The challenge for companies is to develop new revenue models for city logistics. Business models that link innovative processes and technology (stuff) to the smart use of data (fluff). This requires collaboration between the government, entrepreneurs, and research. In recent years, many cities have focused on the development of business ecosystems around knowledge institutes and business clusters for the development of start-ups, scale-ups, and innovative business models.
BCG presents guidelines for designing business ecosystems: “If designing a traditional business model is like planning and building a house, designing an ecosystem is more like developing a whole residential district: more complex, more players to coordinate, more layers of interaction and unintended emergent outcomes”.
Based on the BCG analysis of more than 100 successful and failed ecosystems across sectors and geographic markets, they find that the ecosystem design challenge can be addressed by working through six sequential questions:
- What is the problem that you want to solve?
- Who needs to be part of your ecosystem?
- What should be the initial governance model of your ecosystem?
- How can you capture the value of your ecosystem?
- How can you solve the chicken-or-egg problem during launch?
- How can you ensure evolvability and the long-term viability of your ecosystem?
In contrast to most traditional business models, many business ecosystems have the potential not only for supply-side economies of scale but also for demand-side economies of scale and the resulting positive feedback loops.
Demand-side economies of scale make networks more attractive to users as more users participate in the ecosystem.
Supply-side economies of scale can be based on falling fixed or variable costs. They are particularly strong in many digital ecosystems, which are frequently characterized by asset-light business models, low-to-zero marginal cost, and increasing returns on data.
In particular, demand-side scale effects enable many ecosystems to grow quickly and exhibit winner-takes-all or at least winner-takes-most characteristics (at least for some time). However, some ecosystems have only limited demand- and supply-side economies of scale. And many ecosystems have failed because they did not solve the scalability challenge.