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The Wrong Business Models?

Several recent sessions looking at key resources (energy, food, waste, water etc) and well as more technical topics (connectivity, data etc) have highlighted that one of the fundamental problems we have with our future challenges is that we are trying to look at the potential solutions through the lens of today’s business models. At a time when old financial investment models have been put under the spotlight, it is worth questioning how many sectors are using the wrong business model for the future.

Last week, in a workshop covering energy, it was put this way:

“In many ways, the economics of any energy source depends on the context and so often the economic view gets in the way of reality: Economics gets in the way of logic. The current economic models we use are not suitable for managing our future energy needs where the payback periods will be longer than the usual norms. Energy is a long term capital intensive industry and so we need to provide a framework to appropriate change the energy mix and support the huge investment needed. At the moment renewable solutions are judged according to the fossil fuel standards and rules as well as needing to be seen to be fitting with the infrastructure. However, by their very nature, most alternative energy supply options fit better with other, more distributed, infrastructures and so looking ahead we need to better design the analysis to fit the energy source and purpose rather than use the old ways of thinking. The speed of transition that we need to address the energy challenge is out of sync with the established views on returns on investment.”

Equally from the water perspective:

“We work in a world where too many people use the standard metrics as if they are the only ones we can. We must adopt a different approach from the traditional business models that have been used so far as they are no longer fit for purpose.”

While going back to some earlier sessions that have looked at data, we have had comments such as:

“There is a big question over the business models that will be able to work in the world of ubiquitous cheap data. How will the infrastructure actually be financed over the next decade? And will people be willing to pay? We are increasingly accustomed to free access to free information and so shifting back to a pay to access approach will be no easy move – particularly for the younger generation. Should access to information be monetised, and if so, by who?”

All of these signal that, as we move forward, business model innovation may well come to the fore. We know many of key the answers from a technological, social and political point of view. But it is the economic perspective that may provide the greatest challenges?

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Comments

One Response to “The Wrong Business Models?”
  1. Davide says:

    Dear all,

    I will try this keep this short, but looking around me and reading what’s happen today in round table discussions between expertises leave me with a huge question mark, that is are we discussing too much? And where is the action? When is going to happen that Governments will act for real without further round-table talks. How much have been done so far to tackle food crisis and water for example? Regarding the text above I have to complain regarding the way we threat and talk over the fundamentals of the life (food, water, energy)discussing about business models. Today after the global failure over the traditional business models, we should really stand up and stop to think has business man’s but like human kind. We should take back the control over the fundamental basis, having the opportunity of living for everyone in a decent way. I am not saying that we should live without rules, absolutely not but put more of humanity on what we do and not always look about how to monetise everything with future plans, otherwise we will never sort out anything and we will always think how to tackle the next crisis that someone did. Thinking Global doesn’t have to mean merging for companies and the stronger get everything and dictate rules over the products, but “Think Global” should means act in the way everyone can have advantages. For example, if we know from now on that the future wars (paraphrasing what told above) will be around the water instead of the Oil, why we don’t see how to provide on time this solution. This means invest in technology, already existing today, converting the sea water in drinkable water and this is possible (see China and Spain). We are using just the 10% of global water even less and the rest??? Why wait, why see another crisis, why can’t we prepare on time for the next challenge. If we don’t act, any further word even from the most expert or theorist will be a waste of resource and once more we will fail below our business models.

    Thanks

    (p.s Coca-Cola Company for example, today is buying the natural water resources around the world. Why we should accept the privatization of the public water. Has been demonstrate that privatization doesn’t mean better service but just better income for those which already are rich).

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