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G100 Network Notebook | July 2017

Confronting Cyberwarfare

Evolving cyber threats demand greater agility from security officers to protect a corporation’s most valuable – and vulnerable – assets. A Spencer Stuart study profiles how companies build better responsiveness by staffing cybersecurity teams with talent outside of IT and rethinking the CISO’s role:

“More sophisticated CISOs are social butterflies; they’re very collaborative. They’re interested in their peers’ challenges. They’re able to provide a very balanced view when they’re speaking about a problem. Even during a breach, they don’t throw people under a wheel, but they say, ‘Well let’s see, there are systemic problems and here’s some opportunity to fix them,’ focusing much more on what to do about them than how you got there,” said Richard Puckett, vice president for security operations, strategy and architecture at Thomson-Reuters.”

Less clear are the rules of engagement for nation-states attacked by cyber criminals. As former National Security Advisor Stephen Hadley explains in a video interview, the Russian cyberattack that crippled Estonia’s e-government nearly a decade ago sparked a huge (and to date unresolved) debate among NATO members on how to categorize and respond to cyberwarfare:

“Nobody died – the traditional measure of whether you’ve been attacked. On the other hand, a government was almost paralyzed. What’s the right response? Do you have to respond only in cyberspace? Would you think of responding conventionally, through conventional military power, to a cyberattack? None of that has been worked out.”

Unintended Consequences of the AI Race

Chinese venture capitalist and former Google China chief Kai-Fu Lee expects AI to reshape the geopolitical landscape. In a New York Times op-ed, Lee tracks the expansion of AI in China and the US and predicts that the concentration of money, data, and talent will have a chilling effect on the developing world as mass job displacement proliferates:

“If most countries will not be able to tax ultra-profitable A.I. companies to subsidize their workers, what options will they have? I foresee only one: Unless they wish to plunge their people into poverty, they will be forced to negotiate with whichever country supplies most of their A.I. software – China or the United States – to essentially become that country’s economic dependent, taking in welfare subsidies in exchange for letting the “parent” nation’s A.I. companies continue to profit from the dependent country’s users.”

Resurrecting the QR Code

Thanks to advances in smartphone camera technology, companies including Snapchat, Spotify, and WhatsApp are utilizing QR codes to enable their users to instantly discover image filters, share songs, and find contacts. Wired examines future applications:

“”You can imagine a television where you scan a QR code and that takes you to a troubleshooting instruction manual,” says Connie Chan, a partner at venture capital firm Andreessen Horowitz who focuses on China. You could go to a store, and rather than a cash register they could just have a QR code. Scan it and you’ve paid.”

That is the reality in Chinese cities, where cash has quickly become an anachronism, thanks to mobile payments platforms WeChat and Alipay, owned by Tencent and Alibaba’s Ant Financial, respectively. The two companies are on track to conduct more daily transactions than Visa and Mastercard, reports The New York Times, illustrating the gap between the US and China in going cashless:

“In 2016, China’s mobile payments hit $5.5 trillion, roughly 50 times the size of America’s $112 billion market, according to consulting firm iResearch.”

3D Printing at Scale

To fully understand the potential of 3D printing, look beyond specialized use cases such as prosthetics and jet engine parts, says a bullish piece in The Economist. Recent advances in additive manufacturing will speed production and cut costs, putting the 3D printing revolution on par with the assembly line and just-in-time production:

“Some of the new methods of 3D printing now emerging show that its shortcomings can be overcome. Adidas, for one, has started to use a remarkable form of it called “digital light synthesis” to produce the soles of trainers, pulling them fully formed from a vat of liquid polymer. The technique will be used in a couple of new and highly automated factories in Germany and America to bring 1m pairs of shoes annually to market much more quickly than by conventional processes.”

Longevity and the Labor Market

People over 55 comprise a quarter of all gig economy workers and are also more likely to become entrepreneurs than their younger counterparts, suggesting that large companies are underserving Baby Boomers. The Economist on tapping this resource:

““It’s not employers’ job to save society. They need to see the business case for older workers,” says Laura Carstensen of Stanford University. … Over the past decades the point at which workers are physically no longer able to work has shifted much further up the age range. The idea that only the young can innovate has also been successfully challenged.”

Wearables at Work

AR (augmented reality) is emerging in the workplace, including at GE and Boeing, in the form of Google Glass, which pivoted from consumer tech to industrial aid. From Wired, a look at how workers at an agricultural equipment manufacturer use Glass Enterprise Edition:

“For tasks they have mastered, workers don’t need to look at the screen. But they can wake it at any time to see where a part must go, and even zoom into an object on the display for more detail. Glass tells them what kind of bolt is needed – a wrong-sized bolt could seriously damage a motor – and specifies which wrench to use and how much torque is required. If a part looks damaged, they can take a picture.”

Does Experience Trump Skill for New Board Members?

It depends on gender, suggests an ISS analysis of 100K+ directorships. 32% of women appointed to director roles have previous corporate board experience, compared to 23% of male directors, per Bloomberg. Unconsciously favoring women who have already served on boards can backfire:

“While that means a company is getting an experienced director, it may also mean the company is not getting the specific skills it needs for that position, Roe [managing director of ISS Analytics] said. “You are putting blinders on in your search for talent,” he said, noting that effective directors may put in 300 hours a year.”