Innovation expert, Pieter Geldenhuys, gave an enriching, thought-provoking talk at the Grow Summit on 14 September 2017. Here, he highlighted innovative projects happening across the world, and encouraged business owners to consider how they too – can be smart about innovating in their own businesses.
“Survival dictates that human beings develop and ethics and aesthetics that favour exploiting fully those resource that exist in abundance, and economizing on items that are in short supply” – Taichi Sakaiya, Japanese Futurist
Every new era can be defined by key abundances and scarcities. They define the theory of economics, the substance of business and the foundation of life. It is for that very reason that we breathe Oxygen and not Xenon. Our past is littered with examples of the ever-changing balance between different scarcities and abundances.
Examples from human history show that most people believe that economics is essentially a zero-sum game – that scarcity will ultimately prevail over abundance. According to this view, the resources used for productive purposes will meet diminishing returns and exhaustion. Pastor Thomas Malthus famously predicted a zero-sum game as the human population grew exponentially while food production grew in a linear fashion and irreplaceable natural resources were consumed. Technological Innovation has however trumped the zero-game mindset.
Technology is the key driving force in turning scarcity into abundance. A simple example is the fibre optic cable, that can handle millions more data traffic than a copper cable. Bandwidth scarcity disappeared almost overnight. The Malthusian trap is continually sidestepped by the creation of new abundances where scarcities reigned supreme a few years ago.
The foundation of future business models will also be based on the multi-layer fabric of ever-changing abundances and scarcities.
The exponential increase of bandwidth, storage space and processing power has and will create powerful new business models as new and novel ways are conceptualized to meet the core needs of the marketplace. Companies that once thrived by harnessing scarce resources in their value propositions are now faced by extinction.
The ability to conceptualise and implement business models that are based on digital abundances is never an easy task, especially if the available business models in the marketplace are still based on the premise that bandwidth, storage space and processing power are scarce. A number of trends can help in this regard, especially if these trends are defined within five dimensions that define the business value of digital abundances.
These dimensions are:
Although these dimensions might seem disparate at first glance, it provides a useful guide in defining new services.
The iPod and iTunes combination launched by Apple provides a useful test case.
The dimensions not only help in redefining the character of the underlying assets, but also in the way the business model is redefined. The liquidity of the resources, and the ability to unbundle and rebundle resources allows companies to create brand new value propositions, while using the five dimensions to assist in this endeavour.
A few ideas in different industries might suffice to aid in the use of these new tools.
Consider the motor vehicle insurance industry. Past practice was to define the risk profile of the user and the area in which he or she stayed. This was linked to a list of attributes that would help define the risk profile of the owner, and with it, the monthly rate.
The 3 forces of digital abundance portray a situation whereby the car can be tracked in real time, at a very low cost. As the vehicle can be tracked, the risk profile of the user can be determined to a very fine level of detail. This implies that the granularity of the information regarding the use of the vehicle increases dramatically. This is due to the decreasing concreteness of the underlying elements of value, namely real-time information on the vehicles location, usage and speed. The velocity in terms of collecting the correct information is also redefined. This means that the agency dimension can be redefined as new business models become relevant that allows for a more advanced risk profiling methodology. This in turn implies a business model that works on variable insurance rates based on unique user characteristics. The density dimension becomes applicable as a new set of resources is used to create value in this new ecosystem. This business model also enables new ideas regarding agency as insurance can now be sold in a far more granular fashion.
These dimensions in themselves do not define the idea creation process, but they do provide an interesting guide by which your ideas can be measured.
The ubiquitous nature of the mobile internet enables a range of new services. Established services can also be reframed into new value systems as information becomes easier to find, more granular, more intangible and easier linked to new ecosystems of service delivery. All of these things allow organisations to develop a new agency model to provide a better service to their client base.
All you need to create these wonderful new business ecosystems is bit of insight, a bit of creativity and a bit of nerve so that you and your organisation can keep on challenging the status quo.
About Pieter:
Pieter Geldenhuys is an internationally renowned futurist and expert in the field of Innovation and Technology Strategy. Pieter was the previous Vice-Chair of the Innovation Focus Group at the International Telecommunication Union in Geneva, Switzerland. He assists numerous post-doctorial students in Europe with their research on technology’s impact on the future. He believes the only way to effectively predict the future is to create it.
For more information on Pieter, or to have him speak at your event, send an email to: brooke@uniquespeakerbureau.com.