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| Mr Amo Utii |
What does it mean to create, or cocreate value? How, when, where… is value created? Are there differences between ascribing value to‘goods’ and to ‘services’? According to Douglas B. Cleveland; during the last hundred years the economy has transitioned from agriculture to industrial to services… and now the services sector is the largest and fastest growing component of the economy. Fifty years ago, the services sector accounted for about 60% of output and employment. Today, the services sector share of the economy has risen to about 80%… But then the questions; does a ‘services economy’, over the long term, create sufficient ‘value’ for a country to sustain itself… is it the ‘growth’ engine… does it create large numbers of ‘good jobs’… can it ‘compete’ effectively in global markets…
According to Richard B. McKenzie; the emergence of services economy has given birth to the public policy worry that the U. S. is being reduced to a nation of orderlies, fast food workers, bus boys… The expansion of the services sector has been perceived as a symptom of economic malaise because it has coincided with surpluses of labor in the traditionally high-paying heavy industries and a long term increase in the nation’s unemployment rate… In addition, the expansion of the services sector has been thought to mirror a decline in international competitiveness of U.S. due to its inability to adjust its structures in response to the accelerating changes of globalization…
Another perception of the nation’s shift from industrial to services economy is frequently summarized by the claim that given emergence of the services economy, we may eventually end up doing each other’s laundry… According to Felix Rohatyn; we cannot become a nation of short order cooks, salespeople, copy machine operators, messengers… These jobs are weak basis for the economy… To let other countries make things while we concentrate on services is debilitating both in its substance and in its symbolism…
In the article Services Dominate the Economy by Johathan Peterson writes: Under-way for a century, the transition to services economy has reached the point where most employed persons are classified as working in the services sector… a potpourri of jobs that include; dishwashers, store clerks, nursing home attendants… but also; doctors, lawyers, bankers, computer programmers, even government bureaucrats… Essentially, everyone who is not working in manufacturing, agriculture, construction or mining is a services worker…However the services economy phenomenon has hardly met with universal approval:Some economists and political leaders warn that the nation’s future will be in jeopardy if employment in the great manufacturing industries that helped make the nation rich is replaced by services jobs that are low on wages and low on dignity... Others, however, insist the services boom offers superb opportunities of its own…
Whatever the view, the trend toward a services economy appears complete even as manufacturing becomes more efficient and more sophisticated requiring fewer employees but ever more services… While the debate rages on, there are several points that can be made, e.g.; services and manufacturing will continue to rely on each other, and according to Stephen S. Cohen and John Zysman; services are complements not substitutes or successors to manufacturing… and education plays a critical role: Those with ‘good’ one can do better than ever before, and those with ‘poor’ one are likely to do worse…
One thing is clear: The services economy is not sheltered from foreign competition… In many cases, services workers are no more secure than factory workers, unless they have skills that justifies their positions… And, whatever the task in today’s competitive global economy, employers look harder than ever at how, where… to accomplish tasks as cheaply as possible… According to William Johnston; workers who do not have basic technological skills and literacy to be competitive are going to find that the economy is less forgiving than ever: The haves and have nots are going to be defined by their skills… It’s the technologically able, versus the technologically unable…
In the article Services Economy by Dustin Ensinger writes: High-paying manufacturing jobs have all but disappeared, only to be replaced by lower paying and often menial services sector jobs that produce absolutely nothing of value… According to Labor Department’s Occupational Employment and Wages Report; retail sales, cashiers, general office clerks, food preparation, services workers, nurses… are the occupations with the highest levels of employment… In fact, nine of top 10 jobs in the survey pay such low wages that they put a worker supporting a family of four in near poverty… The findings are symptomatic of globalization and trade policy, which has allowed the nation’s manufacturing base to be gradually off-shored to low wage nations, leaving only low paying services sector jobs in their wake…
The rationalization is that with more open economy and trade policy, many manufactured ‘goods’ are produced overseas where labor is cheaper, and consumers benefit… According to ‘The Post Gazette’; comparing the same research to 10 years earlier the results were unsettling, while millions of manufacturing jobs were disappearing fast food workers increased by 43%, child care employment increased 68% over the decade as the number of one income households dwindle due to the lack of jobs that pay well enough to support a family… At the same time, education promoted as the cure all for the changing economy is not paying off for many… The health care sector may be growing rapidly, but most of the jobs created are the lower paying jobs in the field…
In the article Services Economy by Umair Haque writes: The services economy is creating ‘jobs’; yes, but only of the lowest kind low end, unskilled, dead end, go nowhere jobs … jobs that don’t only crush the soul, damage the psyche, break the spirit but waste people’s potential… The simple fact is the services economy is barely worth anything, because it doesn’t enhance human potential, it doesn’t create much ‘real’ value for people, let alone society, future generations, communities… Services is a great and noble ideal; it implies a higher purpose, common goal, shared benefit, joint concern… but it’s a great tragedy, because instead of challenging people to create and invest in what is truly innovative, earth shaking, groundbreaking… the ‘bullshit’ services economy settles for what is easy, marginal, incremental…
And truth be told, it’s a titanic squandering of resources money, time, effort, imagination – to spend so much on so little of ‘real’ value… The services economy is creating armies of servants that can walk dogs, paint nails, drive cars… instead of finding solutions to the very real, urgent problems of education, healthcare, climate change, finance … Instead of solving the world’s glaring problems, you are simply finding more efficient ways to crack the same old whips and tie the same old leashes… Unfortunately, much of the contemporary commentary on the rise of the services economy is a throwback to Adam Smith, who asserted that labor of manufacturing generally ‘adds to value’, whereas the labor of the menial servant (services providers), on the contrary ‘adds to the value of nothing’… a person [or country] grows rich by employing multitude of manufacturers, and they grows poor by maintaining a multitude of menial servants (services providers)…
Smith differentiated between ‘productive’ workers (who generally seem to fit description of ‘goods’ workers) and ‘unproductive’ workers (who generally seem to fit description of ‘services’ workers)… he maintained that services workers represented a net drain on a country’s productive capacity, and the expansion of the services sector was therefore, part and parcel to a ‘negative sum’ game… According to some experts; Smith failed to recognize that ‘services’ are as valuable to consumers as the ‘goods’ they buy… services are often just as much ‘goods’ as ‘manufactured goods’, and services facilitate the production of both ‘goods’ and ‘other services’…
Some experts suggest that the growth of the services economy is a direct consequence of globalization and trade policy, i.e.; lower labor cost nations are better able to compete for manufacture economy… hence, nations are forced to specialize in what they do best and acquire things they have difficulty in producing. But in final analysis, government policy, programs that promote entrepreneurship, innovation, technology, job creation… must be rooted in market reality… Building on and sustaining economic momentum remains key means of responding to challenges of fostering growth in an increasingly competitive global economy… Question; Is an economy based primarily on ‘services’ sustainable, long term?
Coopetition Explore, Exploit, Collaborate, Cocreate: Sleeping with the Enemy Works It Means ‘Think’ Differently
Coopetition; when you can’t beat ’em, join ’em… far from being just buzzwords collaboration, cocreation, coworking… revolutionize traditional business models… And still another hot ‘co’ trend is coopetition (combination of ‘cooperative’ and ‘competition’) it’s a complimentary business strategy that drives competition and innovation… The ultimate aim of coopetition is pooling aspects of rival organizations’ knowledge and skills in order to coinnovate and create value…The traditional concept of business as ‘winner take all’ contest is giving way to a realization that in a networked economy ( economic environment arising from digitization of fast growing, multi-layered, highly interactive, real time connection with people, devices, business…) companies must both cooperate and compete…
The term ‘coopetition’ requires companies to create business strategies that capitalize on relationships in order to create maximum value in the marketplace… Internet and mobile technologies have made it even more necessary for companies to both cooperate and compete, by enabling relationships through information sharing, as well as, integrating and streamlining processes… In today’s networked economy, coopetition is a powerful means of identifying new market opportunities and for developing business strategy that will result in mutual gain… The world is driven by coopetition relationships and networks that embrace them… According to an African proverb; if you want to go fast, go alone; if you want to go far, go together…
In the article Coopetition is Smarter than Competition by tibbr admin writes: Some business try to build everything by themselves, while other businesses partner with each other… Some experts say: in a growing market ‘coopetition’ makes more sense than competition… Coopetition is cooperating with other businesses (or, even within the same organization) to create value in an effort to gain a competitive edge… It’s all about engaging in much larger business game, when it comes to integrating other products with enterprise social networking, it’s about giving business the opportunity to rethink their approach, so they can be more collaborative, more inventive… ‘Parallelism’ runs deep in the heart of social networking and it’s the foundation of coopetition, share to make things work better, different… The significance of coopetition lays in a way of ‘thinking’; thinking value, thinking experience, thinking future…
In the article Embrace Coopetition for Rapid Growth by Martin Zwilling writes: Before you start negotiating any coopetition deal, spend time thinking about where and how you will be ‘competing’ and how you will be ‘cooperating’… While the natural instinct may be to defeat competitors, or fight for ‘win lose’, deals that are not ‘win win’ won’t work and may indeed, jeopardize the future of a company… In addition, two key issues for any cooperative agreement are; don’t violate the spirit of local laws or customs, and protect your intellectual property (IP) with proper two way non disclosure agreements… before you start… According to Adam Brandenburger and Barry Nalebuff; there is duality in all relationships with respect to ‘win win’ and ‘win lose’ interactions the success of most business is dependent on the success of ‘others’, yet they must also compete to capture the value created and protect their own interests… The coopetition model provides a framework to identify and explain the underlying mechanisms in a firm’s environment and how these mechanisms can be changed to the firm’s advantage think outside the box…
In the article Coopetition not Competition by Karolina Maziliauskaite writes: Many might think that collaborating with competitors is an odd thing to do, but real experiences has demonstrated that it can bring a number of significant advantages, coopetition helps companies reduce costs, share research and development (R&D), open new markets… According to Bernheim and Peleg; coopetition is only possible when all parties decide that it’s in their ‘mutual’ best interests… coopetition is sub form of competition and both terms are closely connected… Also, it’s essential not to forget that there are many possible risks that come with co-opetition…
Hence, a clear line must be drawn between coopetition and competition, defining the extent of collaboration, as well as, the areas where competition begins again… It’s important that each partner be clear about their intentions and expectations, and agree before signing a final agreement. According to Marquis Cabrera; traditional collaboration fail because deep down, stakeholders assume their success must come at the parties’ expense, which is clearly a ‘zero sum’ game… The way forward with coopetition is when companies act with what they recognize as a ‘congruence of interests’ that means in a traditional collaboration, companies’ relationships is defined by; 1+1=2… whereas in forming co-opetitions, companies’ relationships and expectations is defined by 1+1=3…
In the article Murky World of Co-opetition by Taran March writes: Coopetition creates value for the companies involved by leveraging cooperative relationships, such as; shared research and development, create a product/service, entering a new market… According to Charles Green; mistrust is what keeps companies from collaborating with others and instead, they rely on external forces contracts, external guarantors, surveillance… all of which will ensure a specific result… But when trusted relationships are at hand, then not only are fewer external forces needed but parties feel freer to exchange information, ideas… and take more prudent risks. This is intimate form of collaborations and it creates opportunities to engage and leverage each others strengths for their mutual benefit… Thereby creating value rather than just simply splitting differences… Co-opetitive is all about maximizing ‘net value’ for each company through integration of some aspects of each company’s individual ‘parts’…
In the article Changing Rules of the Game by Haydee Hernandez, Rick Murtha, Micah Peng, Yuhong Xiong write: In deciding how to conduct business in an increasingly complex world, many business tend to over simplify their analyses to just ‘win lose’ competitive scenarios… Their reliance on competitive analyses implies the existence of a purely adversarial relationships between each player in their market/ industry… However in reality, there may be coopetitions within an industry without resorting to unfair or non competitive monopolistic practices. In fact, coopetition and competition can often coexist concurrently between the same players, where the individual companies create their own competitive strategy for engaging markets…
This is based on the premise that business is not necessarily a ‘zero sum’ game where each situation is ‘win lose’. There can actually be scenarios in which ‘win win’ is achieved by cooperation, and others in which ‘lose lose’ occurs without it. In fact without coopetition often times there exists a ‘lose lose lose’ situation, because not only do the competitors end up losing out on a potential market, but the market gets under-served because consumers lose out on a potentially useful product or service… In highly segmented industries with strong networking effects, such as; the information technology industry, coopetition and competition may be the only way to conduct business…
However, coopetition is double edged sword, it can give organizations a larger market share, and even a larger market, or it can lead to legal disputes, or it can create stronger competitors… Hence, great care must be taken in selecting when and how to use coopetition as a strategy for an organization’s advantage… The unfortunate aspect of coopetition is that it can be perceived by government or other competitors as tacit collusion… In the process of coopetition, organizations may find themselves in a worse predicament than when they started, coopetition can actually lead to unintended consequences, such as; stronger competitors, or new entrants in the market… According to Gary Hamel; even though practice of competitive collaboration (coopetiton) is on the rise, long term effects may compromise a company’s ability to compete in the future…
This points to one key lesson: Today’s coopetitions are tomorrow’s competitors, or even today’s… Hence control the transfer of information whether through security, or having one central gatekeeper for information sharing… and always try to learn as much as possible from the coopetition… in other words; trust but verify… According to Stuart Richardson; coopetition is a critical business strategy, and it promotes the notion that even with all of your skills, strengths, talent… you still cannot do it alone…
Business relationships must be formed around a clearly articulated set of principles, which are used to measure progress and the relative success of the coopetition… Hence, the players must have a system of metrics that tracks the performance of the arrangement, and if it’s not working; then they must make necessary adjustment or discontinue the relationship, quickly… Also, under no circumstances should you continue with a flawedarrangement… Most important, understand how to protect your own interests while co-opetiting to maximize value…
