This episode is all about Europe's technology sector, from the pace of tech disruption and the growth of AI, to how companies are innovating in the face of political and regulatory constraints and more. Jo Hannaford of Goldman Sachs' Technology Division, points to Europe's geography as a key driver for development and innovation in technology in the region. "You feel like [in] Europe that [the countries'] physical distance doesn't really stop people being able to really...come together and communicate."
This podcast was recorded on February 1, 2019.
This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this podcast is not financial research nor a product of Goldman Sachs Global Investment Research. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. The views expressed in this podcast are not necessarily those of Goldman Sachs, and Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs to that listener, nor to constitute such person a client of any Goldman Sachs entity.
Copyright 2019 Goldman Sachs & Co. LLC. All rights reserved.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
This is exchanged, the Goldman Sachs were reduced.
Developments currently shaping markets industries in the global economy objects. You would go ahead of corporate communications here at the firm,
These episode is all about technology in Europe. The industry's shown enormous growth in the region, but also continues to face pressure from political uncertainty and regulation to talk with the pace of technology disruption in Europe
bright spots and challenges and much much more were joined by Johannes, her head of Goldman Sachs Technology, division for media and glow
out of Quality assurance Engineering, Joe welcomed the programme. Thank you. So, let's, our big big picture from your see what is tech disruption in Europe?
like compared to what is happening in Asia, the? U S way to catch guys
Technology in Europe is ready and we should separate it between the political elite,
and the impact of that May or may not have on the technology sector. And then let us talk about the technology. You could make a k,
that, London is the capital of artificial intelligence in the world, and that's for a couple of reasons
in the kings costs area, which is a vital
six droid itself, historic,
to be an area that experience clay
a lot of social deprivation and in recent years has undergone a complete transformation
in one area. You have the quick institute which told the foremost cancer research institutes
since in the wild. Next to
Alan turing into chief. I research next to you
date mind and
the new headquarters for Facebook and many more
recognize the physical proximity that brings and the type of people that we say
stated in that area.
that committee main the technology industry, and so we are beginning to say a movement of their technology
Acta away from some of its historic premises into that particular area.
and you see in companies were very interesting who, beginning to use a lie in areas that you wouldn't normally anticipated. Education, legal,
I mean financial services is very difficult to disrupt financial services for weeks for May externally, as though the eye
that you could disrupt medicine using eyes fascinating. But why
the trains that you say, I think not just in Europe. A globally is there.
idea that if you get a group of people that don't historically max and they begin to share ideas, really interesting things happen. And you certainly
to see that in that area and those other
it's not just London. Other cities in Europe arguably have the same experience,
He spent some time in Lisbon. There is a huge to energy sector in Lisbon
spending time in southern Spain in Malaga, they
heavily investing in technology and technology education, and they feel it,
but their physical distance doesn't want to stop people being able to really
could come together, communique and I still think
even in a post bricks environment that won't change paper will still tool can work together
One of the trends you say in technology, of course, is the idea that technology does bring together these collaboration tools, whether its slack or instagram or Snapchat. They argued about bringing people together
transcending geographical boundaries.
Recently there has been a lot of attention on the pressure that european regulators and politicians are putting on big tech. Specifically: U S, big tech
our companies intervening in response to some of the constraints that are being put on technology in Europe. One of the biggest challenges when we think about big tech from a european perspective is data protection.
Europe has a history of protecting civil rights and its connection through data
So in recent years we ve had gdp are but
seeing in the U S is privacy and
protection laws becoming into effects, and
makes it also very difficult questions when you think about collaboration, so Gay
subject of ay. I, the dataset that
for I is very
sensitive to the signals that you produce in terms of their results, and so before of a sudden, it say
Summa technology, there's a piece of data which helps product recommendations. If I suddenly,
The consumer saying I want you to remove my data. The impact of that
overall survey, I made it very difficult, but data
Should I, when I think about Europe, I think Europe is leading the way in terms have been able to protect data protection rights for consumers and for all individual
yeah, I suppose is an argument that you're
of having the protections annoying what's coming, then the wild West, which certainly turn eleven the place in the world so bright.
It also big unknown hard to predict sitting here today? Technology,
oftentimes doesn't respect boundaries. What could be the impact of some of the different outcomes on the tech sector in UK,
in Europe, more broadly, leaping planning
I'm from multiple scenarios. It could happen for breakfast
and those scenarios vary from the most extreme, which is that you have to assume that in order to deal with them, a, U n T have to be within the EU. The least extremely is that we can carry on as we ve historically down. That's gonna fall out between those two spectrums for technology has limited impact. I would say, for one reason, I think you can assume
that in a post breaks it world. The UK have to abide by the current regulation that thereby to today, and so the
balance that we have to maintain will mean that we say
I have the same data protection. If you think about the recent fun,
two regulations under my feet. To that would have to continue. I don't
see that's making a huge difference and how companies do together. I think the biggest thing for technology has to be.
That will continue to be ape
to find talented engineers and what you don't
is to not be able to have free movement for employment of people who can foster the kind of technology startup area in London. It's well recognised at London really is the capital for technology, invest
in Europe. And for that to continue. We really need to be able to continue to employ and access technical talent from across Europe, and I think that would be the biggest issue that we face and been able to kind of cape. The context
rated growth that you say moving beyond the UK, what countries do see there alone
had of the game in terms of adapting technology, both in businesses and maybe in the consumer space, and are there any particular parts of Europe that are lagging
I will say lacking. I think the air. Is it really when you go, you gotta fill the idea that if the level of investment is certainly Berlin, when you think
thou areas which you could have attracted to, and you see them
tell him from then set indicative of burning from a Finn, tech start up. Saying
one of the things about Europe, which would make
stand out is that it has a long history of technical education so for the firm
weeping investing in a site in Warsaw and one of them
Things that attracted us to Poland was
Poland has a long track record of technical education. There is a second,
number that population in Poland that take
degrees and second degrees, and they
have well established technical institutions which have a history, and
that's something that is pretty much across Europe. Theres many technical
is this a high number of engineering graduates lamented over engineering on predominantly by computer science? But if you think about
on the other end of the kind of stem education.
And even quantity of modelling, France
has a wealth of history in terms of producing, when the most amazing mathematicians and quantity model, as which we actively take advantage job. When we think about trading strategies
and so the education and the impact of free movement of this wealth of TAT
tell them that we have in Europe the Post bricks its Laurie. I was going to be vital for kind of fostering their industry, so you mentioned that financial industries, while the hardest for technology to disrupt and yet digital banking really seems to be taking off in recent years, both in the EU
and in Europe what's driving the trend in Europe. One of the issues that many of the retail banks face is that they have significant legacy. Technology been able to prevent towards a richer consumer interface is actually quite difficult for them.
we ve managed to do this because we don't really have a history of consumer facing applications, and so we ve been able to leverage some of our core technologies payments processing, for example, and be able to reply that the consumer space- and we ve done that. Remarkably. Quick.
But the way we ve done that is really being quest sounding and when we face if he built Marcus in the UK with
in a year which, if you think about stars
but we are in company and been able to produce,
I'm bank, it would take he probably a bit more than a year,
We ve done that not by creating a separate organization Mcdonalds,
existing engineers, we ask them to kind of work a bit different, lave awesome to work in a way
a job way, and we ve
but in a way that allows us to take the best of our existing technology and use that, but also in
heavily in buying.
where that allows us to grow very quickly. From a european perspective,
Many bank say to me: how did you do this quickly, Joe? How did you manage to kind of developing infrastructure and
a consumer facing application in the time period you did and one of
I think, is very important to our cultural. You do at Rio existing engineers, predominantly Sir John. What what's next from you look across Europe? What's next for technology.
I think the disruption in medicine will continue. We ve
engineers to go into my
research, her basically use? It is one of applications that we have for market risk or credit with their applying to cancer treatment, and, as I think
it continue to say, the trend
in being able to have more customize treatment programmes through the use of technology,
the second trend would definitely Bay within education. I mean you're, seeing it more in the: U S hasn't quite reach Europe, but in the? U s because it s
the size of the? U S,
you see. More and more universe is moving to online education and, if you think about
earlier the desire to actually have more engineers and create more talent. If you
A less wealthy country,
and you have less access to education, online education so that you can
she be online and seeing a lecture, that's base of the? U S and you could take degrees that
that you're in a refugee camp you give you access to education,
colonies and inaccessible to you, I think, that's a fact.
making air in terms of the impact that could have on the world theirs
companies in a Europe which already far ahead in terms of being able to automate education in that way,
just learning but also provide
universities to run more efficiently. That's yet to really
extend beyond the. U, I think when it comes to you about be incredibly important, especially in a post bricks, environment, you
a little bit already about how different types of companies, not just tech companies, are leveraging technology much a medical industry. Of course
see a lot of blurring of wines between traditional sectors, traditional industries and technology, and gives couple examples. I am fascinated by cloud. Macleod is something that's the new term for most people. They understand the concept of a cloud but the transformative qualities of the cloud I think,
yet to be fully realised so give you an example. I am always fascinated by how Netflix, which is the
permanent video streaming technology?
Entire infrastructure runs on a w S and
there's really, but their predominant competitors and would be unthinkable once that you'd be able to
Be using infrastructure and commodities your infrastructure in a way that actually kind of transcends those types abound or.
Think about the cloud in the context of academia,
again a toy, difficult academics to collect large quantities of data.
you have two basic by the hardware. Well, if you think about the cloud, what stops organizations been able to share large quantities of day
seamlessly, if they're on the same cloud platform, there's a lot of
prevention around data security when you think about it in the context of the cloud. But I do think that the way that the world will
Is it a lot? She create more options, share information more easily the huge quantities of data
and so this idea, that you cannot she mine, information, large quantities of information and be able to share information in that way, I think will be very transformative, but I think it will create
association between different types of organizations you haven't seen before you talk.
a bit about how London's become a centre for I, you ve, also discussed in the past to differently
today. I one based on robotics in the other, based on the philosophical term, called ontology. Without going to war,
give us a quick overview, bought these types and the use cases,
for both at home and how they may be adopt its not without controversy. But my personal opinion of this is that there are two forms of aid,
mention there's the one that we must use to, which is based upon cognitive and biological systems, might send people really associated with robotics may
so the robotics that we say is really driven by the artificially industry. Do you know the first
it's so centred around movement and been able to
about how we use our limbs? Peep could have think about that in terms of a but the
I, which is very politically used in our society
is ontology semantic definition. The best example of this is really the internet. If you think about your internet browser on today,
That is a very rich semantic layer that allows you to do word searching and that's ultimately, being the biggest breakthrough. Nay, I that we ve had
most live change. Emmi. Can you mentioned in your life without the internet? How many times you use internet every day to
things will find information irony,
as a child, if you want to look something up here too, I should go to encyclopedia with unthinkable. Now, isn't it go to Shell from pillar book.
and so with apprehension. I think in the public about some of these new things happening in technology
really. My point is that we ve only benefiting from it so far as a society, which is really the internet
when I was young and I just started my career. Thirty years ago, much if they take
she was constrained by the size of the computers so
for example. What's now on my smartphone use,
pick up on her entire room, with the idea that you could actually have a car that was computerized have to have a trail behind it with a computer, the size of your car
I like it wasn't practical, but now computers are so small. You can put them in things that make them realistic do taken.
Your car, they can drive your car. You can put them in
complain that you can with them we ve automated most
house and fell
I have in my frigid home based automated milk buying. We haven't you calibrated they so correctly cause I'm lots of milk,
too much. Travel million voters travel through what is travel, but the idea that this course EVA between ten
in our everyday lives or its enriching it's kind of disconcerting, but other people. I allowed you, think it's great by
you think about the last five years and we do have an elixir
indeed, although my children like a little too much in it, you can actually do collect that you can actually
it turns out lights on. Let me come home, that's unthinkable five years ago that you would have technology
crossing into everyday lives. In that way it means
to say over time where we saw the boundaries of where we stop that Europe wide
savage leader in the Tec field in the region. What are your thoughts on gender diversity on taking Europe in and around the world? For that matter I mean odyssey, gets a fair amount of well deserved attention. Why are there so
few women in senior roles and technology, and what could we shall be doing to change that? I wish we had a clear answer to have only ever done technology mighty computer science degree it can criticise page day. I have
and although there were very few women doing it, there were women doing, and now I reached the thirtieth into
do I look around laughing where have they swimming gone,
it's amazing, Korea, it's very creative. I love her
Coming now as much cited thirty years ago and much
programming languages that I use it to you
go up in museums now, but is
such an amazing career, and I think this
practicalities. Not all schools teach computer science access to computer science. Teachers is limited,
so, I think we want things as happened in my
years ago, I was encouraged to go into computing. It was that she considered thirty is going to be a really great job for woman like a really great career and somehow
over the last fifteen years. In particular, something has happened to make it almost of putting to women.
like there's a kind of dynamic in the vocabulary that you say where it's become
even more about
kind of career, a mammal day as opposed to a woman, and that negativity. That's not
one thing that I experience when I was younger and I quite know where that come from I some theories but
reality is. It is a great career form and you can basically be a programmer from whatever location you won't. Allow should have flexibility is a technical skills
now. She's balance in the UK is more women, going it's mathematics and chemistry in physics and they're all computer science, so
Some of the things that we are doing is affirmed kind of help. That is we
training teachers in schools to teach computer science way. Ah,
creating programmes or sponsoring programmes that allow goes to actually realise three role models. What it's like to be a programme
to educate them and we? We feel, for example, that one or more successful programmes we have in terms of
encouraging women into the fund. Do computer science December in turn programme, and we have that fish,
percent gender diversity on that programme. I'm one of the things
We say is that women will give us a chance for ten weeks to try it.
At the end of those ten weeks order, thereby is about what it would be like to be. A programmer have been completely reset and
dunno sites may-
we realize what a great creators
Wasn't what I thought about it, who wasn't sitting on my programming, was working as part of a team. We were here
very different problem sets of a fascinating problems that is highly creative and where did that perception,
get created that it wouldn't be like that.
When I was younger, that's how it was described to me. I think
those policies, we have to kind of continued Teresa and educate people, but it self fulfilling
more women do this, the more women
encouraged. We know that
RO models are really important, not necessarily female role models, but role models that people can relate to, and so
as a firm where doing programs like they say. Thank you for the opportunity today to like just demonstrated
can have a long, successful happy career as a computer program, and it's really not that hard.
so it sounds hard to make you mentioned. You were encouraged to get into the field added you end up in programme. I went to undergo school. They had a very strong history of science, education, physics, chemistry, mass. My mass teacher is
five years away from retirement, and she decided that
She should start teaching computer science, so she told herself computer science
started running and asked if girls wanted to it
and am I subscribe to a close, and I loved every minute that Chechnya is quite a funny,
We shall she said to her class. Why don't you go home instead of buying your mother flowers?
this day which might have allowances.
The very first programme I wrote was to take all of the futility bills. No house am, I produced a programme that would basically automate them for my mom when I look back at that shows up,
could bewildered what was going on, but actually get really appreciated that the actual date for this they don't talk Sahara that here early years,
programmer. How do you end up a Goldman Sachs? Well ass? She wanted to be an academic, and I didn't internship and another financial institution and of a funny story, but I wanted
to buy my sister realise, wedding, present and so basically decided. I was gonna kind of work for the summer.
And that's how I really got into financial services those working for a couple of years and at that time, is it
Tom again now you could have looked around
So no women that was successful. It was
often riman as a woman back then in the city of London, and I wanted
work. An organization I felt was really a meritocracy, so I decided I come to Goldman Sachs. I bet she heard through the great right.
go mistakes with investing in technology. I mean this is twenty three years ago and
The head of research in London at the time basically want to hire a programme
its ultimate research- and I worked
ready for him. That's how I join the firm as financial analysts in research for automating research products is a test
to this firm that were so far thinking like to do that,
back then tat. She hire a programmer and be non technical to auto.
a product in that way with just unheard of- and I thought he was kind of crazy, but I liked him.
To join Goldman Sachs. I wanted to join Goldman Sachs because
I have heard that there was a
strong culture of diversity here, but I wanted to work in a farm
Look at my gender or didn't look at the fact that with British just would just value
when I get back on the best decisions
ever made because that's exactly more expansive working here, my experience of working here was being five binge
on my work, not my
as a woman. The fact that I am
the east end of London or the fact that I'm this type a person of the fat I have this characteristic. I've been judged on my output and that's all you
and from a company that most people want from a company cover
recently added a woman with a very interesting background in technology, the board retired real
Norman untie, and she has
couldn't cryptography and cyber security talk a little about your own interests in those topics and what it means to have some. Unlike her on the board, I can't even
again how exceptional she must be made to reach and issued a vice admiral. As cartographer I mean she must be exceptional.
But there is a history of women as cryptography. If you think about it,
through the UK and if you ve watched Iphone Limitation game.
We know that the history of Black Sea Park was put on,
they female mathematicians who-
were cryptography, as he would basically looking at the electoral code every day trying to decipher it. Unfortunately, much of that history cannot be discussed because of the official secrets acts, because often it is essential.
with the military, but there is a long history of remain as cryptography us in particular
military and the history
is amazing, with well public
eyes at the second world. War was have lasted a lot longer if it hadn't been for the efforts of those female cryptography US
and they were working with early stage. Digital machines, I'm an algorithm first use of computers and so is incredibly insightful fur jastrow.
we have some one of her standing on the board. That would understand not just modern day cryptography but being able to advise on cyber and cyber security
increasingly you say. Modern day. Crime is happening on the internet, related on cyber you ve taken a person.
Jason fleshly buckle over about that? I have. I am amazed by the history me there's blood she park the site itself, which
no, if ever in the UK, I would advise people to visit, but I think that this history of female cryptography is little known myself us of a my fellow partners. Iraqi crisis came up with blood; she paused
called ultra and we sponsor a teacher to take an Enigma machine which is very much used in the Second World WAR industry
And under privileged areas and teach children to decode that pregnant women,
just over three years, and we ve trained ten thousand students in the UK. The ring,
so successfully oversee the history is kind of cool time, Enigma machine but, more importantly, your teaching them an actual scenario. They actually reenact a day
in the life of the Enigma machine in the Second World WAR, which basically involved the anymore
changed every day they were meant to change it
but for me
for the allies. They didn't change every day I so
every day you had basting start again and
These children are taught to do that. They code and decode, using this machine. They solve problems using a hopefully
that programme women we encouraging children to think about. This is a career. So what technology excited about today,
I still very much and rooted within programming. We don't
about programming as much, but we haven't Goldman Sachs. Two point: five billion lines of code
and in my job in terms of quality assurance, I'm responsible as custodian foot, two point: six billion lines of code.
And same base of my day, start with me doing a code to view a ring up a junior developer.
anywhere in the world and sometimes the afternoon in local, the. U S and I will do
go to view with them and we'll talk about why they felt that piece of code was suitable to sell.
problem in some of the things they could do better,
They evolve. As we see encoding is modern
which is easier for people to learn monovalent
which is that is very straightforward to learn, is python. We are partners
The charity in the UK cooled code fast and they
to train twenty thousand women young women to learn pie,
and maybe and as part of our partnership with them. We have offered
timeless in London Office, the ability to have free training on Python and the coast,
is that we offer to a completely over subscribed within the first thirty seconds of sending this email.
People want to learn how to program I'll get you to do it,
um. Yeah Marty tempt me once, but I I backed down so you ve got a fascinating career. Super interesting: what's the best advice you got over the course that career keep going? I think that
To have a career you ve got to want to have a career people say
you. While you had this exceptional courage, let your partner Goldman Sachs, I say! Well, yes, I know I've had a career. I've worked visit my thirteenth year. Working
I've been a junior programme, a senior programmer. I've kind of just had an
more Korea and which I really enjoyed an I'm lucky to it for company, which has allowed me to have that career so yeah
based in London during your Africa
is what do you like about visiting New York and what a mess? I don't normally scientist,
love Americans and in particular, New York,
it's a bit too late,
it's very critically like me open and I have lived in New York, but I love american system
tourism about Americans and, like they work ethic that I really appreciate,
talk about it enough, but
because they re America so successful. The idea that you can
work hard and be successful and change your life. That optimism is an intrinsic optimism at you write a book about MRS Thatcher and she felt the same way when she visited here. But what I particularly like about coming here, I don't like the weather, but I do like the fact that I get to see a lot of friends. I've worked with for a long time and its very collaborative like if you think about the last two days we ve had. I always leave
these business trips with a set of ideas and a way to do things differently than when I arrived want of examples in the tent.
Division is weeping really
sing on our adoption of cloud.
Hyman Home and I'm gonna think about some of the major cloud providers and think a little bit differently about how we using them in Europe
but he must not London when you're away well. One of the things I think it's really special about London is the fact that
It is truly a multinational city, the coming year,
Is to a certain extent, London, more southern. I think London
also ends by
think about this with brick say I get up in the mornings, and I have a lithuanian chap who makes my coffee and I was going to simple.
place. And then I get my lunch from a polish shop. It's just very multicultural
I really hope that doesn't change on that
thanks for joining Us Java pressure. That concludes this episode of exchanges of Goldman Sachs. Thanks, for
listening, and we hope you join us again. Next time this spot gas was recorded on February. First, two thousand nineteen, this podcast should not be copied distributed, published or reproduced in whole or in part. The information contained in this podcast is not financial research, nor a product of Goldman Sachs, global investment research. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty as to the
accuracy or completeness of the statements or any information contained in this podcast and any liability, therefore, including in respect of direct indirect or consequential loss or damage, is expressly disclaimed. The views expressed in this pot cast are not necessarily those of Goldman Sachs and Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this pop cast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs too. That listener, nor to constitute such person a client of any Goldman Sachs Entity.
Transcript generated on 2021-09-19.