The 3rd Industrial Revolution?Exploring the future of value creation

Dr. Robin Teigland Karinda Rhode in SLStockholm School of Economicswww.knowledgenetworking.orgwww.slideshare.net/eteigland

RobinTeigland

March 2013www.hhs.se

"...when the rate of change outside an organization is greater than the rate of

change inside, the end is near...."

Jack Welch…

Increasing pace of change

Of original Forbes 100 in 1917- 61 companies ceased to exist by 1987- 18 of remaining 39 underperformed market by

20%- Only 2 beat market index (GE & Eastman

Kodak)- Only 1 (1%) today!

Average S&P 500 company lifespan−1920s – 67 years−2010s – 15 years

Dr. Richard Foster, Yale, Sept 2012−Today's rate of change is at faster pace than

ever −By 2020 prediction is > 75% of S&P 500 will be

companies we do not know about todayhttp://www.fastcompany.com/3001444/what-zara-pg-and-berlitz-know-about-agility

Did You Know: Shift Happenshttp://www.youtube.com/watch?v=cL9Wu2kWwSY&feature=search

1. What trends do you recognize?

2. How are these trends affecting you and your organization?

3. What does this have to do with networks?

Growth

Time

Information and knowledge

Human absorptive capacity

Human capacity cannot keep up…

Adapted from Cohen & Levinthal 1989

A Big Bang in the Information Universe

2.7Blndaily comments and ”likes” on Facebook

500Mlndaily posts on Twitter and Weibo combined

200kvideos uploaded to YouTube daily

http://en.wikipedia.org/wiki/Internet, Tomas Larsson, 2012

Big Data is now big money

Tomas Larsson, Sep 2012

http://hbr.org/2012/10/data-scientist-the-sexiest-job-of-the-21st-century/ar/1

”No one knows everything, everyone knows something,

all knowledge resides in humanity.”

networks

Adapted from Lévy 1997

Six degrees of separation

- Milgram, 1967

3.74 degrees of separation!

Source: Facebook

Aug 20125 mln active

monthly users in Sweden

Multiple relationships

@padday, www.thinkoutsidein.com/blog

Growing social media landscapes

http://www.resonancechina.com/2012/03/13/updated-2012-china-social-media-landscape/

Social Media – the connected world

Engagement

Commerce

Analytics

Influence

Platforms - Integrators

Enterprise

Consultants

Social-Local-Mobile

Gaming

Mahaley 2012

People > 45 years becoming more active

Edison Research, 2012 - US-based study

% age group with personal profile on any social networking website

Social media gaining in influence on buying decisions

Which ONE social networking site or service influences your buying decisions the most?

Edison Research, 2012 - US-based study

67% in USA do not follow a brand in social media and for those who do, no one brand

dominates

Of 332 responsesEdison Research, 2012

Think about the companies, brands, products and services

you enjoy following on social networking sites. What is the first ONE that comes to mind?

Creation > curation

46% Creators: Create and post photos, videos, etc.

41% Curators: Find and post photos, videos, etc.

http://pewinternet.org/Reports/2012/Online-Pictures.aspx

The wisdom of the crowd

ClosedExpensiveComplexAccurate

OpenInexpensive

SimpleClose enough

Hinton 2007

AccurateUp-to-date

History tends to repeat itself….Innovation, financial crisis, industrial revolution,

…

Steam engine

Internal combustion

engine

Microelectronics

Late 18th C Late 19th C Late 20th C

Schön 2008

Third industrial revolution?

Where have the traditional sources of sustainable competitive advantage been?

#1

InnovationNetworks of relationships

Brand & Reputation

FIRM

Kaye 1993

#1

InnovationNetworks of relationships

Brand & Reputation

FIRM

TWhere are tomorrow’s sources of

sustainable competitive advantage?

Teigland 2010

How Wrapp’s friend-to-friend marketing platform drives sales

Converting online relationships to offline sales

The “Open Innovation” Opportunity Cloud – Powered by technologies

Mahaley 2012

Mahaley 2012

Crowdsourcing product and service innovations from customers

Open innovation in high techFor 10 years IBM has hosted “ideajams” on specific challenges, i.e., text-

based chats with hundreds, even thousands of contributors from inside and outside IBM. “The 2006 Innovation JamTM brought together >150,000 people

from 104 countries and 67 companies. 10 new IBM businesses were launched with seed investment of $100 mln.”

Mahaley 2012

Open innovation in health care

DEMO!

Mahaley 2012

ExploitationImproving

existing value creation activities

ExplorationDeveloping new value creation activities

Adapted from March 1991

Into the future….

Who develops it?

Who manufactures it?

Who finances it?

30% profit margin in

commodity business

sketchstreet

From clothing to home products….

Open innovation in automotive design/production

“Local Motors is the place for people to create influential vehicles together.”

http://www.youtube.com/watch?v=azCRuwtE_n0

The Firm

The Collective

vs

E.g., Microsoft~ Built by employees within

organizational boundaries

E.g., Linux~ Built by users and distributed freely regardless of affiliation

Models of Knowledge Creation

Teigland, Di Gangi, & Yetis 2012

“Open source” …not just about software anymore

OpenSimulator: A value-creation ecosystem

AcademicEntrepreneurHobbyistLarge FirmNon-profitLocal PublicFederal PublicResearch InstSME EmployeePeriphery

Teigland, Di Gangi, & Yetis 2012

USD 5.5mln in development

costs

Into the future….

Who develops it?

Who manufactures it?

Who finances it?

3D printing becoming more commonplace…

http://www.youtube.com/watch?v=rrrF_MVMlZw

…and it’s no longer just for companies

3D scanning apps

Affordable home 3D printers

In stores near you

Open Source + 3d Printing + InternetComm

http://mashable.com/2013/02/13/robohand/

$60,000

$150

Where is all this

happening?Online

Access to 24x7 global workforce

Matchmakers: USD 1bln industry

Increasing supply of freelance talent globally

https://www.elance.com/trends/talent-available

Global Online Employment ReportQ2 2012 at Elance

The new market place

A shift by companies from being “problem solvers” to “solution finders”

Ericsson & Augur 2011

Shifting market logic

Ericsson & Augur 2011

Into the future….

Who develops it?

Who manufactures it?

Who finances it?

New forms of financing

http://blog.intuit.com/trends/crowd-power-what-is-crowdfunding-infographic/

And even new forms of currency

Mahaley 2012

Just when you thought you got it….

Here comes the Immersive Internet….

O’Driscoll 2009

What are Virtual Worlds ?

http://www.youtube.com/watch?v=Quh2OiPHkm8

Platforms for unleashing creativity and revolutionizing

value creation

My CV• Leading a virtual team of 30

individuals from across the globe

• Creating and successfully executing strategies under

pressure• Managing cross-cultural conflict

without face-to-face communication

Building skills in virtual environments

The number of virtual worlds and users continues to rapidly increase

http://www.slideshare.net/nicmitham/kzero-universe-q1-2012

≈1.9 bln accounts

≈100 worlds

≈1.4 bln VW accounts under age 16

http://www.slideshare.net/nicmitham/kzero-universe-q1-2012

225 mln

170 mln

200 mln

265 mln42 mln (and 8.2 mln bought)

“Clearly, if social activity migrates to synthetic worlds, economic activity will

go there as well.” Castronova, 2006

$14.8 billion worldwide market for virtual goods in 2012E

http://www.superdataresearch.com/monetization-is-a-four-letter-word/

US$ 635,000 for a virtual asteroid!

http://blogs.forbes.com/oliverchiang/2010/11/13/meet-the-man-who-just-made-a-cool-half-million-from-the-sale-of-virtual-property/

• US$ 500,000 profit in 5 years by Jon “Neverdie”

Jacobs• Entropia Universe with GDP

>US$ 440 mln

Cloud party on Facebook - In beta Marketplace app and Cloud Coins

https://www.facebook.com/CloudParty

Education, training…

Learning virtual teaming skills

through experience

http://www.youtube.com/watch?v=Quh2OiPHkm8

Euroversity Network Overview

− EU funded, 3 year multilateral and transversal network (LLP EACEA, KA3 (ICT))

− December 2011 – December 2014− Project Leader: University of Hull (Darren Mundy, Luisa Panichi)− 19 partners from Austria, Cyprus, France, Germany, Israel, Italy,

Netherlands, Norway, Portugal, Sweden, UK Network Aims

−Collect good practice examples in teaching and learning in virtual worlds from different subjects and national and local contexts− Facilitate transfer of core knowledge to new contexts− Provide framework for creation of pan-European virtual-world university

Expected Outcomes− Increased number of experts in virtual world education− Policy for long-term sustainability of network and its outcomes− Model for knowledge transfer− Range of dissemination events

More information: http://www.euroversity.eu/

Training and simulation for Providers of Healthcare Delivery

In hospital counseling atUniv of New England

Virtual hallucinations at UC Davis

Pharmacy training at Umeå U

Emergency training w/ SAIC

Accelerating innovation to meet global needs

Teigland et al. 2010

Integrating users in development

process

http://www.youtube.com/watch?v=2kMNWBU1Yb8

Developing international entrepreneurs?

http://www.bbc.co.uk/news/technology-20492908

The future of immersion…

http://www.bbc.com/news/technology-19568451

Increasing pace of VW/3Di development

Browser-based, hyperlinked 3D

Radical interfaces

Mobile

Short-term Mid-term

Long-term

Adapted from Burden, 2012

Coming soon – by Palgrave Macmillan

Release date April 19, 2013

http://www.amazon.com/The-Immersive-Internet-Reflections-Entangling/dp/1137283017

Only a matter of time?

O’Driscoll 2009

From factories to office parks to….

From the mobility of goods to the mobility of financial capital to …

Teigland, JVWR, 2010

...the “mobility” of labor?

Here today, gone tomorrow?

Some things do not change

Innovation Exchange

Exchange Trust

Trust RelationshipsRelationships Interaction

Are you ready?

What should you think about?

How to let go?

How to leverage the power of networks to create value inside and outside the boundaries of the firm?

How to create a sustainable ecosystem?

Karinda Rhode

aka Robin Teiglandrobin.teigland@hhs.se

www.knowledgenetworking.org

www.slideshare.net/eteigland

www.nordicworlds.net RobinTeigland

Photo: Lindholm, Metro

Photo: Nordenskiöld

Photo: Lindqvist

If you love knowledge, set it

free…

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