creating)new)markets)in)the) - nemode.ac.uk€¦ · creating)new)markets)in)the) digital) ... •...

© Irene Ng 2013, all rights reserved 1

Irene%C%L%Ng%Professor'of'Marketing'&'Service'Systems,'WMG'

Director,'International'Institute'of'Product'&'Service'Innovation'

Creating)New)Markets)in)the)Digital)Economy!IBM Almaden, 15 Jan 2013

[email protected]''

@ireneclng''

http://uk.linkedin.com/in/ireneclng''

'bit.ly/vcssblog'''

www.warwick.ac.uk/go/sswmg''

www.ireneng.com''

About!me,!and!my!institution!


The$University$of$Warwick$

Facts&and&.................................&!  Established$1965$$

!  League$table$positions$–  Times$and$Sunday$Times$(2012)$G$8th$–  Guardian$(2012$guide)$–$6th$$–  Independent$(2012$guide)$G$8th$–  RAE$2008$–$7th$overall$$–  QS*$World$University$Ranking$(2011)$–$50th$$–  We$aimed$to$be$in$the$top$50$by$2015$

!  International$working$–  Formal$working$relationships$with$Boston$

University,$Monash$University,$IIT$Kharagpur,$Jawaharlal$Nehru$University$and$Nanyang$Technological$University$

$$&

Figures&!  Undergraduates $12,979$!  Postgraduates $10,441$!  International$students$6,411$

!  International$students$27%$!  Total$staff $4,912$!  Academic$staff $687$!  International$staff $25%$!  Turnover $£419m$!  Campus$size $292$hectares$!  Academic$departments

$28$!  Research$centres $48$!  Overseas$alumni $44,194$

*$Quacquarelli$Symonds$Ltd$

WMG$Research$and$Development$Centres$

International$Manufacturing$Centre$

International$Automotive$$

Research$Centre$

International$Digital$Laboratory$(IDL)$

Engineering$Management$Building$


New$Centres$

International$Institute$for$Product$and$Service$Innovation$(IIPSI)$

6

Global$Partners$


Product$LifeGCycle$Management$$

Experiential$Engineering$

Product$Evaluation$Technologies$

Embedded$Systems$$

Simulation$and$Modelling$

Robotics$

Cloud$Computing$Security$$

Privacy$Enhancing$Technologies$

Data$Loss$Monitoring$

Vulnerability$Research$

Trust$Management$

Health$Informatics$

eGHealth$$

Neural$Engineering$

Biomedical$Engineering$

Virtual$Reality$Medical$Training$

Visualisation$

Digital$Media$

eGBusiness$

Digital$Manufacturing$

Institute$for$$eGSecurity$

Institute$of$$Digital$Healthcare$

Digital$Technologies$

International$Digital$Laboratory$

Irene%C%L%Ng%Professor'of'Marketing'&'Service'Systems,'WMG'

Director,'International'Institute'of'Product'&'Service'Innovation'

International)Institute)of)Product)&)Service)Innovation)(IIPSI)!

[email protected]''

@ireneclng''

http://uk.linkedin.com/in/ireneclng''

'bit.ly/vcssblog'''

www.warwick.ac.uk/go/sswmg''

www.ireneng.com''


International!Institute!of!Product!&!Service!Innovation!(IIPSI)!

23 January 2013 Copyright Irene Ng, 2012. All rights reserved.

Cloud for Business

Smarter Social Media Data to Intelligence

Mobile for Business

Digital!Software!Innovation!(tech!demonstrators)!


Adding Functionality to Plastic Parts

Polymer Recycling

Low Volume Production

Polymer!Innovation!(sample!tech!demonstrators)!

ExperienceBled!Innovation!(sample!tech!demonstrators)!


Customer Engagement

User Focussed Product/Service Design

Energy Usage Behaviour

Visitor Experience


13

IIPSI$Service$Systems$&$Business+$

•  Technology'disruptions'cause'challenges'to'existing'business'models'(e.g.'Kodak)'

•  Adaptability,'transformation'needed'–'both'for'their'business'models'(the'Lirm’s'capability'to'serve'the'market)'and'their'economic'models'(the'way'they'derive'their'revenues'and'the'market'exchanges'they'participate'in)'

•  Business+'research'into'value'creating'service'systems,'digitisation/virtualisation,'servicePdominant'logic'(e.g.'Bombardier,'Rolls'Royce,'GSK);'also'into'pricing/revenue'models,'methodology'for'new'transactions'&'markets'

•  Transdisciplinary'team'of'social'science,'technology,'business'&'engineering'

•  4'RCUK/EPSRC'DE'projects,'NEMODE'virtual'collaboration'host'

IIPSI)Marketspace)

Startup!space!

SME!space!

Trade!pubs!

Academic!pubs!

Markets!

Knowledge!Transfer!&!

Tools!Projects!

IP Passing Model, demonstrators

Education)

PreBincubating!

1 2

4

3 5

6

18 19

13

14

Students!

12

17

11

independence

Inform Scale

corporate!space!

7

funding!8

Lower TRLs

Social Science

15

Mkt modularity

SME!Devt!

IP Passing Model, demonstrators

9

11 primary knowledge flows, 8 secondary flows

Digital!(software)!innovation!

Polymer!Innovation!

ExperienceBled!

Innovation!

Service!Systems,!New!Econ/Biz!models!

Bootstrap

Practice)

Research)

10

10


Impact!

•  created!12!new!high!tech!startBup!businesses,!!

•  directly!generated!70!new!jobs,!!•  trained!over!450!small!business!in!a!range!of!digital!technologies!over!the!last!4!years!

•  International!publications,!patents,!tools!etc.!


Creating)New)Markets)in)the)Digital)Economy!


Value!was!exchange!(what!I!got!for!what!I!gave)!


But!it!wasn’t!exchange!that!made!us!happy.!It!was!experiencing!what!we!bought!that!gave!us!the!outcomes!we!wanted!

We buy because of the service of the object, even if it was an emotional ‘service’ i.e. things are service avatars*

Mike Kuniavsky, 2010 23 January 2013 Copyright Irene Ng, 2012. All rights reserved.


Ownership!was!the!only!way!to!get!the!‘service’!of!an!object!

•  Previously,!the!only!route!to!service/outcomes!was!through!ownership!e.g.!music!CDs!

•  But!outcomes/benefits!come!only!in!the!context'of!use!and!experience!!

•  If!firms!found!a!way!to!serve!contexts,!individuals!may!not!need!to!own'

•  Case!study:!Music!


VALUE!&!WORTH!

•  BUT…!we!needed!to!BUY!before!experiencing!–!so!industry!focus!is!still!on!buy!(WORTH)!even!while!design!focus!is!on!experience!(VALUE)!

• Worth!and!Value!is!separated!in!time/space!



Something!is!happening……!

•  Exchange!used!to!be!in!further!in!advance!•  With!digitisation!and!connectivity,!exchange!can!now!

be!closer!to!contexts!of!use!e.g.!Music!•  i.e.!worth!is!getting!closer!to!value!creation!•  For!offerings!that!could!be!digitised,!collapse!of!buy!

(potential)!and!use!(kinetic)!into!the!same!time/space!•  VALUE!has!become!more!relevant!again!in!determining!

WORTH!•  With!some!new!business!models,!VALUE!is!increasingly!

determining!WORTH!(due!to!collapse!of!buy!and!experience!time/space!

With!digital!connectivity,!markets!are!now!possible!to!be!formed!!in!context!!

•  Digitisation!results!in!“digital!backwash”!of!the!offering!

•  Serving!contexts!increases!worth!!•  New!business!and!economic!models!emerge!

•  So!how!should!we!think!about!value!now!in!terms!of!how!it!might!be!related!to!worth!and!markets?!


Value+!and!ServiceBdominant!logic*!

•  value'is'the'goodness'we'create'out'of'the'experience'with'something'or'someone'in'context,'and'that'experience/interaction'is'the'enactment'of'our'social'and'cultural'values!!


++ Ng and Smith (2012) *Vargo and Lusch (2004, 2008)

Value&is&co+created&for&outcomes/benefits/value+in+use&

CO-CREATED VALUE that cd be

higher than proposed Enhance

Realise

Propose

Peace!of!mind!Entertainment!

Love!

!!!!!!!!!!!

RESOURCES!

!!!!!!!!!!!!!!!

RESOURCES????!


Value created is Contextual. Resources are therefore also Contextual.

This!camera!is!available!so!it!is!a!resource!in!

context!

This!camera!is!

not!

Things become more valuable in context because they enable resources for value creation

VALUE IN CONTEXT


Two functionally the SAME cameras but not the same value for the user in context. Because one camera is less competent in context, one is a

lesser service avatar (or is just simply not around!)

COMPETENCY OF OFFERING IN CONTEXT IS KEY TO NEW MARKETS



Serving!Contexts!(the!kinetic)!

•  Current!market!platforms!B!tablets!and!mobiles!•  More!platforms!for!contextBbased!markets!now!

need!to!be!created!e.g.!InternetBofBThings!at!home,!in!buildings!

•  markets!are!now!in!the!same!space!as!creatives,!sociologists,!interactive!designers!B!looking!at!contexts!and!lived!lives!

•  For!nonBdigital!things,!linking!supply!chains!to!home!market!platforms!essential!for!new!business!models!

Once!upon!a!time,!our!contexts!were!rather!homogenous!

• Where/when!we!ate!meal!• Where/when!we!listened!to!music!• Where/when!we!exercised!!


•  *Technology liberates us from constraints of –  time, when things can be done –  place, where things can be done –  actor, who can do what –  constellation, with whom it can be done

*Reframing Business, Normann, 2001


Why!is!this!important!

•  Future!digital!connectivity!for!innovation!and!new!markets;!!

•  Understanding!how!current!things!should!evolve!for!connectivity!(e.g.!biopharmaceauticals)!to!serve!us!better!–!new!business!models,!new!econ!models,!exchange!&!new!ways!to!serve!

•  Innovating!offerings/service!that!is!scalable!and!replicable!in!creating!value!in!context!


But!to!bring!your!digitised!offering!(content)!into!context,!you!need!a!

medium/platform!(widget),!connectivity,!and!a!social!space!!

E.g. of ‘service’ in context digitally through your mobile •  Dictionary •  Calculator •  Calendar •  Torchlight •  Camera


The!New!Battleground!

CONTEXT!

Content!

Connectivity!

Social! Widget!

Digitised!offering!in!context!

Who!is!digitising!to!serve!use!context!next?!Tea?!;)!

•  Digitisation!enables!traditional!offerings!to!become!a!resource!in!context,!reducing!time!between!acquiring!a!resource!and!using!a!resource!B!expanding!demand!


In context

Digitisation+Data is the new oil, Context is the new

oil-field


Mobile!phone!as!the!medium!to!propose!digitised!offerings!in!context!

• Why!is!the!mobile!phone!one!of!the!most!popular!device!for!digitised!offerings!today?!!

•  because!it!is!often!present!in!MANY!lived!experiences!(contexts)!!

•  It!may!not!be!the!only!widget!in!the!future!serving!multiple!contexts,!but!it!is!now!


Markets!are!forming!at!where!service!creates!most!wealth!–!in!context!!

Digitisation!allows!new!offerings!to!be!

resources!available,!accessible!on!demand,!

in!context!The!better!you!are!able!to!serve!context,!the!bigger!your!market!


Competitive!Dynamics!

•  Serving!Contexts!changes!the!nature!of!competition!

•  Land!grab!creates!disruption,!enabled!by!new!technologies.!How?!


Context!Enjoying!music!on!spotify!and!seeing!other!friends!choices!of!music!while!in!a!gym!


BUSINESS!MODEL!VS!ECONOMIC!MODEL!

23/01/2013

WMG 37

Value!Creation!

Value!prop!

Value

!cap

ture!

EMI, Sony BMG

person!

MUSIC

ENJOYING MUSIC Money fr access e.g.

spotify Money fr ownership (e.g.

CD) Money fr eyeballs (eg.

Google)

ECONOMIC MODEL - Where exchanges come from, what exchanges are there, creating worth from value creation

BUSINESS MODEL

E.G.!MUSIC!B!CONTENT!

23/01/2013

WMG 38

Value!Creation!

Value!prop!

Value

!cap

ture!

EMI, Sony BMG

person!

MUSIC

ENJOYING MUSIC

Money fr access e.g. last.fm

Money fr ownership e.g. iTunes

Money fr medium (e.g. CD)


E.G.!MUSIC!B!WIDGET!

23/01/2013 WMG 39

Value!Creation!

Value!prop!

Value

!cap

ture!

Apple, MP3 player, Computer

person!

WIDGET

ENJOYING MUSIC

Money fr ownership

E.G.!MUSIC!B!CONNECTIVITY!

23/01/2013 WMG 40

Value!Creation!

Value!prop!

Value

!cap

ture!

O2, Vodafone, Three, Orange

person!

WIFI, 3G

ENJOYING MUSIC

Money fr access


E.G.!MUSIC!B!SOCIAL!

23/01/2013 WMG 41

Value!Creation!

Value!prop!

Value

!cap

ture!

Myspace, facebook, google+, twitter, spotify

person!

Sharing platform

ENJOYING MUSIC

Money fr eyeballs (ads)

E.G.!MUSIC!B!GYM!

23/01/2013 WMG 42

Value!Creation!

Value!prop!

Value

!cap

ture!

GYMS

person!

Sport & fitness environment

ENJOYING MUSIC & SPORT

Money fr access


Industries!propose!value!in!context!

23/01/2013 WMG 43

Value!Creation!

Value!prop!

Value

!ca

pture!

Value!Creation!

Value!prop!

Value!

capture!

Value!Creation!

Value

!ca

pture!

Value!Creation!

Value!

capture!

Value!prop!

Value!prop!

person! person!

person!person!

Value!

Creation!

Value!prop!

Value!capture!

GYMS

person!APPLE, CREATIVE (WIDGET)

SONY, EMI (CONTENT)

SKY, VIRGIN (CONNECTIVITY) FACEBOOK, MYSPACE

(SOCIAL)

Value!Constellation!of!Music!in!Context!

23/01/2013 WMG 44

Value!Creation!

Value!prop!

Value

!ca

pture!

Value!Creation!

Value!prop!

Value!

capture!

Value!Creation!

Value

!ca

pture!

Value!Creation!

Value!

capture!

Value!prop!

Value!prop!

person! person!

person!person!

Value!

Creation!

Value!prop!

Value!capture!

GYMS

person!

APPLE, CREATIVE (WIDGET)

SONY, EMI (CONTENT)


(SOCIAL)

Person!enjoying!music!in!context!

Many!persons!enjoying!music!in!context!



23/01/2013 WMG 45

Value!prop!

Value

!ca

pture!

Value!prop!

Value!

capture!

Value

!ca

pture! V

alue!capture!

Value!prop!

Value!prop!

person!

Value!prop!

Value!capture!

GYMS


SONY, EMI (CONTENT)


(SOCIAL)


PIE



23/01/2013 WMG 46

Value!prop!

Value

!cap

ture!

Value!prop!

Value!capture!

Value

!ca

pture!

Value!capture!

Value!prop!

Value!prop!

person!

Value!prop!

Value!capture!

GYMS


SONY, EMI (CONTENT)


(SOCIAL)


PIE

•  The!Value!constellation!map!shows!you!which! industry!has!a!stake! in! which! OTHER! industry! to! expand! their! market!penetration,!driving!disruption,!convergence,!land!grab!




23/01/2013 WMG 47

Value!prop!

Value

!ca

pture!

Value!prop!

Value!

capture!

Value

!ca

pture! V

alue!capture!

Value!prop!

Value!prop!

person!

Value!prop!

Value!capture!

GYMS


SONY, EMI (CONTENT)


(SOCIAL)


PIE


I!want!to!play!there!because!

more!content!that!I!control!will!drive!my!connectivity!

business!!


23/01/2013 WMG 48

Value!prop!

Value

!ca

pture!

Value!prop!

Value!

capture!

Value

!ca

pture! V

alue!capture!

Value!prop!

Value!prop!

person!

Value!prop!

Value!capture!

GYMS


SONY, EMI (CONTENT)


(SOCIAL)


PIE


I!want!to!play!there!because!widget!that!I!

control!will!secure!my!connectivity!

business!!



23/01/2013 WMG 49

Value!prop!

Value

!ca

pture!

Value!prop!

Value!

capture!

Value

!ca

pture! V

alue!capture!

Value!prop!

Value!prop!

person!

Value!prop!

Value!capture!

GYMS


SONY, EMI (CONTENT)

SKY, VIRGIN (CONNECTIVITY)

FACEBOOK, MYSPACE (SOCIAL)


PIE


I!just!want!to!make!sure!these!guys!can’t!do!it!

without!me!

Connectivity!&!Digitisation!

•  TV!was!in!a!room!•  Music!was!on!speakers!and!stereo!players!•  Digitisation!&!Connectivity!is!changing!contexts!

of!use!•  Changing!contexts!of!use!is!bringing!different!

industries!into!a!context!e.g.!Tesco!has!a!stake!in!your!car!–!will!they!pay!insurance?!

•  Disruption!&!Convergence!comes!from!understanding!value!constellation!of!the!context!

23/01/2013 WMG 50


Changing!Value!Constellations!

• With!more!digital!connectivity,!there!are!more!connected!contexts!

•  more!constellations!with!different!players!will!emerge,!converging!stuff,!creating!new!ways!to!capture!value,!generating!new!business!models,!creating!disruptions!

•  Move!from!vertical!business!models!to!systemic!(horizontal!&!vertical)!

For!more!information:!

Read!the!book!!Value:!Creating!New!Markets!in!the!Digital!Economy!

B  out!January!2013!!


*

* Tentative cover

www.valueandmarkets.com


Making!Value!Creation!in!Context!Digitally!visible!

HubBofBallBThings!(H.A.T)!–!a!designed!experiment!for!new!business!models!powered!by!IoT!

!!

New!(market)!platform!to!serve!context!powered!by!IoT!

•  The!Internet!of!Things!(IoT)!refers!to!uniquely!identifiable!objects!(things)!and!virtual!addressability!that!would!create!an!InternetBlike!structure!for!remote!locating,!sensing,!operating!and/or!actuating!of!such!‘things’.!There!is!a!sense!that!equipping!all!objects!in!the!world!with!the!ability!to!be!animated!and!connected!could!transform!lived!lives.!!

•  The!home!and!the!building!as!new!platforms!to!serve!contexts!in!the!future!



Key = IoT Enabler = IoT Enabled = IoT Enhancer = Trustgate

Public Info Hub

Type1

Legacy

Legacy

Type1

Legacy

‘App in-Store’

‘Thing POD’ Thing Platform for

Open-source Design

Data for developers

Use of Virtual Devices

Applications Developed using open-source API

‘Thing Store’

Standard Data formats and defined

protocols

Type 1 Thing Interface

App

App App

Thing 2s Thing 1s

‘Thing 2’ Network

3D Printing/Scanning

Private Info Hub

Private Info Hub

‘App out-Store’ App App

landlord

The H.A.T.

resident Building mgr

Actuating

External platform

s HubBofBAllBThings!–!tentative!platform!architecture!for!multiBsided!markets!

MM

M

TG!

TG!

Thank!you!


creating)new)markets)in)the) - nemode.ac.uk€¦ · creating)new)markets)in)the) digital) ... •...

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