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Blog 15.03.2021

Platforms economy at the heart of the industrial productivity leap

Author
Toni Mattila

toni.mattila (at) businessfinland.fi
Head of Sustainable Manufacturing Finland
+358 40 5009 909

Twitter:
@MattilaToni
Industry is still in its infancy what comes to utilization of data and, therefore, it provides a significant growth potential for industries.

Information is being increasingly used to create business value, and information itself has already become exchanged commodity. In the field of retail trade, for instance, information has been utilized for long time, to personalize digital advertising and increasing customer loyalty. In the field of commerce, on the other hand, there has already been a move towards integration of physical and digital sales channels and the utilization of information in these multi-channel solutions for creating evermore engaging experiences. Similarly, travel & tourism-related services have been the drivers of the platforms economy from the very beginning. In this particular sector, the forefront of development has already reached local transport, where different means of transportation are connected seamlessly with the help of real-time information on various Mobility as a Service platforms. Industry, however, is still in its infancy what comes to utilization of data and, therefore, it provides a significant growth potential for industries. 

Companies do not always fully understand how meaningful business value from data can be created. 

Information is used to generate business value by collection of data from various sources, combining and analyzing it, and utilizing the obtained results in different areas of business. Accumulation of data in incompatible siloes and formats has often been blamed for the slow development of data utilization in industries. However, the underlying challenges may be less technical. It seems that companies do not always fully understand how meaningful business value from data can be created. I do not, of course, mean that they would not understand how data-driven industrial process would increase productivity and lower costs at a general level. Rather, it is about the challenges of identifying where and how, in practical terms, data can be used to create value in their own business. The fact that commercially available solutions often require significant customization makes their deployment time and resource consuming. Furthermore, system vendors are often not allowed to use their references in public. Thus, all such uncertainties has slowed down the adoption of new methods and technologies in industries.

Data held by an individual company may also be able to generate benefits on a larger scale in the partner networks around it. In such case, we can talk about data economy, because parties engaged in the information exchange have to agree on the principles of sharing or exchanging information. A practical industrial example of such exchange is a data-driven subcontracting network where order-supply chains are managed in real time. Systems such as this require disclosure of company-specific information to partners and thus, trust between networked participants becomes an important factor. Even today, data is shared mostly to a very limited extent in the industry, primarily among the closest partners and mainly for various experiments. The limited availability of information has therefore become one of the main reasons why algorithms for industrial value creation are still undeveloped and many of the benefits promised by the visions of 4th Industrial Revolution have not yet been realized.

Network-based cooperation and partnerships based on digital platforms will be at the heart of industrial productivity and competitiveness. 

In the future, network-based cooperation and partnerships based on digital platforms will be at the heart of industrial productivity and competitiveness. In the platform economy, producers and users are connected to a multilateral market where data is exchanged and exploited, and where information becomes measurable in monetary terms through its business value. The Industrial Platform Economy combines physical manufacturing capacity and services digitally, thus enabling a completely new kind of value creation for the industry. Even though open industrial platforms are still relatively far in the future, we do have very promising initiatives in the pan-European IDSA and Gaia-X, but also some pioneering business modes such as AirFaas Oy in Finland.

In situations like the ones discussed above, developing together and learning from others would be paramount in spreading of good practices and facilitation of the digital transformation of industries. In order for Industrial Data and Platform Economy to emerge in Finland, it would be essential to establish operating models based on openness, joint development and the sharing of experiences. However, learning from others is perhaps the easiest way to get started.

Sustainable Manufacturing Program