By Wolfgang Lehmacher and Mikael Lind
The world is a competitive space. Organisations that are leading in at least one area can stay abreast and win in the competitive race. Edge usually means some form of innovation. Leadership can be determined by factors, like size, market share, and groundbreaking solutions that create the edge but leadership can also concern more than just one party. Some organisations join forces with other actors to achieve together what they cannot reach alone. These collaborations can also go beyond satisfying the group’s interest and drive change in an entire industry.
Innovation leadership starts with taking the initiative to tackle an important (industry-wide) challenge. Whenever actors come together to jointly find new ways to remove a common concern, serve a common need, close a gap in the common interest, or eliminate a shortcoming we might face an ecosystem. The solutions often require some form of innovation. The management of supply chain disruptions, the calculation of CO2 emissions, and the adoption of innovation are three such challenges in the supply chain and transport industries.
This article outlines two recently launched initiatives that are driving innovation and change in the supply chain and transport industry. The Virtual Watch Tower (VWT) and the Port Innovators Network (PIN) are these two initiatives. While the former focuses on supply chain disruption management and carbon dioxide (CO2) emissions calculations based on primary operational data, the latter was created to promote the adoption of innovation in the global port ecosystem. Both are developing their ecosystem to help their larger ecosystems through novel approaches in innovation and adoption.
The factors that make leadership by ecosystem
In the supply chain and transport industry, we have been increasingly seeing cases of different and sometimes competitive economic actors joining forces to cater to common interests. The Digital Container Shipping Association (DCSA), a joint venture between leading shipping lines has been making progress around digital standards in container shipping. The Global Alliance for Trade Facilitation is an ecosystem that supports trade facilitation in emerging markets.
Some actors loosely collaborate but others create tighter partnerships like a membership organszation, a joint venture, or a decentralised autonomous organisation (DAO). Among the common focus areas of such partnerships and ecosystems is digitalisation or decarbonisation.
Two collaborative innovation initiatives
The cargo owner-driven terminal-centric virtual watch tower / VWT initiative, led by Research Institutes of Sweden (RISE), Finland’s VTT, and Singapore’s A*STAR/IHPC aims at improving supply chain disruption and CO2 footprint management. VWT is an institutional and technological innovation. Institutional through its inclusive governance around co-creation and co-evolution, and technological through a novel data volunteering mechanism that relies on the willingness to collaborate between the VWT partners. The assumption is that the solution can enjoy longer durability and higher adoption through co-creation and co-evolution.
Since the initiative’s launch in February 2023, the VWT has experienced remarkable traction. The core team of about four full-time-equivalent (FTE) had managed to obtain funding from Sweden’s Vinnova and Singapore Maritime Institute (SMI). The team grew the community of supply chain, transport, and technology companies to 37 and demonstrated the first of multiple prototypes for disruption management in April 2024 during Singapore Maritime Week. Over the remainder of the two-year project, the team will refine and enhance the architecture and prepare the launch of an innovative neutral two-tier organisational structure for the federated digital solution/architecture designed as a public good.
VWT has been engaging with different potential partners including other ecosystem efforts like TLIP/TWIN, a distributed ledger-based digital architecture for the exchange of trade documents that started in Kenya and which supports the VWT prototyping effort, and the Open Logistics Forum (OLF), a German membership open-source community created by key logistics players that may help VWT to advance the thinking around CO2 emission calculations. Recently, also the Port Innovators Network (PIN) has joined VWT.
In October 2023, the teams of HomePort Hamburg, The Pier at the Seaport (Halifax), and Opentop, the innovation hub of Valenciaport, decided to join forces to create a global network of port innovation hubs and their communities. In February 2024, these parties launched Port Innovators Network (PIN). PIN aims to promote the adoption of innovation in the global port ecosystem by connecting port innovation hubs and their communities, comprising of start-ups, companies, institutions, and investors.
Members belonging to either of the innovation hubs can through this initiative learn from best practises developed at other port innovation hubs, get access to additional startups and technology companies an a platform to promote challenges and scouting initiatives worldwide, and can widen the service portfolio for its hub members. This collaboration expands the port testbeds on a global scale. Through the PIN initiative, startups and technology companies learn from challenges and opportunities identified by other port communities and can be connected to other port community stakeholders.
Currently, the two ecosystems are discussing a mutually beneficial collaboration that would strengthen their ecosystems and ability to fulfil their missions. VWT can be seen as a testbed for PIN and PIN can help VWT to develop VWTnet, the ecosystem’s digital architecture.
The synergies between different ecosystems
Open ecosystems that grow create platform effects: the more actors join the ecosystem, the more value can be created, raising the appeal of the ecosystem for new actors. Initiating the platform effect requires reaching a minimum viable ecosystem. A merger or close collaboration between ecosystems can accelerate the development toward critical mass.
VWT and PIN envision several mutual benefits. The two ecosystems are complementary. While VWT has so far primarily worked on the concerns of cargo owners, PIN is an important partner to co-create the VWT value proposition and associated solutions for terminals. It is at terminals that corrective actions when transports go astray. One hardly re-routes a train, barge, or ship when one or a few containers risk missing a connection, but at a terminal, they can be singled out and treated with priority.
PIN and VWT can work on solutions that help shippers accelerate their shipments at terminals when needed. This would contribute to VWT’s claim of terminal-centricity. Actors in both ecosystems would benefit from such innovations. PIN would be able to replicate novel approaches throughout the broader port ecosystem and VWT could count on more ports to support VWT Community. Joint hackathons could yield additional opportunities for technology providers in both ecosystems to develop solutions that solve real problems.
Conclusions: A formula for leading in the digital age
Digitalisation has opened the door for broader collaboration and the creation and development of well-connected collaborative (innovation) ecosystems. Through ecosystems, industry actors and industries as a whole can take a fresh look at their biggest challenges. Important to note is that without larger-scale digitalisation there will not be broader collaboration and vice versa.
The authors encourage the actors in the supply chain and transport sector to have a closer look at the opportunities offered by ecosystems and ecosystem-building. Organisations can join existing ecosystems or create new ones. Ecosystems can serve many purposes, like decarbonisation and standardisation. Innovation ecosystems may offer a solution when individual actors have long struggled to solve a problem of individual or common interest. Important to note is that most successful partnerships often have a scope that is very narrowly defined. Mutual respect, a shared vision, early shared wins, and a fair distribution of benefits are parts of the mix that make long-lasting partnerships.
There will never be only one ecosystem, but the broad proliferation of initiatives with a dispersion of resources should be avoided. The authors call for broader investigations of the benefits of combining ecosystems that are alike to increase the odds of success. While competing systems also have their merits, some industry challenges are just too big to leave the development of the fix to too many different ecosystems. This is a call to investigate joining ecosystems like PIN and VWT to bring positive change to the supply chain and logistics industry.
Acknowledgement
VWT is grateful for the partnership with PIN and wants to especially thank Phanthian Zuesongdham, Hamburg Port Authority, for her input to this article.
- www.virtualwatchtower.org
- https://www.homeport.hamburg/en/community-2/port-innovators-network
About the Authors
Wolfgang Lehmacher
Wolfgang Lehmacher is partner at Anchor Group and advisor at Topan AG. The former director at the World Economic Forum, and CEO Emeritus of GeoPost Intercontinental, is an advisory board member of The Logistics and Supply Chain Management Society, ambassador F&L, advisor GlobalSF, and member of the think tanks Logistikweisen and NEXST. He is co-author of the Practical Playbook for Maritime Decarbonisation and co-editor of the book Maritime Decarbonisation.
Mikael Lind
Mikael Lind is the world’s first (Adjunct) Professor of Maritime Informatics engaged at Chalmers, and Research Institutes of Sweden (RISE). He is an expert contributor at World Economic Forum, Europe’s Digital Transport Logistic Forum (DTLF), and UN/CEFACT. He is co-editor of the first two books on maritime informatics and is co-author of Practical Playbook for Maritime Decarbonisation and co-editor of the book Maritime Decarbonisation.
Read other articles from LogiSYM August 2024:
- Supply Chain Leadership: A Perspective on its Evolution and How it Can Be Strengthened
- Leading industry change through ecosystem development – A powerful model for innovation
- The Halal Compliant Port
- The Green Corridor: Leadership for a Green Future
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