Reflections on what might have been
Bristol: The Independent Networks Cooperative Association (INCA) Next Gen Road Show
I spent a lot of time in Bristol during July; partly leisure time visiting relatives, attending the Foodie Festival, letting somebody else do the washing up and partly business at the INCA Next Gen Road Show. The Road Show was an excellent event. Lots of suppliers, not least Prysmian Group a major sponsor who highlighted how community fiber network technology has matured and Allied Telesis who gave a fun demonstration of how fiber connectivity is straight forward and almost plug and play. A presentation by UK Broadband highlighted how high bandwidth wireless, both point to point and point to multi point is a credible infill technology with the added advantage of low cost rapid deployment. In short, the technical barriers are coming down.
It’s the cultural barriers that remain. The same week as the road show Ofcom released its 2012 Communications Market Report which revealed that while Superfast Broadband was now available to 60% of UK homes uptake remained low. 6.6% of all residential and SME connections. In my home county of Shropshire the registrations of interest campaign has attracted just over 5000 responses; I have no way of knowing how many of these are business registrations but I do know that there are in the region of 12,500 VAT registered businesses in the county and countless micro businesses which provide one of the mainstays of the County’s economy.
I was interested in the presentations at the road show about the “Why” of superfast broadband as opposed to the “How”. Steven Hilton, Director of the Futures Group, at Bristol City Council talked about “Why Bother” and looked at the role of cities. He picked out some key issues such as new things in the economy and innovation which I have discussed here. He also highlighted how superfast broadband can be both transformative and culturally disruptive something I have discussed previously here, and how early adopters can provide useful lessons learned. From a business perspective his key point was that it is important to develop the infrastructure to meet the demand and he made it clear that the top three requirements for businesses coming to Bristol were accommodation, recruitment and connectivity; not in the future, but now.
The keynote speaker, and participant in one of the workshops, was Irene Ng, Professor of Marketing and Service Systems at the West Midland Manufacturing Group and University of Warwick AIM Services Fellow. She provided me with my lightbulb moment of the event when she talked about New Economic Models and the work of NEMODE (New Economic Models in the Digital Economy) . I have highlighted the advantages of superfast broadband in terms of collapsing supply chains, new ways of doing business where we adapt or go under; let’s call it a process driven approach. Irene’s talk opened the possibilities for understanding the value in a superfast broadband world; where value lies less in ownership and more in use.
What we are experiencing is a disruptive shift from owned value, the consumption of mass produced goods, through the digitization of goods and services which have enabled us to have a “social” conversation and to “co-produce” both directly and indirectly to a context where we derive value from “use” and not necessarily ownership. The future world is one where we have personalized production and the consumer space is occupied by multiple suppliers all of whom have an interest in the contextual environment. The new context needs connectivity, it needs social, it needs content and it needs a widget – a point of access.
Looked at another way; when goods were mass produced we obtained value from either volume, when we had access to cheap goods which we could use, or we obtained value from scarcity through objects of desire. When people became connected we could do things faster and we learned to do things better, then we produced new things, we added value in our mass produced world. We are now moving to a world where we are able to connect things and build intelligence into the products and we create value from our use of those products.
This idea of value from use in a connected world is highly disruptive. Irene gave the example of a person in a gym listening to music on an i-pod. The value the person gets is not in owning the i-pod per se but in the fact that he or she can use it to listen to the music while exercising; there is not even a need to own the music. Within that context other operators have an interest and want to share in it. The music provider would like to be able to target similar music, the i-pod maker would like to know where and how the widget is being used so as to target other potential widget users, the gym would like to know how they can use music to make the exercise space more attractive. All of this potential value is made possible by digitized nature of the product. What we are experiencing is convergence not just of content and devices but also of the value space. Another example was that of a car: in 2009 it was estimated that there were 100 million lines of software code executed on 70 – 100 microprocessors in a premium car. Irene posed the question: who else might be interested in your car? Tesco might be interested; it is your car that brings you to shop. So Tesco might offer you cheaper fuel, they might want to sell you cheaper car insurance; your garage might want to anticipate a problem with your car and even meet you at Tesco in order to put it right while you shop.
The message was; if you are a business you need to understand the new economic models which are facilitated by superfast broadband. Is this a fiction, a mad theory from a mad professor? A quick search of the Internet will reveal items such as Smart TV’s and TV programs that allow you to share the experience using your hand held device. There are Smart Clothes and there is additive printing . What next? Appliances, food, furniture? The protocols for intelligent products already exist: if you are a business and you haven’t yet understood the disruptive impact of intelligent products in a super connected world it’s time to reflect. What the Internet knows about us now is interesting; what the internet will know about the products and services we use will change the way we do business for ever.