Jari Kaivo-oja, Mikkel Stein Knudsen & Theresa Lauraéus
Co-creation is nowadays a key concept of participatory foresight. The definition of co-creation is not easy or and the issue not self-evident, at least not in scientific discussions. Typically, co-creation is associated with service design and development of new services and goods. Co-creation methods and tools can also be used in organizational strategy and vision processes. Nowadays innovation management includes proactive use of co-creation methods and tools, especially when end-users, lead-users and consumers are taken into innovation processes.
Co-creation is everywhere
The approaches of open business models, collaboration with users, customization of products, consumption, co-production, service exchange, retailing, business solutions with knowledge sharing, and participatory roles of consumers, communities and crowds are linked to co-creating processes. All these approaches are based on the fact that human beings are social creatures. We can also link these diverse approaches to emerging trend of the sharing economy.
We can claim that co-creation is not something new and fresh in the field of innovation management. Co-creation has always been a part of idea creation and innovations. The history of innovation cannot be understood without understanding co-creation as a part of innovation processes. Co-creation is also an elementary part of value creation in business life.
For example, David Teece´s classical Sensing-Seizing-Transformation -business model does not work without some forms of co-creation and foresight. Dynamic capabilities are fully utilised only with co-creation tools and methods. As we know dynamic capability is “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments”. David Teece’s mentor was Nobel laureate Oliver Williamson. David Teece’s work, in turn, influenced management strategy theorist Gary Pisano and business innovation expert Henry Chesbrough, who were his students and collaborators. In a way, we can claim that Open Innovation paradigm was a result of co-creation by these grand economists and business modelling thinkers, even if Henry Chesbrough is sometimes credited alone as ‘the father of Open Innovation’. Co-creation of various experts and scientists is often in the background of scientific and business breakthroughs.
From creation to co-creation
Orchestration of excellency in business life requires nowadays novel tools of co-creation. Value creational systems do not work without interactive co-creation processes, especially when we talk about more and more digitalized world. In analogical reality creation was more simple and less complex issue. Today the trend is: We are moving from creation to co-creation and driver is digitalization. There are many reasons for the big change from creation to co-creation.
Today technology and digitalization had changed how hyper-individualized persons and things affect each other. Things are today connected and smarter than before. Globally, Nokia´s “Connecting People” slogan is now more real than before. Also discovery processes are today more complex than before. Process of justification in innovation process is in many ways more complex than before. For example, nowadays, Service Dominant Logic (SDL) is more demanding principle than old Service Logic (SL). This means that process of justification in innovation process is more demanding and complex. This means also that foresight activities should take SDL more seriously in the business world. Interactional creation, co-creation has become to be practiced with dynamic interactions of artefacts, persons, processes. and interfaces. Dynamics of co-creation is a different and more complex challenge than just dynamics of individual creation.
Interactional creation and APPI drivers
Today interaction is not “one-way street”. Progress in innovation processes is based on “two-way” or “multiple highways”. Arrangements are “put into motion” through interactions, which include elements of “upward causality” and “downward causality”. Interactive platforms of digital economy have changed the nature of interactions. Typical platform includes the components of Artefacts, Persons, Processes and Interfaces (APPI).
All the elements are drivers of change in the digitalized network economy. For example, Industry 4.0 challenge includes dynamic development of APPI drivers. Corporations, which can develop dynamic APPI systems and platforms are the winners in the global economy. Everybody knows who are these global growth giants, who master the most successful APPIs.
From Collaboration to New Value Creation Thinking
Manufacturing 4.0: Navigation journey in the conditions of disruption and co-creation
The MFG4.0 project´s main goal is to produce academic publications and elaborate new innovative products and services, business models and entrepreneurship ideas for Finnish society, researchers and enterprises. Finland has invested a lot in developing new technologies, but what the most important innovations, intelligent products and services for citizens are, is an issue not too much discussed. The adaptive and renewal capacity of Finnish innovation ecosystem management will be tested during coming years of global disruptive technological transformation. The list of ”the next big things” has gradually grown longer and longer during last years. Various technology foresight studies indicate that disruptive technological changes will be a key element on changing global economic and social environment. Final outcomes of disruption are not self-evident.
Between now and 2025 disruptive technological transformation will be considerable. The so-called GRIN-waves (Gene technology, Robotics, Informatics and Nanotechnology) contain some key technologies that have great disruptive impacts on economies, business models, and everyday life of people. From this disruptive and risky technology perspective it is important, and we aim to develop new approaches to these disruptive technologies and innovations. We can claim that co-creation is key element of disruption management in business. Already very influential McKinsey study (2013) identified 12 potentially disruptive technology waves, but in reality disruption will be realized in different markets and global value chains and networks. Technologies do not alone co-create anything. There are broad ways of co-creations like submitting, co-designing, tinkering, collaborating etc. Humans do this part of development, not AI, robots or other digital solutions alone.
In Figure 1 relevant scientific framework of ongoing research is figured out. There are thematic elements in the project: Academic basic research, applied research and collaboration. The academic research provides the backbone and analysis framework for the project. The special added value of the framework will include following issues: (1) New research findings relevant for joint public-private partnerships, (2) effective knowledge sharing of research outputs with private and public sector organizations, (3) co-creation of an interactive and digitalized innovations.
Figure 1. Scientific framework of the research project. The logic of creating special added value with the partners (Saarinen 2006)
It is important to integrate theoretical knowledge and practical communication with collaborators to better understanding of socio-technical transition (see e.g. Saarinen 2006). The research project will collaborate and disseminate the results widely through large collaborator and institution networks. We do collaboration with 40 institutional and company co-partners. Co-partners take part in surveys, collaboration, dissemination and utilization of research results and reports.
Also, adaptive mechanisms of socio-technical regimes and niche micro management of SMEs and corporations will be developed towards more agile and flexible practices. The MFG 4.0 research project includes various interactive and participative foresight processes for Finnish industries and business communities. The on-going research is tailored for improving competitiveness and smartness of Finnish economy in the long-run. Some of the new innovations may offer solutions to today´s social problems, ageing, health care, usage of renewable energy, traffic problems in the future. As a recent Open Innovation case study on how an online voluntary community contributes to medical record-keeping in developing countries succinctly puts it, “Write code, save lives” (Sims et al., 2018). The starting point for Finnish business may be very different, but the example shows the valuable co-creative potential of involving consumers, end-users and outsiders in innovation processes.
Co-creation – So what?
Today innovation management includes many co-creation processes of new ideas. Co-creation is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a mutually valued outcome for all partners. In a recent article of Venkat Ramaswany and Kerimcan Ozcan (2018), co-creation was defined in a new way. Their fresh definition of co-creation is:
“Co-creation is enactment of interactional creation across interactive system-environments (afforded by interactive platforms), entailing agencing engagements and structuring organizations.”
This definition of co-creation means that every co-creation framework (CCF) involves a particular combination of APPI components that are implicated through the respective environment of nodal entity in a network. This definition can imply radical changes in business thinking. “Old fashioned thinking” of Business-to-Consumer (B2C) and Business-to-Business (B2B) are now changing to more complex direction, towards multiple linked I2S2I (system environments of platformed interactions) kind of business thinking.
So what? We can always claim that co-creation is nothing new under the sun, but it in current form of thinking can change thinking and action in the business world dramatically. If we think futures of business world from co-creation perspective, co-creation research requires much more attention also in Finland. In future industrial manufacturing systems with dynamic information exchange between the full value chain from suppliers to end-users, understanding how to best organise and optimise co-creation of value can be the determining factor for developing a business advantage or withering away.
Almost needless to say, co-creation can provide a lot of value-added for the public sector, too. Public organizations and agencies are not working in a vacuum of simple creation. Public agencies are also connected to global CCFs and APPI systems, where the perspective of individuals as experiencing actors with their co-creation experiences plays a central business role and has its own relevance. Already two co-creative thinkers can change the world. Futures business models are co-created with individualized immediate feedback loops, with new cooperating structures and platforms and with a new organizational logic.
Research Director, Adjunct Professor, PhD, Finland Futures Research Centre, Turku School of Economics, University of Turku
Mikkel Stein Knudsen
Project Researcher, Finland Futures Research Centre, Turku School of Economics, University of Turku
Senior Researcher, PhD, Finland Futures Research Centre, Turku School of Economics, University of Turku