How to surf on edge of next industrial revolution and profit from convergence of communication, energy, and transportation infrastructure?
In The Zero Marginal Cost Society J. Rifkin explains tremendous shift in new forms of communication, energy creation and distribution, and transport and logistics resulting in new industrial revolution that is happening now. According to J. Rifkin the changes we observe will converge to general purpose technology–Internet of Everything, which will be a platform consisting Internet of Communication, Internet of Energy, and Internet of Logistics.
J. Rifkin proves that in competitive markets, in order to win the market share, companies will have to continuously increase their productivity, and simultaneously decrease the marginal costs and prices of the goods and services sold. As a result, the marginal costs will be brought to near zero, what means they will not be subjected to the market forces we know today, and companies will have to learn how to profit from sharing economy and lateral economies of scale.
J. Rifkin provides great deal of insights for start-ups and start-up accelerators, which plan to surf on edge of next industrial revolution by helping existing market players to transform. As we all know, Google and Apple maximize usage of their technologies in existing vehicles and develop driverless technologies themselves to win Internet of Logistics. But let’s take a look at what other vehicle industry players do to catch up with new economy paradigm.
BMW enables drivers to have remote access to their vehicle. My BMW Remote App enables you to check whether your car is locked or not, when you are not sure to have it locked when getting out. It also allows you to sound the horn, flash the lights, and turn on auxiliary heating or ventilation.
Daimpler, Audi, and also BMW in 2015 together purchased Nokia’s digital maps business for USD 3,1 billion to leverage connected cars solutions they work on. Now Mercedes-Benz offers mbrace – a digital concierge package that will help you out with dynamic route assistance in traffic or bad weather.
General Motors offers apps such as MyChevrolet, MyBuick, MyCadillac and MyGMC, which enable its owners to locate the nearest dealers, or schedule car maintenance, and also find free parking spots. Another app of General Motors – OnStar leverages both geolocalization and big data to offer coupons for Exxon and Mobil gas station, and help you book hotel rooms while you drive.
Toyota – which recently invested USD 1 billion in Toyota Research Institute (incl. research centers near Stanford University and Massachusetts Institute of Technology) -works on open source infrastructure, and develops solutions in telematics to enable safer driving experience. The former one are also the cornerstone of digital innovation strategy in Mazda.
If J. Rifkin is right about Internet of Logistics, above-mentioned companies, leading in transportation industry, will soon find followers, and other transportation business players will look for solutions enabling them to adapt, distinguish, and compete. It might result in new, unexplored marketspace for transportation and logistics oriented start-ups.
Considering nearly 2 million of companies registered at Angels List, specialization in transportation and logistics seem to be less exploited by start-ups than specialization in energy and communication. Intensity of rivalry in this sector might be, therefore, lower than in the other, densely occupied sectors. On the other hand, because of industry regulation standards and high safety requirements, there might be a need for institutional support for start-ups entering transportation and logistics area.
Luckily there are more and more start-up acceleration programs that specialize in transportation, logistics, and supply chain. Such accelerators are Dynamo Accelerator from Chattanooga, US, or The Logistics Tech Accelerator organized by RocketSpace with Lufthansa and MAN focused on solutions for smart warehouses, transport, and trade. The Logistics Tech Accelerator’s application process for start-ups opens in September 2016, and plans to kick-off in January 2017 in Vigo, Spain.
So ask yourself, what valuable company in transportation and logistics nobody is building yet.