Category Archives: business model

Leveraging Technological Change: The Role of Business Models and Ecosystems

Simon Ford was Bit by Bit’s representative at a workshop “Leveraging Technological Change: The Role of Business Models and Ecosystems” in London yesterday. Here he reports on the workshop.

Organised as a collaboration between UCL and École Polytechnique by the formidable duo of Prof. Thierry Rayna and Ludmila Striukova, the workshop was an Anglo-French affair, featuring academics working in both countries on aspects of the digital economy.

In his opening keynote, Prof. Pierre-Jean Benghozi from École Polytechnique provided an overview of how the creative industries and the Internet are changing. This reporter found Prof. Benghovis’s comments about the industry’s dynamics to be most illuminating. He highlighted four dynamics: (1) the economy of luxury and low cost, and the widening gap between high end and mass market; (2) the platform economy, in which aggregation of content, as well as niches and market segments is occurring; (3) an economy of branding, whereby brands are continuing to become more important and companies aim to get closer to consumers in order to develop long-term customer control, and (4) the economy of free in its many forms.

The day’s second keynote came from Prof. Thierry Rayna. As another academic investigating 3D printing, his presentation explored a potential scenario in the future in which prosumers self-organise into their own value chains as they have the ability to design, distribute and manufacture goods. In such a future, what would be the role for corporations? Prof. Rayna suggested that they would retain a role: as gatekeepers.

In the first session of the day, Nicola Searle from the IPO, Rémi Maniak from Telecom ParisTech, and David Wong from the Big Innovation Centre, gave presentations on the role of business models and ecosystems. Drawing on research conducted before joining the IPO, Nicola described how IP had been a secondary influence in the business model decisions made by six Scottish organisations. Of greater importance had been the ability to adapt to the changing environment.

Rémi Maniak followed this by explaining the importance of multi-project lineage for organisations trying to create new business ecosystems. His premise was based on the need for organisations to invest strategically in order to accummulate experience and build assets. While doing so can often bring significant short-term losses, this investment is vital in the long-term if the organisation is to acquire new capabilities and competences.

Taking the unenviable task of speaking before lunch, David Wong provided a summary of what he considers to be the seven intangible drivers of value creation: (1) firm strategy and positioning; (2) radical innovation and first mover advantage; (3) intangible resources and competencies; (4) organisational ambidexterity; (5) network effects and externalities; (6) transaction costs efficiency, and (7) relational optimality.

The after-lunch session shifted towards industry cases, with presentations on innovation in video games (Myriam Davidovici-Nora from Telecom ParisTech) , 3D printing (that was us), and book publishing (Elisa Salvador from École Polytechnique). Your correspondent finds it fascinating that video games has become the largest part of the creative industries by revenue ($66bn in 2013 across all formats) but that it continues to exist at the margins of mainstream culture. Myriam’s presentation took us through some of the key innovations  in the video game industry and she described the growing trend towards the creation of two types of games. At one end there are the big budget, highly cinematic and immersive games, while at the other there are the short session games that require much shorter development times and money.

Discussing the book publishing disruption by ebooks, Elisa Salvador described how publishers remain behind the evolutionary process. While Amazon pioneered the e-reader with the Kindle, traditional book publishers have appeared content to allow Amazon and other technology companies to continue to drive the growth of this industry rather than attempt to take a leadership position themselves.

The third session of the day was around the rise of new stakeholders. Prof. John Darlington from Imperial College kicked off the session with a number of proposals for consumer-side Internet structures. He agreed with Tim Berners-Lee that the Internet had ceased to operate in the best interests of the public and that a ‘Bill of Rights’ may be required to protect Internet users. He showed a demonstration of a demand-side trading system whereby online customers could pool their demand in order to get better deals on their shopping. He commented that the system had been shown to one online retailer, who responded by suggesting that it would put them out of business.

Julie Bastianutti from Lille 1 University shared the results of a study into social search engines. Broadly there are three types of social search engines: (1) charity search engines, which donate a percentage of their advertising revenues to certain charities; (2) ecological search enginers, which have lower energy consumption, and (3) ethical search engines, which do not list certain types of websites. The challenge facing social search engines is that they are reliant on the technology from traditional search engine companies (e.g. Google, Yahoo, Microsoft) and that they are not always willing to work together even when it may appear advantageous.

Joe Cox from the University of Portsmouth provided the last presentation of the afternoon, talking about another project funded by NEMODE, the VOLCROWE project, which like Bit by Bit began last autumn. The project will be investigating the economics of crowdsourcing in not-for-profits where there are no monetised rewards. They’re doing this through studying Zooniverse, an umbrella organisation of citizen science projects, exploring how and why users engage, along with what non-monetary incentives can be used to improve engagement.

At the end of the conference  Prof. Benghozi suggested that there might be a follow-up workshop later in the year in Paris, while Thierry and Mila announced that they are guest editors for a special issue of the International Journal of Technology Management on the workshop topic. The deadline for the special issue is 31st October.

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