Changing your business model, perhaps even turning it on its head and working in close cooperation with competitors – can this be a good idea? Yes, it can even be a prerequisite for innovating mature markets in which there is good access to data and where customers demand greater value.
Collaborations between competitors and the establishment of new standards occur on a regular basis. At the moment, for example, many of us are happy about different mesh systems with Wi-Fi 6. One individual who spends a lot of time thinking about how interoperability can give an extra boost to an entire market is Peter Ljungstrand, Research and Business Developer at RISE. He sees a new phenomenon in the exponential increase of real-time data and how established operators are allowing shared data to redefine their business model.
Public transport being a good example. Traditionally, there are local transport companies that operate underground transit systems, buses, taxis, electric scooters, trains and so on. They have predominantly different markets, mainly selling trips from point a to b.
– “Instead, imagine a mobility-as-a-service solution. The customer pays a monthly fee and does not have to worry about buying separate tickets. The customer can freely change modes of transport for different parts of a journey. By collaborating in an ecosystem and selling everything as a combined service, you can create better customer value and, at the same time, the pot gets bigger.”
The view of what a corporation is is changing
In general, Ljungstrand sees a growing trend characterised by a changing view of what a company is. There is a shift from a clearly defined entity, such as a private limited company, towards being part of more dynamic networks and digital ecosystems in which people network on a daily basis.
How can we maximise value creation in such conditions? One answer to this question, according to Ljungstrand, is to increase value by working with someone previously viewed as a competitor. Software companies that offer services linked to open software are examples of operators moving in this direction. First, considerable development resources are invested and then the result is freely provided as open source for anyone in the market to build their business around.
– “It may seem totally bonkers,” says Ljungstrand. “But by giving it away for free, you create knowledge and a demand for solutions and components. The market is growing, it’s not a zero-sum game.
– “Although the source code is basically free, the knowledge of how it is used is not free. You buy that knowledge from someone able to provide it.”
Ljungstrand underscores that this is not the dominant perspective in business at present. After all, there are a few giants out there that build ecosystems with lock-in effects, and benefit quite well from it.
Although the source code is basically free, the knowledge of how it is used is not free
Interoperability in the public sector creates value
For the public sector, there is a lot to consider when it comes to interoperability and how data from different IT systems can be coordinated to create greater value for us citizens.
– “There are known challenges in terms of inefficiency and obstructions, with administrations that generally find it difficult to cooperate across boundaries,” says Ljungstrand.
Collaboration on city development
Virtual Gothenburg Lab is a collaborative project in which RISE explores solutions in urban development based on shared data. In addition to obvious gains, such as coordinating planned excavation work on the same section of road between the traffic office, the developer and the district heating company, the utilisation of data can have a more comprehensive influence on future urban spaces. The project includes operators from academia, the public sector and trade and industry, such as Volvo Cars.
– “How can we understand the implications of a greater number of autonomous vehicles driving around the city? How are walkways and pedestrian crossings affected? Should we narrow streets, given that autonomous vehicles can drive with greater precision? Perhaps cars with drivers will be seen as curiosities, a bit like the horse and carriage are today. When will it no longer be rational to take your own car in relation to cost-efficiency and time?” asks Ljungstrand.