13 posts categorized "Technology"

June 24, 2014

Innovation in defense: Convergence and catching up

Env_glb_ho_1333_hiNations invest in defense technologies to protect their citizens and also to drive economic growth and prosperity. In Deloitte’s latest Global Defense Outlook, we found that 50 nations spend more than $1.7 trillion every year on defense, and national leaders expect to gain strategic benefits from their investments.

Gaining military advantages from innovation in defense technology is getting harder and more expensive. Changing global economic realities are leading toward catch-up and convergence, reducing the relative advantages of investment in high-tech defense systems. These trends are becoming more evident worldwide.

Catch-up is driven by macroeconomic realities. Higher-income nations among the Top 50 defense spenders (the United States and most of the Eurozone) have led defense innovation for more than 70 years and are responsible for most of today’s advanced weapons, including stealth, unmanned systems, precision strike, naval aviation, and cyber-related systems. These nations reduced defense investment by about 8 percent between 2008 and 2013, confronted by high debt, slow economic growth, and competing demands for deficit reduction and social services.

The lower-income nations among the Top 50 (China, Russia, India, Brazil, Saudi Arabia, Iran, Pakistan, and others) have traditionally spent less and followed the technology lead of the high-income nations. Because these nations are growing faster than the higher-income nations and hold lower levels of debt, they are increasing defense spending. Russia is undertaking the most expensive buildup of its defense since the breakup of the Soviet Union, increasing defense spending by 16 percent between 2013 and 2016. China’s defense spending has doubled over the past 10 years and will increase by 12 percent in 2014.

Convergence is happening because it is cheaper to copy than to create. Innovation can provide competitive advantages in warfare just as in commercial markets, but innovators face high costs and risks. In the United States, defense innovation is concentrated in 80 major defense acquisition programs (MDAPs), including the F35, expendable launch vehicle, and other high-technology systems. These systems are loaded with cost and risk. In fact, the U.S. General Accounting Office reported that the MDAPs have overrun budget estimates by $448B and are an average of 28 months behind schedule – solid evidence that gaining a technology edge in defense is a risky and expensive undertaking.

Copying defense technology is much cheaper. For example, the Chinese Navy boosted its power projection capability by purchasing a used Russian aircraft carrier for $20M and towed it home. This low-cost investment establishes carrier-based aviation in China, an early step toward what Chinese officials call “the century of the sea.”

Lower-income nations are catching up in defense spending as they exploit economic growth and favorable debt positions. The result over the decades ahead is likely to be technological convergence, with advanced defense technologies increasingly available to state and nonstate actors. To learn more, read the Deloitte Global Defense Outlook 2014: Adapt, collaborate, and invest. Please share your thoughts or questions by commenting below!


JackJack Midgley is a director in Deloitte’s strategy practice, advising leaders in the defense and intelligence communities. He leads development of Deloitte’s annual Global Defense Outlook. Follow him on Twitter @jackmidgley.

January 27, 2014

Shaping the future together

Deloitte Davos Live video screen_300x200Times of global change require leaders with a global vision – leaders who inspire confidence and foster innovation. I see this attitude reflected in Davos. I have noticed a remarkable shift of attention at this year’s World Economic Forum. While the meetings in past years focused heavily on finance and the banking industry, representatives of the global technology industry are clearly the thought leaders now.

At the same time, politics seems to have been pushed into the background somewhat – especially, European representatives are less visible this year. But Europe’s image has not yet fully recovered after the Euro crisis and the world is closely watching how European banks will perform in the stress tests.

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November 11, 2013

People, change, and surviving the innovator’s curse

APLC blog image 2If you type the word “innovation” into the search window on Google books, you get more than 54 million hits—a testimony to how the pursuit of innovation has taken hold as the prime business imperative of the 21st century. But is innovation itself really a solution?

On a recent panel I moderated in Taipei, Ming-Je Tang, Vice President for Finance Affairs and Professor of International Business at National Taiwan University, took up this question. He listed a number of companies that were home to some of the most miraculous innovations of the 20th century—from mass production assembly lines to the personal computer. The thing they all had in common in addition to that innovation was that they are all either now struggling—or gone. They are victims, he says, of the “innovator’s curse.”

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September 30, 2013

Disruptive innovation: It's now the fast that eat the slow

Blog image fastDisruptive innovation is a subject we hear a lot about these days. But never have I heard its impact on the large versus the small quite so sharply represented as during a panel I recently moderated made up of business executives.

Let me set the stage. All of the panelists had experienced the perspective of the large, multinational enterprise. One panelist is currently serving as COO of a large bank with 40,000 employees. One had worked for large companies but now was the CEO of his own successful tech start-up. Another panelist was the former CEO and president of a multinational pharmaceutical company and is now a partner in a small private equity firm. Similarly, the last panelist had worked in large tech companies but is now a partner with a smaller enterprise.

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June 05, 2013

Reinventing the ERP engine

Blog_engine_300x200I recently had the opportunity to attend a conference of a major ERP (Enterprise Resource Planning) vendor to learn about technology advances on the horizon and meet with top executives from across the globe, both those just exploring the capabilities of ERP systems, and those with multiple implementations under their belts. While I’m always interested in new technical capabilities, what really captured my attention was hearing how technology leaders are taking advantage of the reinvented ERP engine. 

Let’s face it. Those three letters – ERP – can be very scary to the uninitiated and downright frightening to anyone who’s been through a failed implementation. Historically, ERP implementations have been expensive and time consuming, and are seen as rather pedestrian when compared to newer technologies like social, mobile, and cloud.

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January 18, 2013

Cyber resiliency at the World Economic Forum

Blog_jolyon_cyberresiliencyLaunched at the World Economic Forum in Davos last year, we are asking CEOs and governments to sign a simple set of cyber principles, thereby personally committing to taking cyber risk as a top priority. The Principles are straightforward but powerful, asking leaders to recognize their interdependence, to acknowledge the importance of their leadership on this issue, the need to incorporate cyber risk management into their operations, and perhaps most importantly, the shared responsibility, and so to ask their partners, customers and suppliers to do the same.

This year we are bringing leaders from many different industries and nations together to build on our initial success. We’ve created a powerful community, one that can really move the needle to improve our global cyber resilience. I’ll ask this community during our meeting in Davos to collectively determine what success looks like, which issues need to be dealt with first, and what they will commit to.

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January 17, 2013

When men and mountains meet

Barry outside at Davos 2012The poet William Blake wrote that “Great things are done when men and mountains meet.”1 Despite this poem being more than 200 years old, and recognizing the dynamic collection of men and women leading business and society today, this line perfectly sums up my feelings of anticipation ahead of my return to the mountain in Davos-Klosters, Switzerland, to participate in the 2013 World Economic Forum.

This will be my sixth year attending the forum whose theme this year is “Resilient Dynamism.” Each year I’m impressed by the quality and insightfulness of the event, and by the intelligence and passion of those who take part. Where else do you get the opportunity to interact with smart young innovators, top academics, government leaders, and senior executives … all in one place?

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March 08, 2012

Big ideas, little price tag

Laura_blogSometimes it’s the little things that make life better. Like the DVD envelop buried beneath my pile of mail—a reminder that for a low monthly cost I can enjoy unlimited movies with no late fees. Or the way my MP3 player untethered my favorite tunes from a growing avalanche of CDs and forever changed the way I think about buying, sharing, and listening to music. Or how a free phone app lets me quickly pay my parking meter without a frantic search for spare change.

As a modern consumer, I’ve grown to expect new technologies and services that help me get things done in new and different ways. It's a simple progression: technology advances, prices drop, and over time performance generally improves.

But one major sector of the economy has struggled to embrace the type of innovation that will achieve more for less—government. In an era of increasing commoditization, consumers want quality and convenience, all for a small price tag. Governments have certainly leveraged technology to improve the performance of cumbersome processes in the past 10 years but often at a high cost.

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January 19, 2012

Eyes on the sky: How cloud computing is shaping society

Computer mouse cloud Next week global leaders from DTTL and Deloitte member firms are meeting in Davos at the 2012 World Economic Forum to discuss the important issues of the day. While we can’t all attend, I have the real privilege to participate in a local Davos event in New York for clients of the U.S. firms. I’ll be speaking about cloud computing, and how it is not just a technology phenomenon, but is shaping society itself.

As someone who has been working with leading innovators for many years, my sense is that cloud computing represents a once-in-a-generation convergence of technologies: high-speed broadband, large-scale data centers, and flexible virtualization software. Working together as “cloud computing,” these forces are driving one of the most important global technology transformations impacting on many types of business, political, and social structures.

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September 21, 2011

Deloitte21 program e-Learning for Kids and e-Learning for Life: Founding dreams through free digital education

High school students in Kosovo participating in the e-Learning for Kids curriculum.

Learn more about Deloitte’s education and skills initiatives

What chances does a young person have nowadays without a good education? In a world where quality education is taken for granted in order to have well-being and prosperity we’re not always aware that this is not the case for everyone. Worldwide, there are still millions of youths who will not achieve their dreams of becoming, for example, a nurse, entrepreneur, police officer, or engineer, let alone a Nobel Prize winner simply because of a lack of good education. These young people may not be gaining computer literacy, teamwork skills, and the ability to solve problems, local or global, in a creative and innovative way. Or, they may even work long hours in factories to earn little money, survive in dangerous warzones, or live in remote areas where schooling is unavailable. Because of these circumstances, the goal of a prosperous future seems unattainable.

Who are e-Learning for Kids and e-Learning for Life, and what do we do?

We are here for every child and young adult with a dream. Since the end of 2004, e-Learning for Kids and e-Learning for Life have been developing free, digital, and innovative lessons for underprivileged children and teens, advancing young people’s 21st-century skills-readiness on a global scale. We see ourselves as a foundation that helps young people realize their dreams by preparing them for successful futures. Through our programs, young people enjoy working and playing on the computer. Our digital lessons are designed to inspire learning in a fun way. It is our belief that every young person deserves a chance to reach his or her full potential.

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