Last week I attended the Cambridge Wireless Future of Wireless International Conference. The closing theme of the conference was a debate on whether the future of wireless innovation is to come from the physical or virtual worlds. The obvious easy answer is to say ‘a little from column A, a little from column B’.

This debate got me thinking. How is this balance reflected in the changes we see in our own broadening portfolio of technology clients? The definition of a technology business has been shifting for years: from the tangible chips, networking and IT equipment, through consumer electronics, up to less tangible OTT (over the top) technology-enabled, cloud-based services.

The pace of innovation at the two extremes can vary considerably: The shift from 3G to 4G has been a slow process and it’s not over yet; the gaps between major innovations in handsets, or major shifts in embedded technologies are also (relatively) slow. However, the investments that go into these physical innovations are significant; the commitment by the innovators to bring them to market often more so. The work that goes into designing and manufacturing the silicon, establishing the standards bodies for device interoperability, developing the embedded software that will make the technology function in target applications…all take serious time and commitment and often rely on more than a single organisation.

The significant investments that support these physical innovations therefore allow room, and time, to grow the technology from concept to reality and to start to market it.

In the virtual world, with fewer barriers and lower costs to move straight to market, shorter timescales and lower risks mean entrepreneurs with good ideas can test and roll out a ‘product’ in no time. A lot of good ideas come, and sadly disappear, much faster in the virtual world.

The pace, and relatively high proportion, of virtual innovation is driving some of the major shifts we’re experiencing today in, for example, social networking, IP/cloud based communications and services, mobile apps, even changes in our media consumption. These innovations have the potential to change our lives in many, many ways yet to be imagined.

Without the game-changing physical innovations which often seem to be slow and troublesome, the virtual OTT services and apps that ride on the back of the physical technologies would never be possible. If we fail to give due credit to the physical innovations and the need to continue pushing engineering excellence and investment in the physical world, then the future Twitters, Facebooks and Angry Birds will always be simply good ideas sat waiting for the right networks or devices to be developed.

If we’re going to play a future 3D version of Draw Something or Angry Birds on our mobile devices, we’ll need more graphics processing power and a lot more data capacity. The processing will come from better graphics chips, the data capacity from a 4G network infrastructure of small cells.

I wrote this blog using the cloud-hosted Evernote app, on physical iPad and iPhone devices… typed with virtual keyboards (ooo, and let’s not forget the clever Bluetooth keyboard for the iPad). The lines of physical/virtual technology are becoming blurred, but let’s not forget the fundamental need to encourage (and invest in) the innovations in physical infrastructure if we’re to keep pace with the potential the virtual world can offer.