Digital industrial platforms
During my PhD studies in the third semester, I had the opportunity to assist and teach some classes about the digital economy and specifically about digital platforms and ecosystems. While I hope that the students learnt as much as I did, I became highly interested in one topic:
Digital Industrial Platforms
Before diving into what digital industrial platforms are, it seems useful to define what digital platforms are:
Dating back to the nineties with the onset of the Internet and the increased communication and creation of online communities, native digital platforms such as eBay started to emerge, facilitating online commerce. Later, Amazon and Google made the most of the power of the network to become what they are today.
Nowadays, as technology continues to advance and pierces through new industry boundaries, new types of platforms have emerged. Industry 4.0 and the Internet of Things have led to the emergence of digital industrial platforms which allow firms to connect and collect data from industrial machinery and their environment in order to co-create new solutions and services.
GE’s Predix is one example of a digital industrial platform.
Check out GE’s “Predix” platform:
But, unlike commercial platforms, digital industrial platforms serve as both innovation and transaction platforms. They collect and analyze data from different industrial assets and make this information available to third-party companies so that they can create complementary products and services. Many of these platforms also act as a marketplace where they sell these solutions to industrial customers.
Another difference between B2C and B2B platforms relates to the way they are “built”. The rules that apply in the B2B sector may not apply to the B2C, as network effects are not as prevalent in the manufacturing industry due to the more complex nature of industrial products and the relationships between the third-party developers as well as the customers and the sellers.
What we can say, is that all digital platforms have a technological basis. Industrial platforms are an interesting case as they converge different types of machinery, digital, enabling, and general-purpose technologies. A recent paper by Jovanovic et al. (2022) assessing the creation of different industrial platforms illustrates the evolution of the connection between these technologies:
- Most platforms start with collecting data about each machine or product through the installation of sensors. With this, companies gain a better understanding of their machinery and the connected processes.
- Through analytics, the use of “advanced” sensors can give more information about the performance and weaknesses of the machines. With this, they are able to gather huge amounts of data that they store in a cloud (e.g. Microsoft Azure, AWS, etc.). This helps companies to proactively discover anomalies, and react before a problem arises.
- Finally, AI technologies can help assess the technicalities and data generated by machines and their surroundings. Most importantly AI technologies contribute to the autonomy of the system, like the GE Predix platform, where trains can accelerate and decelerate depending on if you’re driving up a hill or down a hill.
So, even though most scholars have agreed that technology can drive the growth of ecosystems, we still don’t know much about the interaction of these technologies and how they are connected to the formation and expansion of ecosystems. .. So stay tuned while we find out!
Jovanovic, M., Sjödin, D., & Parida, V. (2022). Co-evolution of platform architecture, platform services, and platform governance: Expanding the platform value of industrial digital platforms. Technovation, 118, 102218. https://doi.org/10.1016/j.technovation.2020.102218