The Future, This Week 02 February 2018

Introduction: This is The Future, This Week on Sydney Business Insights. I'm Sandra Peter and I'm Kai Riemer. Every week we get together and look at the news of the week. We discuss technology, the future of business, the weird and the wonderful, and things that change the world. Okay let's start. Let's start!

Kai: Today on The Future, This Week: break-in-news, I spy with my data eye and fashion out of fashion.

Sandra: I'm Sandra Peter, I'm the Director of Sydney Business Insights.

Kai: I'm Kai Riemer, professor at the Business School and leader of the Digital Disruption Research Group. Welcome back Sandra.

Sandra: Welcome back Kai and welcome back everybody to season three of The Future, This Week.

Kai: So before we talk about this week let's have a look at what we learned while we were away. So Sandra what did you learn?

Sandra: I've learned about an extremely cool mega project in sustainable energy in China. One of the Chinese provinces actually built a massive floating solar farm on top of a flooded coal mine.

Kai: The symbolism of that is quite extraordinary.

Sandra: It is absolutely superb and China's looking to invest about three hundred and sixty billion dollars by 2020 in renewable energies. This is one of the projects that are part of that effort and really it's just the site of an extensive coal mine that has now been flooded, there is a lake and on top of the lake they have a solar farm.

Kai: And it turns out this is not only a great way to use these water surfaces but it also keeps those solar panels cool and actually improves their energy output because they don't overheat like they would if they sit on a roof or a stone surface for example.

Sandra: So that was one of my good stories during the break. What have you learned?

Kai: Yeah I learned from an article in Gizmodo that consumer DNA testing doesn't really work. So there's this guy whose aunt mailed in a DNA sample to ancestry.com. And why she would have expected to learn that she's at least 50 percent Middle Eastern because her grandfather was from there, it turned out to be only 16 percent while at the same time it was about 30 percent Greek/Italian which really plunged the whole family into an identity crisis and it led to a lot of discussion and people were upset. And so the guy goes on to then suspect maybe something wasn't quite right with his DNA test and he sent it to three other of these testing services and he got the results back he put them on the table and they looked fairly random. So depending on which tests you looked at he was Norwegian or central European or African American and so in essence...

Sandra:...you could pick what you want to be.

Kai: Absolutely. So what we learn from this is it's not really a hard science and the problem is that these companies do not actually analyse your DNA. What they do is they compare the DNA with DNA from other people in their database and where this DNA is from, so it is actually based on the location of where people send their DNA samples from. So it's not an exact science it's actually just another data inference exercise. It's not at all what these services purport to be.

Sandra: And this is not to say that there aren't actually out there are some companies that do actually sequence genomes and do a fantastic job, slightly more expensive companies that do more in-depth work and as gene sequencing technology gets a lot faster and a lot cheaper we do expect more of these legit companies to come on-board but at the moment there are many many direct to consumer tests that predict your DNA more than sequencing.

Kai: So what else did we learn?

Sandra: One of the stories that has to be one of the cooler stories of the summer has been out of the Verge and it reports on Berlin's Transport Authority and Adidas releasing a pair of sneakers that doubles as a train pass.

Kai: So how does that work?

Sandra: This is a specially designed pair of sneakers that has a canvas printed ticket on them that you can use as a train pass for a year in Berlin. They cost about $180 euros. That's about two hundred and fifty bucks and they save you quite a bit on the Annual Pass which is about a thousand dollars.

Kai: So I presume the scanning works slightly differently than the Opal Card or do you have to actually stretch your leg and put it up on the Opal scanner?

Sandra: The scanning works by someone eyeballing your shoes.

Kai: Really?

Sandra: Seriously.

Kai: So contactless visual technology performance by a human.

Sandra: We are back to old style canvas technology.

Kai: So I can buy some cheap knock off sneakers that look just like those Adidas and then travel for free on the train in Berlin? Is that what we're saying?

Sandra: We're saying you're definitely going to try it. So what else have we learned?

Kai: Okay finally there's an interesting story in Wired magazine about a startup called Yondr and Yondr tries to solve the following problem that there might be occasions where you do not want people to be on Twitter or Instagram such at concerts for example where artists might want to entice the audience to actually pay attention to the performance. Or where they do not want what is happening on stage being live tweeted streamed or being put on Instagram. So how do you go about solving this problem? Some venues have experimented by taking devices off people, putting them in storage and then handing them out later, which logistically is really quite difficult. Devices get lost and damaged.

Sandra: Some people are really good at hiding them.

Kai: Absolutely. So problems occur. So this start up Yondr has developed a little pouch which you place your device into and then the pouch is locked electronically with a code. And people can keep their devices, it's now in the pouch, it's inaccessible. You can't actually do anything with it but you don't have to hand it over. You can take it into the venue and when you leave the venue the pouches unlock your handbag, the pouch and you can take your device. It solves this problem that everyone is online. You don't have to take the device as often, it turns out to be quite popular.

Sandra: Can we buy some for the university for some of the classes we teach?

Kai: We need laptop sized ones as well. Right? In fact the Yondr pouches are already used in health context, enforce compliance with privacy laws in call centres to protect sensitive customer information, in churches, in courtrooms to curb witness intimidation and in more than 600 public schools across the US to actually entice children to pay attention to what's happening in the classroom. So the idea to use it in the university is not too far off.

Sandra: So let's have a look at what happened this week.

Kai: Our first story is from the New York Times it's titled "Strava fitness app can reveal military sites, analysts say."

Sandra: So this is a story that's been covered across a number of news outlets and it refers to data that Strava a health fitness app, basically the social network for athletes and fitness buffs.

Kai: And we discussed Strava on the podcast previously.

Sandra: It's the data that they made public first in November. And since November since they made it public, people have started to take a good look at that data. So how does Strava work?

Kai: Strava is an app that goes on your smartphone but it also works with fitness devices such as Fitbit or the Apple Watch and it basically keeps track of where you cycle or run and then gives you scores but it also importantly shares that data online with your social network or other people which you might not know but who have also run or cycle on that same segment or route across a lake or in your city and basically gives you a position on a leader board. And so uses gamification to entice you to be more active but also to push yourself and run fast or cycle faster.

Sandra: And the app has been extremely popular around the world. Most people who do sports now whether they are wearing a Fitbit or another type of wearable device would all log in to this particular app and share what they do and the routes that they run on and so on.

Kai: So they have millions of data points every day and the company then uses that data, it packages the data and sells it to cities for example for city planning purposes, to improve road conditions for riders, or learn where popular jogging routes are but it also publishes heat maps.

Sandra: And this is a anonymised data so this would not say Sandra ran this route on this particular day but rather someone ran on this route on a particular day.

Kai: And the brighter it lights up on the heat map, the more people would actually cycle or run in that particular location so you can actually see where a lot of activity happens and because it's an app that is out of the US, it's much more popular in western and English speaking countries and so it skews slightly towards that part of population. And this is where those problems arise.

Sandra: Because these heat maps were given for locations around the world so they covered the globe. So first of all they lit up areas where we knew there were military bases in places like Afghanistan but they also interestingly lit up areas where we didn't yet know that there were military bases.

Kai: So in other words this data presumably shows as yet undisclosed or secret locations where Western countries have personnel be it intelligence personnel or soldiers who actually use these apps to keep track of their individual health performance. But when aggregated it pinpoints locations of these camps known or as yet unknown ones and interestingly also certain routes that connect those centres. So quite obviously this data could be used by enemies of those countries.

Sandra: For nefarious purposes.

Kai: So the ABC reports that it was actually an Australian student who studies at ANU who's been following the situation in Syria for a while who said that when using the Strava heat map Syria lit up like a Christmas tree and quite concerningly he was able to actually pinpoint those military bases and when digging deeper people were able to find those in other parts of the world as well. This has then turned into a bigger story and The Washington Post then reported the US military is looking into the situation and has then snowballed into an international story which subsequently led to The New York Times picking up this story, MIT review. And a whole discussion around the privacy implications of that. So let's have a look at this.

Sandra: So we wanted to unpack this story because there are a number of issues that it highlights from privacy and security issues which have been widely discussed in the media going all the way down to the business models that many of these applications rely on. So first to the privacy issue and there's been quite a good follow up OP-ED in The New York Times by Zeynep Tufecki who we've covered previously on this podcast.

Kai: Zeynep is an Associate Professor at the School of Information Library Science at the University of North Carolina and she's also a regular contributor to The New York Times and a speaker at TedX. And she makes the point that with these platforms such as Strava and other social media sites it is not enough to rely on the consent of the individual user to grant usage of their data precisely because no individual user can be informed of the potential risks that might arise from combining the individual data with the data of other individuals aggregating it and then presenting it in a combined way or what we commonly know as big data.

Sandra: So even though I might consent to my anonymous data being shared that has an impact on you as another user of that app who might be running on the same routes whose location I might disclose or whose habits I might disclose online.

Kai: Yeah and if we look at what now has happened with disclosing the locations of military bases, the data of each individual soldier using the app for their own individual fitness purposes wouldn't be a problem but the fact that they overlay all of this data to create a heat map then has those bases where people presumably do their fitness activities in the secure confines of those military bases - basically visualises the outline of those bases in those heat maps so it is the combination aggregation and the big data that then reveals properties at that systemic level that wouldn't be visible with each individual data set.

Sandra: The idea that as an individual signing these privacy agreements we do not understand the risks that we are consenting to on behalf of other people using the same system.

Kai: So what happens now is that we need to understand that people who point at the military and say how can you let this data breach happen, need to understand that there was no data breach by the military, it's each individual who very innocently uses this app and shares this information that then...

Sandra: Potentially anonymously.

Kai: Oh absolutely anonymously. Which then leads to these emerging effects and so Zeynep in her OP-ED makes the point that privacy is not an individual matter it's actually a public good. And we can think about many different other contexts where potentially the same or similar effects might arise and so she says we have to actually change the nature of the conversation away from protecting each individual's privacy to a more systemic tackling of the problem to potentially new regulation and new ways in which those social media companies have to gain consent for using the data so she recommends an opt-in rather than an opt-out system. In other words, rather than me being able to change my privacy settings to hide my data and not having it shared, the company would have to actually ask me specifically whether I want to share the data.

Sandra: Which gets us to our second point that we wanted to discuss today, because the potential solution of opting-in actually presents us with an even bigger problem: that of the fundamental business models that apps such as Strava are built on. They rely on us actually sharing the data because that is what they monetise through the app. So Strava for instance aggregates a lot of this data then makes it available at cost to let's say city councils who might want to optimise public transport or pathways to a park or lighting in a certain area where people tend to run a lot. It also relies on people sharing the data to entice us to be on the app, you want to compete with your friends you want to be there in a social space. If that social space is absent the incentive to use the app in the first place does not exist.

Kai: Absolutely, so as much as I would like those platforms adopting this model it is fairly unrealistic because it would undermine their financial viability and if you think about Google or Facebook then in a lot of those cases the activity that happens on the platform be it search or me connecting with friends and family or liking certain news items or movies or what have you on social platforms are often merely a means to then actually monetising that data through advertisements or selling the data to corporations and advertisers. So there's two sides to this story. There's on the one hand providing a good service to the consumer so that they use the platform and leave these traces but because those services are often free to use it is precisely the collection of that data that makes it worthwhile for the investors and for the companies to then monetise that data. If every user by default wouldn't share their data and would have to actually opt-in to sharing the data you could argue that those business models wouldn't work and the services wouldn't exist in the first place.

Sandra: Yep there would be no usefulness to the consumer or to the people willing to purchase the potential data. Having said that the discussion we've come back to over and over again end of last season around YouTube and Facebook and Google facing backlash in the way in which they monetise their platform and allow advertisers access to biased information for example has shown that the pendulum might have swung too far to the monetising side of the equation and that these platforms have to be very careful the way in which they balance the front end service to the customers and protecting their data and the way in which they monetise and this is the backlash that we're seeing at the moment that Facebook and others are facing about the way in which they create platforms that are highly addictive that make people share and share more data.

Sandra: But where the negative effects are actually a direct result of the business model that is built into the platform. Hence these conversations are really not an easy thing to tackle and there are no obvious solutions to how to move forward.

Kai: No but I think it's in the best interest of the platforms themselves to actually rebalance the way in which back end and front end relate to each other so that we do not have a situation where the monetisation drives to a large extent the way in which the platforms are designed in the way that we don't quite care what happens on the platform as long as we can actually make money from it right and this is the backlash that we're seeing. I think we will see this year a whole discussion around rebalancing this because otherwise regulators will step in and then compromise those business models at a much more fundamental level.

Sandra: Speaking of business models, our last story for today comes from the fashion industry.

Kai: The story appeared in The Canberra Times it's titled "No one wants your used clothes anymore as fast fashion floods the bins."

Sandra: So really the story discusses the fact that given our increasing reliance on fast fashion companies like H&M and Zara coming out with new designs every couple of weeks, the usual model of us donating our clothes, those bins that we have, our ability to recycle those clothes as quickly and as efficiently as we used to has disappeared. What used to happen is that every season we use to take our old clothes to Vinnies or the Salvation Army or put them in one of those clothing recycling bins and they would then be given a new life somewhere else around the world.

Kai: Yeah so what would happen is either those clothes themselves would be recycled by someone else picking them up and wearing them or large quantities of fabric would be shipped to places such as Panipat in India where they would be turned in to a you know arguably second grade of fabric...

Sandra: ...where they would be remade into a cloth known as shoddy which is a lower quality yarn but it would produce cheap blankets for instance for disaster relief operations. And this would delay the negative effects that are brought on by consumerism.

Kai: Yeah but this model is breaking down fast at the moment and it's breaking down from both sides. On the one hand there is a much faster turnover in fashion itself...

Sandra: Yep these trends are accelerating and new clothes are not only becoming available faster and faster but they're also cheaper and cheaper and accessible and in ever growing quantities. So people are buying more of them more often.

Kai: And there's some disturbing statistics actually which show that a lot of these clothing items are only worn once or a couple of times, some of them never and then being discarded because the fashion cycle is now so quick so we are creating ever increasing quantities of used garments and used clothing.

Sandra: And the fact that we can create them cheaper has also given rise to another cause for this break down which is the fact that we can produce a lot of those fabrics much cheaper than we can recycle all clothes.

Kai: Yes so these manufacturers in Panipat India for example have come under pressure from garment manufacturers in China who can now produce new fleece blankets that are much prettier at the same price as the used blankets which means the business model of these recyclers has fallen apart and they have now turned to producing blankets and garments from fleece and non-recyclable garments which means this recycling industry is breaking away at the same time as the quantity of discarded garments is increasing exponentially. Yes so double trouble which meant that this issue has actually made it to Davos this year.

Sandra: So this was the first year that the fashion topics really got the central place on the Davos agenda.

Kai: So what's Davos?

Sandra: Davos is a meeting of business executives, politicians, intellectuals, billionaires that meet once a year in Switzerland at Davos and they come together for the World Economic Forum where they discuss matters of interest for the world across a range of industries, a range of regional and global interests.

Kai: Incidentally the social media issue we discussed earlier has been given air time and George Soros got into a rant about precisely that topic.

Sandra: But also things like the One Belt, One Road and China's Digital Silk Road had a very central place. This year the rise of robots was also a topic for this year. Climate change. The wave of nationalism and populism that we've seen - many of the topics that we have discussed on The Future, This Week over the past season have been a central topic of discussion at Davos.

Kai: Even Trump made it to Davos and got his fair share of pushback for arguing against freedom of the press.

Sandra: But interestingly this time fashion has also gained a place. Quite often we tend to think of fashion as a very trivial industry, one that might be fun to look at but not really having an impact. And I think just to put this into perspective, the conference also highlighted this report by the MacArthur Foundation that said that the fashion industry actually creates one point two billion tons of greenhouse emissions a year, that is more than produced by international flights and shipping combined around the world. So the fashion industry's effects are really not that trivial.

Kai: So not only do we have the issue of discarded fabric and secondhand clothing that we don't know what to do with other than putting it in landfill, the resources that are consumed by creating that fashion also contributes a lot to climate change.

Sandra: So the conversation around our ability to recycle and reuse these garments really comes as a complement to how we normally talk about sustainability in the fashion industry. We most often focus on our ability to use organic cotton or to pair fair wages to workers or to have clean water but no one really thinks about the after life of the products that we are using.

Kai: And while it is important to talk about the input side of things and have fair trade and look into the conditions of workers and use organic materials, what doesn't usually get a mention is the way in which an industry or corporations go about marketing and selling their products and for example shortening the life cycle of products. So the life cycle aspects of the product and the contribution that this makes to sustainability is what we highlight here and other industries are actually much further along such as technology for example where in Europe there are strict regulations for the recycling of televisions and other electronics and companies have to make that part of their supply chain planning. The fashion industry is not at that level yet.

Sandra: And it's important to highlight that in an industry like electronics we actually want to know that the company has done their bit to recycle a lot of those products and consumers actually look at the entire lifecycle of that product whereas with something like fashion as consumers we are much more tempted to feel good when we've just put them in the clothing bin and we assume that something at some point will happen to those clothes.

Kai: So having this discussion in Davos I think is a good first step but where does that leave us?

Sandra: It leaves us with having started the important conversation about a huge industry and actually moving that conversation forward not just looking at things like labour and environment or animal welfare in how we treat brands but also our ability to reuse and recycle.

Kai: And there's some good news already. We've discussed Patagonia the US outdoor clothing manufacturer previously who are known to encourage customers not to discard products and use them for longer periods of time. And also companies like H&M are now starting to produce clothing from recycled fabrics so maybe it is up to the fashion industry itself to make recycling fashionable and actually take care of taking on board the resources that are bound up in this ever growing pile of garments to actually feed it back into the supply chain and not letting it go into landfill.

Sandra: So we must remember that this is not just about putting pressure on the companies to change their business models or the way they currently compete in the fashion industry but it rather requires all of us to change our behaviours in how we consume.

Kai: And we all know from the longstanding discussion on climate change that these are some of the hardest problems to solve the problems that require all of us to change our behaviours and escape the treadmill of consumerism and fast fashion.

Sandra: So speaking of escaping...

Kai: It's a Musk.

Sandra: We're back to our segment 'It's a Musk'. Now with the flamethrower.

Kai: Elon Musk has come out this time under the brand of The Boring Company, his company that experiments with and wants to build new tunnel based transportation systems hence the boring. They have announced a flamethrower.

Sandra: A 600 dollar flamethrower. And I'm not even sure we should say anything more.

Kai: So this has been all over the news and on Twitter, social media. The headline I want to read out is from TNW thenextweb.com: "Elon Musk denies zombie apocalypse rumours, sells 10,000 flamethrowers just in case". And these things pretty much sell. Apparently he's received a lot of orders for these flamethrowers. Which have some people on Twitter call bullshit on the whole exercise saying oh my god Elon Musk is selling more flamethrowers than Tesla Model 3s. Oh wait no these are just announcements as well. So we don't actually know whether this is for real or whether this is just a joke.

Sandra: But definitely 'It's a Musk.

Kai: It's a Musk.

Sandra: And that's all we have time for today.

Kai: Thanks for listening once again. Follow us on season three...

Sandra: ...of The Future, This Week. Thanks for listening.

Kai: Thanks for listening.

Outro: This was The Future, This Week made awesome by the Sydney Business Insights team and members of the Digital Disruption Research Group. And every week right here with us our sound editor Megan Wedge who makes us sound good and keeps us honest. Our theme music was composed and played live from a set of garden hoses by Linsey Pollak. You can subscribe to our podcasts on iTunes, SoundCloud, Stitcher, Libsyn, or wherever you get your podcasts. You can follow us online on Flipboard, Twitter or sbi.sydney.edu.au. If you have any news that you want us to discuss, please send them to sbi@sydney.edu.au.