Update of GIGA-VAMOS– Technology Roadmap

Update of GIGA-VAMOS– Technology Roadmap

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Technology Review 206/2007

206

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Technology Review

Technology Review 206/2007

The Finnish Funding Agency for Technology and InnovationKyllikinportti 2, P.O. Box 69, FIN-00101 Helsinki, Finland

Tel. +358 1060 55000, Fax +358 9 694 9196, E-mail: tekes@tekes.fiwww.tekes.fi

April 2007ISSN 1239-758X

ISBN 978-952-457-364-1

Mikael von Hertzen, Juhani Timonen, Pekka Huuhka

Further Information

www.tekes.fi/gigawww.tekes.fi/vamos

Update of GIGA-VAMOS– Technology Roadmap

Mikael von HertzenJuhani TimonenPekka Huuhka

Oy Swot Consulting Finland Ltd

Technology Review 206/2007Helsinki 2007

Tekes, the Finnish Funding Agency for Technology and Innovation

Tekes is the main public funding organisation for research and development(R&D) in Finland. Tekes funds industrial projects as well as projects in re-search organisations, and especially promotes innovative, risk-intensiveprojects. Tekes offers partners from abroad a gateway to the key technologyplayers in Finland.

Technology programmes – Tekes´ choices for the greatest impactof R&D funding

Tekes uses technology programmes to allocate its financing, networkingand expert services to areas that are important for business and society.Programmes are launched in areas of application and technology that are inline with the focus areas in Tekes’ strategy. Tekes allocates about half the fi-nancing granted to companies, universities and research institutes throughtechnology programmes. Tekes technology programmes have been con-tributing to changes in the Finnish innovation environment for twenty years.

Copyright Tekes 2007. All rights reserved.This publication includes materials protected under copyright law, the copy-right for which is held by Tekes or a third party. The materials appearing inpublications may not be used for commercial purposes. The contents ofpublications are the opinion of the writers and do not represent the officialposition of Tekes. Tekes bears no responsibility for any possible damagesarising from their use. The original source must be mentioned when quotingfrom the materials.

ISSN 1239-758-XISBN 978-952-457-364-1

Page layout: DTPage OyPrinters: Painotalo Miktor, Helsinki 2007

Foreword

This report presents the results of a project initiated by Tekes, the Finnish Funding Agency forTechnology and Innovation.

As part of an earlier technology programme (NETS – Networks of the Future), the report Roadmapfor Network Technologies and Services was published in 2004. Technological development in thearea concerned is very rapid, and Tekes decided to update the roadmap accordingly. The key targetof this report is to summarise roadmaps related to the development of a very large range of technol-ogies and applications. It is expected to support planning and development in different industries,as well as to provide stimulating input for discussion and development work. The project is part oftwo Tekes programmes: ‘GIGA – Converging Networks 2005–2010’ and ‘VAMOS – Value addedMobile Solutions 2005–2010’. It addresses both applications and technological angles.

Long-term roadmaps are challenging to create. The markets, user habits, trends, and also variousunpredictable events shape the future in parallel with technological developments. The roadmapswere given timelines, with reference points of the current state (2007), 2010, and 2015, instead ofjust presenting trends. The purpose of this is threefold: first of all, it provides a framework for com-parison with the previous roadmap; secondly, timing is always crucial for business decisions; and,thirdly, we believe that providing firm time estimates will form a stronger basis for further dia-logue. A firm time framework also enables easier tracking of key changes as time passes.

The subject addressed is extremely broad. Several industries are covered, and a number of broad-band technologies are included; hence, there certainly are areas that could have been handled morethoroughly. We hope, however, that this report nonetheless provides a good overview of the mostcentral subjects. In the conclusions, some critical points have been identified, along with potentialbusiness opportunities related to them.

The content of the report is based on a number of publicly available roadmap reports, personal in-terviews, and a Web-based survey sent to more than 200 persons (with broad international cover-age).

We gratefully acknowledge the valuable insight that was provided by all 40 persons who were in-terviewed individually in the course of this project. A list of these persons is found in Appendix 2.We likewise wish to acknowledge with gratitude the opinions of the 83 persons who responded tothe online survey, as well as those who participated in the expert workshop. The participants in theworkshop are listed in Appendix 3.

The project was implemented and the report written by Oy Swot Consulting Finland Ltd.

Helsinki, March 2007

Tekes, the Finnish Funding Agency for Technology and Innovation

Contents

Foreword

1 Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2 Background and Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3 Project Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.1 General Approach to the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.2 GIGA-VAMOS Roadmap Scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.3 Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.3.1 Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.3.2 Personal Interviews. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143.3.3 Web-based Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.3.4 Workshop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4 VAMOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214.2 Traffic and Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

4.2.1 Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224.2.2 Trends and Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234.2.3 Challenges and Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244.2.4 Standardisation and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254.2.5 Functionalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254.2.6 Systems and Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264.2.7 Terminals and User Interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304.2.8 Vision of the Future. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304.2.9 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

4.3 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324.3.1 Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324.3.2 Construction of Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334.3.3 Building Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

4.4 Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344.4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344.4.2 Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344.4.3 Needs and Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364.4.4 Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374.4.5 Challenges and Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374.4.6 Functionalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384.4.7 Technologies and Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394.4.8 Vision of the Future. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404.4.9 Summary Roadmap for Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

4.5 Business Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424.5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424.5.2 Vertical Business Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

4.6 Conclusions on the Sectors under Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

5 Business Models, Functionality and Services, and Content . . . . . . . . . . . 475.1 Business Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

5.1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475.1.2 Industry Vertical Dimension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485.1.3 Technology Dimension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

5.2 User Behaviour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535.3 Functionality and Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545.4 Content. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565.5 Roadmaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

6 GIGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596.2 Radio Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

6.2.1 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596.2.2 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606.2.3 Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606.2.4 Geographical Differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606.2.5 Bit Rates, Mobility, and Network Structures . . . . . . . . . . . . . . . . . . . . . . . . . . 606.2.6 New Radio Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606.2.7 Key Radio Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616.2.8 Summary and Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

6.3 Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666.3.2 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666.3.3 Network Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666.3.4 Hand-over, Interoperability, and Quality of Service. . . . . . . . . . . . . . . . . . . . . . 676.3.5 Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686.3.6 IP Versions and Next Generations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686.3.7 Competence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696.3.8 Summary and Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

6.4 Devices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716.4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716.4.2 Number of Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716.4.3 Usability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716.4.4 Features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716.4.5 New Design Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716.4.6 Platforms and Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726.4.7 Power Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726.4.8 Summary and Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

6.5 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736.6 Other Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756.7 Hype Curves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

7 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797.2 Key Differences from the Previous Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797.3 Hype Curve Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807.4 Summary Roadmaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807.5 Critical Paths and Points, with Related Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847.6 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Appendices1 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872 People Interviewed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883 Participants in the Expert Workshop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894 Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Tekes’ Technology Reviews in English. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

1 Abstract

This report provides roadmaps for the future of broadbandtechnologies and specific industry sectors’ utilisation ofmobile and wireless technologies, for improving their busi-ness processes and making them more efficient and effec-tive.

The substance of the report is based on recent publicroadmap materials, strongly complemented by 40 individ-ual interviews, an extensive Web-based survey, and an ex-pert workshop. On the basis of this information coupledwith thorough analysis, roadmaps have been drawn up andconclusions drawn.

The roadmaps present the development with timeframesreferring to the years 2007, 2010, and 2015 for the follow-ing areas: traffic and logistics, construction, manufactur-ing, business services, business models, radio access, net-works, devices, and security.

Take-up of technologies is described also, through the useof ‘hype curves’.

The report is concluded by summarising recent keychanges and identifying some critical paths and points aswell as opportunities related to them. At the end is a list of afew recommendations for future development of the GIGAand VAMOS programmes.

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2 Background and Objectives

As part of the Tekes NETS programme, the roadmap reportRoadmap for Network Technologies and Services was pub-lished in 2004. The technological development in the areain question is very fast and hence concerned is very rapid;therefore, Tekes decided to initiate a project named ‘Up-date of GIGA-VAMOS – Technology Roadmap’. A targetof the present report was not to address technological an-gles alone but also to have a strong application focus.

The Tekes programme GIGA – Converging Networks2005–2010 focuses on development of broadband technol-ogies for future converging networks. The five-yearprogramme, with an estimated total budget of EUR 240million and ending in 2010, will be funded by Tekes withEUR 100 million. The main goals are to promote the lead-ing position of the Finnish telecommunications industry intechnologies for wireless broadband communication and tostrengthen strategic basic research and applied research inbroadband communication. The scope of the programme isthe development of broadband technologies (especiallywireless broadband), converged network technologies, ser-vices, and content in a newly profound way driving differ-ent players into ever closer collaboration.

The VAMOS – Value added Mobile Solutions 2005–2010programme is a Tekes programme launched in summer2005 in co-operation with companies and research institu-tions. The programme aims to find ways to utilise the new-est mobile technology solutions.

The objectives of the present project, Update of GIGA-VAMOS – Technology Roadmap, are:● To support the GIGA and VAMOS programmes of

Tekes● To provide insight into future technological develop-

ment, especially for small and medium enterprises(SMEs) that are technology developers or service pro-viders; the target is to support these companies in strate-gic planning and in developing new business and tech-nologies

● To focus on applications relevant to the following sectorsof industry, relevant for VAMOS:– traffic and logistics– construction– manufacturing– business services

● Additionally, to provide a discussion base for collabora-tion between research and business (in particular, SMEs)

Creating roadmaps for the future is very challenging, espe-cially if clear timelines are included. Mostly, if not always,the actual outcome does not correspond to the forecasts.Nonetheless, it was decided to include clear timelines inthe roadmaps, as opposed to only trends, in order to stimu-late discussion as well as make it easier to determine thechanges as time passes and hence be better able to makenew decisions, based on clearly seen changes.

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3 Project Methodology

3.1 General Approachto the Project

The project’s approach was structured into 12 distinctmodules, which are presented in Figure 1.

Swot Consulting Finland Ltd, a management consultingcompany focusing on companies and public sector in thetechnology industry, was selected by Tekes to implementthis project and write the related report.

The project’s starting point was the existing NETS reportRoadmap for Network Technologies and Services, whichwas published in 2004, as well as other relevant informa-tion from the GIGA and VAMOS programmes.

Further information has been accumulated through analy-sis of a large number of recent materials from publicsources and publications, listed in Appendix 1 of this re-port. This information has been complemented by Swot’sown information sources as cultivated through experienceof acting in the information and communication technolo-gies (ICT), electronics, and technology sector.

The key current and future needs of the selected sectors –i.e., traffic and logistics, construction, manufacturing, andbusiness services – were identified. Also, the ideas andneeds of SMEs supplying technology or services to the sec-tors of industry in question were identified.

Content providers, operators, and system suppliers wereaddressed as well. Universities and research institutes wereincluded in order to ensure sufficiently theoretical and fu-ture-oriented views.

The technology enablers and industry-specific develop-ment needs were elaborated upon further in an expertworkshop.

On the basis of all of the above, the final report was created,including updates and changes from the previous report.Also, key conclusions and recommendations are presented.

The project and the report have been and will be presentedto the Programme Management Board of both GIGA andVAMOS, to the GIGA subject-specific task forces, and tothe VAMOS forums.

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Figure 1. General approach of the project.

3.2 GIGA-VAMOS Roadmap Scope

The scope of the project, with the target of a viewpoint ad-dressing technology-enabling as well as sector-specific ap-plications, is potentially very extensive. In order to retain acertain focus and be able to deliver meaningful results, thescope presented in Figure 2 was selected.

In the VAMOS-led dimension, the programme considersthe topic from the industry solution point of view, for eachselected sector (traffic and logistics, construction, manu-facturing, or business services). On a more generic level,the business models are addressed as well. There are, how-ever, also changes in the business models from the technol-ogy-enabler direction, such as emergence of different hard-ware and software platforms. These business model changesare discussed as well.

In the GIGA-led dimension, the analysis considers thetopic from a technology and technology enabler point ofview. The individual technologies can partially be groupedunder the main categories radio access, networks, devices,and security. Some of the individual technologies, how-ever, are relevant in many or all of these main areas.

The two dimensions – the GIGA and VAMOS directions –meet at a crossing point, which can be described to have its

base built on content. The crossing point is built upon indi-vidual technologies (elements), which together formfunctionalities, such as navigation. The functionalities thenare further built into relevant industry-specific solutionsthat provide value to the business processes in question.

3.3 Sources

The project work was conducted through desk studies ofpublic sources and publications, personal interviews, aWeb-based survey, and an expert workshop, all of whichare described in greater detail below.

3.3.1 Publications

A remarkable number of publications were evaluated assources, and the most relevant ones were selected as basesfor reference.

Common to most of the references is that, while they dodiscuss trends quite extensively, when it comes to timing –which is of utmost importance in utilising technologywithin business – the publications are rather cautious interms of taking any strong stands.

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Figure 2. GIGA-VAMOS roadmap scope.

Brief Description of Each of the SelectedReferences

The base document was the Roadmap for Network Tech-nologies and Services (2004), which has a focus onroadmaps for networks, services, and business models. Theindustry-specific solutions were not included as such in thescope of the report.

The report described roadmaps for the future with a timereference to years 2007 and 2012 – i.e., three and eightyears into the future. Since the Roadmap for Network Tech-nologies and Services report was the base report to be up-dated, the present report was given as its reference years2007, 2010, and 2015, which then made it possible to ana-lyse key changes also. These key changes are discussed insection 7.1.

The report addressed also so-called critical paths from thetechnology-centric world of the past to the future’suser-centric world, with individual paths for selected top-ics. The critical paths contained also what are called criticalpoints, where certain criteria – e.g., emergence of standards– must be satisfied if one more step is to be taken along thepath. These critical paths did not have time references, andamong other challenges with them is that, if some elementdoes not proceed according to the path, the model does not

provide an alternative approach. The topics covered by thecritical paths were:● Commerce● Business models● Services● Context-awareness● Content● Digital identity and security● Mobile terminals● Networks● Radio technology

The technology summary roadmap is presented in Table 1on page 8.

NETS – Networks of the Future 2001–2005, Final Report(2005) was based on a previous Tekes programme of thesame name. The content of the report consists of descrip-tions of technologies for wireless systems, broadband net-works, and related service and application concepts. It de-scribes well the technologies that are studied but does notcontain real roadmaps.

eMobility, Mobile and Wireless Communications Tech-nology Platform, Strategic Research Agenda (2006) has atechnical, business, and psychological approach, with year2020 as the vision timeframe. It describes a vision that de-

7

Figure 3. The SET concept (eMobility, Mobile and Wireless CommunicationsTechnology Platform, Strategic Research Agenda, 2006).

8

2007 2012

Services

Towards more natural use or network services

• New services available 2007• Communication getting mobile• Multimedia communication• Personalization and adaptation using simple

context (location)• Mobile services for various fields of life• Collaboration and sharing an important trend

• Communication and user interaction with ICT systemsgetting more natural (new means of interaction)

• More accurate positioning available• Services and adaptation are context aware• Agent technology to help user with vast amount of

content and services• Brokering-type business models

Terminals

From a network-centered world towards terminal-centred world

• More radio accesses implemented for mobile terminals(2G, 3G, HSDPA, WLAN, BT, NFC,DVB-H,...)

• User identification (biometric / smart card)• Terminal can choose best radio access• Limited multimodality• More sensors in terminals

• Multi-purpose terminals (communication, remotecontrol, data storage, authentication)

• Radio access based on SDR• MIMO and start antennae integrated with terminals• Power is a critical issue (due to, e.g., multimedia

processing requirements)• Fuel cells in use as power sources• Size of terminals and sensors very small => can be

embedded anywhere• Communication without a terminal (voice interfaces)

Networks

Increased bandwidth in converging networks

• IP is the dominant network protocol• Network convergence expanding• Application-level handover accomplished• 2 Mbps on move, 10 - 14 Mbps stationary• Data traffic mainly symmetric• Positioning using global navigation satellite system

(GNSS) with cellular positioning and indoor positioning• MIMO and smart antennae integrated with base

stations

• All-IP converged networks with IPv6 base protocol• SDR used to access all radio interfaces in optimum

way• 100 Mbps on move, 1Gbps stationary• Single log-on in heterogeneous networks• UWB mature enabler• PAN networks used widely• Sensor networks embedded in our surroundings

Content

Digital multimedia data to be main source of traffic in networks

• MPEG-4 and its successors as a foundation forvideo coding

• MPEG-7 and XML used widely for metadata• Digital Rights management importance increasing

• Multimedia content is a major traffic source intelecommunication networks

• New multimedia coding algorithms are developed• DRM and content protection integrated in services• All multimedia content is described with metadata

Security

Towards trusted services and end to end security

• Security mainly using VPN, PKI, SIM-card, bankaccount key numbers

• Bio-identification used in certain applications• Trusted third party certification services emerging

• End to end security accomplished• Security embedded in all devices and telecom

infrastructure• Automatic spam and DRM filtering in network• Third-party services e.g. for charging, certification,

personal information used• Authentication done with same scheme for all

networks and services

Table 1. Technology summary roadmap (Roadmap for Network Technologies and Services, 2004).

mands a major shift from the current concept of ‘anywhere,anytime’ to a paradigm shift of ‘any network, any device,with relevant content and context in a secure and trustworthymanner’. The increasing dependence of society on a com-munications infrastructure with a multitude of services andnetworks requires new approaches and an emphasis on re-search captured by a new concept called the SET conceptthat underscores the need for a three-dimensional vision ofresearch activities, for delivery of simplicity, efficiency andtrust. The SET concept is illustrated in Figure 3 on page 7.

Global Visions of a Wireless World (2006), published bythe Wireless World Research Forum (WWRF), describesvisions of the future in terms of major trends, innovation cy-cles, vision principles from a user-centric perspective, andsystem concepts and requirements. Some pictures from thispresentation are referred to later on in this report.

Development of Broadband Technologies and Business,GIGA Converging Networks Technology Programme2005–2010 (2006) contains presentation slides from casestudies in the US, Japan, China, and South Korea. It con-tains good overviews of technological developments inthese countries over the last few years, current areas of fo-cus, and some roadmaps for the future (especially in rela-tion to Japan and South Korea). The key roadmaps from Ja-pan are presented in figures 4, 5, 6, and 7, while the keyroadmaps from South Korea are presented in figures 8, 9,and 10.

E-Business Logistics, Visions, Innovations and Research(2006), published as part of the ELO – E-Business Logis-tics Technology Programme 2002–2005 by Tekes, con-tains roadmaps with some time references.

9

Figure 4. Forecast for broadband households in Japan (Development of BroadbandTechnologies and Business, 2006).

10

Figure 5. Growth of data access speed in fixed and mobile communications(Development of Broadband Technologies and Business, 2006).

Figure 6. Network evolution – DoCoMo’s case (Development of BroadbandTechnologies and Business, 2006).

11

Figure 8. Convergence and technology trends (Development of Broadband Technologies andBusiness, 2006).

Figure 7. The mobile phone in the future (Development of Broadband Technologiesand Business, 2006).

12

Narrowband1990

Broadband2000

BcN2010

2.4 – 9.6Kbps 1.5 – 9.6Kbps 50 – 100 Mbps

ConvergenceServices

Fixed+MobileTPS

Wibro+ HSDPA+ WLAN+ DMBHome Networking

IS95 A/B

64 Kbps

IS95C2000.10

144 kbps

CDMA1 -x EVDO2002

Up:2.4 MbpsDown: 153kbps

WCDMA/HSDPACDMA1 -x EVDV2006

3/1.8Mbps for WCDMA14 Mbps for HSDPA

● Voice and textcommunications

●

●

●

Low interoperabilityand synchronizationamong terminalsEmphasis on electronicdata processingNarrowbandtechnology

●

●

●

●

●

PC-based serviceWeb-based serviceNetworking amongsome IT productsBroadbandtechnology

Broadband internetservice

●

●

●

●

●

Various converged IT servicesUniversal IT integration &Universal networkingBroadband network technology:Digital convergence technologyTrial services in July ‘05

20054-100 Mbps

Figure 10. ICT network evolution in Korea (Development of Broadband Technologies and Business,2006).

Unit: billion KRW (mil EUR)

6,598 (5,237)5,872 (4,660)4,976 (3,949)3,905 (310)2,830 (2246)1,899 (1,507)Total

428 (340)349 (277)292 (232)237 (188)167 (133)96 (76)Others

143 (113)130 (103)114 (90)99 (79)79 (62)62 (49)Stock/Banking

119 (94)119 (94)117 (93)114 (90)108 (86)98 (78)Lottery/Reservation

177 (140)169 (134)160 (127)148 (117)131 (104)95 (75)Community

454 (360)427 (339)374 (297)298 (237)220 (175)113 (90)Adult contents

1,327 (1,053)1,160 (921)916 (727)644 (511)337 (267)123 (98)m-Commerce

896 (711)794 (630)667 (529)520 (413)335 (266)213 (169)LBS

638 (506)587 (466)531 (421)413 (328)320 (254)203 (161)Mobile game

433 (344)356 (283)259 (206)156 (124)77 (61)52 (41)Mobilebroadcasting

250 (198)241 (191)228 (181)210 (167)188 (149)158 (125)

370 (294)314 (249)262 (208)197 (156)121 (96)82 (65)Ringback tone

132 (105)125 (99)115 (91)104 (83)90 (71)78 (62)Ring tone

608 (483)480 (381)322 (256)160 (127)79 (63)13 (10)MMS

28

35

18

18

13

32

61

33

26

53

10

35

11

115

4626 (497)622 (494)618 (490)605 (480)578 (459)513 (407)SMS

2008E2007E2006E2005E2004E2003

Characterdownload

Figure 9. Mobile Internet content’s market outlook in Korea (Development of Broadband Technologies andBusiness, 2006).

ELO – Elektronisen liiketoiminnan logistiikka 2002–2005, loppuraportti (2006) discusses enabling technolo-gies for management of physical material flows and con-tains some roadmaps.

Etätunnistuksen suuntaviivat logistiikassa, LogistiikanRFID Roadmap (2006) covers in a very concrete way thepossibilities for applying Radio Frequency Identification(RFID) technologies in logistics. This publication is re-ferred to later on in this report.

The Odyssey of the Mobile Internet (2006) discusses thesuccess of mobile Internet introduction in Japan as com-pared to Europe and the related barriers and success factorsinvolved in applying new mobile communications technol-ogies in business.

‘The Long Tail’ (2004) describes business model changesthat have been enabled by the Internet.

Kansallinen tietoyhteiskuntastrategia 2007–2015 (2006),later referred to as ‘the Strategy’, was drafted in 2006 inco-operation with actors and decision-makers from varioussectors of society. The Strategy outlines a national visionand strategic intent concerning the information society inFinland. In addition to the current state of the Finnish infor-mation society, the Strategy describes changes in the na-tional and international operating environment. The Strat-egy includes a concrete implementation programme andseveral proposed measures, including parties that could beresponsible.

The main projects defined in the Strategy are:● Initiating a policy programme for reforming public-sec-

tor service structures● Increasing connection speeds for information networks

and ensuring interoperability in the information societyinfrastructure

● Ensuring that the conditions for lifelong learning are met● Reforming the rules for working life and developing

leadership and supervisory work● Reforming the innovation system● Developing the copyright system further● Promoting digitalisation of business in SMEs● Having an influence internationally, especially at the EU

level, and co-operating with Asian countries and neigh-bouring regions

In addition to the main projects, the Strategy includes 72proposals for measures intended to ensure Finland’s trans-formation from an industrial society to an internationallyattractive, human-centric, and competitive knowledge andservice society. The Strategy includes an implementationprogramme and a number of very concrete measures andtargets for 2015 – for example, households and enterprisesgenerally will use connections with a speed of 100 Mbps,and new and renovated buildings will have fibre-optic con-nections of 1 Gbps.

The Finnish real-estate and construction cluster has a rela-tively long tradition in shaping a shared vision for all mainactors in the cluster. Joint vision work was started in 2000,and the latest update report, Kiinteistö- ja rakennusklus-terin visio 2010, Strategiapäivitys, was published in 2005.The report lists the main development trends and evaluateshow the earlier visions have become reality. The reportlists as strong trends:● Internationalisation getting faster and deeper● Services growing and networking● Information management becoming a more and more

important success factor● The importance of energy- and eco-efficiency growing

● In the vision, ICT has a significant role.

New Business Opportunities for Finnish Real Estate andICT Clusters (2005) is a report on a two-phase pre-study toanalyse the trends in the real property business and new op-portunities provided by clustering of real-estate and tech-nology businesses. The work was supervised and spon-sored by the Finnish Association of Building Owners andConstruction Clients (RAKLI), Technology Industries ofFinland, and the Federation of the Finnish Information In-dustries, and it was funded by Tekes. The work addressesbroadly the field’s development globally, with links to theUS and Far East.

The real-estate business and companies are seen as part ofglobal change in which competition is growing tougher.Service capability and improved productivity – so-calledhyperefficiency – is a way to sharpen one’s competitiveedge.

The customers with their increasingly dynamic behaviourplay a central role in profit-making real-estate business.This has led to new concepts in workplace services andnew combinations of business infrastructure solutions. InFinland, these new concepts are still taking shape and find-ing their role in the marketplace.

Applications of new and wireless ICT are important toolsfor the real-estate business, to serve the customers andmanage the property portfolios and services. New businessmodels and networking with ICT providers are ways to fa-cilitate business performance.

The report Mobiiliteknologia rakennus- ja kiinteistö-alalla (2005), part of the VAMOS technology programme,reviews the state and potential of mobile applications. Thereport concludes that mobile technologies and their appli-cation potential are quite new to actors in the constructionand real-estate sector, and that experience is thin. Like-wise, the developers of mobile technologies lack clear un-derstanding of how the technology and markets should beclassified or how the applications and services should bedirected.

13

The report points out the gap between technology develop-ers and the potential users in the real-estate and construc-tion industry: Technology experts often do not want tolimit their thinking to everyday reality, whereas profes-sionals in this field may have difficulties in seeing the solu-tions that the technologies enable. The report points outthat the biggest challenges often are connected with thebiggest opportunities, and it recommends strongly that, infuture development projects, experts in mobile technologyand the construction industry should be part of joint teams.

The research reported on in Mobilizing Business Applica-tions (2005) was carried out as part of the NETS Technol-ogy Programme in 2004 with an objective of creating a re-alistic picture of the role of mobile technology in busi-nesses and identifying the challenges and opportunities inthe area of new mobile business applications and servicesin business use.

The main questions for the research were:● What is the current role of mobile solutions in business

use?● What are the major obstacles to utilising mobile technol-

ogies in business applications?● What are the most important (mobile) technologies in

the short term, and how will they evolve in 2005–2010?

● Where do the most promising new possibilities reside?On the basis of interviews and background analysis, thechallenges for mobile services were found to be mostlynon-technical – the available technical enablers for creat-ing new services were judged to be sufficient for mostneeds arising among the prospective users of mobile ser-vices. The real challenges were seen as being related to un-derstanding the needs of the customer and the fit of the mo-bile solutions with these requirements.

It was pointed out that introducing a mobility aspect to abusiness practice can change the business processes andthe roles of the players in a new value network. Under-standing of the structures of value chains/networks for mo-bile services was seen as a bottleneck.

The large variety of different terminals, and especially theincompatibility between terminal programming platforms,was identified as a challenge. Understanding user needsand usability issues are two very important elements for asuccessful mobile service.

In general, mobile services were considered best suited totasks with a need for real-time information without require-ments for large displays or input capabilities. Good cover-age by the mobile network was considered even more im-portant than bandwidth from the mobile business servicespoint of view.

The content and focus of the key references are summa-rised in Table 2 on pages 15 and 16.

3G Evolution – the Trusted Road Ahead (2005) is a whitepaper published by Nokia and Vodafone. This white paperdescribes rich content and services delivered by differentbroadband technologies, including both some roadmap in-formation and comparisons between different technolo-gies. Some pictures from this white paper are referred tolater on in this report.

3.3.2 Personal Interviews

A number of persons from companies, research institutes,and universities were chosen for personal interviews, with20 persons selected to provide input from a GIGA perspec-tive and 20 from a VAMOS perspective. All VAMOS-re-lated interviewees were from Finland. From the technol-ogy enablement perspective it was felt to be very importantthat persons from other areas, such as China, Japan, else-where in Europe, and the US, be included, for a moreglobal view of the developments and trends. The inter-views were conducted between mid-October and mid-De-cember 2006, and all, apart from two telephone interviews,were conducted face to face. The list of persons inter-viewed is provided in Appendix 2.

3.3.3 Web-based Survey

To complement the personal interviews, especially with re-spondents outside Finland, a Web-based survey was car-ried out in November 2006. The survey was sent to 205persons in total, both in Finland and abroad. With 83 re-sponses received, the response rate was about 40%, whichwas a very typical rate in prior experience with surveys us-ing the same methodology.

A clear majority (56) of the respondents represented com-panies, with 20 representing research institutions. It was re-garded as positive that the majority of the respondents werefrom companies, because of the target and objectives ofthis report; 36 of the respondents represented business and43 technology, which provides a good balance. The indus-tries that the respondents were evaluating had the follow-ing distribution: 25 persons evaluating business services,23 traffic and logistics, 19 telecommunications, three con-struction, and five manufacturing. Because the number ofresponses was low for construction and manufacturing, thelimitations to the statistical reliability of the results must bekept in mind when one analyses the results.

The respondent categories are presented in figures 11, 12,and 13.

14

15

Source Publisher Pub. year Origin Length Timeframe Focus Timeframeestimates

Trends

Roadmap for NetworkTechnologies andServices

Tekes 2004 Finland 107 pages 2007–2012 Roadmaps in fornetworks andservices

Yes Yes

NETS – Networks ofthe Future 2001–2005, Final Report

Tekes 2005 Finland 214 pages 2010 Technologies forwireless systems,broadbandnetworks, andrelated service andapplicationconcepts

No Yes

eMobility SRA,Version 5

WWRF August2006

Global 62 pages 2020 Technical,business, andpsychologicalelements

Some Yes

Global Visionsof a Wireless World

WWRF 2006 Global 57 pages 2017 Vision of a futurewireless world

Some Yes

Development ofBroadbandTechnologies andBusiness

Tekes 2006 Finland 780 pages Up to 2005,somepredictions

Technology andbusiness

Some Some

E-Business Logistics,Visions, Innovationsand Research

Tekes 2006 Finland 92 pages –2010– E-business logistics Some Yes

ELO – Elektronisenliiketoiminnanlogistiikka

Tekes 2006 Finland 178 pages –2010– Enablingtechnologies formanagement ofphysical materialflows

Some Some

Etätunnistuksensuuntaviivatlogistiikassa,Logistiikan RFIDRoadmap

VTTRakennus-ja Yhdys-kuntatekniikka

2006 Finland 45 pages 2006–2015 RFID applications Yes Yes

The Odyssey of theMobile Internet

The FinnishInformationSocietyDevelopment Centre

2006 Finland 252 pages – Mobile Internet andits application inpractice

Some Yes

‘The Long Tail’ Wired 2004 US 5 pages – Business modelchanges

– Yes

Kansallinentietoyhteiskunta-strategia

FinnishPrimeMinister’sOffice

2006 Finland 42 pages 2007–2015 Renewal, human-orientation,competitiveness

Yes Yes

Table 2. The content and focus of the key references.

16

20

56

7

Research institution

An enterprise

Neither of the above

Figure 11. Web-based survey – respondents by employer.

Source Publisher Pub. year Origin Length Timeframe Focus Timeframeestimates

Trends

Kiinteistö- jarakennusklusterinvisio 2010,Strategiapäivitys

RAKLI 2005 Finland 36 pages –2010– Vision of real-estateand buildingcluster, follow up ofstrategy

No Yes

New BusinessOpportunities forFinnish Real Estateand ICT Clusters

HelsinkiSchool ofEconomics

2005 Finland 63 pages Near future Proposals for jointresearch by RE &building and ICT

No General

Mobiiliteknologiarakennus- jakiinteistöalalla

Tekes 2005 Finland 23 pages Near future Project proposalsfor mobileapplications

No No

Mobilising BusinessApplications

Tekes 2005 Finland 46 pages – Challenges andopportunities

No Some

3G Evolution – theTrusted Road Ahead(white paper)

Nokia andVodafone

2005 Global 20 pages 2009 Evolution of mobiletechnologybandwidths andservices

Yes Yes

...Table 2.

The Web-based survey was implemented using the Sur-vette tool of Oy Fountain Park Ltd. In addition to freeformverbal questions and traditional multiple-choice questions,a technique we term ‘graphical evaluation boards’ wasused extensively in the survey for collecting opinions aboutthe importance of different issues. The evaluation board isa circular field. The issues that the respondent is evaluatingare presented via labels, which can be dragged with themouse in the circular field one by one. Issues that get a highimportance rating are placed close to the centre of theboard, with less important ones toward the edges.

Figure 14 shows an example of a graphical evaluationboard. The red dots are the evaluations of 22 different re-spondents for the same issue. In the example case, the ma-jority of the respondents considered the issue in question tobe rather important, while two respondents put it outside

the circles, thus giving it a very low importance rating. Thecalculation outcome for this issue would be a number rep-resenting the median of the distances of all red dots fromthe centre of the circle, which is inversely proportional tothe joint importance evaluation of this group of respon-dents for the issue being evaluated.

The evaluation board is a fast and easy way to collect sub-jective ratings for importance of issues from a number ofrespondents. The method does not require artificially ex-act answering because there is no need to input numericaldata, and the requirement for independence and compara-ble scale of the issues is not as strict as in multiple-choicequestions. In graphical evaluation, the space is used two-dimensionally, although only the distance from the centrecounts as an evaluation metric when the results are calcu-lated.

17

43

36

4

Technology expert

Business person

Neither of the above

Figure 12. Web-based survey – respondents by profession.

23

3

5

25

19

8

Traffic and logistics

Construction

Manufacturing

Business services

Telecommunications

Other

Figure 13. Web-based survey – industries evaluated.

The results from evaluation boards are converted into bargraphs by taking, for each issue in a group, the median ofthe distances of all respondents’ answers from the centre;inverting it (because small distance corresponds to greatimportance); and sorting the resulting numbers in decliningorder for presentation in a bar graph. Figure 15 shows sucha graph. The absolute value does not have a meaning as

such; it indicates only which technology or functionality isimportant. It is also worth noting that each issue is evalu-ated individually, so it is not a problem if the issues overlapor are not of similar size.

The tables describing the expected market entry of differ-ent technologies or functionalities represent the distribu-

18

RFID NFCMEM

SSIPAII-IP IPv

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Sens

or Netw

orks

Accc

elerat

ion Se

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Seman

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GPRS

Bluetoo

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O

Univers

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commun

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n plat

form

Smart

dust

SDR

XDSL

HSPA3G

EDGE

Fuel

cells

WIMAXP2

PWibr

eeUWB

Post

IPLin

ux

WCDMAPA

N LTE

Figure 15. Example bar graph – impact of technologies for the development of machine-to-machinecommunication.

Figure 14. Example of importance evaluation using a graphical evaluation board.

tion of individual opinions expressed in the Web-basedsurvey. If all respondents had placed the market entry in thesame time period, the table would have 10 asterisks in thecorresponding cell. When the opinions are distributed overdifferent time periods, the number of asterisks indicates theproportion of the evaluations selecting that period, witheach asterisk corresponding to 10% of the votes. That thesum of all asterisks is not always 10 is an effect of round-ing. An example can be seen in Table 3.

3.3.4 Workshop

In January 2007, 14 persons, with diverse backgrounds,participated in an expert workshop arranged in the latterpart of the project in order to allow the experts to commentand review the intermediate results of the project. The par-ticipants in the workshop are listed in Appendix 3.

The second target of the workshop was to identify criticalpaths and points in overall development, as well as to iden-tify opportunities that could be of interest for Finnish or-ganisations.

The workshop encouraged lively discussion and providedvaluable comments in terms of either supporting or chal-lenging the intermediate results of the project. These com-ments were considered as a matter of course in the prepara-tion of this final report.

19

ALL Alreadyin use

By 2010 By 2015 After 2015 Never

Identification and tracking ofinvestment goods based on RFID

*** *****

Identification and tracking ofconsumer goods based on RFID

** **** **

Positioning/navigation based ondigital maps and satellite ormobile systems

******* **

Biometrics used for humanidentification

** **** **

Daily use of mobile e-mail by morethan 30 % of business users

*** ***** *

Daily use of mobile Web browsing bymore than 30 % of business users

* ****** *

Table 3. Example of expected market entry of various functionalities.

4 VAMOS

4.1 Introduction

The VAMOS programme focuses on improving businessprocesses in selected industries by utilising mobile andwireless technologies. The key industries selected in theVAMOS programme are traffic and logistics, constructionand facility maintenance, manufacturing, and business ser-vices; hence, these areas were also the ones investigated inthe focus of this project. The concept of business services isa very broad one, and those of greatest interest for VAMOSare horizontal business applications. These are enterpriseresource planning (ERP), customer relationship manage-ment (CRM) (including mobile marketing), and field forceautomation (FFA). The name of the programme – VAMOS(‘Value added Mobile Solutions’) – emphasises opportuni-ties of mobile technology to add value to business pro-cesses. One of the key tasks in VAMOS is to determine thebusiness opportunities in selected industries.

The structure of the roadmap, which forms the essential re-sult of this project for each sector, is divided into four parts:● Key trends● Current situation (2007)● Forecast for 2010● Forecast for 2015

In discussing trends, it is vital to identify which are mostrelevant from a Finnish perspective, despite the fact thatglobalisation drives things in the direction that all trendssomehow affect.

Some common key drivers, enablers, and barriers in re-newal of business processes are presented in Figure 16. It isworth noticing that in many cases the same subject maywell be a driver and an enabler at the same time. Some-times, the same topic may even be both a driver and a bar-rier. It is also very important to stress that developments or

21

Figure 16. Common key drivers, enablers, and barriers in renewal of business processes.

barriers to development are affected strongly by other fac-tors than technology alone, such as politics, regulation,psychology, and marketing.

Logistics is a very broad concept and has strong ties withthe whole value chain – e.g., supply, manufacturing, traf-fic, and transport, as well as consumption. As indicated inFigure 17, this report focuses on the elements of traffic andlogistics, which are discussed in section 4.2, below, andmanufacturing, addressed in section 4.4.

4.2 Traffic and Logistics

4.2.1 Needs

Good knowledge of relevant branches of industry is be-coming very important when the target is intelligent logis-tics solutions. In this context, it is also important to under-stand that the often-required ‘one customer interface’ hastwo dimensions – the human and the machine.

It is essential to recognise in which part of the value chainthe logistics enterprise is and where it wants to be.

Warehouses are well under control at present in the logis-tics chain, but the quantity and whereabouts of property be-ing transported is not always known. This can represent10–30% of the total inventory value of the chain.

Logistics is only one function among many in enterprises,and thus development focus is limited. Enterprises havevery different needs and requirements that must be ful-filled. There are no common standards, but some recom-mendations do exist. When the large corporations deploytheir backbone IT solutions, logistical requirements are

taken into consideration only to a certain extent. The largerthe enterprise is, the more tailoring is required. That SMEstend to use ready-made packages makes integration withthese systems easier.

Needs vary greatly from one segment of the market to an-other, and also within each. Some reasons for this are:● Manner of use● Processes● Fleet size

The price points for willingness to invest in vehicle ICTsystems are estimated to be about five times higher today innorthern Europe than in Eastern Europe, due to the differ-ence in labour cost levels but also as a consequence of a dif-ferent culture of using IT. The US market for truck systemsis about five times the size of the EU market and also muchmore homogenous.

The need for using positioning varies a lot and dependsvery much also on the safety of the areas and districtswhere the transport takes place, as well as the drivers’ reli-ability.

The framework for a logistics provider can be arranged un-der three main categories – namely, the goods of the cus-tomers, the driver, and the truck or other vehicle, as illus-trated in Figure 18, below. The level of integration of sys-tems addressing these categories, both with each other andinto the logistics provider’s ERP system, remains very lim-ited – it is more a question of somewhat independent is-lands.

Information related to the customer and goods: The exactposition is typically not crucial. It still suffices to know be-tween which points the goods are. There is often an inde-

22

Figure 17. Interrelation between logistics and the value chain.

pendent system based on the Global Positioning System(GPS).

Truck information, such as speed, fuel consumption, andengine Revolution Per Minute (RPM) data: These systemstend to be truck-manufacturer-specific, and the needs ofdifferent transportation types are so different that completesolutions are very difficult to build.

Driver information consists of working hour reports, salaryinformation, etc. Some driver information is beginning tobe integrated into the truck systems also, such as workinghour reporting.

The systems still tend to be quite purpose-built for goodstransportation requirements: Digital maps and navigationare not integrated, even if they technically could be. Thereasons for this are the better usability of purpose-specificdevices and greater reliability.

4.2.2 Trends and Drivers

A key trend is outsourcing of logistics, and this has only be-gun. The outsourcing market is still growing. There are bigdifferences between the various sectors of industry in rela-tion to this; for example, the telecommunications and elec-tronics industry are very developed, while the forest indus-try is only in the very beginning of these changes. Thespeed and cycle time requirements in electronics are much

higher than in many other industries, and this has driven thechange.

The market is divided between a few large players, me-dium-size players, and small players. The consolidationand globalisation of the large enterprises and hence logis-tics players following the same trend is one key driver ofdevelopment. The different logistics chains – that is, thebig companies – have different automation of vehicles anddifferent planning, their own management systems, andtheir own standards worldwide. If the customer wantsglobal service, the choice of supplier is limited. Big compa-nies are optimising their chains, but at the same time thereare chains consisting of many independent actors.

The consolidation of logistics companies leads to polaris-ation. It is an interesting option – and feasible from a busi-ness perspective – for large logistics suppliers to serve pri-marily large customers. Smaller customers can be servedwell only if the standard solutions match.

Information technology is going to be an integrated part oftraffic infrastructure. Development will be driven by bigpurchasers, not by the transport companies. Consolidationof vehicle system suppliers is also inevitable.

Technology and business are driving factors, but one of thevery important decisive points for take-up is to determinethe human factors related to the adoption of more advancedlogistics solutions.

23

Figure 18. Level of integration between purpose-specific systems and the logistics serviceprovider’s ERP systems.

That there is much more cargo from Asia to Europe thanthe other way round has further potential to drive some in-teresting and unexpected business model changes.

Logistics centres are a new development phenomenon inFinland – examples are logistics parks in the Ring III area,Vuosaari, and Riihimäki. Similar trends were visible else-where in Europe much earlier. The current development inFinland may include a bit of logistics centre hype.

The key trends and drivers can be summarised as:● Changing business models including outsourcing and

globalisation● Ease of use

– Users who are willing to try new things are drivingchanges – the young generation is very adaptive

● Transparency requirements for all players in the valuenet

● Reliability● Requirements of a large customer for certain

functionalities, which may spread rapidly after that● Standards that are starting to be at a sufficient level● Several needs that will gradually be incorporated into

the same integrated business process● An increasing amount of ICT everywhere, with wireless

use and mobility as key features

4.2.3 Challenges and Opportunities

Challenges and Bottlenecks

The key challenge is one of holistic management. Out-sourcing requires larger entities to be managed and net-worked. Enterprises in the cluster should be capable of en-visioning the developments together.

Everybody has different systems today, with various in-house formats making interfaces expensive to implement.Within a company, there are also many different systemsthat do not work together as they could. Navigation, as anexample, is in very wide use but not integrated into othersystems. The integration is going to take a long time.

The increased amount of information that is digitally avail-able poses an increased security risk also, in the form of po-tential misuse of information (e.g., where a truck is orwhere the goods are stored). Another example in this con-text is electronic licence plates. From a technical stand-point, they could be implemented today, but privacy con-siderations may be an obstacle.

The truck manufacturers are working toward stronger inte-gration of the systems embedded in trucks and those relatedto the driver, but this transition will take time. The problemfrom the transport company’s point of view is that the fleettypically consists of several brands of trucks and that, in atransition period, several types of equipment, systems, and

business processes need to be used, making the process soexpensive that the potential savings are not achieved.

Opportunities and Business Model Changes

Outsourcing requires management of larger entities andnetworking in a holistic way, as indicated above. There isstill much efficiency to be gained, but that requires unifiedmodels, processes, and IT. Logistics is estimated to repre-sent about 17% of the gross national product of Finland,which makes it evident that the potential for efficiency andadded value is vast.

The status of traffic data is somewhat unclear: Is it publicor private? In some countries, the government is investingin traffic data, on account of a belief that the state should re-main in the value chain as a subcontractor of traffic data. Itis not likely that this mode will survive in the long run,since the same development will take place as has beenseen already with geographical information. Traffic datashould come about 15 years behind digital maps.

The market value of rapidly changing information is higherthan that of static information.

A key enabler of the development in traffic and logisticsservices is the shift of financing, including the possiblesubventions, to end-use-based models. Technology is notthe limiting factor. A considerable enabling factor in Fin-land is the strong base of networks and support of mobility.

An interesting example is dynamic follow-up on traffic,which is on its way already. Payment for the use of a roadwill be included in route optimisation dynamically. Dy-namic and complete availability of traffic data enablesprice-setting for all available routes between destinationsalso, in order to steer traffic toward optimal use of theavailable infrastructure.

Timing, however, is a crucial question: When is the benefitof a certain technology or application so great that imple-mentation makes sense? Also, some newer technologymay arise that makes the previous one obsolete too early.

Road and traffic services will be developed according tothe following model of operation: The owner of the roadnetwork contracts the traffic in a region to a company thatcharges for the services on the basis of end users’ usage.

In terms of other developments, there will be trip intermediar-ies in road traffic similar to those for air and rail travel today.In addition, new technology enables, e.g., pay-as-you-driveinsurance. Also, would there be an opportunity for horizon-talisation, with container operator and content operator?

The Finnish Road Administration has a key position in thedevelopment of traffic services. Authorities and politiciansset the pace of deployment. Numerous studies are carried

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out by public actors in Finland, but implementation of realchange is rather slow when no serious problems are clear.

Global and even European policies on transport (e.g., railtransport) are very fragmented.

The country that is first to implement an operational systemreaps benefits. Finland is well positioned due to networks’mobility support and the existing road condition monitor-ing systems.

Because of the view that the vehicle communications arenaremains very fragmented, the right approach may be onewith a universal vehicle platform, consisting of open inter-faces and standard modules. These platforms then can beused for customer-specific systems as the base on whichthe needed applications are built. There will also be verticalplayers, such as companies specialising in bus systems, andthen strong component suppliers.

4.2.4 Standardisation and Regulation

Europe is very fragmented in terms of usage and standards.While the EU is attempting some standardisation, this isdifficult and, to a certain extent, may not even be viable.Emergence of a de facto standard for traffic information inEurope would speed up the development significantly. It ishoped that this will take place.

Follow-up information handling is in the process of be-coming integrated, and the use of open database standardsis increasing.

Regulatory factors may drive technology deployment byenforcing changes in vehicle automation systems. Exam-ples of such regulatory factors include truck safety record-ers as well as breath alcohol detection and interlocks.

Environmental and energy fees will change the logisticsbusiness. Large changes in the prices of oil and emissionrights may have a huge influence. It is possible that addi-tional regulatory fees for energy usage will be imple-mented in the future.

4.2.5 Functionalities

The functionalities and timing of use for certain func-tionalities, as indicated in the Web-based survey’s results,are presented in Figure 19 and Table 4.

Tracking and tracing, identification, and positioning wereidentified as the most important functionalities for the de-velopment of the sector. The second category of impor-tance consists of seamless access to networks, navigation,and mobile terminals, closely followed by digital identityand security. Digital security and identity as an essential el-ement also in traffic was confirmed in many of the personalinterviews as well. There is an EU directive under prepara-tion concerning the release of geographical information topublic use.

It is interesting to note that telecommunications capacity assuch is not seen as one of the most important function-alities, which can be interpreted as an indication that mo-

25

Figure 19. Relative importance of different functionalities for the development oftraffic and logistics.

bile technologies already provide the required throughputfor most applications for the present and the near future.

From the timing table, a few key observations can be made.In the next few years, RFID should see a strong entry intotracking and identification of investment goods. The sameis expected for consumer goods about five years later. Posi-tioning/navigation based on digital maps and satellite(GPS, Galileo) or mobile systems is already in extensiveuse today, but the key area for development is to integratethese systems and the information content into other sys-tems. The use of biometrics for human identification is ex-pected to start becoming common by 2010 and continue itsspread.

Some of the basic functionalities in use today in this fieldare acknowledgement of delivery and information on sub-sequent delivery.

Some other additional functionalities that could be includedin the future:● Identity of the person receiving the delivery● Exceptions● Indication of whether the store at the destination is open● Real-time applications● Fuel consumption

4.2.6 Systems and Technologies

The impact of different technologies on navigation, posi-tioning, tracking, and identification functionalities was ad-dressed in the Web-based survey as presented in Figure 20.By far, RFID was seen as the technology that will have themost important impact, followed by a number of othertechnologies, such as sensor networks and near distance

communications (near field communication (NFC), Blue-tooth, Wibree). Since RFID was seen as so important bothin the Web-based survey and in the interviews, it is dis-cussed separately and in more detail below. Other key tech-nologies are addressed as well but given less emphasis.

RFID Technology

The use of RFID technology has remarkable potential intraffic and logistics, in areas such as:● Tracing and tracking

– Example: Tracking whether all required goods are in-cluded and ensuring that no goods are included thatshould not be

● Car surveillance and monitoring (e.g., an intelligent trans-port system through placement of the tag on, for exam-ple, the registration plate)

However, there remain some bottlenecks, such as:● High price● The limited number of players● That RFID needs to be embedded in products● That some trials have not shown good enough results

(new chips that are available today may be better)● That a certain number of readers is needed (cost needs to

decrease to about €20–200)

The key drivers are that:● Large retail stores such as Wal-Mart, Tesco, Marks &

Spencer, and Metro Group are requiring it of their sup-pliers

● The US Department of Defense is requiring it of keysuppliers

● Large industrial companies are requiring it of keysuppliers

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TRAFFIC AND LOGISTICS Alreadyin use

By 2010 By 2015 After 2015 Never

Identification and tracking of investmentgoods based on RFID

** ******

Identification and tracking of consumergoods based on RFID

*** ***

Positioning/navigation based on digitalmaps and satellite or mobile systems

******** *

Biometrics used for human identification * *** *** *

Daily use of mobile e-mail by more than30 % of business users

** ***** **

Daily use of mobile Web browsing bymore than 30 % of business users

* ****** *

Table 4. Timing of usage of certain key functionalities within traffic and logistics.

The technology is making its breakthrough in both indus-try and the retail sphere. Large retailers and industry areadopting RFID, which means that others need to follow.The technology will complement the bar code, not replaceit. For instance, RFID will decrease errors while increas-ing speed and traceability. Transparency, predictability,and early corrective actions are part of the key addedvalue that logistics companies can provide using, e.g.,RFID technology.

Some large industrial companies, such as ABB with itssubcontractors, have implemented RFID technology suc-cessfully, resulting in:● Better transparency● More efficient operations● Better handling of exceptions● Improved gathering of statistics

All in all, the business results were better management ofgoods and reduced stocks.

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Figure 20. Impact of the various technologies for development of navigation – positioning– tracking – identification.

Figure 21. RFID tags are read when components are delivered to thefactory (E-Business Logistics, Visions, Innovations and Research, 2006).

Typically, RFID will become common earlier in more ex-pensive products, such as drugs, high-end mobile phones,and high-priced investment goods. However, this technol-ogy is already in some use for theft prevention with a fewless expensive products.

Most new cars soon will have passive RFID tags. Tags indifferent parts of cars would provide real value in opera-tions related to sourcing, production, tracking, and mainte-nance.

28

Figure 22. RFID penetration in Finland in the logistics field (Etätunnistuksensuuntaviivat logistiikassa, Logistiikan RFID Roadmap, 2006).

Figure 23. Services using RFID tags in Japan (Development of Broadband Technologiesand Business, 2006).

Eventually, RFID will become common in every product,even daily consumer products. When the price is in therange of one cent per chip, this will be reality. Eventually,the RFID tags will be integrated into the packaging mate-rial.

However, the change of reading systems will be a ratherlong and expensive process (e.g., for readers in point-of-sale systems in stores).

A recent study within the Aino programme (Etätunnis-tuksen suuntaviivat logistiikassa, Logistiikan RFID Road-map, 2006) supports very well the findings of this project.Timing of the penetration of RFID usage as described inthe Aino programme is presented in Figure 22.

Figure 23 describes the usage today and future willingnessto use three RFID-enabled services in Japan.

A summary roadmap of RFID development is presented inTable 5.

Other Technologies

Practical, easy-to-use solutions are in use today – e.g.,WAP-based solutions are still in important use in sometransport applications, enhanced with extended GeneralPacket Radio Service (GPRS) capabilities in some sectorssince the beginning of the millennium. Upgrades to moremodern technologies are not performed, because of thehigh transition costs.

The usage conditions in the Finnish climate are harsh, withlarge temperature changes, which provides both a chal-lenge and an opportunity to develop robustness. The lackof Global System for Mobile Communications (GSM) cov-erage in a sparsely populated country such as Finland was abottleneck earlier on but not anymore.

Newer vehicle systems being introduced in 2007 tend to beoperator-independent, which provides the opportunity touse the most cost-efficient communications option. There

is greater bandwidth, depending on where Enhanced DataRates for GSM Evolution (EDGE) and 3G access are avail-able. More functionalities are being integrated on a contin-uous basis. One of the main ideas continues to be that mostof the inputs are handled automatically, without the expen-sive use of, e.g., driver resources.

The Digita Flash Orthogonal Frequency Division Multi-plexing (OFDM) network will bring Wireless Local AreaNetwork (WLAN) use to public transport vehicles in April2007. Through this, access to the Internet can be providedto passengers.

New-generation GPS will bring another frequency. TheGalileo project has stimulated civil GPS development. Bythe end of 2008, all Galileo satellites will be up, and thesystem is expected to be operational in 2010. Also, As-sisted GPS, or AGPS, technology brings auxiliary informa-tion over the mobile net to improve GPS accuracy and inte-grate services. The technology is already in use. The use ofReal-Time Kinematics GPS (RTKGPS) will enable the ac-curacy of a few centimetres. By 2010, GPS will be widelyavailable in mobile phones. In 2015, it will be a standardfeature of a mobile phone.

At the same time, Micro-Electro-Mechanical Systems(MEMS) acceleration sensors are coming to mobilephones. They can complement the positioning.

Sensor technologies (for temperature, humidity, corrosion,oxygen content, etc. in addition to RFID per se) can pro-vide a great deal of added value, but implementationthroughout the logistics chain is a very long-term develop-ment, beyond 2015.

In 2010, a pan-European smartcard system for mobilephones will be available, and in 2015 commonplace. It willenable a number of payment types, such as transportationfares. Different payment modes are possible and in compe-tition with each other, examples including a purse of elec-tronic money, payment through operator billing, creditcard use, and third-party invoicing.

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2007 2010 2015

RFID

• Successful RFID trials arecompleted

• Large retail stores andindustrial companiesrequire RFID compatibilityof suppliers

• The rapid expansionphase begins

• RFID is used extensivelyin closed systems andinvestment goods

• RFID also is used in dailyconsumer productsextensively

• RFID is a dominanttechnology

• Packaging suppliers havefully integrated RFID

Table 5. Development of RFID usage in traffic and logistics.

Dedicated Short Range Communication (DSRC) is en-abling a pan-European road toll system.

Some trials with digital pens – in conjunction with ac-knowledgement of delivery – were not successful, becausethe pens were not reliable enough and the digital paper wastoo expensive.

There are companies providing platforms for professionalvehicle telematics and fleet management systems. On topof these platforms, sector-specific and company-specificapplications can then be tailored.

4.2.7 Terminals and User Interface

The terminals used are typically purpose-built standard ter-minals for, e.g., truck drivers. Illumination factors havebeen one area that has not been considered sufficientlyfrom the usage point of view.

The terminal typically has functionalities such as WLAN,RFID, bar code reader, and camera.

In the long term, more functionalities are going to be inte-grated into all terminal devices, but the use of dedicatedterminals, built for a specific purpose, probably will remaindominant.

4.2.8 Vision of the Future

The vision for the future is full transparency across thewhole value net, such that:● Tracking and tracing on its own is not sufficient

(too passive)● Exceptions and warning signals are delivered

proactively● There is the possibility of taking corrective action when

exceptions are spotted and reported early enough● The customer is informed in advance

All of the elements necessary for such solutions are avail-able today, but the question remains of having differentsystems to communicate and accumulate the relevant in-formation – for better utilisation of the existing vast quan-tity of data, which is the main bottleneck.

The vision for the future could be the following:

2010: Invoicing for all forms of transport will use the sameprinciple – you pay by the kilometre. The meter is always on.

Optimistic scenario for 2015: Finland has made the impor-tant decisions on time so that in 2010 the management ofroad traffic has moved to the same mode as air traffic.There are Finnish international business success stories inthis field. Business and concepts have been globalised.Change has begun in so many countries that the effects onnational economies start to be visible.

Pessimistic scenario for 2015: Cutting of budgets is neces-sary, recession development takes place elsewhere, and thetraffic and logistics industry withers.

The difference between the pessimistic and optimistic sce-narios is the state’s position on road payments and road op-eration contracts. If the changes in these areas are lefthalf-done, the advantages will not be actualised.

If development is favourable, traffic will take its place as asupport process for society, earning its money from sup-porting the main processes.

4.2.9 Summary

As a summary, the following can be stated:● The network needs to fulfil the basic requirements of

functionality, reliability, quality, and cost-efficiency● Several needs gradually will be incorporated into the

same integrated business process● Users should be able to use the systems – the younger

generation is very adaptive

Figure 24 describes the essentials for realisation of the vi-sion of transparency in a new, future value net within thearea of traffic and logistics: There needs to be uniformityand seamless communication between all companies andauthorities on the level of business models, processes, andIT systems.

A summary roadmap for traffic and logistics, based on in-puts and the analysis and conclusions within this report, ispresented in Table 6.

30

31

Figure 24. Realisation of the vision for the future of transparency requiresuniformity, and seamless communications.

TRAFFIC AND LOGISTICS

Key trends

• Increased need for transparency, for all players in the value net• Globalisation of customers and logistics suppliers• Large retail stores such as Wal-Mart or Tesco and large global industrial companies driving

changes through at a rapid pace• Consolidation of logistics providers

Situation in 2007

• Business and process models are rather well defined within companies• Content is only partially digitalised• Communications between the digital and physical world are sporadic

Situation in 2010

• Business and process models are defined for entire value networks• The majority of content is digitalised• Communication between the digital and physical world occurs in certain areas systematically

Situation in 2015

• Business and process models for dynamically changing value networks are defined• Virtually all relevant content is digitalised• Communications between the digital and physical world takes place systematically, and

transparency is good

Table 6. Roadmap for traffic and logistics.

4.3 Construction

Construction of infrastructure and construction of build-ings are two segments of industry with very different prod-ucts, business processes, and structure, and consequentlydifferent views on utilisation of technologies. The technol-ogies used in construction processes themselves differfrom those included in the products (e.g., buildings androads). Maintenance needs add another point of view onutilisation of technologies. In this section of the report,consideration of the use of technologies in construction in-dustries is divided into the following areas:● Infrastructure construction and maintenance● Construction of buildings

● Building automation

The connection of building automation to the constructionprocess itself is loose, because the lifetime of a building ismuch greater than that of an automation system.

4.3.1 Infrastructure

The greatest volume in the infrastructure construction andmaintenance business is in traffic networks (road and rail)that are owned by public actors and built in large projectsinvolving a substantial design effort. The products havelong lifetimes and require regular maintenance. The chal-lenges in construction and maintenance of other societal in-frastructure, such as that for electricity, water, and tele-communication networks, are largely similar but involvelower volumes.

At the core of the infrastructure cluster is the land and wa-ter structure construction field, where most production tra-ditionally has been carried out as the work of the publicsector. The structure of the industry in European countriesis in various phases of transition from state- or city-con-trolled activity to a cluster of competitive enterprises offer-ing their products and services to the owners of the infra-structure networks. In most cases, the owners are state-owned companies, cities, or other public actors.

The industry traditionally has been quite conservative, andthe availability of individual technologies is not the limit-ing factor in the deployment of new methods. As in manyother industry clusters, one crucial enabler is to first createa common language in an industry where the terminologyhas been diversified. Agreeing on common terms and sub-sequent standardisation are prerequisites for the optimisa-tion and full application of ICT in processes wherein multi-ple parties contribute to the same project.

Traditionally, the purchaser has specified in detail how theproject is to be implemented, and service providers havecompeted on the basis of unit costs. There have not been in-centives for the development of reusable product concepts.Product development culture is emerging in the industry,but it is in its early stages when compared with, e.g., that inhouse construction. At the national level, the industry ac-tively seeks standard product models that would enable au-tomated information exchange between different compa-nies working in a common value network, e.g., when de-signing, building, and maintaining a road.

Standardisation issues and also industry structure issuesseem to be less internationally focused in infrastruc-ture-building than in many other industries.

New (mobile and Web-based) technologies can offer newcommunication and participation possibilities for the citi-zens in relation to infrastructure-planning and constructionissues. They can help to speed up the process of city plan-ning by improving communication as well.

The impact of mobility in infrastructure-building andmaintenance processes is even greater than in house-build-ing because of the mobility of the building site. The powersupply of the mobile terminals is not as critical as in someother applications, because the terminals can be connectedto vehicles in most phases of the work. Robustness andease of use (including hands-free operation) are importantfactors, as is the capability for presentation of graphicaldata, such as maps and design information.

Real-time information about the status of the infrastructureis essential for management and maintenance. Timelinesand geographical coverage are more important than greataccuracy. The bandwidth in collection of real-time infor-mation is increasing rapidly. This puts pressure on infor-mation-handling processes as well.

Maintenance of the road infrastructure is closely linked tooperation issues – i.e., management of traffic. Traffic wasdiscussed separately in section 4.2.

When location information becomes commonplace in con-sumer terminals, it will be possible, for example, to havethe road users report road damage, including photographs,in real time with accurate location information.

In 2010, the automation of road-building processes willstill be in a pilot stage, but the first implementations shouldexist. In 2015, product-model-based design and implemen-tation of projects will be in use. The advantages of mobilitycan be obtained fully only after design and maintenance in-formation is available automatically in digitised form.

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4.3.2 Construction of Buildings

Although ERP systems are commonly in use by construc-tion companies, at present the physical tracking of partsand materials all the way to the building site typically is notintegrated into the system. Existing RFID technology hasnot been reliable enough to justify the investment, althoughit would bring remarkable savings and quality improve-ments to the process. Often, the environmental conditionsat building sites impose limits on the practical input oftracking data. There is a need for robust handheld terminalsfor the transactions outdoors on building sites.

In 2010, RFID tracking of products will be in common usein logistics between enterprises if the G2 standard func-tions well in use. If we must wait for G3, the breakthroughwill take longer. In 2015, RFID tags will be part of every-day life.

The use of product models is much better implemented inbuilding construction than in infrastructure. Some largebuyers already require all design work to be done on the ba-sis of product models.

Also, ERP systems are used in purchasing of materials.Links between suppliers’ product catalogues and designsystems have been built. The first trials of tracking of in-coming materials via RFID are taking place. While stan-dard bar codes – Universal Product Code (UPC) and Euro-pean Article Number (EAN) – were widely implementedfor retail product tracking in the ’70s and ’80s, no commonbar code standard ever was developed for building materi-als. The industry is searching for ways to migrate to pro-cess-based operation from its current project-by-projectapproach. Here, RFID standards may be an enabler. It isexpected that in 2010 the first pioneers will have buildingsites where the incoming products are identified digitallyand linked to the maintenance systems. In 2015, this proce-dure should be commonplace, except perhaps for the siteswith the worst weather and environmental conditions. Theportability, weather-resistance, usability, and reliability ofthe terminals are essential – there is a need for ‘military-grade equipment with civil pricing’.

The advantages of having online up-to-date design infor-mation available on the building site are clear; old versionsof drawings, omissions in designs, and misunderstandingsof the intention of the designer are frequent, and good ver-sion management, perhaps in concert with an online visualcommunication link to the designers, would pay off early.

Control of access to the construction site and recording ofthe tasks accomplished are mobility-based functionalitiesthat will find use in construction-related industries.

4.3.3 Building Automation

Much of the available automation technology, mostly de-veloped first in industrial applications, would be useful inhouses. There is use for traditional automation in the moni-toring and control of the basic parameters and supplies ofhouses. The concept of intelligent building is 15 years old;only the practical implementation has been very slow.

The biggest factor slowing the application of automation inhouses is that there is no open-standard service platform toenable development of different services by independentcompanies and integration of these in the building project.Houses are built as projects, and for house-builders auto-mation is a minor issue, lumped in with electrical installa-tion work. Nobody has the incentive to develop a gen-eral-purpose platform for house automation applications.

One possible driver for the use of sensors in buildings andinfrastructure could be the legal liabilities of the construc-tor. It is not clear, however, who might be a suitable drivingparty for this development. So far, neither the industry it-self nor insurance companies have been very active.

Some applications are under development, such as electricmeter reading using GSM, but in these cases often the de-veloper tries to create a proprietary platform in line withthe earning logic for the maintenance phase.

Also, the established methods of operation in the industrywere seen as obstacles to implementation. Changes wouldcause elimination of traditional jobs and roles yet also cre-ate new ones.

Regardless of all of the structural and cultural issues thatslow down development, there is a slowly advancing trendtoward open multi-vendor platforms in building automa-tion. To quote New Business Opportunities for FinnishReal Estate and ICT Clusters (2005), “[we] assume that thetraditional building systems will become integrated andnetwork connected so that the control of systems and userservices can be designed to use a common user interface ina common backbone network of a building.”

The integration will proceed on several levels and usingvarious interfaces. Communication between building-op-erations-oriented systems serves functionalities such as:● Access control● Energy control● Safety and security● Protection against fire● Heating, ventilation, and air conditioning (HVAC)● Lighting● Lifts, escalators, and internal logistics performance● 24/7 monitoring and maintenance

33

Communication between facilities management and usersis utilised for:● Maintenance work orders and reporting● Lobby services and guest guidance● Reporting and billing

Intelligent building technology also can support the unas-sisted living of older people in their own homes.

While the buildings are designed to last 100 years, automa-tion and data processing technologies become obsolete in afew years. It is to be expected that in building automationthere will be a market for systems that are installed in exist-ing buildings in modernisation projects rather than as partof the original design.

Table 7 presents the results of the Web-based survey in re-lation to different functionalities and the timing of theirbroad implementation. In reading the results, it should beborne in mind that the number of respondents to this part ofthe survey was only three.

The views of the respondents on the use of RFID were split,some of them seeing RFID technology as being in use al-ready and others foreseeing a delay of 4–8 years before im-plementation.

At building sites, optically readable personnel identifica-tion cards are in wide use. The respondents obviously con-sidered this a sufficient level of identification, since theywere unanimously quite sceptical about biometric identifi-cation ever entering use in this branch of industry.

Key trends and developments foreseen in the constructionfield are summarised in Table 8.

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CONSTRUCTION Alreadyin use

By 2010 By 2015 After 2015 Never

Identification and tracking ofconstruction material based on RFID

****** ***

Positioning/navigation based ondigital maps and satellite or mobilesystems

****** ***

Biometrics used for humanidentification

*** ******

Daily use of mobile e-mail by morethan 30% of business users

****** ***

Daily use of mobile Web browsing bymore than 30% of business users

****** ***

Table 7. Timing of usage of certain key functionalities within construction.

Figure 25. Building systems and user services withindependent networks will be integrated in a back-bone and simplify the building network and commu-nication environment (New Business Opportunitiesfor Finnish Real Estate and ICT Clusters, 2005).

4.4 Manufacturing

4.4.1 Introduction

There have been big changes in Finnish manufacturingover the last 10 years. Most of the successful companiesoperate globally, and manufacturing has been moved closeto the customers, partly for logistical reasons and partly be-cause of manufacturing costs. The other main driver hasbeen remarkable structural change throughout the industrybut especially in manufacturing, with system suppliers be-coming a new type of player between large manufacturingcompanies and individual component suppliers. A thirdfactor, which is getting more and more important, is thelack of skilled labour and the geographical imbalance be-tween different parts of the country. Also, investments inmanufacturing have been very modest, and trust that manu-facturing can offer a competitive edge for the companiesconcerned has vanished.

In manufacturing, the electronics industry has seen re-markable improvement in productivity (2.5-fold from 1995to 2002) while other manufacturing has been almost flat.

The current thinking is very much that Finland is makingits living from R&D but manufacturing can be done glob-ally. In the long run, it is, however, impossible to be com-petitive in the total end-to-end process in the absence of

world-class technologies and competence in all parts of theprocess. Hence, choices need to be made as to which part ofthe end-to-end process should receive the focus.

4.4.2 Structure

The great structural change in manufacturing began duringthe recession in the early ’90s, when large companiesstarted to outsource their production. In the beginning, themain reasons were the reduction of fixed expenses and as-sets, but more recently other drivers have been the technol-ogies and competencies that system suppliers and subcon-tractors can provide.

System suppliers were, until the late ’90s, very much likemanufacturing departments for the big companies, but in10 years the best of the system suppliers have developedtheir production control, purchasing, engineering, and evenR&D competencies such that the customer can order acomplete product, to be designed and delivered to the endusers.

Subcontractors who earlier were delivering their goods di-rectly to the big companies now have business relation-ships mostly with system suppliers. The leading subcon-tractors have focused on certain types of manufacturingand have invested in modern machine tools, control sys-tems, and automation.

35

CONSTRUCTION

Key trends

• Interactive online access from the building site to up-to-date design information• Tracking of the flow of material and components all the way• Standardisation of the service platform layer for building automation

Situation in 2007

• Design information in drawings and enquiries by phone• ERP systems managing materials until dispatch from the warehouse, and thereafter no automatic

checking• Emerging standards not in wide use; proprietary channels for new services

Situation in 2010

• Paper drawings primary, with mobile phone cameras to check details• Completion of first pioneers’ implementation of end-to-end RFID tracking of components• Struggle related to standards: COBA, BACnet, own solutions, service-specific solutions

Situation in 2015

• Robust, easily operable handheld terminals for many building sites for online ERP-CAD• RFID-based material tracking between companies – commonplace but gaps still exist• Emergence of a clear standard, however many less dominant existing in paralell

Table 8. Roadmap for construction.

Outsourcing started in the electronics industry in early2000, when globally operated companies demanded thattheir partner companies have their own international manu-facturing facilities in the same countries and locations asthe customers. Now this development is being seen also inengineering and the machine-building industry.

Some of the strategic partnerships have been very success-ful, but there are also plenty of warning examples of badlyplanned and implemented manufacturing co-operation.

This means that we will continue to see considerable struc-tural change and the main trend will be toward insourcinginstead of outsourcing.

4.4.3 Needs and Drivers

The manufacturing field is very large and diversified, sothe needs can vary a great deal from one market segment tothe next. The needs and drivers in the electronics industryand other manufacturing are different. Also, manufactur-ing volume has a great impact. Manufacturing can be di-vided into the following main categories:● Mass production● Flexible, cost-effective manufacture of project and

low-volume products● Manufacture of demanding and more intelligent

mass-customised products

Common needs for the whole end-to-end process are:● Global operations● Technical key accounts: New products are developed in

collaboration with demanding customers so that theproduct has the right features; here, the developmentwork’s scope is much broader than in the past, coveringthe product, manufacturing methods, service, and lifecycle management

● Customer relationship management● Capability to mass-customise small-volume, high-value

products● A high technology and competence level● Competitive pricing and overall efficiency● Accuracy in delivery times and content● Flexibility● Real-time visibility and controllability of the whole

manufacturing network● Manufacturing network management● International sourcing and purchasing● Quality

Mass production in recent years has been moved close tothe customers, especially in the Far East. From the technol-ogy point of view, this means that the complexity of theproducts and the level of automation are still too low tocompete with low labour costs.

In the future, the products will become more intelligent, de-crease in size, and have miniaturised components thatmake manual assembly difficult or impossible. When theflexibility and intelligence of automated manufacturing areincreasing at the same time, the location of mass produc-tion need not depend on labour costs but instead can be cus-tomer- and market-driven.

The main needs and drivers for mass production are:● Product costs● Quick ramp-up● Quality yield

The following aspects of operations in this field will be-come more important:● Integrated enterprise management● Fully integrated. optimised design and manufacturing● Intelligent processes and equipment● Flexible decentralised operations● Plug and Play interoperability

The elements most relevant to manufacturing in Finlandare:● Flexible, cost-effective manufacturing of project and

small-volume products● Manufacturing of demanding and more intelligent

mass-customised products

Today, Finnish competitiveness in these types of manufac-turing is very much related to willingness to create bespokeproducts with a short delivery time and relatively lowprice.

Manufacturing still is based on flexibility, manual fine-tuning, and control, in spite of the fact that companies haveinvested heavily in ERP systems.

By utilising modern technologies such as integrated sales,ICT tools for design and manufacturing, RFID, and flexi-ble self-learning Plug and Play automation, Finland canbuild a real competitive edge in manufacture of small-vol-ume, mass-customised products.

The needs and drivers are:● Management of the total end-to-end process● Modelling and simulation● Flexible, fast, cost-optimised production of

mass-customised products● Improved efficiency● Manufacturing network management and control● Technology and competence level

– Plug and Play flexibility– Self-learning automation– Level of integration

– ICT

36

4.4.4 Trends

Market- and customer-driven trends in manufacturing arethat:● Global structural changes and consolidation are pro-

ceeding apace, which mean big customers, partners, andcompetitors

● Big companies are continuing to reduce the number ofdirect suppliers, and networking and network manage-ment are becoming very important

● Manufacturing in mass production will be moved closeto the customers and performed by the same global stra-tegic partners in all locations

● Other products are either mass-customised or tai-lor-made and delivered with rapid turnaround and excel-lent delivery accuracy and quality

● System suppliers take responsibility for the whole product– R&D– Engineering– International purchasing– Manufacturing

– Life cycle management

Technology- and environment-driven trends are:● Products and manufacturing that all utilise a combina-

tion of different technologies● Plug and Play automation

– Robotics– ERP

● The use of lasers (welding, cutting surface covering, etc.)● Other new joint technologies (gluing etc.)● Machine vision and digital X-ray technology

● Intelligent materials● RFID● MOEMS, flip-chip technology, bioelectronics, and

conductive plastics● Nanotech and biotechnologies● Life cycle management● Recycling● New, environmentally friendly soldering materials and

paints etc.

4.4.5 Challenges and Opportunities

Some of the main challenges and opportunities are listed inTable 9.

A key difference can be seen between developing the man-ufacturing process itself and developing more intelligentproducts, for which manufacturing needs new technologiesand competencies.

Another way of segmenting operations in the manufactur-ing industry is:● In-house production● System suppliers● Subcontractors

A third viewpoint is offered by the fact that provision ofproducts is being replaced by provision of services. Thesubject of changing business models is discussed in moredetail in Chapter 5.

37

Challenges Opportunities

• The number of layers and players inmanufacturing is increasing

• Product and manufacturing competencies aredrifting apart while activities are carried out indifferent companies and other organisations

• Big companies promote strategic partnership,but in practice price is the deciding factor

• Standards and systems still are defined for legalentities, not for the operational network (onesystem supplier can have five differentCAD/CAM systems)

• Management and development of the wholeend-to-end process is a focus

• Constant structural change takes resourcesaway from development

• The price- and cost-competitiveness of systemsuppliers and subcontractors are getting worsedue to heavy investments in technologies andcompetencies

• Networking and good network managementimprove efficiency, flexibility, and responsetime

• Real utilisation and integration of ICT andERP systems provides a competitive edge

• System suppliers have excellent potential tomake technology transfer and utilise bestpractice when working with severalinternational customers

• The level and flexibility of automation haveincreased

• Improved material flow control is enabledthrough the use of, e.g., RFID tags

• Subcontractors and spin-off companies caninnovate breakthrough technologies

Table 9. Challenges and opportunities of manufacturing.

4.4.6 Functionalities

The functionalities, their importance, and the timing forthis field as addressed here are based on the Web-basedsurvey’s results, presented in Figure 26 and Table 10.

Seamless access to the network and machine-to-machinecommunication were seen as the most important func-tionalities. After these, several functionalities occupythe same level of perceived importance. It is important to

notice that most of these ‘features’ are related more toproducts than to their manufacture. The main idea mustbe to utilise the future product features as much as possi-ble in manufacturing control and development. One ofthese opportunities is offered by RFID tags. If all mainparts, components, and modules have RFID tags, thepossibility is provided for real-time accurate materialflow control. The same tags would be used to create themachine cards (as built) as in troubleshooting and lifecycle management.

38

Seamless access to networks

Context aware communication

Machine to Machine communication

Image recognition

Camera

Telecommunication capacity

Mobile terminals

Video telephony

Telepresence

Voice recognition/control

Voice telephony

Navigation

Digital identity and security

Micro Payment

Positioning

Tracking

Identification

Power supply

Mobile Payment

Not important Very important

Figure 26. Which functionalities are important for the development of manufacturing?

MANUFACTURING Alreadyin use

By 2010 By 2015 After 2015 Never

Identification and tracking of materialsbased on RFID

**** ******

Positioning based on digital maps andsatellite or mobile systems

**********

Biometrics used for human identification ** ****** **

Daily use of mobile e-mail by more than30% of business users

**** ******

Daily use of mobile Web browsing by morethan 30% of business users

******** **

Table 10. Timing of usage of certain key functionalities within manufacturing.

4.4.7 Technologies and Competencies

Technologies and competencies must be divided into twocategories. One is related to products and the other to themanufacturing of the products. While the scope and varietyof the products are huge, the list below is based on the ma-chine-building example.

Basic objectives for future machine design are:● To develop machines and equipment that can autono-

mously, unmanned or partly unmanned operate in openinfrastructure and can communicate with other ma-chines and humans

● To develop new performance-based business modelsfurther

● To develop modern after-sales services and service busi-ness models: Service business is getting more important,but for global companies it cannot be based on localpresence in all locations; thus, fleet management, trou-bleshooting, and to some extent problem-solving mustutilise automatic, mobile, and real-time monitoring,analysis, and data transfer (also, in the future, machineswill be able to solve simple problems autonomously orbypass the problem area)

The main areas for development are:● Data collection● Diagnostics● Data processing and analyses● Man–machine communication● Service instructions● Virtual reality

● Unmanned operations moving to ‘open area’ fromthe current closed area

The technologies needed are:● RFID● Sensors● Sensor nets● Communication band use (e.g., Controller Area

Network, CAN)● Broadband● Navigation/positioning (GPS)● Ubiquitous technologies

Key drivers are:● The military industry● The automotive industry● The engineering industry (machine tools, earthmoving

machines, and other moving machines and equipment)● Japan, Germany, and the US

Key obstacles are:● Regulations● Unmanned vehicles in open manufacturing area need for

excellent automation security and reliability

Manufacturing technologies and competencies of the fu-ture can be described in a technology/competence pyramid(Figure 27), which distinguishes among spearhead (inter-national level), key (strong national level), and related(needed but can involve partnership) technologies/compe-tencies.

39

● Mass customization

● CRM

● System integration

Spearheads

Related technologies andcompetencies

Key technologiesand competencies

● Global distributionmanagement

● Modeling andsimulation

● Material technology

● Quality systems

● Financial systems ● HR systems

● R&D

● Engineering● Product datamanagement (PDM)

● Integrated systems

● Internationalsourcing andpurchasing

● Logistics

● Enterprise control

● Network management

● Assembly

● Production control

● Integration of differenttechnologies

● EDI and other digitalcommunication

● Manufacturingtechnologies and automation

Figure 27. Future manufacturing-related technologies and competencies.

4.4.8 Vision of the Future

The vision for the future for Finnish manufacturing couldbe the following:

Finland is one of the world’s leading manufacturers ofmass-customised low-volume products

The development of manufacturing is based on the identifi-cation of customers’ needs, an effective end-to-end manu-facturing process, flexibility, management of the interna-tional strategic networks, a high competence level, andcost-efficiency

In all actions, one of the objectives is sustainable develop-ment and environment-friendliness

4.4.9 Summary Roadmap forManufacturing

A roadmap related to manufacturing for three different in-dustries – machinery and engineering, wood products, andelectronics – is presented in Table 11.

A summary roadmap for manufacturing, based on inputsand the analysis and conclusions in this report, is presentedin Table 12.

40

Machinery and engineering Wood products Engineering

1980s

• Modularity• Tailoring• Flexibility• Productivity• Subcontracting (the flexibility of

capacity)

• Big companies withdrawfrom the carpentry industry

• The level of processingrises

• Investments in productdevelopment

• Support from other fields ofbusiness

1990s

• Flexibility• Improvement of capital

employed• Distribution of risk• Outsourcing of production

caused by structural changes• System suppliers

• Specialisation increases• The level of automation in

production increases• Export increases

• Strong growth• Focusing• Development of products

and production � massproduction

• Strong increase ofautomation in production

2000s

• Tailoring• Speed• Flexibility• Productivity• Development of networks• Co-operation even of

competitors

• Customer-orientedproduction is a focus

• Stocks are minimised• Networking is key

• Growth• Structural changes in

production (transfer ofproduction to countries withlow production costs)

2010 +

• Mass tailoring• Speed• Specialisation• True networking• Internationalisation of

networks

• Companies specialisestrongly

• Networking increases• Productivity grows• The technology level

increases significantly

• Stabilisation• Structural changes

Table 11. Roadmap for developments related to manufacturing for three different industries –machinery and engineering, wood products, and electronics.

41

MANUFACTURING

Key trends

• The level of integration is increasing, more focus is put on end-to-end processes, and fully integrated ERP systemsenter use not only for individual companies but for the whole network

• In large-volume and mass production, the level of automation is increasing, making the selection of productionlocation more customer-driven than labour-cost-driven

• Online real-time follow-up and management of material flow are more and more important• The intelligence of the end products produced and of the manufacturing machines and equipment is increasing

constantly (e.g., monitoring, diagnostics, and wireless M2M and M2P communication)

Situation in 2007

• Sophisticated and integrated ERP systems are in use, but these are missing the real-time monitoring andfeedback – changes still require manual decisions and actions

• Some kinds of identification and location tags are in pilot use (RFID)• Automated manufacturing systems have high flexibility, and wireless M2M and M2P communication see

increasing use in real-time performance and condition monitoring

Situation in 2010

• Sophisticated and integrated ERP systems cover whole networks, providing for real-time monitoring and feedback;some changes are made automatically and don’t need human decisions or actions

• Identification and location tags are widely used: RFID tags are left on the components, subassemblies, and completeproducts, and these convey manufacturing, performance, condition, and even recycling information

• Automated manufacturing systems have limited capability of ‘self-adjustment’; there is great flexibility in volume,product size, materials, etc.; and wireless M2M and M2P communication are commonly used in real-timeperformance and condition monitoring

Situation in 2015

• Way of operation– Wide use of virtual reality with the customer for simulation of mass-customised products– Emulator that generates the customised product structure from built and tested modules in the piloting stage– Part-automated generation of purchase orders (manufacturing, components, etc.)– Fully integrated ERP systems (real-time information available to all stakeholders)– Continuous performance and condition monitoring, troubleshooting, and some self-repair

• Manufacturing– Machining

� Automated, self-learning, and adjustable manufacturing systems (manufacturing is flexible in terms ofcapacity, size of the products and components, etc.) are used; the system can solve some maintenanceproblems automatically or bypass the problem area; the level of automation is so high that labour costsare not the driving factor for the location; and full integrated with ERP and wireless M2M and M2Pcommunication is in place

– Assembly� Volume production has flexible adjustable automation directly connected to ERP (Plug and Play);

the system allows rapid ramp-up and yield� Small-volume products still are assembled mostly manually, but PDM information can be fed wirelessly

to all places and users– Logistics and life cycle monitoring

� RFID or similar tags are used for all parts and components– Autonomic, ‘moving’ automation is in pilot use: Instead of transporting the parts and components to different

manufacturing cells, the robots move around to different locations, obtaining all product and manufacturing datavia wireless links

Table 12. Summary roadmap for manufacturing.

4.5 Business Services

4.5.1 Introduction

Figure 28, drawn from New Business Opportunities forFinnish Real Estate and ICT Clusters (2005), presents un-der the title ‘Customer Business Services’ a number of sup-port processes and services that a corporation needs tohave, and which very often are subcontracted to specialistsin each branch of industry. These services, which includetraditional legal, financial, real-estate, and HR services,have been handled since long before any computers wereused in business. This group also includes ICT services.Depending on the strategy and specialisation of each com-pany, other non-core business processes may beoutsourced as well.

Outsourced Non-core Business Processes

Companies always have sought competitiveness and focusby defining their core competencies and processes and bysubcontracting (outsourcing) non-core services to compa-nies for whom these services are the core area of compe-tence. The result is a network of specialised providers ofservices. The main limiting factors in outsourcing and net-working have been management and the related costs ofdealing with outside vendors as opposed to doing all neces-sary activities in-house. These management activities in-clude:● Finding service providers/customers● Specifying service content and level● Closing the contract

● Addressing contract risk● Guaranteeing the speed and reliability of communica-

tion between provider and buyer● Addressing transportation costs● Taking care of delivery time requirements● Handling quality assurance

Development of markets and fast, reliable communicationbetween customers and service providers increases the fea-sibility of outsourcing. The possibility of linking externalresources to value chains has grown to global scale. Gen-erally, at least bigger companies have learned outsourcing.Outsourcing of processes to specialists need not always bedriven by direct cost; external service providers can bringstandardisation, better quality, and functionality that one’sown resources do not allow.

We believe that outsourcing will continue in the comingyears and that its geographical scope will increase. Properunderstanding of how the parts of new value networks arelinked together is important and improving.

Human resource management, real-estate and location ser-vices, and ICT, where mobile value-added services willhave a significant impact, are discussed in further detail be-low.

Human Resource Management

Human resource services form the company’s link to thepersonnel and more generally to those people who maycontribute to the work of the company. The main aspects of

42

Figure 28. The role of service providers integrated with the customerbusiness (from New Business Opportunities for Finnish Real Estate and

ICT Clusters, 2005).

the operations are recruitment, management of employ-ment contracts and conditions, and development of theskills and motivation of the personnel.

The use of ICT-enabled remote work has been increasingslowly. Mobile technologies will not cause a revolution intraditional job structures but will improve the efficiencyand flexibility of information-related work. The spectrumof job types will broaden also: HR systems will support theutilisation of creativity by enabling flexibility – with thebest resources for each job, and flexibility of working ar-rangements for those who appreciate it. This will create anew increase in ‘untypical’ employment contracts. Themanagement of information security (IS) in a network ofdifferent partnerships and different levels of association ofpersons with companies will cause challenges for HR man-agement, among these being how to keep safe track of ac-cess rights of temporary employees of a subcontractor’ssubcontractor. Technological solutions for identificationand authentication of persons are available, and, e.g., bio-metric identification methods are improving. Privacy pro-tection laws will impose limits in many countries, affectingfail-safe and effective information security systems.

Security issues related to HR are a challenging part of thetotal problematic of privacy–security–trust related to newservice structures and networks. There are technologicalconcerns also. An essential enabler of business services isthe handling of digital identity and security throughout en-tire processes, covering fixed as well as mobile access tothe resources. Now providers of applications have to buildsecure access and authentication/authorisation methods ona case-by-case basis in many industries. It is likely that, by2010 more service providers will be able to provide secureaccess services for use as part of various industry verticalsolutions. This may include the technology only but alsocould be enhanced to include trusted third-party servicesfor various transactions and relationships.

In the development of mobile business process applica-tions, it is an advantage to be able to develop richer applica-tions in the PC domain with the same application develop-ment tools as at mobile client level. The present strict divi-sion between the phone world and PC world probably willdisappear.

Collaboration tools enable better teamwork over distances.Teleconferencing will be part of the standard PC environ-ment by 2010 and finally become commonplace also insmaller companies. Teleconferences will not replace per-sonal presence but, rather, enable quicker and more fo-cused meetings and support mobile work.

Real-estate and Location Services

Real-estate and location services provide the link of busi-ness processes to locations, buildings, and other man-builtphysical infrastructure. Due to a standardised approachoriginating from national surveying bodies, Geographic In-formation Systems (GIS) already are quite advanced, butthe data formats vary from country to country. The Infra-structure for Spatial Information in Europe (INSPIRE) pro-posal aims at an EU-wide standard for presentation of geo-graphic data. Whereas geographic data (in the form ofmaps) is quite well digitised, what describes buildings re-mains largely on paper alone. New buildings are designedon the basis of digital data, but, since there is no standardi-sation between constructors, the integration of geograph-ical data, building infrastructure data, and functional dataof building users will proceed very slowly.

Section 4.3 deals with construction and building mainte-nance issues in more detail.

ICT Services

ICT services provide a company with access to the rapidlygrowing world of ICT infrastructure and applications. Thetrend toward outsourcing in ICT will continue, and thoseintegrators able to take highest-level responsibility for allsystems and applications will have an increasingly largerole but also encounter fierce competition. Companies dothe outsourcing in a cost-conscious manner, but the maindriver will be the quality and reliability of service.

At the second level, providing services to system integra-tors, there is a large and growing ecosystem of specialisedvendors of applications, services, solutions, and equip-ment. Some confusion about the role of different serviceproviders in the field of information processing will con-tinue: Telecommunication operators have tried to take onmore integrator-type ICT responsibilities, leveraging themobile applications, and, e.g., financial consultants mayenter fields related to information security. The trend willbe that, as conventional business applications, mobile ap-plications, and communication infrastructure converge,there will be need for overall integrators to provide mainte-nance for all company infrastructures.

4.5.2 Vertical Business Applications

Vertical business applications are electronic services thatare broadly used in a variety of industries. For example,ERP and CRM systems are traditional business applica-tions where mobility will bring new features. Personal in-formation management (PIM) was not chosen as an area offocus for this report.

43

Enterprise Resource Planning

An ERP system presents a digitised dynamic model of theentire business process of the company concerned, includ-ing data on the actual physical flow of materials, planningtools and plans for production, and detailed monetary val-ues over the whole business process. It communicates out-ward to customers, banks, and suppliers in the form of or-ders, invoices, payments, etc. The model is used for docu-menting, monitoring, and predicting the business process.

There are two major aspects to the development and trans-formation of ERP systems – namely, increased network-ing with other members of company networks and im-proved synchronisation of the computer model with thereal world, where mobile and wireless technologies canplay a vital role.

When companies grow into networks of specialised pro-viders of different services, the ERP of a company willhave to include models of the whole network in order to fa-cilitate supply chain management (SCM). Visualisation,forecasting, and optimisation tools for networks will seeincreasing use.

Technological possibilities for mobile tracing, tracking,and identification of items will improve the timelines andaccuracy of ERP models.

Customer Relationship Management

The use of CRM systems links the business process to itscustomers by modelling the customer base and providingtools to provide customers with focused and tailored ac-tions, such as marketing messages, product offers, or fo-cused pricing. Mobile applications make the biggest im-pact in CRM through context-sensitive data processing.Privacy protection probably is going to limit combining ofstored customer data with position information and activeaddressing of mobile customers with place-dependentmessages, but user-initiated enquiries in, e.g., shoppingmalls or on the roads will be possible in a few places by2010 and commonplace by 2015.

In the Web-based survey, the following results, illustratedin Figure 29 and Table 13, were obtained. Digital identityand security, seamless access to networks, identification,and context-aware communications were seen as the mostimportant functionalities for the further development ofbusiness services.

All of the functionalities considered were seen as beingwidely adopted today or being in broad use in 2010, exceptfor mobile Web browsing and mobile e-mail, where somefurther growth is expected in 2015 still.

44

Seamless access to networks

Identification

Digital identity and security

Mobile terminals

Context aware communication

Positioning

Navigation

Machine to Machine communication

Telepresence

Power supply

Tracking

Mobile Payment

Telecommunication capacity

Voice telephony

Micro Payment

Camera

Video telephony

Voice recognition/control

Image recognition

Not important Very important

Figure 29. Which functionalities are important for the development of business services?

4.6 Conclusions on the Sectorsunder Focus

A summary of the developments in the sectors of industryconsidered in the report – i.e., traffic and logistics, con-struction, manufacturing, and business services – is pre-sented in Figure 30, below.

The overall development can be conceptualised through adescription of four layers:● Models existing only in people’s minds● Business and process models● Digital content● The physical world

The key is seamless communications across these layers’boundaries.

45

Figure 30. Conceptualised development through a description of four layers.

Business services Alreadyin use

By 2010 By 2015 After 2015 Never

Identification and tracking of investmentgoods based on RFID

****** **

Identification and tracking of consumergoods based on RFID

*** ****

Positioning/navigation based on digitalmaps and satellite or mobile systems

******** *

Biometrics used for human identification ** ******

Daily use of mobile e-mail by more than30% of business users

**** **** *

Daily use of mobile Web browsing bymore than 30% of business users

** ****** *

Table 13. Timing of usage of certain key functionalities within business services.Conclu-sions on the Sectors under Focus

The development stages and their expected timing are de-scribed in Table 14.

46

Business and processmodels

Digitised content Communicationsbetween digital and

physical world

2007 • Well defined withincompanies

• Islands • Sporadic

2010• Well defined for whole

value networks• Connection of islands in

progress• In certain areas

2015• Defined for dynamically

changing valuenetworks

• Visibility of a commonbasic level

• Systematic and withgood transparency

Table 14. Roadmap for development of the layered model.

5 Business Models, Functionality and Services,and Content

5.1 Business Models

5.1.1 Introduction

Business models are changing continuously, but more radi-cal change is occurring right now due to the stage of devel-opment of the Internet and mobility.

It is very difficult, even impossible, to pin down futurebusiness models. What is more important is to determinethe enablers and various concepts for business models. Atthe end of the day, each player must specify his own busi-ness models. Only the business model platforms and con-cepts may be defined in advance.

One of the keys for this development is the removal of bar-riers – technical, political, policy, standards, regulator-re-lated, IPR-based, etc.

What is clear is that the traditional value chains are break-ing down and new value nets including new players areemerging. This is happening in relation to both industryverticals and technologies along with technology plat-forms. In the next two sections of the report, these two di-mensions are discussed, first the business models related toindustry verticals, then technologies.

Some of the underlying key changes are a more central rolefor service business, development of digitalisation, and thecontinued effects of Moore’s law.

The WWRF describes the overall future end-to-end modelby way of the so-called Reference Cake Model forI-Centric Communications, presented in Figure 31. One ofthe important aspects of this model is the ‘I-centric’ view,in which the user – ‘I’ – is the starting point, as opposed tothat position being held by, e.g., technology or business.

47

Figure 31. Reference Cake Model for I-Centric Communications (Global Visions of a WirelessWorld, 2006).

Overall there will be a rich multitude of suppliers and us-ers, creating many business opportunities also for newplayers.

5.1.2 Industry Vertical Dimension

Business Model Changes

Media and entertainment are driving the overall develop-ment right now. The key developments are:● Digital convergence● Mobility● A truly mobile Internet

What will be the business models and rules of the game inthe future in addition to the above media and entertain-ment’s roles as drivers? Will IT rules enter the mobilityspace? Will mobility rules extend to the Internet or viceversa? These questions are very important from a Finnishindustry point of view, where the particular cluster strengthhas been in mobility.

The traditionally well-defined value chains will breakdown, and new value nets will emerge, where the value isredistributed and, while, the total value may not necessarilyincrease, increased efficiency will be achieved. Valuechains will become more straightforward, and intermediatesteps will disappear due to digitalisation; for instance,wholesale operations may disappear in certain sectors.Sometimes also new value may be created, but this is notalways the case.

New players will come from outside the existing valuechain and change the rules of the game.

Pricing models from the user perspective are crucial interms of usage penetration. If pricing is based on price perbit, there are clear barriers. If flat-rate pricing models areused, usage is encouraged and penetration rates grow.

One of the bottlenecks is pricing (for mobile roaming), andthe future will see the capacity of international connectionsagain become an important issue.

Apple’s iPod product concept is a concrete example of howan existing value chain was broken down and a new, re-shaped value net, with new players and roles, emerged. TheiPod product concept example is described in Figure 32,below. Earlier, music aggregation and selection was doneonto CD, marketed in a traditional way, and distributedmainly via stores or expensive mail-order operations. Nowconsumers decide for themselves which music they want toindividually select, and marketing and distribution occurover the Internet. The essence is that, through its iPod con-cept and iPod product itself, Apple changed the manner ofaggregation, marketing, distribution, and consumption ofmusic.

Even though the example relates to music, it is an excellentexample for illustrating the opportunity also in the sectorsfocused upon in this report.

Many of the new business concepts and models have beenvery hard or impossible to imagine in advance. One exam-ple is Habbo Hotel. Much has to do with knowledge (ornon-knowledge) of user behaviour.

Peer-to-peer traffic in, e.g., Tampere today representsabout 90% of the traffic in the networks, according to oper-ator information. This has some important implications.

48

Figure 32. How the iPod concept and product changed music aggregation, marketing,distribution, and consumption.

Firstly, peer-to-peer traffic has increased significantly; sec-ondly, this is symmetric traffic, which is not supported wellby current network technologies such as ADSL (Asymmet-ric Digital Subscriber Line); and, thirdly, much of the con-tent actually is produced by the consumers themselves.

There are examples from more traditional sectors such astraffic or construction: The maps of the pipe network underroads in Finland are being digitised, which can add com-pletely new efficiency factors as well as new earninglogics. The forest industry and related logistics form a bigopportunity in the Nordic countries to provide cost-effi-ciency and added value. Also, health care and related digi-tal information can be a remarkable opportunity for largecost savings, as well as added value.

There are vast changes in progress in enterprises. Work ex-pertise will be outsourced further not only to companies butto individuals. A transition of applications to make use ofbasic and embedded network functionalities is taking placealso.

Capabilities at different levels of CRM, such as informa-tion management, customer data, and data-mining, couldbe embedded in the network in future.

The digital world can be embedded in the physical world invarious industries: The next step is RFID, from intelligenttransport to manufacturing and after-sales services. Trac-ing may be a privacy issue in the future. At the same time,there will emerge new business models using ‘your data’ as

an example: A black box is embedded in your car and youpay for insurance on the basis of usage. In addition, an op-portunity will appear for new value-added services.

The development of business models is presented in Figure33, below. The five business model categories presented inthe figure, for a certain resource, are investment-based,time-based, usage-based, exchange-based, and free ofcharge (which can be subsidised or co-operatively based).

Typical development involves movement from invest-ment- to time-based and further on to usage-based. The re-source exchange and free models are the most disruptiveones. Also, often there are movements back from us-age-based to time-based models. The picture does not indi-cate that the development goes from left to right but that themultitude of alternatives is increasing and that certain cy-cles and patterns are common.

Another natural development is that functionalities thatused to be advanced start to become basic features and be-come free of charge or part of a basic package.

It is important to note also that sometimes a very success-ful service and business model is a bottleneck and mayprevent entry of the next wave of innovation. One oft-cited example is the very wide use of text messages in Eu-rope and that this may have been slowing down the devel-opment of some mobile Internet applications in Europe,as compared to Japan.

49

Time-based

Investment-based

Usage-based

Exchange ofresources

Name of Model:

GraphicalPresentation of

Model:

Example:

Free ofcharge

No insurance:invest in newcar if accident

Annual carinsurance fee

Car insurancefee based on

kilometres drivenand places

Exchange ofusage rightsof Fon WLAN

access

Wikipedia

Figure 33. Development of business models.

Web 2.0

‘Web 2.0’, a phrase coined by O’Reilly Media in 2004, re-fers to a perceived or proposed second generation ofInternet-based services – such as social networking sites,Wikis, communication tools, and folksonomies – thatemphasise online collaboration and sharing among users.Since then, many technical and marketing communitieshave adopted and loosely adapted the phrase.

Examples of some Web 2.0 players are presented in Figure34.

The community phenomenon includes content producedby individuals as one of its key characteristics. Otherchanges include giving software out and in exchange get-ting free access to users through the network.

Another example is Fon, which provides shared use ofWLAN connections. Though the company is viewed as aWi-Fi community and does subsidise the customised rout-ers sold in its online store, it is a for-profit company. Fonmakes money by charging a usage fee to ‘Aliens’ for daypasses, which can be used to connect to the Internet via aFon access point.

Certainly, there will be many new players entering thisfield, some of which may be very disruptive to existingbusiness models and some creating completely new busi-ness models.

In these examples, Digital Rights Management (DRM) isnot a problem, since the individuals do produce the contentthemselves and want to share it.

In the new era of the Internet, there are clearly more oppor-tunities also for smaller companies. However, the trend ofgoing for de facto standards is pushing somewhat in the op-posite direction.

Another very interesting aspect of the landscape that willchange the possibilities to provide and distribute value-added mobile solutions is the ‘long tail’ concept introducedby Chris Anderson (in Wired, 2004), described in Figure 35.

Business has tried to focus on customers and market seg-ments where sales volume per unit is high.

In the Internet-powered era, and with mobility capabilitiesadded, it will be very interesting to address the ‘long tail’from a business perspective also. The main growing oppor-tunities now may be in the long tail phase, but – not onlythat – it may mean also that the ‘body’ segment, with lesspersonalisation and customisation, may shrink.

The typical example again comes from the music world.Record shops do not want to keep CDs that sell only a fewunits. Today, with the possibility to download the musicover the Internet without high marketing and distributioncosts, suddenly the long tail becomes very attractive. Thecost per contact will go down, but the number of variantsincreases. Where the end user can create the variation, as isthe case with music purchases over the Internet, this is not aproblem.

This business value chain certainly will have an impact atleast on certain business services but also potentially on lo-gistics. Here there may exist very interesting new businessopportunities.

50

Figure 34. Examples of Web 2.0 players.

This trend may also further strengthen models of discrimi-nated pricing – i.e., the seller of a resource (product or ser-vice) may know so much about the purchaser that the sellerprices the resource on the basis of this knowledge.

Application of the long tail concept may change the dy-namics also and provide new global opportunities for com-panies and countries that are geographically further fromlarge domestic markets.

Customer Needs and Aggregators/Integrators

No existing service provider (operator) will be able to pro-vide all of the services required by customers and users.This will create networking and new business models. Bigservice providers will have to compete with people whoprovide different and specialised services.

One of the key questions from the operator’s standpoint ishow to provide the bit pipe or to grab a position in the con-tent model. On the other hand, it is a fact that the end usersdo not want to deal with too many different suppliers –there will be good opportunities for new middlemen be-tween service providers and users.

For instance, Google is active in many areas related toeasy-to-use services that, though not necessarily techni-cally challenging even with today’s technologies, mayhave an immense impact on business models nonetheless.

It may well become feasible to provide free mobile servicesin whole cities, or even nationwide, that are funded by ad-vertisement.

Web search algorithms will be crucial. The number of in-formation sources and the quantity of data are increasingall the time. Obtaining relevant information easily is key.Advanced information search technologies are vital. Rela-tively speaking, it is easier to develop business models andapply software for searching than hardware and basic tech-nologies. A good example is Google, which was very goodat adapting, with excellent timing, what was commerciallyavailable.

The information available via advanced search enginescould be sorted on the basis of factors such as:● Reliability● User profile● User motivation● User locationDifferent levels of reliability of information may be an im-portant differentiation factor in the future. This may lead tonew pricing schemes also.

From the user perspective, it would be important for the in-telligent search engines to develop at least as rapidly, pref-erably more quickly, as the quantity of digitally availableand accessible data increases. This challenge and businessopportunity is presented in Figure 36, below.

51

Figure 35. The long tail concept provides business opportunities for value-addedmobile solutions (‘The Long Tail’, Wired magazine, 2004).

Traffic and Cost Developments

Usage of the Internet has grown very rapidly over the lastfew years, driving the amount of traffic up, on average,116% per year. At the same time, revenues for transportingthe traffic have risen by only 14%. Hence, revenue per bithas declined by an average of 48% per year. This develop-ment is illustrated in Figure 37.

Society and Regulators

Society’s role in the changes will be large. Not only thestrongly developing user communities but also the authori-ties and regulators will be important.

Regulation can be a bottleneck for development when theplayground is too regulated. On the other hand, due to thenumber of unlicensed bands, there may emerge too manynetworks and also greater concern over security.

A key trend is the drive for liberalisation of spectrum use,where Ofcom, the UK regulator, remains quite visibly atthe forefront globally in terms of new business models andenabling business use of new technologies. Some exam-ples are trading, reselling, spot trading, and dynamic allo-cation of spectrum.

Many cities are planning to provide wireless access free ofcharge in their area, as mentioned earlier. Free access,funded by taxes, may become a prerequisite for attractingbusinesses and a basic service, like streetlights. In the longterm, certain sensor networks may have the same role.

5.1.3 Technology Dimension

Business models are changing also in the technology di-mension in the mobile and wireless arena. The technologyconvergence drivers for new business opportunities are il-lustrated in Figure 38.

The number of standards and technologies has increased agreat deal since 2G. Many companies in the past were ca-pable of addressing a sustainable part of the value chain bythemselves. The number of alternative and complementingtechnologies is going to grow much larger, which has cre-ated different types of business models related to bothhardware and software.

Commercially available software base platforms haveemerged, such as Microsoft, Linux, and Symbian, as wellas platforms with additional functionalities, such asNokia’s S60.

Companies are focusing also on developing multi-inputmulti-output (MIMO) platforms in radio technologies, re-lated to hardware and software both, which then are usedby companies selling their own branded products.

Also, more and more functionalities are being integratedinto the same standard chips, which makes the individualchips cheaper but at the same time increases the develop-ment cost constantly.

No-one, not even the largest companies, has the capabilityand willingness to invest in all of the relevant technologiesand products related to them. This overall trend driving to a

52

Figure 36. Search engine capability developmentv. quantity of digital data available.

Revenue/bit: -48%

Traffic: +116%

Revenue: +14%

Figure 37. Annual Internet growth rates(The Multi-Service Edge, 2005).

layered and networked approach becomes more dominant,an approach that shares risks and opportunities.

An example of the layered approach with modularity andopen interfaces in a mobile device is presented in Figure39, below.

5.2 User Behaviour

All three driving elements for a new service need to be inplace – user interest, business models, and technology, asillustrated in Figure 40, below.

Technology and business models are enablers, while userinterest is the real driver and creator of business.

Investments in examination of user behaviour are increas-ing, but it is still difficult to predict how users actually aregoing to behave. As an example, the community-type com-munications that have emerged in the last few years aresomething that was difficult to predict.

Many of the new services introduced have not succeeded,but some have.

The mobile TV trial was successful as a pilot. Youth are ea-ger to try new things, and hence the threshold for tryingnew services and applications of technology is muchlower.

53

Figure 38. The business opportunities ofconvergence in technologies.

Figure 39. High-level concept of modular design with open interfaces(Multiradio – Architectural Challenges of Mobile Devices, 8.11.2005).

High level concept: ExamplePhysical level architecture

5.3 Functionality and Technologies

A certain technology typically does enable the implemen-tation of a new functionality or, alternatively, enhanced im-plementation of an existing functionality.

Machine-to-Machine Communications

Figure 41 describes the impact of different technologies onthe functionality of machine-to-machine communications,according to the Web-based survey. Evaluated as havingthe strongest impact are All-IP and RFID.

Context-Aware Communications

Figure 42, below, illustrates the impact of different tech-nologies on the development of context-aware communi-cations, according to the Web-based survey. Personal AreaNetwork (PAN), Post-IP, and sensor networks are seen asthe most important technological drivers.

Earlier estimates concerning the emergence of con-text-aware solutions were much too optimistic. There maybe mission-critical applications related to location and po-sitioning – and here the real penetration will take much lon-ger than that of less critical applications.

In Japan, location- and position-based services are com-mon already, and they are not always regarded as con-text-aware services at all – somehow proof of how muchthey have entered everyday use.

The collection of information can happen through sensors,actively sending the information, or, alternatively, througha mobile phone or other such device. Sensors probably are

54

0

RIDF NFC

MEMSSIPAII

-IP IPv64G

Sens

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Seman

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GPRS

Bluetoo

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XDSL

HSPA3G

EDGE

WIMAXP2

PWibr

eeUWB

MIMO

Linux

WCDMAPA

N LTE

Post

IP

Fuel

Cells

Figure 41. Impact of technologies on the development of machine-to-machine communications.

Figure 40. All Three elements need to be in placeto develop new business: 1) user interest,2) business models, and 3) technology.

required before further context-based services can be im-plemented on a large scale.

Privacy is one of the key bottlenecks. One way of removingthis barrier is to have a special button to push, by which youallow information about yourself to be used. One examplein Japan is a service that is very popular and has been in usefor three years: The best train connection is sought for youon the basis of your location and where you want to go. Itseeks the alternatives and suggests the optimal one, with,e.g., the closest train station and information on where youneed to change trains.

By 2010, there will be an increased number of neweasy-to-use context-aware services, and the number will beincreased further by 2015.

Table 15 describes the anticipated usage take-up of a selec-tion of some key functionalities, based on the Web-basedsurvey responses of all respondents. Identification andtracking of investment goods will be very common by2010, while this will be reality for consumer goods by2015.

55

0

NFCDRMSIP AII

-IPIPv6 4G

Sens

or ne

twork

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Seman

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WIMAXP2

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ux

WCDMAPA

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RIDF

Figure 42. Impact of technologies on the development of context-aware communications.

ALL Alreadyin use

By 2010 By 2015 After 2015 Never

Identification and tracking of investmentgoods based on RFID

*** *****

Identification and tracking of consumergoods based on RFID

** **** **

Positioning/navigation based on digitalmaps and satellite or mobile systems

******* **

Biometrics used for human identification ** **** **

Daily use of mobile e-mail by more than30% of business users

*** ***** *

Daily use of mobile Web browsing bymore than 30% of business users

* ****** *

Table 15. Anticipated usage take-up of some key functionalities.

5.4 Content

Media and entertainment are driving much of the develop-ment right now.

Today Finland is behind the leading markets related to mo-bile media, which clearly are Japan and Korea. This is thecase despite the fact that Finland was behind only Italy inEU countries to begin commercial mobile TV services onthe basis of the DVB-H (Digital Video Broadcasting –Handheld) standard, by the end of 2006.

The re-forming of entire value chains and value nets is pro-gressing. Experience is that too early trials fail. The keycriteria are how and when to enter. It is important to followdevelopments closely and have good readiness and capa-bilities to act rapidly when the timing is right.

Today’s media use many parallel distribution channels,such as television, the Web, and mobile services. Contentproviders and pipe providers operate in a net of interdepen-dency. For fast growth, it is important for none of the play-ers in the net to be too greedy. Also, the models with sepa-rate pipe providers, such as in digital TV, have problems ofcompetitiveness: What is a decent profit for a network pro-vider? What drives efficiency? In relation to mobile TV, itmay well be that an external aggregator is necessary to fi-nally make business happen.

There will be much more content that is matched to the enduser. At the same time, production techniques that providescaling benefits for strongly customised programmes arebeing developed.

Competition for the consumers’ limited resources (money,time, and interest) is increasing (e.g., the hit product in2006/2007 was the navigator). The future is very difficultto predict – the Internet was not mentioned in the informa-tion society programme from the early ’90s. It is, however,worthwhile to follow the user behaviour of the youth astrend-setters.

Google has had a big impact on classified ads. The futurewill see interactive advertising. An overriding question ishow the overall ad market is developing and how it isshared among the various media. The overall ad market inthe television realm has been growing in the US but actu-ally shrank recently in the UK. The business models arechanging: Google’s sales in the UK exceeded the sales ofChannel 4, where Google grabbed all of the growth.

The digital home, which may have an immense impact,starts with different user groups and places. The ‘play cor-ner’ and workplace are connected to the Net already, andthe sofa soon will be. The impact of change has only begun.

Some drivers for the digital home are:● Surveillance and security● Digital cameras – still and video● Media PCs● Children and robots● Ease of use● Energy savings● What the neighbours have

A concept of globalisation and aggregation will emerge:‘Google TV’ will arrive, with 90% being the same globalcontent and 10% localised by country.

Due to the increased capacities that digitalisation providesin distribution, there is not going to be a need for licencesfor TV in the future. Aggregators who work under a licencemay be in a very difficult position.

From the media perspective, the key questions are who hasthe ‘ownership’ of the customer in the future and whichrole is selected, among pipe provider, simply providing theconnections; content provider, producing real content; oraggregator, combining content addressed to differentgroups of end users. The expression ‘ownership’ in thiscontext refers to the position of the player with the greatestimpact on the customer and the decisions that the customermakes. This is illustrated in Figure 43, below. The contentproviders are likely to have a very strong role. Also adver-tisers will have a very strong role, especially when theystart to know more and more about the individual consumerand the ads actually include a great deal of useful informa-tion.

56

Figure 43. The roles and customer ownershipin the media business.

5.5 Roadmaps

An overall summary roadmap based on all inputs and anal-ysis within this roadmap update project has been developedand summarised in Table 16 in relation to business models.

57

BUSINESS MODELS

Key trends

• Current value chains are falling apart, and value nets are being formed with the value capturing redistributed• Intermediate players may lose their role if sustainable value is not created or alternative approaches introduced• Consumers and media are driving many changes, with, e.g., content creation• The number of services that are perceived as free of charge is increasing• The number of distinct technologies existing and emerging is increasing

– Not even the largest companies have sufficient resources or willingness to invest in all technologies:Horizontalisation of technologies will occur, with different commercial technology platforms andplatform layers emerging

• People will continue to want to communicate• Moore’s law will continue to apply• The technological possibilities are greater than the capabilities for business use – strong technology push• The users are even slower to adapt technology• This gap is increasing all the time

Situation in 2007

• Existing value chains are breaking down, and intermediate players are losing their position– Examples are travel agencies and music and film retailers

• New players have emerged to capture value in the value net (e.g., Yahoo and Google)

Situation in 2010

• Many of the existing value chains have broken down• Much of the new value is created by consumers or user communities themselves, and some of the value has been

adapted and utilised by businesses• New strong players have emerged, really able to provide value to businesses and end users

Situation in 2015

• Transition from ‘old-fashioned’ value chains to true value nets has taken place in most areas• Platform economics have emerged – multidimensional platforms that serve many purposes and

are being funded from several directions• Much new business is based on originally consumer-developed value• Digital Rights Management issues have been solved, through either a standard or a de facto model of operation,

and there may well be two groups, those who pay for the service and get some extra benefits andthose who are satisfied with a basic offering that is free of charge

Table 16. Roadmap for business models

6 GIGA

6.1 Introduction

The areas of focus of the GIGA programme are wireless ac-cess, seamless networking, network support, and telecom-munications business, especially new business models andvalue chain evolution.

In order to serve these focus areas and to be able to identifykey differences from the previous roadmap, this chapterhas been structured to address, by section, radio access,networks, devices (previously called terminals), and secu-rity (the latter being given separate consideration on ac-count of its increasing importance).

Each section concludes with a roadmap, which is struc-tured in the same way as in the VAMOS section of the re-port – i.e., into the following four parts:● Key trends● Current situation (2007)● Forecast for 2010● Forecast for 2015

The chapter is rounded out with a summary of ‘hypecurves’, for each of the years 2007, 2010, and 2015, respec-tively.

The timescales forecast do depend on technological devel-opments but very much also on legislative, IPR, and busi-ness model issues.

The subjects of business model and value chain evolutionhave been presented in Chapter 4 because of the great manyintersections with the VAMOS programme.

6.2 Radio Access

6.2.1 Definition of Terms

The number of radio technologies and standards used isconstantly on the increase, and at the same time the termi-nology is not unified.

The 2G GSM standard was defined very well, and therewas a quite common view, especially in Europe, that theevolution would simply be to 3G and then 4G. The realityafter 2G has been much more fragmented, and 3G andWCDMA – one of the 3G standards – is only one of the ra-dio access technologies being used.

In moving further on to the future, it hence has become im-portant to define the terminology after 3G. The WWRFspeaks of ‘Beyond 3G’, abbreviated ‘B3G’, or even moreabout a Future Wireless World, describing the fact thatthere will coexist many different standards and technolo-gies. This evolution is illustrated in Figure 44.

It is important also to recognise that there are some geo-graphical differences in the vocabulary used. In Japan andespecially Korea, it is common to speak about 4G in refer-ence to all future technologies, including, for instance, theWiMAX (Worldwide Interoperability for Microwave Ac-cess) standards.

In North America, the vocabulary used for the subject iseven less clearly defined, and by ‘4G’ or even ‘5G’ compa-nies might, from a marketing perspective, be referring to,for instance, WiMAX.

International Mobile Telecommunications – Advanced(IMT-Advanced) is a concept used by the InternationalTelecommunication Union) (ITU) for mobile communica-tion systems with capabilities that go further than those ofIMT-2000. IMT-Advanced previously was known as ‘sys-tems beyond IMT-2000’.

In this report, the WWRF definition is the main one that isused.

59

Figure 44. Evolution of radio technology definitions.

6.2.2 General

Some general assumptions applied are that:● Moore’s law will continue to hold for the foreseeable fu-

ture, with performance doubling every 18 months andpacking density continuing to increase, but ever greaterR&D spending will be needed, giving chip manufactur-ers a larger piece of the pie

● Everything that can be digitalised will be● Everything that can be wireless will be done wirelessly● Fixed lines always will be faster than mobile, but speed

of radio access will not necessarily be a showstopper formost applications

● Cell size will decrease continuously, bringing new op-portunities all the time

● Many interesting mobile applications are very close tobeing able to attract users; the response speeds have be-come sufficient, the user interfaces have become better,and functioning business models have emerged – oneexample is services based on local digital maps

6.2.3 Regulation

Today, frequency bands are divided into fixed segments al-located for different usage. However, the frequencies couldbe dynamically allocated, with only a rough regulationframework. New technologies support this approach. Thisconcept could become reality in the timeframe of 2010–2020.

6.2.4 Geographical Differences

Japan and the EU are rather close in terms of standardisa-tion related to radio access technologies. One of the biggestdifferences is that the EU puts much more focus on roam-ing functionalities, due to the region’s geography consist-ing of many, rather small countries.

Because it is a small and densely populated area, Japan iseager to deploy 4G, while the EU wants to reap returnsfrom the 3G investments first.

The Asian and European roadmaps and standardisation ef-forts are well synchronised in terms of the most importantquestions, while North America has a different traditionand does not recognise as strongly the need for standardsand harmonisation.

6.2.5 Bit Rates, Mobility, and NetworkStructures

In B3G and by 2017 in the Future Wireless World, as statedby the WWRF, the target for stationary bit rates is 1 Gbpsand for full-mobility wide area network applications is 100Mbps. It will be difficult to get significantly beyond theserates at reasonable cost.

There are more free frequencies at higher rates, whichmean in practice that repeater stations will become morecommon.

Digitalisation of homes will be a major change. Homes willbe connected to networks, and in the homes there will benetworks. One of the key questions is related to the busi-ness models and what the operators’ business will be.

Concepts of integrated ‘home base stations’ probably willemerge, with a multitude of radio technologies integrated.The transport to the home employs, e.g., ADSL, and in thehomes the concept provides Internet connections, digitalTV, etc. If the service is priced on a fixed-fee basis, therecan be strong growth of usage and new services. Exampleapplication might be photos that can be transferred auto-matically from the camera device to the storage and view-ing devices. These applications may open up many oppor-tunities for SMEs to develop new business.

6.2.6 New Radio Concepts

The importance of ‘cognitive radios’ will increase. The ter-minal or base station searches for the most suitable avail-able radio bandwidth and communications protocol, afterwhich the use of the communications path starts. This willhappen first in the ‘infra’ part of radio networks, because ofsize, power consumption, and price drivers. Cognitive ra-dios will coexist with the current radio environment. Thefirst cognitive radios applied in real networks may becomereality after 2015.

Software-defined radio (SDR) or multiradio refers to radiocommunication systems using software for the modulationand demodulation of radio signals. It does bring importantadditional advantage despite the fact that radio frequencyelements already are integrated on silicon. The radio accessmethod is changed simply via software. With the samehardware, different radio solutions can be implemented.This approach comes from the applications direction. Thetrend started from the infra side; e.g., High Speed PacketAccess (HSPA) upgrades in the infrastructure typicallywere pure software upgrades. The infra area is physicallylarger as well as more expensive, which has been the keydriver for use of this approach there first. Other views havebeen presented, which claim that SDR never will becomevery important.

In the wireless communication systems context, MIMO re-fers to the use of an array of antennas (i.e., multiple anten-nas) at both the transmitter and receiver. For the last de-cade, MIMO has been of increasing interest in research,and it will become even more important on account of themany different radio access technologies that will be usedin mobile devices.

Also, semantic technologies are going to emerge over thenext five to 10 years.

60

6.2.7 Key Radio Technologies

Wide Area Technologies

The deployment of WLANs will continue, and there willbe WLANs in all hot spots. The WLAN standard is livingand evolving. No major changes to the current approachbefore 2010 are expected. Operators will not disappear, de-spite WLANs becoming more common, since somebodyneeds to take care of and run the networks. There willemerge new operators, since WLANs are not of prime in-terest to incumbent operators. Here WLANs are positionedto be part of wide area networks but naturally also have arole in short-range communications.

The direct derivatives of 3G are HSPA and Long-TermEvolution (LTE). Often, HSPA is divided further, for sepa-rate consideration of downlink and uplink, into HSDPAand HSUPA, respectively. For downlink, HSPA reaches14 Mbps, and 1.5 Mbps for uplink, while LTE will go up to100 Mbps. Even if not yet widespread, HSPA access is de-ployed already. The first LTE systems will be on the mar-ket in about 2012 and in extensive use by 2017.

The WiMAX technology is increasing in importance. Oneof the WiMAX drivers is that operators are not necessarilygoing to get the required 3G licences. The use of WiMAXwill complement 3G and its derivatives.

It is claimed that WiMAX is cheaper than HSPA and LTE,because the original design criteria and selected compo-nents make it so. Some have expressed the view that build-ing WiMAX infrastructure will not necessarily be cheaperthan 3G, HSPA, and LTE at all, when the whole network isconsidered and the economies of scale of 3G, HSPA, andLTE are taken into account. Fixed WiMAX is alreadyspecified and available on the market, and WiMAX withmobility soon will be introduced to the market.

The key differences from WLAN are better mobility andsecurity; WiMAX could become the Internet accessmethod for more rural areas as well.

Code Division Multiple Access (CDMA) technologiesseem to be slowly disappearing.

Flash-OFDM-based solutions operating at 450 MHz havebeen introduced, but they probably will be rather expen-sive, particularly because of not achieving economies ofscale. These technologies have their strongest support inthe US. Some Flash-OFDM networks have been deployedin Europe, one of them in Finland.

DVB-H is a technical specification for bringing broadcastservices to handheld receivers. It was formally adopted asEuropean Telecommunications Standards Institute (ETSI)standard EN 302 304 in November 2004. The major com-petitor of this technology is Digital Multimedia Broadcast-

ing (DMB). Finland and many other European countrieshave adopted DVB-H.

Short-range Radio Technologies

Bluetooth has a very strong position in near field communi-cation, with over one billion devices using it today.Bluetooth is a radio standard and communications protocolprimarily designed for low power consumption, with ashort range (power-class-dependent: one, 10, or 100metres), based on the use of low-cost transceiver micro-chips in each device.

However, Bluetooth will recede as Wibree replaces it inmany applications. Wibree is easier to use, employs sim-pler authentication, and offers significantly lower powerconsumption. The range is about 10 metres.

Currently, NFC technology is targeted mainly for use withmobile phones. The working distance is 0–20 centimetres.

NFC could enable many new applications and uses of mo-bile phones, such as:● Car keys, house/office keys, hotel room keys, etc.● Money● Tickets – flight tickets, concert/event tickets, etc.● Travel cards● ID● Electronic wallet / smart wallet

The relative positioning in relation to working distance andbandwidth of Bluetooth, Wibree, and NFC is presented inFigure 45.

Ultra-Wideband (UWB) is a technology for transmittinginformation spread over a large bandwidth (>500 MHz)that should, in theory and under the right circumstances, be

61

Bandwidth

0.2 m 100 m

Workingdistance

Near FieldCommunications

(NFC)

Wibree

Bluetooth

Figure 45. Positioning of short-range communica-tion wireless technologies.

able to share spectrum with other users. The future of UWBis still somewhat unclear, but the technology is intended toprovide efficient use of scarce radio bandwidth while en-abling both high-data-rate Personal Area Network wirelessconnectivity and longer-range, low-data-rate applications,as well as radar and imaging systems. Licensing issues forUWB have been open. The technology will gain ground inshort-distance communication. In 2010, half of newlaptops will have UWB, and in 2015 it will be in very broaduse.

Ultra-Wideband is a good enabler for accurate positioning,with centimetre-scale accuracy without use of satellites.Wireless USB is based on the WiMedia Alliance’s UWBcommon radio platform, and it will be positioned veryclose to Wibree and Bluetooth.

As RFID technology matures, the price development willdetermine the speed of implementation. The bottlenecks liein commercialisation, materials, and production. In 2010,RFID will be in wide use, and in 2015 it will bring new ap-plications – partly intelligent environments with integratedsensor networks.

Millimetre radio technologies, which today are used in, forinstance, parking sensors of cars, are developing also, andthese may become interesting low-cost elements for indoorsensor applications. The latest development related tomillimetre radio technologies, however, is the newWirelessHD (for ‘Wireless High-Definition’) group, estab-lished in November 2006. Six large Japanese and Koreanconsumer electronics companies formed this group, whichaims to use 60-GHz radios that could carry uncompressed

high-definition video across the living room at 5 Gbps. Thecost of the technology, the maximum range of about 10metres, and the lack of penetration through walls are thekey challenges with this technology.

6.2.8 Summary and Roadmap

A summary of the take-up of different radio technologies ispresented in Figure 46, below.

Figure 47, below, describes the 3GSM (2G, 3G, and LTE)evolution path in terms of availability of technology andtypical end user bit rates. The term ‘3GSM’ is widely usedto describe the evolution from 2G to 3G and beyond.

Table 17 provides a comparison of some different technol-ogy alternatives.

It has become very clear that the path of the future is not amatter of which one technology or standard will be used forradio access but, rather, one of the coexistence of manycomplementary technologies and standards. Interoperabilitywill become even more important and crucial than today.

The positioning and coexistence of the short-range commu-nications technologies were presented above in Figure 45.

Figures 48 and 49, below, present in summary form the po-sitioning of the most important long-distance communica-tions technologies – WLAN, WiMAX, and HSPA/LTE –in relation to bandwidth, price, and mobility.

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Figure 46. Estimated take-up of different technologies by 2009 (3G Evolution – theTrusted Road Ahead, 2005).

63

Typical coveragedeployment

Voice Mobile data Broadband accesstypical speed range

3G WCDMA and HSPA Wide area coverage inurban, suburban, keyroads

Indoor coverage inmost locations

Global 2G/3Groaming; automatichandovers withGSM/EDGE

Full mobility andhandover support

Circuit switched andVoIP

Mobile use-caseoptimised applications& terminals

Interoperability

Internet applications

Practical 0.6–2 Mbps

Other BroadbandWireless technologies

Metropolitan areacoverage in urban andkey suburban areas

Indoor coveragetypically with externalantennas or dedicateddeployment

Partial mobility andhandover support

VoIP

Internet applications Practical 0.2–2 Mbps

WLAN Offices, homes,specific publicpremises andhot-zones

50…100 nodes pertypical office/hotel

Limited mobility andhandover support

VoIP

Internet applications Practical 1–10 Mbps

Table 17. Comparison of different technology alternatives (3G Evolution – the Trusted RoadAhead, 2005).

Figure 47. 3GSM evolution path (3G Evolution – the Trusted Road Ahead, 2005).

The timing of the commercial availability and usage of dif-ferent key radio technologies were evaluated in theWeb-based survey, and these survey results are presentedin Table 18.

Also, the relative impact of different technologies forseamless access to networks was evaluated via theWeb-based survey, as presented in Figure 50.

The penetration of the Internet protocol, IPv6 and All-IP aswell as WCDMA and B3G/4G were regarded as the mostinfluential technologies.

An overall summary roadmap based on all inputs and anal-ysis involved in this roadmap update project that are relatedto radio technologies has been prepared and is summarisedin Table 19.

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TECHNOLOGIES RELATED TORADIO ACCESS

Alreadyin use

By 2010 By 2015 After 2015 Never

RFID ****** **

MIMO ** ***** **

SDR *** **** *

WCDMA ******** *

UWB **** ***

NFC ** ******

Wibree ****** *

Table 18. Commercial availability and usage of key radio access technologies.

Mobility

Bandwidth

HSPA/LTE

Stationary Walking Vehicle

WLAN

WiMAX

Figure 48. Positioning of key wireless technologies– bandwidth/mobility.

Mobility

Price

Stationary Walking Vehicle

WLAN

WiMAX

HSPA/LTE

Figure 49. Positioning of key wireless technologies– price/mobility.

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RADIO ACCESS

Key trends

• The number of radio access technologies is still increasing• Many of them will coexist, each with a specific purpose• Bandwidth is increasing so that many more functionalities can be used with ease• Everything that can be done wirelessly will be

Situation in 2007

• More than a billion devices use Bluetooth• WLANs are common• 3G is widely deployed, but usage is still low• HSPA is being introduced

Situation in 2010

• Wibree complements Bluetooth• RFID has achieved strong commercial penetration• WLANs continue to have strong position• WiMAX and HSPA are in broad commercial use• The first LTE networks are deployed• Home access networks start to play a crucial role

Situation in 2015

• Relay networks between terminal devices have become more common• Radio frequencies start to become dynamically allocated (not only by fixed segment)• There is some kind of wireless connection everywhere with reasonable price and performance• Cognitive radios are in use• Stationary bandwidths (peak rates per user) start to be around 1 Gbps in hot spots and

100 Mbps in high-speed applications• WLANs and WiMAX are in broad commercial use• LTE is in commercial use with reasonable penetration rates

Table 19. Roadmap summary for radio access.

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EDGE

DVB-H

WIMAX P2

PWibr

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N LTE

Figure 50. Relative impact of technologies for development of seamless access to networks.

6.3 Networks

6.3.1 General

The GSM standard and its derivatives form a very robustbase, but the number of new and complementary technolo-gies that are in use and are yet to come is immense, and thiswill create further complexity – not just at the access levelbut also on the network level. Fixed and mobile operatorsare converging, and so are the networks as they switch overto packet-based operation standardised on Internet Proto-col Version 4 (IPv4) and Internet Protocol Version 6(IPv6).

One challenge facing future developments is that the newstandards and technologies need to fit the existing environ-ment.

6.3.2 Standards

In terms of standards, Europe and Asia seem to be moreenthusiastic, while the US typically drives for de factostandards. There is ‘no time’ to develop standards, peoplewant to go to market sooner, and thus de facto standardsbecome the rule. Standards as such probably are good forsmaller players, lacking the muscle to develop or enforcede facto standards. For end users, standards are typicallybeneficial, since then the user is not tied to one technologysupplier.

6.3.3 Network Concepts

In future, the most descriptive terminology will involvespeaking not about individual networks only but about net-works of networks. Below, some examples are described inmore detail.

The ‘MultiSphere Level’ concept introduced by theWWRF is a different and very useful concept, one that pro-ceeds from a user-centric perspective also when it comes tonetworks. Everything starts with the Personal Area Net-work; continues to the immediate environment, instantpartners, radio access, and interconnectivity; and finallyproceeds to the ‘CyberWorld’, as outlined in Figure 51, be-low. The user can have several parallel profiles, such asbusiness or private user. The concept can be expanded to asimilar path with devices in the centre instead of a person.

One of the key elements of the model is that usage needs tobe easy; i.e., the complexity is masked as in the ‘calm com-puting’ concept introduced by Xerox years ago.

The Personal Network (PN) is again a network that followsalong. It uses the devices securely, follows the user all thetime, and gets connected to other personal networks. TheFederated Networks (FN) approach involves the connec-tion of several parallel personal networks, where resourcesare shared, trusted profiles are used, etc. Authorities mayhave the right to forcefully take into use FN infrastructurein emergency or crisis situations.

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Figure 51. The MultiSphere Level Concept (The Wireless World Research Forum–Global Visions of a Wireless World, 2006).

The difference between PANs and PNs is that PANs focusprimarily on the radio access only; PAN development willbe restricted somewhat by the multitude of competing can-didate technologies and standards for wireless short-rangecommunication.

How will the networks be composed? It is not clear what anelement is. Is a terminal a terminal, or is it actually at thesame time a repeater station – i.e., a network element? Is arailway car a network?

The digital home concept is on its way; one example of anew application is secure storage for photos. The digitalhome involves not just a radio access question but a veryimportant networking change as well. Home networks willbe an important change driver, and the related changeshave only started. The key drivers for these future invest-ments will be both cost and value, not to forget security andease of use. Internet Protocol Television (IPTV) probablywill be one key application even in the near future. Thereare strong reasons to believe that IPTV could be the maindriver for the digital home also in China. It should be sim-ple enough to adapt to (also for older people), and it offers alarge screen and comfortable environment.

There soon will be – perhaps even via government regula-tions – a fibre link to almost every home in developedcountries.

There were great expectations for machine-to-machine(M2M) interaction in the mid-’90s, but then telecoms tech-nology developed much more rapidly than automation did.In 2010 to 2015, telecommunications and automationprobably are going to be convergent again. Figure 52 de-scribes the image for future utilisation of ubiquitous net-work technology (see Development of Broadband Tech-nologies and Business, 2006).

Smart dust – i.e., self-co-ordinating flocks of miniature ornano-scale robots performing tasks as a team – is an inter-esting futuristic idea, but it remains to be seen whether itever will be real. Some applications may exist in 2015; themain problems, however, are related to networking, powersupply, and eventually biodegradability.

6.3.4 Hand-over, Interoperability, andQuality of Service

The vision for the future involves networks of networks,where vertical hand-over operations (between networks)occur invisibly to the user. The quality-of-service (QoS)angle is very important here. The future will see a multi-tude of networks, due to different optimisation priorities,such as coverage, data rates, propagation, and mobility.Any network needs to be able to connect to any other.There will be a need for a lot of fast cross-layer communi-cation, and the protocols of the layers being different in-

67

Figure 52. The image of future utilisation of ubiquitous network technology (Development ofBroadband Technologies and Business, 2006).

creases complexity. For instance, the necessary securitychecks must not delay the service. Issues related to bothprotocols and business models need resolution.

The end-to-end connection must be reliable, so the QoSand performance requirements have growing importance,from a network as well as application point of view.

6.3.5 Capacity

Bandwidth between the access network and the core net-work is likely to become the next real bottleneck, due tosignificant bandwidth increases in the access network. Asricher content becomes more common and usage grows,the availability of bandwidth will become a problem. Thiseventually will lead to bottlenecks in the core networkagain. A simple rule applies: All available bandwidth willbe used in the long term.

Figure 53 shows the typical data rates needed for somecommon applications, as well as the rates provided bysome cellular technologies.

6.3.6 IP Versions and Next Generations

Deployment of IPv6 technology, which exists today, will bedependent on the changeover costs. Some of the key featuresof IPv6 are that the address space increases significantly, the‘options field’ is much broader, and some features supportmobile applications better. ‘Light’ versions of IPv6 are be-ing developed for sensor network applications.

The current IP versions have severe limitations, however.

The fundaments of IP were designed some 30 years ago.Now there are significant new needs, such as:● Mobility● Sensor network connections● Different types of networks● Different types of nodes – not only computers but, e.g.,

mobile phones and Personal Digital Assistants (PDAs)● Greater security

Today’s IP implementation is, in addition, not necessarilycost-effective; overheads are very high; multimedia appli-cations consume excessive bandwidth; and IP service hasdelays.

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Figure 53. Application data rates required and delivered by cellular technologies (The Multi-Service Edge, 2005).

Currently discussions are under way in relation to Post-IPnetwork and Next Generation Network (NGN) develop-ment, which is being standardised at ITU level. It isclaimed that the NGN, in essence, just replaces the currentnetwork with IP – serving as an extension of the telecomsnetwork.

Europe and Japan are collaborating well on the Post-IPfront, while the US seems to have somewhat differentviews. The current estimates are that the first Post-IP net-works could be operational in 2015–2020.

The network is, however, changing only gradually. ThePost-IP world is most likely to include sensors and cogni-tive and context functionalities. The networking is auto-matic and robust, and the best/easiest method of access isused. Communications in general are based on what theneeds are.

All in all, the changes in networks cannot be radical, due tothe huge existing infrastructure. Rather, the question is go-ing to be more of evolutionary networks. Obviously, alsothe software content of the networks themselves is going tocontinue increasing.

6.3.7 Competence

Competence issues are arising as well. It is increasinglyhard to gather ‘all of the experts’ (those with expertise in,e.g., security, performance, and standards) as the complex-

ity and multiplicity of solutions increases. There also is anincreasing need to remain up to date, with an ever-increas-ing pace. Thus, networking of people – even through com-munities, as described in earlier sections – becomes moreessential and is the recipe for facing the above challenges.

6.3.8 Summary and Roadmap

The Web-based survey was used also to collect views con-cerning which technologies will be most crucial in terms ofdevelopment of telecommunications capacity. From thoseof the results that emphasise B3G/4G, All-IP, LTE, andHSPA (illustrated in Figure 54, below) the conclusion canbe drawn that the radio capacities that are delivered and infull use today are not yet sufficient. It is important to note,however, that HSPA is a mature technology but has not en-tered wide commercial use yet.

The timing of the commercial availability and of the usageof different network-related key technologies was evalu-ated by means of the Web-based survey, and the survey re-sults are presented in Table 20, below. Most of the technol-ogies listed were seen as entering broad use by 2010–2015,while Post-IP network applications would become domi-nant only after 2015.

An overall summary roadmap based on all inputs and anal-ysis considered in this roadmap update project has beensummarised in Table 21 where network technologies areconcerned.

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-IP IPv64G 3G

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WIMAX P2

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Figure 54. Relative impact of different technologies for the development of telecommunications capacity.

70

NETWORKS

Key trends

• The current core and edge networks are converging (as are the operators)• The current network protocols are being replaced with IP• Network changes happen only gradually and over time• There are significant new needs to be taken into account, since the original IP was designed some 30

years ago; among these are mobility, sensor network connections, the many different types ofnetworks, and different types of nodes

Situation in 2007

• The edge networks start to become bottlenecks because of the increased bandwidthin access networks

Situation in 2010

• The first few countries no longer have a PSTN circuit-switched network• Many horizontal infrastructure platforms exist commercially, based on which system

suppliers build the products• Virtual peer-to-peer networks have increased significantly in importance• The proportion of software content continues to increase

Situation in 2015

• The first Post-IP networks will be deployed• The network is invisible to the user• There are no more PSTN circuit-switched networks• The home in developed countries will be a digital network of its own• There will be a multitude of networks of networks

Table 21. Roadmap summary for networks.

NETWORK-RELATEDTECHNOLOGIES

Alreadyin use

By 2010 By 2015 After 2015 Never

IPv6 ** **** **

SIP ****** **

All-IP * *** ****

PAN * **** **

4G *** ***** *

Post-IP ** ******

HSPA *** ***** *

DVB-H **** ***

Peer-to-peer networks ****** ** *

Semantic Web **** ****

Table 20. Commercial availability and usage of key network technologies.

6.4 Devices

6.4.1 Introduction

Mobile terminals will be transformed into multipurposedevices. Many of the traditionally fixed devices will haveradio technologies for communications purposes built in.The terminals will become repeaters or gateways for localconnectivity within networks, and they also will be embed-ded, e.g., in vehicles. Accordingly, this report speaks moreof ‘devices’ than the more traditional ‘terminals’ as the um-brella term.

The basic mobile device business is becoming rather ma-ture, but the horizontal technologies only now have startedto develop rapidly. On the infra side, the horizontal tech-nologies are a bit more developed.

Many of the technologies that were described in the sectionon radio access are obviously also relevant to the devices.Often, developments are driven from the infrastructureside, where the size and cost of the equipment are greater,meaning that the potential benefits of technological devel-opment are initially higher as well. When very small sizesneed to be reached, the development may, however, bedriven from the device direction.

6.4.2 Number of Devices

The number of mobile devices is growing at twice thespeed of PC growth. The number of subscribers will ex-ceed two billion in 2007 and three billion in 2008. TheWWRF anticipates that there will be seven trillion wirelessdevices serving seven billion people by 2017. In otherwords, there will be one thousand devices per person.

6.4.3 Usability

The mobile phone has become the single personal device,and has replaced, for instance, notebooks. People do notwant to carry many different devices with them, somultifunctional devices will be more common in the mo-bile domain, while those in the stationary domain will bemore purpose-built.

The terminals of today can do virtually anything – with in-creasing complexity, the problem starts to be ease of use.Parallel SIM cards and use of several devices will becomemore common. Devices need to update each other automat-ically, so that the same, up-to-date information is alwaysavailable.

The Post-IP approach would mean, in devices, that there isalways a snapshot of the situation and it is the changes, the

deltas, that are continuously updated. The user does not re-cognise this and sees the information as continuous, de-spite the snapshots.

Some of the persons interviewed were of the opinion thatwireless technology soon is going to begin providing themaximum ‘receiving bandwidth’ of humans (eyes, ears,brain), which means that this bottleneck of wireless appli-cations may soon be passed.

One of the continued main development needs related todevices is the further enhancement of the user interface tobecome more user-friendly.

6.4.4 Features

Wireless access is a prerequisite for most laptops today,and in the future they will employ several alternative radioaccess technologies, such as WLAN, WiMAX, and cellu-lar with radio bit rates up to and beyond 10 Mbps.

For mobile devices, more and more features will be incor-porated into the basic package and assumed to be a part ofeven the lower-cost models. As an example, some yearsfrom now positioning will be part of all mobile devices,while today this functionally is an extra feature.

Voice over IP (VoIP) and, e.g., Skype functionality will be-come common also in mobile devices.

6.4.5 New Design Criteria

No mobile devices so far have been Internet-optimised; in-stead, they have been designed with voice as the key pa-rameter. Now some manufacturers have created such de-vices, which also are called Internet Tablets.

The idea is that these Internet Tablets will ‘mobilise theInternet’. The Internet will go truly mobile and is becomingcasual. The user groups are quite different:● Middle-aged businesspeople use the device as a PC

and mobile service extension● Youngsters and the next generation use it with friends

and for chatting and music

There is an important distinction between:● Internet Tablets● ‘Wanna be’ Internet devices, such as e.g. the PC

– Smaller PCs can be made– PDAs can be made wireless

– The legacy from a landline or mobile phonecan be addressed

Internet Tablets have broadband access over a WLAN con-nection or connection via a more traditional mobile phone.

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These Internet Tablets are a threat to mobile operators, butat the same time they are going to increase the traffic in thenetworks of broadband operators in any case.

6.4.6 Platforms andArchitecture

Thus far, the internal architecture of mobile terminals hasbeen created primarily in individual sections. In future,there will be a renewed networked architecture for mobileterminals. An example is presented in Figure 39, in section5.1.3. The cost of materials in mobile devices/phones willbe only a few tens of euros. The Mobile Industry ProcessorInterface (MIPI) alliance is developing this approach withclear interfaces and protocols. For instance, the camera in-terface may be one of the first to be standardised, within thenext one or two years.

The software platforms on which future mobile devices arebuilt will be based on competing alternatives such asSymbian, Nokia S60, Microsoft, and Linux solutions. Inthe trend toward an open source platform, Linux is an obvi-ous preferred choice.

The interconnectivity between different main platforms,such as Symbian, Linux, and Microsoft offerings, cur-rently is poor, and there is a clear need for further devel-opment.

A generic picture of the horizontalisation of the architec-ture and business models for mobile devices is presented inFigure 55.

6.4.7 Power Supply

Power supply continues to be an issue with mobile devices.No revolutionary developments are likely by 2010. In2015, the majority of devices most probably still will bepowered by rechargeable batteries.

6.4.8 Summary and Roadmap

An overall summary roadmap based on all inputs and anal-ysis within this roadmap-updating project that relate to de-vices has been prepared, and the results are summarised inTable 22.

72

Figure 55. Horizontalisation of technologies in mobile devices.

6.5 Security

Information security is a subject that is relatively new andof increasing importance. Information security has been anactive research subject in universities since the early ’80s.Security issues traditionally have been handled as separateitems, while, by contrast, they should be an integral part ofall platforms, products, systems, operations, and users’ be-haviour.

Much comprising the fundamental structures and user dis-cipline is still rather weak. The shift to an integrated ap-proach to security will take time: Even if many, if not most,products today are designed to take security issues into ac-count even in the design phase, this also is needed on sys-tem level, where systems consist of several products. Thefact that there is an installed base of products and systemsthat will be replaced only slowly means that it is going totake time for an overall integrated approach to security tobecome reality.

The other very important point is that security is very much auser-level question. The identity in most cases is held by us-ers, not by devices. Users many times are the weakest link,and they need to know the risks and realities if this risk is tobe minimised. At the same time, user confidence and trust isvital, to enable fast expansion in usage of wireless services.

Security issues are becoming more and more of a financialrisk factor as well, with huge monetary risk potential. Thekey security issues are moving away from the world of hack-ers, who generally just want to be recognised, to that of pro-fessional crime, where financial benefits are the target.

Today, SIM cards and PIN codes are the cornerstones ofauthentication. In the future, identification will be more re-lated to one or a combination of several of, for instance,walking, grip, fingerprint, voice, and skin conductivity. Atype of ‘secure citizen identity’ would be an enabler formany new services and ease of use.

No matter what, IP always brings an information securityrisk, and users do not necessarily even understand this. Thebasic model of IP is that sending is easier than receiving.For instance, SPIT (spam over IP telephony) will be an in-creasingly important issue. There will be a need to splitcontact lists into a trusted and an open list. ‘Bot’ attacksmay have radical and very far-reaching financial conse-quences (Internet bots are software applications that runautomated tasks over the Internet; malicious use of thesecan involve, for example, co-ordination and operation of anautomated attack on networked computers).

Information security may actually be the key driver forPost-IP development.

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DEVICES

Key trends

• The number of mobile devices is growing at twice the speed of PC growth• Mobile devices will transform from ‘terminals’ into ‘gateways’ for local connectivity as well as

being embedded in, for instance, vehicles• Horizontal platforms continue to emerge: Symbian, Linux, Microsoft solutions, radio technology

platforms, multiradio technology platforms• Simplicity of use is the most important individual driver

Situation in 2007

• The number of mobile devices exceeds 2 billion• The first mobile devices to be designed purely to be Internet-optimised are on the market• Average prices continue to decline by 10–15% annually

Situation in 2010

• It is becoming common to use several parallel devices for different purposes; the devices updatethemselves automatically with up-to-date data

• When one is on the move, there is one personal mobile device with ample functionalitythat the user always carries

Situation in 2015

• There is radio connectivity everywhere, and the network is invisible to the user• The user interface has become significantly more user-friendly• The number of self-learning services provided is vast• Two years after 2015, according to the WWRF: “7 trillion wireless devices serving 7 billion people”

Table 22. Roadmap summary for devices.

Solving of security issues is one of the key challenges ofhome networks as a large set of functionalities becomescommon.

The Web-based survey was used also to identify the mostimportant technologies for the development of digital iden-tity and security. Included were RFID and NFC, but then

also the above-mentioned Post-IP was on the top of thislist, as illustrated in Figure 56, below.

An overall summary roadmap based on all inputs andanalysis within this roadmap-updating project that relateto security has been prepared. It is summarised in Table23.

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Figure 56. Impact of technologies for the development of digital identity and security,on the basis of the results of the Web-based survey.

INFORMATION SECURITY

Key trends

• The importance of security is increasing all the time• Because of the change in value nets, the security issues become end-to-end issues, also outside companies• The weakest link in the end-to-end chain (structures, platforms, products, systems, operations, and users) is

the target of security attacks – many times, the end user• Security issues are no longer primarily a question of hackers but about professional abuse

Situation in 2007

• Security still is handled as a separate issue

Situation in 2010

• The fundamental importance of information security has become widely understood• The complexity of security issues has increased, but there also are enhanced capabilities to address them

Situation in 2015

• Security will be proactively treated as an integral element across network, access, device, application,operation, and end user boundaries from the very beginning, not an ‘afterthought’

• Advanced identification methods, such as biometrics, have some use

Table 23. Roadmap summary for information security.

6.6 Other Areas

The commercial availability of some other relevant tech-nologies was evaluated via the Web-based survey. The re-sults of these assessments are presented in Table 24.

6.7 Hype Curves

The breakthrough of technologies on the time axis can bedescribed also via the ‘hype curve’ concept, originally in-troduced by Gartner in 1995.

Each technology goes through technology-driven positivehype, has a peak of inflated expectations, goes through atime of negative hype, and reaches a slope of enlighten-

ment – where the technology will be applied in scale bybusiness.

The timing of some key technologies was mapped in thisstudy onto the hype curve concept for the roadmap years2007, 2010, and 2015, primarily on the basis of the resultsfrom the personal interviews. These curves are illustratedin figures 57, 58, and 59, respectively.

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WiMAX

LTE

IPv6

RFID

FMI HSPA

IPv4

WCDMA

LBS

ATMBluetooth

WLANWibree

Visibility

Maturity

TechnologyTrigger

Peak ofInflatedExpectations

Trough ofDisillusionment

Slope ofEnlightenment

Plateau ofProductivity

Tracing &Tracking

GPRSEDGE

Figure 57. Hype curve concept, results for 2007.

MEASUREMENT AND OTHERTECHNOLOGIES

Alreadyin use

By 2010 By 2015 After 2015 Never

Smart dust * **** ** **

Sensor networks **** ***

DRM **** ** *

Microbial fuel cells *** **** *

MEMS * *** ** *

Table 24. Commercial availability of some other key technologies, estimated onthe basis of the Web-based survey’s results.

It is interesting to compare these results with a Gartnerresult from July 2006 (see Kauppalehti, 2.1.2007) aspresented in Figure 60. For instance, the results concern-ing RFID and IPv6 support quite well the findings of thisproject.

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Technology Peak ofInflatedExpectations

Trough ofDisillusionment

Slope ofEnlightenment

Plateau ofProductivity

WiMAX

LTE

SensorNetworks

4G

RFID

FMI

HSPA

IPv4

WCDMA

GPRSEDGE WLAN

IPv6

Tracing & Tracking

MIMOSW Radio

Visibility

Maturity

TechnologyTrigger

Figure 58. Hype curve concept, results for 2010.

Visibility

Maturity

TechnologyTrigger

Peak ofInflatedExpectations

Trough ofDisillusionment

Slope ofEnlightenment

Plateau ofProductivity

LTE

4GRFID

FMI

HSPAIPv4

IPv6

Tracing & Tracking

Post-IP

VirtualPresence

Figure 59. Hype curve concept, results for 2015.

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Figure 60. Gartner hype curve from July 2006 (Kauppalehti, 2.1.2007)

7 Conclusions

7.1 Introduction

This chapter summarises the key changes since the previ-ous roadmap report, compares the key differences on thehype curve with the information in the previous report,summarises the anticipated roadmaps, and identifies someof the critical paths and points as well as the opportunitiesrelated to them.

7.2 Key Differences fromthe Previous Roadmap

The key changes seen since the previous roadmap are sum-marised in Table 25. Because of the difference in tar-get-setting and the objectives of this project, the present re-port has discussed business-related questions clearly moreextensively than the previous roadmap report did.

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2007 2010/2015

Services

• Community-type services have grown rapidly• The number of business models has

increased, also with many free-of-chargeservices

• Many different business models coexist

Devices• ‘Devices’ is a more descriptive term

than ‘terminals’• Internet-optimised devices are on the market

• The user carries one personal mobile device• User-friendliness has developed significantly

Networks

• The number of radio access technologiesis increasing

• WiMAX has rapidly become a key technology• IP is becoming the dominant protocol• The edge network is becoming a bottleneck

in terms of capacity

• Devices function as relay networks• Some cognitive radios exist• Home networks are important change drivers• Some sensor networks start to exist

Content • The amount of individually created andshared content is increasing rapidly

• De facto rules are applied for DRM

Security

• Security still is handled as a separate issue • The fundamental importance of security iswidely understood

• Security is proactively treated as an integralelement across network, access, device,application, operation, and end userboundaries from the very beginning,not as an ‘afterthought’

Table 25. Key differences from the previous roadmap.

7.3 Hype Curve Changes

In comparison of the hype curve for 2007 created as part ofthis project with the Gartner hype curve in the previousNETS roadmap report, some key changes can be identi-fied:● GPRS and EDGE have progressed● WCDMA has progressed well● 4G has dropped away from the curve for 2007

(however, it appears again in the curve for 2010)● LTE is a newcomer on the curve● RFID was not mentioned on the previous curve

7.4 Summary Roadmaps

A summary of each roadmap is presented in graphical formbelow, in figures 61 to 68.

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Figure 61. Roadmap summary for traffic and logistics.

Figure 62. Roadmap summary for construction.

81

Figure 63. Roadmap summary for manufacturing.

Figure 64. Roadmap summary for business models.

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Wibree

Terminal relay networks

LTE

RFID

3G

Home access networks

Bluetooth

WLAN’s

HSPA

Wireless connection everywhere at reasonableprice and performance

Cognitive radios

OtherWide area networksMediumShort range communications

201520102007

Figure 65. Roadmap summary for radio access.

Figure 66. Roadmap summary for networks.

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Figure 67. Roadmap summary for devices.

Figure 68. Roadmap summary for security.

7.5 Critical Paths and Points,with Related Opportunities

The challenge many times involves moving from trial op-erations to real business, even if the trials as such have beensuccessful.

There are many examples of a trial or business concept be-ing parked or sold and then flourishing under another com-pany. The barrier is typically either simply wrong timing orthe lack of a suitable culture.

There were 13 critical paths/points identified, each ofwhich has related opportunities that should be studied andexamined further. Some of them are very practical, whileothers are more visionary in nature. These critical pathsand points, with their related opportunities, are listed in Ta-ble 26, below.

In evaluating these opportunities, it is useful to apply aframework for cycles of innovation, describing the differ-ent cycle times, in order to position the opportunities anddetermine the right timing for the opportunity and relatedinvestment in it.

The WWRF (see Global Visions of a Wireless World,2006) has a good generic model describing these cycles,which is illustrated in Figure 70, below.

Policy-related subjects have very long cycles, typicallylasting up to a decade. Network-related innovation ques-tions have medium cycle lengths, of typically about sevenyears, while terminals or devices have short cycles –namely, two years or less.

It is important to note that services, with all of the currenttechnology enablers present, can have very short cycles ofinnovation – i.e., about one year. This is why many new in-novative services may become reality rapidly, as the exam-ples of Web 2.0 have shown recently.

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Figure 69. The Challenge of Creating a Successful Process – from trials to business.

Figure 70. Model for cycles of innovation (from Global Visions of a Wireless World, 2006).

85

Critical path or point Opportunity

• The environmental/energy balance is changing • These changes will make many new things feasible

• Business is shifting toward services • Mobility is enabling this change in many cases

• Speed increases and cost decreases • In mobile solutions, this is highly pronounced

• Individual identification of mass products isgaining force

• This yields extensive cost, accuracy, and value creationopportunities

• Business processes are being reshaped • Entirely new types of business processes are enabled bymobility: Real-time road conditions, maintenance personnelmanagement, in-the-pocket Web services

• Disruption, a security issue, can affect Wall Street oreven entire influential countries

• Opportunities related to information security and informationreliability appear

• Spam over IP telephony results in disinformation andhas connection to financial impact

• SPIT filters can be used

• The oil reality appears – the oil production peak hasbeen passed, and oil is starting to become a morescarce resource

• Tele-presence and virtual reality opportunities appear

• The market economy opens borders (which maybecome closed again in cycles); this leads to lowertransaction costs

• Can this be an opportunity for a ‘faraway’ country likeFinland?

• Is the Short Message Service disappearing? • What comes instead?• How is SMS use changing?

• Ambient communications gain importance • Examples include Information ‘appearing’ on the calendar

• What are the next disruptive services?• The next killer application after mobile voice may

emerge

• YouTube – what next?• Enablers do exist• Scaling capabilities are there• Community presents opportunities• Ads have a new role – information-rich?• Pricing models and reputation can be explored• Context- and presence-related services may appear

Table 26. Critical paths and points identified, with related opportunities.

7.6 Recommendations

Some key recommendations can be summarised for thefurther work within the GIGA and VAMOS programmes.

Disruptions

It is important to be prepared for radical change and disrup-tions thus:● Be ready to ‘unlearn’● Keep abreast of what is happening in the environment● Reflect on the changes and be pragmatic● Ensure capability for fast reaction, and act rapidly

when decisions have been made

Business Models

It is impossible to envisage the exact business models ofchoice in advance, but it is important to prepare for them asenablers and determine which are the most suitable for thebusiness and company in question.

Sector-Specific Considerations

The construction, traffic, and logistics fields have a ratherdomestic focus and somewhat limited use of international

standards. The opportunity of these standards should beutilised, for Finnish companies to be at the forefront of theupcoming changes in business and business models.

All in all, open standards should be seen more as an oppor-tunity, applicable for all branches of industry.

Focus and Choices

This report had a predefined scope that was very broad; inorder to achieve concrete results in the further work of theGIGA and VAMOS programmes, it is important to have astrong focus and select some key areas in which break-throughs are being and can be achieved, such that theselater on can be utilised elsewhere.

Opportunities

The technology is not the limiting factor in many areas.There is plenty of room for business innovation and com-mercial success.

Business model changes should be seen more as an oppor-tunity for a ‘faraway’ country such as Finland than a threatin the global marketplace.

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Appendix 1

References

Roadmap for Network Technologies and Services. PetteriAlahuhta, Marko Jurvansuu, Heikki Pentikäinen,Tekes. Technology Review 162/2004.

NETS – Networks of the Future 2001–2005, Final Report.Tekes, Technology Programme 1/2005. Helsinki2005.

eMobility, Mobile and Wireless Communications Tech-nology Platform, Strategic Research Agenda, version5. Prof. Rahim Tafazolli, Juha Saarnio. August 2006.

Global Visions of a Wireless World. The Wireless WorldResearch Forum, Mikko A. Uusitalo. November 2006.

Development of Broadband Technologies and Business.GIGA Converging Networks Technology Programme2005–2010, Tekes. February 2006:Broadband in Japan. Shigetoshi Kudoh, GIGA Con-verging Networks, Tekes, TokyoFixed Line Broadband in China, Tony Wang / FinproChina, GuangzhouBroadband Internet In Korea, Yoonmi Kim / FinproKoreaFixed Broadband in the USA, Miika Nevalainen,Veijo Iivonen, Finpro USA, Silicon Valley

Wireless Broadband in China, Mikael Leinonen, FinproHong Kong

Wireless Broadband In Korea, Yoonmi Kim / Finpro Ko-rea, GIGA Converging Networks

Wireless Broadband in the USA. Miika Nevalainen, VeijoIivonen, Finpro USA, Silicon Valley

E-Business Logistics, Visions, Innovations and Research.ELO – E-Business Logistics Technology Programme2002–2005, Tekes, Editor: Heikki Kekäläinen. Tech-nology Review 196/2006, Helsinki 2006.

ELO – Elektronisen liiketoiminnan logistiikka 2002–2005loppuraportti, Teknologiaohjelmaraportti 7/2006. Tekes.Helsinki 2006.

Etätunnistuksen suuntaviivat logistiikassa, LogistiikanRFID Roadmap. Antti Permala, Ajantasaisen Liiken-neinformaation T&K-Ohjelma Aino, Aino-julkaisuja30/2006. Helsinki 2006.

The Odyssey of the Mobile Internet – the Emergence of aNetworking Attribute in a Multidisciplinary Study.Ville Saarikoski. Finnish Information Society Devel-opment Centre Publication Series, Helsinki 2006.

‘The Long Tail’. Chris Anderson. Wired magazine (on-line), issue 12.10, October 2004. Available from theWorld Wide Web at http://www.wired.com/wired/ar-chive/12.10/tail.html.

Kansallinen tietoyhteiskuntastrategia 2007 - 2015, Tieto-yhteiskuntaohjelma, Valtioneuvoston kanslia. Helsin-ki 2006.

Kiinteistö- ja rakennusklusterin VISIO 2010, Raportti 4.Vision strategiapäivitys. Arkkitehtitoimistojen LiittoATL ry, Kiinteistöpalvelut ry, Rakennusteollisuus RTry, Rakennustietosäätiö RTS, Suomen Kiinteistöliittory, Suomen toimitila- ja rakennuttajaliitto RAKLI ry,koordinaattori, Suunnittelu- ja konsulttitoimistojenLiitto SKOL ry, Sähkö- ja teleurakoitsijaliitto STULry, Teknologian kehittämiskeskus Tekes, Ympäristö-ministeriö. 23.11.2005.

Mobiiliteknologia rakennus- ja kiinteistöalalla. Jussi Ka-nerva, Harri Haapasalo, Tekes, Teknologiakatsaus187/2005. Helsinki 2005.

Mobilizing Business Applications, Petteri Alahuhta, JariAhola, Hannu Hakala, Tekes, Technology Review167/2005, Helsinki 2005.

3G Evolution – the Trusted Road Ahead. Nokia/Vodafonewhite paper. 2005.

New Business Opportunities for Finnish Real Estate andICT Clusters. Neoclusters, RAKLI, Editors: JussiKanerva, Kaija-Stiina Paloheimo. Helsinki School ofEconomics 2005.

The Multi-Service Edge, Tellabs Business SolutionsPrimer. Tellabs. September 2005.

Multiradio – Architectural Challenges of Mobile Devices,Tekes, ELMO Seminar. Kalle Kivekäs, Nokia Re-search Center, Nokia Corporation. 08.11.2005.

Gartner Hype Curve from July 2006. Kauppalehti.2.1.2007.

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Appendix 2

People Interviewed

We would like to thank all those who were interviewed during this project for their valuable viewsand contribution. The persons interviewed are listed below.

88

Surname First name Organisation

Ainali Timo NetHawk OyjGolmie Nada National Institute of Standards and Technology, USHärkönen Jorma MTV3Inoue Masugi National Institute of ICT, JapanJaakola Pekka SanomaWSOY GroupJuntti Markku Oulun YliopistoJurvansuu Marko VTTKegel Ian British TelecomKetola Kari Plenware Group OyLu Shannon B-Star, ShanghaiMäklin Martin TeliaSonera OyjMäntylä Martti Helsinki Institute for Information Technology (HIIT)Pipatti Eskoensio SanomaWSOY GroupRäty Esko Tellabs OySaarnio Juha Nokia OyjSalmelin Juha Nokia NetworksTalvitie Jaakko Elektrobit GroupUusitalo Mikko Nokia OyjVirtanen Ari Nokia OyjWright Steve British Telecom

Interviews: GIGA

Surname First name Organisation

Aalto Erkki Rakli ryArola Tomi Valmet Automotive OyHelkkula Vesa Aplicom OyHietanen Sampo TieliikelaitosHämäläinen Pekka Tekla OyjKorpela Mikko SysOpen Digia OyjLehtinen Kai Tekla OyjLiukkonen Kimmo YIT OyjLång Krister DHL Finland OyMikkonen Pekka Procomp Solutions OyNuutinen Risto Schenker OyPaananen Vesku MicrosoftPekkanen Jukka Rakennusteollisuus RT ryPermala Antti VTTRainio Antti ITS Finland rySeppä Heikki VTTSopula Jouni Schenker OySulameri Toni Forum for Intelligent Machines c/o Hermia OyTalvitie Jaakko Elektrobit GroupVuoria Aila Skanska Oy

Interviews: VAMOS

Appendix 3

Participants in the Expert Workshop

We would like to express our gratitude also to all participants who provided valuable insight on thesubject at the expert workshop held on 10th January 2007.

89

Surname First name Organisation

Frantti Tapio VTTIkäheimo Jorma NetHawk OyKillström Ulla Elisa Communications OyjMarkus Kari TekesMattila Ville-Veikko Nokia OyjMikkola Hannu Racon OyMustonen Panu Ramblas Digital LtdMäntylä Martti Helsinki Institute for Information Technology (HIIT)Nikander Pekka Sony EricssonPenttilä Matti VTTPermala Antti VTTRantala Jukka Nokia OyjSimula Timo Netcare FinlandSyyrakki Matti Tekla OyjTirri Henry Nokia OyjVirtanen Ville Tieliikelaitos

Participants

Appendix 4

Abbreviations

2G/2.5/3G/4G X Generation Mobile System3GPP 3rd Generation Partnership Project

A/V Audio/VideoAAA Authorisation, Authentication, and AccountingABC Always Best ConnectedACM Adaptive Coding and ModulationADSL Asymmetric Digital Subscriber LineAGPS Assisted GPSAMI Ambient IntelligenceAPI Application Programming InterfaceATM Asynchronous Transfer Mode

B2B/b2b Business-to-BusinessB2C/b2c Business-to-ConsumerBACnet Building Automation and Control NetworkingBAN Body Area NetworkBT BluetoothBW Bandwidth

CAN Controller Area NetworkCC/PP Composite Capabilities/Preferences ProfileCDI Content Distribution InternetworkingCDMA Code Division Multiple AccessCELTIC Co-operation for a European sustained Leadership

in TelecommunicationsCOBA Connected Open Building AutomationCOPS Common Open Policy ServiceCORBA Common Object Request Broker ArchitectureCPN Customer Premises NetworkCRM Customer Relationship Management

DAB Digital Audio BroadcastingDARPA The Defense Advanced Research Projects AgencyDBS Digital Broadcast SatelliteDEAS Interoperability Developments for Enterprise Application and SoftwareDiffServ Differentiated ServicesDMB Digital Multimedia BroadcastingDMFC Direct Methanol Fuel CellDRM Digital Rights ManagementDS/FH-CDMA Direct Sequence / Frequency-Hopping Code Division Multiple AccessDSL Digital Subscriber LineDSRC Dedicated Short Range CommunicationDVB Digital Video BroadcastingDVB-H Digital Video Broadcasting – HandheldD-WDM Dense Wavelength Division Multiplexing

90

E2E/e2e End-to-EndEAN European Article NumberEDGE Enhanced Data rates for GSM EvolutionEDI Electronic Data InterchangeERP Enterprise Resource PlanningETSI European Telecommunications Standards Institute

FDM Frequency Division MultiplexingFDMA Frequency Division Multiple AccessFFA Field Force AutomationFlash-ODM Fast Low-latency Access with Seamless Handoff,

Orthogonal frequency Division MultiplexingFN Federated Networks

GIS Geographic Information SystemsG-MPLS Generalized Multi-Protocol Label SwitchingGNSS Global Navigation Satellite SystemGPRS General Packet Radio ServiceGPS Global Positioning SystemGSM Global System for Mobile communications

HAVi Home Audio/Video InteroperabilityHFC Hybrid Fiber CoaxHSDPA High-Speed Downlink Packet AccessHSI Human System InteractionHSPA High-Speed Packet AccessHSUPA High-Speed Uplink Packet AccessHTML HyperText Markup LanguageHW HardwareHVAC Heating, Ventilation, and Air Conditioning

ICT Information and Communication TechnologiesIEEE Institute of Electrical and Electronic EngineersIETF Internet Engineering Task ForceIMS IP Multimedia SubsystemIMT International Mobile TelecommunicationsINSPIRE The Infrastructure for Spatial Information in EuropeIP Internet ProtocolIP/MPLS Internet Protocol / Multi-Protocol Label SwitchingIPR Intellectual Property RightsIPTV Internet Protocol TelevisionIPv4/6 Internet Protocol Version 4 or 6IS Information SecurityISP Internet Service ProviderIST Information Society TechnologiesIT Information TechnologyITEA Information Technology for European AdvancementITU International Telecommunications Union

LAN Local Area NetworkLBS Location-Based ServicesLTE Long-Term Evolution

91

M2M/m2m Machine-to-Machine CommunicationsM2P/m2p Machine-to-Person CommunicationsMAC Medium Access ControlMBnet Network of Excellence in mBusiness Applications and ServicesMC-CDMA Multi-Carrier Code Division Multiple AccessMCS Modulation and Coding SchemeMEMS Micro-Electro-Mechanical SystemsMFC Microbial Fuel CellMIMO Multiple Input / Multiple OutputMIPI Mobile Industry Processor InterfaceMIPv6 Mobile IPv6MITF Mobile IT ForumMOEMS Micro-Opto-Electro-Mechanical SystemsMP3 Standard for music compression (MPEG subset)MPEG-2/4/7 Motion Picture Experts Group, version 2/4/7MPLS Multi-Protocol Label Switching

NFC Near Field CommunicationNGN Next Generation NetworkNIST National Institute of Standards and Technology, US

ODM Original Design ManufacturingOEM Original Equipment ManufacturingOFDM Orthogonal Frequency Division MultiplexingO-FDM Optical Frequency Division MultiplexingOMA Open Mobile AllianceOPEX Operating ExpenditureOSA Open Service AccessOSS Operations Support System

P2P/p2p Peer-to-PeerPAM Pluggable Authentication ModulesPAN Personal Area NetworkPDA Personal Digital AssistantPGP Pretty Good PrivacyPHY Physical layerPIM Personal Information ManagementPKI Public Key InfrastructurePN Personal NetworkPoC Push-to-talk over CellularPSTN Public Switched Telephone Network

QoS Quality of Service

RDF Resource Description FrameworkRF Radio FrequencyRFID Radio Frequency IdentificationROADCON Strategic Roadmap towards Knowledge-Driven ConstructionRoaming A mobile device ‘roams’ when it changes its point of attachment to

another (operator) network. This requires formal agreements betweenoperators and is not seamless – i.e., the current session is not continuedwhen the next operator network is accessed.

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RoW Right of WayRPMS Remote Plant Monitoring SystemRTKGPS Real-Time Kinematics GPS

SCM Supply Chain ManagementSDMA Space Division Multiple AccessSDR Software Defined RadioSeamless hand-over The current network connection is maintained without disruption

when the mobile terminal connects to a new access network.SET Simplicity, Efficiency, and TrustSIP Section Initiation ProtocolSLA Service Level AgreementSME Small and Medium EnterpriseSMS Short Message ServiceSOAP Simple Object Access ProtocolSONET Synchronous Optical Network (US standard)SPIT Spam Over IP TelephonySS7 Signalling System 7STB Set-Top BoxSW Software

TCP Transmission Control ProtocolTDMA Time Division Multiple Access

UaProf User Agent ProfileUDDI Universal Authority Mark-Up LanguageUI User InterfaceUMTS Universal Mobile Telecommunication SystemUMTS PS UMTS Packet SwitchedUPC Universal Product CodeUPnP Universal Plug and PlayUWB Ultra Wide Band

VAN Vehicle Area NetworkWAP Wireless Application ProtocolWCDMA Wideband Code Division Multiple AccessWDM Wavelength Division MultiplexingVDSL Very High Speed Digital Subscriber LineVHE Virtual Home EnvironmentWi-Fi Wireless FidelityWiMAX Worldwide Interoperability for Microwave AccessWirelessHD Wireless High DefinitionWLAN Wireless Local Area NetworkVoD Video on DemandVoIP Voice over IPWPAN Wireless Personal Area NetworkVPN Virtual Private NetworkVTT Technical research centre of FinlandWWRF Wireless World Research ForumWWRI Wireless World Research Initiative

XDSL x (generic) Digital Subscriber LineXML Extensible Markup LanguageXMPP Extensible Messaging and Presence Protocol

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Tekes’ Technology Reviews in English

206/2007 Update of GIGA-VAMOS – Technology Roadmap. Mikael von Hertzen, Juhani Timonen,Pekka Huuhka. 93 p.

205/2007 Seizing the White Space: Innovative Service Concepts in the United States. Peer Insight. 76 p.

202/2007 Five Steps for Finland’s Future. Pirjo Ståhle (ed.). 42 p.

200/2007 Innovation, Journalism and Future. Erkki Kauhanen and Elina Noppari. 88 p.

196/2006 E-Business Logistics Visions, Innovations and Research. ELO – E-Business LogisticsTechnology Programme 2002–2005. Heikki Kekäläinen (editor). 91 p.

191/2006 MASI Technology Programme 2005–2009. Yearbook 2006. Eija Alakangas &Pekka Taskinen (eds)

184/2005 Globalisation of R&D. Part 1: R&D in a Global World, and Part 2: R&D in a Global Economy.

182/2005 Research training and national innovation systems – Finland compared to Australia and the USA.Sandra Haukka. 154 p.

179/2005 Pharma development in Finland today and 2015. (Updated version of review 163/2004) 78 p.

177/2005 Best Practices in Innovation Policies. Heikki Kotilainen. 92 p.

172/2005 Business Cycle Effects on Start-Up Finance in Finland. 47 p.

171/2005 Technology Based Entrepreneurship and Regional Development in Finland. 51 p.

167/2005 Mobilizing Business Applications – A survey about the opportunities and challenges of mobilebusiness applications and services in Finland. Petteri Alahuhta, Jari Ahola, Hannu Hakala. 46 p.

165/2004 Utilisation of Large Finnish Study Cohorts in Genome Research. Kirsti Käpyaho,Leena Peltonen-Palotie, Markus Perola, Tero Piispanen

163/2004 Pharma development in Finland today and 2015. Malin Brännback, Markku Jalkanen,Kauko Kurkela, Esa Soppi

162/2004 ROADMAP for Network Technologies and Services. Petteri Alahuhta, Marko Jurvansuu,Heikki Pentikäinen. 104 p.

158/2004 Microfluidics. Pasi Kallio, Johana Kuncova. 32 p.

157/2004 Proteomics – Challenges and possibilities in Finland. Heini Koivistoinen, Harri Siitari. 35 p.

156/2004 Finnish Software Product Business: Results from the National Software Industry Survey 2003.Juhana Hietala.

150/2003 Towards a Supercluster: Chemical and Biochemical Innovations Connecting Finnish Clusters.

149/2003 Managing Non-Core Technologies: Experiences from Finnish, Swedish and US CorporationsAnnaleena Parhankangas, Päivi Holmlund, Turkka Kuusisto. 76 p.

147/2003 Innovative waste management products – European market survey. Christoph Genter. 40 p.

145/2003 The Finnish Maritime Cluster. Mikko Viitanen, Tapio Karvonen, Johanna Vaiste, Hannu Hernes-niemi. 187 p.

144/2003 Tracing Knowledge Flows in the Finnish Innovation System – A Study of US Patents Grantedto Finnish University Researchers. Martin Meyer, Tanja Siniläinen, Jan Timm Utecht,Olle Persson, Jianzhong Hong. 36 p.

138/2003 Finland’s Wireless Valley: Domestic Politics, Globalizing Industry. Dan Steinbock.

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