Deliberative approach to creating MARKETS of TOMORROW

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.    

Consider the following:

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.