Our fundamental economic system is being restructured around us!

New digital technologies are re-constituting the very way in which we create value. In this shift from the information or knowledge economy through to the generative economy the focus is no longer on the production of specific products and services for consumers but rather lies in the creation and control of ‘ecosystems of use’.

When we talk of an ‘ecosystem of use’ we refer to the way in which, in a generative economy, value is created through the control of an ecosystem that provides an environment in which others are able to create products and services via the use of products existing within the ecosystem. In this respect Youngjin Yoo has argued that a:

generative economy results when one actor’s production leads to the creation of new innovations that were not necessarily intended by the original inventor.

An example of an ‘ecosystem of use’ within this new generative economy is the combination of Apple’s operating systems (iOS and Mac OS), APIs (application programming interfaces) and SDK (software development kit). Combined, these various aspects of Apple’s broader product infrastructure create a space of generative value creation, that is an ‘ecosystem of use’. A concrete manifestation of the broader forms of value created as a result of this ‘ecosystem of use’ is Apple’s app store on iTunes. With each app released in the iTunes store value is simultaneously being produced both for Apple (in terms of their share of profits of each app sold) and for the developers of those apps.

The key to success in this new economy is thus not the production of products per se but rather the control of ecosystems of products which are themselves used to create new products. The emergence of these ecosystems of use provides an increasingly open-system of value creation.

These systems are open in that while they may be designed to bring about the creation of specific forms of value – such as apps for sale in the iTunes store – other types of value and products, not previously intended by the creators of the ‘ecosystems of use’, may also be created. In this respect the internet is a ‘ecosystem of use’. While it has produced much value in terms of its original intent as a point to point communication system it has also produced huge amounts of additional value – such as the creation of the World Wide Web and e-commerce – that were never intended by the systems creators.

The creation of these ‘ecosystems of use’ is opening up a range of spaces of innovation, adaptation, and agility that will allow for the creation of a host of new spaces of value creation.

Looking at Apple, Youngjin Yoo has claimed that the true value going forward for the company lies not in their current range of products, such as the iPhone 6S or the Apple Watch, but rather lies in their ‘ecosystem of use’. Looking at their operating systems, APIs and SDK he claimed that:

the real innovation is in how they are preparing the enabling technology for payment, Internet of Things, and healthcare applications. They are thinking in an incredibly rigorous and deliberate way about who will come into their space and play with them.

In this respect, as an organization, Apple may be seen to be less concerned with products per se but may instead be more focused on people’s experiences and their activities. It’s the focus beyond the product – considering the entire ecosystem that maintains the user experience in the center – that will allow Apple to continue to grow and evolve. It is the dual focus on both design within a context and of design of a context that will help generate new value in the generative economy.

NB: In writing about the generative economy we ought not confuse this with the work of the same name pioneered by Marjorie Kelly. We will talk more about her work on alternative ownership structures in a later post.

Images courtesy of: Pixabay

Inter-operability of systems is a good thing! But it’s about the people too.

The ability for information to transfer across and between organizations is a key aspect of organizational effectiveness and/or the effectiveness of broader systems. Often, however, in these types of discussions of information inter-operability, the focus lies on the technical systems at hands. The focus is on specific differences in what technology is involved or how different technologies interact

In this respect, these approaches – including, as an example, the International Organization for Standardization’s (ISO) Technical Report on Health Informatics – rely heavily on two key concepts:

Functional inter-operability – the exchange of information between two or more systems in a format that is readable by humans; and
Semantic inter-operability – information shared is understood by formally defined domain concepts and is computer process-able by the receiving system.

The problem though is that these approaches exclude an important part of these systems – human users. This is despite the increased focus on user experience and the growth of ‘Human-Computer Interaction’ design over the last twenty years.

This is an important oversight to overcome as the effectiveness of work systems is heavily dependent up the ways in which human and technological aspects of systems are designed with respect to one another.

Some interesting recent research has explored the ways in which re-framing the focus of inter-operability helps provide a more realistic, and hence more useful, model for approaching the issue of organizational inter-operability. Their approach:

characterizes differences in work activities based on the work of a user rather than the technical capabilities of the system, and in this way, shifts the focus of description from one of technological capability to the performance of and impact on the joint human–technology system (ref).

Bringing the user back into the frame has a number of important implications.

One is the realization that in some cases lower levels of automation may be more effective. This is contrary to standard thinking, which is that higher levels of automation are better overall, particularly as that is seen as working to increase inter-operability. This is not the case though if there is ‘pushback’ by users on inputting data into machines – which is often the case for tasks that may break workflow. Automation may thus be better delayed in this case until technology that supports direct transfer is supported.

Another important implication is it provides a greater understanding of the need to more effectively communicate various system capabilities to users in a way that feels both more meaningful and more directly related to their specific work activities. One of the major reasons for the failure of deployment of new technological systems is a lack of user uptake. Without a consideration of user needs, and helping users understand why they ought to adopt and/or use new systems – and not just in terms of efficiencies of use but overcoming the inertia of long-term use – programs like this will continue to fail.

Ensuring that human needs are incorporated in the design and build out phases of technological deployments is a crucially important step. We need to always ensure that the system as a whole is being taken into consideration as we design and build it out. Users are a vital part of any system – even systems designed to increase informational interoperability.

A successful design is one that depends on a deep understanding of the ways in which the technological and human aspects of a system are designed with respect to one another. Both are always required – and successful systems (and so too system deployments) take this matter seriously.

Images courtesy of: Pixabay