Are we able to make Finland the best place to research, develop and utilize artificial intelligence and platform economy in business? If we ask for Business Finland the answer is yes. But what does this all mean?
I want to confess that I have been working with platform economy and APIs only a few months. So, the industry and platform economy is a new thing for me but it is not a new innovation. It took a decade for business managers to understand it’s potential and importance and now it is one of the most trending things in the technology industry.
API Economy 101 -book was an eye-opening experience for me (big recommendation!). Moilanen, Niinioja, Seppänen & Honkanen (2019, 236) define the platform economy as “A set of initiatives that intermediate decentralized exchanges among peers through digital platforms. As a business model, the platform economy is based on dynamic, multi-party innovation cooperation and exchange marketplaces, where it is possible to achieve wide-spreading and rapidly scalable network effects”. When I first heard the words “platform economy” and “API” I was scared I would never understand their meaning. For me, it was helpful to see the principles of the platform economy in the context of a vacation.
After landing to the destination I took Uber from the Airport to the Airbnb apartment. Uber and Airbnb are platforms where producers and customers can interact. Uber doesn’t own any car or driver. One of the main tasks of the platform is creating rules, managing and improving interactions (Moilanen, Niinioja et al. 2019, 49). The most successful is the platform which creates the most value to customers by improving the interaction between consumers and producers (Moilanen, Niinioja et al. 2019, 49).
Resources provided via platform are like the bride’s traditional wedding dress: they include something new, something old, something borrowed (Manu Setälä, 2019). This also applies to APIs. There is no need to start building something completely from scratch as there is plenty of APIs free or with a modest fee to use. Instead of creating something new focus on how you can add value to something already existing. It is possible to add value to everything if you just find the friction, the interaction problem to solve among different groups of customers and partners. This is what Uber did: they realize that customers think regular taxies were too expensive, they didn’t know the exact time the car arrives and how much the ride will cost. With an open mind and broad view, you can find gaps in your offering and optimate your business. Trust me.
Networks make this all possible. Like blockchains, platform economy runs on trust. I would like to talk about the sharing economy of technology. Enabling the interaction between parties and making it possible for them to use each others’ resources via a technical platform results in a win-win-win situation. When we do together we create value together. Airbnb allows you to take advantage of vacant apartments: when the owner isn’t in the city someone can rent the apartment and the resource (in this case the apartment) is in effective use.
All this summed up together to a customer-dominant business model which is the core of the platform economy. In the customer-dominant business model networkers co-create value together and without collaborative processes and shared resources, it’s impossible. The customer is at the heart of everything, but with platform economy and especially multi-sided platforms, you have to think of multiple value propositions to multiple segments. We encourage you to look for opportunities to add value. Dig deep into how the value chain is constructed and what resources you and your network have for creating the added value. No one can disagree that our customers deserve the best value with reasonable costs and we need the potential for growth. Platform economy and APIs as boundary resources and building blocks for the platform are the keys to it.
Intrigued by the idea? Business Finland a cooperation partner of APIDays Finland 2019 has an AI Business Program for Finnish companies to increase the competitiveness and productivity with AI and platform economy. Conference attendees can meet Business Finland AI Business Programme’s Programme Manager Outi Keski-Äijö and Senior Advisor Manu Setälä at Business Finland stand. With them, you can discuss how you can join the AI Business Program and what Business Finland can offer to your company. It doesn’t matter are you a startup or larger company. The only thing that matters is that you want to be part of making Finland the world's best place to research and develop platform economy.
Manu Setälä, 2019
Moilanen, J., Niinioja, M., Seppänen, M. and Honkanen, M., 2019. API Economy 101: Changes Your Business. BoD-Books on Demand