Post on 14-Apr-2018
© 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
irene.ng@warwick.ac.uk''
@ireneclng''
http://uk.linkedin.com/in/ireneclng''
'bit.ly/vcssblog'''
www.warwick.ac.uk/go/sswmg''
www.ireneng.com''
About!me,!and!my!institution!
© Irene Ng 2013, all rights reserved 2
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$
© Irene Ng 2013, all rights reserved 3
New$Centres$
International$Institute$for$Product$and$Service$Innovation$(IIPSI)$
6
Global$Partners$
© Irene Ng 2013, all rights reserved 4
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)!
irene.ng@warwick.ac.uk''
@ireneclng''
http://uk.linkedin.com/in/ireneclng''
'bit.ly/vcssblog'''
www.warwick.ac.uk/go/sswmg''
www.ireneng.com''
© Irene Ng 2013, all rights reserved 5
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)!
© Irene Ng 2013, all rights reserved 6
Adding Functionality to Plastic Parts
Polymer Recycling
Low Volume Production
Polymer!Innovation!(sample!tech!demonstrators)!
ExperienceBled!Innovation!(sample!tech!demonstrators)!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
Customer Engagement
User Focussed Product/Service Design
Energy Usage Behaviour
Visitor Experience
© Irene Ng 2013, all rights reserved 7
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
© Irene Ng 2013, all rights reserved 8
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.!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
Creating)New)Markets)in)the)Digital)Economy!
© Irene Ng 2013, all rights reserved 9
Value!was!exchange!(what!I!got!for!what!I!gave)!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
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.
© Irene Ng 2013, all rights reserved 10
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
© Irene Ng 2013, all rights reserved 11
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?!
© Irene Ng 2013, all rights reserved 12
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!!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
++ 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????!
© Irene Ng 2013, all rights reserved 13
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
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
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
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
© Irene Ng 2013, all rights reserved 14
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!!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
• *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
© Irene Ng 2013, all rights reserved 15
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
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
© Irene Ng 2013, all rights reserved 16
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
In context
Digitisation+Data is the new oil, Context is the new
oil-field
© Irene Ng 2013, all rights reserved 17
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
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!
© Irene Ng 2013, all rights reserved 18
Competitive!Dynamics!
• Serving!Contexts!changes!the!nature!of!competition!
• Land!grab!creates!disruption,!enabled!by!new!technologies.!How?!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
Context!Enjoying!music!on!spotify!and!seeing!other!friends!choices!of!music!while!in!a!gym!
© Irene Ng 2013, all rights reserved 19
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)
© Irene Ng 2013, all rights reserved 20
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
© Irene Ng 2013, all rights reserved 21
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
© Irene Ng 2013, all rights reserved 22
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)
SKY, VIRGIN (CONNECTIVITY) FACEBOOK, MYSPACE
(SOCIAL)
Person!enjoying!music!in!context!
Many!persons!enjoying!music!in!context!
© Irene Ng 2013, all rights reserved 23
Value!Constellation!of!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
APPLE, CREATIVE (WIDGET)
SONY, EMI (CONTENT)
SKY, VIRGIN (CONNECTIVITY) FACEBOOK, MYSPACE
(SOCIAL)
Person!enjoying!music!in!context!
PIE
Many!persons!enjoying!music!in!context!
Value!Constellation!of!Music!in!Context!
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
APPLE, CREATIVE (WIDGET)
SONY, EMI (CONTENT)
SKY, VIRGIN (CONNECTIVITY) FACEBOOK, MYSPACE
(SOCIAL)
Person!enjoying!music!in!context!
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!
Many!persons!enjoying!music!in!context!
© Irene Ng 2013, all rights reserved 24
Value!Constellation!of!Music!in!Context!
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
APPLE, CREATIVE (WIDGET)
SONY, EMI (CONTENT)
SKY, VIRGIN (CONNECTIVITY) FACEBOOK, MYSPACE
(SOCIAL)
Person!enjoying!music!in!context!
PIE
Many!persons!enjoying!music!in!context!
I!want!to!play!there!because!
more!content!that!I!control!will!drive!my!connectivity!
business!!
Value!Constellation!of!Music!in!Context!
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
APPLE, CREATIVE (WIDGET)
SONY, EMI (CONTENT)
SKY, VIRGIN (CONNECTIVITY) FACEBOOK, MYSPACE
(SOCIAL)
Person!enjoying!music!in!context!
PIE
Many!persons!enjoying!music!in!context!
I!want!to!play!there!because!widget!that!I!
control!will!secure!my!connectivity!
business!!
© Irene Ng 2013, all rights reserved 25
Value!Constellation!of!Music!in!Context!
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
APPLE, CREATIVE (WIDGET)
SONY, EMI (CONTENT)
SKY, VIRGIN (CONNECTIVITY)
FACEBOOK, MYSPACE (SOCIAL)
Person!enjoying!music!in!context!
PIE
Many!persons!enjoying!music!in!context!
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
© Irene Ng 2013, all rights reserved 26
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!!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
*
* Tentative cover
www.valueandmarkets.com
© Irene Ng 2013, all rights reserved 27
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.
© Irene Ng 2013, all rights reserved 28
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!
23 January 2013 Copyright Irene Ng, 2012. All rights reserved.