Exploring the role of digital infrastructure in business model innovation

Principal applicant: Laura Phillips

Co-applicant: Prof Andi Smart

Approximate start date: July/August 2016

Approximate finish date: September/October 2016

Total amount requested: £ 5,000

Overview and benefits

This proposal is to support research activity with BT, the collaborative pilot study proposed is intended to operationalise a strategic partnership being pursued by the university.

Background

Funded by the European Regional Development Fund and BT, The Next Generation Broadband (NGB) Infrastructure project, known as Superfast Cornwall, saw an infrastructure roll-out of fast, fibre based broadband to over 95% of homes and businesses in Cornwall. While NGB has improved digital deprivation in the region, the Southwest is still considered at a high risk of broadband non-adoption. While infrastructure provides availability, the project’s final report and reports by the Broadband Stakeholder Group (BSG) highlight the need to improve both domestic and SME take-up. Further, more needs to be done in supporting small and micro businesses toexploit the potential benefits of NGB, which include productivity gains, improved market intelligence, market expansion and product and service innovations that would not be possible without superfast digital connectivity.

BT challenge

With significant corporate investment in NGB and as the leading product provider of internet connection for business, BT has a vested interest in the take-up and exploitation of NGB. Current challenges include:

  • A significant minority (13%) of micro businesses do not have an internet connection for business purposes – Do micro businesses choose domestic products for business purposes? If so, why? How can business products better fit their needs?
  • Only 22% of the micro business market has a superfast connection, the average UK micro business has an internet connection of 12 megabits per second, which can only support limited digital capabilities (i.e. a low digital maturity). While cost is the number one cited reason for non-adoption, perceived relevance is also a key factor –How can NGB support the needs of small and micro businesses? How can product providers support businesses in understanding and exploiting the potential benefits of superfast digital connectivity (i.e. shift from low to high digital maturity)?

Academic challenge

  • Viewed through the theory of affordances, NGB has affordances, or possibilities for action, which must be triggered or actualised in order to be exploited. For customers to exploit the potential of NGB, the affordance must first be perceived by the customer. An ability to recognise the affordance of NGB may be influenced, not just by the features of NGB, but by the customer’s capabilities, goals, and access to external information. What is more, the speed of broadband connection, or indeed the applications which that speed enables, are not of benefit to the customer in themselves; the value of NGB consists of what it ‘affords’ businesses. As it stands, research suggests small and micro businesses do not always perceive and/or have the capability to realise the affordances of NGB - What affordances does NGB hold for small and micro businesses? How do the features of NGB, customer capabilities, goals, and external information effect recognition of those affordances?

Technological innovations, like NGB, can allow the development of new ways for businesses to create and capture value, triggering changes in a business’s operational and commercial activities, and hence in the business model - Given its affordances, how can NGB support business model innovation?

Proposal aims

  • Fund scoping activity with BT
  • Align business and academic interests in superfast digital connectivity take-up and exploitation
  • Conduct a pilot project based on the questions above
  • Develop a ‘case for support’ for a grant/project proposal

Proposal Benefits to the OiT Cluster

  • Foster a potential strategic partnership with BT
  • Build and strengthen the network of external stakeholders interested in OiT research
  • Develop a research plan, collect preliminary data and evaluate feasibility of a full scale study
  • Potential cluster grant bid

Proposal Benefits to BT

  • Increased understanding of the value proposition of NGB to small and micro businesses
  • Evidence to assure stakeholders (and funding bodies) that wider research is worth supporting