Digital Ecosystems supporting growth and SMEs F. Nachira European Commission DG-INFSO - Unit “ICT for Business” Head of Sector “Technologies for Digital Ecosystems“ 2004 Introduction How ICT could support business and SMEs, preserving local development and values ? Which research ? Which synergies with other actions ?
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Digital Ecosystems supporting growth and SMEs F. Nachira European Commission DG-INFSO - Unit “ICT for Business” Head of Sector “Technologies for Digital.
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Digital Ecosystems supporting growth and SMEs
Digital Ecosystems supporting growth and SMEs
F. NachiraEuropean Commission DG-INFSO - Unit “ICT for Business”
Head of Sector “Technologies for Digital Ecosystems“
F. NachiraEuropean Commission DG-INFSO - Unit “ICT for Business”
Head of Sector “Technologies for Digital Ecosystems“
2004Introduction
2004Introduction
How ICT could support business and SMEs, preserving local development and values ?
Which research ? Which synergies with other actions ?
How ICT could support business and SMEs, preserving local development and values ?
Which research ? Which synergies with other actions ?
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Structure of the presentation
Structure of the presentation• Local and global challenges: networking for s&e
development
• Lisbon Strategy, eEurope: ICT and knowledge
• Regional Clusters: from Industrial Districts to Business
Ecosystems
• Digital Ecosystem concept
• How to implement?
• DBE : building a Digital Ecosystem infrastructure
• A network of local Digital Ecosystems
• A different future for local growth and SMEs ?
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
SMEs: AdvantagesSMEs: Advantages• SMEs are highly focused• niche products - specialized services• SMEs very often depend on large enterprises• solution partners - component providers - service partners• SMEs can play a role as innovators• their best chance to stay competitive• no large bureaucracies to overcome• SMEs could be strong through synergies• find the right partners - learn how to network and cooperate
SMEs: Disadvantages• limited specialised resources (knowledge)• no R&D dept., no legal dept, • difficult to cope with complexity and globalisation• global value chain, access to knowledge
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
SMEs software users (i.e. non-IT product/service providers): • From a limited environment to a global competition, + interrelations• From a well-defined business relationships to dynamic fuzzy
relationship• un-known partner => on-demand access to services• affordable applications not available for SMEs• taylored applications fitting with local conditions not available• limited adoption of IT => minor increase of productivity
SMEs sw providers: - From a limited environment to a global competition, - Rapid evolution of standards- Sw is part of an environment, interoperability, sw more and more complex- Difficult to compete with large global corporations with dominant positions
SMEs sw providers: - From a limited environment to a global competition, - Rapid evolution of standards- Sw is part of an environment, interoperability, sw more and more complex- Difficult to compete with large global corporations with dominant positions
GlobalizationGlobalization => decline of European SMEs?
=> decline of European SMEs?
SMEs new difficulties: increased complexity an d role of knowledgeA) more R&D, innovation neededB) the value is extracted by immaterial (it’s now an asset in the balance)Creation, distribution, use, exchange of knowledge for purpose of value creationattempt to limit diffusion of information=> drm, patents,copyrights,secrecy clauses -------------> risk of foreigner oligopoly of immaterial means of production
SMEs new difficulties: increased complexity an d role of knowledgeA) more R&D, innovation neededB) the value is extracted by immaterial (it’s now an asset in the balance)Creation, distribution, use, exchange of knowledge for purpose of value creationattempt to limit diffusion of information=> drm, patents,copyrights,secrecy clauses -------------> risk of foreigner oligopoly of immaterial means of production
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Role of ITCRole of ITCThe adoption and use of ITC is one of the major factor of productivity
gain• Internet creates new opportunity of business (services, content …) … but his usage allows:• to increase the productivity• in all sectors• in all kind of business
• the access to the global market • the access and sharing of knowledge and skills• the development of networked organisationsHalf of productivity gain in US during last 5 years
depends on ICT adoption Half of productivity gain in US during last 5 years
depends on ICT adoption
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
Models of Clusters
*source: G-Nike 2002
Growth Node*Industrial District*
Business Ecosystem
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Models of Clusters (1)Models of Clusters (1)Industrial district [Alfred Marshall 1922]:Business structure dominated by small, locally owned firms- Scale economies relatively low- Substantial intra-district trade among buyers and suppliers- Key investment decisions made locally- Long-term contracts and commitments between local buyers and suppliers- Low degrees of co-operation or linkage with firms external to the district- Labour market internal to the district, highly flexible- Workers committed to district, rather than to firms- High rates of labour in-migration, lower levels of out-migration- Evolution of unique local cultural identity, bonds- Specialised sources of finance, technical expertise, business services available in district (outs)proximity, innovation and competition, enterpreneurship, social capital, specialised workforce, tacit knowledge, ...
Industrial district [Alfred Marshall 1922]:Business structure dominated by small, locally owned firms- Scale economies relatively low- Substantial intra-district trade among buyers and suppliers- Key investment decisions made locally- Long-term contracts and commitments between local buyers and suppliers- Low degrees of co-operation or linkage with firms external to the district- Labour market internal to the district, highly flexible- Workers committed to district, rather than to firms- High rates of labour in-migration, lower levels of out-migration- Evolution of unique local cultural identity, bonds- Specialised sources of finance, technical expertise, business services available in district (outs)proximity, innovation and competition, enterpreneurship, social capital, specialised workforce, tacit knowledge, ...
Industrial district, Italian Variant [Markusen, Alberti 1996]:- Hi-degree of cooperation among competitor firms to share risk,stabilise market,share innovation- Strong trade assoc.: provide shared infrastructure, mangmt training, marketing,tech./financ.help- Strong local government role in regulating and promoting core industries
Industrial district, Italian Variant [Markusen, Alberti 1996]:- Hi-degree of cooperation among competitor firms to share risk,stabilise market,share innovation- Strong trade assoc.: provide shared infrastructure, mangmt training, marketing,tech./financ.help- Strong local government role in regulating and promoting core industries
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Models of Clusters (2)Models of Clusters (2)Growth Node [O’Callagan 2000]:an evolution of the cluster concept - emphasises the external networking dimension, knowledge transfer, social learning- hi performing geo-cluster of organisations and institutions- networked to other clusters- potentially supported by ICT
Growth Node [O’Callagan 2000]:an evolution of the cluster concept - emphasises the external networking dimension, knowledge transfer, social learning- hi performing geo-cluster of organisations and institutions- networked to other clusters- potentially supported by ICTBusiness Ecosystem [2002]:“an economic community supported by a foundation of interacting organisations and individuals” “distinct identity + adaptation to environment” with dynamic relationsdepends on global networking- sw+hw ICT infrastructure essential element includes: services, knowledge, business
Business Ecosystem [2002]:“an economic community supported by a foundation of interacting organisations and individuals” “distinct identity + adaptation to environment” with dynamic relationsdepends on global networking- sw+hw ICT infrastructure essential element includes: services, knowledge, business
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Evolution of e-adoptionEvolution of e-adoption
more complexity in organisationsEu
rop
e is u
sed
to c
op
e w
ith
com
ple
xit
y a
nd
div
ers
ity
SM
Es a
re
dyn
am
ic a
nd
flexib
le
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
ICT support for networked business
ICT support for networked business
To facilitate the emergence of future
business forms designed to exploit the
opportunities and manage the challenges posed by the socio-economic and technical revolutions of
the 21st century.
To facilitate the emergence of future
business forms designed to exploit the
opportunities and manage the challenges posed by the socio-economic and technical revolutions of
the 21st century.
Future business, more competitive, innovative, agile and value creating,
will require new technologies, applications
and services to enable them to work as
networked knowledge-based businesses.
Future business, more competitive, innovative, agile and value creating,
will require new technologies, applications
and services to enable them to work as
networked knowledge-based businesses.
develop ICTs supporting organisational networking, process integration, and sharing of resources that enable networked organisations (private and public) to build faster and more effective partnerships and alliances
re-engineer and integrate business processes, share efficiently knowledge and experiences and develop value added products and services for networked organisations
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Lisbon GoalsLisbon Goals
“EU: Largestknowledge-
basedeconomy by
2010”
“EU: Largestknowledge-
basedeconomy by
2010”
The Lisbon PerspectiveThe Lisbon Perspective
EnlargementEnlargement
Candidate countries
were full partners in FP5
Candidate countries
were full partners in FP5
ERA: EuropeanResearch Area
ERA: EuropeanResearch Area
FP6, Eureka, COST, national RTD programmes
FP6, Eureka, COST, national RTD programmes… towards a
‘single market for research &
innovation’
… towards a ‘single market for research &
innovation’
Broadband access, e-business, e-government,
security, skills, e-health, ...
Broadband access, e-business, e-government,
security, skills, e-health, ...
Other policiesOther policiesSingle market, single currency, security of
Europeans, sustainable development, ...
Single market, single currency, security of
Europeans, sustainable development, ...
e-europee-europe
Digital Ecosystems for SMEs and local growth
F. Nachira - March 2004
eEurope 2005eEurope 2005The victious circle to be broken:
weak network infrastructure unavailability of on-line services
Eeurope is based on two parallel actions which reinforce each other developing a virtuous circle
The first group services, applications and digital content
•has the goal to develop modern on-line services (of e-government, e-learning, e-health)• and of services for favouring a dynamic e-business environment The second group is composed of catalysts
aiming at creating:–affordable broadband–infrastructure for information security
The victious circle to be broken: weak network infrastructure unavailability of on-line services
Eeurope is based on two parallel actions which reinforce each other developing a virtuous circle
The first group services, applications and digital content
•has the goal to develop modern on-line services (of e-government, e-learning, e-health)• and of services for favouring a dynamic e-business environment The second group is composed of catalysts
aiming at creating:–affordable broadband–infrastructure for information security
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
Business Ecosystems
local conditions
Business Ecosystems
local conditionsTechnical
Infrastructure
Business & Financial
Conditions
Human Capital andPractices
EffectiveGovernance
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Which ICT technology ?Which ICT technology ?•“… the actual slowly changing network of
organizations will be replaced by more fluid, amorphous and often transitory structures based in alliances, partnership and collaborations”.
•“…building a community that share business, knowledge and infrastructure”
•“To support this scenario, which envisages the aggregation of services and organizations, is required a further stage in ITC technology adoptions which exploits the dynamic interaction (with cooperation and competition) of several players in order to produce systemic results in terms of innovation and economic development.”
From “ Towards a Network of digital business ecosystems fostering the local development ” (EC, Discussion paper, 2002)
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
How to deal with the complexity?
How to deal with the complexity?
No easy answer, no short-term solution
long-term process, but intermediate results
Paradigm shift :machine model => living organism model building a machine => nurturing players and conditions
Paradigm shift :machine model => living organism model building a machine => nurturing players and conditions
Players
Small organisations
R.O. Univ.
P.A. Gov.
Cooperative effort : among local actors (gov, biz, uni-res) among EU regions
Cooperative effort : among local actors (gov, biz, uni-res) among EU regions
Digital Ecosystems for regional development F. Nachira - June 2004
Advantages of new paradigmsAdvantages of new paradigms
• How turn weakness in advantages
• Opens your mind: abandoning un-necessary constrains you discover new opportunities
• Examples of this approach• Intell. Manufacturing System programme (establish. Next generation manufact. Sys) 91-00 => holonic systems concept• Cybesyn project (apply principles of cybernetics for effective democracy) S.Beer Chile 70-73 => autopoietic systems• Visionary approach + intermediate tangible results•
Digital Ecosystems for regional development F. Nachira - June 2004
Lessons from the living worldLessons from the living world
• Is built on composition and complex hierarchies
• No central control, no plans defined in advance
• Fault tolerant:No central point of failure, just viability concept
• Diversity and autonomy (recursive)
• Just adaptationto the local conditions
• Selection and evolution
• But you need an infrastructure supporting the life (composed of living organisms too - rec. concept), and a critical mass of individuals and biodiversity (bootstrap problem)
Digital Ecosystems for regional development F. Nachira - June 2004
What is a Digital Ecosystem ? What is a Digital Ecosystem ?
THE DIGITAL ECOSYSTEM
• is a pervasive “digital environment”
• which supports the business ecosystems
• which is populated by “digital components”
• which evolves and adapt to local conditions with the evolution of the components
THE SOFT SUPPORT INFRASTRUCTURE, WHICH OFFERS AND TRANSPORTS
SERVICES & INFORMATION (knowledge)EMPOWERING THE NETWORKING
Digital Ecosystems for regional development F. Nachira - June 2004
What is a Digital Component ?What is a Digital Component ?
DIGITAL COMPONENT
•could be: software components, applications, services, knowledge, business processes and models, training modules, contractual frameworks, law ...
•.... and hopefully a mixture of that
AN USEFUL IDEA, EXPRESSED BY THE LANGUAGE
(formal or natural), LAUNCHED ON THE NET,
WHICH CAN BE PROCESSED (by computers and/or humans)
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
Advantages for SMEs of the digital ecosystem
paradigm
Advantages for SMEs of the digital ecosystem
paradigm
•
SMEs (dynamic, adaptable, flexible, rooted at local level)
• Advantages of the approach
•Reducing treshold for market entrance•Reducing the relevance of the marketing•Possibility to provide only a component•Provision of ethnocentric solutions•Afford together the complexity
“It is not the strongest of species that survive, nor the most intelligent,
but the one most adaptable to changes.”
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Digital Business Ecosystems F.Nachira - Catania, Feb 2004
Example of use of Digital EcosystemTourism Sector
Digital Business Ecosystem Open-source infrastructure “Commons”
DynamicdigitalServices(multiple revenue models)
DBE
Plane ticket
Tour Restaurant
Hotel
Car rental
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
MarketMarket
SME 1SME 1 SME 2SME 2
SME 3SME 3
Sale digital DBE servicesSale digital DBE services
“Meta-market”“Meta-market”
DBEDBE
(SW Producer)(SW Producer)(SW User)(SW User)
SME 1SME 1 SME 2SME 2software services
support oforganisations
software servicessupport of
organisationsDBE
ServiceDBE
Service
The three-layers impactThe three-layers impact
P.DiniLSEP.DiniLSE
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
What it does mean ?What it does mean ?
1 – ICT adoption for SME users. If successful, the DBE will increasethe efficiency of business transactions and processes:
DBE as software that mediates a market
1 – ICT adoption for SME users. If successful, the DBE will increasethe efficiency of business transactions and processes:
DBE as software that mediates a market
2 – SME SW Producers. If successful, the DBE will increase themarket for software services and applications:
DBE as software that mediates a “meta-market”
2 – SME SW Producers. If successful, the DBE will increase themarket for software services and applications:
DBE as software that mediates a “meta-market”
Digital Ecosystems for SMEs and local growth F. Nachira - March 2004
The Digital Ecosystem policy has two main goals:
1 - To facilitate ICT adoption on the part of European SMEs
2 - To support European SME software producers
The Digital Ecosystem policy has two main goals:
1 - To facilitate ICT adoption on the part of European SMEs
2 - To support European SME software producers
Strategic goals of Digital ecosystemsStrategic goals of Digital ecosystems
Digital divides(N/S; am.regions;LE/SMEs; …)
Digital divides(N/S; am.regions;LE/SMEs; …)
Cultural, social & economic problemCultural, social & economic problem
SW that adapts to SMEs rather than SMEs that adapt to SWSW that adapts to SMEs rather than SMEs that adapt to SW
Give equal opportunities of access to Markets, business networks, supply chains,
automatic service composition, …
Give equal opportunities of access to Markets, business networks, supply chains,
automatic service composition, …
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Socio-Economic Context:The Business EcosystemSocio-Economic Context:The Business Ecosystem
P.DiniLSEP.DiniLSE
ICTscatalyse
improve
improve
Growth
Market & internalefficiency
Cooperation &innovation networks
improve
lead to
New value systems& business models
encourage
supportsPolicy
supportsBiologyenhances
“Commons”
Open SourceOpen standards
formalise
justify
regulate
supports
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
History 0f digital ecosystem conceptHistory 0f digital ecosystem concept
September 2002
Discussion Paper: “Towards a network of digital business ecosystems fostering local development”
End 2002 Large interest from Scientific Community
October2002
Brainstorming on “Digital business ecosystems” concept
April2003
Three independent FP6 IP proposals submitted
November2003
Start of selected proposal: DBE
June 2004Two regions joined to the initiative on their own (in addition of initial 3)
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
Research Aspects Research Aspects The transposition of behaviours and architectures from natural to digital and to economic systems requires the focusing and integration of R&D from several disciplines, ranging from fundamental science to computer science and to social science. Research should develop the basic theories and technologies needed for structuring and for the bottom-up spontaneous deployment and evolution of digital ecosystemsSome non-exhaustive examples are:In fundamental science-Models and Complex system theory, simulation and optimisation, fitness landscape mechanisms: how to transpose from living organisms mechanisms like adaptation, selection, evolution, autonomy, viability; how to develop concepts and operational models for the self-organisations of digital components.-Formal languages and models: how to express the genetic structure of the digital components (digital genotype); how to include environmental influence in the expression of the digital genotype into instantiated software components (digital phenotype); how to make semi-formal knowledge computable, such as revenue model languages, business needs, contracts and legal constraints.In network architectures-Network architecture: how to leverage P2P technologies to enable a spontaneous evolution of a non-centric, fault-tolerant, secure and self-healing pervasive architecture; how to realise Internet-enabled shared and distributed semantics.-Interoperability and system orchestration: how to dynamically integrate highly decoupled service components; how to allow services to interoperate without prior co-ordination and adaptation.-Business model languages: how to create platform-independent protocols and languages expressing Platform-Independent Models taking into account ontology mapping.-Knowledge sharing and management: how to realise a non-centric pervasive fault-tolerant knowledge sharing with introspection capabilities.In socio-economic and organisational models-Business model and license interoperability: how to compose components with different license and revenue models.-Policy and growth models: how to identify sustainable growth models and business ecosystem co-operation at wide geographical levels.Constituency building: -how to promote self-organising cross-cultural dynamic communities; how to spin-off viable and self-sustaining local digital ecosystems.
The transposition of behaviours and architectures from natural to digital and to economic systems requires the focusing and integration of R&D from several disciplines, ranging from fundamental science to computer science and to social science. Research should develop the basic theories and technologies needed for structuring and for the bottom-up spontaneous deployment and evolution of digital ecosystemsSome non-exhaustive examples are:In fundamental science-Models and Complex system theory, simulation and optimisation, fitness landscape mechanisms: how to transpose from living organisms mechanisms like adaptation, selection, evolution, autonomy, viability; how to develop concepts and operational models for the self-organisations of digital components.-Formal languages and models: how to express the genetic structure of the digital components (digital genotype); how to include environmental influence in the expression of the digital genotype into instantiated software components (digital phenotype); how to make semi-formal knowledge computable, such as revenue model languages, business needs, contracts and legal constraints.In network architectures-Network architecture: how to leverage P2P technologies to enable a spontaneous evolution of a non-centric, fault-tolerant, secure and self-healing pervasive architecture; how to realise Internet-enabled shared and distributed semantics.-Interoperability and system orchestration: how to dynamically integrate highly decoupled service components; how to allow services to interoperate without prior co-ordination and adaptation.-Business model languages: how to create platform-independent protocols and languages expressing Platform-Independent Models taking into account ontology mapping.-Knowledge sharing and management: how to realise a non-centric pervasive fault-tolerant knowledge sharing with introspection capabilities.In socio-economic and organisational models-Business model and license interoperability: how to compose components with different license and revenue models.-Policy and growth models: how to identify sustainable growth models and business ecosystem co-operation at wide geographical levels.Constituency building: -how to promote self-organising cross-cultural dynamic communities; how to spin-off viable and self-sustaining local digital ecosystems.
Digital Ecosystems for SMEs and local growth F. Nachira - June 2004
DBE
Network of local “knowledge areas” (innov. centers)
Digital Ecosystems for SMEs and local growth F.Nachira - June 2004
DBE - Digital Business EcosystemFP6 Integrated Project 50795320 partners from 9 EU countriesTotal initial EU funding 10.5 M€Duration 3 years, started: 1 November 2003