Searching for the right application: A technology development review and research agenda

Magistretti, Stefano; Dell’Era, Claudio; Verganti, Roberto

doi:10.1016/j.techfore.2019.119879

Cited by 43 publications

(35 citation statements)

References 130 publications

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“…They just do not make them, as they are delegated to AI. In other words, AI is the stimulus for an epiphany in the way we look at design (Magistretti, Dell'Era, and Verganti, 2020; Verganti, 2009, 2011a, 2011b). This has profound implications both in terms of the object and of the process of design.…”

Section: Discussionmentioning

confidence: 99%

Innovation and Design in the Age of Artificial Intelligence

Verganti¹,

Vendraminelli²,

Iansiti³

2020

J of Product Innov Manag

Self Cite

356

206

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At the heart of any innovation process lies a fundamental practice: the way people create ideas and solve problems. This "decision making" side of innovation is what scholars and practitioners refer to as "design." Decisions in innovation processes have so far been taken by humans. What happens when they can be substituted by machines? Artificial Intelligence (AI) brings data and algorithms to the core of the innovation processes. What are the implications of this diffusion of AI for our understanding of design and innovation? Is AI just another digital technology that, akin to many others, will not significantly question what we know about design? Or will it create transformations in design that current theoretical frameworks cannot capture?This paper proposes a framework for understanding the design and innovation in the age of AI. We discuss the implications for design and innovation theory. Specifically, we observe that, as creative problem-solving is significantly conducted by algorithms, human design increasingly becomes an activity of sensemaking, that is, understanding which problems should or could be addressed. This shift in focus calls for the new theories and brings design closer to leadership, which is, inherently, an activity of sensemaking.Our insights are derived from and illustrated with two cases at the frontier of AI-Netflix and Airbnb (complemented with analyses of Microsoft and Tesla)-which point to two directions for the evolution of design and innovation in firms. First, AI enables an organization to overcome many past limitations of human-intensive design processes, by improving the scalability of the process, broadening its scope across traditional boundaries, and enhancing its ability to learn and adapt on the fly. Second, and maybe more surprising, while removing these limitations, AI also appears to deeply enact several popular design principles. AI thus reinforces the principles of Design Thinking, namely: being people-centered, abductive, and iterative. In fact, AI enables the creation of solutions that are more highly user centered than human-based approaches (i.e., to an extreme level of granularity, designed for every single person); that are potentially more creative; and that are continuously updated through learning iterations across the entire product life cycle.In sum, while AI does not undermine the basic principles of design, it profoundly changes the practice of design. Problem-solving tasks, traditionally carried out by designers, are now automated into learning loops that operate without limitations of volume and speed. The algorithms embedded in these loops think in a radically different way than a designer who handles the complex problems holistically with a systemic perspective. Algorithms instead handle complexity through very simple tasks, which are iterated continuously. This paper discusses the implications of these insights for design and innovation management scholars and practitioners.

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Section: Discussionmentioning

confidence: 99%

Innovation and Design in the Age of Artificial Intelligence

Verganti¹,

Vendraminelli²,

Iansiti³

2020

J of Product Innov Manag

Self Cite

356

206

View full text Add to dashboard Cite

show abstract

“…They are forced to critically consider what they have, such as existing relationships, which usually brings to myopia towards new markets (Henderson & Clark, 1990; Leonard‐Barton, 1992). On top of these, they have the chance to look more easily at technological opportunities as enablers of new models, rather than rejecting them because they have alternative technologies (Schilling, 1998) or simply substituting previous technologies (Magistretti, Dell'Era, & Messeni Petruzzelli, 2019; Magistretti, Dell'Era, & Verganti, 2020a; Magistretti, Dell'Era, & Verganti, 2020b; Verganti, 2009).…”

Section: Discussionmentioning

confidence: 99%

“…travel agencies and travellers), instead of on the supply side (Trabucchi & Buganza, 2020). Moreover, it shows how two‐sided platform literature might inspire that on technology development by guiding the exploration of technological opportunities in a more meaningful way (Magistretti, Dell'Era, & Verganti, 2020a; Verganti, 2009). Thus, technological substitution is recognized as a lower effective strategy for adopting new technology than a more conscious adoption of the technology leveraging on existing knowledge gained in such a context.…”

Section: Discussionmentioning

confidence: 99%

Exploiting incumbents' potentialities: From linear value chains to multisided platforms

2020

Self Cite

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Two‐sided (or multisided) platforms are significantly transforming the competitive landscape. Companies like Airbnb and Uber entered and challenged traditional industries by adopting business models able to innovatively exploit the opportunities provided by digital technologies. Recent studies have pointed out that the characteristics of multisided platforms might inspire traditional businesses to foster innovation, enabling different kinds of value creation and capture. This paper aims to explore this possibility through a longitudinal case study of an Italian tour operator that moved from a traditional linear value chain model to a multisided platform. Relying on the literature about multisided platforms and the modalities adopted by incumbents in fostering innovation, this research offers contributions to both theory and practice. Firstly, it shows how incumbents can reinterpret their resources and relationships in order to conceive new multisided platforms. Secondly, it investigates how the experience gained by incumbents can unveil technological opportunities. Thirdly, it shows how the incumbents can manage complexity and adopt a systemic perspective in developing multisided platforms. Thus, the contribution to the academic dimension is in enriching the knowledge of how multisided platforms can help incumbents in dealing with their ‘typical curse’.

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“…Invented to "overcome the problem of double spending on the internet" (Nakamoto, 2008), blockchain had the potential to radically change the world in many ways, with the same pervasiveness that the internet had in its infancy. In the '90s, the world was not yet able to understand, manage or imagine all the possible (and impossible) applications for such a general purpose technology (Magistretti, Dell'Era, and Verganti, 2020) like the Internet. Once the technology began to diffuse, however, more and more researchers started to explore the possible applications of this innovation.…”

Section: Blockchain: the Main Characteristicsmentioning

confidence: 99%

Disrupting the Disruptors or Enhancing Them? How Blockchain Reshapes Two‐Sided Platforms

Trabucchi¹,

Moretto²,

Buganza³

et al. 2020

J of Product Innov Manag

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The importance of platform-based businesses in the modern economy is growing continuously and becoming increasingly relevant. Specifically, the deployment of digital technologies has enhanced the applicability of two-sided business models, enabling companies to act not just as builders and owners of assets, but also as orchestrators of external resources. Management research has, therefore, focused increasingly on the unique aspects of this model. At the center of a two-sided platform there is a platform provider that enables a transaction between the sides, reducing the relative transaction costs. However, in recent years, a new technology emerged that challenges some of the underlying assumptions of this model: the blockchain. Blockchain enables the creation of a peer-to-peer network that is able to authenticate transactions, upon which applications and services may be built. It allows users to conduct transactions without the need for a central platform. We explore how blockchain technology reshapes two-sided platforms, focusing in particular on the role of the platform provider. The research is based upon multiple case studies, using an inductive approach to explore this emerging phenomenon. Our findings show there is a significant shift in the role of the central player that links the two sides of a transaction using blockchain. We frame this as a shift from a "platform provider" to a "service provider," leveraging the blockchain as a Platform-as-a-Service. Our work examines the peculiarities of this model, unveiling new dynamics in these businesses. Specifically, we show that different variables must be considered to classify two-sided platforms using blockchain. Furthermore, the essential characteristics of two-sided platforms must also be enlarged. For example, traditional platform theories emphasize the importance of cross-side network externalities in creating value. In blockchain-enabled platforms however, we show the use of "tokens" play a key role in creating different types of externalities between the two sides. Practitioner Points • Blockchain is enabling a new type of two-sided platform, challenging the existing business models of firms operating in the modern platform economy • Blockchain helps address traditional problems with two-sided platforms (e.g., the chicken and egg paradox, and generating trust between the two sides of a market) while creating new opportunities (e.g., the use of tokens to create additional network externalities) • End users (e.g., the suppliers and customers that transact in the marketplace) play a more central role in blockchain-enabled platforms, while the service provider becomes more of a facilitator, leveraging the Platform-as-a-Service offered by the Blockchain provider • The concept of "value sharing" is central in blockchain-enabled platforms; service providers share more of the value they create with the ecosystem of market participants

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Searching for the right application: A technology development review and research agenda

Cited by 43 publications

References 130 publications

Innovation and Design in the Age of Artificial Intelligence

Innovation and Design in the Age of Artificial Intelligence

Exploiting incumbents' potentialities: From linear value chains to multisided platforms

Disrupting the Disruptors or Enhancing Them? How Blockchain Reshapes Two‐Sided Platforms

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