A Historical Shift in the Economy and Society

Irving Wladawsky-Berger

22 Source: Kurzweil 1999 – Moravec 1998

1900 1920 1940 1960

1E-5

1E-3

1E+0

1E+3

1E+6

1E+9

1E+12

$100

0 B

uys:

Com

puta

tions

per

sec

ond

IntegratedCircuit

DiscreteTransistor

VacuumTube

Electro-Mechanical

Mechanical

202020001980

Nanotechnology

Digital technologies are to the 21st century as steam power was to the Industrial Revolution

Accelerating Advances in Digital Technologies

3

Continuing Technology Advances

Huge amounts of informationBillions of mobile devices; trillions of sensors

Massive computational power and storage capacityHigh bandwidth, wireless networks

. . .

4

The Internet: Industrial Information & Knowledge Economy

5

NetworkingTCP-IP

InformationWorld Wide Web

Communicationse-mail

. . .

Business, Government, . . .e-business

Services, Apps, . . .Cloud Computing

Internet

Internet Evolution

Collaboration, Blogs, Wikis, . . .Social Media

7

~$6,000

1981 1994 2011+

Cost ~$2,000 $25-50

1%Penetration 10% 75%

PCMedia / device Laptop / internet

Phone

Non existente-services potential Medium High

The last three decades have witnessed tremendous progress in global digital connectivity and ubiquity

The decreasing cost of technology is reducing the “digital divide” and democratizing access to government and business e-services of all sorts

7

Towards Ubiquitous Connectivity

822

Consumption Model: The Mass Customization of Services

Delivery Model:

The Industrialization of Services

Cloud Computing: a consumption and delivery model for services, apps, information, . . .

94

Cloud Computing

Banking

Retail

IT

Consumption model: focused on the overall end user experienceStandardized service offeringsRapidly provisionedFlexibly pricedEase of accessSelf-service

Delivery model: focused on overall infrastructure managementVirtualized resourcesManaged as a single large resourceDelivering services with elastic scalingEconomies of scaleDeploy technology advances

10

6

Clouds enable ubiquitous access to applications from an increasingly diverse set of devices

On demand self service

Anytime from any device

Decoupling data from device

Unified communications

Delivery of real time data and analysis

1116

Real-time Information access, analysis and optimization The world's physical, digital & financial infrastructures

are converging

15

A Planet of Smart Cities•In 1900 only 13% of the world’s population lived in cities•Now, the majority of the world’s populations lives in cities•By 2050, cities will likely make up over 70% of the world’s population•Urban areas are expected to absorb all the planet’s population growth - 2.5 billion people - over the next four decades

13

Smart Cities Services

Public Safety

Government Services

Water

Healthcare

Transportation

Energy and Utilities

Cell Phones: The New Local Bank?

Source: Yankee Group, Financial Access Initiative

In developed countries approximately 81% of adults are banked vs. 28% in developing in countries

There are ~5 billion cell phone users worldwide but only 1.8 billion bank accounts

US

- 91.0%

- 84.7%

Brazil- 43.0%

- 82.9%

UK

- 91.0%

- 92.4%

Russia

- 69.0%

- 94.5%

India

- 48.0%

- 56.2%

China- 42.0%

- 53.4%

Africa

- 20.0%

- 48.0%

Gap Narrowing Gap Widening

2 – 3 billion underserved

1.8 billion bank accounts

4.8 billion mobile phones

6.9 billion people

|

Three disruptive forces are reshaping the global payments landscape

Ubiquitous connectivity driving next wave of digital commerce, both online and mobile:

▪Technological advances and decreasing costs have driven exponential growth in digital access

▪A surge in online and mobile connectivity has resulted in significant digital commerce growth

Accelerating shift from paper-based to electronic payments across global markets

▪Developed markets continue shift away from cash and checks

▪Cash-based economies in emerging markets turn electronic as consumers become banked and new payments forms emerge

Integration of information-based services with payments, driven by new players and business models

▪Targeted and contextual marketing

▪Identity and fraud solutions

▪Pricing and supply chain optimization

A Historical Shift in the Economy and Society

Irving Wladawsky-Berger