The Future, This Week 01 December 2017

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. OK let's roll.

Kai: Today in The Future, This Week: cities creating real kerb appeal, Meetup at work and quantum bits.

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. So Sandra what happened in the future this week?

Sandra: Our first story is actually one about kerbs in cities.

Kai: So this one was published in Wired magazine and titled "To see the future of cities, watch the curb. Yes the curb".

Sandra: It turns out actually you can tell a lot about the city just by looking at the kerbside. And that actually has always been the case.

Kai: Oh yeah I remember very fondly our first podcast you had a great story about kerbside in large cities in the pre-car era. I think it does involved horse manure.

Sandra: Yeah this was actually back in 1894 during the great horse manure crisis. This was due to the fact that most of the world's largest cities and London was the largest city, the commercial centre of the world actually at that time, all of the cabs, all of the traffic was driven by horses buses each night about 12 horses and all of these horses were eating quite a bit of feed and then as a result making shit. And this was piling up in the streets to an extent that it became a great crisis. There were tens of thousands of kilos of this stuff, not only in London but also in New York and the automobile although it was in sight (that was the year that Benz patented his first automobile) but even back then you could actually understand cities by looking at the kerbside. This is basically a story of urbanisation where population growth in cities has moved from about 2 percent of people in the world living in cities to almost 15 percent of people living in cities. So the kerbside actually became this symbol of the inability of cities to cope with rapid growth.

Kai: So the piles of shit on the kerb told you something about the rapid growth of the cities, the number of people living there and the growing traffic in those cities and cities have a similar issue today. So the kerb has become a new battleground for people looking for parking space but also for share bikes are clogging up sidewalks.

Sandra: For ride sharing cars being double parked with hazard lights on waiting for passengers to get in. Cycling lanes that battle for the same ground.

Kai: Bus lanes, taxi ranks. So the kerbside has become the location where the competition of these different modes of transport plays out and cities have to deal with this.

Sandra: Not only that but there is also competition for different modes of standing. Is this a bus stop or is this somewhere where I park my car as a private citizen because it's just in front of my house or in front of the apartment building that I live in. So the kerb becomes this place where we collectively decide what goals are we going to maximise. Is this a place where we collect garbage? Where we park buses? Where we do deliveries? Where we stop our Uber cars? Where we park our bikes? Where we have our coffees in the morning? Or where we park our Teslas.

Kai: Yes so at a fundamental level is the competition between public interest and private interest. Is this a place that can be designated to a particular use, is this a taxi rank? We have to make those decisions. Are these areas for resident parking or they parking for anybody? Do people have to pay to park here, is it free parking? So all of these decisions cities have to make and the issue here is that the complexity grows. With ride-share and share bikes a new layer of complexity has come in and in Sydney we have things like GoGet car-share companies those cars need permanent designated car spaces. So with all of these different modes of transport we add more and more complexity and councils and cities have to figure out how to best allocate that space and to come to new ways of allocation sometimes by different hours of the day, different week days, so there's now a demand for more dynamic, more flexible allocation of this space to maximise what exactly?

Sandra: Well it depends. These are huge sources of revenue. Parking outside my building can be up to four dollars an hour. That is a lot of money to lose in case you are going to use that for a cycling lane or for Uber pickups. But what the article is saying is really we can actually observe how our use of these spaces is changing and how these spaces are being challenged again in front of my building, near the same $4 parking space there are four bikes that are just stopped next to the kerbside waiting for people to use them. But we can actually use this kerbsides to gauge the impact of technology, to gauge how our consumer preferences are changing, and to gauge how cities decide to optimise for different things.

Kai: And so the fundamental underlying issue of course is that space is scarce in the inner city environment. Streets are quite narrow. Cars have grown bigger, more transport is happening. Buses are getting larger. We might put a light rail in the middle of the street. There's now all these Ubers, the bike-share. And we're really in a transition period where we haven't quite figured out where transport is going, there's lots of new propositions, there's the proposition of electric self-driving ride-share cars that will pick us up anywhere where we might not actually need that many cars parked in the streets because residents won't have cars in the inner city environment. But these are promises at the beginning so we're in this transition period where cities have to figure out what are the right models for different areas. Inner city suburbs, the CBD, the outer ring of suburbs around this, how do you connect all of this and how do you make the best use of the kerbside for residents living there, for businesses like coffee shops who want to use the kerbside for seating, for ride-shares who need a place to stop safely without having double parking and upsetting and blocking traffic. So all of these things have to be done. So how do we go about this?

Sandra: Ah actually we don't know and prediction is not really a good thing. Back in the London Times they were predicting that London would be buried under nine feet of manure in the next few years. It really wasn't as the automobile came around so making predictions about what's going to happen there or what we should do there is really difficult. But the articles point is really that we can use the kerbside as a shorthand to understand the dynamics of all of these competing goals that smartphone technology enable services, city services, personal preferences, consumer preferences. How all these things are playing out.

Kai: Yes absolutely. So many of the issues that we see come on the back of digital technology and enabling these new business models (bike-share, car-share) but also other technological developments such as self-driving cars and electric vehicles. So for example will we see electric charging stations in our cities, charging pads where you park your car on and the car charges wirelessly. So the question of how we go about dividing that space and making use of this space going forward is something that cities have to actively engage with. And the question of whether we privilege access to the space or we organise access to the space, will we use technology to do this - new smartphone apps that let us book certain kerbside spaces, do we put a price on this. If more self-driving cars come in and we have less cars in the inner city does that raise serious questions about tax revenue. All of these questions cities will have to engage with moving forward.

Sandra: So moving forward, the future of work. Our second story for today comes from the Financial Review where WeWork is to buy Meetup.

Kai: So WeWork is a company that offers coworking spaces. For those of you who are not familiar with the idea of coworking, coworking is the idea that instead of signing a long term lease for office space you can join a coworking space on a membership basis which allows you to then book by the hour or by the day the kind of spaces you need - meeting spaces, desk space, office space. It's a concept that started in the start-up space small companies but has ventured into all kinds of different areas. It's a very diverse concept now and it kind of resonates with the idea of the future of work these different workspaces where you have different offerings for different kinds of work, collaborative work, solitary work where you need a quiet space, very creative work. And so these coworking spaces have really popped up in all different kinds of shapes all over the world. Probably most countries have some coworking spaces now. They're very popular in inner city areas but we also find them in regional centres now to enable start-ups innovation but also give small and medium sized companies spaces where they can meet and where they can grow their businesses together.

Sandra: And indeed, over the last couple of years we've seen a huge number of them pop up across Australia with different flavours and this is something that we've been looking at here at the University of Sydney Business School indeed one of our colleagues has been researching this for the past year.

Kai: Yeah. So Tim Mahlberg who is really an expert on coworking, he and I together have done a study on this so he as the lead researcher has analysed over 300 of these coworking spaces across Australia and we've published this as a report via Sydney Business Insights and the report is available through a link in the show notes. Interestingly we found a whole range of different flavours of these coworking spaces and we've classified them into seven archetypes. So here's Tim explaining those archetypes for us.

Tim Mahlberg (audio): There's about seven main types if you like of coworking spaces that have emerged in Australia. You know one of the biggest ones we might call like an Urbanpreneurial Pad - the entrepreneur who's in the city and in a creative industry and a freelancer and a more of a professional and these are pretty funky spaces. These are the kind of typical kind of places that you find. The other ones I've found were what I sort of call Digital Den so the tech fuel places where you're accelerators are and you've got your VCs in there scouting for the next unicorn but there's some other really interesting ones like you know there's these places I call social studios and this is where young people who are driven by wanting to create social impact. We're coming together in non-profit sponsored spaces to really start to learn about how you create impact through building new business models. Then there's the ones like the village which is a corporate community where you know large organisations are looking to engage deeper with their customers and kind of create new relevance if you like. One of my favourite ones though is one that we found emerging sort of on the fringes of cities and in regional areas and this is what I call the Town Hall Terminal. So think in a town hall as a place where people can come and voice their concerns for the community and provide input and look at kind of where that community is going and what I found here was you know local small business who are going let's come together and have a conversation around where we want our community to go more broadly. It's really exciting and I've got a lot of friends who run these around Australia and it's just the salt of the earth type of people and just the passion you just want to bottle up and take back to the city. People just want to change the world you know. And then another one is sort of more creative types who are more on the artistic side so call that the Creative Collective. And in the last one I found was at the other end of town which is up in the highrise in the cities and this where I think we're seeing the blurring between a coworking community and that entrepreneurial spirit and the typical traditional office environment and I call these the Executive Establishment and this is much more up-market and I think this is why we're seeing people from the typical working pathways looking at these entrepreneurs, going well I could do that and I want to take control of my work and I've been working in industry for 20-30 years in corporate and I've got something really powerful to offer and I think this is that kind of bleeding zone between the two types of work we're starting to see and I'm really excited to see how other types of coworking spaces emerge to new industries or more interests. And one of the ones that we haven't really seen much yet but it's this idea of taking a multi tenanted corporate building and embedding this sense of a vertical community through that whole building and starting to create the sense of connectedness you get in a coworking space and that facilitated connections.

Sandra: So the news today was about one such coworking space WeWork. Where does WeWork fit into all of this?

Kai: Yes so according to Tim, WeWork basically competes with what we call the Executive Establishments - the coworking spaces that are targeted at corporate users, corporations who want to grow their spaces or create innovation teams, create spaces beyond the typical corporate offices. But WeWork is also venturing into building spaces for more start-up or entrepreneur oriented clients. But most importantly WeWork is a global company. WeWork now has a valuation of more than 17 billion dollars which puts them right in the mix with large tech companies when some critics say isn't it more like a real estate business.

Sandra: Well yes you could argue that but you could also argue that coworking spaces are actually much more than that in the same way a company like Airbnb for instance enable people to have experiences around the world not just live for a night like you would do in a hotel. And they've been working quite hard at developing that side of the business. Coworking spaces and places like WeWork have been working quite hard at going beyond renting out spaces to entrepreneurs or corporates or businesses.

Kai: Look if we narrow down coworking to just the space aspects we're really missing the point. The idea of a coworking space is that it comes with not only extra services and you know coffee shop and all of the kind of amenities that you want in a modern workplace but that they're really about building communities of like minded people, people with the same kind of problems - say entrepreneurs who work together in this space who make acquaintances but also learn from each other the kind of skills that you need to grow a business, what it means to go through different funding routes, they teach each other things, they have seminars, they have gatherings on Fridays and they have meet-ups and this is where this story really becomes interesting.

Sandra: So what the article tells us is that WeWork is now buying Meetup, a company that's got already over 35 million members. That is a community service where people can literally meet up with people who have the shared interests and the shared interests might be drone racing or learning a new language but they might be understanding a new technology or talking about certain type of new business models or about investments into China. So very serious interest groups across a whole range of businesses and passions and interests.

Kai: Yeah absolutely. So if you look at coworking spaces just from the space aspect the acquisition of Meetup might not make much sense. But once we understand that coworking spaces are really about building communities, it makes a lot of sense because WeWork and Meetup are both about building communities but they approach this issue from different ends. WeWork from the point of view of building great spaces where you can build communities and Meetup from the end of organising communities digitally by bringing people together. And so what that means for WeWork is on the one hand they acquire digital technology that allows them to organise these meet ups but they also can use Meetup, which by the way will continue to exist as an independent company under the WeWork roof, they can use meet ups to fill their spaces after hours and to organise events that bring together the kind of target groups that they would like to see in their coworking spaces so for them it's a lot about synergies and building communities that they then grow into their coworking spaces.

Sandra: So in this instance WeWork finds itself in the same place where many other tech companies have found themselves where at the core at their beginning technology has enabled such companies to appear in the first place, companies like WeWork that can rent out these spaces, companies like Airbnb that can rent out rooms around the world. But what these companies have discovered is that a lot of their strength comes from building true connections between people, real relationships, real networks, real interest groups. So what WeWork has done in this instance and what also companies like Airbnb have done is to use that infrastructure, use the technology to actually enable connections in the real world. So in the case of Airbnb, it now enables a whole host of experiences where you can go around New York or learn cooking or find out the ins and outs of various cities, buy ingredients like a local, understand certain pubs, race your drones down the beach and similar real life interactions and community building that happen completely outside and independently of the platform that are no longer monitored by these platforms are happening in the case of meet ups and WeWork.

Kai: So what underpins this acquisition but also this narrative around Meetup and its role in the future of work is the realisation that what is missing often times when we talk about the future of work and how technology shapes the future of work is that work is fundamentally a social endeavour and that if we're talking start-ups, small entrepreneurs but also innovation teams, and even teams and large corporations, what often is the hardest thing to do is building the kind of communities that are the infrastructure for innovation to happen, for creativity to unfold and for learning to unfold especially when we're trying to grow new ideas and new businesses. And so WeWork is really setting itself up here as an infrastructure provider for the future of work through the building of these work related communities.

Sandra: So really enabling what then happens behind the scenes of WeWork.

Kai: So going forward I think the interesting thing will be to see how WeWork lives up to its ambition to be a large tech driven global company with creating the infrastructure for local communities to emerge. So how to reconcile the global with the locals. So I think it's a really interesting move and I'm looking forward to seeing how it plays out.

Sandra: We'll keep an eye on this one.

Kai: So our last story is from Science Daily and it's titled "Key component for quantum computing invented - University of Sydney team develop microcircuit based on Nobel Prize research.

Sandra: And I'm quoting from Science Daily: "This is incredible".

Kai: So how is this incredible? What is quantum computing and how is that going to change the world? These are important questions. We hear a lot about quantum computing recently. Sandra and I can't claim that we fully understand all the details but I think that's the point. No one really understands how we're going to form a whole new computing paradigm. But there's great promise in quantum computing to come up with a new computing paradigm that has orders of magnitude higher computing speeds and so that is what gets people excited.

Sandra: And since a team of researchers here at the University of Sydney just made a breakthrough in this space we thought we'd take this opportunity to talk about it.

Kai: So let's talk about the basics. Traditional computing is based at a very fundamental level on electric switches, switches that can be on and off, that a binary.

Sandra: So bits - ones and zeros, it can be either a 1 or a 0 but not both at the same time.

Kai: This is where qubits (quantum bits) come in which are not either 0 or 1 but can exist in multiple states at the same time.

Sandra: So what quantum computing does is really take advantage of the ability of very small particles of subatomic particles to exist in multiple states at the same time. So without going into quantum physics and things that neither of us are an expert in nor fully understand what we need to know about quantum computing is that due to the way that these very very small particles these really tiny subatomic particles behave differently than things in the normal scale operations that are done at that scale because they can be computed at the same time they can be done much more quickly than what we can do today with computers and they also will use a lot less energy than traditionally computers used today.

Kai: So while Sandra and I both agree that we do not fully understand how this works, which incidentally is a hallmark of today's society because we're using lots of things that we do not fully understand, what is significant here is two things. First of all I studied computing right so I have a reasonable understanding for how you go from basic theoretical computers, to chips, to assembler languages, basic programming languages and higher programming languages how all of this hangs together is based fundamentally of the idea of electrics switches that are binary. If we take this away and we put something else under this, this whole computing paradigm, the way in which we control those machines which we talk to those machines we programme them will have to change radically so if those quantum computers come to be we have to fundamentally rethink computing.

Sandra: So once we figured out there could be such a thing as quantum computing and this is going back to the 1980s where Richard Feynman imagined the existence of a quantum computer. Since then we've been trying to devise algorithms or languages or new ways of solving problems once these things exist. So what we're ending up is really with two problems to solve. One is what are the new ways in which we program these things, how do we think about errors in this space, how we think about algorithms, about languages in which we communicate with quantum computers. And the second really big part is how do we actually build them? So to be able to have something other subatomic level that functions and doesn't fall apart it turns out that you actually need to cool it a lot, you need to have it very stable, isolate it from other things and then you need to interact with it.

Kai: So questions arise: to what extent and at what point will quantum computers become a mass phenomenon beyond the laboratories of scientists in large corporations and universities and then on the back of this how do we rebuild a computing paradigm in the sense that we now find ourselves with this exciting new technology that is very much in its infancy but we haven't actually figured out all the kind of things that in traditional today's computing have taken us from the 1950s to today where coding is widely available to anyone where we teach coding in kindergartens. So the idea that we bring in quantum computers and make them a mass phenomenon and we just have to retrain all the computer scientists and the programmers to now work on quantum computers doesn't seem to be straightforward because we haven't even figured out what this kind of computing will look like and what we do know from works of Thomas Kuhn for example who has studied paradigm shifts is that when new paradigms form they form in a way that you can't actually predict them beforehand. So we don't actually know what everyday quantum computing would look like. What we can do however is speculate about the effects that computing that is orders of magnitude faster and more powerful might have on certain aspects of society.

Sandra: So you're right there that most of the things that are being talked about in terms of what quantum computers will be able to do are actually exponential extrapolations of what normal computers can do. So when we talk about the hopes for quantum computing there are hopes for things like optimisation. The fact that we'll be able to optimise much much faster things with many many variables; there are things like being better able to simulate very complex things in things like chemistry for instance which we just do not have enough computing power now and having almost reached the limits of what we can do in terms of technology today, we need a new paradigm to solve some of these problems but we haven't yet imagined completely new things to do with these computers.

Kai: But we also know that computing that is orders of magnitude more powerful will break certain things so encryption for example, encryption rests on the fact that it is impossible with current computing technology to break a certain code. If we had quantum computing, most of today's cryptography would instantly be obsolete.

Sandra: So whilst there are no advantages for real consumers in day to day life yet for this quantum computers, there is no real advantages for corporations or governments in this quantum computers today. The reason we decided to start talking about this is because there is a lot that is being done around quantum computers and this story has highlighted one small such component, a very very tiny microwave circulator that allows us to talk to these machines. It's not the only development. Actually building a quantum computer that works that delivers those benefits or even that challenges our financial markets is a massive technological undertaking on the one hand and there are universities and labs and companies around the world working on it. But it also requires us to rethink how we program these computers and how we think of what they can do but also once they are out in the world how we reorganise our social lives and our economies around it. And these are all questions that we need to be asking at the same time as we're developing those technologies.

Kai: So we discuss a lot of different technologies on The Future, This Week, many of which we already fully understand where we can talk about the implications how we reorganise different business practices once we apply those technologies. Quantum computing is different. Quantum computing at this point is a promise. It's not yet well understood but when it comes to be its implications will be such that we have to rethink not only computing but many of our business practices at a very fundamental level. So we think it's a good idea to start this conversation now, keep an eye on this, and as this technology matures and we learn more about it come back to it over the coming years.

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

Kai: Thanks for listening.

Sandra: 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 this podcast on iTunes, Soundcloud, Stitcher or wherever you get your podcasts. You can follow us online on Flipboard, Twitter, or on sbi.sydney.edu.au. If you have any news that you want us to discuss please send them to sbi.sydney.edu.au.