World Economic forum has recently released insight report: Markets of Tomorrow, Pathways to a New Economy, that presents powerful approach towards developing new markets, which can have transformational benefits to societies.
1. Some of the new technological, social and
institutional inventions have capacity to create great economic value, while being
inclusive, sustainable, and supporting broader social and environmental
objectives.
2.
Report offers twenty such markets, as reference,
classified into three categories:
a.
Safeguarding planetary boundaries:
Electric vehicles, Plastic recycling, water rights and quality credits,
hydrogen, reforestation
b.
Empowering and protecting people:
Broad based antivirals, care, data, digital transformation services, Precision
medicine, Unemployment insurance, skills capital, Hyperloop based transport
services
c.
Advancing knowledge: AI, Genes and
DNA sequences, Satellite services, Space fights etc.
3. Each of these markets hold transformation promise
and are at different level of maturity and impact, that also varies from country
to country. Some of the general-purpose technology
offerings like AI may have vast applications and hence their impact is further
multiplied by use-cases that involved actors may creatively employ.
4. Report points out at SEVEN TARGET CONDITIONS
that needs to be evaluated and worked upon, if markets of tomorrow have to take
root and create desired impact. Market
actors, be it government, public and private institutions, or businesses, have
to collectively or exclusively work on the gaps to take market to next stage of
maturity.
5. Market creation starts with Invention,
that is product or asset or service that can be produced at scale. Next comes set of willing Producers
that are ready to reliably produce to serve the market- and these may include current
players in adjacent markets, start-ups, or public institutions. Some products
need complimentary infrastructure to be in place, for iots
consumption. Take the case of digital
financial services that require physical and institutional infrastructure as
prerequisite. Another market condition
is the size of demand that is likely to be in short and sustainable
basis? Next set of three conditions are not only pivotal to market evolution,
but often pose significant challenges in getting met.
6. Setting up clear market Standards for
the new products, wherein different players are innovating around different product
characteristics and are competing using these as differentiators form important
market condition. Emergence of standards
early may discourage IP creation and inventions in alternate but associated technological
solutions. However, at the market level,
absence of standards may suppress demand as customers find it difficult to
commit and may wait for standards to emerge.
Defining standards, in terms of cope and specificity has to be balancing
act between consumer confidence and producers’ IP-led competitiveness.
7. Putting Value to the new product
or asset, needs sufficient convergence and judgment among different actors. In case of absence of reference points, the Value
attribution may vary from very high to free of any monetary number. Further,
Value at aggregate may be immensely more that Value of each similar item- think
data-base. In some cases the VALUE may
not be as such in core as in Use-case application- in which case the incentive
to build on the core withers away. Drawing consensus on the VALUE of new
product and stability and transparency around this VALUE would reflect growing market
maturity.
8. Codification of new product or asset defines the
legal framework and define property rights around which transactions can become
legally viable and commercial contracts can be drawn. Complexity in defining scope of legal rights that
are equally well understood among all actors in the markets is going up, especially
with innovations that are building on earlier IPs and involve digital technologies
to bring out significant value. “What kind of codification is possible around genes
and DNA sequences? Will the intangible
information behind them or the tangible sequence of nucleotides be codified?”,
asks Report as an example.
In nutshell, report presents framework, defined in-terms of key questions, that market creators can leverage to identify, plan and prioritize their efforts- be at national or cross-industry levels -to fully exploit the transformational potential of new markets.
The framework that
is easy to comprehend, has the power to reveal the challenges and impediments
that can act as inhibitors to emergence of new markets, while
taking care of the landscape in which the analysis has to be made. The agenda for the market actors become evident
as well.
The report contributes immensely to the literature around institutional approach to new Market Creation.
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