Is Europe missing out on the market potential of the platform economy?
Let’s be honest — the headline figures do not look good. Out of a total of USD 4.3 trillion globally, Europe can currently claim only 200 billion of market capitalisation — that is, less than 5%.
Such potential figures are reflected by market realities — whereas 82 digital platforms exist in China, including the all-powerful Alibaba, the UK has only 8 and Germany 4.
‘You can see how far behind Europe is,’ said Dr. Peter Evans, VP Research at The Center for Global Enterprise, at a recent BearingPoint event covering the platform economy. But does this mean the continent is doomed to consume services from North America and China, in the worst case becoming a sideshow in an increasingly digital world?
We do not believe so, for a number of reasons. If we look at the way the digital revolution is unfolding, it is clear that we are still at an early stage. Even with the enormous potential already being demonstrated by information-centric companies such as Google and Facebook, and sharing organisations like Uber and AirBnB, there is more to come — which plays to Europe’s strengths.
Where are such breakthroughs to come from? The answer is to look at the intersection between the physical and the digital worlds. While the Internet of Things might have a long heritage, it is also clear that current IoT solutions — largely sensor-based remote monitoring and management — are relatively primitive.
Industry 4.0, or the fourth industrial revolution, is a significant opportunity, not simply to improve operational efficiency and the customer experience, but also to use cloud-based analytics and machine learning, 3D printing and virtual reality to create new ways of design, engineering and construction, maintenance and management. Some great companies in Europe have already been leading this charge - not least Schindler, Schneider and Siemens.
While Europe may be lagging behind in platform provision, it has a heritage and market leading position in manufacturing and engineering, as well as computerisation. Europe’s business landscape has numerous examples of organisations that are bridging the gap between the physical and digital, from automotive companies to construction.
At BearingPoint, we believe the future lies not in simply building services on top of a platform, but delivering a platform that can also evolve in line with a rapidly changing landscape. Indeed, this is one of the founding principles of our own services platform initiative and product set, which we call Digital Ecosystem Management. Agility should be a facet of both the platform and the services it enables.
While the future is digital, it will also be physical — where software and services meet the real world. Europe may have lost ground to Silicon Valley in technology terms, but an even bigger opportunity looms, in which Europe has a real chance of success. Speed is of the essence, however — in this rapidly changing world, only the fastest moving organisations will maintain their current advantage.
