Introduction
The future will present you with infinite possibilities, opportunities, realities
Why infinite realities
Infinite Realities – The future will present you with infinite possibilities, opportunities, realities
The world around us is rapidly changing. What were once core capabilities, skills, and traits may no longer be differentiating or relevant. Organizations, leaders, and experts must continually re-skill and up-skill their capabilities in anticipation of emerging technologies, business models, and opportunities
Six Web3 technologies comprising of distributed cloud, artificial intelligence, mixed reality, blockchain, cognitive devices, and DApps, the business models derived from them, and strategies to positively create value using them are becoming critical to businesses, institutions and governments.
Therefore, leaders and experts must equip themselves with the knowledge and experience on why and how to positively impact organizational value by leveraging Web3 technologies and business models. This mandate is the one Infinite Realities aims to fulfil.
Infinite Realities provides the following key offerings to benefit businesses, leaders, and experts:
Infinite Realities is also fostering a strong partner and expert network to complement further and strengthen its key offerings’ benefits.
Consumer staples sector
This section provides a Point of view (PoV) and key trends in the Consumer staples (FMCG, CPG, Retail, and luxury goods) sector. The consumer staples sector is one of the sectors the Infinite Realities learning services will reference to provide practical illustrations of Web3 technologies and business models.
The consumer staples sector is more vital to the needs of human beings than most other sectors. The global consumer staples sector has over $6.8 trillion market cap, growing at over 5.4% CAGR from 2018 to 2025. The consumer staples sector generated the second-highest total returns to shareholders across all industries from 1970 to 2010.
The consumer staples sectors’ size, sophisticated global functions, sourcing, production, logistics, distribution, retail, and customer engagement make the consumer staples sector uniquely attractive.
Consumer staples sector must continually adopt new business models that reinvent marketing to focus on consumer relevance and build new digital and commercial capabilities to grow channels and markets while gradually replacing the earlier business models that worked well for over two decades.
Figure-1 Market cap by sector
Figure-2 Consumer staples sector supply chain tech and VC funding and deal count globally (2017-2022)
In recent years, margins, not growth, have driven profitability. Margin expansion contributed double that of growth regarding value contribution to consumer staples enterprises. Sector-leading consumer staples companies have underperformed compared to white-labeled or small- to medium-cap players. Leading consumer staples organizations should shift from just reengineering (i.e., leveraging current business models and extending them) to reinventing or supporting entirely new business models to be successful in the next decade.
Supply chains are the backbone of the consumer staples sector. Research conducted by G-Ventures (a leading venture capital firm in the Middle East) reveals that customers are willing to pay 2 to 10% more for products from consumer staples companies with traceable and accountable supply chains. There has been a tremendous inflow of venture capital funding into the supply chain domain, from $17b in 2017 to $70b in 2021 (see Figure-2), which signifies the growing significance of the consumer staples sector and supply chain domain.
The Infinite Realities learning services discuss an in-depth case study of Web3 technologies and business models in a consumer staples organization context.
Smart city, cognitive city sector
The smart city and cognitive city sectors are another of the sectors the Infinite Realities learning services will reference to provide practical illustrations of Web3 technologies and business models. This section provides a Point of view (PoV) and key trends in the smart and cognitive city sectors.
Today, the world faces unprecedented rates of urban expansion – around 55% of the population lives in cities. By 2050, this will likely increase to 68%, translating to an additional 2.5 billion city citizens. Thus, research reveals that the global market for smart cities will grow at 25.2% CAGR from $648 billion in 2021 to approximately $6 trillion by 2030 (see Figure-3).
The digital evolution of cities has been ongoing for a few years. Forbes estimates that cognitive city initiatives will be $10 trillion annually, which will grow to $14 trillion annually by 2025. These initiatives have resulted in a virtuous cycle of accelerated innovation.
Based on business models 2.0, smart cities focus on foundational capabilities, such as smart sensors and smart IoT-enabled devices. In contrast, based on business models 3.0, cognitive cities are the next evolution of smart cities that have already gained traction in the last few years.
The design and evolution of cities go through cycles of innovation that cater to the evolving needs of the city’s citizens. In the last few decades, city designs have become more inclined to accommodate cars rather than people, leading to health issues for citizens. As governments steer the designs of cities into the future, there has been a growing focus on talent, technology, climate, globalization, the well-being of citizens, and collaboration between cities and their citizens.
The following forces will shape the evolution of cities:
Figure-3 Cognitive cities market size to reach $6 trillion by 2030
Figure-4 Percentage of foreign-born citizens in modern cities
- Competition for talent
Population demographics in cities are poised to change with a slowdown in population growth within the city and an increase in migration from rural to developed areas. Overall, these two factors will result in a war on attracting high-caliber talent.
Global migration has blurred national boundaries over the last twenty years. Dubai is now the most cosmopolitan city, with 83% of its population being of foreign origin, closely followed by Belgium, where 62% of its inhabitants are of foreign descent (see Figure). Other cities and countries are rapidly taking approaches to present themselves as more cosmopolitan to attract top talent. McKinsey’s global connectedness index, which takes several data points into account, such as goods, services, and people, ranks Germany, followed by Hong Kong and the US, as the most connected countries in the world. Today, research reveals that six major cities connect the world: Dubai, London, Hong Kong, New York, Singapore, and Tokyo. Other cities and countries aspiring to be global hubs would need to establish their vision of a connected, cognitive city.
3. The Anthropocene age
The world and several countries will face acute shortages in resources such as water, food, and energy. There has also been a compounding effect on the stresses in various countries, with increased natural disasters, political conflicts, and income disparity.
4. Technology’s expanding role in designing cities
The Infinite Realities learning services discusses a case study of Web3 technologies and business models in a smart city/cognitive city context.
Web3 technologies
Figure-5 Top 40 tech trends for the next five to ten years (McKinsey Tech Council, 2022)
Web3 succeeds Web2 technologies. The total addressable market (TAM) of Web3 is estimated to be in the range of $2.6 trillion to $12.5 trillion globally. by 2030. It is a broad range, but this estimate serves as an early indicator of Web3’s potential
by 2030. It is a broad range, but this estimate serves as an early indicator of Web3’s potential
Web3 technologies make peer-to-peer interactions the essence of a new generation of networked commerce and society. It retires centralized business models, platforms (Web 2.0), critical authority figures, and value flows. While several consumers are already experiencing Web3 technologies, the mainstream adoption of Web3 will likely only happen from 2025. Hindsight reveals that Web2 took about two decades to unwind fully, and it is likely that Web3 will take a similar duration, if not longer
The maturity of Web3 technologies adoption in organizations will go through three stages: augmentation, optimization, and unification. The augmentation stage refers to the initial foundational technologies used to increase the workforce’s capabilities, machines, processes, and data. This stage will mainly address isolated, disconnected use cases, which will be expensive to implement and require considerable training. During the optimization phase, use cases and enabling technologies interlock and become more aligned and integrated across the organization. This phase will allow connecting data and processes to improve organizational functions. In the final stage of maturity, the unification stage, there will be a convergence of these exponential technologies across the organization, both internally and externally. The enabling technologies will converge into a seamless and nearly inseparable physical–digital immersive experience.
Based on readiness and potential, the Infinite Realities learning services compiles and examines the six most important enabling Web3 technologies for business models 3.0: (1) distributed cloud, (2) artificial intelligence, (3) blockchain, (4) augmented reality (AR), virtual reality (VR), and extended reality (XR), (5) cognitive devices (e.g., autonomous vehicles or drones), and (6) distributed intelligent autonomous units (DIAU) or distributed apps (dApps).
Other pivotal emerging technologies, such as 5G/6G and quantum computing, exhibit immense potential. However, since these technologies and the business models they create are still in their infancy, they are not ready and have not been reviewed in detail in Infinite Realities learning services. These emerging technologies may be included in the future.
Business model 3.0
Business Models 3.0 and underpinned by Web3 technologies. Each technological revolution has transformed how society works, starting with the power loom and industrial automation. More recently, the internet, followed by digital and mobile technologies, fundamentally changed how we work. Today, society faces changes by immersive and Web3 technologies that will transform daily life by distributing and immersing work and home activities in a hybrid real-immersive world.
dynamic data you can see and interact with. This magical future is comprised of Business Model 3.0 created using Web3 technologies. Business model 3.0 and Web3 will transform every aspect of our lives, from retail and advertising to work and education to entertainment and social interaction.
Due to recent events, business model 3.0 is sometimes perceived as a form of monetization or a get-rich-quick scheme (for example, crypto). However, amid this ambiguity, many leading organizations are systematically experimenting with and adopting new business models of product ownership using Web3 technologies. These new business models mark advancement and a new approach to corporate strategy.
In this third-generation business model, society will see eliminating the boundaries between physical objects and digital content. As BM 3.0 matures, our interactions with information will move beyond traditional screens, tablets, and phones. People will interact with self-driving cars or have holographic conferences with work colleagues or in classroom environments. Surgeons can perform diagnoses and surgeries virtually in collaboration with human and robotic colleagues, enabled by 3D-printed surgical instruments and hands-free immersive models.
In this third-generation business model, society will see eliminating the boundaries between physical objects and digital content. As BM 3.0 matures, our interactions with information will move beyond traditional screens, tablets, and phones. People will interact with self-driving cars or have holographic conferences with work colleagues or in classroom environments. Surgeons can perform diagnoses and surgeries virtually in collaboration with human and robotic colleagues, enabled by 3D-printed surgical instruments and hands-free immersive models.
We are already in the early stages of realizing this vision for BM 3.0. Web3 is an age of infinite expressions. Eventually, BM 3.0 will displace centralized tech giants e.g., Google, and people will own their data. A distributed model has no central “kill” switch, single point of failure, or central controlling authority.
The emergence of new technologies and business models can impact the delicate equilibrium of the sectors and organizations. This philosophy remains true for BM 3.0, whereby sector-leading organizations will begin investing early in Web3 to gain a first-mover advantage.
Leaders and experts of all sectors must start preparing themselves to remain relevant in response to the advent of Web 3.0 technologies and business models.
Operating models
Figure-7 Nine components of an operating model
Operating models are the blueprints for creating and delivering value to target customers that execute and bring a business model to life. Like operating models, the service model builds on the business model and defines the organization’s offering, the service, or the product that delivers value to the customer.
Operating models are typically comprised of nine components:
- Performance management
- Places (or location strategy)
- Sourcing and alliances (or partnership strategy)
- Tools
- Ways of working
- Decision rights
- Financials (or finance strategy)
- Organizational structure (or organizational strategy)
- Talent
Designing operating models requires careful consideration of each of the nine dimensions.
An operating model change is driven when introducing a business model or evolution into the business strategy or business model. Operating model changes require a structured and iterative approach.
Resource-based view of organizations
A firm’s resources include all assets, capabilities, processes, information, knowledge, and so on that it controls for its successful operation. A firm’s resources can be classified into three categories:
- Physical capital resources, for example, plant or equipment
- Human capital resources, for example, training, experience, or relationships
- Organizational capital resources, for example, formal reporting, annual planning, and informal relationships between the firm and its environment
An organization’s resources may not always be a source of competitive advantage. Sometimes, it could be a source of competitive disadvantage, or sometimes, it could be a source of effectiveness and efficiency. Certain conditions exist where an organization’s resources can provide a competitive advantage and enterprise value.
The Infinite Realities learning services explore and discuss how Web3 technologies and Business Model 3.0 can provide a competitive advantage for organizations.
Transformation, value, and impact
Figure-9 A hierarchical view of business model—value creation, value proposition, and value capture (Clauss, 2017)
Typically, a firm’s business model evolves organically. Business models undergo significant changes in reaction to a problem or an event, such as increasing the speed of business decision-making. Sometimes, they remain the same, but the resources and capabilities that support the model may change.
Transformation is the continuous interconnection of all business units to address the customer’s needs and adapt to the evolving economy. Another definition of transformation is the system-level refactoring of markets, businesses, institutions, and society due to digitization or digital diffusion. For example, business transformation and digitization can occur by intertwining artificial intelligence into the processes of a manufacturing firm. As competition occurs based on business models, organizations must continually transform their business models to maintain a sustainable competitive advantage in their sectors.
Transformation leads to an integrated customer-centric perspective across an enterprise, such as launching new products or services beyond the core business portfolio (e.g., being a mobility service provider), transforming channels to match customer behavior and preference (e.g., omnichannel customer experience), and making broad improvements in one or core corporate functions (e.g., supply chain digitization).
Significant business transformation initiatives are the profound transformation of the business operating model, ways of working, processes, and competencies of traditional organizations that want to reposition themselves due to a dramatic change in the sector’s competitive landscape.
When organizations are transforming their functions, for example, the supply chain, the value of these investments should be judged based on how they enhance process reach, process richness, or the degree of business agility.
Infinite Realities learning services explores and discusses how leaders and experts can lead Web3 technologies and Business Model 3.0-enabled transformation and how it can ultimately create value for the enterprise.