Neoskilling for an Effective Ecosystem
Published by : Industrial Automation
Neoskilling or preparing actors in their ecosystem for the future is critical for the success of digital ecosystems, say Prof L Prasad and S Ramachandran.
In India, many grandiose initiatives launched with great fanfare, invariably stutter and putter before stalling or ignominiously petering out. The major reason for most inordinate delays is the lack of a robust “ecosystem” to support expedited implementation, in order to effectively tackle the numerous operational problems that plague any rollout.
Digital ecosystems with a common objective
Such ecosystems need multiple stakeholders to come together and work as a cohesive team towards a common goal. But that is not the case always. One recent example is the electronic rechargeable highway toll payment scheme FASTag. Multiple players such as National Payments Corporation of India for running the program, acquirer banks for validation, issuer banks for issue of RFID tags, payment gateways, and the highway and revenue authority for GST are involved.
The scheme has been touted for almost a decade and is yet to take off as a digital initiative for toll payment. This is an ecosystem on our national highways, unable to be implemented yet due to the lack of teamwork. The stakeholders need to resolve basic and operational issues such as revenue sharing and wrong deductions. If successfully rolled out, hours of waiting can be avoided. According to a study conducted by IIM Calcutta and the Transportation Corporation of India, the cost of waiting and fuel spent at the tollgates is more than $20 billion every year.
How can such ecosystems be made successful? It starts with a common goal agreed upon by all. According to the World Economic Forum1, traditional ecosystems consisted of interacting stakeholders such as producers, suppliers, innovators, customers and regulators to shape a collective outcome, sometimes geographically bound while at times focusing on a sector. On the other hand, modern digital ecosystems “consist of interacting organisations that are digitally connected and enabled by modularity, and are not managed by hierarchical authority.” The objective for FASTag in this case is to evolve the ecosystem into a scalable model. For that to happen across the nation, every stakeholder should work towards the objective.
Choice of technology
Following a common objective is the technology itself. Continuing the FASTag example on highways, the government’s one-nation-one driving license project is an example championed by the ministry for road transport and highways. Its objective is to remove duplicate licenses across the country. The look and feel of licenses should be the same across states, with the option to use regional languages. The cards were planned to have QR codes and Near Field Communication for the traffic police to use devices and read driver information.
The technical glitch faced by the implementation stakeholder National Informatics Centre was in the interoperability for machine-reading of the cards. Traffic police in Karnataka for example did not have the devices to read the smartcard licenses with the inbuilt integrated circuit. Instead, they had to use a mobile app to read the QR code and know the driver credentials. It is important to get every stakeholder on the same page when it comes to choice of technology for interoperability.
With the objective and technology taken care, the people aspect is critical for the success of digital ecosystems. Neoskilling or skill development for new, emerging needs of the industry is all encompassing.2 It includes not just hard skills that are technical in nature but soft skills to succeed. Digital transformation comes with sweeping changes in how organisations work. Neoskilling should take care of soft skills such as change management to overcome inertia to new methods.
Neoskilling for the people aspect
The classical way in which organisations have been using digital technologies is to create a competitive advantage from it that competitors cannot easily replicate. The focus has been on Neoskilling employees inside the system on these emerging trends. But that will no longer be sufficient in a digital ecosystem.
Emerging technologies have reached levels of maturity and economies of scale to make them affordable for the masses, making them ubiquitous. Business leaders should look beyond their employees to their suppliers, partners and dealers outside the four walls of their enterprise. Only by Neoskilling or preparing actors in their ecosystem for the future by hand-holding them can organisations make their digital initiatives successful.
The keiretsus of Japan and the chaebols of Korea were examples of tightly bound supply chains working with clockwork precision for physical movement of goods. But the new age digital definition of a digital ecosystem consists of interacting organisations that are digitally connected, enabled by modularity and not managed by hierarchical authority. According to Nikkei Asian Review, the number of software vendors exceeded the parts suppliers for the first time in the Japanese automotive industry. More than 50% of the cost of a vehicle today is for the software and electronics that go into it.
In order to have the network effect of technologies such as the internet, mobility, cloud and internet of things that are connected by their very nature, it is important to train all stake holders who interact with them directly or indirectly.
The small and medium enterprises sector contributes to close to 40% of the GDP in India. But the findings reported by Google showed that only one-third of this sector is leveraging the power of digital technologies. Google launched its training initiatives for the SMB sector a few years back. According to its estimate, digital empowerment can increase the GDP contribution from SMB firms by at least 10 percentage points.
According to Sundar Pichai, “Today, anyone can become an entrepreneur, a developer, or a creator, but it is important that they have the right tools and skills to digitise. We believe it is important for us to invest in training and equipping these individuals and small businesses to accelerate their journey of growth." Technology providers have their own motivation to upskill segments in the society such as the SMB enterprises to ensure that the benefits of the digital revolution are far reaching.
Suppliers form the backbone of any equipment maker. They need to be considered in the larger scheme of things for digitisation to ensure that they have the necessary infrastructure, tools and most importantly the skilled workforce to play an active role.
When Adidas started its modern factories in Germany and the United States a few years back to make shoes using advanced technologies such as robotics and additive manufacturing, there was wide media coverage. The idea was to make footwear customised to each customer in a short cycle time, close to the point of demand instead of a faraway place with cheap labour. It looked like the days of low cost manufacturing in Asian countries and shipping them to the developed economies was over. But the story did not end there.
In a recent announcement, Adidas announced that it will gradually close its operations in these “Speedfactories”. The company realised that it made more sense to concentrate its manufacturing in Asia “where the know-how and the suppliers are located”. Emerging technologies may not be sufficient yet for product makers to work independently, without considering the ecosystem in which they operate.
The digital future of tomorrow will be a global ecosystem in which humans will continue to play an active role, irrespective of the levels of automation and digitisation. Successful leaders should keep this ecosystem in mind when they plan for growth of their enterprise, however cutting edge their product or the technology may be. Only such initiatives will be successful in the long-run ensuring its benefits reach a wide base of stakeholders and not a select few.
Prof L Prasad (Retired), Organisational Behaviour & Human Resources – IIM Bangalore, has more than 40 years of experience in the USA and India. His professional activities encompass teaching, research, consulting and training, centre on the themes: ‘Achieving a Competitive Edge through People!’ and ‘Leadership in a VUCA World.’ His passion is ‘high impact leadership’.
S Ramachandran is Principal Consultant, Infosys, for application of emerging technologies to address business needs, in the manufacturing vertical in Infosys Knowledge Institute. His focus is on developing compelling thought leadership and points-of-views, based on recent trends in management and digitisation. He is a regular blogger and a speaker on topics such as Digital Transformation and Industry 4.0.
1. Platforms and Ecosystems: Enabling the Digital Economy, Briefing Paper, World Economic Forum, Feb 2020.
2. Prasad L, Ramachandran S, Neoskilling for Digital Transformation and the Artificial Intelligence revolution, Wiley India, Jan 2020.