When digital ecosystem development is far faster than physical ecosystem development

By | November 11, 2019

I have the advantage of having seen the evolution of the crop of company sponsored student projects (10 to 12 annually) for at least 7, if not 8 of the annual PDP Galas at the Design Factory (which is only 10 years old) New product development direction is moving towards artefacts and services that integrate into a wholly new hybrid physical-digital ecosystem.

In late 2017, BCG’s Henderson Institute posted an article on theme, but from the more industrialized legacy infrastructure context of countries which developed in the past century. Here’s a juicy snippet from the middle of their introduction of the concept of hybrid ecosystems.

[…], we believe the acquisition is not an isolated occurrence but part of a broader trend: the shift from the largely digital ecosystems that dominate today to ones richly exploiting both the digital and the physical worlds. This shift signals opportunities not only for digital giants but also for physical incumbents to build new digital-physical ecosystems. Orchestrators of these hybrid ecosystems must follow some new principles and adopt a set of behaviors different from those that purely digital ecosystems require.

So, my anecdotal observation on the direction of evolution of new product development is being supported by the think tanks that feed management consulting verticals like corporate strategy and future roadmaps.

I am right now in Nairobi, Kenya. And all around me, a rapid digitalization triggered transformation of the everyday economic activity is taking place in front of my eyes. I was here doing user research among informal sector businesses with a digital footprint earlier this year in March, and that too was following up on first movers we’d met back in early 2017.

Kenya’s digitalization trajectory resembles that being described by BCG Henderson Institute and I have the visual documentation backed by interview write ups going back the same duration of time.

I think what I am seeing here is that the developing world has been able to leapfrog on the back of the mobile but the impact of this is still unevenly distributed based on each specific country’s state of mobile economy. Its high time GSMA put out the major telco markets for their own specific ecosystem reports instead of lumping it all as sub Saharan Africa.  Kenya’s digitalization on the mobile platform may not take the exact same outcomes and solutions to begin modernizing its economy; but parts of it are definitely converging with the digital global value chains.

The digital global value chain – DGVC – has connected up the digitalizing informal trade sectors of vast swathes of the developing world. In early adopters like Kenya, we know the smallest woman trader, sitting on the side of a busy road with her goods laid out on a tarpaulin is aware of the digital marketplace potential of social media apps on her smartphone.

I can map the emergence of the Kenyan hybrid digital-physical ecosystem, with emphasis on linkages between the rural and the urban; the formal and informal; and all parts in between. What I must figure out how to do is disaggregate the static parts from the dynamic parts; or, at least cluster them by whether the change is  short term one or one likely to take a longer span of time. Only then would my approach and methodology be one that can capture the context in a dynamic fast changing environment of uncertainty.

Which, in turn, describes our current era as handheld digitalization and social media are transforming so many aspects of daily life and work. Ergo, Kenya is digitally developing far faster than its physically developing but this should not imply that it cannot become a developed nation digitally first.

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