Traditionally, it has been human interaction of one kind or another that has created value. An individual or business entity provided a product or service in exchange for some other good, service, or currency.
Increasingly, it is digitization of many elements across multiple inter-connected businesses that creates value, with systems of machines and applications doing much of the work and the interacting.
This elevated interface between businesses, humans and systems is called the “Ecosystem Economy”, and more than anything else it represents an economy based on new ways of connecting people, processes and things. It is about autonomous machines and adding machine thinking to our more familiar machine learning. It is also about taking artificial intelligence and making it real by converting it to assimilated intelligence. It is about leveraging IoT as the building blocks for responding to the challenges of change, complexity and competition.
Particularly in the coming 5G environment, people will be connecting to things (and vice versa) as much or more than they connect to people. Those things, those machines, will increasingly take on an identity of their own.
Autonomous cars are a perfect example, with the vehicles of the not-so-distant future expected not only to propel themselves, but to arrange for their own refueling and maintenance and take care of their own financial transactions.
For instance, if you catch a ride with an autonomous taxi or Uber-style vehicle, it will be the vehicle itself that bills you (or the machine or system you have set up to handle your financial transactions). Essentially, everything would be transparent except for an occasional alert or update.
In a way, Apple can be seen as a precursor to the ecosystem economy. It has been amazingly successful selling smartphones. But it isn’t the phones themselves that made Apple’s market. It is the veritable millions of apps that you can get for free or for a token amount that make the phone so valuable. The apps, and behind them armies of creative programmers and developers, are part of the ecosystem that supported the smartphones.
It is entirely realistic to expect that we will see that same type of development and advancement in autonomous vehicles in the near future.
The importance of differentiation and scale
Enterprises in the ecosystem economy must determine where they are positioned and what they bring to the ecosystem that competitors or other organizations don’t. Or anticipate what it is that they can bring to bear in the future to gain an advantage over others.
Differentiation is foundational to competition. If a product or service we offer is just like someone else’s, about the only way left to compete is through price. But in a digitized ecosystem, it is the differentiation a company can achieve that becomes the way it creates value.
Let’s take Bitcoin as an example. It is a vastly different way to pay for goods and services – so different that our many regulatory agencies are struggling with how to deal with it. It represents differentiation on a scale that is so disruptive that it actually hinders adoption.
Bitcoin offers a lesson to enterprises that navigating the ecosystem economy in terms of differentiation will require a significant amount of finesse if they want to be leaders.
Another challenge will be scalability, because a company’s product set will have to be easily scalable in order to adapt to rapid market changes. Differentiation can actually aid scalability, especially in a market that is becoming constricted due to commoditization.
One issue to consider is how your company would maintain itself in case your differentiation and scaling attempts fall short. Again, using autonomous vehicles as an example, while there may be significant progress forward, every time there is a serious accident or major glitch it sets the industry back. Companies then must work to prove that they really do provide safety and true autonomy.
Finally, honestly assess whether your company can handle this new ecosystem economy. Are you and your staff trained so as to manipulate and manage in such a new environment? Sustaining this ecosystem will require highly capable people and significant investment in education and training.
An emerging ecosystem
A foundational element of the new ecosystem economy is Sprint’s Curiosity IoT platform. Designed from the ground up exclusively for IoT, it exists to allow enterprises to fully manage their IoT devices and connectivity through a distributed and virtualized core and operating system. It has the requisite ecosystem of vendors who can provide all the elements necessary for successful IoT deployments and operations.
The provisioning platform architecture allows for easy attachment of IoT appliances to a network and enables readily available applications to be put onto those appliances. By enabling application development and deployment, it enables new forms of value through monetizing various IoT appliances.
As more companies scale with Curiosity, the entire ecosystem will continue to expand and take us to the ecosystem economy.