make awesome products customers can’t live without.

A PIECE OF THE ACTION What I’ve always loved about the culture of the technology industry is equity. I got my first stock bonus as a young engineer at Texas Instruments and boy, did that motivate me. Nothing tells employees that you value them more than putting your money where your mouth is in terms of ownership. It goes a long way.

While some of these tips are written for top executives with significant control over how organizations are structured and employees rewarded, that’s OK. You may not be in the corner office today, but if you play your cards right, you never know. Just remember, if it motivates you, it will motivate others like you.

WAYS TO MANAGE YOUR MOST MOTIVATED AND TALENTED EMPLOYEES

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AN ICON JUST GOT LARGER

THE NAVITIMER 46 mm

COVER STORY

ANNIKA FALKENGREN PRESIDENT & GROUP CEO,SEB

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ANNIKA FALKENGREN STEPS DOWN AS SEB CHIEF EXECUTIVE Longstanding boss of Swedish lender moves to Swiss private bank Lombard Odier Annika Falkengren is stepping down as chief executive of Swedish lender SEB to join Swiss private bank Lombard Odier as managing partner.

Ms Falkengren, who has been chief executive for 11 years and worked at SEB for almost three decades, successfully guided the bank through the financial crisis and gained a reputation as one of the most powerful women in finance. She is the only true independent director on Volkswagen’s supervisory board.

“After all my years at the helm of SEB, it was not easy to take a decision to pursue a new career and role. However, I have come to the conclusion that now is the right moment,” said Ms Falkengren.

SEB said she would leave by July 2017 at the latest and added it would now begin a process to recruit a new chief executive.

Ms Falkengren’s appointment is a coup for Lombard Odier, which is facing stiff competition to manage the assets of the world’s rich — including from Swiss banking rivals such as Pictet and Julius Baer as well as UBS and Credit Suisse. Swiss private banks have had to rethink their business models after the US-led crackdown on tax evasion and are looking for expansion, particularly in Asia. Lombard Odier’s senior managing

partner remains Patrick Odier, who stepped down last year as chairman of the Swiss Bankers’ Association.

Swedish banks came through the 2008/09 global financial crisis in relatively good shape, although the exposure of the likes of SEB to the Baltic states caused some headaches. Worried about their relative large size to the Swedish economy, regulators in Stockholm have forced local lenders to have some of the highest capital ratios in Europe.

But the Swedish central bank and some analysts remain worried about the local housing market — particularly in the large cities of Stockholm, Gothenburg and Malmo — after years of negative interest rates have boosted prices.

Marcus Wallenberg, SEB’s chairman and one of Sweden’s leading businessmen, said that the bank’s strategy and financial targets would remain unaltered.

“Annika Falkengren has with her longstanding commitment to SEB and its customers, her stellar leadership and her deep industry knowledge, shown that people matter. She successfully navigated SEB through the global financial crisis and set a clear strategy forward on which she and the whole SEB team LUMINARY | 24

CV Annika Falkengren Born 1962 in Bangkok

Education 1987 BSc Business Administration and economics, Stockholm University

Career 1987 Trainee and various positions in trading department, SEB 2001 Head of corporates & institutions division, SEB 2004 Deputy chief executive, SEB 2005 Chief executive, SEB 2011 Supervisory board member, Volkswagen and Munich Re

relentlessly has delivered,” he added.

Ms Falkengren and Denis Pittet, a lawyer by training who has worked at Lombard Odier since 1993, will both become managing partners, which involves becoming an owner of the private bank as well as helping run it.

Mr Odier said: “These two appointments represent a strong endorsement of our strategy, differentiated business model and long-term vision.”

Interests Spending time with family

LUMINARY | 25

FINANCE RAISING MONEY TO SUPPORT A GREAT IDEA? CONSIDER FORMING AN ADVISORY BOARD

BY MICAH JOHNSON Sometimes, a great idea can run away from you if it becomes an immediate success -- especially if you do not have the proper plan in place to meet that instant demand for your product.

After seven years running a service business that helps large organizations with multiple locations manage social media and online reputation, my company and I decided to make a leap into the mobile app world. I took the largest problem that didn’t have a solution -- one we run into on a daily basis -- and sketched out what a mobile app might look like to solve it.

Distributing the sketches to our internal team helped me further refine the idea and overall direction of the app. With that refinement in place, I built a few Photoshop mock-ups, a sales presentation and started test marketing it to our current clients.

The initial results were in. The existing clients loved the concept. We took the development one step further and started building a beta version. One that would allow us to demo the app firsthand to anyone who was interested. This is where things got a little crazy. We set up a no-frills booth at an automotive trade show to demo an experience with our initial beta version of the app. The auto industry is our biggest no-brainer target industry. During the two-day show, we ended up being one of the most trafficked booths and had a total of 400 dealerships interested in using our app.

At the same time, our test marketing was spreading and, in total, we identified three industries that our app would work perfectly for, easily generating a high demand in all of them.

The problem? We didn’t have an app ready for that demand LUMINARY | 29

RAISING MONEY TO SUPPORT

A GREAT IDEA?

At first we thought, “Let’s raise some kind of information is extremely capital! We can increase our develop- valuable and helps us stay leaps ahead of ment any competition team size and get this app built pronto!”

Start building your advisory board However, as we reached out to potential • Define the objective you want your investors, a few things became clear: advisory board to fulfill.

• We need money, yes. But at what cost?

• Build your dream list of people you’d • We need more insight and conneclike on your advisory board. As tempttions into our target industries. ing as it is to ask buddies, it’s ideal to have a mix of representatives with • We don’t need dumb money, we need experience in your target industries a strategic investor that can provide and the capital world. Left and right these insights and connections. brains should help dissuade too much conformity.

Enter the advisory board By building an advisory board, we’re • Contact every person on your wish list accomplishing a few things right away: with an individualized pitch. Whether it’s a direct ask to be an advisor or • We are making connections in the some serious wooing, do your best to major industries where we want get them as excited about the offering strong market share. as you are.

• We giving incentive to our advisors to • Set the expectations for board memhelp us grow the business. bers such as meeting frequency, • We are leveraging advisors that have bringing solutions with problems, connections to smart capital and can honesty, transparency, etc. be introduced through them as a • Establish the compensation (options, third-party instead of seeking capital stipend, travel, meals, etc.) directly. the solution to the problem and can • Create an advisory board contract that keeps everyone on the same page with build expectations, term, compensation and an app to solve that solution, there is confidentiality. still a lot of knowledge we do not possess. Initial discussions with poten- Finally, we don’t want to dread meetings tial advisors have already refined our with our advisory board. Hopefully these revenue model and shaped the way tips will help you avoid that too. we’re thinking about the rollout. This

Switzerland’s biggest banks to face more stringent regulations

Reliance on the financial sector has led Switzerland to introduce tough new regulations. UBS and Credit Suisse could see these become even stricter if they increase their market share

BY MARK BRANSON, CEO FINMA Switzerland’s financial regulatory body Finma has recently set out plans to strengthen the country’s banking regulations, including an increase in various different capital requirements.

Since then, however, the head of the body has stated that the country’s two biggest banks – Credit Suisse and UBS – would be forced to further increase their capital requirements.

The regulatory requirements announced in mid-October will bring total capital requirement based on risk-weighted assets will also rise from 19 percent to 28.6 percent. The new rules will also require what banks hold of their exposures in going and gone concern capital to rise from less than five percent to 10 percent. New requirement for loss absorbing capital were also announced as part of the plan, meaning taxpayers should not have to bailout financial

“Switzerland’s economy is heavily skewed towards its banking sector, leading to concerns that of the impact of another financial crisis” institutions should any new crash arise in the future. Further, Switzerland’s leverage ratio closer will be brought in line with global banking standards, at around five percent. The UK currently has a ratio of four percent, while the US’S sits at around five percent.

However, according to Mark Branson, Chief Executive of Finma, the leverage ratio will rise even further if the country’s banking giants expand their size further. “If the size were to expand, the capital requirement would gradually rise,” Mr Branson said in an interview, suggesting

that the rate would be at around 5.5 to six percent.

“Once you go over certain thresholds, you come into the next bucket” Switzerland’s economy is heavily skewed

towards its banking sector, leading to concerns that of the impact of another financial crisis. The country’s banking monoliths were heavily hit by the 2008 financial crisis, after losing large amounts on mortgage loans.

LUMINARY | 30

FINANCE

RESTRUCTURE BEFORE IT’S TOO LATE MANY COMPANIES GET BAD PRESS WHEN THEY ANNOUNCE THEY ARE TO RESTRUCTURE - BUT SUCH REORGANISATION CAN BE A VERY POSITIVE STEP

THE EARLIER A COMPANY ADMITS A CRISIS, THE GREATER THE CHANCES OF A TURNAROUND. STILL, MANY ONLY ACT WHEN IT’S TOO LATE ‘Company to be restructured’, ‘everything to be put to the test’, ‘restructuring necessary’ – companies that appear in the press under such headlines often have a hard, uphill struggle ahead of them. Nevertheless, such news also has its good side. The crisis-stricken company is taking action – trying to turn the boat around by means of a restructuring programme.

Restructuring processes can be initiated either internally or externally. Internal initiators may be the LUMINARY | 35

executives (chairpersons, managing directors), the supervisory bodies (supervisory or advisory board members) or the owners (partners, shareholders).

The basis for this is that the instruments required for detecting a crisis at an earlier stage are in place. As regards corporate planning requirements, the legal system only includes rudimentary rules. However, the requirements grow sharply with the onset of insolvency. It is, therefore, up to the stakeholders to lay down

suitable rules in the company’s memorandum and articles of association, management guidelines or information regimes, so that the causes of a crisis can be recognised well in advance.

MANY COMPANIES GET INTO DIRE STRAITS AS A RESULT OF PLANNING WITHOUT EARLY WARNING SYSTEMS

The conventional external initiators of restructuring processes are lending banks. On account of the provisions in loan agreements (e.g. covenants) and banking supervisory regulations relating to risk exposure, banks only reach positive loan decisions if the borrower has proof of restructuring capabilities.

However, while banks were previously reliable initiators of turnarounds – on account of harsh banking supervisory regulations – restructuring measures are now often initiated inconsistently or too late. One reason for this is that it is possible to resell non-performing loans. This means that restructuring processes are no longer subject to banking supervisory regulations. Therefore, in more and more cases,

investors will have the task of initiating and maintaining restructuring processes, since merely continuing business as usual will not create any added value in the long run.

FINANCIAL AND STRUCTURAL REORGANIZATION

But what does restructuring actually mean in practice? Just as in the field of medicine, there are two approaches – you can combat the short-term symptoms or eliminate the causes of the illness over a long period of time. Intervention from outside is financial reorganization. This involves contributions from creditors and equity capital providers as a means of improving balance-sheet ratios. This can include deferment of payments, forfeiture of claims by creditors, and conversion of liabilities to shares.

An alternative could also be a reduction in share

capital.

Completely different instruments are used in a structural reorganisation, which entails restructuring the entire enterprise internally. This means changing production and distribution processes, reorganising departments such as purchasing and operations, and reorienting the company’s strategy.

In practice, the financial aspects often have greater clout. Without any doubt, the best thing that creditors and owners can do to ease the financial situation in a crisis is to sit down at one table. However, experience shows that such measures alone are often insufficient.

Many a long-established company has once more been in the headlines just a few years after a supposedly successful financial reorganisation. The decisive reason for this is that, although these companies had less debt and fresh capital, they were still working with the same structures and a strategy that was only gradually changing.

ELIMINATING THE CAUSE

The main goal of restructuring is to eliminate the causes of the crisis. All measures are taken to ensure that a company will once more become competitive and generate a return which is normal for the respective sector. Analysing causes is often a laborious task, since they are usually a combination of out-of-date production methods, entrenched distribution channels, a neglected control system and other factors. Only those who have the courage to leave familiar paths and reorganise structurally can get back on the road to success on a long-term basis.

Without the help of external advisors, such an analysis often gets bogged down halfway to its goal. And even during the following implementation phase, it is easier for an external advisor to ease old structures away and modernise an enterprise.

Restructuring only bears fruit after some time, when new processes take effect, new products are launched and new distribution channels are well established. It is not possible to restructure an enterprise comprehensively within quarter of a year; the impact of a reorganisation based on structural criteria is only noticeable in the following quarters. The ability to implement efficiently is of crucial significance to the success of the restructuring programme.

THE PERFECT PLAN

Integrated corporate planning is crucial to the success of a restructuring programme. Up until now, it has often been the case that a plan was not devised until a crisis occurred. Many companies get into dire straits as a result of planning based on nothing but their own viewpoint, without deploying modern planning and early warning systems. The consequences are fatal – they recognise earnings and liquidity risks too late, come under time pressure, and can only concentrate on financial reorganization.

Those who are really serious about restructuring their enterprise cannot avoid looking at integrated

LUMINARY | 36

FINANCE planning. This means linking various plans for areas such as sales, investments and staff, and transferring them to an integrated earnings, assets and liquidity plan. Only when all essential reciprocal influences have been included in the plan can a reliable and objective-oriented result be achieved. The degree of detail, as well as the organisation and intensity of the plan, depends on such factors as the company’s size and complexity. What » is decisive in this respect is that the objectives are precisely defined and that a specific plan of action (that can be monitored) is devised.

FLEXIBILITY WITHOUT RED TAPE

Companies in a crisis have many options for action – this not only applies to an out-of-court turnaround, but also to insolvency proceedings under the supervision of a court.

The US has been a role model in this respect for many years. If a US company is threatened by insolvency, they can file for insolvency proceedings pursuant to Chapter 11 of the US Bankruptcy Code. The debtor is then granted protection from creditors for a limited period of time, so that restructuring measures can be implemented. A company is allowed to continue business operations during such proceedings, in accordance with US insolvency law. Moreover, as a rule, a restructuring concept is devised together with creditors and examined by the insolvency court. The management may then apply for further loans to help them to get back on their feet. New creditors have priority above all over other lenders.

England is also well known for the flexible options that the country’s insolvency law allows restructuring companies, without too much red tape. Two options from the variety of proceedings offered by English insolvency law are administration and company voluntary arrangements (CVA). A CVA is a kind of out-of-court settlement agreement between the creditors and the debtor company.

ABUNDANT ALTERNATIVES

In countries like France and Germany, governments have adapted their insolvency law to the Anglo-Saxon model and, by doing so, have given restructuring efforts a lot more weight. In Germany, the Law on Further Facilitating the Restructuring of Companies (ESUG) came into effect in March 2012. Obviously, the objective is to make it easier to turn around companies in a crisis. This can be achieved by in-court restructuring proceedings without an insolvency administrator, such as debtor-in-possession and protective shield proceedings. This means that the previous management is allowed to lead the company through the crisis itself – in each case supervised by an independent custodian and generally supported by a restructuring expert with insolvency experience.

This is a good idea in principle. However, up until now, a large number of ESUG reorganisations have

LUMINARY | 37

failed. In reality, one in four proceedings in Germany ends in ordinary insolvency. The decisive reason for this is insufficient preparation and lack of time. Ideally, a restructuring concept will already have been devised in advance and can provide a basis for a feasible turnaround plan. Anybody who begins from scratch on the day the application is submitted has very little chance of devising a convincing plan, in view of the complexity of the proceedings. In such cases, it is often only the deployment of outside experts that can help.

THE VALUE OF EXPERTISE

Business law firms are the right restructuring partners, provided they have a good feeling for business and the ability to implement efficiently. Only then is it possible to create an integrated corporate plan, a due diligence review and restructuring concepts, as well as to manage M&A processes. At the same time, law firms already know prior to insolvency what is crucial in a worst-case scenario.

ABOUT PLUTA

The company was founded in Ulm in southern Germ ny, more than 30 years ago. PLUTA is an expert in restructuring and turning around companies that have been affected by a crisis or insolvency. The law firm concentrates on legal advice and insolvency administration, together with consultation on and implementation of restructuring programmes. With more than 35 appointed insolvency administrators and over 330 employees in more than 40 offices in Germany, Italy, Spain and Poland, PLUTA has been one of the leading restructuring companies for many years.

The insolvency and restructuring business has become global like every other business activity. Enterprises have branches, customers or suppliers outside their own borders, so require cross-border advice. The international network BTG Global Advisory, of which PLUTA is a member, will in future increase its efforts to offer international services for cross-border restructuring. The network used to focus on insolvency administration, but nowadays important pre-insolvency restructuring has been added to the range of services.

BTG Global Advisory covers wide parts of Europe, North America and Asia. This year, newcomers to the network included GlassRatner Advisory & Capital Group in the US, as well as Rodgers Reidy with headquarters in Australia, Hong Kong, Malaysia and New Zealand. Farber Financial Group in Canada, Begbies Traynor in the UK, and Integrated Capital Services in India have all been members of the network for several years now. PLUTA supports the network from its offices in Germany, Italy, Spain and Poland.

Q&A

INNOVATION AT GLANCE Jake Schwartz CEO and Co-Founder General Assembly

Portfolio in brief: Jake Schwartz 36 year old Co-Founder and CEO of General Assembly (GA), the tech education company based in New York with 13 campuses worldwide.

Jake Schwartz grew up in Oregon, and had an early love of music. Switching from violin to fiddle to guitar, he found that music developed his thinking and communication styles, a tool which came in handy later as CEO of General Assembly, the company behind the learning facilities of the same name.

The company offers online and in-person courses and workshops in business related tools such, as marketing, design, product development,

and data science. Under his leadership, General Assembly has scaled to nine cities (Berlin, Boston) Hong Kong, London, Los Angeles, New York, San Francisco, Sydney, and Washington, D.C.) in less than three years, working with more than 70,000 students along the way.

Prior to founding General Assembly, Jake worked for Associated Partners, a multistage private equity firm focused on telecommunications, media, and technology. He has a B.A. in American studies from Yale University and earned an MBA with honors from The Wharton School. Schwartz, 35, is based in New York City.

SUCCESS WILL BE WHEN THERE’S A VOWS COLUMN WITH TWO PEOPLE WHO MET HERE, THAT’S MY DREAM, THAT’S COMMUNITY

GENERAL ASSEMBLY TOGETHER WE’RE CREATING A WORLD OF INNOVATION LUMINARY | 39

Q&A opportunity?

Jake Schwartz: I almost started a crowd-funding business in early 2007, before Kickstarter or any of those companies took off. I saw the trend and could have ridden the wave, but I chickened out. It’s a great lesson in taking the leap when you see something like that coming.

LUMINARY: Which technology sector excites you most?

Jake Schwartz: I think self-driving cars are going to change how we live in fundamental ways and radically alter the real estate market. Sociologists talk about how the Interstate and the car are what created suburbs and sprawl. Once you don’t have to drive, all sorts of neighborhoods, towns, and lifestyles become attractive.

LUMINARY: What do you do to live a balanced life?

Jake Schwartz: I’m not sure I do live a balanced life. I try to read novels, work out, hang out with my girlfriend; things like that. But GA is a huge part of my life, and I’m glad that it is. That was what I set out to have my work be — a core passion and calling — and so I’m happy that it’s almost all-encompassing.

LUMINARY: Is business school necessary for entrepreneurs?

Jake Schwartz: We get that question often at General Assembly because you could argue that business school is something we’re trying to disrupt. And it’s tricky because I’m also an MBA [graduate] from Wharton. I definitely use all the knowledge and experience I gained

LUMINARY: What was your first job?

Jake Schwartz: I worked as a tour manager for a singer-songwriter I knew who had a record deal in the late ’90s. It was awesome. I drove, met a lot of interesting characters, and sometimes I got to run the soundboard.

Being in the music business is the ultimate entrepreneurial experience — nothing happens if you don’t make it happen, and so you have to be a hustler. It makes

GA THE WORLD’S MOST INNOVATIVE COMPANY OF 2015 IN THE EDUCATION SECTOR, GA IS RECOGNIZED “FOR TEACHING THE SKILLS WORKERS NEED NOW.” to run GA now that we’re 200-plus person company, but I’m not sure how useful it was when we were getting started. I think if GA had been around when I was in my 20s, I wouldn’t have needed to go to Wharton at all.

LUMINARY: What is the best advice you ever received?

Jake Schwartz: Howard Schultz once told me that if he could go back, the one thing he’d do differently at Starbucks was “hire the best HR person and give them a seat at the table.” That resonated with me in a huge way, and so I went back to GA and did just that. We hired our amazing Chief People Person, Jill Maguire-Ward. She’s a C-level executive, and she’s involved in all the major decisions at the company. It has literally changed our company’s course, and I don’t think we’d have been able to scale past 200 employees without her.

LUMINARY: What is one goal that you would like to accomplish during your lifetime?

Jake Schwartz: When I was a little kid, my dad would read me science fiction books about interstellar travel, and it’s had a huge impact on me. I really want to be able to go up in space with him while we’re both still alive.

LUMINARY: What was your biggest missed LUMINARY | 41

Silicon Valley startups look easy.

LUMINARY: What do you do for fun?

Jake Schwartz: I’m always trying to learn a new musical instrument. I’ve tried to learn the banjo a few times, and right now I’m working on it again. It’s hard, but it’s so different than my work that I find it really relaxing.

LUMINARY: What is one unique or quirky habit that you have?

Jake Schwartz: Ask anyone on my team and I’m sure they’ll have a laundry list. One of the biggest is I’ve been on a no-carb diet, off and on, for several years, and it’s still a daily struggle. Sugar is like crack [cocaine] for me, and so it’s better if I completely abstain.

LUMINARY: If you could have one superpower, what would it be?

Jake Schwartz: I’d love to be like [X-Men leader] Professor Xavier and have telepathic abilities. It would make running a company way easier.

Correction: Due to an editing error, an earlier version of this story described General Assembly as a series of

“coworking-meets-learning facilities.” The company no longer offers coworking.

LUMINARY: Why so successful?

Jake Schwartz: “Persistence and resilience. There have been so many times where taking an entrepreneurial path felt like the difficult, unsafe and risky way to go.

It was my persistence that allowed me to overcome the uncertainty. I literally couldn’t get it out of my head.”

LUMINARY: No. 1 role model?

Jake Schwartz: Richard Barth, CEO of KIPP and GA board member: “He is an incredible individual, manager and leader. I hope to someday be even close to as good as he is” Luminary: we went to take a portrait of him reclining in his pod and he straightened up — “I’m supposed to start looking like a CEO,” he said, laughing.

“Success will be when there’s a Vows column with two people who met here,” he said. “That’s my dream. That’s community.”

WE DON’T USE THE WORD ‘UNIVERSITY’ BECAUSE IT’S A LITTLE PRETENTIOUS,” HE SAID. “WE WANT TO MAKE SOMETHING A LITTLE MORE PRACTICAL He said universities have been intentionally slow to teach practical skills. On this he was animated.

“There’s something relgious about it — when we think of college, we think robes, gothic — like a church. These diplomas look like indulgences,” he said. “Universities are selling salvation in way more of a symbolic than actual way.”

LUMINARY | 42

TECHNOLOGY FOUR REASONS TO BE EXHILARATEDABOUT TECH INNOVATION echnology is advancing at a much faster pace today than it was 26 years ago. The progress we will experience in the next five to 10 years will definitely out-measure that of the last five to 10 years. We are just around the bend from life- and world-changing technologies we can’t yet imagine.

Here are four reasons to be really excited about tech innovation, which is transforming everything: 1. TECH FOSTERS COLLABORATION AND CONNECTEDNESS. Technology is blamed for causing less communication and connection between people.

Although innovations like smartphones and social media were built with the intention of bringing people closer together, in many ways they have done just the opposite.

We are constantly on our phones, missing out on face-to-face interactions and distracting us from what’s happening in the moment. In fact, people between the ages of 18 and 36 check their smartphones an average of 43 times per day, according to research published by SDL in 2014.

But as technology becomes more advanced and more integrated into our lives via the internet of things, we will become more connected and social than ever before. There will no longer be physical blocks that we carry around and stare at while dining, chatting or working.

Everything will be seamless and integrated, which will yield unbelievable collaboration and connectedness.

2. TECH IS IMPROVING MEDICAL CARE AND HEALTH Innovations in technology are radically LUMINARY | 45

changing the way healthcare is delivered and monitored. Smartphones, tablets and wearables are increasingly being used and are allowing patients to take control of their own health.

After all, seven in 10 U.S. adults already track at least one health indicator such as weight, diet or a symptom of a condition, according to a 2013 survey from Pew Research. In this new system, healthcare is evolving to become proactive rather than reactive, allowing patients to potentially catch and treat problems earlier.

In addition, technology allows treatment to become more individualized. Those

Health tech and biotech have the power to transform the lives of millions, if not billions, of people in the not-too-distant future.

3. TECH INCREASES THE ABUNDANCE OF RESOURCES. Technology is being used to spread food, wealth and other resources around the world. Agritech innovations are aiming to increase the amount of water and food supplies, as well as their quality. Crowdfunding websites are allowing charities to better connect with communities around the world, to raise the funds they need.

Innovations are allowing medicines and vaccines to be created and distributed at lower cost, increasing access to necessary treatments around the world.

Technology will show where the greatest needs are and then help to alleviate them.

With the help of new innovations in technology, poverty, hunger and disease will decrease tremendously in the coming decades.

4. TECH GIVES US MORE TIME Technology is increas-

with rare and specific illnesses, disabilities and injuries will benefit from new technology and the tailored treatments they allow. Providers, hospitals and health systems can personalize and track treatment plans to better fit the needs of individual patients, and patients can personalize their exercise regimens, diets and health goals.

Not to mention that advances in science and technology are ushering in a new era of medical research that will likely cure many diseases in the coming decade or two.

ingly eliminating jobs. The workforce is being automated, and robots can perform many jobs more efficiently than humans can -- and this will continue at an exponential rate.

As more and more jobs are automated, and resources become abundant, we will have more time to grow our intellects and our hearts. We can focus on the arts, obtain knowledge and personally grow and help others. We will live less by the sweat of our brow, and more by the inspiration of the mind and heart.

TECH STARTUPS ARE PRODDING THE DINOSAUR

That Is the Insurance Industry JENNIFER FITZGERALD CONTRIBUTOR CEO and Co-Founder of PolicyGenius

Here’s a sentence you don’t read every day: Insurance is so hot right now.

Entrepreneurs and investors have finally woken up to the opportunity in the insurance industry. At $831.5 million, investment in insurance tech this year is already up nearly 10 times what it was in 2010.

The opportunity has been staring entrepreneurs and investors in the face for years. The first insurance companies in the U.S. were started in the 1700s, and that cottage industry has grown into one of the biggest markets and sources of capital in the world. Premiums in the U.S. insurance industry total around $1 trillion, or approximately 7 percent of gross domestic product. On top of that, insurance companies invest nearly $7 trillion in assets.

And here’s the kicker about all that insurance money -- it’s generated by millions of agents, with lots of paper, in processes that look much the same way they did 30 years ago.

In my previous life as a McKinsey consultant, I advised the top insurance companies on projects that were, at their core,

incremental. They were always about increasing the productivity of the agent-based sales force, or improving the efficiency of paper-based claims operations. In other words, what I was doing was putting the dinosaur on a diet and prodding it with a stick. What needed to be done was bring a whole new breed of animal into the insurance game.

So I left McKinsey in 2013 to do just that and started a digital consumer insurance company, PolicyGenius. At PolicyGenius, we want to do for consumer insurance what TurboTax did for taxes: Make a complex and intimidating financial task easy enough to do it yourself online.

While raising seed capital for my insurance tech company last year, the most common question I got from prospective investors was, “Why is now the right time for tech to disrupt insurance?” The obvious answer for those unfamiliar with the insurance industry is the Affordable Care Act, which was signed into law in 2010. The law created exactly the kind of macro shakeup that attracts entrepreneurs. Indeed, since 2010, 56 percent of all insurance tech startups are focused on LUMINARY | 46

TECHNOLOGY health insurance, either delivering new employer brokerage models (Liazon, Zenefits, Benefitter), new consumer brokerage models (Gravie, Stride Health) or even new health insurance (Oscar). These startups are pushing the brick-and mortar incumbents to deliver better services and providing much-needed options to consumers.

Beyond the Affordable Care Act, there are other forces at work that have opened the floodgates, allowing creative entrepreneurs to reshape the insurance industry more broadly. These are the market disruptions I see: 1. THE END OF AN ERA Americans used to rely on their employers for retirement security. After 20 years of service, you’d get a gold watch and a pension to fund your sunset years. Then, in the 1980s, growing pension costs and a legislative change replaced the corporate pension with the 401(k) and gave rise to the modern retail investment and retirement industry.

That shift -- from employer to consumer responsibility -- is exactly what’s about to happen to insurance. Employer-sponsored insurance is the legacy of an IRS ruling after World War II that allowed employers to deduct employee health insurance as a business expense and employees to receive that benefit as nontaxable income. Sixty years later, we have a sprawling and bloated system, where the extra employer layer adds billions of dollars of cost and empowers employers to make intrusive decisions about their employees’ healthcare. Add to that, the cost of health insurance premiums growing at four times inflation and workers changing employers far more often than they did 60 years ago, and you have a system that’s going to break.

The cracks are already showing. The number of workers at small and medium-sized companies who get employer-sponsored health insurance has steadily declined since 2000. The CEO of Aetna has called for the creative destruction of healthcare and taking the employer out of the health insurance equation. Startups that can effectively step into that employer insurance void, the same way companies like Fidelity and Schwab stepped into the employer pension void, will enjoy a massive opportunity.

2. A CHANGING WORKFORCE It’s no secret that the workforce is rapidly changing. The average worker changes employers every 4.6 years. And, more disruptively for insurance, more workers are finding themselves outside the typical employer relationship. Spurred by on-demand services like Uber and countless “Uber for X” startups, freelancers and independent contractors are projected to grow from 42 million people to 65 million in the next 5 years.

These workers need individual insurance (like health, disability and life) and business insurance (liability and property).

Insurance companies, and the traditional insurance agent model, are ill-suited to serve the self-employed and provide LUMINARY | 47

them with the advice and products they need to financially protect themselves and their families.

Ask 100 freelancers how they navigate the insurance maze and they’ll all say same thing -- with tremendous difficulty.

Easing that difficulty for them represents a tremendous opportunity.

3. AN AGING SALES FORCE Most insurance in the U.S. is still sold by human agents, same as it’s always been. But it won’t be for long. The average age of an insurance agent in the U.S. is 59, and one-fourth of the industry’s workforce is expected to retire by 2018. In other words, insurance companies are standing on a burning platform. And they’re already starting to feel the heat.

For example, life insurance ownership is at a 50-year low, not because the need has changed -- in fact there’s a $20 trillion life insurance gap, but because the agent sales channel can’t reach the modern financial consumer. To their credit, insurance companies realize this reality, but the fact of the matter is that they can’t move as fast as startups can. So they’re investing in startups.

Insurance companies have dramatically increased their direct investments in tech startups to the tune of $1.8 billion since 2010. Much of this investment has gone to the first waves of financial technology:lending (Prosper) and wealth management (Learnvest, Betterment). But talk to any insurance company directly investing in startups, and you’ll learn that they’re hammers in search of nails, that is, smart entrepreneurs tackling the fundamental problems in insurance.

4. UNMET NEED Finally, and most importantly for a mission-driven company, there is a tremendous unmet need for insurance in the U.S. According to a recent survey by the Federal Reserve, 47 percent of households couldn’t cover an emergency expense of $400. Insurance is intended to fill in this savings void for unpredictable emergencies. However, too many Americans have low savings and inadequate insurance, which leads to financial disaster. For example, health problems and disability contributed to half of all home foreclosure filings and over 60 percent of all personal bankruptcy filings. It’s not easy or sexy to sell insurance to middle America, but it’s an important problem to solve -- and the first company to do it will be huge.

These are the tailwinds that made me excited about insurance tech two years ago and which continue to drive my company forward. We recently closed a $5.3 million Series A round, which included the participation of insurance companies’ venture arms, including AXA Strategic Ventures and Transamerica Ventures. We, and our insurance partners, are excited to make insurance the next big thing in tech.

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TECHNOLOGY

REAL-LIFE 'TRACTOR BEAM' CAN LEVITATE OBJECTS USING SOUND WAVES t may seem straight out of "Star Trek," but it's real: Scientists have created a sonic "tractor beam" that can pull, push and pirouette objects that levitate in thin air.

The sonic tractor beam relies on a precisely timed sequence of sound waves that create a region of low pressure that traps tiny objects that can then be manipulated solely by sound waves, the scientists said in a new study.

Though the new demonstration was just a proof of concept, the same technique could be adapted to remotely manipulate cells inside the human body or target the release of medicine locked in acoustically activated drug capsules, said study co-author Bruce Drinkwater, a mechanical engineer at the University of Bristol in the United Kingdom.

LEVITATING OBJECTS In the past, scientists have used everything from laser beams to super conducting magnetic fields to levitate objects. And in 2014, researchers at the University of Dundee in Scotland showed that acoustic holograms that act like a tractor beam could theoretically suck in objects.

"They really just showed the force was there; they weren't able to grab or pull anything," Drinkwater said.

The principle behind the new system is simple: Sound waves, which are waves of high and low pressure that travel through a medium such as air, produce force.

"We've all experienced the force of sound — if you go to a rock concert, not only do you hear it, but you can sometimes feel your innards being moved," Drinkwater told Live Science. "It's a question of harnessing that force."

By tightly orchestrating the release of these sound waves, it should be possible to create a region with low pressure that effectively counteracts gravity, trapping an object in midair. If the object tries to move left, right, up or down, higher-pressure zones around the object nudge it back into its low-pressure, quiet zone.

But figuring out the exact pattern of sound waves to create this tractor force is difficult, scientists say; the mathematical equations governing its behavior can't be solved with a pen and paper.

REVERSE-ENGINEERED FORCE FIELD

Researchers recently created an acoustic hologram, or a 3D sound field projected onto a 2D space, which can be used as acoustic tweezers, cages and twisters that manipulate objects as they levitate in air.

Credit: Image courtesy of Asier Marzo, Bruce Drinkwater and Sriram Subramanian Š 2015 LUMINARY | 49

So Drinkwater, his Ph.D. student Asier Marzo and other colleagues ran computer simulations through myriad different patterns of sound waves to find the ones that produced the signature combination of a low-pressure region surrounded by high-pressure zones.

They found three different acoustic force fields that can twirl, grab and manipulate objects. One works like tweezers and seems to grab the particles in thin air. Another traps the object in a high-pressure cage. The third type of force field acts a bit like a swirling tornado, with a rotating high-pressure field surrounding a low-pressure, quiet "eye" that holds the object in place, the researchers reported.

To accomplish this task, the team used a tiny array of 64 mini loudspeakers, made by a company called Ultrahaptics, that produce exquisitely timed sound waves with accuracy to the microsecond level. Past acoustic levitation systems have used two or four arrays of these transducers to essentially surround the system, but the researchers' models allowed them to create the same force field using just one array. The team demonstrated their tractor beam using tiny balls of polystyrene, the same material used in packing peanuts.

WAVELENGTH AND INTENSITY The size of the low-force region depends on the wavelength: The longer the wavelength, the larger the region of low pressure. The sound intensity determines the maximum density of an object that can be pushed and pulled by the acoustic force, Drinkwater said.

In this instance, the sound waves operate between 140 and 150 decibels. That would be an ear-splitting volume if people could hear it, but the sound waves operate at 40 kilohertz, at a wavelength of about 0.4 inches (1 centimeters), well above the human hearing range but audible to dolphins and dogs.

"I think, if you pointed this device at a dog, it would hear it for sure," Drinkwater said. "It wouldn't like it; it would run away."

The team currently levitates lightweight polystyrene balls that measure up to 0.2 inches (5 millimeters) across. But for the system to be useful for medical operations, the team would need to miniaturize it to manipulate objects on the micron scale.

Doing so would mean using higher-frequency sound waves — a relatively simple tweak, Drinkwater said.

"The fact that we do it as a one-sided system is so important," Drinkwater said. "To get at the body, you have to apply it to one side."

LUMINARY | 50

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INNOVATION

WHAT ALL COMPANIES MUST KNOW ABOUT INNOVATION, BROUGHT TO YOU COMPLIMENTS OF JAMA SOFTWARE

THE 6 MOST COMMON INNOVATION MISTAKES COMPANIES MAKE Because innovation is a system-level problem, a point solution – trying to drive widespread change by doing a single thing – is wholly ineffective. It is equivalent to attempting to turnaround a failing school plagued by disinterested students, overwhelmed teachers, and crumbling infrastructure by painting the walls blue.

Soothing, perhaps, but unlikely to have any real impact. Here are the six most common innovation mistakes to avoid.

YOU NEED AN INNOVATION STRATEGY Why is it so hard to build and maintain the capacity to innovate? The reason is not simply a failure to execute but a failure to articulate an innovation strategy that aligns innovation efforts with the overall business strategy.

Without such a strategy, companies will have a hard time weighing the trade-offs of various practices—such as crowdsourcing and customer co-creation—and so may end up with a grab bag of approaches. They will have trouble designing a coherent innovation

system that fits their competitive needs over time and may be tempted to ape someone else’s system. And they will find it difficult to align different parts of the organization with shared priorities.

IS INNOVATION MORE ABOUT PEOPLE OR PROCESS? What’s more critical to producing a breakthrough innovation – finding creative people or finding creative ideas? This is a question Pixar head Ed Catmull has asked a great many people, and he says they tend to be pretty much split on it.

THE DISCIPLINE OF BUSINESS EXPERIMENTATION The data you already have can’t tell you how customers will react to innovations. To discover if a truly novel concept will succeed, you must subject it to a rigorous experiment.

In most companies, tests do not adhere to scientific and statistical principles. As a result, managers often end up interpreting statistical noise as causation—and making bad decisions.

To conduct experiments that are worth the expense and effort, companies need to ask themselves several questions.

HOW COMPANIES CAN LEARN TO MAKE FASTER DECISIONS SpaceX had a problem. Managers at the aerospace manufacturer wanted to make faster decisions for one of their big clients—NASA—by finding alternatives to the high volume of meetings and cumbersome spreadsheets used for tracking projects.

Initially, NASA sent a fax (yes, a fax) whenever they had a query, which SpaceX added to a list of outstanding questions. The company then assembled a weekly 50-person meeting to review product status information contained in spreadsheets, addressing each question individually before sending the responses back to NASA. SpaceX’s dilemma is not an uncommon one.

In today’s organizations, the speed of decision making matters, but most are pretty bad at it. One-third of all products are delivered late or incomplete due to an inability or delay in decision-making, according to research from Forrester Consulting and Jama Software. Others at Gartner cite “speed of decision making” as the primary obstacle impacting internal communication. No doubt you’ve been part of a team that waited… and waited… for a higher-up to make a decision before you could resume your work.

LUMINARY | 52

INNOVATION

THE SINGULARITY, VIRTUAL IMMORTALITY AND THE TROUBLE WITH CONSCIOUSNESS (OP-ED)

BY ROBERT LAWRENCE KUHN Robert Lawrence Kuhn is the creator, writer and host of "Closer to Truth," a public television series and online resource that features the world's leading thinkers exploring humanity's deepest questions. Kuhn is co-editor with John Leslie, of "The Mystery of Existence: Why Is There Anything at All?" (Wiley-Blackwell, 2013).

This article is based on "Closer to Truth" interviews produced and directed by Peter Getzels and streamed at www.closertotruth.com. Kuhn contributed this article to LUMINARY

According to techno-futurists, the exponential development of technology in general and artificial intelligence (“AI”) in particular — including the complete digital replication of human brains — will radically transform humanity via two revolutions. The first is the "singularity," when artificial intelligence will redesign itself recursively and progressively, such that AI will become vastly more powerful than human intelligence ("super strong AI"). The second revolution will be "virtual immortality," when the fullness of our mental selves can be uploaded perfectly to non biological media (such as silicon chips), and our mental selves will live on beyond the demise of our fleshy, physical bodies.

AI singularity and virtual immortality would mark a startling, transhuman world that techno-futurists envision as inevitable and perhaps just over the horizon. They do not question whether their vision can be actualized; they only debate when will it occur, with estimates ranging from 10 to 100 years.

I'm not so sure. Actually, I'm a skeptic — not because I doubt the science, but because I challenge the philosophical foundation of the claims. Consciousness is the elephant in the room, and most techno-futurists do not see it.

Whatever consciousness may be, it affects the nature of the AI singularity and determines whether virtual immortality is even possible.

It is an open question, post-singularity, whether super strong AI without inner awareness would be in all respects just as powerful as super strong AI with inner awareness, and in no respects deficient? In other words, are there kinds of cognition that, in principle or of necessity, require true consciousness?

WHAT IS CONSCIOUSNESS? Consciousness is a main theme of "Closer To Truth," and among the subtopics I discuss with scientists and philosophers on the LUMINARY | 53

program is the classic "mind-body problem" — what is the relationship between the mental thoughts in our minds and the physical brains in our heads? What is the deep cause of consciousness? (All quotes that follow are from "Closer To Truth.")

NYU Philosopher David Chalmers famously described the "hard problem" of consciousness: "Why does it feel like something inside? Why is all our brain processing — vast neural circuits and computational mechanisms — accompanied by conscious experience? Why do we have this amazing inner movie going on in our minds? I don't think the hard problem of consciousness can be solved purely in terms of neuroscience."

"Qualia" are the core of the mind-body-problem.

"Qualia are the raw sensations of experience," Chalmers said. "I see colors — reds, greens, blues — and they feel a certain way to me. I see a red rose; I hear a clarinet; I smell mothballs. All of these feel a certain way to me. You must experience them to know what they're like. You could provide a perfect, complete map of my brain [down to elementary particles] — what's going on when I see, hear, smell — but if I haven't seen, heard, smelled for myself, that brain map is not going to tell me about the quality of seeing red, hearing a clarinet, smelling mothballs.

CAN A COMPUTER BE CONSCIOUS? To Berkeley philosopher John Searle, computer programs can never have a mind or be conscious in the human sense, even if they give rise to equivalent behaviors and interactions with the external world. (In Searle's "Chinese Room" argument, a person inside a closed space can use a rule book to match Chinese characters with English words and thus appear to understand Chinese, when, in fact, she does not.) But, I asked Searle, "Will it ever be possible, with hyper advanced technology, for non biological intelligences to be conscious in the same sense that we are conscious? Can computers have 'inner experience'?"

"It's like the question, 'Can a machine artificially pump blood as the heart does?'" Searle responded.

"Sure it can — we have artificial hearts. So if we can know exactly how the brain causes consciousness, down to its finest details, I don't see any obstacle, in principle, to building a conscious machine. That is, if you knew what was causally sufficient to produce consciousness in human beings and if you could have that [mechanism] in another system, then you would produce consciousness in that other system. Note that you don't need neurons to have consciousness. It's like saying you don't need feathers in order to fly. But to build a flying machine, you do need sufficient causal power to overcome the force of gravity."

"The one mistake we must avoid," Searle cautioned, "is supposing that if you simulate it, you duplicate it. A deep mistake embedded in our popular culture is that simulation is equivalent to duplication. But of course it isn't. A perfect simulation of the brain — say, on a computer — would be no more conscious than a perfect simulation of a rainstorm would make us all wet."

To robotics entrepreneur (and MIT professor emeritus) Rodney Brooks, "there's no reason we couldn't have a conscious machine made from silicon." Brooks' view is a natural consequence of his beliefs that the universe is mechanistic and that consciousness, which seems special, is an illusion. He claims that, because the external behaviors of a human, animal or even a robot can be similar, we "fool ourselves" into thinking "our internal feelings are so unique."

CAN WE EVER REALLY ASSESS CONSCIOUSNESS? "I don't know if you're conscious. You don't know if I'm conscious," said Princeton University neuroscientist Michael Graziano. "But we have a kind of gut certainty about it. This is because an assumption of

consciousness is an attribution, a social attribution. And when a robot acts like it's conscious and can talk about its own awareness, and when we interact with it, we will inevitably have that social perception, that gut feeling, that the robot is conscious.

"But can you really ever know if there's 'anybody home' internally, if there is any inner experience?" he continued. "All we do is compute a construct of awareness."

Warren Brown, a psychologist at Fuller Theological Seminary and a member of UCLA's Brain Research Institute, stressed "embodied cognition, embodied consciousness," in that "biology is the richest substrate for embodying consciousness." But he didn't rule out that consciousness "might be embodied in something non biological." On the other hand, Brown speculated that "consciousness may be a particular kind of organization of the world that just cannot be replicated in a non biological system."

Neuroscientist Christof Koch, president and chief scientific officer of the Allen Institute for Brain Science, disagrees. "I am a functionalist when it comes to consciousness," he said. "As long as we can reproduce the [same kind of] relevant relationships among all the relevant neurons in the brain, I think we will have recreated consciousness. The difficult part is, what do we mean by 'relevant relationships'? Does it mean we have to reproduce the individual motions of all the molecules? Unlikely. It's more likely that we have to recreate all the [relevant relationships of the relevant] synapses and the wiring ("connectome") of

the brain in a different medium, like a computer. If we can do all of this at the right level, this software construct would be conscious."

I asked Koch if he'd be "comfortable" with non biological consciousness.

"Why should I not be?" he responded.

"Consciousness doesn't require any magical ingredient."

RADICAL VISIONS OF CONSCIOUSNESS? A new theory of consciousness — developed by Giulio Tononi, a neuroscientist and psychiatrist at the University of Wisconsin (and supported by Koch) — is based on "integrated information" such that distinct conscious experiences are represented by distinct structures in a heretofore unknown kind of space. "Integrated information theory means that you need a very special kind of mechanism organized in a special kind of way to experience consciousness," Tononi said. "A conscious experience is a maximally reduced conceptual structure in a space called 'qualia space.' Think of it as a shape. But not an ordinary shape — a shape seen from the inside."

Tononi stressed that simulation is "not the real thing." To be truly conscious, he said, an entity must be "of a certain kind that can constrain its past and future — and certainly a simulation is not

of that kind."

Regarding the promise of brain replication to achieve virtual immortality, Tononi is not convinced. According to his theory of integrated information, "what would most likely happen is, you would create a perfect 'zombie' — somebody who acts exactly like you, somebody whom other people would mistake for you, but you wouldn't be there."

Inventor and futurist extraordinaire Ray Kurzweil believes that "we will get to a point where computers will evidence the rich array of emotionally subtle types of behavior that we see in human beings; they will be very intelligent, and they will claim to be conscious. They will act in ways that are conscious; they will talk about their own consciousness and argue about it just the way you and I do. And so the philosophical debate will be whether or not they really are conscious — and they will be participating in the debate."

Kurzweil argues that assessing the consciousness of other [possible] minds is not a scientific question. "We can talk scientifically about the neurological correlates of consciousness, but fundamentally, consciousness is this subjective experience that only I can experience. I should only talk about it in first-person terms (although I've been sufficiently socialized to accept other people's consciousness). There's really no way to measure the conscious experiences of another entity."

"But I would accept that these non biological intelligences are conscious," Kurzweil concluded. "And that'll be convenient, because if I don't, they'll get mad at me."

LUMINARY | 54

INNOVATION WILL

SUPER

STRONG

AI

BE

CONSCIOUS? I'm not going to evaluate each competing cause of consciousness. (That would require a course, not a column.) Rather, for each cause, I'll speculate whether non biological intelligences with super strong AI (following the AI singularity) could be conscious and possess inner awareness.

1. If consciousness is entirely physical, then it would be almost certainly true that non biological intelligences with super strong AI would have the same kind of inner awareness that we do. Moreover, as AI would rush past the singularity and become ineffably more sophisticated than the human brain, it would likely express forms of consciousness higher than we today could even imagine.

2. If consciousness is an independent, non-reducible feature of physical reality, then it would remain an open question whether non biological intelligences could ever experience true inner awareness. (It would depend on the deep nature of the consciousness-causing feature and whether this feature could be manipulated by technology.)

3. If consciousness is a non-reducible property of each and every elementary physical field and particle (panpsychism), then it would seem likely that non biological intelligences with super strong AI could experience true inner awareness (because consciousness would be an intrinsic part of the fabric of physical reality).

4. If consciousness is a radically separate, nonphysical substance not causally determined by the physical world (dualism), then it would seem impossible that super strong AI (alone), no matter how advanced, could ever experience true inner awareness.

5. If consciousness is ultimate reality (cosmic consciousness), then anything could be (or is) conscious (whatever that may mean), including non-biological intelligences.

Remember, in each of these cases, no one could detect, using any conceivable scientific test, whether the non-biological intelligences with super strong AI had the inner awareness of true consciousness.

In all aspects of behavior and communications, these non-biological intelligences would seem to be equal to (or superior to) humans. But if these non-biological intelligences did not, in fact, have the felt sense of inner experience, they would be "zombies" ("philosophical zombies" to be LUMINARY | 57

precise), externally identical to conscious beings, but blank inside.

And this dichotomy elicits (a bit circularly) our probative question: whether true conscious experience and inner awareness in non-biological intelligences would bring about distinctive, richer cognitions (however subtle and undetectable) or represent higher forms of absolute, universal value (however anthropomorphic this may seem).

IS VIRTUAL IMMORTALITY POSSIBLE? Now, what about virtual immortality — digitizing and uploading the fullness of one's first-person mental self (the "I") from wet, mushy, physical brains that die and decay to new, more permanent (non biological) media or substrates? Could this actually work?

Again, the possibilities for virtual immortality relate to each of the alternative causes of consciousness.

1. If consciousness is entirely physical, then our first-person mental self would be uploadable, and some kind of virtual immortality would be attainable. The technology might take hundreds or thousands of years — not decades, as techno-optimists believe — but barring human-wide catastrophe, it would happen.

2. If consciousness is an independent, non-reduc-

ible feature of physical reality, then it would be possible that our first-person mental self could be uploadable — though less clearly than in No. 1 above, because not knowing what this consciousness-causing feature would be, we could not know whether it could be manipulated by technology, no matter how advanced. But because consciousness would still be physical, efficacious manipulation and successful uploading would seem possible.

3. If consciousness is a nonreducible feature of each and every elementary physical field and particle (panpsychism), then it would seem probable that our first-person mental self would be uploadable, because there would probably be regularities in the way particles would need to be aggregated to produce consciousness, and if regularities, then advanced technologies could learn to control them.

4. If consciousness is a radically separate, nonphysical substance (dualism), then it would seem impossible to upload our first-person mental self by digitally replicating the brain, because a necessary cause of our consciousness, this nonphysical component, would be absent.

5. If consciousness is ultimate reality, then consciousness would exist of itself, without any physical prerequisites. But would the unique digital pattern of a complete physical brain (derived, in this case, from consciousness) favor a specific segment of the cosmic consciousness (i.e., our unique first-person mental self)? It's not clear, in this extreme case, that uploading would make much difference (or much sense).

In trying to distinguish these alternatives, I am troubled by a simple observation.

Assume that a perfect digital replication of my brain does, in fact, generate human-level consciousness (surely alternative 1, possibly 2, probably 3, not 4, 5 doesn’t matter). This would mean that my first-person self and personal awareness could be uploaded to a new medium (non biological or even, for that matter, a new biological body). But if "I" can be replicated once, then I can be replicated twice; and if twice, then an unlimited number of times.

So, what happens to my first-person inner awareness? What happens to my "I"?

Assume I do the digital replication procedure and it works perfectly — say, five times.

Where is my first-person inner awareness located?

Where am I? Each of the five replicas would state with unabashed certainty that he is "Robert Kuhn," and no one could dispute them. (For simplicity of the argument, physical appearances of the clones are neutralized.) Inhabiting my original body, I would also claim to be the real “me,” but I could not prove my priority.

I'll frame the question more precisely. Comparing my inner awareness from right before to right after the replications, will I feel or sense differently?

Here are four obvious possibilities, with their implications: 1. I do not sense any difference in my first-person awareness. This would mean that the five replicates are like super-identical twins — they are independent conscious entities, such that each begins instantly to diverge from the others. This would imply that consciousness is the local expression or manifestation of a set of physical factors or patterns. (An alternative explanation would be that the replicates are zombies, with no inner awareness — a charge, of course, they will deny and denounce.)

2. My first-person awareness suddenly has six parts — my original and the five replicates in different locations — and they all somehow merge or blur together into a single conscious frame, the six conscious entities fusing into a single composite (if not coherent) "picture." In this way, the unified effect of my six conscious centers would be like the "binding problem" on steroids. (The binding problem in psychology asks how do our separate sense modalities like sight and sound come together such that our normal conscious experience feels singular and smooth, not built up from

discrete, disparate elements). This would mean that consciousness has some kind of overarching presence or a kind of supra-physical structure.

3. My personal first-person awareness shifts from one conscious entity to another, or fragments, or fractionates. These states are logically (if remotely) possible, but only, I think, if consciousness would be an imperfect, incomplete emanation of evolution, devoid of fundamental grounding.

4. My personal first-person awareness disappears upon replication, although each of the six (original plus five) claims to be the original and really believes it. (This, too, would make consciousness even more mysterious.)

Suppose, after the replicates are made, the original (me) is destroyed. What then?

Almost certainly my first-person awareness would vanish, although each of the five replicates would assert indignantly that he is the real "Robert Kuhn" and would advise, perhaps smugly, not to fret over the deceased and discarded original.

At some time in the future, assuming that the deep cause of consciousness permits this, the technology will be ready. If I were around, would I submit? I might, because I'm confident that 1 (above) is true and 2, 3 and 4 are false, and that the replication procedure would not affect my first-person mental self one whit. (So I sure wouldn't let them destroy the original.)

Bottom line, for me for now: The AI singularity and virtual immortality must confront the deep cause of consciousness.

LUMINARY | 58

Q&A

Mr.Ikuo Nakagawa President, Konica Minolta Business Solutions Europe

AHEAD OF THE GAME Managed Print Services is increasingly becoming a full-service data industry. Key player Konica Minolta is committed to leading the way in this period of transition In today’s increasingly digital age, it’s becoming ever more important for companies to adapt their business practices accordingly. Having an efficient system in place can help simplify and speed up basic processes, saving both time and money.

Tokyo-based technology firm Konica Minolta offers a solution, with a unique Managed Print Services (MPS) model and a broad portfolio of services that covers everything from consulting right through to implementation. Catering to a diverse range of clients in 41different countries across Europe and beyond, the company offers tailor-made solutions with the aim of improving efficiency and helping businesses become more sustainable. European CEO spoke to the company’s President, Ikuo Nakagawa.

LUMINARY: How does MPS fit in with the est of Konica Minolta’s business?

Ikuo Nakagawa: By optimizing printing, MPS forms the basic foundation for Konica Minolta. However, printing is now just one component part of a whole document process, so companies need to digitize and face up to major challenges such as big data, the cloud and an increasingly mobile workforce.

This is significant; given 90 percent of all corporate information assets are held in documents, the costs associated with insufficient document management can be substantial. Surveys show 7.5 LUMINARY | 61

percent – or one in 14 – of corporate documents go missing every year, and knowledge workers can spend up to 50 percent of their time searching for specific content items.

LUMINARY: What differentiates Konica Minolta from others in the MPS industry?

Ikuo Nakagawa: Last year, US IT research company Gartner named Konica Minolta a leader in their Magic Quadrant for Managed Print and content Services, which is a guide for organizations looking for MPS providers.

In 2010, Konica Minolta started expanding its Optimized Printing Services (OPS) initiatives globally, and the company has now served more than 6,000 corporations worldwide. We have also introduced project management offices and specialized teams at our regional operations, to provide support to clients looking to optimize their business processes. facturers, logistics companies, pharmaceuWe are passionate about creating tical companies and the hospitality sector. strategies that lessen the need for printing, while reducing operational expenses and LUMINARY: How important is providing access to information as effective- sustainability in the company’s ly as possible. The combined offering of our strategy?

OPS, MCS and IMS services allows us to Ikuo Nakagawa: Konica Minolta’s architect, implement and manage management philosophy is ‘the creation of end-to-end solutions in a cost-effective new value’ and it’s rooted in the core of our manner while supporting our customers company. We take a comprehensive along the way. approach when it comes to sustainability, Konica Minolta can also analyse incorporating stakeholders into our processes and implement solutions specifi- mission. We recently received the RobecoScally for SMEs. We have a diverse array of AM Gold Class Award for being the MFP clients of different sizes, from SMEs to market leader in terms of sustainability. We global players, including automobile manu- also feature on the Dow Jones Sustainabili-

Konica Minolta is helping to simplify everyday processes for businesse

for example by developing the world’s first organic light emitting diode panel to be made using only phosphorescent materials, which uses significantly less electricity than conventional lighting.

We developed the technology used to take the first ever Earth pictures from space (the Minolta Hi-Matic, during John Glenn’s Mercury Friendship 7 space flight in 1962). We’ve made substantial developments since then, including a special type of film that increases the viewing angle of LCD screens for use with TVs, PCs, smartphones and other devices. Our pick-up lenses are now used in almost all Blu-ray and DVD players. We have created materials to improve safety in cars, and thermal insulation in buildings. Our innovation extends to the healthcare sector, with products designed to help medical professionals. We created a device that lowers X-ray radiation exposure to patients (known as AeroDR) and in 2005 we released the first mammograph to use phase contrast technology.

In 2002, we developed Simitri – the world’s first polymerized biomass toner. The product is both economical and environmentally beneficial, reducing CO2 and NOx emissions by up to 40 percent. We have received recognition for these achievements: in 1992, Konica Minolta became the first company in the world to receive a Blue Angel mark in the field of copying, and in 2013 we became the first of those using laser-based MFPs to receive the new Blue Angel Mark covering newly revised criteria.

ty World Index and the FTSE4Good Global Index, and have been awarded the Blue Angel Mark and EPEAT Gold status.

We also go beyond environmental sustainability, encouraging young people to start their own businesses. That has led us to become a Global Partner of Pioneers, a platform that encourages startup businesses across the continent. We also sponsor CNN Heroes, a program that supports social entrepreneurship.

LUMINARY: What are Konica Minolta’s long-term environmental goals?

Ikuo Nakagawa: According to the Intergovernmental Panel on Climate Change, greenhouse gas emissions in 2004 were 7.66t-CO2 per person per year. It’s estimated the amount the Earth will be able to absorb in 2050 is 80 percent less than that.

These estimates were used to determine our Eco Vision 2050 target of an 80 percent reduction in lifecycle CO2

LUMINARY: What are Konica Minolta’s ambitions for the future?

Ikuo Nakagawa: Our fundamental goal is to anticipate our clients’ needs and turn their emissions by 2050 (compared to the level of ideas into reality, by delivering innovative emissions in 2005). As part of the program, and meaningful solutions that contribute to we are also focusing on preserving biodivera better future. sity, promoting recycling and ensuring We involve our clients in current efficient use of the Earth’s resources. We developments that affect the market and have broken these goals down into tangible provide them with tailored, end-to-end objectives in our medium-term environsolutions. Our services, from consulting to mental plan for 2015, which includes implementation and management, cover measures to prevent global warming and the whole spectrum of business technology reduce the risk of chemical substances. As needs. Konica Minolta wants to give shape part of our medium-term plan for 2016, we to people’s ideas, thoughts and concepts. aim to reduce product lifecycle CO2 For us, it is vital to not only understand our emissions by 40 percent from 2005 levels. clients’ technology needs but to help We have already made substantial progress, businesses develop in the most effective achieving a 54.5 percent reduction between ways possible.

2005 and 2013.

Konica Minolta has proven it LUMINARY: What are the company’s can be as nimble as a startup, even though it biggest achievements to date? builds on 140 years of tradition. We are Ikuo Nakagawa: Konica Minolta is especially proud of what we have achieved helping to simplify everyday processes for in Europe since Konica and Minolta merged businesses while making work life more just over 10 years ago and we hope to enjoyable.

We have also made continue with those achievements in the ground-breaking innovations in other fields, future.

LUMINARY | 62

HEALTH

CHEMICALS IN PERSONAL PRODUCTS MAY STIMULATE CANCER MORE THAN THOUGHT

BY SARA G. MILLER

A group of chemicals commonly used in cosmetics and other personal-care products may stimulate the growth of breast cancer cells at doses much lower than previously thought, a new study finds.

The study was done on human breast cancer cells growing in lab dishes, and it's unclear whether these chemicals, called parabens, act the same in the human body.

But the chemicals have been shown in previous lab and animal studies to mimic the activity of the hormone estrogen, meaning they can bind to receptors in the body to which estrogen normally binds.This is a concern because when estrogen binds to estrogen receptors, it causes cells to multiply, and in women this increases breast cancer risk, said Dr. Dale Leitman, an adjunct professor of nutritional sciences and toxicology at the University of California, Berkeley, and the senior author on the study.

including shampoos, body lotions and sunscreens.

It's also known that parabens can activate the same pathway as estrogen, but previous studies have found that they do so very weakly, Leitman told Live Science.

"Because they're weak, they're assumed to be safe compounds," especially based on the levels of parabens that have been found in humans, he said. [What Is Estrogen?]

But previous studies looked at just the parabens by themselves, Leitman said.

"The real problem when you do studies in the laboratory is that you study one compound at a time, but in the body, that's not the case.

What you're seeing in the body is really a combination" of the effects of many compounds, Leitman said.

In the new study, published in the journal Environmental Health Perspectives, the researchers Parabens are a type of chemical focused on the effects of parabens preservative, and are found in a when mixed with one additional wide array of consumer products, compound: a type of growth factor LUMINARY | 65

called heregulin that has "All we can say from our also been linked to breast study is that in order to cancer cell growth. determine how safe the parabens are ‌ [we need] In experiments, the to test them not by researchers looked at how themselves but with other well the cells grew when chemicals that stimulate cell they were exposed to both proliferation," he said. parabens and heregulin, compared with how the Dr. Jiangang Chen, an cells grew when exposed assistant professor of public only to parabens. The health at the University of scientists found that when Tennessee Knoxville who they added heregulin, they was not involved in the could drop the level of study, agreed. parabens by 100 times and "The study, like others the cancer cells would still published, only demonstratmultiply faster than those ed the effects in the cells, without heregulin. which may not reflect the In other words, when the same scenario as in an intact heregulin was added, the biological system," Chen parabens were 100 times told Live Science. But more potent at stimulating additional studies have also cancer cell growth indicated that other compared with breast compounds may also cancer cells exposed to only contribute to how parabens parabens. affect breast cancer risk, Chen said.

With this increased potency, parabens may have an effect Indeed, the study raises at a level that could be seen concerns that the "safe in humans, Leitman said. levels" of parabens used in cosmetic products should be Still, Leitman stressed that re-evaluated, he said. more studies are needed to determine the safety of the However, more research is chemicals. Lab studies and ultimately required before a animal studies are indirect conclusion can be reached ways of estimating the regarding the safety of potential hazards of parabens, Chen said. parabens, Leitman noted.

EATING A HEALTHY DIET MAY REDUCE BRAIN SHRINKAGE

BY AGATA BLASZCZAK-BOXE, CONTRIBUTING WRITER

People who eat a diet rich in fish, fruits and vegetables but low in meat may lose fewer brain cells as they age, according to a new study.

In the study of 674 older adults, the researchers looked at whether the participants' diets during the past year included the following nine components of the so-called Mediterranean diet: eating lots of vegetables, legumes, cereals, fish, fruits and nuts; consuming healthy monosaturated fats like olive oil but avoiding saturated fats; drinking moderate amounts of alcohol; and eating low amounts of meat and dairy products.

The average age of the people in the study was 80.

The researchers scanned the participants' brains, and found that those whose diets included at least five of these nine components had brain volumes that measured 13.11 milliliters larger on the scans, on average, compared with the brain volumes of the people whose diets included fewer than five components.

This difference in brain volume between the two groups is equivalent to the amount of shrinkage that happens over five years of aging, the researchers said.

"These results are exciting, as they raise the possibility that people may potentially prevent brain shrinking and the effects of aging on the brainsimply by following a healthy diet," study author Yian Gu, of Columbia University in New York, said in a statement.

When the researchers took a closer look at the relationship between brain shrinkage and the Mediterranean diet, they found that the diet's protective effect was driven to the greatest extent by two components: eating

more fish and eating less meat.

This finding suggests that "eating at least 3 to 5 ounces of fish weekly or eating no more than 3.5 ounces of meat daily may provide considerable protection against loss of brain cells equal to about three to four years of aging," Gu said. [7 Ways the Mind and Body Change With Age] None of the people in the new study had dementia. The researchers noted, however, that greater amounts of brain shrinkage have beenlinkedto a greater risk of cognitive decline.

The new study was observational, and more research is needed to examine the relationship between the Mediterranean diet and brain structure, Gu told Live Science.

The new study does not prove that following the Mediterranean diet prevents brain shrinkage; rather, it shows there is a link between the two, she said.

The mechanism between the Mediterranean diet and a greater brain volume is not clear, but it may have something to do with the beneficial effects of nutrients present in the foods, the researchers said. For example, the omega-3 fats as well as vitamins B and D in fish have been shown to promote the growth of neurons and slow brain shrinkage.

LUMINARY | 66

HEALTH

SCIENTIFIC PRIZES BRING NEEDED ATTENTION TO MENTAL HEALTH RESEARCH

BY DR. HERBERT PARDES

Dr. Herbert Pardes is executive vice chairman of the board of trustees at New York-Presbyterian Hospital and president of the Scientific Council of the Brain & Behavior Research Foundation — and last year was the first to win the prize that now bears his name. Pardes contributed this article to LUMINARY This fall, scientists around the world will trade lab coats for tuxes and ball gowns for the annual "award season" announcements of the Nobel Prize, the MacArthur Foundation fellowships, the Lasker Awards, and the star-studded and televised Breakthrough Prize awards. These prizes, each accompanied by significant monetary awards, shine a much-needed spotlight on important scientific research that, in the past, the media has often considered too dense and academic to be of interest to the public.

We are in a day and age when one of television's biggest comedy hits, "The Big Bang Theory," is about the lives of Caltech Ph.D.s, when biopics about Alan Turing and Stephen Hawking win Oscars, and when Hawking hobnobs with a Russian billionaire to search for extraterrestrial life. Suddenly, science, technology, engineering and mathematics (the "STEM" fields) have acquired a glamorous sheen that is LUMINARY | 67

attracting people with deep pockets who want to accelerate the often slow, deliberate and bureaucratic march toward new findings and cures.

PHILANTHROPY HAS A PLACE IN RESEARCH Many in the scientific community are worried by a trend in which wealth trumps peer reviews, grant applications and selection committees, but many philanthropists are serious, knowledgeable, deeply committed and determined to find cures for the most intractable diseases.

For those of us who have devoted our lives to scientific research, there is a lot to appreciate about this new world order.

In today's funding environment, the most significant inroads to scientific discovery will likely be generated by a combination of public and private funding from people with a vested

stake in finding cures. Just look at the progress made by public-private partnerships such as the American Cancer Society in reducing mortality from breast, lung and colon cancer, and the Cystic Fibrosis Foundation — which supported the development of Kalydeco, the first drug to treat an underlying cause of the disease — through its "venture philanthropy."

Federal funding for scientific research has sharply declined over the past 10 years, and dwindling resources have led to the erosion of federal grants, lab closures and diminished incentives for all scientists and, consequently, the loss of talented young researchers.

Even so, private philanthropy still lags behind public funding. The U.S. National Institutes of Health's (NIH) yearly budget is $31 billion, half of which goes toward basic science — the backbone of most scientific discoveries but lacking the allure to attract the

wealthiest philanthropists.

Within that agency, the U.S. National Institute of Mental Health (NIMH) has an annual budget of $1.4 billion, a figure that has declined more than 10 percent in the past five years when adjusted for inflation, meaning a substantial decrease in funding for both basic research and clinical trials.

In fact, private funding is now helping to drive the kind of high-risk, high-reward research that may change lives and end the suffering that psychiatric illnesses bring to so many.

IMPROVING CARE FOR MENTAL HEALTH During my career, I have been privileged to work in both the public and private sectors. In 1984, I left my position as director of the NIMH to become chairman of the Department of Psychiatry at Columbia University because I felt I could accomplish more on the outside.

Early in those early days, I set up an annual information symposium about mental health for the public, featuring scientists talking about psychiatric research in plain English. This event attracted hundreds of people starved for information, and enhanced the work of the Brain & Behavior Research Foundation (BBRF), which funds innovative ideas in neuroscience and psychiatry to understand the causes of brain and behavior disorders, and find better ways to diagnose and treat them. Grant recipients are selected by the foundation’s Scientific Council, which comprises 165 leading experts across disciplines in brain and behavior research, including two Nobel laureates; four former directors of the NIMH; 13 members of the National Academy of Sciences; 21 chairs of Psychiatry and Neuroscience Departments at leading medical institutions; and 47 members of the Institute of Medicine.

Since 1987, the foundation has awarded 5,000 grants worth nearly $340 million. More importantly, it has seeded the research of an entire generation of

brilliant young neuroscientists and clinicians who have gone on to obtain $3 billion in additional funding for their work. This is a philanthropic model worthy of emulation.

The field of mental health has come a long way since I visited a state hospital for the first time as a college sophomore in 1953. I will never forget what I saw — a naked man locked in an empty room, smearing his feces on the wall.

Today, people living with mental illness certainly have access to more help, and scientists are making great strides in basic research, new technologies, next-generation therapies and early interventions.

There are about 320 million Americans, and approximately one in four live day-to-day with mental illness. An influx of veterans are coping withpost-traumatic stress disorder (PTSD), depression and suicide, and have raised awareness and aroused sympathy for people with psychiatric disorders.

However, high-profile, violent incidents involving people with mental illness continue to reinforce lingering stigmas. Decades after the deinstitutionalization of mentally ill patients, the United States still lacks adequate community support, psychiatrists, psychologists, social workers, nurses and hospital beds. Many people go untreated, and there are more people with psychiatric illnesses in prison than in psychiatric hospitals.

healthy human brain gives rise to the miracle of thought and consciousness, and how genetic, cellular and circuit anomalies lead to the full panoply of brain disorders Partly because of the logjam in Washington, enlightened philanthropists have never had a more important role to play in driving brain research forward. Though it is difficult to imagine what our ultrapartisan political system can accomplish, Congress must find ways to fund mental health research. Simultaneously, generous philanthropists must provide support.

I'm honored that the Brain & Behavior Foundation will present the Pardes Prize — a $300,000 award recognizing humanitarians striving to change the way the world views mental illness through education, prevention, research, clinical care, mentoring, treatment or advocacy for both individuals and policies that affect mental health.

Society has found ways of recognizing contributions in basic science, clinical research and clinical care in the nonpsychiatric health fields, but the AN AWARD TO ADDRESS A CRISIS field of mental health in psychiatry is So much more needs to be done. How complex and affects people throughout do we let people know about this the world. With this prize, we hope to epidemic? How can we get the NIH, expand the care, treatment and underthe NIMH and the U.S. Congress, more standing of the underlying causes of specifically, to increase funding for mental illness, and reduce the pain research into mental illness? How does these conditions cause individuals and mental health become a top priority so their families. that help is available to all who need it?

I'll happily put on my tuxedo to call These problems have deep roots, and attention to issues surrounding mental solutions are elusive and complex. illness. It is time to stop talking about That's why it is so important that scien- helping people with mental illness and tists continue conducting basic and actually do something to help them clinical research to understand how the lead productive lives.

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