Creating and Managing Synergies in a Network of Rural Living Labs Hans SCHAFFERS1, Joost van BEMMELEN2, Petr HORAK3, Christian MERZ4 1 Helsinki School of Economics, Fredrikinkatu 48A, FIN-000100 Helsinki, Finland Tel: +358 9431 38946, Fax: + 358 9431 38391, E-mail:
[email protected] 2 ESA/ESRIN, Via G. Galilei, Frascati, Italy Tel: +390694180583, Fax: +390694180952 , E-mail:
[email protected] 3 WIRELESSINFO, Cholinská 1048/19 784 01 Litovel Czech Republic Tel: +49 721 690244, Fax: + 49 721 696826, E-mail:
[email protected] 4 SAP AG, Vincenz-Priessnitz-Strasse 1, 76131 Karlsruhe, Germany Tel: +49 721 690244, Fax: + 49 721 696826, E-mail:
[email protected] Abstract: This paper addresses the issue of how sources of synergies within a network of Living Labs can be identified, and how these synergies can be managed and exploited to benefit individual Living Labs and their stakeholders and strengthen the network as a whole. The C@R Integrated Project, aiming to catalyze rural development by boosting collaborative work environments and comprising seven Living Labs serves as a case study. Main sources of synergies are in the Living Labs application domains, technologies, infrastructures, services, and local communities and networks. Apart from synergies between Living Labs, additional sources of synergies lie in the reuse of existing platforms, tools and services. The paper demonstrates how different types of synergies can be identified and exploited in various ways. A case is presented focusing on two Living Labs reusing existing services and exploiting synergies based on shared services and components. Policy recommendations focus on Living Labs synergies to support rural development.
1. Introduction The concept of open innovation [1] focuses on viable business models to structure collaboration and partnerships between companies to exploit new technologies. Recent ideas like mass collaboration [2] and democratic innovation [3] are taking this concept further to shape an ongoing development towards large-scale, user-driven and collaborative innovation. Living Labs are experimentation and validation environments characterized by the early involvement of user communities, closely working together with developers and other stakeholders, and driving rapid cycles of ICT-based innovations. Living Labs thus can be considered as user-centric environments for open innovation. This paper concentrates on strategies for open and networked innovation to examine the issue of how common and complementary resources (“assets”) in a portfolio of Living Labs can be identified, managed and exploited. Such common and complementary resources provide opportunities for resource sharing and synergies creation across the network of Living Labs. Using the terminology of Varian and Shapiro [4], it can be stated that a Living Labs network comprises potential “network effects”. The success of its products and services depends on the capability to generate “positive feedback” to establish critical mass. Collaboration across the Living Labs network is a necessary condition to be able to share common and complementary resources, and connect local user communities and companies, in order to create a wider market and provide services that are viable. We aim to explore how such principles affect the “business model” underlying collaboration and
service creation within the Living Labs network. The work is based on preliminary findings of the C@R Integrated Project (www.c-rural.eu) which aims to boost the introduction of collaborative working environments as key enablers catalyzing rural development [5]. Seven Living Labs are part of this project, located in rural environments in six countries: South-Africa, Spain, Finland, Hungary, Czech Republic and Italy (Table 1). Living Lab Sekhukhune (South-Africa) Soria (Spain) Frascati (Italy) Turku (Finland) Homokhátság (Hungary) Vysocina (Czech Republic) Cudillero (Spain)
Objectives of Living Labs Boost rural entrepreneurship. Clustering of SMMEs (Small, Medium and Micro Enterprises): Infopreneurs are service providers for SMMEs & consumers Technical support and services to entrepreneurs in Soria for promotion of business activities. Promotion of the tourist sector, of learning activities, and of mycological resources. Pre-incubation services with innovative applications in a dynamic collaborative platform. Create network of incubators. Transfer and use of space technologies to nonspace sectors for applications in sectors such as environment, agriculture and tourism. Provide incubator services for networked SMMES. Develop Collaborative applications to support and improve spatial service provision To provide a collaborative framework for facilitating the daily tasks of the farmers and rural residents and stimulate community building Explore new technologies for geodata provision and exchange, focus on eGovernment and eParticipation services. Develop collaborative applications to support and improve spatial decision making. Offer technical support and services to users in fishing industry to facilitate daily tasks using collaborative environment. Manage alerts on board, catches reports etc. Table 1: C@R Living Labs and their objectives
The issue whether a portfolio of Living Labs embeds real network effects which can be exploited on a wider scale, thus realizing the concept of “networked Living Labs”, is still hypothetical and remains to be tested and validated. Potential network effects providing opportunities for sharing and synergies lie in the Living Labs service propositions, the rural economic and social environment (e.g. stakeholder networks, user communities), the policy frameworks, available infrastructures, and in the available know-how base and technologies. These opportunities potentially can be exploited in various directions and in this paper we focus on the establishment of network partnerships and on development of tools, services and applications based on shared services and components, to share and reuse resources. As a mid-term future vision we foresee business models based on value networks spanning across the different Living Lab locations, e.g. in overlapping sectors like tourism and in business incubation services.
2. Methodology The approach of this paper is to provide an initial validation of the concept of management of synergies in a network of Living Labs. A framework will be proposed to identify and examine the synergies between Living Labs in the C@R integrated project. We discuss strategies on how to exploit these synergies and some initial results will be presented. Main emphasis is on the “operational” level: synergies across Living Labs in user community building, technical development (in particular applications development and reuse of services), infrastructure deployment, stakeholder involvement and operational processes. In identifying and exploiting these synergies, the integration of innovative collaboration services, tools and applications in the rural Living Labs potentially will be accelerated. At a more “strategic” level of analysis, focus is on synergies at the business model level, in the way two or more Living Labs may work together to deliver Living Lab services on the basis of a common business agreement. The approach of synergies identification and exploitation is based on an analysis of types of synergies, on examination of various ways to exploit synergies, and on a more detailed investigation of these synergies.
2.1 Identification of synergies Table 2 presents an initial overview of potential Living Labs synergy categories, examples of specific sources of synergies, and strategies for their exploitation. The seven C@R Living Labs constitute a portfolio of Living Labs in different stages of development, located in different rural economic, social and policy contexts, and are aiming for partly different, partly comparable products and services. Each of the rural Living Labs environments comprise their specific material and immaterial “assets” such as knowledge, local business network, user community, local innovation policies, technologies and infrastructures. The local Living Labs also exhibit opportunities to share and reuse their assets through the network instead of only locally. The level and scope of common and complementary local assets makes the C@R set of Living Labs to a network which can be investigated on how exactly to exploit the synergies and how to establish collaboration between networked Living Labs through an adequate business model. As this exercise impacts on socio-economic development both on a local level (i.e. identification of best practices through know how sharing) and on a rather global level (i.e. cross continental supply and value chains), it has implications for rural development and ICT policies at the regional and interregional level as it demands for a more active interregional innovation policy. A selection of sources of synergies is discussed below. Main categories Rural policy and business environment Know-how, competencies, technologies Markets and users Industry base Infrastructure and networks Market channels
Local/rural sources of potential synergies (examples) Good innovation practice in rural setting Local / rural stakeholder networks Local public-private partnership Local technological competencies Local know-how base Local research centres Local educational facilities Advanced local end-users and companies Local communities of end-users Local industry structure Industry-research local networks Local experimentation infrastructure Service and application components Business models for local markets Local marketing channels
Strategies for exploitation of synergies in a Living Labs network Sharing local practices globally Create a learning network environment Sharing partnership design approaches Sharing technological competencies Sharing know-how in the network Creating networks of research centres Creating networks of educational facilities Create variety of networked local markets Create network of end-user communities Partnering in global value networks Inter-networking of local networks Providing access to larger markets Reusing of components and applications Business models for network markets Local markets are part of network market
Table 2: Living Labs Synergies and Exploitation Strategies
C@R Living Labs are situated in an environment of remote areas, ageing population, and poor regions. Locally oriented policies are being developed to address the local issues. A potential source of synergy is in developing strategies for rural development that draw from common experience and are applicable in other contexts. Of seven C@R Living Labs, four are dealing with business incubator services, promoting entrepreneurship for SMEs. Some of the strategies directed to supporting small, medium and micro-enterprises could be shared. The C@R Living Labs are planning to use a variety of technologies, infrastructures and applications: wireless networks, fixed networks, GIS, collaboration tools, etc. Some of the Living Labs host specialized technology providers and research institutes. Such technologies can be tested in local environments and can be deployed more easily across the network. The network of local markets and network of local user communities will enable to provide a more diverse environment for testing and validating products and services. Although the available local infrastructure and networks do not yet allow for such testing
and validation on a wider scale, the connection of local environments is crucial to accelerate sharing technologies and competencies as well as to enabling business models that are based on providing products and services across the Living Labs network. A different source of synergy stems from the fact that C@R is part of a wider project portfolio comprising other Integrated Projects focusing on collaborative work environments and Living Labs, such as Ecospace, CoSpaces and Laboranova. These projects will result in technologies, collaborative services, collaboration tools and collaborative applications as well as in a common reference architecture based on open standards. Identification of technologies, services, applications and methodologies that potentially can be shared and reused, and even developed in collaboration, is an important source of synergies. 2.2 Exploiting the synergies The sources of synergy within the C@R Living Labs network can be exploited in three generic directions. The first, strategically oriented, direction is to create innovative Living Lab business models, tested and validated in various Living Labs in different circumstances and thus can be considered well-proven models for use in other Living Labs. A business model can be defined as expressing the business logic and services offerings of a firm. It defines the process of value capturing and delivery to the firm’s stakeholders, also it describes the value generation processes within the firm. A business model underlying a Living Lab expresses the value proposition of that Living Lab to its stakeholders (rural network), and it describes the processes through which it generates value to these stakeholders. A successful business model is highly affected by the specific context of the Living Lab (rural environment) and by its objectives and ambitions. In the C@R context these models are mainly challenged by developmental impediments that are related to the absence of adequate infrastructures, the disconnection to economically strong regions and markets, difficulties to find good professionals, the non awareness of business opportunities or the missing managerial know-how about running a business. However approaches related to the preparation, formation and operation of Living labs and the services it offers can be shared through the network and it can be learned from experiences. The second, operationally oriented, direction is to accelerate services, application and tools development and validation. On the basis of specific rural context and objectives, C@R foresees collaborative applications that meet its objectives. The precise definition of these applications and their testing and validation in specific user settings may depend on the individual Living Labs and can be further detailed and customised there. Various highlevel components and services however, that enable these collaborative applications can be commonly designed and shared, as well as many parts of the process of testing and validation. The initial implementation of prioritized pilot use cases brought up a common service library that comprises reusable components for further orchestration into end user relevant collaboration tools. Thus, network effects can be exploited. Synergies also can be exploited with other Integrated Projects (collaborative services, applications, tools, technologies, methodologies). The third direction is to reuse methodologies for user involvement, deployment, userroll out and impact assessment. Generic methodologies such as for user involvement, userdesign communication, participative design, measuring impact can be applied to every Living Lab. Application of these methodologies will be specific to the Living Labs environments, but experiences can again be shared across the network of C@R Living Labs, and can be a source for Living Labs outside this network as well.
3. Exploitation of Living Labs Synergies 2.3 General synergies analysis across all Living Labs This approach is applied to the set of seven Living Labs in C@R. The Living Labs focus on business incubation (Turku, Frascati, Soria, South-Africa), open communities for farmers (Hungary), collaborative governance in spatial planning (Czech Republic), and collaborative fishery (Cudillero). Common service propositions have been identified and are being implemented through use cases, such as e-training, spatial analysis support, business development support, and collaborative knowledge sharing. Figure 1 presents the interactions and relations between Living Labs in terms of these services, most of which are of direct importance for two or more Living Labs. For example, collaborative GIS services (search, classify, share information) is demanded by the Soria, Sekhukhune, Czech and Turku Living Labs. Underlying technologies such as GIS, Web 2.0, wireless networks, navigation and positioning, remote sensing are demanded in nearly all Living labs. At the level of the Living Labs network, an active management is precondition to customize the resources and services to the specific local market demands.
Figure 1: Living Labs synergies at level of service propositions
As regards strategic synergies, we focus on common business models enabling the four Living Labs addressing business incubation services to work together, and we identify the criteria under which this makes sense. The offered incubation services can be classified as twofold. On the one hand service offering focuses on the incubation of operational excellence of small and micro enterprises. On the other hand the incubation services address the pain points of starting up a company. Typically the targeted size of enterprises are either on a small (
