Jan 27, 2020
Devon Watson, Chief Marketing Officer for Diebold Nixdorf recently traveled to Dubai UAE and sat down with the Dubai Future Foundation - a government initiative driving accelerator programs - as well as a special block chain consultant, to discuss how the region is approaching growth and innovation.
Devon Watson: 00:14 Hello again and welcome to this week's episode of COMMERCE NOW my name is Devon Watson, Chief Marketing Officer for Diebold Nixdorf. Today I find myself in Dubai, UAE. We're at the Dubai Future Foundation, a government initiative driving accelerator programs in the region. I'm joined today with Ghaith Abdulrahman and Karin Gabriel, both of whom are project leads at the Dubai Future Foundation and a special guest Mark Balovnev. He's the founder of Educhain and a partner at Accelliance, a blockchain consultancy based here in Dubai.
So maybe to start off, Ghaith, if you could tell us a bit about Dubai Future Foundation and some of the programs you guys are running here.
Ghaith Abdulrahman: 00:54 Sure, absolutely. Dubai Future Foundation was born out of the belief in the need to drive future in Dubai. As you know, Dubai is one of the global cities and a major, major regional player and it's been doing really well in a lot of sectors, primarily specific sectors that drove it out of turbulent times in the past and it created a successful business community and society. We've had brands come here and stay and we've had homegrown brands that have gone global. So the need to start planning for the future comes out of the belief that we need to continuously be number one, and it started in the World Governance Summit where we had an exhibition around the Museum of The Future, where we wanted to demonstrate what the future could look like. And instead of demonstrating relics of the past, it was more about what could future sectors look like, what could human interaction technology look like and how could society look like in the future? Everything from government to private sector and the society itself.
From that very, very humble beginning. The foundation has over 200 employees, a vast portfolio of projects that range from everything from building capacity for society, government and multinationals around explaining what the future could look like when when emerging technology comes into their sectors to building disruptive programs around with multinationals government about how could we lead on certain sectors? How can we transform government from a nascent and inactive player to a proactive player? Which has been the case for Dubai government for a long time, where they've been pushing and driving the innovation in any economy or any sectors or in the economy, since their inception, and the private sector has been kind of following rather than leading. So that's really to build and capitalize on that effort quite a lot.
Some of the programs that we host range from connecting government to very bright startups to entrepreneurs to building capacity on a leadership level to help them understand how is technology changing their sector? How it could change your organizations to working with private sector as well around a similar scope to building capacity with university students and high school students around breaking down myths, breaking down misconceptions around things like AI, blockchain, other parts of technology and how could they be part of that new wave of entrepreneurship, but also how can they use that technology moving forward. So the scope's quite vast. We get into a lot of programs, what we primarily focus on building programs that link regulators or government with a private sector and startups and how do we build the value chain around these three.
Devon Watson: 03:38 Got it. And one of the things that you mentioned that I thought was pretty interesting, so as I look around Dubai, the desire to be number one is pretty obvious, the world's tallest buildings and very impressive engineering feats. But there's also this kind of clear trend towards the societal aspect, the satisfaction or happiness. I've noticed that those measurements are kind of stitched in every place I go in the user experience. Can you talk a little bit about how the user experience, as it pertains to really a societal benefit here right, the government is what's actually driving this and how does that marry up to this desire to be number one because many other governments or institutions would view it as one or the other?
Ghaith Abdulrahman: 04:23 Absolutely. You're spot on. I mean the general vision is to be number one and that, to different stakeholders and government, that could mean different things, right? From a government centric perspective, one of the things that means is that, beyond creating government entities that are stellar, that are continuously innovating and taking the lead in their sector, there's a huge services mandate towards the people, towards a society that needs to be fulfilled. And that's been a primary concern and primary focus of the government entities here. How can we provide world-class services to the citizens, to the users, whether they're commercial, residential, and everybody who even passes by or transits Dubai, right? How can we give them an experience around service that's not comparable, right?
And there's been a lot of focus. Everything from gearing the Government entities internally, whether they're from an organizational perspective or from a services perspective, operational perspective, but also how can we team them up with the best technology that can facilitate providing the best services. So that's been really the focus. And ultimately the common denominator across all that is that we want everybody who hand or deals with Dubai government to be happy with the outcome and the transaction and the experience.
Devon Watson: 05:36 Got it. And one of the things that I've always thought a lot about when I go to a different city and I see how they're trying to stimulate innovation is, how you bring the right mix of participants together, right? And you need students, right, that are graduating and becoming risk-takers and new ventures. You need often some sort of government support. You need large corporations that can be acquisition vehicles for these different startups and things like that. And you need capital, right? And one of the things that I noticed that I thought was really interesting is that you've brought a Techstars program here, so maybe you could tell us a little bit about that.
Ghaith Abdulrahman: 06:12 Sure. So Techstars program was launched the beginning of last year and it was the first accelerator program we hosted in our flagship project Area 2071. So Area 2071 is an experimentation space between government multinationals and startups focused on identifying a disruptive business models and technology. And out of that we hosted a Techstars for the first time in the region. It was the first endeavor in the region there were sponsored by one of the big family businesses in in the UAE. And we really liked the outcome of the program because the way it was organized and the way that it was structured was in a way that ensured that the companies would not just succeed, but find a home in Dubai. So we found that quite attractive to our mandate and our positioning. So we hosted them for two cohorts over two years. And a lot of these companies are going to get special visas around that enables them to stay for a long period of time, sponsor their teams, and sponsor their families to be based here out of Dubai.
So that's the support that we've usually provides any accelerator program or any startup. But that Techstars experience has been quite stellar because it also pushed us to launch a project recently, it was one of the reasons that focuses around how can we incubate ideas on a university level where it's safe to fail, it's safe to experiment with new ideas for businesses and how can we play a role along with the private sector and the government funds around seeding these ventures and graduating a lot more of these ideas. And that's the problem that you find in the Middle East in general, is that there's a lot of talent, there's a lot of bright ideas, but there's very few mechanisms that enable it to go from idea stage to execution stage or a POC stage. And that's kind of where this project, which is called Genie Zones or Alchemy Project has come out from.
Devon Watson: 08:01 The way I often phrase that problem when I'm thinking about it. It's something that recurs in different regions as well as solving the get to market problems, not the go to market problem, right? And it's a different mindset, right. And you need, in particular, permission to fail, right? And that's not always culturally viewed as an okay thing.
Ghaith Abdulrahman: 08:21 And that's why universities are the best place to do it, especially when you embed that program within the credit system that the university student goes through. It becomes more of an incentive and it puts the parents at ease as well because they say what, he or she are focusing on the degree and at the same time that this program that they're doing is contributing towards that degree. So that program really fits in quite well with everybody's needs
Devon Watson: 08:45 And then that changes the perception, right. And opportunity to learn rather than a blatant risk, right?
Ghaith Abdulrahman: 08:52 Absolutely.
Devon Watson: 08:52 That's excellent. So thank you Ghaith. That was super helpful. I really liked the kind of the mission around what you guys are trying to create here with the ecosystem. So Karin, maybe we could move over to you and tell us a little bit about, as this ecosystem is coming together, you're trying some new things, what are the technologies, what startups maybe are starting to capture your attention that you're bullish for that will have a great future.
Karin Gabriel: 09:18 Absolutely. And I think, I just want to start off giving a bit of context of the kind of programs we run here. So my colleague mentioned earlier Techstars, which is one of the programs that are invited to set up an Area 2071. And Area 2071, as mentioned earlier, is an ecosystem that comprises of three main stakeholders, private sector organizations, government organizations and talent in the form of startups primarily. And they're all situated here in Area 2071 in Emirates Towers. And our goal is to make sure that we harnessed experience and expertise of our members in this ecosystem. And we work on specific programs that are all driven by a specific challenge. So challenge is a need, a problem statement that we identify together with our partners. Then our goal is to find the right stakeholders, bring them on one table, and then we create a program that allows the different stakeholders to work together and co-create a solution for the challenge statement. And these challenge statements usually revolved around technologies and we have seen all kinds of technologies from AI to a block chain artificial intelligence. Sorry, let me move [inaudible 00:10:29].
Yeah. So we have seen all kinds of technologies being represented in our programs from artificial intelligence to blockchain, virtual and augmented reality and so on. And I think what's interesting about our programs is that they are driven by a specific need. So in Dubai future accelerator, if we work with their road and transport authority that looks into autonomous driving, for example. The electricity and water authority looks into new forms on energy savement, energy generation, but it was a water generation. The knowledge authority of course really wants to revolutionize the education system to make sure that it's ready and prepared for the 21st century. I think what we have seen interestingly is, in the beginning a bit of question on the government side on why should we work with startups? Because for them this was a new field. As you can imagine, even for us in Dubai Future Foundation, we are very young organization. We are less than six years old.
But if you want to buy let's say new furniture and new equipment, we have to go through an RFP process which is very strict, which doesn't allow us to work with startups, which means all of the solutions that startups provide around innovation. I think that we can access on a legal basis. That's why Dubai future accelerators was set up as a test bed to allow startups to work with government entities and explore during the nine weeks program how they can collaborate. And we have really seen a shift in the mindset of the government from being in the beginning very careful when it comes to working with startups. They wanted to know which were the partners that the startups have worked with before and they wanted to do have references. To really switch integrate, you have never tested it before. I want to be the first one you test it with.
I want you and us to sit down and further develop your technology. Now I can give you an example here, we had a company from the UK called Desolenator and they brought to Dubai a solar powered water desolination technology sit in MVP stage. They signed an agreement with the electricity and water authority from Dubai and over course of one and a half years, defer to develop the technology and have now building a community size plant in Dubai using this technology.
Devon Watson: 12:46 It's a great success story.
Karin Gabriel: 12:48 Absolutely. It's brilliant and I think it shows the risk appetite the government has and the confidence in the startups and really understanding that emerging technologies can help them offer better services to their customers.
Devon Watson: 13:02 So the self-awareness and government's part to understand that there probably was a lot of red tape and things like that. I did a similar interview with another accelerator in a different part of the world and they were telling me that at first when they got started, they were bringing these brand new startups in and the government form had to make the startup list of the number of fire extinguishers they had. No startup has any clue why you would even, right? They don't even think that way. Right? So it's interesting that the government here was kind of self aware that there was impediments and red table, whatever you might want to call it, to that progress and then and then fixed it. What was that conversation like through the education process though? Was there an aha moment or was it just kind of a continual collaboration to help refine how the government looks at it?
Karin Gabriel: 13:52 Yeah, that's a good question. And I think it's an ongoing process. So they have been a lot of aha moments and I'm pretty sure they will be a lot of aha moments moving forward. So for example, one of our partners really looked into changing or adapting their procurement system, right? Because our procurement based system sometimes takes months. And months are not an issue for large corporations, but months are an issue for a startup because they have limited resources. And I really think it's by having the government partners and private sector organizations as well, work with the startups over a period of nine weeks, every single day side by side to really see the potential that they have in transforming the services or the way we offer the services to our customers. And not only our customers, but we had one example where a smart Dubai office who is kind of like the tech department of the Dubai government so to say, and they are also in charge of the software used in their houses, the inventory, management and planning system, which until recently was very much focused on paper and it was very manual.
It was sometimes very frustrating for the employees, right? Because you know you have to print a lot of items. There's just a lot of time that is gets wasted from employees time on this admin tasks. They teamed up with a company from the US called Ensosoft. Now they changed the name to Nybl. And over the period of nine weeks they went to one of the warehouses. They looked at the processes and they recommend to the director training of smart Dubai office and how they can change it and they agreed. Then they signed a contract and they're now using IOT and AI to digitize the system, which means the employees have now more time because they can focus really on the important tasks. So again, looking into happiness.
Devon Watson: 15:40 Excellent, interesting. In all of these different entities that you're working with. Can you give us a couple of examples of other interesting technologies that you know you guys are maybe doubling down on or really focused on?
Karin Gabriel: 15:52 Yeah, I mean, one very interesting one is around virtual reality for example, and augmented reality. This year we run a very interesting competition with Burj Khalifa and HTC. And Burj Khalifa was looking into providing a new touristic experience at the top of Burj Khalifa. They already have one, but they wanted to edit a new one. And instead of just creating it internally, they wanted to harness the creativity of the VR ecosystem globally. We ran a competition, 115 companies applied. The top six came to Dubai. They presented the demo and then we had two winners and they walked away with... the winner walked away for prize money and the second run app their experience will now be placed in the Dubai mall, which is attached to Burj Khalifa and the winners on top as well as the global port of HTC.
What do you have seen as well with Emirates for example, they focused in our core this year on transit pass passengers. There are a lot of passengers we have coming to the Dubai airport, it's the busiest airport in the world, so we are very lucky. A lot of transit passengers, a lot of flights that are being missed or people don't find their gates. So they developed a very interesting solution and the country [inaudible 00:17:03] too much. How they can really personalize the support, the customer service support, after transit passengers and they worked with a startup during this program.
Devon Watson: 17:15 So virtual and augmented reality is something that I think the banking sector has taken interest in a few times. Nobody's really figured out quite how to use it. And so there's some things with the signage that helps direct traffic flows and stuff like that. And it's an augmented reality if you will. But it's very interesting to think of the different use cases you could have at the top of Burj Khalifa. And I can't imagine trying to catch Pokemon, running around on the top floor. That would be a dizzying experience.
Karin Gabriel: 17:44 Yeah. But I mean it's interesting because we talked about banks and of course, I mean as mentioned earlier, blockchain is massive, right? And the hype around blockchain has slowed down a bit now. We really talk about proper applications in blockchain. But there's still a bit of a question mark around that. And in partnership with the World Economic Forum and the Center for the Fourth Industrial Revolution, we hosted a blockchain governance accelerator. So again, we brought together private sector organization, public and startups who have either looked into implementing doctrinaire already done. So at a certain extent and using the World Economic Forums toolkit. So it's a guide book that they have created. We analyze the Skybook through case studies and the outcomes were fed back to the toolkit to now be presented next year to World Economic Forum. But this really goes back to our goal. We believe that innovation is driven through collaboration. I think that's the way forward and Dubai is doing its best to position itself as the global test but for emerging technologies.
Devon Watson: 18:50 Fantastic. Great, thank you. Mark, I'd like to switch over to you and you've been the founder of a company called Educhain. You're a partner at Accelliance, which is a blockchain consultancy. Maybe just to get your macro perspective on blockchain first, how do you see things as they've evolved over the past couple of years, right? From the hype cycle and what do you see moving forward as we kind of get to the industrial phase with blockchain?
Mark Balovnev: 19:19 Yeah, sure. So I am a bit of a unique experience and I guess I came in as a hobbyist. So before they were cryptocurrencies, they were virtual currencies. And back in 2009 2000 time we were trading those currencies and we were the market makers for various types of virtual currencies. And of course when Bitcoin came around we were one of the first to adopt it and start trading. And so before there were really big exchanges, I hear about these days where you can go and buy and sell different types of cryptocurrencies. We were actually doing that manually with a team of agents across several countries connecting different markets from China to the US and beyond. So we've seen everything in the space from the emergence of big point as a new way to facilitate payments all the way to blockchain in 2015 and early 2016 when financial institutions started taking notice.
So we've seen a dramatic shift in the way that blockchain has been approached from the early days when there was a lot of hype and a lot of over promising and under delivering to a new sort of environment where people have gone and they've invested a lot of money, they've seen what works and what doesn't. And they started the drill down on the fundamentals. So there was a time in 2017 2018 where people thought blockchain could be applied to everything. And of course there was that corresponding investment and time. And we've definitely seen that die down a bit. But what that means is that now that the people who are in the space, they understand what to do and what not to do, and they've really to focus on the applications and technologies that work. And so for me personally, it's a time of great excitement and rates anticipation because this is really where the production applications are coming out and the technology is really started to impact the end users.
Devon Watson: 21:04 Got it. And I think you're exactly right. And in 2018 I was personally convinced that if my coffee wasn't enabled by blockchain, I wasn't cool. I would those 100% convinced to that. But now as the tech is industrializing, there are more developers trained up. Right. Because that's been something that's kind of starved that ecosystem is that, you know, if you don't have a really good grasp of not just comp side but mathematics, it's very hard to get into the core development of it. That shortage is slightly alleviated. What are the areas where you're seeing kind of the most promising traction?
Mark Balovnev: 21:42 Well, I would even add to that in the sense that people and the governments and banks and others didn't know how to work with the technology. So not only were they missing those technical capabilities, but they didn't know how to structure governance. They didn't know how to work with their competitors. They didn't know how to collaborate with startups and emerging technology. So that was one of the things that we as well saw a lot of development and a lot of maturity. And so with that said, I think there's this moment where we saw blockchain being applied to everything. Everyone was talking about blockchain for every single industry. But these days it's really come back to the fundamentals, which is the same industries that they emerged from financial industry. So financial services clearing and settlement, supply chain, trade finance, a lot of international use cases around financial services and the financial industry at large.
So that's definitely one of the biggest ones as well as things like records and data notarization. So blockchain is a very good at a few things. It does some very well, but when you tried to make it do everything, it breaks down, right? So one of the things that we see a lot of traction in is digitizing processes, digitizing documents, and using blockchain as a way to find out where things are coming from, who's issued them or who's shared them and if they're legitimate or not. And that can be applied across a variety of industries from education to supply chain and beyond.
Devon Watson: 23:01 Got it. Final provocative question. Is Bitcoin a currency or an asset?
Mark Balovnev: 23:07 Well that that is a tough question and I'd love to prefix this by saying that I'm not a financial advisor and this is not the official position of any of the companies organizations that I represent, but I think that it is a payment token or something like this. We've seen a definitive sorting of these types of tokens. For example, Finma Switzerland looks at utility payments and securities and I think securities represents a non-tokens of shares and companies, shares and debt shares and other assets are the real asset back tokens. Whereas, so you have to open some utility that provide access to a certain right or certain products in payment tokens. So we like to categorize on and look at them from that perspective.
Devon Watson: 23:56 Fantastic answer. Thank you, Mark. That was excellent. Well, thank you all for joining us on this episode of COMMERCE NOW, if you enjoyed listening to this, please follow us or subscribe to Commerce Now on iTunes or your favorite podcasting app. You can also find us on YouTube, Facebook, Twitter, LinkedIn at Diebold Nixdorf.