marketing – Platform Value Now

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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