The legal sector has many processes some of which include collection of forensic evidence. In this video Doug Hall explains how this applies to finance.

Legal sector collects forensic finance evidence

As a term forensic just means to do with evidence and really it’s any part of the legal process where you need accounting services. So the primary areas that we cover is my own practice, which is commercial disputes, fraud investigations and also computer investigations. I get that a lot that it’s about cutting up bodies but that’s forensic pathology. Forensic is really just, as I said, about evidence, it’s how a commercial issue is dealt with through the legal process and forensic is about establishing the evidence in support of or to defend a case, in my arena in disputes.

If you enjoyed this TV show about the legal sector and forensic evidence then why not browse more videos on Inside Finance.

The attitude to risk form those in high risk environments is to exercise caution as Michael Pagliari explains in this TV show.

A cautious attitude to risk

I actually have a few clients that have done exactly that and I’ve actually found that there I’m on the more cautious of our clients.  So their business risk, if you like, is very high and they’re well aware of it and the last thing they want to do is suffer losses under their financial asset portfolio, so I’ve tended to find those people the most cautious of all the clients that I manage money for. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

Keep visiting Inside Finance for more great videos on attitudes to risk and similar subjects.

Digital technology is growing and growing. In this TV show Nigel Huddleston explains why the future of Google+ is exciting for business and pleasure.

Social digital technology

We’re really excited about Google Plus because as a social platform it’s not a standalone, we’re integrating it with search. But it’s really exciting because we’ve not only got more than 400 million unique users, but they’re using it in a really creative way that maybe they aren’t with other social platforms. The video content capability is great, showing photos of course is really, really important. But what we’re seeing from an advertiser’s angle as well is that they’re able to example, link to their Google Plus page in the advertising. We’re seeing a five to ten percent uplift in click through rates, to the link to the Google Plus page. So that’s really important, we call that social extensions. So there’s a meaningful impact from an advertiser’s side in terms of having that Google Plus social platform.

Keep an eye on Inside Finance if you are interested in social digital technology. There will be more TV shows from knowledgeable business insiders like Nigel Huddleston.

 

Digital generation, digital natives and generation Y are all references to the young people who have grown up with technology. They are now reaching the age where they are entering industry. Graeme Codrington discusses the significance of this.

The digital generation born at the same time as the internet

Technology is obviously a huge driver of change in our world. Recent advances in computing power have really brought computers up to a level where they can now deliver on what our imaginations have been promising for a few decades, and it really just is in the last literally 18 - 24 months that computing power speed size and price have all come together to mean we can really do what we want to do with computers and now we are set up for the next decade of change, but in addition to the raw computing power, it's also the people, we have got a group of people we like to call digital natives who are entering the world of work, these are the young people that were born in that remarkable year of change 1989, the year communism died and the Berlin wall came and Tiananmen Square happened. But also 1989 was the year the internet as we know it was started. Tim Berners-Lee invented HTML and web pages where born, and young people who were born in 1989 were born in the same year that the internet was born and started working for you last year, and they've brought their computers with them, and so it's this combination of computing power and a new generation of digital natives arriving in the workplace at precisely the same time, its going to cause huge disruptive change.

Inside Finance TV will continue to follow the impact of the digital generation entering the world of work.

Using new technology may seem like a business risk but, as Martha Lane Fox discusses in this TV show, it is a risk not to.

Business risk - Getting left behind

It’s not that If you don’t get online or use the technologies immediately then ‘this’ will happen. I don’t think it’s quite like that, I think its a long term systemic problem. You will just be left behind because you will be operating in a world that’s just not as modern as other people. So you won’t be taking advantage, both of new cost space that you can have by using technology better, but also the new markets that you can reach. So I don’t necessarily think that you’ll fall of a cliff today or tomorrow. But over time I just don’t think you’ll be able to be competitive.   Keep an eye on Inside Finance TV if you are interesting in hearing more about business risk.  

Technology infrastructure is something all businesses should consider updating. In this TV show Nigel Huddleston explains that investment into digital technology isn't that expensive.

Technology infrastructure to fit a digital world

One of the key things is, is experiment. That’s one of the messages that I have to many players in the sector at the moment. It doesn’t cost a fortune to experiment with a YouTube channel or a Google Plus or indeed any social platform. It doesn’t cost a fortune to try out maybe new mobile devices, what the look and feel of your mobile site is, and invest in mobile optimised sites. These things are not massive in terms of the expenditure compared to say refurbishing a hotel. Yet there has historically been a reluctance on the side of many to invest in it. I would say given today’s consumer is incredibly connected, it’s really important to be very technologically aware and make sure that what the users are doing in terms of their behaviour is at the absolute heart of your strategy and your IT investment decisions. And if it’s not you’re probably going to fall behind.

If you enjoyed this video and want to hear more about investing in technology infrastructure, please browse more TV shows on Inside Finance.

Artificial intelligence in the future might replace professionals, as technology could automate the procedures which workers currently follow. Graeme Codrington gives his view in this TV show.

Artificial intelligence in the future - The GP

Take your local GP. You to to your GP you've got something that you feel is really wrong with you, pain down the side of your body. You go in to the GP and the GP follows a very strict diagnostic pattern. In fact you'd be upset if they didn't follow the medical practices as laid out by the Medical Council of your country. Once they've got a diagnosis based on that very strict process, they then probably turn to their computers and go on to netdoctor.com just to double check and make sure they've got the latest information because just like you, your doctor only had to get 50% to pass at university, and I don't know if you have ever thought about that, about which 50% you're happy your doctor doesn't know. So you are actually very comfortable that they go the internet to find that extra information. and then of course they send you off to a lab for tests, and at the lab is just a machine that takes your blood, everything is automated. So even one of the most intimate of professions, the doctor, is easily replaced. Just like the investment banker. this is happening and is going to continue to happen over the next decade. It's almost every profession from accountants and lawyers, who I think will be the first to go, all the way through to medical doctors and everything in between could easily be replaced by technology. ________________________________________________________________ Inside Finance TV will continue to discuss artificial intelligence and the future world of work. Look out for more from Graeme Codrington.

Digital technology could replace almost any business service. In this TV show Graeme Codrington asks what you can offer that computers can't.

Competing with digital technology

Something that people have known a long time with digital technology is that it is going to dis-intermediate. It's going to take out the people who sit in the middle of all sorts of services, and ofcourse the previous economy was all about services, it was about people who sat in the middle, who were able to take information and match you with that necessary information. But Google and Bing and others have really shown us that you can take those people out and put a system, a computer, in the middle. And that really is the big news for the next ten years, that almost any agency, almost any business service, almost anything that could be done at a digital distance, can also be done on the basis of an algorithm. Sure a complex algorithm, sure something that takes in to account thousands of different variables and emotional factors as well, but there is absolutely no reason why those have to be done by human beings, and every single business service, every single agency, needs to be thinking, 'What can we offer that computers can't, what can we do that computers can't do?' And don't fool yourselves to thinking its a long list. We're going to have to find ways to get, its not about being smarter than computers, because you can't do that. It's not about being faster than computers, because you can't do that either. so what is it? What is it for you? __________________________________________________________ If you enjoyed this video about competing with digital technology, why not watch more interviews and briefings on Inside Finance TV

Progressive technology has allowed people to stay connected wherever they are. Stuff TV's Lucy Hedges discusses the Tablet.

Progressive technology from Apple

Well lets think about 5 or 6 years ago. Smart phones were good but they weren't incredible, which is what you're seeing now. Tablet was almost a foreign term. We had PDAs, we had Netbooks, so miniature laptops, but we didn't necessarily have this rectangle. This little slate that we can fling in our bags its effortless use, its effortless to carry around. That's what we've got now. We've progressed to a level, mainly bolstered by Apple and the iPad. Its completely carved out an entirely new category that's enabling us to get the most out of consumption on the move, be it retail, multimedia, general information or work based stuff. It's allowing us to, with a simple tap and a swipe, have access to online tools, emails and web-browsing. It's great for productivity. There's so much you can do now, and that's partly or mainly down to all of these new gadgets. _______________________________________________________________________________________Progressive technology and digital connectivity have huge implications for business and Inside Finance TV will continue to follow the effects.

Of all the innovative technology mentioned in Robert Scoble's book, it's the sensors that get Bob Barker's attention on today's TV show.

Innovative Technology - Sensors are a "hub of context"

Okay so the Age of Context book that Robert Scoble and Shel Isreal have written. I began to read it and it started going into the five things that were important, that were big data and social and mobile and location and I’m thinking, I’ve heard about that a lot. But then came the sensor fifth thing which really bought the book alive for me, because throughout the whole book he’s talking about the sensors that are, I think you have on average seven sensors in your phone now. So that’s your kind of hub of context because it knows where you are, it knows what day it is, it knows your calendar, there’s all those things. Then he talks about the sensors that Google glass can help you with, then he talks about the sensors that are in the ground, the sensors that are on pills, it just goes on and on and on about all these things that clever companies are doing in the health industry, in the government, in the defence industry, all kinds of industries with all this new technology and it really brings it alive. And of course the great thing about Scoble is he’s been around and interviewed all these companies that are really doing real things now and it’s very inspiring that people from across the world, not just Silicone Valley, but companies in Barcelona and companies in Japan and all over the place, so really, really fascinating book. Inside Finance TV will continue to follow discussions about innovative technology - Look out for more from Bob Barker.

We live in a connected economy, but businesses should ask permission to use consumer data, as Nigel Huddleston explains in today's TV show.

Our connected economy creates vast data fields

One of the things with data is what we use with it, both as Google, but also as a provider or a supplier of holidays, content hotels.

That one of the key things with data is to make sure that it’s permission based, so that you’re using information the way that the user allows you to use.

 And that means that the onus is on you to make sure that if you’re using that data then it’s useful to the consumer so that you’re using it in a way that’s going to be helpful to them.

 So if you’re checking into a hotel or about to arrive at a hotel and maybe they’re kind of following you from the airport and can see through mobile that you’re on their way. As long as you give permission.

They know that you’re ready to check-in, that they know what room type that you prefer, they know what you like in your room in terms of flowers or drinks in the bar, all of those things are potentially useful, but only with the user’s permission.

But again, early stages there, there’s lots of exciting things going on in using user information.

I think it’s very early stages in this big data field.  I would say we’re probably two out of ten in terms of where we can go with this.

And who knows where it’s going to go, you know, it’s almost as if it’s the early stages of the dot com era again in terms of the power of big data.

Inside Finance TV will have more expert discussion on the connected economy - Look out for more from Nigel Huddleston.

 

Innovative technology has overcome the limits of our muscles and now it is overcoming the limits of our minds. In this TV show Andrew McAfee graphs the revolutions through human history.

Innovative technology is a "huge deal for humanity"

Well if you take a geek approach to human history you start to graph it, because geeks love numbers, they love quantifying things. So a geeky approach to human history would be one where you start graphing over a time things like how many people there are, total population, or some metric about how advanced our civilisations are. Now it turns out people have come up with those, so you can graph those numbers as well. Those two curves look exactly the same, either the population curve or the social development curve, what’s really weird about them is that they are totally flat throughout almost all of human history and then at one point in time they bend almost 90 degrees and they go from basically horizontal to basically vertical and that point in time was the industrial revolution. So in other words all the other revolutions that we’ve had, revolutions and philosophy in religion and how we approach the world, the opening up of the world via trade, lots of things have happened over the course of history. If you take this kind of geeky approach to graphing the course of humanity you come to the conclusion none of those things have mattered very much and what did matter was overcoming the limitations of our muscles, of muscle power, via the industrial revolution. What we’re doing now with the computer revolution is overcoming the limitations of our individual minds or our brains, to at least the same extent as we overcame the limitations of our muscles with the industrial revolution. So if the simple question is how could this not be a huge, huge deal for humanity. Inside Finance TV has further expert discussion about innovative technology - Look out for more from Andrew McAfee

In this digital economy more consumers are using mobile devices to make purchases. Nigel Huddleston says mobile optimised sites are key:

Digital economy - 30% of travel queries made on mobiles

The industry is pretty switched on to search, both in terms of paid search and then also organic. I would say perhaps that there are some leaders in the industry. The OTAs, because of the very definition of who they are, they’re online travel agents, probably had a bit of a leading edge to begin with. And some of the suppliers are playing catch up, but pretty quickly. One of the best examples is in the mobile space. Getting a mobile optimised site is really key now. It’s not just a 'nice to have, it’s a must have, you know, many, many users are searching and actually booking travel through mobile devices, whether that’s a high end mobile device or a tablet now. And we’re seeing the early stages of that at the moment. But it’s huge, it’s about 30% of all queries now made on mobile devices. Look out for more experts discussing the digital economy on Inside Finance TV.

Business growth strategy at Google involves developing social platforms alongside existing search functions. Nigel Huddleston explains:

Business growth strategy from Nigel Huddleston

We know that social is really important in travel. We can see from user behaviour that people do actually listen to and act upon the recommendations of people they in particular trust, but even people that they don’t know. So social’s huge, you know, people are actually changing hotels that they choose, they’re even changing which country they’re going to go on holiday based on these kind of social recommendations. So Google’s investing very heavily in it at the moment with Google Plus. But one of the key things there is, it’s not just a standalone, we’re trying to amalgamate it and bring it together with search, so it’s bringing together search and social in a really powerful way. There is more expert discussion about business growth strategy on Inside Finance TV.    

Geo-targeting is a stronger marketing strategy than ever before. Nigel Huddleston discusses how the hospitality sector is personalising offers.

Geo-targeting advances with technology

We’re in a really exciting phase of the hospitality sector when it comes to technology and the use of the mobile devices. There’s a whole host of opportunities that weren’t there before in terms of getting your messages out to the consumer. You can know for example if somebody’s getting off a plane at say Heathrow Airport. We can now target them and know that they’re at Heathrow Airport. We can probably put an offer to them that’s very relevant, you know, discount, 30% off for the hotel that’s just three miles away. So really using that geo-targeting in a way that was never possible before. We will be sharing more ideas about geo-targeting and marketing strategies on Inside Finance.

In our connected economy it is important for businesses to be social. Google has increased its connectivity with Google Plus, as Bob Barker discusses: So Google is beginning to go social itself. Its Google plus network is only two years old and it’s still working out how best to use that glue. But what they’ve done, if you look at the bar that Google has, when you look at the Google bar, the plus bar is right at the far left. It’s the first thing on the menu. It’s before search. So they see social as very, very important. The thing that Google Plus does, is it gives people an identity within the Google world and it allows people to share content within the Google world, and it allows people to connect with people in the Google world, and they’ve got a real tight integration with everything else that they do. So within Google Plus you have circles of friends. So they’ve been really thinking through how do you operate in the social world. So you can have circles of friends and those circles of friends can also reflect in your Google Mail, so if you want to look at, if you have a particular set of friends you can sort your email by those friends. They also have a free communities application, you can set up communities within that social area, so they’re bringing more and more functionality out. They’ve got hang outs, which is the video conferencing and it’s all integrated into every bit of the system.  So it becomes easier and easier and more integrated to use. So they’re putting a lot of time and effort into this and it’s early days with it, and people are beginning to go onto Google Plus more, because ultimate with all that effort, it’s collating all that content and it’s giving you better search results because it’s part of Google. So if you like, when you’ve used Google Plus and you put content on Google Plus, and you know You Tube is integrated with it too. It’s all that time giving you higher and higher potential to get higher search rankings and being found and being understood is what it’s all about.

In the connected economy online communities continue to grow.

Inside Finance TV will be following ideas about the connected economy and will have more videos from Bob Barker.

We are now in a digital connection economy. Keith Coates discusses the changes that have lead us here:

Transitions to the digital connection economy

Ralph Jenson talks about various economies through which we’ve transitioned, it’s a very general, very broad framework but it’s really good to help us understand our current context, ‘cause leadership is always context-specific.  So, very quickly, he talks about the hunter-gatherer era, it was an economy in which there was competitive advantage that was forged through a sense of focus.

The interesting thing in the story is that technology is the disruption, so technology changes the rules of the game.  In this particular case the technology that did that, the plough, the ability to harness animals, so we moved into the agrarian society.  From there we moved into the industrial era.  So each of these are economies in which we look at what created a competitive advantage.

The industrial era is interesting because competitive advantage in this particular set of circumstances was created through business efficiencies, that’s where the science of management was birthed.  Frederick Taylor and others – if you can’t measure it, you can’t manage it.  If it isn’t broken, don’t fix it.  So the legacy of that era remains today.

I still meet companies and leaders who think that their competitive advantage will be forged through greater business efficiency.  Business efficiency is a hygiene factor now.  So, we moved from then to what was called the information-based economy, where it was how we utilised data and from there we moved into the connection economy.

There are more videos discussing the digital connection economy on Inside Finance.

Technological advancements happen faster than we might expect. Andrew McAfee discusses how we can work with artificial intelligence:

Technological advancements in the game of chess

The progression that we’re seeing is that initially computers, robots, artificial intelligence, are laughably bad in head to head competitions against people. But they improve so quickly that they get as good, and then they get much, much better very, very quickly. So for example early in the career of Gary Kasparov as the world chess champion, he played 32 simultaneous matches against the world’s best chess computers of that time, I believe it was in the mid or late 1980’s. He won 32-0, he was just annihilating the digital competition. In 1997 Kasparov played a match against Deep Blue, which was a super computer built by IBM solely for the purpose of playing chess against him and he lost narrowly that match against Deep Blue in 1997. Nowadays though computer versus human chess is completely uninteresting because the computers are so much better. There was a computer chess programme available for small phones, that entered a tournament in Argentina where the entry requirements were so strict that only about 1,000 players around the world, human players, even qualified, the smart phone entered, out of ten matches it won nine of them, so it’s just totally uninteresting to play chess head to head against a computer. It’s so bad that they asked a grand master a couple of years ago how he would prepare for a match against a computer and he said ‘I’d bring a hammer’. So this head to head war we see over and over, but the digital competitor goes from laughably bad to unarguably superior much more quickly than we’d expect. What I find really interesting though is that that head to head competition is not the end of the story, because once you start allowing human and digital labour to come together and work as a team, you get an even additional bump in performance, over what you get from digital alone. So we now have freestyle chess tournaments where any combination of human and digital chess player can come together and what we learn is that fine, computer beats grand master, smart team easily beats computer and that smart team is not composed of grand masters, it doesn’t contain super computers, it consists of people who are pretty good chess players and pretty good with computers, with moderately powerful computers but what the people have understood is how to divide up the task between what people are good at, what machines are good at. When you get that task division right, again you can annihilate the competition. So the shift in our thinking needs to move from racing against machines, which is becoming a fools errand in more and more circumstances and needs to shift to racing with machines, which is where some really huge opportunities lie. More videos about technological advancements are available on our Inside Finance TV channel.  

The technology revolution is changing the way people learn about products. They are more likely to follow the advice of  an internet forum than an official review. Andrew McAfee discusses:

Embracing the technology revolution is vital to survival

Well if you’re ignoring the technology revolution among your consumers you’re clearly just missing the boat, in a very broad and deep way. It’s clear that we’re plugged in too much at the time, we’re staring at screens, that we’re getting a lot of our signals from our peers, from strangers over the net via review sites and judgement sites and relying less on the old guard for helping us figure out what our next purchases should be and how we should be shaping our behaviour. Any company that’s not part of that by now is already losing ground very quickly and that’s only going to accelerate. It’s striking to me how the old world of relying for example on restaurant critics and how many stars the hotel has, as given by the hoteliers body, that’s in the rear view mirror now, we just go to Yelp and Trip Advisor and look around. I can’t remember I looked at the official rating for a hotel that I was going to stay at, I find these things meaningless now. Look out for more videos about the technology revolution on Inside Finance TV.

Disruptive technologies that can completely change the way an industry works may be developed by another industry all together. Keith Coats Discusses:

Disruptive technologies could originate from any industry

Disruption in business is probably not going to come from within your own industry, and the danger of benchmarking is that we mark ourselves and our progress against those who are running the same race.  So you would have expected Yellow Pages to be at the forefront of search engines – Google didn’t come from Yellow Pages.

There’s a large bank in Africa who rolled out an entire African strategy who, by benchmarking themselves against fellow competitors, that’s all they looked at.  They went into Africa to discover that the biggest competitor to banking came from cell phone technology, or mobile technology, people transacting through their mobile devices, that changes the rules of the game.

So, the principle is this, is if we’re only looking within our industry, at people running in the same race as us, the chances are we’re not going to see the disruption.  And smart organisations today are looking far enough and wide enough outside of their windows to … and asking the right questions to see the disruption that will change the rules of the game.

And our message to big companies who are leaders in their own particular sphere is don’t wait to be disrupted, be the disruption in your own industry, change the rules of the game.  And if you don’t and you become complacent and you focus on business efficiencies, there will come a time when somebody will disrupt your industry and it’s going to come from outside.

We will have more videos about disruptive technologies on Inside Finance, where you can also watch more from Keith Coats.

The disclosure rules have been in for quite some time.  And it’s my understanding, although I’m not a lawyer, it’s my understanding that they were brought in so that the days of ambushing your opponent on the steps of the court after months and months, sometimes years of preparation for a trial and say, you know, “Ha ha, you didn’t know about this document.”

Which really undermines their whole case, e-disclosure was brought in and disclosure as well was brought in to stop that from happening so that both parties understand fully the strengths and weaknesses and certainly in terms of the documents before they get to the long process of preparing for a trial.

It may well be, for example, if the other party knew of the existence of certain documents that a settlement would have been the preferred route as opposed to spending an awful lot of time on expensive advice and procedures to get to the point where they, in effect they give in as they would have done a year ago.

 

When parties are involved in litigation, each party has an obligation to disclose the documents of relevance to the case.  And whether those documents are good for their side or bad, and so with each firm of any size now, having huge amounts of information it’s important to be able to easily digest that information and sift it for relevance to a particular matter.

It’s gone an incredible distance.

There are two types of reviews really, one is a traditional linear review where the lawyers and the clients will look at the documents and read the documents themselves and use their own eyes and understanding to make a categorisation of a particular email etc.

And they will sift those down by using keywords and date range parameters and so forth.

The big steps now are that computers are making those decisions for them, sometimes more successfully than others.

 

For e-disclosure but predominantly emails, the reason for that is it’s now obviously by far the preferred method of communication for the written media.

And attached to emails are documents, so you might have contracts, spreadsheets, image files maybe.

But usually those are just the two types of information, emails forms the largest and then you have a review of what we call loose documents.

So these will be documents that themselves aren’t attached to an email or in any sort of structure of that nature.

 

The big thing that people are talking about now is technology assisted review, where the PCs … sorry, the disclosure systems are able to make a judgement on a categorisation of a document based on the categorisations that have been made before.  How it works is this.  You will have a population of say, for argument’s sake, 100,000 documents, and a lawyer will review the first 1,000 and then the system will say, based on your choices of those first 1,000 documents, I think if you were to carry on, the remaining 99,000, you would categorise in this way

And so then the lawyer will look at those and say, “Well it was right in this document, it was wrong in that document and I would have made that document this.”  So by now you’ve looked at 2,000 documents and the system says, “Okay, well, you know, thanks for helping me out, based on that I now predict that you would make the choices for the remainder, the 98,000.”  And so you finally get to a stage where having reviewed only a few thousand documents, you can have confidence that whilst it won’t be perfect, if 98% of the choices that the computer’s made, you agree with, you may well be able to say to the other side, “We’ll stick with those categorisations that it’s done.”  It’s being talked about a lot.

It’s still very new but it’s potentially a way to save thousands and thousands of pounds in the review phase.

Well, the problem with this technology is one of trust, because in order to … for both parties to agree they both have to understand how the system’s come about to make those choices.  And they … ideally what will happen is both parties will be using the same system.  And they will both agree to use technology assisted review and therefore both sides will have confidence that the system is working fine [0:14:52.3].  It’s not that usual for both parties to have the same type of system.  So your technology assisted review might be different to mine and I’m going to think that it’s actually inferior to mine.  And therefore I don’t want you to rely on your results but I’m happy to rely on mine, getting the two sides to agree is the trick.

 

I don’t think it’s way too complex, I think it’s way too fast. You know, I was talking to a senior partner from an accounting firm now long since retired who was reminiscing about how he used to get instructions by letter. And you know, you’d get round to implementing them, whereas of course now it’s, you know, microseconds basically and it’s Twitter and it’s email and it’s everything, so it’s instant. The trouble is that because people can communicate instantly, they expect instant replies. And I think we’re in danger of doing everything too fast and not doing everything sensibly. You know, I think the hardest thing in business now is to find time to think, find time to stand back and give yourself space and not to react immediately, not to follow the crowd, just to stay calm and so, you know, most of what happens can be ignored. And that’s a very courageous thing to do, but I think that’s probably the most sensible thing that most people can do. Most news is noise, ignore it.

Cyber space is about the virtual world, it’s about the world of the internet, it’s about the world of soft intelligence and all the other intangibles which are not part of the fixed assets of an organisation. Cyber risk is the risk that those assets in cyber space are going to be manipulated or misused. Cyber crime is the use of those assets in cyber space by criminal activity. Cyber terrorism is the use of those assets in cyber space by terrorists. What we’re looking at is a very significant issue that increasingly our assets are invested in cyber space. How do we protect those assets from criminals, from terrorists and from any other people who want to misuse those assets for a purpose other than that which they were intended?

if you’re better governed you become more efficient. Secondly, that once you’re better governed and you’ve got all of those systems into place, that you are enjoying stronger stakeholder support for what you’re seeking to achieve, and that’s very important. But that said, we are acknowledged globally as one of the leaders, one of the proponents of good practice, governance. And that’s good feedback for us because we want to know that we are getting somewhere. However we still continue to encounter organisational collapse. We still continue to encounter cases of value destruction. And that tells us that we can’t be complacent about the systems we are putting into place. But certainly as far as the financial sector is concerned, despite the fact that we’ve had a double recession and people even talking about a third recession after that, most of our corporate world have survived intact and continues to perform well. And we will put that down to the fact that our companies are well run and well governed.

I’m not an IT expert. But there are certainly small changes that companies can do and there are specialist organisations out there that can help them to do that. There are a number of small changes companies can make that will effectively stop 80% of them. And that is an incredibly cost effective way to go. You can never stop it completely. The world of IT is such as we all know with computer viruses, as soon as you close one loophole or close one avenue then another one opens. So this is an ongoing struggle. People who are working in this area are developing new ways all the time. And like I say, sort of 80% of it can be dealt with in a very cost effective way which leaves you 20% exposed, which is probably always going to be the case. What is being stolen from companies can be as serious as their future strategy, detail, you know, through details of their customer base, all that kind of intelligence that is so important to companies in this competitive environment. If a competitor can get hold of it then obviously that’s very damaging for a company. But we’re not talking about competitors within the UK, this is a worldwide problem and the most cyber attacks are coming from overseas.

Martha Lane Fox on the connected economy.

According to Martha Lane Fox, UK Digital Champion, the connected economy brings new and cost-effective solutions to business in the UK. The connected economy is characterised by the use of digital technologies like social media, smart phones or cloud computing to unlock greater efficiency and cost savings. Although the UK has seen difficulty in key sectors like retail, the connected economy or digital economy has been booming. The UK's £121Bn internet economy is the largest of any G20 country "I certainly think that there are more ways to be more connected into the things that are important because of technology, than perhaps there were in the last economic downturn. So you know I believe very deeply that the opportunity that digital technologies afford you will give you more robust ability to survive. So for example, you know, how would it have been possible to just get out there and select some customers and talk to them in the past as easily as it can be now through a Facebook group or through a LinkedIn group or through a Twitter profile? You know, there are so many ways that you can connect into your customer base, stay close to it. But also though, you know, the opportunity to save money by using digital technologies more smartly, whether it’s with cloud computing through to how you actually talk to your employees, suppliers, whatever the thing might be. So both on there and outside your business and internally, I think that technology can help really ride the wave." According to Inside Finance TV experts like Graeme Codrington, the connected economy is more than just marketing. It's a fundamental change to the way businesses will operate.

Peter Maher: "I think I am by no means a technophile, I’m probably more likely be a technophobe but I have seen the requirements of auto-enrolment and that is that, you know, you must enrol a member of staff within three months of him joining your firm.  He may choose to opt out once you’ve enrolled him.  He can do that within a month or at a later date.  He can’t do via his employee.  He must come to an adviser or the insurer.  But three years later or three years after the date at which the firm auto enrolled its first member of staff, he has to be auto enrolled again and put back in.  So you will have people joining and leaving automatically.  And if you missed those dates, you’re in breach.  The only way you can do that is through technology.  There will be human error if you try and do it by man or woman and the amount of men and women it will take to do it will be huge.  So technology will save you an awful lot of money in manpower and it will save you the pain of making a mistake which may ultimately cost you by way of penalty."

Mark Webb: "So if we looked at something like Financial Services sector or indeed other sort of slightly sleepy or what you would call mature sectors, you might not think there’s things like research and development tax credits there because you would think that type of business doesn’t have that sort of activity.  But if you actually start to look at what those businesses do and how they organise their business, a lot of, for instance, how they look after a back office function in terms of the computer systems, how that operates, how it links things together.  And all of the work around making these things talk to each other and making things actually happen may well qualify for research development tax relief.  So it’s worth talking to a specialist."

Laurence Bard: "Well, actually the government wants to play a certain game.  It wants the UK to be competitive.  It knows that companies can set up intellectual property owning companies in tax havens, so what does it do?  It says, “You don’t need to do that, you just need to own your patents within a UK company and we will give you a lower rate of tax, and that low rate of tax is 10% instead of the normal 20%.”  If you own patents which you can exploit in your business from a UK registered company, which is going to pay UK tax or is paying UK tax, then there’s a 10% tax rate on offer. And it’s a method of calculating the profits attributable to or in some way linked to patents that you own in your company and you carve out an element of your profits and you say, “That’s not taxed at 20 something percent, that’s taxed at 10%.”  And it’s a very generously carved relief because the example that’s given is that if you have a Land Rover and there’s a patent on the wing mirror, the whole Land Rover, because you sell a Land Rover as a unit, because there’s a patent on a wing mirror the whole thing qualifies.  Of course on a Land Rover there’ll be lots of other things that are patented.  But that’s the extreme example, you sell a product, a bit of it’s patented, you’re in the Patent Box for the full price of your Land Rover.  I think there are going to be a lot of companies taking advantage of it.  And I think the government is also hoping that a lot of companies that would otherwise locate themselves in the Netherlands or Portugal or the Cayman Islands will say, “Ideally I would like to be in the UK anyway, let’s stick with the UK, it’s got a good tax rate, or let’s even come to the UK, which we hadn’t thought of before”, because it’s a competitive world."

Laurence Bard: "The principle cost is your in-house employees, the costs of their salaries, bonuses, national insurance, pensions.  If you subcontract R&D out to another company that would qualify, there’s a sort of profit margin taken off it.  But designed to get to their underlying staffing costs, the cost of software bought for R&D, the cost of raw materials consumed in the process, for example you might build a prototype and need, spend money on raw materials and have to scrap the prototype at the end of it. Those are the principle costs.  The sort of things that don’t qualify for example would be rent and rates, hardware that gets capitalised in your accounts as a capital cost.  So the big thing is the staffing cost tends to be in most companies."

Laurence Bard: "If someone has an idea and it involves some sort of scientific or technological development, the question is are they able to develop it simply or does it actually involve questions such as I don’t know whether I’m going to get there? Or I don’t know how I’m going to get there, either of those and if those are in a technological or scientific field then the answer is likely to be there is R&D.  And it doesn’t matter if somebody else has done it, if it’s not public knowledge, if let’s say you know, Google have developed a wonderful search engine and you want to build a search engine to compete with them, but they’re not going to tell you how to do it, you might just as well be doing R&D, even if you end up with something that is maybe even in theory at a Google’s product.  So it’s to do with technological or scientific uncertainty and it’s in the view of somebody who is competent professional working in the field, that’s one of the definitions.  So if you’re the Chief Technical Officer of a company and you say, “This is technologically uncertain”, then it is technologically uncertain.  But you might want guidance as to what that means as well.  But that’s as far as the definitions go.  We have a document that’s five or six pages long which defines what is R&D, but those are the key points in it."

Laurence Bard: "You normally get a straightforward tax deduction for a business expense.  You spend a pound you get a tax deduction of one pound.  If you are, what can be actually almost quite a large company, instead of getting a one pound tax deduction you get a two pounds 25 pence tax deduction.  So you’re getting an extra 125% deduction coming off your tax bill.  So you know you might make profits before your extra R&D tax credit, with that uplift you start to breakeven or make losses.  And if you make losses and a lot of start-up companies do make losses here because they’re spending so much money on R&D, they can actually get a refund.  They can get a 25% refund.  Let’s say they spend £100 on R&D, and they lose at least £100 over the year, they’ll get a £25 refund for tax they’ve never even paid, they’ll get a subsidy of £25 from the revenue.  So that is a very ... again, for the innovative loss making developer that is a wonderful shot in the arm.  What they’re often very short of is cash funding.  They’re big on ideas and they’re big on how to spend the money, they’re not quite so good at getting it in, 25% subsidy is very useful."

Laurence Bard: "The obvious examples might be pharmaceuticals, men in white coats and test tubes.  Another obvious example would be automotive, you know, Jaguar, Land Rover developing weird and wonderful extra ways that engines run.  And then less obviously you have all sorts of ... I mean banking you might think doesn’t do anything innovative, but banks spend a huge amount on software and the use of the internet and it has to be secure and it has to work."