Organisations and Business Models
Harnessing the potential of business model innovation and open innovation to drive competitive advantage in the modern economy
Relying on superior access to traditional factors of production – land, raw materials, labour and capital – and prevailing understanding of firm competitiveness alone is inadequate for organisations seeking to survive and thrive in the modern economy. Radical changes in the environment precipitated by a spate of disruptive technologies require a radical response to build and sustain competitive advantage – one that represents a departure from conventional practices.
Business model innovation is often overlooked in the general discourse on innovation, which has traditionally focussed on creating new technologies that can spawn novel and exciting products and services, and constructing the institutional and policy frameworks that best facilitate them. Yet in an era where new products and services can be easily imitated, and where their lifecycles are shortening at alarming rates, product or service innovation alone is unlikely to deliver sustainable competitive advantage. Visionary organisations are increasingly rethinking their business models and asking themselves tough questions on how they can better create, deliver and capture value. Without an innovative and effective business model, organisations may find their attempts to reap the economic benefits of their cutting-edge technological innovation at best arduous and at worst futile.
Organisations are also innovating the way they innovate – by embracing open innovation in various guises and forms. Until recently, innovation has always been conceived as an exclusive domain of in-house R&D departments, with the involvement of external parties usually being formalised in inter-organisational joint-ventures or alliances. However, collaborative networks involving external stakeholders from partners and suppliers to competitors and customers are increasingly acknowledged for their value in spawning innovative ideas and co-creating products and services – faster and more effectively. The idea of ‘picking from an exclusive pool of in-house brains’ has now shifted to ‘tapping into a world of talent’.
However, to be successful at business model innovation and open innovation, leaders must pay considerable attention to key organisational drivers of competitiveness – culture, structure, processes and practices. The notion of ‘organisation’ itself reinforces silos and may impede the ability to innovate. Without the right structure and processes, these silos will only be further strengthened and will prevent people from looking beyond departmental and organisational boundaries for ideas. The lack of a culture and practices that promote exploration and experimentation of new ideas, as well as exploitation of opportunities, will hamper even the best initiatives to reinvent business models.
In view of these, the Big Innovation Centre will work collaboratively with partners and other stakeholders to pursue a research agenda that seeks to:
- Provide new thought leadership on strategy and competitiveness that highlights intangible sources of competitive advantage, offers an ecosystem paradigm for strategic planning, and identifies new frontiers of growth;
- Help organisations understand what business model innovation is, why it is important for competitive advantage, what some future business models may look like, and how they can reinvent their business models;
- Equip organisations with practical understanding of open innovation and how its value may be realised, and co-create with partners initiatives based on open innovation approaches; and
- Help organisations rethink and realign their culture, structure, processes and practices in order to implement business model innovation and open innovation more effectively.
Our work in these areas will cut across industries as well as our competence blocs on big data and the digital economy, life sciences, and sustainability and green technology.