China, India and the US to dominate the global
platform economy; much of Europe lags
Research released by Accenture (NYSE:ACN) reveals that despite
the potential for small and traditional businesses to become
successful digital platform companies, as few as 10 percent of new
start-ups focused on digital platform business models will become
profitable independent entities in the coming years. The analysis
also reveals that China, India and the U.S. will dominate the
platform economy by 2020, and that the gulf between countries will
increase. To help bridge this gap, the report outlines five
critical steps businesses and governments can take to succeed.
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US & China top the Platform Readiness
Index (Graphic: Business Wire)
Accenture’s report Five Ways to Win with Digital Platforms,
published in collaboration with the G20 Young Entrepreneurs’
Alliance, assesses the ability of 16 G20 economies to support the
flourishing of digital platforms. It shows that the UK and Germany
join China, India and the U.S. at the top of the Accenture Platform
Readiness Index (see figure 1), but other emerging markets and
European economies are predicted to lag behind, lacking sufficient
business and socio-economic enabling conditions.
“When you think of digital platforms, think of China and India
as much as the U.S. These economies are using the power of
platforms to create large scale markets very rapidly,” said Paul
Daugherty, chief technology officer, Accenture. “Many European
economies are in danger of missing out in the platform economy.
Multi-stakeholder cooperation is required to address the fragmented
digital markets and to support the greater levels of digital
enterprise and consumption that successful platform businesses
need.”
Accenture’s analysis shows $20bn was invested in digital
platforms between 2010 and 2015 in 1,053 publicly announced deals.
More than half of this investment took place between 2014 and 2015.
It also shows that rankings on the Platform Readiness Index
strongly correlate to the levels of digital platform activity and
investment in G20 countries (see figure 2).
The report recommends that governments engage with businesses
leaders to advance a range of policies that can create a rich
enabling environment for digital platforms including the following
actions:
1.
Prioritize data protection standards
and rules: Drive the harmonization of data privacy and data
security legislation. Smooth cross-border data transfers.
2.
Design regulations with digital
platforms in mind: Experiment with regulations alongside new
technologies and business models. For instance, the U.K.’s
Financial Conduct Authority’s “regulatory sandbox” allows start-ups
to test ideas without immediately incurring all the normal
regulatory consequences.
3.
Encourage cross-border electronic
trade. Harmonize taxes and standards, consumer protection,
contract laws and logistics infrastructure. The eWorld Trade
Platform (eWTP), initiated by B20 China, aims to accelerate
international policy collaboration to support SMEs.1
4.
Invest in digital infrastructure:
For example, the E.U.’s Payment Services Directive (PSD2) will
empower start-ups to expand customer reach and encourage innovative
business models.
5.
Think small, act big: Educate SMEs
on alternative funding, such as crowdfunding and peer-to-peer
lending; and on data privacy and consumer protection. Support SMEs
with digital economic zones to support e-commerce.
Five ways to succeed
Accenture notes that only 15 percent of Fortune 100 companies
have developed digital platform business models to date Successful
digital platforms will proliferate as small businesses and
traditional industries follow the lead set by digital-born platform
companies. Accenture identifies five factors critical to sustaining
critical mass in digital platforms, which use new technologies to
create large scale markets of customers and service providers:
1.
Proposition: Create differentiated
platform services that extend beyond the point of transaction; and
that support both customers on the demand side and service
providers on the supply side.
2.
Personalization: Target customers
through tailored experiences across all channels, using customer
data to anticipate needs and offer bespoke experiences.
3.
Price: Apply new pricing models,
such as pay-as-you-go, ‘freemiums’, and subscription pricing to
respond to peak demand.
4.
Protection: Embed trust at the
heart of the platform, using both prevention and compensation
techniques to attract customers and differentiate the platform.
5.
Partners: Scale the platform
rapidly by identifying digital partners – such as app developers
and payment service providers – who can enrich the platform
experience and fulfill customer needs.
“Digital platforms are not just the preserve of digital born
companies, like Airbnb and Alibaba, but are now becoming a default
business model in most industry sectors, both B2B and B2C,” said
Francis Hintermann, managing director, Accenture Research. “To
enjoy efficiencies and high rates of growth, companies will need to
transform everything from the way they co-create goods and services
with third parties, tailor their offerings to customers, and price
them dynamically. Crucially, they will only sustain critical mass
by working with digital partners who can deliver the range of
functional services that complete the customer experience.”
About the Accenture Platform Readiness Index
The Accenture Platform Readiness Index measures 16 G20 countries
by a number of factors including the size and savviness of their
digital population, the extent of its digital talent and the
strength of its wider entrepreneurship culture. Accenture also
measured degrees to which companies are willing to share
intellectual property and ideas in a spirit of open innovation, the
quality of their technology infrastructure and their ability to
support home-grown technologies. The agility and flexibility of
market regulation on issues such as data privacy, data portability
and cybersecurity was also measured.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With more than 375,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
1 Draft policy paper of B20 SME development
taskforce, May 2016
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version on businesswire.com: http://www.businesswire.com/news/home/20160914005171/en/
AccentureMatthew McGuinness, +
1-917-272-7187matthew.mcguinness@accenture.com
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