International Master – Innovation seminar UTSeuS international research seminar, 23-24th of october 07 Pascal Jollivet (Costech) UNIVERSITÉ DE TECHNOLOGIE

International Master – Innovation seminar

UTSeuS international research seminar, 23-UTSeuS international research seminar, 23-24th of october 0724th of october 07

Pascal Jollivet (Costech)Pascal Jollivet (Costech)

UNIVERSITÉ DE TECHNOLOGIE COMPIÈGNE

Connaissance, organisation et systèmes techniquesCOSTECH

Ascending Innovation : economics and management

Business & economic models for

Ascending/Eco-systemic/Open Innovation

Pascal Jollivet

COSTECH research lab’ (EA 2223), collegium CNRS-INSI

UV SICMaster UTC Mention IC M1

Academic year [email protected]

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1. Ascending innovation : similarities

Ascending innovation/bottom up innovation ? Network-Ascending innovation/bottom up innovation ? Network-innovation !innovation !

Pyramidal/”Flat” organization. Pyramidal/”Flat” organization. Hierarchy/control (commandment) Hierarchy/control (commandment) Conception/executionConception/execution Reticular cooperative organization Reticular cooperative organization

of workof work–

Innovation impulse by Innovation impulse by the base ? From the hori-the base ? From the hori-zontal network !zontal network !

Jollivet, Ascending Innovatio, Shanghai , dec. 2013

1. Ascending innovation : similarities (2)

Crowdsourcing / contributive model / Ascending Crowdsourcing / contributive model / Ascending Innovation …Innovation …

Innovativeness ; Control/initiative ; distributed Innovativeness ; Control/initiative ; distributed governance/centralized owner/common; production/valuing-governance/centralized owner/common; production/valuing-monetizing;monetizing;

Crowdsourcing : Crowdsourcing : internalization/externalisation (outsoucing)/crowdsourcinginternalization/externalisation (outsoucing)/crowdsourcing a “center” that sources (centralized “valuing”/monetizing)a “center” that sources (centralized “valuing”/monetizing)

Contributive model : no centralized “valuing”/monetizing entityContributive model : no centralized “valuing”/monetizing entity

3Jollivet, Ascending Innovation for Complex Cities, UTC, 2013

The end of the structural dichotomy between :The end of the structural dichotomy between : Producer and consumer (Prosumer? FabLabs ? Hacker ? User-innovator)Producer and consumer (Prosumer? FabLabs ? Hacker ? User-innovator) Offer and demand (economics of contribution, wikinomics)Offer and demand (economics of contribution, wikinomics)

Democratization of innovation ?Democratization of innovation ? more actors, more “non-profemore actors, more “non-profe

sionals”, more outside of (big) sionals”, more outside of (big) companiescompanies

User-producerUser-producer Internalization/externalisation ./Internalization/externalisation ./

crowdsourcing … crowdsourcing … democratization of innovation ? democratization of innovation ? (KickStarter, Google Summer (KickStarter, Google Summer of Code, FLOSSof Code, FLOSS


1. Ascending innovation : similarities(3)

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1. Ascending innovation:planning/serendipity

Serendipity : The impossible planning of innovation? Serendipity : The impossible planning of innovation? Planning innovation, an oxymoron ? Planning innovation, an oxymoron ? Solution ? Preparing for the non-forecastable : engage ain a Solution ? Preparing for the non-forecastable : engage ain a

serendipity processserendipity process

Decision making for Decision making for innovation/start up : innovation/start up : predictive logic predictive logic vsvs effectual logic ? effectual logic ? SarazvatySarazvaty

Jollivet, Ascending Innovation, Shanghai , dec. 2013

1. Ascending innovation : outcome/ecosystem

Product, process, service innovation? No : system Product, process, service innovation? No : system innovation (as platforms) ! innovation (as platforms) ! CEO Nokia re. Android & Apples eco-systemsCEO Nokia re. Android & Apples eco-systems

Produce an output ? Design anProduce an output ? Design an outcome ! outcome ! Experience a MMORPG ! Experience a MMORPG !

Experience design. Experience design. My GO “experience” : emotion My GO “experience” : emotion

in tele-presencyin tele-presency

6Jollivet, Ascending Innovation, Shanghai , dec. 2013

1. Ascending innovation : Business Models (the market of derivatives) Fee of Free ? Paying of Gratis ? Fee of Free ? Paying of Gratis ?

“Is there nothing as free lunch”? “Is there nothing as free lunch”? Freemium !!Freemium !!

Deezer, SpotifyDeezer, Spotify Youtube, Facebook … Gmail !!Youtube, Facebook … Gmail !!

7Jollivet, Ascending Innovation, Shanghai , dec. 2013

Sell product ? (the market of derivatives) Sell product ? (the market of derivatives) MonetizeMonetize (use value) experience ! (use value) experience !

Sell “gadgets”/derived goods (additional Sell “gadgets”/derived goods (additional powers) on Online Gamespowers) on Online Games

Selling a product? New business modelsSelling a product? New business models How to build use-value experience (functionality focused) for How to build use-value experience (functionality focused) for

the user . How to monetize his experience? the user . How to monetize his experience? Market value / use value /monetizing … Market value / use value /monetizing …


1. Ascending innovation : Business Models (the market of derivatives)

Sell the owning of an object? Rent the Sell the owning of an object? Rent the access to/the use of … a service/access to/the use of … a service/a “function”a “function” The economics of service/functionnalityThe economics of service/functionnality

Separate profit from non-profit? Design “hybrid” Separate profit from non-profit? Design “hybrid” public/private goods public/private goods (private service/public services) ! (private service/public services) !

* Gmail … * JP Decaux AbrisBus * Gmail … * JP Decaux AbrisBus (Bus Stop with advert ) (Bus Stop with advert )

– * Velib/e-car !* Velib/e-car !

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1. Ascending innovation : Business Models : access / hybrid

Selling time of attention (to advertisers ): The economics Selling time of attention (to advertisers ): The economics of attention of attention P. Lehaye (former CEO TF1 TV, France) : “We sell time of P. Lehaye (former CEO TF1 TV, France) : “We sell time of

available brain ! ” (i.e. mn. of attention). available brain ! ” (i.e. mn. of attention). Which differentiation /competitors (other advertiser’s providers) ? Which differentiation /competitors (other advertiser’s providers) ?

Personalized advert : relevancy re. watcher’s interests Personalized advert : relevancy re. watcher’s interests -> more qualitative “attention” to the advert-> more qualitative “attention” to the advert Minimalism of the advert (a “sponsored link”, not a banner) : less Minimalism of the advert (a “sponsored link”, not a banner) : less

disturbance/less cognitive cost for the final user disturbance/less cognitive cost for the final user -> more -> more qualitativequalitative “attention” to the advert “attention” to the advert

How to “monetize” How to “monetize” qualitativequalitative “attention” (not only “volume” of “attention” (not only “volume” of the audience/public) ? the audience/public) ?

A higher number of click per exposition to an advertA higher number of click per exposition to an advert -> a better ratio of performance of advert -> a better ratio of performance of advert -> a higher price to sell the “outcome” (attention) ! -> a higher price to sell the “outcome” (attention) !

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1. Ascending innovation : Business Models : Gmail/Gsearch (1)


Dimensions of innovation

Case (simplified)

Offer (use value) Innovation : Product ? No. Process ? Little. Service ? Cloud. Outcome ? Experience : qualitative « attention » of the « user ».

Bus. Model Selling the « soft advert » exp. of watcher to advertiser.Monetizing ? Better ratio of click per exposure : higher price of advert !

Sourcing(in/out/crowd)

Crowdsourcing : attracting max users/audience (crowd) through delivering a « public good » (Gmail) + having them produce content (mails) + datamining the contents

Eco-system The use value of Gmail is strengthened by each other “service” part of Google’s “offer”, thought integration (G.Drive-G.Doc/Agenda/ “G+”, Android on Smartphones … ). Externa-lities of each service are therefore internalized in the System.

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1. Ascending innovation:Business Models : Gmail/Gsearch (2)


1. Ascending innovation : Complex systems, ecosystems Def. : Def. : ComplexComplex System (math) System (math)

Many variablesMany variables Many interactions;Many interactions; Non linear « rules »Non linear « rules »

Ex : The study onEx : The study on

the the motivationmotivation

to contribute to contribute to to

Wikipedia.Wikipedia.


Global Economy Dynamics as a complex system

1. Ascending innovation : Complex systems, ecosystems

Complex system (Def : Complex system (Def : ~sociology ) ~sociology ) The system is more than the The system is more than the some of its parts : collective some of its parts : collective

intelligenceintelligence

Ex : Collective Ex : Collective intelligence : the intelligence : the MIT/Canadian MIT/Canadian Experimental Experimental Psychology/Management Psychology/Management Research of the collective Research of the collective performance on a team to performance on a team to solve simple/complex solve simple/complex problems.problems.


1. Ascending innovation : Complex systems, ecosystems

EcoEco-system (complex)? -system (complex)? Self regulation : Self regulation : unlike simple automats Command/control that need unlike simple automats Command/control that need

human intervention in case of unpredicted/unexpected perturbating event. human intervention in case of unpredicted/unexpected perturbating event. Like feed back integration in cybernetics. Like real biological eco-Like feed back integration in cybernetics. Like real biological eco-systems adapting to changing environment. systems adapting to changing environment.

So that it stays« alive » So that it stays« alive » (non-anthropic : reproduction, adaptation)(non-anthropic : reproduction, adaptation)

Bio-mimetics dynamics Bio-mimetics dynamics (ex : predation/ co-evolution).(ex : predation/ co-evolution).


1. Ascending innovation Protecting/sharing knowledge

Protect your ideas ? Share knowledge ? Protect your ideas ? Share knowledge ? Enclosure/disclosure of knowledge for innovationEnclosure/disclosure of knowledge for innovation

Benefits from protecting (enclosing) for innovation ? Benefits from protecting (enclosing) for innovation ? Preventing against copy from competitors (supposedly) ;Preventing against copy from competitors (supposedly) ; Preventing (potential) competitors to innovate ?Preventing (potential) competitors to innovate ?

Ways of legally protecting innovation with IP:Ways of legally protecting innovation with IP: Patents, copyrights (models, brand … ) and … secret !Patents, copyrights (models, brand … ) and … secret ! Not every “applicable novelty” can legally be patentedNot every “applicable novelty” can legally be patented



Strategic practices of patenting : the evolution of IBMStrategic practices of patenting : the evolution of IBM From exclusive “in sourcing/using/valuing” of patents (5%).From exclusive “in sourcing/using/valuing” of patents (5%).

Indirect internal monetization of knowledge through incorporation in Indirect internal monetization of knowledge through incorporation in products/servicesproducts/services

To direct external monetization of knowledge To direct external monetization of knowledge through selling/renting patentsthrough selling/renting patents

New high profit-making strategic practice/business model New high profit-making strategic practice/business model re. patents : patent Troll !re. patents : patent Troll ! Buying patentsBuying patents To threaten small/medium size high tech companies of trial if they To threaten small/medium size high tech companies of trial if they

to pay for licencesto pay for licences



Benefits from sharing (disclosing) for innovation ?Benefits from sharing (disclosing) for innovation ?i.i. Share knowledge/project ideas to “interest”/involve/attract Share knowledge/project ideas to “interest”/involve/attract

potential partners and ease the adoption (diffusion) of your potential partners and ease the adoption (diffusion) of your innovation !innovation ! - P2P on music : piracy or marketing gains (free “promotion”) ? - P2P on music : piracy or marketing gains (free “promotion”) ?

ii.ii. Enabling crowdsourcingEnabling crowdsourcingiii.iii. Self-reinforcing dynamics : the more you share knowledge, the Self-reinforcing dynamics : the more you share knowledge, the

better it becomes (improvement)better it becomes (improvement)

Ex : California Spirit vs French ? The different Ex : California Spirit vs French ? The different feelingsfeelings & & practices practices about patentsabout patents in the 2 territories in the 2 territories



Innovation dilemma re. Intellectual Property (IP) ?Innovation dilemma re. Intellectual Property (IP) ?1.1. Opening/sharing/diffusion knowledge increases innovation Opening/sharing/diffusion knowledge increases innovation

(at least at global scale) : self reenforcing process(at least at global scale) : self reenforcing process2.2. Monetizing knowledge requires building enclosure (that prevent Monetizing knowledge requires building enclosure (that prevent

diffusion)diffusion) A dual slope (hybrid) model of valuing knowledge for A dual slope (hybrid) model of valuing knowledge for

innovation ?innovation ?


1. Ascending innovation Protecting/sharing knowledge Strategies to transcend the dilemma : Google vs Apple ?Strategies to transcend the dilemma : Google vs Apple ?

Google : the Google : the dual slopedual slope IP strategy : IP strategy : Enclosure ? Enclosure ?

• Includes Patents ! Includes Patents ! • Motivation : don’t be evil : only for protection against patents threat from Motivation : don’t be evil : only for protection against patents threat from

others, non for “aggressive” use…others, non for “aggressive” use… Disclosure ? Disclosure ?

• Chrome, Android Floss, Google Summer of Code … Chrome, Android Floss, Google Summer of Code … The The tricktrick to keep global control on the eco-system ? Functional to keep global control on the eco-system ? Functional

systemic dependency beetween the 2 (ex : Android Consortium). systemic dependency beetween the 2 (ex : Android Consortium).

Apple : the enclosure (main) option and the patent threat to Android Apple : the enclosure (main) option and the patent threat to Android ecosystem strategic ( and Google). ecosystem strategic ( and Google).

Main practices re. patents from big IT firms ? Main practices re. patents from big IT firms ? • Preventing competitors to innovate ! Preventing competitors to innovate ! • Biggest financial issues re. patents : Apple vs Samsung trial … with Biggest financial issues re. patents : Apple vs Samsung trial … with

Android and Google as final targetAndroid and Google as final target 19Jollivet, Ascending Innovation for Complex Cities, UTC, 2013


Gmail Case (simplified)

Ethics of Work : Fun/work ?

We are google bees ? Tacit worker ?

Intelectual Property : Open/closed knowkedge ?

Selling the « soft advert » exp. of watcher to advertiser.Monetizing ? Better ratio of click per exposure : higher price of advert !

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1. Ascending innovation :Business Models : Gmail (3)


Conclusion (of part I – Issues/conceptual tools )

Innovating, today ? Innovating, today ?

Requires exploring/answering such Requires exploring/answering such a multidimensionnal « complex (eco)system », a multidimensionnal « complex (eco)system »,

Now: let’s explore it through (real) Ascending Now: let’s explore it through (real) Ascending Innovation case studiesInnovation case studies



Apple Case (simplified)

Offer

Bus. Model

Sourcing(in/out/crowd)

Eco-system

Ethics of Work (Fun/Work).

I.P. (ouvert/fermé connaissance).

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1. Ascending innovation:Business Models : Apple.


Documents

International Master – Innovation seminar UTSeuS international research seminar, 23-24th of october 07 Pascal Jollivet (Costech) UNIVERSITÉ DE TECHNOLOGIE