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Every other day, a handful of new collaboration press releases await us in GulfWeekly’s inboxes.
From the MENA Fintech Association, launched a couple of weeks ago, to the recent Bahrain Fintech Bay collaboration with SES, ‘collaboration’ and ‘ecosystem’ are buzzwords thrown around so often that they are starting to become noise in an already boisterous atmosphere.
Yet, these partnerships, when fruitful and well-managed can often lay the groundwork for innovation for years to come.
Take the SES Fintech Bay collaboration. While the primary noted objective to “develop Bahrain’s space capabilities” may seem like a Xanadu ideal, the immediate pay off of improving cloud computing and communication capabilities will provide the cash flow needed to achieve loftier goals.
Khalid Saad, CEO of Bahrain Fintech Bay, said: “Our partnership with SES aims to support Bahrain’s transformation into an innovation and knowledge-driven economy, including Bahrain’s Cloud First Policy, by developing the right space capabilities and infrastructure.”
As Bahrain and its local partners continue to sign these collaboration agreements, it is important to determine what kind of ecosystem they plan to engineer. With central planning being one of the key assets of the kingdom, this is easier done here than in freeform economies with multiple regulatory authorities.
Dr Katri Valkokari, a Finnish research scientist who studies business models and market structures, defines the three main types of ecosystems in her 2015 paper, Business, Innovation, and Knowledge Ecosystems: How They Differ and How to Survive and Thrive within Them.
She states that while innovation ecosystems integrate exploration and exploitation, knowledge ecosystems focus on generating new knowledge and technologies and business ecosystems focus on creating customer value, most national models tend to integrate two or more, either consciously or subconsciously.
Bahrain’s FinTech ecosystem is a business and an innovative one, leveraging collective exploration of existing technologies to create market value. As such, its collaborations should be in line with this, emphasising companies that have a proven history of value-driven applications that fulfil existing customer demands.
Bad partnerships can not only cost valuable capital but can do permanent damage to a business and ecosystem’s brand equity.
A notable example in recent years has been Microsoft and Nokia’s collaboration on Windows Phone, in a gargantuan effort to create an iOS and Android competitor.
This of course was unsuccessful, in part due to a lack of differentiating innovation and inability to attract mobile developers to either brands, but also because neither of the two brands were playing to their strengths.
Nokia which had previously been an innovator in phone revolution, under the leadership of Microsoft, simply replicated features of other lesser smartphone manufacturers while Microsoft, which has a massive business suite ecosystem decided to target the personal consumer market.
As a result, not only did Microsoft back out of the operating system market, it sold the Nokia brand at a fraction of its acquisition price to HMD, a team of former Nokia employees, who are now porting Android onto a once-behemoth’s offerings.
This humble journalist urges brands and ecosystems to carefully consider their existing equity and potential value creation before jumping in the sack with a big-name brand.