1. Technology & Innovation…… The past, the present and the future…..? Andy Button Divisional Technology Banking Manager HSBC Bank plc InfoLab21 : Technology Matters 6th September 2006

2. The Global Business Environment The Internet Location irrelevant Productivity Network-centric not location-centric Think globally, act locally

3. Globalisation E-Commerce markets are not the same as old markets!! Networked markets can change suppliers overnight!! What happens to markets happens amongst employees!! Markets know more about products than companies do!! Markets are smarter, faster and more informed!! Exponential change is like a runaway train…….by the time you see the danger, it’s too late!! (kind permission of Peter Cochrane)

4. The Knowledge Economy Science & Innovation Investment Framework - Chancellor July 2004 £185m (124 awards) over next 2 academic years under HEIF 2 R&D spend to increase to 2.5% of GDP by 2014 Wellcome Trust expects to commit £1.5bn in UK over next 5 years Technology & Innovation accounts for 8% of GDP

5. What is Innovation? “The commercial application of new ideas” USP provided by science/technology Invention + entrepreneurship –more growth in last 150 years than previous 1000 Contrast China 7th - 12th centuries –invented paper, movable type, clocks, gunpowder –but government prevented wide exploitation Japan 1950-95: 55% of tech came from UK

6. The Knowledge Economy Science & Innovation Investment Framework - Chancellor July 2004 £185m (124 awards) over next 2 academic years under HEIF 2 R&D spend to increase to 2.5% of GDP by 2014 Wellcome Trust expects to commit £1.5bn in UK over next 5 years Technology & Innovation accounts for 8% of GDP

7. Microsoft Corporation 1978

8. “I went to my bank first and met a very nice chap, very friendly. It turned out he was normally doing things like lending money to people to set up newspaper shops. He did not really feel qualified to comment on my adaptive non-linear pattern recognition technology. But he did give me a good piece of advice, which I carry with me even now, which is that people will always buy confectionery.” Mike Lynch CEO and founder of Autonomy. 5 Dec 99

9. The Empathy Gap Business Characteristics High growth rate Fluctuating cash needs Business inexperience New market/technology Low fixed assets ratios High gearing ratios Steady growth forecasts Stable cash-flow forecasts Track records Documented market Good fixed asset ratios Low gearing ratios Banks Prefer

10. Start-up Investment Profile “Seed”1st Round2nd RoundMezzanineIPO Venture Capital Investment Banks Value Risk Friends & Family Angel Investors Time Equity Gap

12. The Business Plan Choose a card ……. keep it in your mind for a few seconds …………..

13. The Business Plan Card has disappeared!!!!!! The business plan should contain realism - avoid “smoke & mirrors!”

14. Understanding the Technology Does it work? USP/ How innovative? Market? Timeliness? Longevity? Family of products? Management? IPR? Priority Risk

15. “The Present……. ” Wireless technologies - Bluetooth, Wi-Fi & 3G Broadband - networks & infrastructure/ ASPs Network security - viruses Smart card technologies/ biometrics Radio Frequency products Nanotechnology Biotech (drug discovery, diagnostics & devices) “Green” & Environmental - Renewables Digital Media & Software

16. Famous past quotes……!!!!!!!! “I think there is a world market for maybe five computers” (1943) “Computers in the future may weigh no more than 1.5 tons” (1949) “But what………is it good for?” (1968) “There is no reason anyone would want a computer in their home” (1977) “640k ought to be enough for anybody” (1981)

17. The Future……? VDU displays will come in rolls like wallpaper Quantum computing Utility computing Omnipresent Computing Telephone communications will be virtually free Desert Reclamation including new megatechnologies Ocean Farming Genetics will give new biomimetic materials and “designer” foods Expert systems will redefine artificial intelligence Micromachines Automated Transport Systems Virtual reality

18. And finally… Reliability Resolution ‘Rchitecture Route Risk Reward

19. “If you do not change direction, you may end up where you are going” Lao Tzu (604 -531 BC) Why the business plan?

20. Technology & Innovation…… The past, the present and the future…..? Andy Button Divisional Technology Banking Manager HSBC Bank plc Thank you.