Harvesting the crowd
Stacking up: There's still plenty of room for innovation at ports
Maurice Jansen explains how ports can bring innovation to their door
Most ports float on 20th century dominant designs, while the transport and industry which are supported by the port and its infrastructure of roads, electricity grid and energy supply are based on fossil fuels. Institutions and transactional systems run on dominant logics that were invented centuries ago.
Dominant logic can sustain competitive advantage for a long time, but also works as a filter in which relevant data are implicitly selected. What works is maintained and what’s new is received with scepticism and disbelief while the messenger is disregarded. This is true for many ports in Europe and while they are still considered the engine of many economies, many fall behind in terms of innovation power.
Creative destruction - a process where industries renew themselves from within by replacing existing businesses and making old ones redundant - is needed for ports to make the transition to sustainable ports. Breaking through the dominant logic and challenging the reason for existence in which established port users still invest billions of dollars sounds like a paradox, an impossible yet inevitable assignment. Some ports seem to have accepted this ambiguity, and have turned to young creative entrepreneurs to make innovation happen.
Platform for trade
Port innovation comes with a sense of place. Ports are and have always been a platform for trade, a place where ideas travelled further, literally. I consider ‘platform innovation’ the most powerful instrument to disrupt existing business models. Most companies that survived the first internet bubble in the early 2000s have built themselves operating platforms: Apple’s iTunes for music, Google’s Android, Microsoft Office 365, Sony’s Playstation for games, Facebook for sharing of social events. The question is what makes platform innovation so different from other types of innovation and how can you create a platform?
Essentially, most innovations often result in more of the same ‘stuff’, such as a new car model or mobile telephone. Other innovations lead to optimisation. Such innovations enhance efficiency, provide transparency or create an abundance of choice for the customer. Platform innovation goes one step further, instead of using algorithms to aggregate more (of the same) data, it actually creates more inventory of content: music (Spotify), rooms (AirBnB), taxiseats (Über). In transportation, online booking platforms consider load capacity of trucking companies a source for value to customers in demand of empty space.
Existing theories on innovation in port clusters consider sophisticated demand of lead firms as the main drivers for their suppliers to innovate. This assumes that innovation potential is already within the cluster. Platform innovation takes a quite different approach: innovation is an open process, wherein everyone can participate, creating a crowd-like approach between insiders and outsiders. Boudreau and Lakhani (2013) explained how the crowd can become a source of innovation in a number of ways: through contests, crowd communities, crowd complementors and crowd labour markets.
Contests are the most straightforward way to engage a crowd. They may also be the oldest type of using the crowd. A good example is a port hackathon, such as the World Port Hackathon in Rotterdam, Smartport hackathon in Singapore and Port & Logistics Hackathon in New York City. Authorities as well as lead firms first brainstorm on the challenges and provide open data in a port data laboratory. A crowd of hackers, programmers, experts, students and professionals get together for a 24-hour ‘hackathon’ and at the end of the day the solutions are presented in front of a critical jury. The best solutions win prizes and the initiators also provide a launch path to bring the best ideas up to the point where the prototype can be adopted by a launching customer.
Collaborative communities also have a long tradition: Wikipedia may be one of the first crowdsourced community in the internet era and is still alive and kicking. The fundamental condition for others to join in is that contributors will have to believe in the ‘do good’ mission of the community. The ‘what’s in it for me’ question has changed into ‘what’s in it for us’. It builds on the premise that the intentions of the community appeal to the needs of the crowd, quite often linked to societal goals, and therefore get free support from the public.
In Los Angeles, the city and its ports have called upon the crowd to get involved in reaching zero emission goals. Port Authority of New York-New Jersey announced in March of this year a new data-sharing partnership with Waze, a provider of free crowdsourced traffic and navigation provider for real-time sharing of traffic data across bridges, tunnels, bus terminals and roadways serving its airports and ports, which feeds data back to the users. This so-called connected citizen programme is free, provides two-way data sharing of publicly available traffic information with the aim to improve traffic flows, making roads safer and increasing the operational efficiency of those companies using the roads.
Empowering the crowd
Crowd complementors empower the crowd by building upon a core product or technology, transforming that core product into a platform that works like an accelerator. Commonly used examples are Apple’s iTunes and iCloud solutions which build on Apple’s core mobile products. In logistics, Amazon.com is rapidly doing the same. The company is connecting the dots as a global online shopping mall for traders, smallholders, and web shops including home deliveries, all on one platform. The shopping mall is online, so therefore shipping also goes online.
In the port landscape, the port of Rotterdam has been expanding its online portal Inlandlinks from a platform for information of its inland terminal network into Navigate, a platform of online tools that strives to make hinterland logistics more transparent and efficient. The port takes the port gateway function to a whole new level: services go online, data becomes real-time while service levels of operators become transparent. The next level could be to become an open platform for independent hinterland navigation service providers.
In the fourth type of crowdsourcing, the inventory of human capital is at the core of the proposition. Collaborative communities still have the bottleneck of allocating people to R&D processes in an old-fashioned manner, often with fixed contracts. These people may not be the most motivated, have the best skills to do the task, or be available when they are needed. Freelancers are the best these companies can get.
In the connected society, knowhow is no longer locked up in companies, neither are freelancers the only knowledge workers. Intermediary platforms match immediate support and work like spot markets and dating sites. The construction industry – particularly in the home improvement segment - is an early adopter of this new opportunity, with numerous examples in the US. In Rotterdam port as well, the shipping and transport college and some logistics providers are developing a crowdsourced platform for life-long learning. The biggest challenge is to find the best management and organisation model, not so much the right people within the crowd.
Crowdsourcing as a way to foster innovation is not new, what is new is the distributed nature of the crowd and the way technology can connect these ‘assets’ in the port network at relatively low costs. Ports need to understand their pivotal position as a platform, for all kinds of assets that can hold value. Successful start-ups are innovative not because they have smart algorithms, but because they understand the new laws of competition, which is actually as old as mankind. What can be harvested, needs harvesting: warehouse rooftops and factory screens harvest the sun, sensors are harvesting transport moves, tides and currents as well as positions of fixed infrastructure and let them interact with each other; matchmaking platforms harvest the human skills of an open labour pool; and software developers harvest the abundance of data that comes along with cargo flows. Technology providers then turn this data into user-friendly dashboards. The port is a platform and functions like it has always done: a stable place for harvested assets with a distributed crowd of entrepreneurs who turn ideas into ventures, and where valuable services are then fed back to users.
Maurice Jansen MSc is senior manager innovation, Research & Development at Rotterdam-based STC Group. With credit to Using the Crowd as an Innovation Partner, by Kevin J. Boudreau and Karim R., April 2013, Harvard Business Review.
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