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Mikael Eriksson Björling

Things that matters! About digital transformation, design, culture and lifestyle in the Networked Society

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3 ways that new technologies are accelerating innovation

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Most innovation is directly or indirectly driven by new technology – even business model innovation and changed consumer behaviors – and the way new technology transforms our world and various markets. In this way then, an understanding of new technology and its impact is a prerequisite to be able to innovate, and to do it constantly.

So, how are emerging technologies, such as 5G, artificial intelligence, and virtual and augmented reality contributing to innovation? They do it mainly in three overall ways:

  • As founder of new markets
  • As vehicle for innovation
  • As enhancer of human capabilities

Let’s go through these three ways one by one:

Technology as founder of new markets

New technology has a huge impact on markets and market dynamics. This has always been the case, but in the digital age this is happening faster than ever before. Over the last decades we’ve seen how digital technology has disrupted many different markets. Streaming has disrupted the music industry, as well as TV and film, and social media has radically disrupted the entire media sector.

Let’s take a look at 5G – a technology that Ericsson is developing. As 5G starts to become a reality in the marketplace, many new capabilities and possibilities emerge, such as network slicing, ultra-low latency, lightening fast speeds, and extreme reliability to mention a few. And these capabilities are enabling many new use cases: from remote controlling vehicles in a mine to small sensors that have 10 years of battery life. These technology features will transform the current logic in many businesses and create new markets for those who sees the possibilities.

When new technology becomes established in our society it also drives new behaviors among people and their role as consumers, and these new behaviors represent potential new markets. The same thing happens in industries: when a new technology becomes available organizations can possibly change areas within their business, such as value chains and operations, but also whole business models and the entire market itself.

Artificial intelligence (AI) is another hot technology area that will open new markets and market niches in many industries. Today, most areas are related to innovation efficiency and effectiveness (the areas to the left in the model I described in my previous blogpost).

The most common area of exploration today is the automation of business processes, for example, digital and physical tasks. Harvard Business Review recently said that 25 percent of the 250 business executives in their survey think AI will help them pursue new markets. Far more of these executives see AI as helping out with efficiency and effectiveness in their current business logic.

Technology as vehicle for innovation

As we’ve previously discussed, innovation and technology are tightly interlaced. Two very notable ways technology propels innovation forward is that it boosts tinkering and experimentation, and that in itself accelerates innovation processes.

Not long ago experimentation with new technologies was only possible by multinational corporations or government-funded research labs. Today, affordable technology – digital and other – makes it possible for most enterprises – big and small – to experiment with ideas and concepts in whole new ways, and also in reality instead of only in test labs.

For example, it’s now possible to test products and services online at a very low cost, as well as test out updates, alterations and tweaks. Prototyping has become available to all through easy to use software and 3D printing. AI can simulate various market scenarios based on available real-life data. Virtual reality makes it possible to create completely new types of blueprints that actually make products and services come alive for real, and thus make them possible to evaluate prior to building or manufacturing them.

Digital technology and the new technologies that it enables (like AR, VR and AI) cut the traditional industrial age innovation process short. What used to take years of planning, testing, and executing can now be accomplished in months and sometimes even weeks.

Another way emerging technologies – AI in particular – can speed up innovation, is by removing obstacles of uncertainty or lack of information. Continuously identifying and ruling out hypotheses at a quick pace will no doubt make the innovation process more focused and effective in generating strong solutions. AI, being far superior to humans in analyzing big amounts of data in an instant, cuts innovation processes significantly. Data is the protein of AI systems: if there is a sufficient amount of data, AI will be able to increase the speed of innovation.

Technology as enhancer of human capabilities

One way of looking at it is that digital transformation, after having transformed domain after domain, has reached technology itself and is beginning to recursively transform technological evolution as we know it. This unlocks a great potential, but it also raises concerns as to what it means that technology – and not only humans – has control over technological progress. As discussed further, there are both optimistic and pessimistic stances in regard to our technological future.

Regardless of position in this matter, it is clear that emerging technologies are becoming increasingly important in the very process of innovation.

Now, technological evolution has reached a point where it can help us overcome – or at least circumvent – our own cognitive short-comings. Where the human mind fails to display characteristics beneficial for driving change and creative thinking, technology can give us an extra push towards a greater innovative capacity.

One area close to my heart is design, and in particular design and innovation. The designer today has a completely new set of possibilities and tools for designing and prototyping. Both rapid as well as creating shapes and interactions that would have been impossible a decade ago.

Ericsson Strategic Design Lab is working with cities and city planning questions, and for this they are using AR to remove buildings from a real environment and place models of the new architecture into it, creating a tool that makes it possible to explore city planning with an extreme low cost and possibilities that were only fantasy some year ago.

Another example is seen in car manufacturing, were companies are starting to do car models in VR instead of the super expensive and time-consuming clay model that was traditionally used. And in the same industry, there are newcomers such as Local Motors who are challenging the traditional way of designing and producing cars using crowd sourcing, open source and 3D printing technologies for physical prototyping and production.

Finally, and to summarize, an understanding of new technology is necessary in two primary capacities:

  1. Understanding technology as a starting point: Organizations that want to innovate must (in most cases) understand the seedbed that new technology creates for any market today. How has new technology changed the conditions in your market and what technologies are out there that will transform your products and services, and how do you model them for the market?
  2. Understanding technology as an enabler: The second capacity in which an understanding of technology is necessary for innovation is as an enabler. For example, how new technology can help make new ideas and inventions possible to realize on the market. Technology is also an enabler for experimenting with new ideas and testing out new concepts, and organizations that understand how to utilize new tech in this phase of innovation will gain leverage that other organizations lack.

So, how will 5G, AI, VR and AR, contribute to innovation in your industry? Do you see the possibilities, or only threats?

Like this post? Don’t forget to check out the first and second at Ericsson Big Ideas Blog

Why is innovation the buzzword right now?

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What exactly is innovation? And how does it work in the business transformation context within ICT?

At Ericsson, we have talked about the fundamental digital transformation that is taking place across our entire society for many years, with particular focus on the new opportunities and challenges it brings.

This shift has matured recently: new businesses move from startup buzz to industry disruptor at lightning speed. Just take a look at the great impact on traditional businesses that companies such as Airbnb and Uber have had in their industries. This will only accelerate as more and more intelligence moves up in the cloud.

Just a short while ago, digital transformation was only on the agenda of the larger tech players. Now, it’s on everyone’s agenda. Businesses and organizations of all sizes in every industry understand that digital transformation is also affecting them and the way they do business both now and into the future. They are all aware that in this new world there might be a garage startup, either around the corner or on the other side of the globe, with ideas that will disrupt their current market by offering radically different propositions.

So, when there is awareness, what should traditional businesses and organizations do? Let’s begin by answering the questions I asked in the beginning of this post.

There are four different drivers in our innovation model, which you can see in the figure below:innovation-model-768x332

  • ‘Outside Drive’ (at the top) are areas outside of a company’s control. This could be changed laws or regulations, shifting consumer behaviors, or new disruptive technologies such as AI, VR or 5G.
  • ‘Inside Control’ (at the bottom) are areas a company can control, such as definition of their core business, consolidation, scale gain opportunities or maturing technology.
  • The left side of the model is evolution from where the business is today, to the right which is disruption.

To secure a good position in the future market of your business, you must be aware of what is happening in your broader industry related to the fields in the model. If we plot where innovation is happening, we can see that traditional businesses focus naturally on the left side of the model in value chain effectiveness and efficiency, while we often find the digital giants and startups on the right side of the model.

The lower left corner of the model is about using new technologies to innovate for better performance of current offerings. If we take the example of a car manufacturer, this could be using ICT to automate the flow and construction of cars in the factory. Basically: do what you do more efficiently than the competition. ict-cityview-768x440The upper left corner is about using ICT to innovate value chain efficiency and improve offerings to the current market. In the car industry, this is typically a connected car. Today’s connected cars are sold as any other car, but they make use of the connectivity to improve the offerings toward the car buyer. This could be to offer safety features like calling 112 automatically if an accident happens, or having built-in connected features like ‘find where I parked my car’.

Read the rest of this blog post at Ericsson Big Idea Blog

Social businesses prefer impact to profit

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How does it work to have positive impact as the main outcome of a business and not profit? While conventional for-profit businesses have maximizing profit at the core of their business models, social businesses see profits as a tool rather than an end. Stable revenue is only a part of a much larger picture to achieve social impact.businessmodel-768x319

Social businesses use the same three-dimensional model as conventional, for-profit businesses:

  1. The value proposition defines what type of value the business is offering on the market
  2. The revenue model defines how the business is making revenue from its value proposition.
  3. The network relations define the different market actors that a business has relationships with

These three components build what social business call the ‘Financial Sustainability Model’. However, this is only one of three important components in the business model. The other two are ‘Social Impact Model’ and the ‘Community Engagement’.

The Social Impact proposition explains the intent and mission of the business. To exemplify, SiembraViva in Medellín, Colombia, offers convenience and conscious consumption to urban dwellers yet the social proposition is to empower local farmers and increase ecological produce.

The Community Engagement: This is an imperative element to the social impact proposition and financial sustainability model. Community engagement roots the social business, ensuring the social impact proposition is relevant and that the financial sustainability model has an arena on which to act. socialbusinemodel-768x202 Read more about this topic at Ericsson Networked Society site

Related: The Social Business Era: Creating Impact and Influencing Change

Say hello to the era of social business

post-1-siembraviva-768x373In our brand new report, The Social Business Era: Creating Impact and Influencing Change, we explore a new model for 2017 and beyond: The Social Business. This is a new type of company on the market that is out to challenge traditional ways of doing businesses.

The majority of companies operating today use profit as their main measurement, i.e. the business is judged by others (the market) with economic figures and the potential for growth. But things are changing.

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It is no coincidence that social businesses have recently emerged and developed in the Networked Society. But why is this happening now?

  1. The ultra-capitalistic industrial society of the late 20th Century is now being questioned as a relevant model for a ‘good world’. At the same time, the state and traditional social institutions that are supposed to care for the welfare of citizens are failing people across the world.
  2. New generations growing up with mobility, broadband, and internet access are now entering the arena of social issues. They are also used to things moving quickly, getting things done right away, and seeing direct impact. They experience frustration with old ways of doing things and the slowness and inefficiencies of institutions to accomplish any real change.
  3. The necessary technology is already in place. Today, we have technology platforms, digital tools, and social networks available for free or at a low cost, which makes it possible for people to start something without the need for large investments or technological skills.

How do we define The Social Business?

  1. No dividends allowed. “A non-dividend company that is created to address and solve a social problem”.
  2. Focus on intent and output: “An organization formed by one or more people whose commercial activities are primarily driven by the desire to create positive social change”.
  3. A broad, pragmatic approach: “A business whose primary intent is to create social impact and that uses revenue streams to become financially sustainable in order to further that impact”.

Create positive impact…who wouldn’t want to do that?

In my next post for the Networked Society blog, I will take a look at the main differences between traditional and social businesses.

Read more about this report at Ericsson Networked Society site

Related: The Social Business Era: Creating Impact and Influencing Change

 

The future of learning

The future of learning, what is it about, what challenges are we facing? A couple of years ago I did a film (together with a bunch of skilled people, such as the film team from Radon) in a project about, how education and learning is changing as we enter the Networked Society. We meet with some of the most prominent thinkers to talk about learning and education. I like this film a lot (still)! And looking around most schools and university have long way to go to meet the future.

Life in 2025: The Mobile

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In our model of lifestyle movements for the Networked Society in 2025, the last group, the Mobile, are difficult to pin down. To some extent they definitely want to see themselves as classless. Their overall motivation is to move between contexts without committing too heavily to one career path, one lifestyle, one life project, or one category of consumption.the-mobile-588x300

Some of them they may work on freelance basis, others might engage in various kinds of collective projects and then they may simply step back from any type of productive life, before they again seek out employment in different areas. The Mobile might quickly switch geographical and cultural contexts and may compromise a relatively good job with a good salary to take a lower paying job at an interesting location. In a sense, the Mobile are relatively empowered in society, but they tend to shy away from taking on too many challenges and responsibility. They are often highly individualistic and prioritize the accumulation of personal experiences before a career or a socially regarded position.

The Mobile focus on experiences, preferably as alternative as possible. They collect these experiences and use digital tools, services, and social media to maintain and manage their narrative of their life experiences. They prefer to live light in order to stay flexible and they exercise a mobile lifestyle. Accordingly, they avoid owning and possessing things and instead choose access-based models. Being highly digital in everything they do and consume allows them to stay light, flexible, and mobile.

The Mobile:

  • move between contexts
  • focus on experiences
  • own as little as possible
  • are highly individualistic
  • shy from responsibilities
  • use digital services of access.

Explore more about The Mobile here.

Life in 2025: The Social

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In 2025’s Networked Society, the Social are empowered and have momentum in society but do not belong to a traditional labor market. They have either chosen to leave or been forced out of the traditional labor market, because of the structural changes in society, and have instead taken matters into their own hands. Accordingly, they are removed from institutionalized systems but they have also deliberately chosen to “escape the market” because they no longer believe in the traditional industrial system (because it hasn’t been able to provide for them). As they are stepping out of the system and escape the market, they are promoting an alternative economic system.the-social-588x300

Some of them move from traditional forms of work to focusing a majority of their time and effort in the categories they are passionate about. They become more and more involved in these categories, until a point where they start to add productive value to their consumption. This can be done in different ways. When a person becomes extremely knowledgeable about a category that she is interested in, she rises above the market, making other consumers and companies extra interested in the person’s opinions and ready to reward the person as an expert, communicating her opinions in various social media outlets or entering into more formalized co-creation with commercial providers. As a result of this, some people make their passion their occupation. This can be done by making their names in various forms of social media, making money through fashion blogging, news writing, video game reviews and other pursuits. Or, they may start up small alternative businesses, focusing on handicraft, craftsmanship, or sustainable ecological products, and eventually turn their passion into their living.

The Social:

  • operate outside the traditional labor market
  • focus on their passions
  • disrupt the traditional ways
  • are empowered by and dependent on their own community
  • take collaborative initiatives
  • form alternative networks.

Explore more about The Social here.

Life in 2025: The Anchored

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The Anchored are the people steadily rooted in the middle class, which was once the result of the 20th century industrialization. In 2025, they are still living in the traditional industrial economic system. While they used to be employed in the manufacturing industry and related sectors, in the 21st century they have migrated increasingly to the service sector.the-anchored-588x300

A majority of the Anchored hold jobs in retail, sales functions, the catering industry, transportation, logistics, healthcare, customer service functions, and IT service functions. Some still work in the manufacturing industries and in civil servant positions, but they are significantly fewer than before due to a decreased need for traditional labor in these sectors and, in the case of government, due to significantly weaker finances.

The Anchored are the people in the Networked Society who most hold on to traditional, 20thcentury values. Due to their diminishing financial means, they are increasingly consuming only basic, automatically manufactured products in most categories, while saving up to acquire one or a few more goods loaded with material status.

The Anchored:

  • work within the traditional industrial economic system
  • value traditions and stability
  • focus on material status
  • divide life into work and leisure
  • save up to acquire a few goods loaded with material status
  • focus on affordable experiences.

Explore more about The Anchored here.

Life in 2025: The Players

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In the Networked Society of 2025, the Players are outside the economic system or have never been invited into it. They also lack the ability, skills, connections, and motivation to get back into the game, land a traditional job, or organize themselves. They do temporary jobs here and there, live off various forms of social security payments, and exchange favors with family and friends. Most of the Players have plenty of time at their disposal, and spend their time primarily on entertainment and games of various kinds. Sometimes they are pulled into different initiatives, but they rarely organize themselves.

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The Players often live under strained conditions and sometimes even struggle to take care of some of their basic needs. Many of them can’t really afford to own a home, but they tend to value their possessions greatly.

The Players spend much of their time playing in different ways. Primarily they consume easily available entertainment of all kinds: TV, movies, games, sports, social media, betting, and adult entertainment. Many of them seek out free alternatives on the market, whether legal (freemium business models) or illegal (such as pirate streaming of TV and video).

The Players:

  • operate outside the traditional labor market
  • have plenty of time
  • engage in digitally enabled entertainment
  • seek out free alternatives
  • value possessions and personal security.

Explore more about The Players here.

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