the digital future
As well as being a preoccupation for individual businesses, business model innovation is also an issue for national economies. In spite of the emergence of new technologies, achieving sustainable growth and productivity remain major challenges. Being able to develop business models which will bring new technologies successfully to market will help to deliver productivity gains for new and established firms alike. Firms need to understand the importance both of business model innovation and evolution and have the people, capabilities and culture in place to make it happen.
Dr Chander Velu, head of the IfM’s Business Model Innovation Research Programme
According to Mckinsey research, organizations typically use five key capabilities to develop business models which will bring new technologies successfully to market will help to deliver productivity gains.
- Digitization is the process of using tools and technology to transform customer-facing journeys in powerful ways, and also reshape time-consuming transactional and manual tasks that are part of internal journeys, especially when multiple systems are involved.
- Advanced analytics to discover insights and make recommendations.
- Intelligent process automation (IPA) is an emerging set of new technologies that combines fundamental process redesign with robotic process automation and machine learning. Examples include smart workflows (to track the status of the end-to-end process in real time, manage handoffs between different groups, and provide statistical data on bottlenecks), machine learning (to make predictions on their own based on inputs and provide insights on recognized patterns), and cognitive agents (technologies that combine machine learning and natural-language generation to build a virtual workforce capable of executing more sophisticated tasks).
- Business process outsourcing (BPO) uses resources outside of the main business to complete specific tasks or functions.
- Lean process redesign helps companies streamline processes, eliminate waste, and foster a culture of continuous improvement.
Digital issues are now political issues
Europe’s digital future
Many European economies are performing well below average in terms of how they employ digital technologies and innovation to drive growth.
According to Professor Klaus Schwab is a Founder and Executive Chairman of World Economic Forum, a recent Forum project, Fostering Innovation-Driven Entrepreneurship in Europe, published in collaboration with the European Commission as part of a series: Digital Minds for a New Europe, emphasised the need for collaboration between start ups and established businesses to co-develop cutting-edge technologies that require significant investment.
The European Parliamentary Research Service has estimated that not having a digital single market would cost Europe €260 billion per year in efficiency losses; on the contrary, having a digital single market would raise long-run GDP by at least 4%.
The entire economy now relies on digital networks and services. Transforms not just how we consume and share data but how we structure our economy and live our lives
Realising the promise and prosperity of a digital Europe requires European policy-makers, business leaders and other key influencers to align policy and practice.
Government as a platform for innovation
According to Adrian Monck of Web Economic Forum, it was in the 1980s that governments started to lag behind the corporate world in terms of innovating with digital technology.
And as Marianna Mazzucato has shown in the Entrepreneurial State, governments were behind many of the innovations that underpin today’s digital society, from the internet to GPS to the iPhone.
A Sharing Innovation Economy
We live in a sharing platform society, where we spend an increasing proportion of our time on digital platforms, particularly provided by Google, Apple and Microsoft, but also social media such as Facebook, Twitter and YouTube, shopping platforms such as Amazon and eBay, and newer platforms of the sharing economy, including Uber and Airbnb.
The digital era is creating value though new platforms of economic activity such as those we see in the fast-growing sharing economy
All these platforms run on the basis that the more time we spend there and the more things we do, the more data we generate, and that data can be used for policy innovation, in the provision of public goods such as security and public health and citizen convenience. digital citizens have new expectations of government in terms of being able to interact digitally.
The US writer Tim O’Reilly in his Government as a Platform (GaaP) model, argues that if you look at the history of the computer industry, the innovations that define each era are frameworks that enabled a whole ecosystem of participation.
He puts forward seven principles for platform thinking in government: open standards, “keeping it simple”, design for participation, experimentation, data mining, learning from hackers and leading by example.
The approach is to create a series of building blocks or platforms that can be slotted into the services of any agency
Governments can also achieve significant efficiencies by embracing digital technologies.
It is perhaps tiny Estonia, with a population of 1.2 million, which offers hope for the idea of government as a platform for innovation.
The case of Estonia illustrates the importance of the GaaP principle to build a simple system and let it evolve
Estonia’s successful e-governance initiative, which delivers online services to citizens, is well known but, as yet, not well replicated. OECD research indicates that European member states can increase public service efficiency and impact, better implement reform agendas and raise levels of citizen engagement through the use of digital technologies.
This vision of Europe’s digital future will not become a reality without leaders from all sectors being open to the possibilities that the digital economy brings
As the European Commission’s Entrepreneurship 2020 Action Plan has shown, small and medium-sized enterprises that embrace novel digital technologies tend to grow two to three times faster.
Policy-makers, educators and governments must make greater effort
The World Economic Forum’s Networked Readiness Index is a key indicator of how countries are harnessing information and communications technologies in crossing the digital frontier.
Singapore and Finland lead the way.
The United Kingdom at number eight has seen improvement since the previous year.
Government support is important when it comes to performing digital
According to Helen Margetts, Director and Professor, Oxford Internet Institute, University of Oxford, one country pursuing enthusiastically the GaaP dream is the UK applying reform the government’s registers.
Verify, a federated identity system; GOV.UK Pay, for making payments to government; and Notify, so that people know the status of their case or application, looks promising, but are still at the starting blocks.