New Business Models as a Product of the Networked Society

* Teemu Salmi

In today’s ever-evolving world, it has been proven time and time again that nothing is impossible—especially when it comes to technology. Consider this: the world’s largest taxi service owns no vehicles. The world’s most popular media network owns no content. And the world’s largest accommodation provider owns no real estate. These statements have become commonplace in modern business conversations, but the question is: how? How have these companies gained global recognition and impressive standing without even owning the material provisions necessary for their services? The answer is simple: they adapt to changing technology, and they take full advantage of it.
Unicorns exist. We aren’t talking about the mythical creatures, but rather, we’re talking about the billion-dollar startups that have grown at unprecedented rates to rapidly establish sky-high monetary worth. And when we look at the evolution of business in tandem with the technological revolution, it is clear that the former is definitely driven by the latter. Companies like Uber, Snapchat, Airbnb, and Dropbox are among the 15 most valuable unicorns in the world, while Facebook has transcended to the status of “super-unicorn”—and they’re all startups. Moreover, they’re all existing pieces of a future Networked Society.
The secret to these companies’ tremendous growth lies with the growth of technology at the same pace. All of them operate digitally, and an overwhelming proportion of consumers utilize their services from smartphones, which have globally penetrated society at a remarkably fast pace. This increase in the presence of mobile technology will only continue: reports by Ericsson anticipate that today’s 7.3 billion worldwide mobile subscriptions will leap to 9 billion by the year 2021, and the Middle East and Africa will play host to the majority of this data explosion.
In the MEA region, smartphone subscriptions are projected to increase by more than 700 million by 2021, and mobile broadband presence will quadruple. Despite the region’s late arrival to the online party, it is home to companies like Souq.com, a startup which has already reached unicorn status, and a handful of other companies that are well on their way to joining the unicorn club. Souq.com, the largest e-commerce platform in the Arab world, thrives on the uptake of mobile technology in the region, and companies like Careem and Bayt.com are following its lead. These companies have succeeded, and continue to do so, by adapting to evolving customer expectations in the digital age and, in turn, by adopting new business models.
It has become undeniably clear that in order for businesses to prevail, keeping pace with technological transformations is essential. Customers are coming to expect that the products and services they need will be easily accessible by mobile and digital means, and their expectations of technology are perpetually growing. According to Ericsson’s 10 Hot Consumer Trends of 2016, consumers envision homes with embedded sensors, emergency centers that can be contacted via social media, health-monitoring wearables replaced with internal sensors, and a host of other technological advances within the next few years. Their expectations are undeniably high—and the businesses that can meet these expectations are the businesses that will thrive.
In order to meet their customers’ expectations, businesses must have access to the technologies of the future—and this is where communications service providers come into the equation. In a Networked Society, there is a clear need for companies to embrace digital transformations, and in light of this, operators must be agile. They must be prepared with software solutions and technologies to keep their customers at the forefront of digital advancement.
Companies are learning from the success of unicorns: they understand that the biggest changes to be made are in altering how organizations think and work in favor of digital transformation. Finding ways to react quicker and share vital data and analytics company-wide requires an upheaval of conventional business models. Business intelligence is growing increasingly dependent on big data, and major analysis and strategic planning must take place to develop a new corporate mindset. Undoubtedly, companies must have a high degree of agility and flexibility in order to withstand an inevitable future of digital transformation.

Head of IT and Cloud, Ericsson, Region Middle East *