Harvard – Cloud Computing Is Helping Smaller, Newer Firms Compete

As this IOD article describes, First Minister Nicola Sturgeon recognizes businesses are the lifeblood of Scotland’s success.

She also identifies international growth as the key to their success, but that less than 10% export internationally.

Also Nicola says:

“By focusing on our innovative abilities, we can develop ground-breaking technologies and return an immense boost for our economy.”

In Scotland we can see the whole picture of the impact of this when you consider Scotland’s primary economic challenge: Stalled productivity.

The David Hume Institute documented the nation has made no productivity gains in 15 years and “Scotland sits mid-table for productivity among OECD countries, and falls below other European economies such as the Netherlands, France, Italy, Germany, and Spain.”

The Royal Society of Edinburgh responded to explain that productivity growth is dominated by the top 1% of companies, with the remaining 99% stagnant, and they identify a lack of investment in R&D as a primary cause.

Cloud-powered Innovation

The solution is the Cloud. It brings technology to small businesses that previously only large organizations could afford and use.

This Harvard Business Review article explores how this technology is powering the US economy, particularly SMEs:

“most strikingly, cloud computing — unlike other technologies like PCs and e-commerce — has been adopted first by smaller and younger firms.

..the most nimble, youthful, and entrepreneurial companies are the pioneers of adoption.”

For example Harvard describes KenSci, a small Seattle-based healthcare analytics company, where they did exactly this:

“KenSci has been able to quickly scale up and offer its services worldwide, without building a sizeable IT-infrastructure beforehand. The computational agility of cloud computing has been playing a role in manufacturing as well, fostering the creation of new “smart’” products.”

The Cloud can help bring and accelerate new Scottish startups to market, across a multitude of industries from Smart Cities, Healthcare and Construction, among many others, greatly boosting the economy and international exports.

However as the Microsoft digital nation blueprint reports:

“While 75% stated that digital technology was essential to the future growth or competitiveness of their business only 37% of the 4,000 Scottish businesses surveyed stated that their employees were equipped with sufficient technology skills to meet the business’ digital technology needs.

Only 36% invested in an improved company web site and only 17 – 19% have invested in e-commerce sites and Cloud services.

28% still don’t even have a web site!”

Bringing the Cloud to Scotland’s Rural Economy

Sectors like Tourism are a huge part of Scotland’s success, and is a great example because it is mainly populated by very small businesses: B&bs, tour operators et al, with many still under-utilizing technology as Microsoft reports.

As this CNBC article describes there is huge potential to help the industry grow even more, tapping into the technology to develop innovative new digital business models that expands their global reach and the way in which they service their customers and run their operations.

While understandably the needs of technology for rural communities tends to focus on broadband, the key to their success is a complete suite of digital services, to enable this type of business model innovation, what our Smart Villages platform offers.

We’re bringing the Cloud to Scotland’s rural small businesses to empower them with state of the art e-commerce capabilities, so that they can digitize their business models and participate more effectively in the online economy.

In their research Unlocking the digital potential of rural areas, Scotland’s Rural College identify that over half of small businesses describe other challenges beyond high speed access standing in their way of mastering digital.

Successfully doing so could add between £1.2bn and £2.5bn annually in Gross Value Added (GVA) to Scotland’s rural economy and at least £1.44bn to rural business turnover the report says, with almost four-in-five rural business owners believing digital tools and services are important to their future growth potential.

However 52% of rural business owners say they face some form of skills-related obstacle to adopting digital to unlock more growth, such as recruiting people with appropriate skills to finding training for their existing workforce.

Almost a third (30 per cent) have difficulty finding external or outsourced digital connectivity support, 14 per cent have difficulty accessing appropriate external digital training for the existing workforce and one-in-five (20 per cent) say their existing workforce lacks sufficient skills or they struggle to recruit people with appropriate digital skills.

The SRC study identified that rural small businesses have correctly determined what they need to address the situation:

Cloud computing is seen as the biggest driver (67 per cent).

This is exactly right. All the leading ‘digital disruptors’, like Netflix and Amazon, achieve their cutting edge business models through leveraging the massive global delivery platform that is the Cloud.

As all the research describes the obvious challenge is skills – Understandably small rural retailers and tiny artisan businesses can’t be expected to have the know how needed to do the same.

Shop @ Biggar.online

So we do it for them, SmartVillage.scot is a Cloud platform designed to bring sophisticated Social E-Commerce capabilities to thousands of small businesses.

We provide a central resource of these support skills and have built the platform, and business model, they need to easily and quickly move their company online and participate more effectively in the Digital Economy.

Each Smart Village will act as an e-commerce marketplace, a single shopping portal that aggregates the products available from local retailers and artisans. For example the first we’re now setting up is Shop @ Biggar.online.

Like all of Scotland’s rural communities the town offers a wealth of local entrepreneurism producing high quality products that are ripe for selling to a global market, the only thing standing in the way of this growth for the local economy is the technology capability – This the market need our Smart Village platform is addressing.

Platform Economics and Hyper-Growth Strategies

A critical factor of this approach is that it synthesizes multiple objectives and offers an accelerated capability for maximizing success of each.

By this I mean it addresses the digital skills needs of the local community and Cloud-empowers small businesses, through a single web site that grows e-commerce sales within a context of also boosting tourism trade simultaneously.

Smart Villages provide a ‘Platform’ to rural communities, simply meaning a marketplace system that aggregates multiple small vendors; in the same way Uber does for taxis and Airbnb for rental properties. In this case the vendors are local artisans and retailers.

The best brand vehicle for promoting and selling their products is the local community itself – The history and heritage that defines the storytelling of how and where they make these products; the same content that is best for tourism marketing too.

In short it’s a ‘rising tide floats all boats’ approach, an integrated model that is ‘Place Based’, rather than multiple, isolated policy programs for each of these areas separately.

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