Digital Innovation And Entrepreneurship (6013B0524Y)
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LECTURE 1
Number of employees have decreased and market capitalisation has increased.
Platform = business model that uses technology to connect people, organisations and
resources in an interactive ecosystem, based on enabling value creating interactions between
external producers and consumers. (Industry where information plays an important role is a
candidate for platform revolution). Provides an open, participative infrastructure and sets
governance conditions
*purpose: consummate matches amongst users and facilitate exchange thereby
enabling value creation
Advantages platform:
1. Scale more efficiently by eliminating gatekeepers
Platform: gatekeepers replaced by market signals provided by community
Pipeline: rely on efficient gatekeepers to manage flow value from producer to
consumer.
2. Unlock new sources of value creation and supply
Platform: supply unlocks spare capacity and harnesses contributions from the
community which used to only be a source of demand.
3. Platforms use database tools to create community feedback loops
Platform: allow for quality community signals
Pipeline: rely mechanisms to ensure quality → costly & inefficient
Platforms invert the firm:
before Platform
General marketing Internal spread by agents and External spread by consumers
employees
IT Back-office enterprise planning Front-office consumer relationship
(ERP) management (CRM)
Finance Shareholder value & FCF of firm Stakeholder value and role
interactions
, WEEK 1
60 Countries’ Digital Competitiveness
by Bhaskar Chakravorti Ajay Bhalla and Ravi Shankar Chaturvedi
https://hbr.org/2017/07/60-countries-digital-competitiveness-indexed
(Bhalla & Chakravorti & Chaturvedi, 2017)
5 most salient features of today’s digital landscape
1. Digital technology is widespread and spreading fast
2. Digital players wield outsize market power
3. Digital technologies are poised to change the future of work
4. Digital markets are uneven
5. Digital commerce still connected with cash
Stand out: digitally advanced and high momentum (Singapore)
Stall out: high state digital advancement while exhibiting slowing momentum (Norway)
Break out: low scoring in their current states of digitalization but are evolving rapidly (China)
Watch out: significant challenges with their low state of digitalization and low momentum (US)
Steps towards a more digital planet
- More digital innovators should recognize that public policy is essential to success of the
digital economy
Policy beyond infrastructure and more towards access capital and education
- Those working to accelerate their country’s digital momentum should focus on specifics:
identifying and amplifying the country’s unique drivers of digital momentum
No one size fits all policy:
Developed countries: innovation
Undeveloped countries: institutions
Smaller countries can create high value by creating the right ecosystem.
Level and pace of evolution dependant on:
- Supply
- Demand
- Institutional environment
- Innovation and change
→ eg. airbnb
, LECTURE 2
Innovation funnel = generating a large number of possible ideas, some are discarded and
some of them will be fine-tuned and converted into a development plan, creating a “funnel
shape’’→ open innovation may reduce this funnel effect or reduce cost for
organisation
Open innovation = relying on outsiders both as a source of ideas and a means to
commercialize them (Boudreau & Lakhani, 2009)
Platform too open? More fragmented because it’s more difficult for creators to
monetize and the intellectual property is more difficult to control. It does encourage
innovation eg. Wikipedia
Platform too closed? Partners will not contribute to the value required to make mutually
rewarding decisions possible eg. apple before 2000
Conventional business strategy focuses on:
- Importance barriers competitions
- Assumption value created and captured within organisation
Where should organisations be more open?
1. Manager and sponsor participation
Manager: firm that manages
Direct access users
Organizes and controls interaction
Closest consumers/producers
Sponsor: firm that sponsors platform
Legal control technology
Controls architecture and intellectual property
Legal & economic control long term and strategy
Management
1 firm Many firms
1 firm Proprietary Licensing
Playstation Windows
Sponsorship Monster Google
Visa (>2007) Palm OS
Many firms Joint Venture Shared
Careerbuilder DVD
Orbitz UPC
Visa (<2007) Android
*proprietary models have better interfaces and seamless interactions
* when sponsorship is shared decision making becomes low
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