Business models and sustainability of Future Internet initiatives

Philip Inglesant Institute for the Study of Science, Technology, and Innovation University of Edinburgh, UK

MyFIRE Context Sustainability and exploitation of FIRE EFs

EF Users: Researchers

Experimental facilities: Sustainable Business Models

Innovation: Diffusion Impact

Outline

Models of sustainability for Experimental Facilities

Business models Funding and status of the EF

Models of innovation
Diffusion Acceptance

Maximising benefits of EFs

In pathways to innovation
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Business model
A business model describes the rationale of how an organization creates, delivers, and captures value - economic, social, or other forms of value
Osterwalder & Peigneur 2010

Conceptual model
which makes assumptions about customers, costs, competitors Teece 2010

Business models of Experimental Facilities

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Simple business model

Teece, D.J. (2010) Business Models, Business Strategy and Innovation

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Business models in FI testbeds

But what if the technology is not welldefined? How does this apply to Future Internet? Choices for potential users (research or industry):
Use experimental facility Use Federated experimental facility Do NOT use experimental facility Or use local/internal facility

Organisation profile

301 respondents
136 University / Higher Education 73 Private commercial organisation 55 Public organisation
45,2% 24,3% 18,3% 9,3% 9,6% 1,7% 0,3%

Private commercial

Non profit

Profit oriented

University / Higher

Public organisation

Funding agency

Other

Factors of the EF business model From survey results

The status of the EF
Public private internal mixed not-for-profit

Sources of funding
Public private mixed; grants; projects

Distance to market
Exploratory -> Exploitation

Targeted layers
Physical, datalink, transport, session, application Technologies covered
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Factors of the EF business model

Source: Ballon et al (2005)

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Status of the Experimental Facility Impact on business model Public

Universities:

Only 42% open to external users 67% open to external users

Other public research

Private company
EFs provided as core service of company; or EFs are internal for company research

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EF sources of funding
40 35 35 30 25 20 15 19 12 12 5 0 19 36

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5

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Openness to external users By funding type

Only internal users Only external users 79% 67% 60% Both

58%
50% 50% 37% 25% 17% 21% 11% 53%

40% 33%

National research council

Industry sponsorship

Commercial customers

European Commission

Internally funded

Other public funding body

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FIRE Sustainability 2 basic models The Industrial approach

eventual self-sustainability

The academic approach,

Innovative facilities for researchers Continuing reliance on public funding.

Digital Accelerator for Innovation and Research

DAIR - Canada
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DAIR - Canada Digital sandbox for innovative SMEs

High-tech innovators
Design Validate Prototype Demonstrate

Dedicated portion of CANARIE

Canadas advanced research & innovation network
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From Experimentation to Innovation

In competitive world there is constant invention AND Innovation in technology forces changes to business models BUT How does experimentation lead to innovation?
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Linear model of innovation From Basic Research to Production

Basic Research

Applied Research
Development

(Production and) Diffusion

Source: Godin (2005)
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Diffusion of Innovations Everett Rogers Categories of adopters

Innovators Early adopters Early majority Late majority Laggards

Willingness to adopt
Awareness interest evaluation trial adoption
Rogers, E. (1962): Diffusion of Innovations

5 factors in each stage

Relative advantage compatibility complexity trialability observability
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Sources of Innovation

Innovation as solution of ill-structured problems

Simon, H (1973): The structure of ill structured problems

Innovation around a technological paradigm

For example, an artefact Importance of tacit knowledge
Dosi, G (1988): Source, Procedures, and Microeconomic Effects of Innovation

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Intermediaries in technological innovation

Many intermediaries between producer and consumer

retailers, media companies, telecom platform operators, advertising agencies

Intermediaries are:
Facilitating Configuring Brokering In uncertain and emerging markets
Stewart & Hyysalo (2008): Intermediaries, Users & Social Learning in Technological Innovation
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Intermediaries in technological innovation

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Intermediaries & FIRE

Long-term, visionary research

Experimentally driven

Large-scale infrastructure
Medium- and long-term research Increasingly federating existing testbeds

Experimental Facilities as:

Intermediaries Stores of tacit knowledge
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Intermediaries & FIRE

EF Users: Researchers

Experimental facilities: Sustainable Business Models

Innovation: Diffusion Impact

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Thank you !

Standardisation

In research and testing methods Standards as output of research Standardisation and exploitation

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Areas of operation

Other Transportation Media, Toys and gaming Tourism Retail

Maritime industries
Manufacturing Insurance

Respondents operate mainly in ICT (62%) sector and Education area (45%)

Information and Communication

Industry Healthcare Government Food industry Environment Energy and utilities Electrical equipment Education Defence/ Security Construction Biotechnology/ Chemicals/ Cosmetics Banking and Investments services 0,0%10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0%

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Respondent profile
45,5%

30,6%

32,9%

15,9%

Possess Future Make use of Finance the Internet Future Internet establishment of experimental experimental Future Internet research facility research facility experimental research facility

None

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Qualities of Future Internet And needs for experimentation

Openness emerging standards
Economic and environmental sustainability Reliability Best efforts vs. reliable delivery protocols

Standardisation

Smartness and contextawareness Internet of Things

Scalability IPv6 & routing table bloat

Paths to Innovation

Security and Trust Human-level as key to Future Internet use

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Impact of Experimental Facilities

Future Internet Research

Engineering Technology components Methods Skills Tools

Experimentation Exploration New paradigms New protocols, services, Applications Emergent properties Validation Fine-tune operation Compliance Interoperability

Clean slate and/or Evolution

Innovation

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