The Digital Multinational by Satish Nambisan & Yadong Luo

Author:Satish Nambisan & Yadong Luo [Nambisan, Satish & Luo, Yadong]
Language: eng
Format: epub
Tags: Digital global business strategy; Digital transformation; Digital globalization; Deglobalization; Loose and tight coupling; International business; Innovation; Multinational company;
Publisher: MIT Press
Published: 2022-01-19T00:00:00+00:00

Company-Innovation Asset Connectivity

Digital Assets and Recombinant Innovation

As a company accumulates more and more digital assets (whether as part of its offerings or operational processes), opportunities for recombining those assets in different ways to generate new innovation also increase. Indeed, an important consequence of the digitization of products and processes is the increased ability of companies to reconfigure existing ideas in new ways to make new ideas—a process called recombinant innovation. Such cross-pollination and recombination of digital assets, along with new business logic, can lead to novel value creation opportunities in different parts of the world.

A case in point is the smart home market, which is expected to grow from about $85 billion in 2020 to about $140 billion in 2023.14 As the number of digital components in home appliances and devices increased over the last few years, so did the opportunity to recombine these different digital assets and the data they produce in different ways to create new value for customers. Such home-based digital assets are present in simple devices such as video doorbells, outdoor cameras, smart locks, and smart speakers, as well as in more complex home appliances such as heating, ventilation, air conditioning, and refrigeration systems. When combined with new digital technologies and platforms such as IoT, 5G, blockchain, and AI, these diverse digital assets allow companies to offer a potpourri of solutions to fit different markets.

Digital assets include a diverse range of resources, including digital product components, digital processes (virtual manufacturing and logistics operations), data (generated from operations and market transactions), and digital content (digital design documents and digital brand and marketing materials). The number of digital asset types and classifications has been increasing exponentially with the infusion of digital technologies into all aspects of business. The sheer range and amount of such digital assets accumulating day by day within a company imply the promise and potential of recombinant innovation unleashed by digitization.

Digital assets have monetary value that can be unlocked through reconfiguration and reuse in different contexts. Thus digital assets imply the potential to generate more value through continued sharing and reuse. At the same time, to realize such value, companies will need to ensure two key conditions.

First, digital assets have to be organized in a form that makes them easily discoverable and accessible across the organization. Digital asset management tools have gained much prominence in the last few years to address this need. A recent industry report ranked digital asset management as a top-three digital priority for large organizations.15 The global digital asset management market is anticipated to grow at about 16.5 percent to reach $8.5 billion by 2025.16 Cloud-based digital asset management solutions allow companies to not only store digital assets (along with their metadata and “right to use” information) but also find, share, adapt, and deploy those assets with speed and agility. Thus digital asset management tools increasingly form a cornerstone of a company’s collaborative innovation efforts by serving as the connective tissue across an organization in the reconfiguration of digital assets.

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