Binary District Journal

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Artificial Intelligence

Regional strengths in shaping Asia’s AI evolution

December 4, 2019
Margarita
McKinsey estimates that by 2030, 70 percent of companies “might have adopted at least one of the five categories of AI like computer vision, natural language, virtual assistants, robotic process automation and advanced machine learning.” The report estimates that AI has the potential to deliver “additional global economic activity; of nearly $13 trillion by 2030 and add 16 percent to the higher cumulative GDP compared with [September 2018].” In geographical terms, Asia occupies 29.4 percent of the Earth’s land surface, but it also has a population of nearly 4.5 billion as of 2015 – 60 percent of the world’s total. Young Asians have an optimistic view of AI as a whole. A Microsoft survey found that 39 percent of young Asians foresee a future with connected or driverless cars, 36 percent fathom a world where there will be software robots that improve productivity and 19 percent imagine robots as social companions. The youth in the continent are looking forward to AI increasing their productivity, facilitating the way they connect with others and improving their physical and mental health. Job loss due to automation, which is a paramount concern in many parts of the world, seems to have taken a back seat in Asia, with only 26 percent worried about losing their jobs to technology. Each of the countries in Asia is at a different level of technological development. The progress of AI also naturally differs by country and region. McKinsey states that, while the United States is considered to be the leader in the global AI sphere, China is the runner up. This can be reinforced by looking at how many people are employed in the AI field worldwide. According to the Nikkei Asian Review , the Canadian AI startup Element estimates that there are 22,400 top talents in AI worldwide – 10,295 of them are in the United States while 2,525 are in China.

“THERE ARE 22,400 TOP TALENTS IN AI WORLDWIDE – 10,295 OF THEM ARE IN THE UNITED STATES WHILE 2,525 ARE IN CHINA”

Element also found that Japan was an outlier to the AI talent scene with only 805 top talents working in the country, which is the world’s third-largest economy. Japan will have a huge deficit of AI talent in the future if it doesn’t fill the void quickly enough. On the other hand, Singapore is relatively stocked with AI talent, with 40 percent returning to the country after obtaining the requisite skills abroad. Chinese, South Korean and Indian talents are also heading back to their countries of origin after studying in other countries. What is Shaping AI in Asia? In order to understand how AI is taking shape in Asia, particularly Southeast Asia and East Asia, Binary District spoke with IBM Japan and Muthu Kumar Chandrasekaran, an AI expert specializing in machine learning and natural language processing. We began by asking each about the challenges and opportunities that exist in the AI field in Japan and Singapore respectively. The IBM spokesperson expressed concern around labor shortages and low labor productivity in the country, as well as Japan’s declining population. According to IBM, this represents a big challenge for the AI sector, as “many enterprises cannot start using AI due to lack of strategies and leaders, lack of skills and human resources, and many enterprises do not proceed to actual operation because PoC does not produce the expected results. There are many companies that have been put into operation but are not using small-scale and narrow areas, and have not advanced their digital transformation.” Chandrasekaran, on the other hand, is optimistic about the Far East as it has always been a ‘great playground for applications when new technologies hit the market.” “Unlike in the West,” he says, “the Far East does not have anti-trust tendencies towards technology companies using user data for machine learning. This has resulted in the Far East becoming the first to get technologies such as facial recognition in the real world and fully realizing the power of online social networks for recommendation systems. “The Far East has a larger local technical labor force than in the West. This is driving western companies to open their largest development centers there. This indicates the potential for innovation that still remains untapped.

“UNLIKE IN THE WEST, THE FAR EAST DOES NOT HAVE ANTI-TRUST TENDENCIES TOWARDS TECHNOLOGY COMPANIES USING USER DATA FOR MACHINE LEARNING”

“While Singapore has created a great start-up ecosystem in the last few years, other larger Far Eastern economies are yet to fully commit to such an initiative. Chinese companies are still focused on the local markets and haven’t adapted their brands to compete with western companies globally. The governments in India and Japan can do more in terms of policies and investment to encourage AI-based start-ups.” Like other emerging technologies, AI has been in danger of getting swallowed up in its own hype. It is possible, though, to gauge the state of emerging technology by looking closely at various new developments associated with it. When it comes to Japan, for example, Natural Language Processing (NLP) is gaining momentum. IBM states that instead of developing an AI model from scratch, it is necessary to use learned AI such as NLP and Image Recognition provided by a vendor that can fit the enterprise’s business needs. IBM Japan, for example, launched Watson, which supports the Japanese language in 2016. “In the case of IBM Watson, many APIs can be customized by learning enterprise-specific data, and these can be combined to develop AI applications that meet your needs,” the company tells us. “AI applications are already being developed and used in various industries and operations. For example, AI applications for customer services that respond to proposals for appropriate products and confirmation and change of order information, and AI applications that support professionals such as operators and engineers are being developed and put into production, and are used to cover the labor shortage and to provide higher service quality.” There are exciting developments happening elsewhere in Asia as well. Chandrasekaran points to the use of facial recognition technology in real-world applications in China as well as the rise of self-driving car companies in both China and Singapore. He also notes the large volume of accepted papers from the Far East in top academic AI conferences as an indicator of an AI boom in the region. “Data-driven social networking companies that have changed the shopping and payment industry for the better in China are a great example of where the Far East is ahead of the West,” Chandrasekaran says. “Strong will from governments in the region to invest in large nationwide AI programs (e.g. AI Singapore) with civilian participation is very different from western government funding programs through their defense research arms. Civilian participation and enthusiasm are necessary for the adaptation of AI in people’s daily lives.” Of course, every part of Asia has its own unique culture, which does have an effect on how technology progresses in individual nations. Japan has always been one of the world’s premier manufacturing hubs. Domestically, according to the Ministry of Economy, Trade, and Industry, Japan’s manufacturing industry is responsible for 90 percent of the country’s exports.

“I EXPECT SINGAPORE TO HAVE THE FIRST SELF-DRIVING VEHICLES IN USE BY THE PUBLIC, FOR EXAMPLE, AS GOVERNMENT BUSES OR AS UNIVERSITY SHUTTLES”

It is not surprising, then, that AI would find prominence in the manufacturing sector in the country. “AI is also being used in the manufacturing industry,” IBM tells us. “Many companies have been working on the predictive analysis (predictive maintenance, demand forecasting, etc.) using routine data, but moreover, using atypical data such as text, images, voice, and sound in AI to gain expert knowledge and progress toward digitalization.” Singapore’s relatively small size and well-organized environment lend itself to other developments. “I expect Singapore to have the first self-driving vehicles in use by the public, for example, as government buses or as university shuttles,” Chandrasekaran says. “These, in my opinion, are easier to deploy than a self-driving taxi fleet.” He also argues that, since the country has significant strength in enhanced education programs, it has the opportunity to increase public participation in academic matters. “Public universities here have opened the door for its people to come to participate in community-driven initiatives to learn and practice AI, for example, a course from NUS,” he says. “Hardly any western government has a cohesive nationwide effort to help their public learn and acquire new skills that this AI-driven world needs. Just like e-governance Singapore will emerge as a leader in deploying technology-enhanced education at scale to train its general public in AI.“ This article was originally published on Binary District by Charlie Sammonds. Binary District is an international сollaborative technology community that creates unique competency-based workshops and events on new technologies. Follow them on Twitter.
Acoustics

Towards a greener construction industry

June 30, 2023
Johanna Rita

The construction industry is considered to be among the major sectors that contribute significantly toward the emission of GHGs in the environment, which have a major effect on climate change. Construction and the wider built environment currently accounts for around 40% of the world’s global greenhouse gas emissions

According to the report Future of Construction: A Global Forecast for Construction to 2030 by Oxford Economics, global construction output is expected to grow by 42% by 2030. As the sector grows, so too does the risk of greater pollution and waste. Thus, the construction industry has a crucial role in reducing carbon emissions and promoting sustainability. This article explores a new type of eco-friendly technology that construction companies can use to innovate their old ways of doing things and build sustainably, through acoustics.

Acoustics is a scientific field that deals with the production, control, transmission, reception, and effects of sound. It is applied in various fields, not just limited to music and audio reproduction, but also in noise control and construction, among others. 

“Environmentally friendly products are often either very expensive or lack one or more technical features”, explains Mikko Paananen, CEO and Founder of Aisti. “There is a so-called harmonised product standard that includes four properties: fire safety, acoustics, bending strength, and indoor emissions”. 

He admits that bending strength and acoustics have been challenging for environmentally friendly products as the options are either cheap and environmentally harmful but technically good products or expensive, somewhat environmentally friendly, and technically poor products. Typically, mineral wool or glass wool is used in acoustical panels. 

However, Aisti has developed a completely new, environmentally friendly solution by mixing water, cellulose fibre, and foaming agent. The product is unique and has not been developed elsewhere in the world. Notably, it is carbon-negative, meaning the wood fibres have sequestered more carbon dioxide than is emitted during the production.

Aisti focuses on room acoustics – how sound travels in a given space. Everyone has likely seen acoustical panels embedded in walls or ceilings in places like offices, hospitals, and schools. The purpose of these panels is to absorb sound and prevent echo in the room.

“Our product has all the good qualities: it is as affordable and technically good as traditional solutions, while being extremely environmentally friendly”, underlines Paananen. “Once our factory opens in 2025, the product will replace all similar mineral wool and glass wool products. In the future, we can also use our product for insulation, where mineral wool and glass wool are widely used”.

Paananen cannot think of any other environmentally friendly transformation that the construction industry has undergone. “If anything, we have gone in the opposite direction”, he says. “Mineral wool and glass wool were big things in the past”.

The construction industry has a significant impact on the environment, as it uses many environmentally harmful products due to the lack of available sustainable solutions or their high cost. Solutions like Aisti serve as pioneers for environmentally friendly alternatives, suggesting that the construction industry is gradually moving toward more sustainable practices. 

Artificial Intelligence

EU’s Regulations and the Future of AI

June 22, 2023
Johanna Rita

Artificial intelligence (AI) is advancing at a rapid pace, faster than we might imagine. However, It is not only fascinating but also, at least to some of us, unpredictable and scary. This is why the European Commission is currently contemplating what regulations and guidelines should be established for AI. 

Will these new rules hinder AI development? And will they affect startups that utilise or develop AI technology?

High-risk areas of AI include, for example, infrastructures involving ethical considerations and safety components of AI products. However, the lack of clear regulations can also keep companies on edge, as they are uncertain about the guidelines. This uncertainty can impact the scale of investments companies are willing to make in AI.

Nevertheless, both Mikko Lehtimäki, Co-founder and Chief Data Scientist at Softlandia, a company leveraging AI, and Pontus Stråhlman, partner at Voima Ventures, which invests in AI startups, believe that regulations are ultimately beneficial. 

 

“AI is a tool, just like many others. Of course, it is a challenging tool and can be misused, so having some ground rules is essential”, says Stråhlman. “The purpose of regulation is good, and it does not inherently hinder AI development. 

 

If AI were left unregulated, surveillance technology could develop in a detrimental direction”.

 

Lehtimäki shares the same view. “Surveillance applications definitely need regulations”, he confirms. “The EU’s risk categorization is reasonable,  however the regulations should be considered based on the applications that utilise AI, rather than solely on whether a technology is classified as AI or not”. 

 

He also describes AI as “a vague concept” and believes it would be better to focus on rules based on the use cases rather than merely the presence of AI. This could be the biggest challenge when the EU starts implementing regulations.

 

How will regulations affect AI startups?

Voima Ventures has invested in several startups that leverage AI, such as Kuva Space and MVision. These companies employ AI in various ways, including data collection and medical applications. Stråhlman notes that regulations like GDPR have posed clear challenges in using medical data. 

However, he has a clear message for startups: don’t be too afraid of AI regulation.

“Startups should focus more on whether their business ideas will still be relevant in 5-10 years when AI progresses in great leaps and bounds”,  Stråhlman emphasises.

Again, both Stråhlman and Lehtimäki agree that excessive regulation of AI can be a hindrance. “I certainly don’t oppose privacy protection, but regulations related to it slow down the progress”, says Stråhlman.

Lehtimäki mentions that EU regulations have not yet affected their company’s operations, but the unclear nature of the rules makes it difficult to draw conclusions. 

“It is possible that once the regulations come into force, we may have to register as a provider of large-scale AI models”, he notes. “This would entail additional costs and reduce our agility, and we might need to demand reports from our customers on the impact of using our applications”. 

Even though the regulations have not been finalised yet, their implementation will most obviously increase the costs and slow down the innovation.  “If utilising or offering AI technology becomes too bureaucratic, it will impede the operations of small companies”, explains Lehtimäki. 

“AI will become the business of large corporations, meaning there will be fewer players innovating and developing AI and AI-powered services”.

The future of AI

Despite forthcoming regulations, Lehtimäki does not believe they will significantly slow down AI development: “Of course, if AI regulations elsewhere in the world are not as burdensome as in the EU, there is a risk of falling slightly behind global progress, but probably not significantly”.

According to the European Commission, the EU has the potential to become a global leader in safe AI. The commission plans to invest one billion euros annually in AI. 

Stråhlman and Lehtimäki underline that regardless of regulations, AI will be part of everyday life in Finland and globally in ten years. They do not anticipate an AI dystopia or a scenario where AI surpasses human intelligence.

“Human beings can create much more dangerous weapons that pose a greater risk than AI”, says Stråhlman. 

Instead, he believes that AI will solve many societal challenges, such as labour shortages. However, the nature of work will undergo significant changes, presenting both opportunities and challenges. It is also important to remember that if AI is not subjected to any regulations, it will undoubtedly be used for nefarious purposes.

Quantum Technology

What is the potential of quantum computing really?

June 19, 2023
Johanna Rita

Quantum technology is a rapidly advancing field that offers significant opportunities.  It has been a honeypot for investors in the past few years, as evidenced by a total global investment of $2.35 billion in 2022. 

Fast growing companies can be found in abundance throughout the Nordic region in particular, for example, Quantum Machines in Sweden and Sparrow Quantum in Denmark. Finland too boasts expertise in quantum technology, with numerous companies involved in its research and application.

“Quantum technology is a phenomenon that doesn’t seem to make sense at first”, says Juha Riippi, the founder and CEO of Quanscient. “It is a completely new way of building computers by harnessing the phenomena of quantum physics”. 

Quanscient specializes in multiphysics modeling which accelerates the testing of various products such as electric motors and aims to utilize quantum technology on its platform in the future. In April this year, it raised €3.9 million to help bring products to market faster with its quantum computing-powered solution.

According to Riippi, the advantage of quantum computers over traditional computers is in their ability to process a significant amount of information in parallel. Traditional computers store and process data using bits, which can be either zero or one. Quantum computers, on the other hand, use quantum bits or qubits, which can simultaneously be in the state of zero and one, or anything in between. 

This gives quantum computers immense computational power and the ability to perform complex calculations simultaneously.

“The more qubits a quantum computer has, the more powerful it becomes”, agrees  Juha Vartiainen, Co-founder and COO at IQM Finland. “Adding just one qubit multiplies the computer’s performance”. 

IQM has built Finland’s first quantum computer and raised a €128 million round led by climate tech investor World Fund – Europe’s largest quantum round ever. As a spinoff of Aalto University and VTT Technical Research Centre of Finland, IQM’s core technology builds upon decades of research from the Quantum Computing and Devices (QCD) lab.

 

Why quantum?

Quantum computers can be used, for example, in the early stages of medical testing to study the active compounds of a drug and examine how certain protein chains interact and affect the recipient of the medication.

“Today, simulations are used to some extent, but if there are already a few complex molecules to model, the capacity of current computers is insufficient”, explains Riippi. “Quantum computers can model very complex and extensive molecular chains, speeding up the process by years“.

In industrial sectors, quantum computers can be beneficial in the modeling of airplane aerodynamics, for example, accelerating product development and manufacturing.

In the financial industry, quantum technology can be utilized in investment optimization.

Finland has been researching quantum technology since the 1960’s. “We have a lot of research on quantum technology and growing companies that utilize it”, confirms Vartiainen. “Considering how small our country is, we are in a good position”. 

The construction of Finland’s first quantum computer has been a three-phase process. The first version had five qubits, the next had 20, and in the ongoing third phase, there will be 50 qubits. In future quantum computers, it is believed that there could be even millions of qubits. 

According to Vartiainen, there is immense interest in quantum technology, and it will emerge as a new industry.

 

A threat or possibility?

Although quantum technology will solve many problems in the future, there is still much room for improvement. Vartiainen points out that the technology can also be misused.

There are countless databases around the world containing people’s personal data encrypted with old technology. Quantum computers could break these encryptions. “This is a topic widely discussed in the field of quantum technology”, agrees Riippi. “Quantum-secure cryptographic algorithms are already being developed”.

However, the opportunities created by quantum computers outweigh the potential threats. 

 “Once the security issues are addressed, quantum technology will be very beneficial to us within the next 15 to 20 years”, assures Vartiainen. “Quantum computers are also more environmentally friendly than traditional computers”. 

The power consumption of a quantum computer is comparable to that of a traditional computer, but with significantly higher computational power. This reduces carbon dioxide emissions, which is great for the climate.

 

How fast can it be adopted?

“Quantum computers are currently at the stage where modern computers were in the 1960’s”, says Riippi. “However, the technology is advancing rapidly”.

“In the future, quantum technology will enable us to achieve wonders that are difficult to comprehend. Although we are still in the testing phase, the technology improves year by year. Someday, quantum technology could be accessible to everyone, perhaps through various cloud services.”

Quantum technology is still in its early stages, but within the next couple of decades, it is expected to become increasingly useful and advanced.

The pace of development in the field depends largely on investors. Currently, quantum technology is generating significant interest among investors, and Finnish companies like Maki.vc and Voima Ventures, as well as British firms like Entrepreneur First and Amadeus Capital Partners, have invested in quantum technology startups.

It could be profitable for university researchers studying quantum technology to establish a company and commercialize their research. Quantum technology is a future-oriented industry that will bring about significant transformations.

Startup

Startup-Corporate Collaborations in Tampere

August 31, 2021
Margarita

As a startup founder or a team member, you most likely have an endless supply of passion and willingness to learn as much as you can about your industry. However, it is pretty impossible to know everything there is to know about every area of business, and have all the resources available to you immediately within your team. You may find that you or your team lack experience in specific areas, or need access to a workspace, or could use funding/investment as well as professional guidance from seasoned professionals. Incubation, acceleration, advisory, and other partner programmes offer startups some truly valuable support.

One such programme is the EEX Journey that matches startups with corporate leaders as advisors in a year-long entrepreneurial journey. Over the course of the year startups benefit from an advisory board’s growth strategy guidance, business insights and network.

Having an advisory board is key to the growth of many startups across the world. Advisors are a valuable resource – they help your startup tackle distinct challenges and propel your business forward. An expert selection of professionals can fill the experience or expertise gaps in your own team. Finding dedicated people with specific skills and building an advisory board to match your startup’s unique needs can be challenging – programmes such as the EEX Journey can help.

EEX Journey Kick-off group 2021

The power of social capital is still underutilized. The insights the teams are exchanging are deep and strategic, beyond ordinary small talk. Many startups have learned how to better collaborate with and sell to large corporations. Corporations are tackling to keep their offerings up to date and build new initiatives. We’ve proven it’s possible to learn and adopt new drive and speed from entrepreneurs”, Elisa Kitunen, Country Manager, EEX Oy.

No No No, a member of Platform6 in Tampere, is a third-party platform created for consumers and businesses to work together to resolve issues and build better future customer experiences for both parties. The startup believes that if businesses work with transparency and integrity, the positive results will surely follow. No No No joined the EEX Journey programme in January 2021 and believes that programmes  such as this one are critical for connecting startups with the corporate environment.

“There has been a gap in the cooperation between startups and corporations in Tampere. As a startup that targets corporations in Finland, we need to understand their pain points and the way they make purchasing decisions”, says Jaakko Timonen, Founder and CEO at No No No.

No No No and their advisory board team

Another Platform6 startup, Valaa Technologies, has also benefited from programmes such as the EEX Journey. This prop-tech startup uses software robotics to help building owners connect their legacy automation systems to the cloud. “We pivoted our busienss during the EEX program. Our advisors had invaluable connections and experience that helped set our course with the new product. Also, their journey hasn’t ended yet: they now form our permanent advisory board and have also joined as investors”, says Ville Ilkkala, CEO at Valaa Technologies.

Great ideas and passion will only take your startup so far. Having a good network of professionals supporting and backing your mission can make all the difference in your growth. The ongoing pandemic has proven once again that startups need a supportive and collaborative community and can greatly benefit from programmes within the ecosystem.

The next EEX Journey starts in January 2022 – apply now through this form: https://www.eexglobal.com/eexstartup

Artificial Intelligence

Ultimate.ai, from Tampere to the world!

July 14, 2020
Margarita

Finnish customer service automation startup Ultimate.ai is one of the few companies that managed to grow despite the difficult year of 2020, and has raised $20M in Series A Funding, led by OMERS Ventures with participation from Felicis Ventures and existing investors HV Capital, and Maki.vc. Even though the company is Helsinki and Berlin based, their story began in Tampere, and they still have a branch in the city, at Platform6. Together with Tribecast, we had a chat with Reetu Kainulainen, CEO and Co-founder of ultimate.ai.


Reetu Kainulainen, CEO and Co-founder of Ultimate.ai

The beginning

The whole idea of Ultimate.ai originally started in a hackathon, where a company in Finland was looking for help for event organising services. “The first thing we did was just build the deep learning based algorithms. We didn’t have a product yet, but we started to get some traction, and realized this technology could be used to help customer service agents to automate some parts of their workflow.” Reetu explains.

It took Reetu and his Co-founders Jaakko Pasanen and Markus Rautio a long time to come up with a product, and one of their earliest demos to a big company was just a console output of their algorithm. But the customer started working with it, and has remained a customer ever since. “Maybe that says, that you don’t really need this super polished product to get started, as long as you have a strong problem that you are solving.” Reetu says. In 2017 Reetu, Jaakko and Markus got into Techstars in Berlin, and that really started pushing the process forward into building a scalable version of their product. That’s where they met their fourth co-founder Sarah Al-Hussaini.

Keys to success

As many of their customers are big global companies, one might think that having Finnish as your first language might bring some difficulties in building a customer service AI. On the contrary, since they had to build their initial services in one of the most difficult languages there is, it is now easier to do it in other languages as well.

The platform’s flexibility and highly tailored services is also something that sets them apart from their competitors. One of the key values Reetu believes to have driven Ultimate.ai’s growth is having strong opinions, held weakly, and being very close to their customers constantly learning from them.

Moving to the next level

Ultimate.ai has always believed in solving problems with technology instead of money. However, the series A funding now allows them to really create the market and become the number one player when it comes to customer service automation.“We are going to invest in the product, and AI research, as well as create a world class customer success team, so our customers can get to success as fast as possible.” Reetu says.

When asked about tips for new companies, Reetu raises up two key points: “For me everything comes down to the product. You need to really think about who the customer is, what they need, and build the perfect product to solve their problem. You should also think about distribution from the very beginning; how will my customers buy this and how will they get the value. When you build that within the product, it makes everything so much easier.”

Business communities and home sweet Tampere

Reetu also talks about the importance of business communities: “It’s a marathon building a company, and it is so important not to be isolated. You of course have your co-founders, but it is also important to have a network around you, and get peer support, ideas and inspiration from them. It doesn’t mean that you have to participate in every single event, but having the support network will help you, and you will help them.”

Tampere also has a place in Reetu’s heart: “I want to give a big shoutout to the whole Tampere community. Especially the first people that were scrappy enough to leave New Factory and go to the old and moldy Nordea office we had back then, and hustle your way into this amazing Platform6 you have today. That’s good entrepreneur spirit! I remember so many micro moments with the Tampere startup community back in the days, and I hope we can scale up that kind of tight community mentality even when the community is growing.”

<h2″>Don’t give up!

Even though Ultimate.ai seems like a fairytale success story, Reetu reveals that the road to success has not been an easy one. “It’s kind of a managed chaos. Even when the company is growing, and there are many customers, it’s still very hard, and we are still at a very early stage. Building a company is constant problem solving. Every step of the way is difficult, but that’s the point. The most successful companies are the ones who don’t give up. But you also need to be critical and not just stubbornly smash your head against the wall. Try new things. Listen. Learn. And don’t take things too seriously and drive yourself into a burnout. That is where the community can also help you; they can remind you to have fun too and that you are not alone!”

Listen to the full Tribecast interview with Reetu Kainulainen

Read more about Ultimate.ai’s series A funding

Find Ultimate.ai in LinkedIn & Twitter

Security

How can we stop our toasters from spying us

December 11, 2019
Margarita
Statista projects that there will be 75.4 billion Internet of Things (IoT) connected devices by 2025, a fivefold increase in the number of devices in a 10 year period. IoT devices are connected via the internet – while one can be forgiven for thinking that not every piece of technology can or should be connected in this way, the truth is that the future will see all kinds of devices made ’smart.’ Griffin already produces a $100 connected toaster which can enable users to adjust temperature and even create presets for different types of bread directly from their mobile phone. The rapid proliferation of such devices raises questions about the safety and security risks that these connected smart gadgets pose. A toaster may be relatively harmless on its own, but once it connects to the internet it can do more than just burn your toast. As an example, the toaster’s counterpart, a smart fridge, was compromised to send thousands of spam emails without the knowledge of its owners. Security firm Proofpoint, which caught the errant spamming fridge, found a botnet attack that has the ability to take over devices remotely and send emails. The attack reached 100,000 devices spanning routers, multimedia centers, TVs and that one particular model of fridge. So, what can we do to protect our IoT devices from this type of attack? The First Step Is to Diagnose  The US Federal Bureau of Investigation released a public service announcement in 2018 which warned of the dangers of ‘cyber actors’ using IoT devices as proxies for anonymity and the pursuit of malicious cyber activities. Some of the techniques the FBI listed for judging whether an IoT device is compromised are to check for spikes in internet usage (a larger than usual internet bill, for example, maybe a symptom), devices that become slow or inoperable, unusual outgoing Domain Name Service (DNS) and outgoing service or home or business internet connections slowing down.

“THE MODERNIZATION OF CRITICAL INFRASTRUCTURE IS AN AREA THAT NEEDS FOCUS TO ENSURE SECURITY CONTROLS ARE INTEGRATED TO MITIGATE THE RISK OF DISRUPTION”

Binary District Journal spoke with Raj Samani, Chief Scientist at security solutions company McAfee. “The modernization of critical infrastructure is an area that needs focus to ensure security controls are integrated to mitigate the risk of disruption,” he tells us. “We have seen the impact when this is not the case, often resulting in the loss of essential services, such as power, to citizens.” The Raging Concerns About IoT With the IoT growing around us, the concern is real and not just a product of paranoia. We spoke with Tatsuya Mori, a professor at Waseda University in Tokyo, Japan. He confirmed one area of risk as the IoT develops. “The most worrying threat to the current IoT is the existence of IoT devices with insufficient security measures,” he says. “For example, many IoT devices such as webcams or IoT toys have been shipped with the weak password configuration. An attacker can easily take over the device by logging into the device from a remote site.” He also told us that there are as many as hundreds of devices worldwide that are infected with malware and controlled by adversaries. These devices can be used to conduct further attacks in the form of denial of service. Tatsuya also expressed his concerns about the use of the cloud, as many AI devices rely on it for the core of their ‘intelligent services.’ Once the cloud is compromised an attacker can steal sensitive data. The Firmware Is the Soft Spot Firmware – the permanent software that is embedded into IoT devices – is the Achilles heel of the IoT universe. While software that runs computers and mobile devices is regularly updated by the companies behind them, IoT devices do not always receive the same love from manufacturers. In fact, some of these devices may not even be updatable at all. Professor Mori revealed that IoT devices that have been discontinued may not be able to receive updates at all. Since many users are not technologically proficient, the ideal situation would be one in which the device comes with an auto-update feature. Mori also feels that it is vital that users are informed about the End of Life (EOL) of their products, a significant step in them becoming more knowledgeable about the potential risks to the device in the future. In fact, it could be argued that it is crucial that the IoT industry establishes some sort of universal standards when it comes to updates. This would allow for the rollout of updates irrespective of the device’s manufacturer. It would also free consumers from having to update their devices themselves, as the process could be widely automated. The update process would work almost as it does in the case of mobiles and laptops, wherein the device connects to an update server, downloads the relevant update, authenticates it and then proceed to install it, largely by itself. Security Concerns Have Become Obstacles in Development Security concerns surrounding IoT devices are so strong that they have become an impediment to the development of IoT as a whole. We asked Gareth Davies, Director of Public Relations at the GSM Association, his thoughts on the impact on development. “Today we see that the majority of IoT services do not make it past the ‘proof of concept’ stage because of security concerns – with organizations not prepared to take the liability for services that may be insecure and could lead to brand damage and fines (though GDPR rules, etc),” he tells us.

“TODAY WE SEE THAT THE MAJORITY OF IOT SERVICES DO NOT MAKE IT PAST THE ‘PROOF OF CONCEPT’ STAGE BECAUSE OF SECURITY CONCERNS”

“There are also many examples of IoT services that have been commercialized that have major security issues – you only have to look at all the press stories which appear on almost a daily basis. So today security is a major barrier to the commercialization of IoT services.” Another big issue is that of privacy. IoT devices pose a number of privacy-related issues such as user identification, user tracking, profiling, and utility monitoring and controlling. Since a lot of IoT devices are designed in a particular way, for example, to be in ‘sleep mode’ while not being used, the efforts to secure them are more complicated. With respect to privacy, Samani says, “I would suggest the most important element is establishing a level of understanding from consumers on the privacy implications of buying connected devices for the home. For example, digital assistants are excellent technology, but it is imperative that consumers are aware of their ‘always on’ nature.” Industry Leaders on IoT Security Risk Mitigation While all risks related to IoT may not be eliminated, there are things that we can do to ensure that we do not end up becoming victims of our own technological innovations. This means developing a security mindset. It is essential to recognize that connecting previously unconnected devices to a network does have its own hazards, knowing that new kinds of devices may bring new vulnerabilities. “The reason security is a barrier to market adoption of IoT services is down to a mix of lack of expertise, lack of scalable solutions and lack of cost-effective solutions that fit with the lean commercial models associated with many IoT services,” Davies says. “To address these points the GSMA promotes a harmonized industry approach to address IoT security issues via the use of the common recommendations contained within our very comprehensive set of IoT security guidelines. We also promote the use of ‘self-assessment’ using our IoT security assessment. The success of the GSMA IoT security guidelines can be seen from the fact they are being references by most global standards organizations, including ETSI, ENISA, and NIST.”

“THE REASON SECURITY IS A BARRIER TO MARKET ADOPTION OF IOT SERVICES IS DOWN TO A MIX OF LACK OF EXPERTISE, LACK OF SCALABLE SOLUTIONS AND LACK OF COST-EFFECTIVE SOLUTIONS”

McAfee, too, has an ‘Advanced Threat Research Team’ which conducts a significant body of analysis of the security and privacy implications of devices like cars, medical equipment, and even padlocks. They also have the McAfee Security Home Platform, which is focused on home networks and can automatically secure connected devices through a router. IoT Security is Being Addressed  IoT devices are unique in the sense that they are ordinary daily objects and so their need for effective security measures might not be immediately obvious, but steps are being taken to minimize risk. Professor Mori revealed that efforts are already underway in Japan to address the concerns regarding the security of IoT devices as the Japanese Ministry of Internal Affairs and Communications and the National Institute of Information and Communications Technology (NICT) in cooperation with internet service providers have launched an initiative called NOTICE or National Operation Towards IoT Clean Environment. “This initiative aims to investigate IoT devices that could be used for cyber attacks and alert users of those devices,” he tells us. “On the basis of their survey, we may be able to take effective actions toward mitigating various threats.” This is just as well because as we make strides towards the connected era, we are also taking the first steps towards ensuring our toasters don’t end up spying on us. This post was written by Margarita Khartanovich for Binary District, an international сollaborative technology community that creates unique competency-based workshops and events on new technologies.
Privacy

Smart cities won’t infringe on privacy

December 7, 2019
Margarita
Across the world, over a thousand smart city pilots have been launched—many of them attempt to construct entirely new cities with fresh identities from the ‘tabula rasa’ of a blank slate. These new cities can be simply placed down onto the landscape like a grounded alien spaceship, built with technology in mind from day one. Equipping existing urban centers with the latest technology, though, is a different challenge entirely. Cities shaped over centuries by the demands of different civilizations, where horses once pulled carriages, are gradually transitioning to a smarter future. AI-directed traffic, smart parking and other intelligent infrastructure are taking its place on streets that were originally built to serve very different needs. If these ancient cities are to transition successfully, suggests smart city strategist Renato De Castro, the DNA of the city must be preserved—with new technologies woven into the historic urban fabric in a way that respects the ancient spirit of the place. “People have a deep connection with their cities, even deeper than with their province, region or country,” says De Castro in an interview to BDJ. “To understand the unique DNA of the city and translate it into a strategy to develop a wiser city will be crucial for the success of any project. Citizens do not want a new city, they want a better city to live in.” A city that by all rules of nature should be two meters underwater, Amsterdam has both a unique heritage and a tendency for innovation; using a complex system of dikes, barriers, and levees to protect the population from the ever-present threat of floods. Walking on these city streets today doesn’t feel futuristic; elegant Victorian facades and cobblestoned streets give the sense of walking inside an artifact. It is an urban feel that the city council’s smart city division hopes to preserve as they integrate the sensors needed to take the city into the next generation. These sensors provide the data that feeds the digital infrastructure of the smart city, fueling the analytics process that ultimately feeds back to urban development. But embedding such sensors into historic water pipes, electric lines, traffic signals, and roads can be as complex as brain surgery in a place like Amsterdam. It can put the city on lockdown while the procedures take place, interrupting the city’s daily life and quite possibly altering its character forever. To get around this, Amsterdam relies on a different source of fuel for its smart city engine: apps. The Apps for Amsterdam initiative was designed to challenge developers to build applications that contribute information to a public pool of data and keep citizens informed on a range of issues—from air quality to restaurant sanitation and threats to public safety. The Mijnbuur app—which translates as MyNeighbour—is one such app that adds a smart element to neighborhood WhatsApp groups. This allows concerned residents to share intel on local issues while having the option of inviting city officials and even police officers into the conversation to tackle more serious problems. Verbeterdebuurt, or Improvedneighborhood, allows citizens to suggest changes and highlight problems with the city by snapping a photo with GPS metadata and sending it straight to the authorities. While using applications to generate data can skirt the difficulties of implementing new digital infrastructure, the processing and storage of this data still raise questions that current systems can’t always find an answer to. Most pertinently – when data is generated from a private application and fed back to a government source, who can take ownership of this data, and who should be able to use it to advance their agenda? Many cities that retain data from smart city projects require the companies doing the data collection to subsequently destroy it in line with GDPR principles of data minimization. But as this data drives the development of the smart city, destroying it can be counterproductive. “Even simple infrastructure like a streetlight, which historically might have been built by the private sector and funded by the public, introduces new issues when it’s smart. Add WiFi access points and systems to harvest anonymize data, and you raise new private/public issues.” says expert Gary Sharkey, who is helping PwC develop a smart city strategy. Smart cities built on greenfield sites can create a structure to manage this data from the ground up. If these new cities are in more authoritarian regimes or less privacy-conscious jurisdictions – like China – then there is little incentive for them to ensure that data is managed appropriately. Elsewhere, historic cities bound by the democratic process are faced with the challenge of building a digital infrastructure that allows data to be collected and shared as openly and efficiently as possible. This is all while still giving citizens the maximum possible control over their personal data in accordance with GDPR principles such as privacy by design, data portability and the right to be forgotten. Smart cities company Sharkey suggests that cities upgrading their digital infrastructure need to first get their “data house in order,” pointing to efforts by the European Union to create new vehicles that bridge the public and private sector to effectively manage data. These vehicles include an ‘operating system for smart cities’ FIWARE, which claims to be a “shared set of mechanisms to develop smart city solutions.” This software is designed to slot in with city level governance and break data down into silos that prevent the mixing of public and private data but also provide a holistic picture of city events. At the heart of this software is a novel idea known as the data marketplace, which is effectively the 21st century equivalent of the market square. It enables the transacting of both sensitive private data, at a cost, and the sharing of public open-source data that is made freely available for everyone’s benefit. This relies on big data, cloud computing,  and smart city technology to create an interface that enables the convenient buying and selling of data. And it is this convergence of technologies – combined with human ingenuity and historical sensitivity – that can pull ancient cities into the 21st century without damaging our architectural legacy, or infringing on our innate rights to privacy.
Fingerprint

The case against traditional passwords

October 2, 2019
Margarita
Passwords have been around for millennia. Thousands of years before the advent of the computer, the Roman military would use what Polybius described as a watchword to distinguish ally from enemy. Similarly, during the Battle of Normandy, US paratroopers used constantly changing call-and-response passwords – flash would be responded to with thunder, for example — to establish friend from foe. The password entered computer science in 1960 thanks to Fernando Corbató, as a means of keeping files private. The Massachusetts Institute of Technology had developed a time-sharing system that all researchers had access to, however all files shared a common disk. To keep individual files private, a password was introduced and users could access only their own. With the introduction of the internet, the popularity of the password soared as a straightforward but relatively effective means of keeping user accounts secure. Decades on, cybersecurity is still a challenge as data leaks and hacking attempts are more rife than ever. For many, the fact that we are still primarily using passwords as a means of protecting our sensitive data is an anachronism in dire need of addressing.

Enter biometrics

This is where biometrics can make an impact – and, indeed, they already are. You can thank tech giants like Apple and Samsung for popularizing the technology, introducing fingerprint scanners some six years ago and slowly building functionality onto the technology. Initially, users could unlock their devices using their fingerprints. Today, banking apps grant access based on the information, and purchases can be made on app stores using no more than a print. On a very simple level, biometrics improve the user experience. Rather than having to remember passwords or draw patterns to unlock devices or perform other secure tasks, users can simply use fingerprints or facial recognition. Both are almost always quicker and more secure, serving as a brilliant example to users that the technology is nothing to fear and can improve their experience significantly. Some 89 percent of consumers are already familiar with biometrics in some form, with 55 percent using fingerprint recognition technology on a regular basis. This comes from the inclusion of fingerprint scanners on just about every major smartphone released in the last few years. With one tap, users can gain access to their devices in a way that is deemed so secure, that it can be used to authenticate payments. Many also now utilize facial recognition technology for even more seamless user identification, with the likes of Apple allowing users to pay using only their faces. Passwords are a weak link for both user security and company efficiency. For most people, the notion of having the same password for every account they hold is too dangerous — password theft is rife and any breach would be best contained to a single account. On the other hand, remembering multiple different passwords across the myriad accounts we hold in 2019 is also imperfect. For customers, it’s a headache, while for corporations it can be an expensive waste of time. According to CNN, Microsoft spends $2 million a month on help desk calls from people who want to change their passwords. According to a 2017 report from VISA, some 61 percent of respondents have multiple passwords across their different accounts, making the problem a significant one. When asked why they had abandoned an online purchase in the past, half of the respondents cited not being able to remember a password as a reason. Abdulaziz Alzubaidi has a PhD in engineering with a focus on security and is currently a faculty member at Umm Al-Qura University. For him, biometrics are the future of authentication and the humble password may be due retirement. “When we talk about biometrics, we should consider both types of biometrics; physiological and behavioral,” Abdulaziz told Binary District Journal. “Modern devices support physiological biometrics such as fingerprint and face recognition. Although these biometrics have a few limitations, they should be used as an authentication method, since traditional methods like entering a PIN or drawing a pattern are vulnerable to simple exploits like shoulder surfing attacks, which allow anyone to gain device access. In my opinion, I see biometrics having a high possibility of replacing traditional authentication methods. “Imagine this scenario, your device has been used by a friend or even a family member, who knows your password for your device and online bank. He/she can easily access the device and log in to your account, even if he/she uses multi-factor authentication. This simple scenario shows that traditional authentication methods can increase the security issue for anyone. It is not only for banking but for any available app on your device, like social apps, emails etc., so biometrics are more secure when we compare them with the password method.”

Managing resistance to change

User experience is important here, though. If relying on fingerprint scanning alone is too porous, developers should consider other methods of authentication before adding more biometric hoops to jump through. No one wants to have to scan their thumb and their face while speaking into their phones just to access their mobile banking. Equally, some people may not be comfortable with using a fingerprint scanner at all, particularly if they are being asked to provide that information just to access a social media account. What will be important is customization. Developers will have to offer users different options and make the security implications of those options clear, much in the same way that some websites offer two-stage authentication but don’t make it compulsory. If a banking app can be opened with one a fingerprint, great, but some users will feel more comfortable adding a password and an iris scan to the process, once the latter becomes sophisticated enough. In terms of security, pivoting to biometrics may well throw up just as many questions as it does answers. Crucially, passwords can be changed if stolen. If a hacker finds a way of breaching biometric authentication, the implications for the user’s multiple accounts and devices would be huge – it’s a lot less simple to change your fingerprints or your face. There have also been cases of hackers gaining access using a picture of a user’s face. This could mean that multi-stage authentication will still be necessary, nullifying the seamlessness that makes biometrics so appealing in the first instance.

Just be yourself

The next step in customized authentication is behavioral biometrics. This is biometrics not based on physical identifiers like fingerprints or scans of the iris, but rather the analysis of a user’s behavior to determine their identity. Going far beyond technologies like voice and signatures, behavioral biometrics can focus on anything from finger movements to hand tremors and hand-eye coordination. It can even be determined how well the user knows the information they are being asked to submit, or how familiar they are with the app they’re trying to gain access to. “Recent research has proved that behavioral biometrics have the potential to identify a smartphone owner with high accuracy,” Abdulaziz says. “Most of these studies use different approaches like touchscreen, keystroke, gait, behavioral profiling etc., and show each subject has a unique identity. Behavioral biometrics does not need more sensors, so the cost of building any device will not increase. “The main points that we need to consider are time to train, size of data, and where should be trained. Addressing these points will lead behavioral biometrics to be one of the important biometrics, in my opinion, not only in smartphones but to most smart devices.” Behavioral biometrics, if successfully deployed, will solve problems that other forms of cybersecurity have faced throughout their existence. One major positive is that it is a passive form of identification – users need not change their behavior at all to access their devices – in fact, quite the opposite. They can also be deployed throughout the session in the background, meaning gaining access won’t give hackers carte blanche to exploit a user’s account. As with all authentication methods, accuracy will be paramount. There are a number of companies – see NuData, BehavioSec or Invisible Challenges, for example – working on building behavioral biometrics solutions, while UK bank NatWest has shown interest in utilizing the technology to prevent fraud in real time. Getting to a workable degree of accuracy will involve machine learning and even deep learning, while a large degree of drip-feeding will be needed to encourage a typically skeptical public to trust the technology. If the success of fingerprint ID for smartphones can be taken as a marker, then biometrics will be welcomed by users. The technology is an easy sell, and any discomfort around tech companies holding your fingerprint data will be offset by how clearly preferable Face ID is to a password when it comes to keeping a bank account secure. There will be teething problems – hacks will make headlines and some will be uncomfortable with the technology – but ultimately the password appears doomed in the face of a truly 21st century alternative.