In the modern world, nearly everything is interdependent and interlinked. Data plays an essential role in this integration and is the feedstock for platforms. We understand the platform economy as a way of creating value and organizing layered (business or other) activities enabled by digital platforms, information and data. Based on the data, platforms typically are able to offer personalized, timely and optimized services for their users, and better service offerings for the service producers. The higher the quality of the data on the platform, the better it can serve the needs of the platform and its users and producers. Therefore, the quantity and quality of the data play an important role in platforms. Platforms develop new ways to access data across a variety of sources and develop new technologies for analysing and utilising data. Consequently, platforms are becoming increasingly connected and interlinked.
In this signal post, we discuss how platforms play an important role in the integration of the world by discussing examples from different platform categories.
X as a service
The concept of “X as a Service” refers to the delivery of anything as a service. The concept implies the integration of the client’s needs and the provider’s offerings (which at the same time is the basic concept of a platform). The concept has spread from the information technology industry to other sectors and now, with the advancement of digitalization, nearly anything as a service is available. Many of these services have interrupted conventional businesses, like Airbnb and Uber, for example. Some common examples of different XaaS include mobility, information, food, music, movies, manufacturing, security, maintenance, finance, procurement, purchasing, design, car wash, and lighting as a service.
Mobility as a Service (MaaS) is one example of how platforms integrate different traditional businesses with new technologies. In MaaS, different modes of transportation are integrated with new technologies like AI, eCommerce, autonomous vehicles, etc. The result is a shift away from the concept of car ownership towards a real-time, customer-centric transportation platform that includes diverse modes of transport, including public transit, ride-sharing, car rentals, and autonomous taxis.
Other “X as a Service” platforms integrate new technologies and aggregate data from other devices like refrigerators, ovens, toothbrushes, smartwatches or even mirrors. This enables the creation of mega platforms that gather large amounts of data on users and make that data available across a network of platforms that offer services and products.
Smart city
The Smart city concept is nicely described by Aveva: “Firstly, a smart city connects and collects information about itself through sensors, other devices, and existing systems. Next, it communicates that data using wired or wireless networks and databases. Thirdly, it analyses that data to understand what is happening now and what is likely to happen next. Finally, it must act based on this intelligence.” Application platforms can then utilize the data collected by the Smart city. Habibzadeh et al. give some examples of these platforms including Smart home, Smart parking, Smart driving, Smart health, Air quality monitoring and Smart transportation. Obviously, the availability of the data enables new platforms and services to be created. Helsinki has been a forerunner with its ambitious Forum virium Helsinki project and has been recognised in global rankings. Examples of those include second place in the world by the Smart city index in 2020 and the first prize in the “Year in Infrastructure world congress”.
The Smart city concept has been adopted around the world as in Vietnam, Latin America, Cape Town in Africa, for example. While it initially appears counter-intuitive, smart city development is progressing faster in developing countries than in the developed world because the developing cities can jump directly over building “traditional” infrastructure and go directly to the smart era. Once the core Smart city technology has been implemented, it creates opportunities for the continued development of smart city infrastructure as well as for offering new services in the smart city environment.
Recycling
Resources like materials, energy and data can be recycled. Recycling of goods and materials takes place commonly via platforms. On an industrial scale, ecosystems are formed to allow the reuse of waste materials and energy and to provide related data. The ultimate aim of recycling nowadays is to optimize the operations and to minimize emissions. Platforms having online access to data have the best possibilities in this optimization and are able to manage the operations in an optimal way.
European Circular Economy Stakeholder Platform is a joint initiative by the European Commission and the European Economic and Social Committee. The platform has 85 member platforms, which enable national, Pan European and international collaboration in order to activate a circular economy in all possible ways. The member platforms include ones directed to specific sectors such as the Chemical Recycling Europe, EU Platform on Food Losses and Food Waste and Furn 360, for example.
Recycling products at the end of their life is more efficient if it is considered as part of the product design process. Many platforms gather and analyse data that provides knowledge to improve product design. On the other hand, materials tracking systems based on AI, RFID, block chain can optimise the entire value chain from the production of raw materials to product production to product transportation and its eventual recycling.
Industrial platforms and technology integration
One of the best-known examples of industrial platforms may be Industry 4.0, which “refers to the intelligent networking of machines and processes for industry with the help of information and communication technology (Plattform Industrie 4.0)”. Industry 4.0 (another example) implies both vertical and horizontal integration of data and operations as well as new technologies and new business models to achieve efficient and sustainable production and personalized offerings. Smart industry is a synonym to Industry 4.0. Smart manufacturing and Integrated Intelligent Manufacturing (I2M) concepts add data sharing and intelligence into the manufacturing chain, allowing better optimization and control over ever-larger operations.
The steel industry has launched its own Smart Steel initiatives and programs. The EU launched the Smart Steel research program, the Swedish-Finnish steel company SSAB collects and provides data on their products along the whole service chain thus helping the selection of materials and recycling of steel, Anstair Smart Steel supports efficient and modern building in challenging circumstances, etc.
A good example of how different production plants can operate together and form a whole self-standing bioeconomy ecosystem is the Äänekoski mills. Äänekoski mills integrates a wide variety of different materials, processes and outcomes. It optimizes the use of materials and energy, producing even excess energy. Its core products are pulp, tall oil and turpentine, and various formats of bioenergy. In addition, it produces sulphuric acid, product gas, biogas and biopellets for its internal use, and biocomposites from pulp for plastic replacement. Moreover, new biofuels, fertilizers and earthwork materials, lignin-based bioproducts and pulp-based textile fibres are in the pipeline. The mill produces electricity, district heat and steam, and solid fuels for sale.
One different example of an industrial platform is the integration of transportation and 3D printing, which would allow for manufacturing components close to the client and thereby decreasing transportation and related emissions.
Health
In the health sector, it is essential to share and integrate data and knowledge in order to enable efficient collaboration between different health providers. New technologies support the diagnosis and treatment of illnesses but also the storage, transmission, and access to sensitive personal data. The Kanta platform, for example, includes every citizen’s health data in Finland and offers different health sector experts access to the data when needed. Broader integration of data and different platforms is developed in the Aurora system, which aims to create the conditions for a people-oriented, proactive society.
DNA (Deoxyribonucleic acid) molecules define the uniqueness of each of us and are passed from adult organisms to their offspring (NIH). Making use of DNA requires gathering large interconnected datasets, performing complex analysis, and providing a way for scientists and organisations to access the data. A number of platforms have emerged to meet these needs and support the research of inherited illnesses and the development of new treatments. DNA-based platforms are also used when investigating crimes and even when deciding what food “compliments” your DNA. Other use cases include the search for family members by using DNA heritage platforms like MyHeritage or Ancestry.
Platforms and their integration nowadays play an important role in the prevention of communicable diseases like COVID-19. ECDC, WHO and others provide situational awareness data and instructions during epidemics. Many researchers are trying to develop a vaccine for COVID-19. Finnish researchers are developing a ‘vaccine platform’, which could be used to produce a vaccine for COVID-19 and related other diseases afterwards.
The most broadly integrated platforms are so-called Super-platforms. In China, where the government manages the collection of citizen data, Tencent is an ultimate example of a super-platform and it operates also in the health sector. Tencent, in collaboration with other platforms and companies “tries to develop a complete digital representation of one’s biological self – taking into account genetics, epigenetics and other factors, and allowing for a truly personalized medicine to emerge”. Google is collaborating with its partners to do the same and so are the big pharmaceutical companies.
Education
For some years already, universities and private organisations have offered platforms and portals for self-education. Important aspects of learning platforms are presented in a literature summary by the University of Jyväskylä. Verywellfamily listed the seven best online learning platforms this year. The platforms offer education in various areas like IT coding, innovation, child development as well as Shakespeare; the most popular courses being related to ICT. Some universities offer online professional degree certificates, micro or nano degrees.
COVID-19 created a tremendous challenge for education when schools and universities had to rapidly switch from in-person to remote learning. This was a world-wide transition and UNESCO has summarized the national platforms used at schools in various countries. In addition, new educational platforms are continuously being developed. Universities play an important role in this. The Finnish company Gofore aims to develop a meta platform, called Digione, which will integrate different educational actors by allowing the integration of the different systems they use.
New trends in educational platforms include benefitting from new technologies like augmented and virtual reality as well as mobile applications, 5G and new ways to support education.
Marketing
Platforms have disrupted the traditional marketing industry. Paper brochures and leaflets are replaced by ads on social media and internet sites. Many subscribers of newspapers and magazines read their papers digitally, which implies that more and different ads can be offered to the readers. Digital advertisement can benefit from new technologies such as 3D, VR, AR and links that offer more data and experience.
Big social media and internet companies like Facebook and Google collect a big part of their income from personalized advertising that improves the efficiency of marketing. Social media companies collect data by offering ‘free’ applications such as Facebook, Instagram, Twitter etc. for citizens but also for companies. Their data reserve is huge, which enables them to become super platforms that have a bigger budget and more power than many of the world’s nations.
In addition to the global giants, smaller companies, such as Finnish-based company Smartly, have created successful businesses by specializing in social media marketing.
Banking & Financing
The platform economy requires a trustworthy digital transaction system to operate. That is what banks are offering and, consequently, banks are an inevitable part of successful platforms. In addition to transactions, banks offer a reliable identification system for safe entry to other systems. Therefore, a bank account is a key to most platforms and banks are integrated into most platforms. The revised Payment Services Directive (PSD2) has been essential in fostering innovation in the financial services sector as it requires banks to open their payment services to other companies.
Banks themselves are entering the platform business actively and forming alliances to offer a broader variety of services to their clients. As an example, one of the new marketplaces offers “non-financial products from third-party service providers, such as business management services, health-related products, or even e-hailing functionality, aimed at providing a one-stop shop “platform-as-a-marketplace” service, accessed through their banking interface”.
Governments support the trustworthiness of the banking system. In addition to international agreements, some mutual ones aim to guarantee two-sided data sharing and transactions as in the case of Singapore and Australia, for example.
One challenge in developing countries is that many poor people do not have the official identification needed to open a bank account. The Asian Development Bank, for example, is funding the development of a low-cost identification system, which would allow the poorest people to open a bank account – and be a part of the digital economy. About 80% of the Africa’s 1.2 billion people don’t have a bank account or credit history. Banking platforms that offer micro-loans, like Social Lender, are overcoming this by integrating with users’ social media profiles to determine a “social reputation score” that acts as a proxy for the users’ trustworthiness and likelihood they will re-pay the loan.
A Finnish example of a new financial offering is the DIAS platform for the housing market. It combines several actors such as lawyers, inspectors, and bankers along with new technologies like distributed ledger and digital signatures to offer digitized and distant transactions for buying and selling real estate, houses and flats. Zillow is a corresponding platform in the US.
Discussion
Interconnected and integrated platforms have gained enormous economic and social power in the world. Accessing and aggregating data is the key aspect of this development. Data can be collected from free markets (US-based platforms) or in a centralized way like in China; both ways seem to produce huge super platforms. Indeed, data has become such an important aspect of our economy that the old saying that “data is the new oil” has become true. The power of the platform economy is accepted broadly and companies need to be involved, whether they like it or not, to be profitable. The big question in industry often is “who owns the data?”.
Trust and security are necessary preconditions for a successful platform. Banks – supported and owned by state governments – form a layer above or beside platforms thus securing safe access. The security is supported by international initiatives and agreements such as the Singapore Australia digital economy initiative or the GAIA-X, a Federated data infrastructure for Europe. GAIA-X aims to develop common requirements for a European data infrastructure. The discussion seems to have moved from platforms and integrated platforms to the data economy. Banking seems to have taken an important role as a necessary infrastructure component to guarantee the security of financial transactions and data handling.
Platforms have become a necessity in our lives. On one hand, platforms enable equal possibilities to participate in various activities in society but on the other hand, as platforms grow and become interconnected they have gathered significant power such that they now have more power than most of the world’s nations. Ethics and especially privacy are the prevailing topics related to platforms.
LINKS
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Interview study report: Do Finnish companies capitalise on opportunities in the platform economy?
This signal post summarizes our newest research report on an interview study that explores how Finnish companies view and capitalise on opportunities in the platform economy. The study is based on interviews that were conducted in Finland and in the USA in 2019 with companies from various business sectors such as food, pulp and paper, manufacturing and security.
For more details, read the full report.
Interview study
The aim of our interview study was to find out how Finnish companies view and capitalise on opportunities in the evolving platform economy, the phenomenon that we broadly define as a way of creating value and organizing layered (business or other) activities enabled by digital platforms, information and data.
The guiding research questions for this work were:
- How do Finnish companies understand the concept of the platform economy in general and in their business sector?
- What opportunities and threats do Finnish companies perceive in terms of the technological, social and political aspects of the platform economy?
- What factors act as drivers or barriers in the process of Finnish companies entering the platform economy?
- How do the findings from Finnish companies compare to those from the USA?
In 2019, a total of 10 interviews were conducted in Finland and 8 interviews in the USA, representing various business sectors such as food, pulp and paper, manufacturing and security. The rationale for complementing the Finnish interviews with a handful of American interviews was to gain a rough overview of the similarities and differences between the two, even if meticulous comparisons could not be made based on these limited samples.
Results and recommendations
The results of the study reveal new aspects of Finnish companies’ attitudes and preparedness for the uptake of platform economy opportunities. For example, the companies appeared to be well aware and informed about the platform economy and platform-based business models even if risk-averse attitudes and the legacy of traditional non-platform businesses were described as significantly slowing progress. In comparison, the interviews in the USA focused more on how important it is to make progress fast and learn from the more rapidly changing sectors. The American companies also seemed less risk-averse, more open to data sharing and more strongly customer-driven in their service development.
We conclude our report with a discussion and analysis of the strengths and weaknesses of Finnish companies in the emerging platform economy. These are further processed into recommendations for the Finnish companies and public sector decision-makers.
Key recommendations for the Finnish companies that are willing to capitalise on the opportunities of the platform economy (for details, see the full report):
- Dream big and adopt a bold mindset.
- Identify and address the bottlenecks.
- Build and join partnerships and ecosystems.
- Listen to the customers’ needs and values.
Key recommendations for Finnish public sector decision-makers who are willing to support progress in the platform economy (for details, see the full report):
- Maintain support measures and address gaps in the innovation chain.
- Tap into the positive social and societal aspects and potential of platforms.
- Enable business and safeguard public interest through regulations and improve response time.
- Deepen public-private collaboration.
For more information
Gaming industry meets the platform economy
In this signal post we discuss the opportunities and threats in how the platform economy is changing the gaming industry. While digitalisation and the internet have already transformed the sector in many ways, technical and business models innovations are continuously giving new shape to the market. Legislative and regulatory approaches are also changing, with a strong need to address the risks and negative impacts involved. Consumer protection and money laundering are just two examples of the societally and economically important challenges in the core of gaming.
In simplified terms, gambling means wagering of money on an uncertain event and uncertain outcome, with the aim of winning more money. Gambling entails consideration and risk-taking as well as the promise of a prize. The word ‘gaming’ is typically, and in this signal post, used in reference to legal gambling, i.e. gambling services (not computer, video and mobile games, although connections to those will be discussed in the last paragraph) offered by companies in compliance with the law. These laws do, however, differ greatly between countries and regions, ranging from total bans to strategic gambling tourism as in Monaco or Macau.
Good (and not so good) use of platform strategies
Online gambling providers employ the same strategies found in other areas of the platform economy. Their systems are based on an eCommerce platform upon which various games and offerings are built. While many operate in a business to consumer (B2C) model, others also offer products and services in a business to business (B2B) model. By gathering feedback from their user base and testing new products and services, the online gambling providers create an ecosystem around their platform to drive innovation and build their customer base.
Providers that are licensed through countries with strict regulatory frameworks, such as in Europe and North America, are obligated to operate in a transparent and responsible manner. There are other countries with less robust regulations and in some cases, online gambling providers operating there use platform technologies such as blockchain, cryptocurrencies, and smart contracts to both build trust with their customers and to operate without complying with regulatory and tax laws.
European context
A recent study prepared for the European Commission paints a picture of the European regulatory landscape for online gambling. Taking into account the growing consumption of online gaming, the report addresses the many challenges that urgently require a stronger regulatory response, such as gambling addiction, protection of minors, consumer protection, integrity of sports, money laundering and crime. What makes regulating and enforcing regulations extremely complex in the online environment is that gambling services are offered across borders, often by virtual gambling facilities that may consist of layered eco-systems of service providers. Services are also available 24/7, their use is made extremely convenient, transactions take place immediately and the user may perceive the game experience as being anonymous.
The study emphasizes the importance of European level action. However, specific European Union (EU) level regulation is not suggested, which is in alignment with previous communications by the European Commission. National policies, and therefore national regulations, share a lot of objectives but have also major ideological differences. Harmonisation would, therefore, be a step too far at this point, but joint efforts in effective enforcement, for example, is in the interest of all parties.
The online gaming and betting operators established, licensed and regulated within the EU have organised themselves as the European Gaming and Betting Association (EGBA). The aim of EGBA is to ensure a safe and reliable European digital environment for online gaming by working together with national authorities, EU authorities as well as other stakeholders. The association is committed to a high level of consumer protection while developing regulated services with the goal to be attractive enough to channel users away from unregulated offers.
According to EGBA, the online gambling market in Europe has an annual growth of around 10% and the gross profits of the sector are expected to grow to €24.7 billion in 2020. Comparing online and land-based gambling, in 2017 the ratio between the two was 21:79. The top three most popular online offers are sports betting (40%), casino games (32%) and lotteries (13%). Interestingly, Europe is the leader, with the share of European services accounting for 49% of the global online gambling market in 2017. The international business opportunities for European gaming services is expected to grow further, especially in several US states where sports betting was recently legalised.
Case of Finland
In Finland, the gaming system is based on the exclusive right principle, and since the merger in 2017, all gambling games are being offered by one single operator Veikkaus Oy. The company is owned by the Finnish State, and the offering covers lucky games, slot machines, instant games and skill games, with one-third of its activity taking place online. Veikkaus has a strong obligation and commitment to operate games responsibly and mitigate risks, and the revenue generated is used for societal causes in its entirety. This means that roughly one billion euros per year is distributed, via the relevant ministries, to beneficiaries in culture, sports, science, youth work, etc.
Even with the long tradition and strong value basis, debates about Veikkaus and the Finnish gaming system in general get heated from time to time. For example, last autumn Veikkaus’ new strategy aimed to address the public discussions about whether the fact that revenues benefit the common good justifies the problems caused, and typically these problems are being borne by those in the weakest position. Building a safe and more responsible gaming environment is one of the big strategic goals of Veikkaus, and the decision to speed up the adoption of compulsory identification on slot machines is one practical step. This means that starting in January 2021 Veikkaus will introduce new technology that will better prevent underage gaming as well as enable players to set a ban on their own gaming.
When it comes to the digital and online world, Veikkaus is a pioneer in esports solutions, and it was among the first companies in the world to offer legal esports betting in 2014. Service development in the esports domain is continuous, and products, services and platforms around esports have been developed in collaboration with Veikkaus and others using a unique concept, the Innovation Challenge Week. The winner last year was German GameBuddy, with their innovation of a social community platform for gamers.
Interesting insights into the Finnish case are also found in the survey commissioned by Kasino Curt in 2019 that gathered citizens’ views on the monopoly, political decision making and negative impacts around gaming. One clear finding is that Finns are not fully content with the current mitigation actions to fix problem gaming: 27% of respondents said enough was done, whereas 44% disagreed. 58% went so far as to agree that gambling machines should be removed from everyday environments such as grocery stores, but 29% would not make such changes. A majority of respondents also thought Finland should break away from the monopoly and introduce a licensing system instead, totalling 40%, whereas 29% disagreed on this. The gaming market and industry implications of such a change would be significant. Public discussions comparing future alternatives are active, and the pros and cons of the licensing system option should be studied carefully in order to see if licensing could be a viable approach in the increasingly global gaming environment expressed in the platform economy.
Connections to computer, video and mobile games
Millennials and Generation Z have grown up in a digital world with easy access to computer, video and mobile games. They have a preference for entertainment where there is skill involved and there is the option to play against other players. Not only are online gambling providers catering to this preference, but physical casinos are starting to replace traditional slot machines with games that resemble video games in an effort to attract younger customers. Additionally, these younger generations grew up playing on multi-player game platforms like Fortnite, CS:GO, and Defence Of The Ancients (DOTA) and are now driving the demand for professional esports tournaments and esports betting.
The near-ubiquitous presence of tablets and mobile device platforms means young people have unprecedented access to mobile games. In many cases, these are simple entertainment. However, there is a growing segment social casino games that are introducing young people to virtual gambling. Social casino games simulate typical card and table games but players wager virtual credits and no money changes hands. The games are often integrated into social media platforms and the outcomes are not always random. Instead, they are based on psychological theories that increase engagement and player satisfaction. In some cases, online gaming providers also produce social casino games and there is growing concern that the use of social casino games amongst young people is a “gateway” to money gambling in adulthood that may contribute to gambling addiction.
Selected articles and websites
Alison Drain: White Paper, The Converging of the Gaming and Gambling Ecosystems
Esportsearning: Top Games Awarding Prize Money
European Gaming and Betting Association (EGBA)
Hackernoon: What is the Future of Gambling Industry?
Hyoun S. Kim: Social Casino Games: Current Evidence and Future Directions
Kasino Curtin tilaama tutkimus osoittaa: suomalaiset eivät luota kansanedustajiin rahapeliasioissa
MintDice: How Cryptocurrency is Changing Online Gambling in Europe
NewsBTC: MECA Coin – Creating a Democratized Online Gambling Ecosystem on Blockchain
Publications Office of the European Union, 2018: Evaluation of regulatory tools for enforcing online gambling rules and channelling demand towards controlled offers
Veikkaus: German GameBuddy wins Veikkaus Innovation Challenge Week
Veikkaus: Responsibility for the individual in focus in Veikkaus’ new strategy – compulsory identification on slot machines brought forward by a year
Veikkaus: Veikkaus – a Finnish gaming company with a special mission
Veikkaus: Veikkaus to hold an Innovation Challenge Week to find startups and begin collaboration – focus on esports
Wikipedia: Gambling
Platforms and eco-consciousness drive innovation in the pulp and paper industry
Finland is a global leader in the pulp and paper industry. It’s an industry that’s undergoing rapid change and modernization. In this signal, we look at the significant impact platforms are having on the entire value chain of the industry, such as driving innovative developments in products and production techniques.
Once considered a traditional resource industry, pulp and paper producers have been forced to innovate and re-invent themselves in response to the rise of platforms such as eCommerce, online food delivery and e-mail. Growth opportunities are being created as eco-conscious consumers are demanding sustainable alternatives to oil-based plastics and foam. In response, pulp and paper companies are developing innovative ways to use wood fibres in packaging, cosmetics, hygiene, clothing, and electronics, among other things.
In a market that’s focused on improving margins and product quality while remaining price competitive, the internal operations of pulp and paper producers are benefiting from digital platforms such as smart sensors, Industrial Internet of Things (IIoT), big data and augmented reality (AR).
The pulp and paper producers that are likely to experience the highest rate of future growth are the ones that transition even further from being B2B or B2B2C entities toward being part of an ecosystem that focuses on close interactions between forestry suppliers, package printers, brand owners, retailers and end consumers, as well as other industrial sectors. Successful ecosystems will draw on multiple platforms and create what’s known as a “circular bio-economy” based on sustainable forestry, minimizing production waste products and greenhouse gases and maximizing recyclability.
The decline of paper
The advancement of digital platforms and eco-consciousness has resulted in a rapid slowdown in demand for traditional paper products since 2015 when the worldwide demand for newsprint and writing paper declined for the first time ever. Digital platforms for e-mail, news, and electronic payments have displaced paper products like newsprint, printing paper and banknotes. On the other hand, specialty papers, such as photographic paper, have been impacted by the rise of digital photography and photo-sharing platforms like Instagram, Google Photos, Flickr and Facebook.
The rise of packaging
While annual growth in the global paper and paperboard market has slowed, the segments experiencing rapid growth are tissue, packaging, and specialty papers such as food wrappers and labels. In the next 5 years, over half of this growth will occur in emerging markets, with China and India having the highest rates of growth as average incomes increase and shopping patterns change to include more packaged goods and online purchases.
eCommerce platforms create growth opportunities
The rapid growth of eCommerce platforms like Amazon and Alibaba is creating opportunities for the pulp and paper industry. By 2022, online sales are expected to make up about 15% of global retail spending. In addition to increased demand for shipping boxes and packing materials, the drive for increased sustainability is leading to the development of lighter and stronger packaging materials to reduce shipping costs and CO2 emissions during transport.
As eCommerce platforms look to improve operational efficiency and reduce the time needed to prepare packages for shipping, there’s demand for modular shipping boxes that can be filled quickly and are compatible with robotic and automated packing and fulfillment systems. Further efficiencies can be gained by the convergence of primary packaging (which contains the product) and secondary packaging (the shipping container) so the primary package is robust enough to be shipped without the need for secondary packaging.
Smart packaging is an emerging trend in both traditional retail and eCommerce markets. In some cases, smart packaging involves placing “invisible” markers that can be seen by mobile phone apps that tell consumers additional information about the product. In other cases, smart packaging is “active packaging” that contains sensors to monitor location, temperature, tampering, etc. For high-end luxury products, an active package may contain a Near Field Communications (NFC) chip so the end-user can validate the authenticity of the product.
Innovative pulp and paper solutions address the needs of food delivery platforms
Online food delivery platforms such as UberEats, DeliveryHero, Wolt, Fiksuruoka and ele.me are growing rapidly in most developed countries. By 2025 global revenue for these platforms is expected to more than double to USD$200 billion. Asia accounts for over half of the global market. While these global revenue numbers are impressive, it’s important to consider that currently only about 10% of the world’s population has access to online food delivery platforms. Along with online food delivery, demand is increasing for pre-packaged ready-to-eat meals and grab-and-go/take-out hot meals and salads.
As food delivery platforms grow, so does the need for packaging and containers. As consumers become more eco-conscious and some jurisdictions introduce legislation to limit single-use plastics, significant opportunities are being created for innovation and growth in the pulp and paper industry. Pulp and paper-based products, such as those from foopak and metsaboard are made from recyclable bioplastics and wood fibres, which are a viable alternative to replace oil-based plastic and foam used in packaging and utensils.
One important area of innovation is the development of eco-friendly barrier coatings. Because pulp and paper products absorb liquids and allow oxygen to pass, they must be coated to be used as food and beverage containers. Initially, many barrier coatings were oil-based plastics, which impacted the recyclability of the containers. Innovative new barrier coatings made from bioplastic and water-based materials, such as Protean, are now available and continue to evolve.
Platforms improving operations
The production of pulp and paper-based products requires complex processes and significant investment in facilities and machinery. Platforms are being used by producers to maintain product quality, production efficiency, and improve product margins. Big Data and the Industrial Internet of Things (IIoT) allow machinery to be monitored and fine-tuned. These platforms are also used to forecast demand, analyse production costs, and optimize product pricing. Augmented Reality (AR) platforms are being used to provide operators with real-time data and 3D animations to support training, operation and maintenance functions.
While some pulp and paper producers are implementing these technologies themselves, other producers are turning to technology partners that offer comprehensive service platforms. For example, Valmet, Metso, Andritz, and ABB offer service platforms providing equipment, proactive maintenance, analysis and optimization, control and (remote) operation of the production system.
Selected articles and websites
ABB – Integrated Solutions for Improved Pulp and Paper Mill Productivity
Andritz – A global service organization to ensure high plant availability and top-tier equipment performance
Anomera – Bio-Cosmetics
BBC – Could ‘invisible barcodes’ revolutionise recycling?
Domtar – Personal Care Products
Foopak – Paper Packaging Innovation
Forbes – The Soon To Be $200B Online Food Delivery Is Rapidly Changing The Global Food Industry
Institute for European Environmental Policy (IEEP) – The Circular-Bioeconomy in agriculture and forestry
Lenzing – Bio-Textiles
Making of Tomorrow – Creating a Bio-Based and Easily Recyclable Packaging Material
McKinsey & Company – Packaging solutions: Poised to take off?
McKinsey & Company – Pulp, paper, and packaging in the next decade: Transformational change
MetsaBoard
MetsaFibre Bio-Product Mill
Metso – Digitalization in pulp & paper – Optimizing processes based on valve performance data
Mondi Group – E-commerce Packaging
Mondi Group – Mailer Bag
Paper Advance – 5 key trends disrupting the paper and board market
Paper Advance – Finnish pulp and paper industry is on the move
Paper Industry World – The paper mills of the future available today
Platform Value Now – Platforms and Forestry
Proship Automated Packaging Solution
Protean Barrier Coatings
Pulp and Paper Canada – Consumer Demand for Sustainable Packaging to Boost Paper Coatings Market
Pulp and Paper Canada – Market Outlook: Pulp Prospects
RFID Journal – NFC Applications for Wine and Spirits Brands
Two Sides – The Smart Packaging Revolution
Valmet – Dialogue with Data Takes the Industrial Internet to a New Level
Valmet – Industrial Internet and Remote Solutions for Higher Process Yield
Vision 2040 of the European Forest-Based Sector
VTT – Greener electronics from spent grain and pine bark
Takeaways from the Platform Economy Summit 2019
In this signal post I will share my takeaways from attending the Platform Economy Summit Europe in Frankfurt, September 17-18, 2019. The summit brought together business leaders, investors, policy makers and platform strategists to discuss opportunities and threats of platform-based business models. Political, technological and societal dimensions were also explored, especially from the European perspective, and a wide range of strategies to harness the potential of the platform economy were laid out.
The two-day summit featured inspirational in-depth talks by the platform economy experts and gurus, most notably by Professor Marshall Van Alstyne from MIT IDE and co-author of Platform Revolution Sangeet Paul Choudary. Success stories, lessons learned as well as future aspirations were shared by companies and organisations from all walks of life, such as Alibaba Group, Deutsche Bank, European Commission, World Economic Forum, Apigee, FoundersLane, MaaS Global and Amadeus. Lively panel discussions occasionally evolved into profound debates, and the interactive participation of the audience ensured all points of view were being heard.
Next I will summarise my main takeaways under the following statements:
- “The platform game has only just begun.”
- “There is no ONE platform strategy.”
- “Emerging technologies will rule in round two.”
- “The bold yet patient mindset will succeed.”
These statements reflect the overall tone of discussions at the summit, and I will explain them using what was heard and seen in the presentations, talks, panel discussions, message board conversations and polls, written materials and networking activities.
”The platform game has only just begun”
As discussed in one of our previous signal posts, the platform economy is still in its infancy, and we have only seen the very first success stories. This was also the message at the summit, and future potential across different sectors and industries was widely discussed. In fact, platforms have potential to transform all and any traditional industries but also to blur sectoral boundaries. Platform business is all about ecosystems (not egosystems) that allow different fields to collaborate and innovate something new.
Expected next steps in platform development assume tighter B2B ecosystems to form and blossom. Platforms and “platforms of platforms” will enable business relationships among competitors as well as complementors to evolve. From the European perspective the regulatory harmonisation and solid foundations in public digital infrastructure provide a good breeding ground for this. Unlike what we often hear in the mass media, various speakers at the summit saw European public sector initiatives as profoundly productive support actions to foster responsible and healthy platform business. Examples include national and EU-led actions to re-regulate and de-regulate, such as the GDPR (General Data Protection Regulation) and PSD2 (Payment Services Directive 2). European Single Market was also seen as an encouraging environment for European platforms to grow in and scale up from, on the path from local or national to global business.
Silicon Valley may be the mecca of technological innovation, and China has recently established itself as the leading business model innovator. Europe can learns from these, but also highlight its own strengths, such as its special focus on social and societal value creation. Awareness of the various pros as well as cons of the platform economy is high in Europe and keeps growing, and this attitude supports balanced and responsible development of platform activities.
”There is no ONE platform strategy”
All companies, organisations, business sectors, industries and markets have their unique qualities, and consequently there cannot be one single platform strategy that would fit all. The “digital natives” that have grown into global platform giants are obviously very different from moderate-sized incumbents in traditional industries, local markets and long business traditions. Understanding of what types of platform strategies fit with different situations is growing, and an integral part of it is also to find your own role relative to other actors in the so called ecosystem economy.
The strengths and weaknesses of an organisation help determine the best platform strategy. The size, maturity, traditions, legacy, resources, capabilities and skills are all important factors. Not everyone needs to set up their own platform, and an important step is to assess which one of the basic roles in the platform economy could suit you: the orchestrator, partner or contributor. You also need to consider who you want to join forces with and experiment and collaborate with. And who do you want to challenge and compete against?
”Emerging technologies will rule in round two”
Discussions on the platform economy are often coloured with technologically visionary ideas on AI (artificial intelligence), machine learning, blockchain technologies, big data and APIs (application programming interfaces), cloud computing, IoT (internet of things), etc. These technologies will improve functionalities such as identity management, ecosystem coordination, fostering of openness and trust, decision assistance and anomaly detection. These and more opportunities were addressed at the Platform Economy Summit, and amazing future aspirations were laid out by speakers on how these advanced technologies will be harnessed in the future.
However, the message was also pretty clear that there is no need to procrastinate and wait for all of these technology solutions to mature, even if they will be game changers later on, in the “round two” of the platform economy. Currently available technologies are more than enough to get started with, and the first round of the platform economy game is in full swing. To get your platform strategy ready and implemented is the thing to do right now, and in practice this could mean for example getting a good understanding of what is the potential with data in your branch of business. There is static and dynamic data, and there is also primary and secondary data. APIs are an important tool in ecosystem building, and B2B API activity correlates well with business growth and success.
”The bold yet patient mindset will succeed”
The often repeated message of the summit was, that companies willing to embrace the platform economy should get started and crystallise their platform strategy as soon as possible. Studies show that even a “failed” platform strategy results in better financial outcomes than no strategy at all. Developing a platform strategy necessitates boldness, radically innovative thinking and support from the top management. A platform strategy needs to go beyond digitalisation and incremental improvements, with the aim to operationalise new business models enabled by platforms. It needs to be integrated into the overall corporate strategy and show willingness to change and rethink the old ways.
But even if a platform strategy requires risk taking and changes in many aspects, including the company culture, it does not need to mean suddenly abandoning the core business. Instead, the platform strategy could be implemented, for example, in a separate business unit that is granted the resources and support to explore and develop the company in its new role as an actor in platform ecosystems.
Lack of boldness and leadership were mentioned as the common delimiting factors in platform strategy uptake. But along the next steps, if platform opportunities were being explored, the consequent challenge was often the lack of patience in fostering platform business growth. We are so used to hearing the overnight success stories of global platform corporations that our expectations of the pace of growth may be unrealistic. Instead, a patient mindset is needed, so that innovation horizons are conquered one step at a time. Also, monitoring the development of platform initiatives may often require different performance metrics and KPIs than what the traditional business is measures with. Therefore new approaches and patience will be also needed in follow-up processes.
Selected articles and websites
Jacobides, Michael G. (2019). In the Ecosystem Economy, What’s Your Strategy? Harvard Business Review
MIT: Marshall Van Alstyne
Platform Economy Summit Europe
Platform Strategist: Sangeet Paul Choudary
Platforms for active transport, fitness and exercise
In this signal post we will discuss some examples of platforms for (1) active transport, e.g. city bikes and scooters, and (2) fitness and exercise, e.g. on-demand online classes. These platforms are enablers for transport and mobility but also contribute to health and wellbeing. For the time being many suchlike applications remain somewhat limited in openness and interlinking with other services. But in the future, when integrated by e.g. wearable devices and overarching platform umbrellas, we can expect to get more insights and encouragement to help us lead healthy, active lifestyles.
Transport
In Finland, springtime means that city bikes reappear in the urban scene. In the recent years, city bike systems have grown very popular, and more and more cities and towns are setting up these services. The online platforms make using city bikes easy, as real time information and maps of stations and available bikes is readily available on mobile apps. Although most services are suspended in the winter, the growingly biking-friendly attitudes, and the fact that cycling is a ‘citizen skill’, explain the success of city bikes in Finland. In fact, Helsinki with their Helsinki city bikes has been shown to be the number one biking city in Europe, if we compare the number of trips per day and per bike (totaling 8.7 in Helsinki).
A newer thing in the urban environment is the emergence of electric scooters. In Helsinki, like many other cities around the world, these gadgets appeared rather suddenly and are already very visible in the streets. In spring 2019, already two commercial electric scooter service providers are present (TIER with planned 150 and VOI with planned 200 scooters), and the public transport authority HSL will pilot their own system (with 300 scooters). Operated with similar service platforms as city bikes, electric scooters are another fun and affordable way to move about in the city. There have been some minor challenges in the introduction though. After use, the scooters can be left anywhere in the city, and oftentimes poor parking decisions are made by users. Also, traffic safety issues have been raised, and not all users are aware that scooters are in most cases comparable to bikes when it comes to traffic rules.
Although these new transport services are often brought to the market as standalone offerings, they have already been integrated to wider mobility services. This makes sense especially because city bikes, scooters, etc. work well to solve the first and last mile parts of trip chains. For example, city bikes have been successfully implemented around the world in combination with public transport and MaaS packages (mobility as a service). In the future, the digital integration of different services beyond transport could also involve applications tracking health and environmental impacts. Aspects of and further potential with entertainment should not be overlooked either; many already seem to treat the GPS enabled hunt for the electric scooters as a fun game.
Excercise
Wearable devices, such as the wristband market giant and pioneer Fitbit or the Finnish smart ring design award winner Oura, are one of the most known examples of platforms relating to exercise and wellbeing. There are also numerous smart phone apps that use the phone or user input to track and guide healthy and active lifestyles. Interestingly, almost one half of Finnish youngsters aged 11-15 told in the LIITU 2018 study that they already use a smart phone app that tracks their activities.
But also more concrete linkages of the platform economy to physical activity exist already. Future potential in this sector is vast, and as one visionary tweet suggests, we should probably have a service and app that would give you access to gyms, swimming pools, fitness classes, climbing, etc. with one monthly payment. It is also worthwhile to acknowledge that even in Finland, where organizing sports and exercise has a long tradition of voluntary work and not-for-profit associations, the trend is towards business logics and profit making.
One example of digitalization and platforms entering the fitness sector can be found in the new service Les Mills On Demand by the internationally successful fitness brand Les Mills. They are better known for their pre-choreographed workouts that have been commercialized since the early 80s, by licensing instructors to lead classes in fitness centers around the world. The new on-demand service cuts corners by making online videos of customized workouts available for in-home use.
Another example comes from Peloton, again a well-known company in the fitness sector for many years. They are famous for their bikes and treadmills, but the new service Peloton Digital provides online access to live and on-demand classes, such as cycling, running, bootcamp, yoga and outdoor workouts, via their app. This new app doesn’t even necessitate purchasing a Peloton bike or treadmill, but is available to anyone, meaning that Peloton has now embraced business on the fully digital domain too.
Our third example is Mirror, an interactive reflective surface offering and streaming a wide range of fitness classes and one-on-one training. When exercising, the LCD panel, stereo speakers, camera and microphone are in use, and you can for example practice your boxing and even sync your heart rate monitor with the system. At other times the device simply works as a mirror on the wall.
Selected articles and websites
Aalto Maija, Helsingin Sanomat, 28.3.2019: Helsingistä kehkeytyi sähköpotkulautayritysten taistelutanner: Uusi tulija polkee kilpailijansa hinnat.
Ahonen Anton, Urhes: Liikunnan kansalaisyhteiskunnan muutokset 80-luvulta tähän päivään.
Alue-ennakoinnin seminaari 21.-22.3.2019: Tulevaisuus liikuttaa! [Seminar materials in Finnish]
Auvinen Heidi (2018). Wearable devices, data and the platform economy.
Fastcompany: This $1,495 connected mirror turns your bedroom into a boutique fitness studio
Helsinki Regional Transport, 22.03.2019. City scooters to be available in Vuosaari this summer.
Helsinki, 2.4.2019. Helsingin kaupunkipyöräjärjestelmän suosiovertailututkimus.
Kokko Sami, Martin Leena (2019). Lasten ja nuorten liikuntakäyttäytyminen Suomessa LIITU-tutkimuksen tuloksia 2018.
LaVito Angelica, CNBC: Peloton launches an app that’s available to anyone—regardless whether they buy a bike or treadmill.
LES MILLS: LES MILLS On Demand.
Merle Karp on Twitter, January 2019.
Mirror. The nearly invisible home gym.
Peloton: The Peloton Digital Membership.
Platforms are the new reality in transport
The transport and mobility sector is one area of the economy already benefitting in a big way from platform innovations. Megatrends of digitalization and servitization are having a major impact on transport systems around the world, and as a result the transport sector already functions, to a great extent, according to the principles of the platform economy. For example, we see app-based innovations in ride-sourcing (e.g. Uber) and in mobility as a service (MaaS) packaging (e.g. Whim). The pioneering platform companies in transport are becoming mainstream alternatives to traditional models that typically involve car ownership. User interest in access-focussed platform services such as these is growing. To support these developments, and to manage unintended negative impacts, new regulations have also been introduced (e.g. the Finnish Act on Transport Services).
The platform economy meets the current transport discourse
In recent years, the transport sector has eagerly adopted the terminology, business models and ecosystem approaches that characterize the platform economy. This is not only seen in entrepreneurial initiatives and business innovations but also in the public sector sphere. Decision-makers and policy planners have acknowledged the great potential of platforms to promote more sustainable mobility in terms of accessibility, flexibility, affordability, environmental performance, etc. Steering measures and regulations can help platform-based transport and mobility market grow in a sustainable manner, i.e. building on public transport services and with preference to environmentally and socially sound solutions.
In the current transport discourse, the term platform economy is already well established. Service providers identify themselves as platform owners, and politicians alike have grasped the opportunities involved with platform-based value creation (see, e.g. Anne Berner, the Minister of Transport and Communications of Finland). It has even been suggested, that the platform economy is the currently reigning ideology in transport policy.
Recent and expected developments in the field
Recent examples of new platform-based transport services in Finland can be found under Traffic Lab, an initiative by Finnish Transport Safety Agency that brings together innovators to collaborate, share and learn. These and many others were presented at the Transport and Infrastructure 2018 seminar this autumn.
In turn, the public sector ambitions to incorporate digitalization and servitization into the transport sector were recently highlighted in the scenarios for carbon-free transport by 2045. From the follow-up work on these scenarios, we expect to see concrete action plans that embrace the full business and societal potential of platform innovations.
Selected articles and websites
Anne Berner, Minister of Transport and Communications of Finland: Alustatalous liikuttaa myös Suomea, Impulssi-blogi
Anne Berner, Minister of Transport and Communications of Finland: Opening markets in the digital era, New Europe
Carbon-free transport by 2045 – Paths to an emission-free future. Interim report by the Transport Climate Policy working group
Heikki Metsäranta: Ideologiat liikennepolitiikassa, Tie & Liikenne 4, 2018
The Ministry of Transport and Communications: Act on Transport Services
Traffic Lab website, Finnish Transport Safety Agency
Väylät & Liikenne 2018 esitelmät (Transport and Infrastructure 2018 Seminar proceeding summaries)
Wearable devices, data and the platform economy
Wearables are an example of product and service businesses coming together in a way that aligns perfectly with the concept of the platform economy. In this signal blog post we discuss the wearable markets and envision its future potential when embracing the fast-paced developments in technology, data analytics innovations and business models.
What’s up with wearables?
Wearable technology, or simply wearables, are yet another application domain, where the opportunities of the platform economy are immense. These smart electronic devices incorporated into clothing or worn on the body as implants or accessories have potential to not only provide entertainment or infotainment but even ground-breaking solutions for aging, wellbeing, healthcare, emergency management, safety, housekeeping, etc. Wearables can in fact be the connector that allows data on an individual, such as location, activity, mood or vital functions, to be integrated into other data reserves in a smart and useful way, for example to help find a route to a destination, track exercise intensity, provide feedback to improve mood or give personalised tips for nutrition or health.
For the time being the most widespread wearables are smartwatch type activity and fitness trackers, such as those by the wristband market giant and pioneer Fitbit or the Finnish smart ring design award winner Oura. Suchlike devices usually track, among others, steps, calories consumed, heartbeat and hours slept. But we’re bound to see more as the following three take place: (1) More sophisticated sensors and tracking technologies are being introduced into wearables. (2) The range of wearables will diversify from wristbands (and smartphones) towards IoT-connected smart clothing, implants, etc. (3) Abundant data alongside with innovative thinking will allow unimaginable new ideas to turn into products and services.
New technologies are being embedded in wearables
One example of recent developments is how contactless payments have become a part of the wristband functionalities, such as Fitbit Pay. Another welcome novelty is featured in Matrix Powerwatch, a smartwatch that converts body heat into energy to power itself, so that you never need to charge it.
From the health care perspective, an interesting innovation is non-invasive glucose monitoring with a smartwatch. When mature and accurate enough, this technology embedded into everyday wearables could make a big difference for diabetics. Apple has announced interest in developing a solution, but the forerunner in applying the technology is HealBe, although they use it in their GoBe device for the time being only to measure calorie intake. In fact, this is also one of the first non-manual food intake tracker in the wearables business.
A complementary example is how AI has been trained to detect diabetes with nearly 85 percent accuracy by simply looking at heart beat over time. So in fact, even with the sensor technologies of current wearables, pre-screening of diabetes could already be a part of the data analytics.
Cross-pollination of data means new services and new business logics
The full potential of what the platform economy has to offer with wearables can be realised when multiple data sources are brought together. By this we mean data collected by one wearable device as well dynamic data from other wearables, other gadgets and basically any other data collecting objects. Equally important are the more static datasets, information reserves and knowledgebases that provide further context to analyse and process data captured by wearables. For example, imagine wearing a smartwatch that has been measuring your activity and food intake through the day. This data collected by your wearable could be compared against nutritional recommendations as well as reflected upon the ingredients available in your smart fridge. Combining all this data, a recommendation to fix a protein-packed omelette in the evening could be provided by your smart watch. Of course, there are also great risks with increasing data flows and interfaces, so attention needs to be paid to ensure for example reliability, safety and privacy.
In the current market setting we can see multi-sided platform business emerging around wearables. Wearable manufacturers are growingly willing to let third-party app developers to interface with the data their device collects instead of relying solely on their own software. This allows room for services to grow and improve. For example, an Indian online fashion store Myntra has built a software platform for wearable devices not only for its own line of products but also for those developed by third-party device makers. The core idea of the Myntra Wearable Platform is, well in line with platform thinking, to allow device manufacturers to integrate their wearables to talk to one another as well as to encourage external app developers to make use of the data.
The development of the wearable market and the service business around it means also new flavours in business models. One categorisation of strategies lists (1) product model, focusing on device sales, including product and service, (2) subscription model, focusing on as-a-service approach and recurring fees, (3) cross-selling model, focusing on selling allied products after device purchase and (4) data-sharing model, combining physical product sale with additional information products. The platform economy can accommodate all four business models, but the most fruitful outcomes for the consumer would probably emerge with the openness and multi-sided market opportunities enabled by the data-sharing approach.
Selected articles and websites
Cerillion: Business Models for Wearables in the IoT Economy
Engadget, Velazco: Data from wearables helped teach an AI to spot signs of diabetes
Engadget: Healbe’s GoBe 2 calorie tracker teases the future of wearables
ETtech: Myntra debuts a wearable platform along with its first wearable product Blink Go
European Commission: Smart Wearables: Reflection and Orientation Paper
Fitbit Official Site for Activity Trackers
Fitbit Pay
Gadgets & Wareables: Review Healbe GoBe 2: putting the automatic calorie-tracker to the test
Healbe GoBe Automatic Body Manager
Matrix PowerWatch
Oura Ring
The Conversation: Turning your health data into a “wellness score” might not be good for you
Wikipedia: Wearable technology
Turning common pessimistic beliefs of platforms into positive narratives
In this signal post we tackle four commonly stated beliefs that suggest the platform economy is but a game of global giants and Finland has very little chance to benefit or take part. These critical messages heard over and over again are:
- “We cannot compete with giants.”
- “It is already too late.”
- “Finland is too small.”
- “The US or China is going to take it all.”
While all the above four statements are valid concerns, we will explore them one by one with the aim to extend the discussion from pessimistic caution towards narratives of encouragement. In fact, we’d rather suggest using these statements to challenge practitioners to think of ways to get involved in the value creation networks that indeed are characterised by giant platform companies steering fast-paced developments in a global context. Positive messages have also been emphasised in the national strategy work and ministerial future reviews. Our recommendations for surviving and excelling in this game include the following:
- Join and contribute in an ecosystem.
- Use your unique strengths and find your niche.
- Think digital and global but do not forget about tangible and local.
“We cannot compete with giants”
When looking at the successful platform giants, such as Amazon, Alibaba, Spotify, YouTube, Baidu, Apple, Uber or Airbnb, you may wonder whether there is any room for new entrants. These giants have grown relatively fast and assumed leading or even monopolistic standing in regional and global markets. They are not only dominating the digitally powered business but often disrupting the traditional trade and industries too.
The point is, however, not to pick a fight and compete with one of these forerunner giants enjoying their monopoly position. Although you could do that too, if you come up with a more efficient, attractive or innovative service than what they offer. In fact, the monopoly status of many of these platforms could start to crumble as soon as strong new competitors with fresh ideas get their act together. An alternative newcomer strategy would be to explore interconnected business openings complementary to those of the giants. After all, the platform economy is the perfect environment to make use of business models based on multi-stakeholder value networks and ecosystems, layered services and synergetic alliances.
One should also acknowledge the longer-term fluctuations in economic success. Even giants fall, and monopolies may need to make room for a more diverse market situation. Social media platforms are a good example of an “industry”, where we have already seen pioneers and former market leaders such as MySpace and IRC-Galleria to lose their standing to a multitude of new, specialised platforms for private, professional and other purposes.
“It is already too late”
Again, if focusing on the incumbent giants, one might think it’s all been done already, and that it is too late to start from scratch. But the fact is that many business sectors are only beginning to warm up to the idea of the platform economy. Futures enabled by digitalisation remain in many business areas just visionary talk, as companies and other practitioners still rely on traditional business models, pipe-like supply chains and one-sided market logics. Innovative thinking and openness to apply the principles of the platform economy will provide countless new business opportunities in sectors like real estate, construction, waste management, manufacturing and agriculture.
New opportunities are also to be discovered with applying emerging technologies, such as artificial intelligence, blockchain, robotics and virtual reality. It is definitely not too late to contribute to the development of these technologies and the yet undiscovered potential they have when applied into digital platforms. New services, business models and delivery channels in sight!
“Finland is too small”
As a small, remote country it is easy to think we cannot make a big difference in the global game. Our domestic market is not big enough and we are but a population of some five million. The platform economy, however, is the perfect arena for even a small actor to grow and achieve international success. The European Single Market is our extended home ground, and there are no barriers that couldn’t be overcome in terms of global growth either. And again, platform strategies are all about alliances and partnerships, and the Finnish can surely find their niche as a part of these platform ecosystems.
The high level of education, expertise and skills in Finland is an important asset in the platform economy. ICT skills, databanks as well as knowledgeable citizens are a key resource in developing platforms as well as in introducing them in the consumer market. The compact domestic market can also be taken as an advantage, if used as a test-bed and proof-of-case to explore and market forerunner services. Well-connected stakeholder ecosystems can collaborate on domestic applications and then expand internationally, as we have seen with the example of mobility as a service business.
“The US or China is going to take it all”
The US and Chinese platform ecosystems are undoubtedly dominating the platform business for now, and for the time being Europe is largely dependent on the US-driven ecosystem. Finland and Europe among other countries and regions can nevertheless contribute to the development of these agglomerates. For example, it has been suggested that European public values could be employed to bring important value-centric platform policies into the big picture. The EU General Data Protection Regulation (GDPR) is already one major step forward, and besides privacy, values such as accountability, fairness and democratic control could be similarly promoted. The European strength in the traditional markets to balance power relationships and support stakeholder collaboration among (1) the market, (2) state and (3) civil society makes a strong case in the platform economy too. It could indeed provide a more acceptable alternative to the current focus of the US ecosystem on the market or that of the Chinese ecosystem on the state.
Another counter-argument to the dominance of the US, China or any other superpower is that even if the platform economy strives on digital solutions on the global level, many practical applications have roots in the tangible, physical world too. These types of local aspects are manifested in e.g. services and products being produced and consumed, which means business opportunities can be found both near and far.
Selected articles and websites
Valtioneuvoston kanslia, Työ- ja elinkeinoministeriö, Innovaatiorahoituskeskus Tekes: Digitaalisen alustatalouden tiekartasto
Finnish Government, Ministry of Economic Affairs and Employment: From transformation to new growth, Futures Review of the Ministry of Economic Affairs and Employment
Ailisto, et al. 2016: Onko Suomi jäämässä alustatalouden junasta? Valtioneuvoston selvitys- ja tutkimustoiminnan julkaisusarja 19/2016
van Dijck (2018): European public values in a global online society, Keynote at the workshop: “Platform Economy: Innovation, Entrepreneurship and Public Policy Perspectives”
Food in the platform economy: Consumer apps, production chain management and visionary ideas
This signal post provides an overview of progress and expected future directions of digital platforms in the context of food. Firstly, we take a look at existing platforms of different type within the consumer interface. Secondly, we explore the wider opportunities of platforms along entire food production chains and ecosystems. Thirdly, we identify a handful of emerging platform innovations waiting to enter the markets.
Platforms for the consumer
In the context of food, digital platforms for consumers can make the daily life more convenient, efficient and affordable. Comparing choices is easier, payments happen online and deliveries can be arranged too. Special deals and personalised offers are being increasingly used, and customer review systems act as an in-built quality control measure. Digital platforms may also serve as gateways to widen the range of accessible choices for consumers or bring additional benefits such as social connections. A platform can help arrange a lunch date with a potential new business partner or connect like-minded people to cook and eat a meal together.
Platforms for everyday grocery shopping remain for the time being primarily company-specific initiatives, as large grocery retailers that dominate the traditional markets have preferred to build their own platforms rather than common marketplaces. The restaurant business, specialised small-scale producers and consumer-to-consumer segments have, on the contrary, been keen to adopt platforms based on two-sided or multi-sided markets. Examples of these include:
- platforms for finding, booking, paying and reviewing restaurants, e.g. Eat.fi (Finland + international) and Foursquare (USA + international)
- platforms for ordering and paying takeaway food or food deliveries from restaurants, e.g. Pizza-online (Finland), Wolt (Finland + international) Foodora (Germany + international) and Uber Eats (USA + international)
- platforms for buying and paying for food and groceries directly from typically small or local producers, e.g. Farmhouse (Australia), OurHarvest (USA), Maano (Zambia) and Forestfoody (Finland)
- platforms for buying and paying affordable surplus meal deals or food products from restaurants or grocery wholesalers, e.g. ResQ (Finland + international) and Fiksuruoka.fi (Finland)
- platforms in the consumer-to-consumer space such as meal sharing, pop up activities, food swap, etc., e.g. Ravintolapäivä (Finland + international), Meal Sharing, foodsharing (Germany) and Traveling Spoon.
It is notable that many of the established and emerging platforms contribute to (economically, environmentally or socially) sustainable consumption patterns and sharing economy principles. Restaurants and households alike are minimising food waste, and social connections and community spirit are fostered through local activities. Even the food delivery services are, instead of simply increasing motorised transport and related negative externalities, growingly using sustainable alternatives like bike couriers.
Platforms for the food production chain
Digital platforms have potential also in capturing entire supply chains and supply network ecosystems of food production. The food industry is, in fact, an exceptionally interesting application area, because benefits of digitally managed production chains do not limit to the obvious efficiency savings but extend to topics such as food safety, cold chain management and transparency in production conditions and origin.
One example of future opportunities with digitalisation is the so called Food Economy 4.0 that paints a picture of a sustainable consumer-centric ecosystem. The core of this concept relies on three change paths: (1) from mass production to personalised solutions, (2) from centralisation to agile manufacturing and delivery and (3) from horizontal to vertical food production. In Finland, a strategic roadmap has even been drafted to an envisioned consumer data-driven, digital platform model to disrupt inflexible and inefficient value chain structures among primary production, various industry sectors, logistics, retail and service sectors in the food chain. This concept foresees that industrial platform creation could proceed step-wisely and ultimately evolve from transportation, warehousing and market platforms into long-term interoperability across industries and platforms.
Similar ideas relating to the currently linear, industrialised and centralised food supply chains are also promoted in examples such as food hubs, precision agriculture and analytics, recycling applications and dietary information systems. Even if we currently see these concepts emerging as standalone applications and platforms, the next step forward would be to embed and interconnect them throughout value networks. Stakeholder collaboration and novel thinking will be a necessity, but synergetic effects and added value are expected to be substantial.
Longer term visions
Even more innovative long-term visions for food in the platform economy include initiatives that plan to use blockchain technologies to manage transactions. Russian-originated INS Ecosystem plans to transform the push-based grocery business to a pull, using a dynamic system to fulfil orders and adjust prices by connecting sellers and buyers directly. This efficiency improvement would minimise the need for shelving foods and also reduce waste. Another similar decentralised marketplace initiative is BlockFood with its technical architecture based on smart contracts that allow customers to order food from restaurants and have it delivered. A third example, FoodCoin, has perhaps even more ambitious plans, aiming to create a global marketplace of food and agricultural products using the Ethereum technology. The platform would engage all actors along the supply chain from farmers and equipment manufacturers to food manufacturers, restaurants and consumers. All of these platforms have advanced plans to make use of tokens and cryptocurrencies.
But what if the food itself that we consume will change dramatically? Powdered meals and personalised food fabrication are examples of such innovations. These would implicate even wider opportunities for digital platforms, as instead of traditional recipes and supply chains the demand would expand to smart, personalised diet planning and novel nutrient markets. The focus could thus move from platforms optimising logistics to platforms providing intelligent nutritional solutions that are tailored to personal needs. Further on, personalised approach to food to improve wellbeing and health could even be combined with measuring and monitoring of your daily condition, genetic information and personal goals. And all of this could be interlinked to platforms that use nudging and positive reinforcement to encourage positive behavioural patterns in our daily choices, a step forward from what platforms like Zipongo are already exploring.
Selected articles and websites
Allfoodexperts: Food powder. Eat what you like
Allfoodexperts: Sharing Economy Reaches Food: Startups Based on Collaborative Networks
BlockFood: BlockFood is the world’s first decentralized food ordering & delivery platform
Complexity Labs: Food Systems Innovation
FoodCoin Ecosystem: Global blockchain ecosystem for food and agriculture businesses
GreenBiz, RP Siegel: This blockchain startup is hungry to address the grocery industry’s food waste dilemma
INS Ecosystem: A Decentralized Online Grocery Marketplace: How it Works for Consumers
Kotiranta et al. (2017): Roadmap for Renewal: A Shared Platform in the Food Industry
MedTech Engine, Mariëtte Abrahams: The personalised nutrition trend – how digital health brands can revolutionise healthcare
News.com.au, Frank Chung: CSIRO sets sights on personalised ‘food generator’ based on your DNA, lifestyle and even sweat
Platform Value Now, Heidi Auvinen: Digital platforms for supply chains and logistics
Poutanen et al. (2017): Food economy 4.0 VTT’s vision towards intelligent, consumer-centric food production
The Technology Media, Elina Koskipahta: The platform combines feedback from journalists, food critics and local users
World Food Program: Maano – Virtual Farmers Market
Zipongo: Eating well made simple