35,000 visitors from all over the world are yet another milestone in the ongoing rise of SXSW as one of the key events of the tech industry. A must-visit conference that this time even the president attended. In his speech at Austin’s The Long Center for the Performing Arts he made an impassioned and partisan plea to technology professionals and tech-minded citizens to apply their ideas and talents toward solving some of the country’s biggest challenges and philosophical divides.

But there was much more to SXSW 2016. 1,200 forums and panel speaking events covered all the hottest topics of technology and digital business. Here’s a couple of the topics, products and companies I think are the key take away topics that will make on ongoing impact.

Encryption: Apple vs. FBI dispute is only the beginning

From a European perspective the Apple vs. FBI confrontation gives a fresh new impression on how this topic starts to be handled in the US. While in Europe privacy and encryption are deeply grounded in the public opinion and skepticism has spurred dramatically over the last few years, the US side seemed to rather sum it up as “fussy European data protectionists are a burden to technological progress and nothing but a pain for innovative tech companies”. But now things are starting to change. The tone in the FBI’s attempt to force Apple into hacking its own operating system and establish a backdoor is heating up.

The essence of the dispute really is if encryption is permitted to become so strong that not even the creator of the software can gain access to respectively secured data. Apple vs. the FBI is only the preliminary climax in this discussion. It’s a topic that will accompany us for a longer time. Fresh off the news is the next subject: Facebook’s WhatsApp is getting into the line of fire, too.

And during this year’s SXSW, encryption was an important topic heard in many discussions on many stages. According to Stephen Levy (Author of “Crypto” and shortly before SXSW having pubslished this great piece on why we are fighting the crypto wars again) the change in perception in the US is noticeable since the Edward Snowden disclosures. And it was also the ignition point for tech firms to accelerate utilization of really strong encryption algorithms. Before that, smartphones and other devices had only been half-heartedly protected. Just enough to be lightly protected against very basic electronic eavesdropping, but not strong enough to be of concern for intelligence services.

Widely acclaimed was an event on the security of healthcare data. I guess when it comes to this level of personal and sensitive data, even more people start grasping how crucial it is to seriously address personal data encryption. And, to close the circle, Obama had his lowlight moment at SXSW 2016 when he tried to foster understanding for the US government position on gaining access to encrypted data on our smartphones in light of the San Bernadino terrorist attacks.

Virtual Reality: the mega trend

Being a modestly ramping up trend at SXSW 2015, virtual reality was the mega trend at this year’s conference. Sure, high-end products like Oculus Rift and HTC Vive are still rather pricy and entry-level glimpse products like Google Cardboard seem like a lame duck when considering what is possible and what will become possible. The range of 360 degree VR videos, games or other content and services is still very limited (although Sony made quite an impression with their Playstation VR launch title lineup). And last not least, it is still a problem that a not insigificant number of people trying VR get sick as a parrot. However, I cannot imagine many other technologies which promise such a breathtaking outlook for a new experience in gaming, movies, entertainment, social engagement and so many other aspects in everybody’s life.

Two dozen forums and panels at SXSW 2016 where explicitly about VR and 3D virtual worlds. The Oculuses, Samsungs, Sonys and HTCs of this world let people try their headsets, McDonald’s put people in virtual Happy Meal boxes and the Washington Post offered a virtual flight to Mars.

This is only the start. But what is remarkable during this early stage of VR finally accelerating into a bright future (my opinion), is that many small and unknown studios, developers, companies are able to create similarly impressive VR experiences like the big and established media companies and game developers. The startup Icaros was wowed for their abdominal VR flight simulator. SpiceVR made an impression with an innovative combination of 360-degree video and drone technology and Splash won the SXSW Accelerator pitch competition for their technology that lets users stitch awesome 360-degree content from simple smartphone videos.

AI & Robotics

Sure thing, Artificial Intelligence was omnipresent, too in Austin. Considering the recent progress and noise in AI, many of us start wondering what is the last resort of making us humans uniqute? Already today, machines, computers, software are superior in computing power and speed. They calculate faster, they can manage complex processes within the blink of an eye and just now they start beating us humans in sophisticated games like Go. Many think, empathy is our last resort and that AI will not or at least not so fast grasp and develop what makes humans human. That is, real empathy, which goes beyond pure mimicking of emotions.

A very remarkable session touching this topic was held by Hiroshi Ishiguro. Ishiguro is a professor at the University of Osaka where he is working on the development of intelligent robots. Some of them look simply cute but the most striking piece of his work is an astonishing copy of the professor himself. What makes this work special is not only the realistic look of the android, but what it is capable of. Ishiguro gave a live demonstration of his doppelgänger’s capabilities. People from the audience could interact with it and engage in conversations and they were stunned by the level of curiosity and quick-wittedness. Ishiguro was clear about where he wants to take this: develop and construct android robots which are indistinguishable from humans. It may still be some way to go, but his presentation in Austin has raised the confidence level that it is not an impossible endeavor.

SoftBank and Aldebaran Robotics brought their servant-style robot Pepper that has been around for a while. Several thousand units of Pepper can be found in Japanese households already. New is their cooperation with IBM Watson which they had announced some weeks ago. Watson’s AI capabilities are supposed to boost Pepper’s abilities to learn and adapt to different jobs and areas of deployment, going beyond the household helper into areas like hotels and professional accommodation or even healthcare in hospitals. Aldebaran’s Rodolphe Gelin gave clear guidance as to what he thinks is the most crucial challenge to crack to really get there: mimicking human communication with realistic utilization of gestures. Which puts us back to Hiroshi Ishiguro’s work.

The rise of voice as the better UI

Another key theme these days and also very present at SXSW 2016 is the rise of voice as the better and more powerful user interface. Startups as well as established tech giants are heavily ploughing through this field. Voice centric personal assistant services like Google Now, Siri or Amazon Alexa have been around for a while now and they are making big leaps of progress. Voice is seen as the better interface that is more direct, closer and more intimate. Linguist Lesley Carmichael, driving development of Siri competitor Cortana over at Microsoft, stressed how crucial it is to be able to trust the voice driven interaction, just like a real personal assistant.

SXSW 2016 gave experts the chance to discuss how voice control will evolve for in-gaming experiences, how to optimize the development of voice content for Amazon’s Echo or how to make sure voice control can penetrate every aspect of everyday life. A representative product highlighting where we are heading is the Onyx, a wearable communication accessory for instant voice conversations. It is a small circular gadget with microphone and loudspeaker that connects to your smartphone via Bluetooth and can be attached to your shoulder or upper body. It allows hands-free convenient voice interaction with your digital services at any time.

In order to take it to the major league, which is super realistic voice-based communication between humans and machines, you end up in the high ranks of artificial intelligence. Natural language processing is only the first step, conversational intelligence is the next. But even early stage services like Siri or Cortana have a level of complexity that makes it challenging for startups to compete. Apple, Google, Microsoft and Amazon all have their distinct strategies and put a lot of resources, both financially and manpower into the topic. However, Viv, a startup from the original creators of Siri is on a mission to build a “global platform that enables developers to plug into and create an intelligent, conversational interface to anything”. That could be a big help in enabling a vaster ecosystem that is pushed forward by startups. Some believe Viv has the potential to “change everything” we know about the web and some of its key business models.

Robot journalism

Speaking of voice UIs, natural language processing and the likes, there is another interesting aspect about language: writing – here in the sense of what you could call automated text generation or robot journalism.

Reading coverage about financial reports, earnings calls, etc. of listed companies is just as boring as writing them. Their prose and style are monotonous and repetitive. So why not use automated language processing and generation for those jobs?  On the input side you have masses of easily predictable and similarly structured facts. On the output side you use a large pool of common language and vocabulary formulas and respective assessment criteria to condition all this into human readable text. This does not take hours but seconds. Those kind of articles surely are rather monotonous and predictable in their form, but they contain all the facts and are rigorously factual.

At SXSW 2016 you could learn that Associated Press has quadrupled the number of companies they cover in this space, thanks to the help of automated text generation. Whatever your feelings are about intelligent algorithms producing news content for humans, there is a clear benefit: investors and readers with interest in smaller companies get much better coverage; coverage that simply was not there before. Carrying out such a broad coverage by humans would simply not be fundable. An in return, human journalists can spend more time focussing on content where a higher degree of research, power of judgment and feeling for the language is required and expected.

Messaging Platforms – absorbing all the attention from the App ecosystem via “conversational UI”

Today you need an app for transferring or sending money, ordering taxis or Ubers, booking hotels or ordering food. But recent news and many of the presentations at SXSW 2016 show that we are very quickly heading into a future where all of this is being subsumed into messaging platforms. The Asian players like WeChat/Weixing, LINE, Kakao Talk, etc. have shown what is possible for quite a while now and meanwhile “western-world” messaging giants, most notably Facebook Messenger are getting a lot more serious about this. What you used to call apps in the “old” world, is simply represented by “contacts” in your messenger, which in reality are bots which carry out the desired tasks for you. Jeff Xiong, CEO of WeChat puts this principle of the conversational UI very simple: “Users are spending a lot of time within chat apps anyway. It is simply more easy to add just another contact.” An interesting piece from that session came from Julia Hu, who is a co-founder at Lark, a startup offering – among other things – a personal weight loss coaching service. Their chat bot works as elaborated as even being able to react to the current mood of the user. They found out that male users trust their bot more than a human counterpart.

The development is fueled by preferences and user behavior of the millennials. Heavy communication via messengers and open mindedness towards innovative value added services in these platforms heats up the need for service providers to rethink “mobile first” into “mobile only”. Twenty-four percent of the millennials check their smartphone immediately upon waking, and that excludes the alarm feature. That jumps to 52% within 5 minutes of waking. Almost half of the millennials—45%—check it more than 200 times a day.

These patterns are putting a lot of pressure on industries like commerce, transportation, finance, catering, tourism and many more. New services adopted and driven by millennial users are increasingly getting traction with a broader audience. Behavior of the millennial user group is being adopted on a much broader level fast. This is the time where older generations are losing their power to coin the behavior of the young. It is the other way round now.

Most entertaining event

As a closing note, there was very entertaining and noteworthy session run by Eric Campbell and Golden Krishna: “You know what? Fuck dropdowns”. In less than an hour they ripped apart complex UI and UXD concepts applied at well known corporate and institutional websites. Blunt but tongue in cheek and not without demonstrating smarter alternatives. The key message is: simple but rigorous design principles, location tracking and facial recognition techniques help improve usability of websites drastically. The presentation will be made available at www.Fuckdropdowns.com soon.

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