TECH4GOOD
The restrictions brought about by the pandemic triggered many profound changes in our lifestyles. Suddenly, our lives are now driven by apps that make things possible without leaving our homes. And those changes stayed on even after the dangers of the disease significantly subsided. When we crave something, we seldom go out anymore to satisfy those cravings. We get them delivered. Going to theatres is almost history. The term workplace has been revolutionized by video call apps we barely knew existed before the pandemic.
Those days of physically getting to places and limited choices are distant memories. Today, thanks to the disruptive power of subscription and on-demand services, homes have become portals to infinite entertainment libraries, forever altering how we unwind, socialize, and even discover new cultures – all with a few clicks on a device we carry in our pockets. This is just one example of how innovative business models – fueled by technology and an insatiable consumer desire for convenience – are reshaping our everyday lives at an unprecedented pace.
Business model innovation is basically inventing new ways for a business to run, create and capture value for customers, and making it more competitive. It is like changing the recipe to make your business more successful. Building on emerging technologies, anticipating changing generational preferences, and environmental pain points, new business models are transforming the very fabric of our daily lives anchored on instant gratification and on-demand experiences.
Gone are the days of one-time purchases for software, music, and even movies. Subscription services, pioneered by companies like Netflix and Spotify, offer access to a vast library of content for a recurring fee. Platforms like Airbnb,Grab, and Move It have disrupted traditional industries such as hospitality and transportation. These businesses do not own assets (hotels, cars) themselves, but facilitate connections between users and business partners, creating a more efficient and often, cheaper way to access services.
New business models like those of Lazada, Amazon, and Shopee have turned shopping from an errand to an on-demand experience. Forget limited store hours and geographical restrictions. Those mobile apps let you browse and buy anything, anytime, from anywhere with an internet connection. They can track your browsing habits and interests to recommend products you might like, providing a very personalized shopping experience.
Do you need groceries, medicine, or a quick meal delivered? No more squeezing errands into your busy schedule. Grab Delivery and Lalamove connect you with riders who handle pick-up and drop-off, freeing up your time and energy. We live in a world where we expect things fast. On-demand delivery caters to this by providing near-instant access to goods, quickly satisfying our cravings or needs. These apps also connect consumers with a broader range of local businesses, promoting local entrepreneurs and fostering a more diverse shopping experience.
The rise of online marketplaces like Upwork has empowered individuals to become their own bosses targeting global markets. This model caters to a growing desire for flexibility and autonomy in the workforce, while businesses benefit from a readily available talent pool in the Philippines. This innovation has brought tremendous opportunities for Filipinos in the countryside as long as they have the skills needed by employers and stable internet connectivity in their areas.
The influence of these innovations extends far beyond individual transactions. They have spurred economic growth by creating new markets and job opportunities. The sharing economy alone is estimated to contribute trillions to the global GDP. They have also shrunk geographical distances, facilitating collaboration and innovation across borders and extending the market reach of Filipino MSMEs.
As business model innovations continue to evolve, regulators and policymakers face the challenge of fostering an environment that encourages innovation while protecting consumers and maintaining fair market practices. Overly restrictive regulations can stifle innovation. Policymakers should strive for a balance, allowing businesses to experiment while ensuring consumer protection and fair competition.
Regulators should closely collaborate with innovators to understand the potential and implications of new business models. This can help create regulations that are beneficial for both businesses and consumers. Regulators can use regulatory sandboxes (I will write more on this tool in my next column) to test new ideas in a controlled environment before full-scale implementation. This will also allow the regulators to understand the technologies behind the new model better and see that consumer rights and privacy are not compromised. A key approach is to focus on the outcomes. Instead of prescribing specific processes, regulations should focus on the outcomes that need to be achieved, allowing the innovators the flexibility to find ways to reach those outcomes.
Business model innovation will continue to reshape our world. Ultimately, its success hinges on a collaborative effort – businesses striving for responsible practices, regulators fostering a fair environment, and consumers exercising informed choices. This collective approach will ensure that innovation continues to serve humanity, not vice versa. ([email protected])
The author is an executive member of the National Innovation Council, lead convener of the Alliance for Technology Innovators for the Nation (ATIN), vice president of the Analytics and AI Association of the Philippines, and vice president of UP System Information Technology Foundation.