Is Google-inspired ‘moonshot factor’ a new model for tech R&D?

Telefonica’s own Google X looks to deliver a new form of digital R&D in Europe

It’s Friday lunchtime. In a spacious meeting room inside Barcelona’s Diagonal Zero Zero tower, a disparate group of coders, engineers, data experts, designers and general thinkers have gathered over sandwiches to listen to a short presentation by a distinguished neuroscientist. His topic for the day is the cutting edge science that is mapping, with ever more accuracy, the brain activity that correlates with physical actions. Today, impulses from the brain are being used to enable patients to move and manipulate objects using robotic limbs. But with scientists beginning to understand the link between specific neurons lighting up and speech—even down to individual words and phrases—we are looking ahead to a world where humans may be communicating each other through a kind of machine-enabled telepathy or at the very least a thought driven man/machine interface.

When the presentation comes to end, those in the room are divided up into groups and asked to come up with scenarios looking at how an ever more sophisticated interface between human beings and digital devices might affect how we live and work in 20 years’ time. After about half an hour, each of the teams gives its own presentation covering their thoughts and ideas.

As a TV game show host might say: “It’s all a bit of fun,” with most of the scenarios owing more than a little to Blade Runner and Black Mirror. But it is fun with a purpose. Launched two years ago but only now opening its doors to outsiders, Telefonica’s Alpha unit has been set up and positioned by the company as a European equivalent of the celebrated—but determinedly secretive—Google X skunk works facility in California. With its own governance structure, Alpha and its relatively small team of around 40 employees has a remit to stay abreast of the breakthroughs in science and technology that are continually emerging from university labs and science parks and consider how these developments could help to drive the disruptive business models of tomorrow. “We tell people to think high and dream bigger,” says Pablo Rodriguez, Alpha’s CEO.

In that respect Alpha is an ideas factory. But as concepts are created and considered and honed into potential business plans, a select few—around one a year—will be given funding over a five to seven year drawing-board-to-market cycle. These will be Alpha’s moonshots and they are seen as crucial to Telefonica’s long-term plans to look beyond the present and tap into the profitable opportunities afforded by digital disruption. As Rodriguez adds: “Disruption produces 70% of growth.”

A new kind of R&D?

So what does that mean in practice? As the largest company listed on Spain’s stock exchange, Telefonica is the biggest player in the domestic telecom space, and is also a serious multinational telco. As a provider of broadband, mobile and landline services it is both an infrastructure provider and technology business. And like other big telecoms companies, it takes R&D seriously. Over the last ten years or so it has been working alone and with partners on technologies such as the internet of things, blockchain and data analytics. And as Rodriguez notes: “We were hiring data scientists long before it became common for companies to do so.”

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