Dear Sandra, please tell us about your career, how did you combined your academic and industrial experience?

I am passionate about science and innovation and like to assist our customers by bringing their products to market more efficiently, more sustainably, with benefits based on science, and with a clear story enduring success.

I was born and brought up in Maastricht, a city founded by the Romans in the South of the Netherlands. I feel privileged to come from Maastricht because it is rich in history and of cultural importance. Due to Maastricht’s proximity to several other countries, it differs from the rest of the country and is often said to be the ‘most European’ place in the Netherlands. After spending my youth there, I moved to Amsterdam to study chemistry at the Free University and did my PhD at another university in Amsterdam. As a molecular biologist with expertise in yeast fermentation and DNA modification I obtained my PhD in Biomedicine. Amsterdam is well known for its beautiful canals, quirky architecture, and lively nightlife, but I actually liked living in Amsterdam the most because the people are open-minded and Amsterdam offers plenty of opportunities for students and young professionals to express and develop themselves. In Amsterdam I also met my partner, who studied Biology at the time, and in February 2023 we will be married for 25 years.

Although I started my career as a chemist, I gradually specialized in molecular biology, life science and nutrition. I was lucky to be appointed Assistant Professor so early in my career and soon after became associate professor in Rotterdam. In these two academic hospitals, I was working closely together with Prof Hans Büller, a famous pediatrician, and an intelligent biochemist, Dr Jan Dekker. Together we pioneered with a small team of scientists and doctors doing pediatric research in Amsterdam, and we built a complete and very successful Pediatrics laboratory in Rotterdam. This was an exciting time during which I learned a lot and gained a lot of knowledge in life science, especially gut and immune health, food and pharma. We collaborated with a lot of big pharmaceutical and food companies. These collaborations were very exciting and actually triggered me to switch to the food industry at a certain timepoint to be able to apply the knowledge I had gained over the years in academia.

First, I started working as Nutrition and Health Director at Lipid Nutrition which was at that time part of Loders Croklaan, based near Amsterdam. This was a B2B type of business developing lipid ingredients for the food and supplements markets mainly. With a small R&D team we worked on the development of several different lipid ingredients for health with omega-3 and beta-palmitate being the most famous and successful ones. However, also many other, innovative ingredients were developed and several patents filed. Thereafter, I was offered a very nice position in a brand new innovation center in France and started to work for Tate & Lyle ingredients as their Health and Nutrition Director. During this international phase of my career, I learned a lot about the diversity in people, their cultures and habits as Tate&Lyle is a big multinational with R&D centers across the world.  I was responsible for the management of a team working on product development and nutrition and leading R&I programs to bring new food ingredients to the market with scientifically proven benefits yielding several patents. After a couple of years, an opportunity at Danone came along and I was appointed as their Scientific Program Director. This step really gave my career an extra boost as this is an extremely dynamic and successful B2C company with the development of health and nutrition products being at the core of their business.

Over the years, I have gained experience in (infant/medical/senior) nutrition, food science & technology, life sciences, health claim substantiation, GRAS and novel food applications. I led multidisciplinary teams focusing on innovative programs involving (pre)clinical research, product development, quality & safety of different foods and food/feed ingredients like prebiotics, lipids, plant-based ingredients among others. I have set-up up many international collaborations and has a large international network in industry and academia.

Tell us how you ended it up being recruited by Presans? What are your topics of interests?

I am active as Fellow of Presans, a Paris-based open innovation service provider. Together with Presans, I provide companies the world’s leading talents and experts on demand. Companies can tap into our comprehensive network of 6 million talents, scientists and technologists to tackle the most complex industrial challenges.

I became interested to work for Presans while I was still working for Danone. I already had in my mind to start my own consultancy when Darko Jesic, the current COO contacted me and told me about the capabilities of Presans. I immediately got excited and wanted to work for Presans as Fellow and Explorer. I saw this as a great opportunity to be able to work with many different multi-national food and pharma companies on big challenges in the research and innovation space. Being passionate about innovation, I am always eager to find experts on the topic that can help our clients on their needs. With my broad background and experience in academia and industry, I can help a wide range of clients on their needs in the areas of food, pharma, biotechnology, life science and nowadays also on sustainability.

Over the years, I worked on many different projects and one of the last ones was focusing on the Future of Food. Nowadays, projects are more and more focusing on sustainability matters and finding alternatives for the traditional meat and dairy. This is an exciting area I am currently working on. For more detailed biography, please have a look at my linked-in or research gate site.

Introduction

Since the start of the pandemic in December 2019, coronavirus SARS-Cov2 has killed 6.4 million people and infected at least 570 million people worldwide while the numbers are still continually increasing¹. The population most vulnerable are seniors, especially those who are obese and/or have an underlying disease like diabetics or cardiovascular disease.

Why are they so susceptible to COVID-19 and what do they have in common? This as yet isn’t completely clear. However, it seems seniors with/without the abovementioned disease suffer from an ongoing low grade inflammatory process (called inflammaging) and a gut microbiota disbalance, which unravels potential targets for prevention or treatment.

Therefore, the main objective of this paper is to explore seniors’ increased vulnerability to COVID-19 in terms of the function of their aged immune system (inflammaging) and their gut microbiota imbalance, and to suggest a few ways to intervene in order to lower the risk of coronavirus infection in seniors with or without underlying disease.

The latest science suggests that interventions with probiotics, omega-3, vitamin D and multivitamins, that target these mechanisms, might be successful.

 

Ageing population

The world is rapidly ageing. One in five people worldwide will be over 60+ in 2050. Although we all live longer nowadays, unfortunately the quality of life as we age hasn’t improved in recent years. The prevalence of diseases like heart disease, arthritis and osteoporosis are still very high in senior people which drastically impacts their mobility and quality of life. Also the susceptibility to infection increases with age. Therefore, developing and promoting adequate nutrition for the senior people is extremely important in order to help them maintain health for as long as possible.

 

Ageing population and susceptibility to infection

Seniors represent the group most vulnerable to COVID-19, with underlying age-related health issues, such as hypertension, diabetes and cardiovascular disease, being risk factors that can lead to complications in the case of infection. Further, the inevitable natural deterioration of the immune system makes it harder for older adults to fight off infection. Obesity, smoking and malnutrition also weaken the immune system and are thus associated with increased risk. Generally, there are nutritional deficiencies in for instance calcium, vitamin D, folate, and zinc among the senior population. A poor nutritional status is widely considered one of the significant risk factors for severe COVID-19². According to a study in Wuhan, where the outbreak started, the prevalence of malnutrition is elevated in seniors with COVID-19³.

 

Ageing and inflammageing

During ageing, chronic, low-grade inflammation — called inflammageing — develops, which contributes to the pathogenesis of age-related diseases. It is associated with a decline in the effectiveness of the immune system termed immunosenescence. A variety of stimuli sustain inflammageing, including viruses, pathogenic bacteria, a poor diet, psychological stress, pollutants, damaged cells or specific drugs (Figure 1). Across the lifespan, people have to constantly adapt to these harmful stimuli. The balance between pro- and anti-inflammatory parameters may shift to a more pro-inflammatory state, and, consequently, age-related diseases may emerge and ability to responds effectively to viruses and other pathogenic organisms decreases. In some COVID-19 cases the immune system even overreacts, which is known as the cytokine storm, damaging the cells more than the virus it targets.

Figure 1. The ageing process: a lifelong adaptive response to harmful stimuli leading to inflammageing and gut dysbiosis.

 

Ageing and a microbiota disbalance

The gut is a key contributor to our immunity, with more than 80% of the immune cells residing in the gut. The functioning of the immune system is closely linked to the functioning of the gut microbiota and vice versa. With age, the microbiota becomes less diverse and disbalanced. Many factors influence the microbiota including viruses, diet, pathogenic bacteria and antibiotics (Figure 1).

In seniors, a decrease in beneficial bacteria (e.g. Bifidobacteria and Bacteriodes) in the gut microbiota is observed. It is believed that perturbations in the gut microbiota in seniors trigger the innate immune response and may lead to chronic low-grade inflammation (inflammageing), leading to frailty and unhealthy aging⁴. This results in a microbiota that it less able to protect against pathogens, support the immune system, and digest food to supply nutrients (e.g. vitamins) and energy (e.g. short chain fatty acids) to the body. Ultimately, this leads to an increase in the transit time and constipation and susceptibility to various gut-related diseases such as gastroenteritis, infection and inflammatory bowel disease.

It is therefore not surprising that a disbalanced microbiota might increase the COVID-19 risk. COVID-19 has indeed been found to correlate to a difference in composition of the intestinal microbiota⁵. For instance, the anti-inflammatory bacterium Faecalibacterium prausnitzii among others is correlating negatively with COVID-19. Furthermore, a disbalanced gut microbiota together with intestinal inflammation, increases levels of angiotensin-converting enzyme 2 (ACE2), a cell surface receptor that serves as a target of SARS-CoV-2 thereby increasing the risk of COVID-19 infection.

 

The Mediterranean diet: A rich source of inspiration to target Covid-19 in seniors?

To date, considerable evidence has demonstrated that food and nutrients affect immune system and the microbiota. Especially, the Mediterranean diet is a powerful tool to promote healthy ageing by counteracting inflammaging and stimulating a healthy microbiota. As this diet is high in vegetables, fruits, nuts, fish and olive oil, it can provide seniors with the necessary macro- and micronutrients, polyphenols, anti-oxidants, pre-, pro-, post- and synbiotics to restore and maintain immune cell function and restore the microbiota balance. Therefore, this diet is a good source of inspiration when looking at ingredients that can decrease the risk of COVID-19. Recently, several reviews have appeared describing the potential of ingredients like curcumin, lactoferrin, pre- and probiotics, omega-3, vitamins B₁₂, C, D, and minerals iron and zinc^6–14. However, a very limited number of observational and intervention studies have been carried out in Covid-19 patients and therefore to date, the most promising candidate micronutrient is Vitamin D^15–17 (Figure 2). Also emerging science indicates promises for probiotics, omega-3, and multi-vitamins^18,19.

 

 

 

Figure 2. Potential nutritional interventions targeting COVID-19 in seniors.

 

Vitamin D targeting Covid-19

From observational studies it is clear that a poor vitamin D status in seniors prior to infection is associated with increased SARS-CoV-2 infection risk²⁰. This is not surprising as low vitamin D status predisposes for respira
tory tract infections in general. Several clinical studies on vitamin D are currently ongoing and four have been published already. One showed that a high-dose of vitamin D supplementation led to increased viral clearance indicating vitamin D had a therapeutic effect¹⁶. Another study reported that vitamin D supplementation taken during or just before COVID-19 was associated with less severe COVID-19 and better survival rate among frail elderly residents^15,17. Vitamin D supplementation also produced decreases in indicators of muscle damage in an elderly population, which may ultimately contribute to improving the health status and quality of life of elderly patients recovering from COVID-19²¹. However, vitamin D did not significantly reduce hospital length of stay in moderate to severe COVID-19 patients¹⁹. Therefore, Vitamin D so far seems a promising nutritional intervention to prevent COVID-19 or treat especially mild/early phases of the disease (Figure 2).

 

Probiotics, Omega-3, Multivitamins and magnesium targeting Covid-19

Recently, a large, app-based survey among more than 300.000 UK consumers showed a modest but significant association between use of probiotics, omega-3 fatty acid, multivitamin or vitamin D supplements and lower risk of testing positive for SARS-CoV-2 in women¹⁸. Another cohort study showed that a combination of vitamin D, magnesium and vitamin B12 in older COVID-19 patients was associated with a significant reduction in the proportion of patients with clinical deterioration requiring oxygen support, intensive care support, or both²².

A randomized clinical trial recently showed that a specific probiotic combination improves symptomatic and viral clearance in Covid-19 outpatients²³. Another trial specifically showed that in an elderly population the administration of a probiotic may enhance the specific immune response against COVID-19 and may improve the COVID-19 vaccine-specific responses²⁴. Therefore, specific probiotics seem promising candidate nutraceuticals to prevent or ameliorate symptoms of senior patients suffering from COVID-19 (Figure 2), but clearly future studies are needed to show which probiotics work best and what mechanisms are behind.  

The two mechanisms of actions described earlier (counteracting inflammaging and balancing the gut microbiota) may explain why the supplements had a beneficial effect on reducing the risk of COVID-19 infection. Specifically, vitamin D can modulate the innate and adaptive immune responses because immune cells (B cells, T cells, and antigen-presenting cells) express the vitamin D receptor and can thereby respond to vitamin D²⁵. Deficiency in vitamin D is associated with an increased susceptibility to infection. Probiotics are known to stimulate beneficial microbes in the gut and thereby interact with the gut-associated immune system, resulting in improved immunity and superior responses to vaccines. Omega-3s are demonstrated to be anti-inflammatory, but if they reduce the risk of SARS-CoV-2 infection is not yet clear. Multivitamins often contain micronutrients with antioxidant properties and roles in supporting the immune system.

 

Conclusion

Although observational studies shows promising results for the use of omega-3, and multivitamins, so far only specific probiotics and vitamin D have been tested in a clinical setting in seniors making these to date the most appealing nutritional supplements for seniors both at risk of, and suffering from COVID-19. Nevertheless, several nutritional intervention studies are ongoing making it likely that other candidates might appear on the horizon soon.

 

Author Bio

Sandra is Fellow at Presans since 2015. She is also consultant in strategy and innovation focusing on nutrition and health. She chairs the Nutrition Consultants Cooperative (NCC) and heads Einerhand Science & Innovation, recently receiving the Luxlife Food and Drink award for being the best European Early Life Nutrition Consultancy. In March 2021, Sandra Einerhand had the opportunity to present her activities on the National TV. Since april 2015, she is a member of the scientific advisory board of TNO Triskelion. Before, she worked in academia as associate professor in Life Science and in industries as Global R&D Director with Danone Nutricia Research being her last employer. She has experience in implementing an open innovation strategy, leading multidisciplinary teams focusing on innovative (pre)clinical  research, program management, product development, quality/safety of different food (ingredients) and neutraceuticals. Sandra Einerhand started her career as a molecular biologist with expertise in yeast fermentation and DNA modification and obtained her PhD in Biomedicine. She is co-inventor on several patents and is author of >100 international scientific papers, editorials, and chapters in international books and has given lectures at >50 international conferences and exhibitions.

EDUCATION

• Msc in Chemistry at the Free University in Amsterdam, NL
• PhD in Biomedicine focusing on fatty acid oxidation in health and disease (1992), Academic Medical Centre, Amsterdam University, NL

 

This article, written by Sandra Einerhand, was originally published in Nutra Horizons in 2020 but updated with the most recent science.  

 

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This article is the third in a series about the Disruptive digital tsunami, after Global shortage of digital skills.

Digital, smart, data, software, services, command, and control are words that express the revolution business world. Key to this digital transition is that it also effects our daily life: entertainment, health, energy, transportation, tourism, and on and on.

Digital is valuing data. It starts with data acquisition, data transmission via networks, and ends with data interpretation. It includes production chain automation and user communities. Step-by-step, all businesses are generating data about their processes and about customer usage of their products and services.

This data has tremendous value, because it follows along the production, distribution, and use of the product or service. It enables the company to redesign the product or service, for enhanced features and quality management, by a continuous, real-time adaptation. Digital is a means for all businesses to optimize their processes and become therefore more efficient and more profitable. Germany has taken the lead in this movement by setting up the Industry 4.0 program. The target of the program is to support German industry by helping companies to interconnect all of their machines to facilitate more agile production processes and improved quality management. This revolution, initiated in 2013 at CeBIT, the world’s largest and most international computer exposition, intends to put Germany on the top of industrial countries despite its very high labor cost.

Access to digital data is also a way for a company to reinvent its business model. For example, Michelin was selling tires, a pure product. The company had optimized the design of its product, and its relationship with its customer had been stable for many years. Michelin has been able to take the risk of reinventing itself by no longer selling the product alone but instead as part of a bundle that includes a service component. The transformation from selling a product to providing a service bundle changes the entire company. Data exploitation is the tool that can help a company make this kind of transition. The company must analyze its product, gathering and managing the acquired data to ensure that the product provides the quality of service required by its customers. This movement from product to service is inexorable. Companies that do not make the transition will be attacked on the cost front by the countries that have low labor costs and on the composition of the offering (quality, features, and service) by companies such as the participants in the Industry 4.0 program. The digital wave is not a choice but rather an opportunity, which can become a killing threat to companies that don’t move.

Digital data also provides an opportunity to continuously invent new businesses. Google, Apple, Facebook, and Amazon.com (GAFA) analyze industries looking for any that generate good profit margins but have weak relationships with their customers (for example, music, video, banking, retail, telecommunications, utilities, and other traditional industries have been attacked by these digital giants). GAFA focus on user demands and reinvent a high-value service for the user. They then often provide this service to the user for free in order to acquire the associated data. Because they have a rich understanding of the users, they are then in a good position to become intermediaries, providing customers with access to the more traditional industries in exchange for a portion of the profit margin (such as the 30% revenue share earned by Apple’s iTunes Store) and oftentimes even setting the price of the product or service such as streaming a song or owning an e-book (note, however, the price battle between Hachette and Amazon, which was settled in November 2014). Such a business transformation represents both a risk and an opportunity—at least, for the companies that take the lead. This transition is not a single step but rather a series of revolutions. By enabling companies to focus on users and gather information about them, digital opens the door to any kind of imagination. By tracking and analyzing user demands, creative people can develop new offerings tailored to the user feedback. For example, Pascal Nègre, CEO of Universal Music France, explains that the company is managing its fourth digital revolution in recent years: piracy, ringtones, the iTunes Store, and now streaming. The music production company hopes it has found the solution after experiencing a 65% decrease in value in less than fifteen years!

Digital transition is associated with a major social trend. Companies were accustomed to advertising their products to consumers who were waiting for this information so that they could consume even greater quantities. The reality of this digital era is the proliferation of communication channels. The Internet gave people the opportunity, and therefore the desire, to access information from various sources: the community effect. In some case, the customers are now more informed than the sales associates. These community tools have demonstrated an important consumer demand: people want to have deeper relationship with a product, service, or the company providing it. An advertisement is no longer sufficient. This customer preference is clear to retailers when their customers have already searched on Internet for information on their products before going to the store. It is also clear to companies that no longer have to be the lone voice boasting about their brand; they can now foster direct communication among consumers on the brand’s social networks (Facebook, Twitter, and so forth). The consumer demand for a deeper relationship forces companies to reinvent their communication strategies. Doing so often strengthens the value of the brand.

Digital is characterized by continuous innovation and access to the crowd. Some of the digital barbarians have become digital giants, pervading society. Google was founded in 1998; Apple, the most profitable company of all the time, was founded in 1976; Facebook, with more than a billion users, was founded in 2004. The digital transition is not a game we can just check on later. It is a challenge which can affect all businesses—and, indeed, everyday life—now, and when a company’s position is taken by a digital barbarian, it is already too late.

From a technology point of view, we are confronted by a series of waves: analog to digital information, compression, digital transmission and watermarking, pattern recognition, matching and statistics, service bundling, cloud computing, Big Data, high-performance computing, and real-time computing. We cannot master all of these new technologies. That is why platforms, open source, and reusability are so crucial in the digital era. They allow companies to follow and catch up to the technology waves. In this new world, the key is speed. The developer community has created new tools around reusability, agility, and test automation that enable companies to deliver continuously new versions of their products and services. In this digital world is has become more and more difficult to follow the traditional V-model process, because  the specifications themselves cannot be stable if no one by the market itself knows exactly what the product should be.

The most recent hacker attack on Sony (data on forty-five thousand employees was published), the hacker attack on Target (it cost the company $1 billion and the CEO his job), and many other cyber attacks have put pressure on companies’ security and opened the door to additional investment in R&D in pursuit of more effective methods of cybersecurity..

The digital economy has spurred innovation by start-up firms. The digital giants that have had incredible success were created as start-ups. In addition, many successful start-ups have been integrated into more traditional companies and have continued to innovate from th
e position of insider (this is particularly true inside companies like Cisco Systems and Facebook, as well as Dassault Systems, a French software company). Many of the large industrial companies are now creating their own venture capital firms, incubators, or accelerators (examples include Orange, Alcatel-Lucent, Novartis, and Qualcomm) to manage innovation inside their own structures. It is not always easy for them to attract the key people, since such people typically have entrepreneurial spirit and a desire for freedom. This movement is not a cycle but rather a structural shift. Innovation requires freedom and risk. Because the digital economy has made innovation possible for everybody, the large players must adapt in order to remain on the forefront of innovation.

Digital transition is a risk for a sleeping company, but it is an incredible opportunity for an agile one—it opens up opportunities to reinvent the business and thus create new value.

Be optimistic—innovate!

This section was written by Philippe Letellier. Philippe was R&D General Manager at Technicolor before becoming the Innovation Director of the Institut Mines-Télécom. He is currently Digital Fellow at Presans, Vice Chairman of the ITEA3 EUREKA program, and is launching an innovation accelerator. His perspective is balanced between technology and business.

 

 

 

***

This article was initially published in the book Innovation Intelligence (2015). It is the third section of the fourth chapter.

 

This article is the third in a series about the Disruptive digital tsunami, after Digital innovation: reshuffling the cards.

We cannot entirely blame the traditional industry for the difficulties those companies are experiencing in the digital wave that can properly be called the digital tsunami. In fact, these traditional companies are trying to adapt but are encountering severe challenges.

First, they must adapt not only to new technologies but to an entirely new world of management. To ensure faster response times, command chains must be shorter. R&D must be closer to and more integrated with marketing. Feedback from customers and users must be the product or service almost in real-time. Projects must be managed by multidisciplinary teams. Agility is key. As we will see in chapter 6, large companies that want to gain such agility for disruptive innovations tend to create dedicated structures separate from the rest of the company. We will revisit this notion of internal, but separate, innovation labs later. Since the environment is changing constantly at an incredible speed, traditional companies are facing not one digital transformation, but a series of constant transformations. They need to reevaluate their positioning in the value chain in almost real-time. Second, these traditional companies are challenged by the shortage of digital skills, a problem faced in most countries. The UK Digital Taskforce’s report Digital Skills for Tomorrow’s World published in July 2014 explains that in the United Kingdom, “as of August 2012, the digital economy accounted for 14.4% of all companies and 11% of jobs. It’s not just the technology sector that needs digital skills but all sectors.” The need for digital skills is expected to increase significantly in the coming years. Despite a number of alarming reports, most countries are not ready to meet the demand for these skills. As Isabelle André, head of digital activities for the French newspaper Le Monde, told us, “the problem is that young professionals in IT find it more exciting to work at Google than at Le Monde.” The skills shortage is not so much at the young entry-level. The critical skills shortage is at the executive level, among people who need a combination of expertise in digital technology and sound business background. These decision-makers need to gain an understanding of the digital wave’s potential, and the fruitful, innovative options it could open up for their companies. Some people have this combination of digital knowledge and business experience, but most of them prefer to live in the new economy, in companies that can experience double-digit growth, and it is difficult for companies in traditional industries to attract them. This shortage of traditional-industry executives who have digital skills can also be partially attributed to passive reluctance from the executives who are already in place; they remember the good old days fondly and are not prepared to accept that the value of their traditional business is being diluted by the new opportunities presented by the new economy. Remembering is one thing; living in the past rather than not reacting to the present is a sign of slow and inevitable decay.

Recall that we mentioned the electricity wave as an earlier innovation similar to the digital wave. There is, however, a significant difference between the two. Evolution is taking place much more rapidly today, in part because the capital expenditure associated with digital innovation is much less than what was needed for designing appliances.

Xavier Niel was the digital barbarian who disrupted traditional telecommunications operators. As of 2011 all telecommunications operators had very complex offerings. Aware that there was a strong risk of a digital barbarian entering the market with a much simpler and cheaper offer, the traditional operators all tried to simplify, without success. All of the complex offerings were being developed by poor management. Some of the executives had good intuition, but there were too many other people around the table for decisions. Then the digital barbarian, Xavier Niel, entered. With his company Free Mobile, he simplified the offering, like Steve Jobs did when he returned to Apple in 1998. Free Mobile differed from the traditional operators in three main ways: focused resources, a simple offering from the customer perspective, and lower prices. At Free Mobile, decisions are made by small groups and command chains are short; there is hardly any middle management. As a result, top management cannot ask the rest of the team to implement much complexity. This structure and approach yields simple solutions and their associated lower cost, which was Xavier Niel’s objective.

 

***

This article was initially published in the book Innovation Intelligence (2015). It is the third section of the fourth chapter.

 

(Metaverse Layers – illustrated by Samuel Babinet for ADL)

Some of the technologies behind the Metaverse, as we defined it in our previous article, are not particularly new. However, since the Facebook (Meta) announcements in September 2021, many people have had an uneasy feeling: either the Metaverse is indeed something completely new, or else it’s simply a re-packaging of a set of technologies that have been under development for several decades.

What is the situation exactly?  What are the building bricks that make up the Metaverse?  What are the technologies in each of these building bricks?  How mature are they?  When will they become mature? When can we hope (or fear) to see the “real” advent of the Metaverse?

To begin answering these questions, this article introduces a framework we developed at Arthur D. Little.  This framework aims to represent the architecture of the Metaverse in six layers.  Six layers that cover the “value chain” of the Metaverse. Six layers whose top-level corresponds to new user experiences and business models and whose lowest level corresponds to the required hardware and software infrastructure.

Figure 1 – the six architectural layers of the Metaverse, according to Arthur D. Little

 

Layer #1: Experience Continuum – Use cases and business models

Layer #1, which we have named Experience Continuum, is the layer that brings together all the new use cases and new business models, existing and future. These new use cases and business models blur the boundaries between reality and virtuality, as we defined it in our previous article (thinking in particular about augmented reality and the creator economy). Like the Internet today, use cases can be segmented into three categories: individuals (socializing, entertaining, playing, etc.), companies (exchanging, collaborating, etc.), and industry (modeling a production line or distribution network).

 

Layer #2: Human-Machine Interfaces – The gateway

Layer #2, which we’ve named Human-Machine Interfaces (HMIs), is as the name suggests the layer that allows humans to perceive and interact with Layer #3.  HMIs are the gateway to the Metaverse.   HMIs include a mix of hardware and software that allows users to send inputs to the machine, and the machine to send outputs to users, and thus form a consistent interaction loop.  Some of the underlying technologies, such as the keyboard and mouse on the input side, or the screens on the output side, are very mature. On the contrary, other technologies, such as brain-machine interfaces, are much less mature. Between the two, there is a whole range of more or less mature HMIs, such as virtual and/or augmented reality visors, holography, and haptic interfaces.  The more these technologies advance, the more immersion, and interaction with the Metaverse will involve all of our five senses.

 

Layer #3: Extended Reality – The visible face

Layer #3, which we’ve named Extended Reality (XR), is the immersive representation that augments or replaces reality. It is a spectrum ranging from 100% real to 100% virtual. Extended reality combines the world and real objects with one or more layers of computer-generated virtual data, information, or presentations.   Thus, the extended reality is in a way the visible face of the Metaverse.  Extended reality includes virtual reality (VR) and augmented reality (AR), as well as a whole spectrum of possibilities in between. The technologies that compose it are also at varying degrees of maturity. For example, virtual reality today is much more mature than augmented reality. The more these technologies develop, the more they converge, and the more the Metaverse will be synonymous with continuity between the real and the virtual.

 

Layer #4: World Engine – The engine

 Layer #4, which we have named World Engine, corresponds to all the software allowing the development of virtual worlds, virtual objects and their processes (digital twins), and virtual people (avatars or digital humans). The World Engine will likely evolve from today’s game engines such as Unity or Unreal and will thus have similar core architectures. The World Engine will be composed of four essential building blocks: i) The graphics engine, responsible for creating and rendering the visual layer of the virtual world; ii) The logic engine, responsible for managing interactions between various virtual entities; iii) The physics engine, allowing the creation of realistic multi-physics modeling and simulations (e.g. concerning fluid dynamics or gravity);  iv) The presence engine, enables users to feel present in any location as if they were there physically (for example, the first state of presence technology can be found now in 4Dx cinemas which incorporates on-screen visuals with synchronized motion seats and environmental effects such as water, wind, fog, scent, snow and more, to enhance the action on-screen). Again, the underlying technologies have quite variable levels of maturity as we already have amazing graphics but are only making our first steps in the presence space.

 

Layer #5: Infrastructure – Piping

Layer #5, which we have named Infrastructure, corresponds, as its name suggests, to the physical infrastructure (network, computing power, and storage) guaranteeing the real-time collection and processing of data, communications, representations, and reactions. Infrastructure is the piping that ensures the existence of three essential properties of the Metaverse: immersion (which increasingly allows users to be “in” the Internet); interaction (which allows users to interact in real-time, as if they were in the same room, also a key requirement for immersion); and persistence (which enables the Metaverse to continue to exist even when the user is not logged in).  Infrastructure is probably the least sexy layer that almost no one talks about, and yet it is the most critical: because the infrastructure required for the Metaverse does not yet exist.

 

Layer #6: Key Enablers – Oiling the wheels

Layer #6, which we’ve named Critical Enablers, brings together a set of technologies, mostly software, that are essential to the proper functioning of the other layers.  This sixth and final layer is the oil lubricating the wheels.  It brings together IoT (Internet of Things), blockchain, cybersecurity, and Artificial Intelligence (AI).  The latter, for example, is necessary for the automatic generation of digital t
wins or for the creation of realistic avatars with realistic attitudes.

The architectural framework presented above is, for sure, a simplified view of reality – if we can talk about reality when we talk about the Metaverse ;-). In this respect, it is quite open to debate. And we encourage you to tell us what you think, or even to challenge this framework. This simplified view, however, makes it possible to analyze the complexity that underlies the Metaverse. In particular, in future articles, we will dive deep into each of the layers in order to understand the ins and outs, as well as the maturity of each of the technological elements that compose it.  This approach will allow us to answer the question: should I be interested in Metaverse as part of my business?  What are the opportunities today and in the future?

 

This article, written by Albert Meige and Michael Papadopoulos, was originally published in French on Forbes France.

Exactly 20 years ago, without knowing it, I was about to contribute modestly to 2 of the 7 bricks of the Metaverse: I was finishing my studies as a telecom engineer and on March 6, 2001, I was starting my internship at the Australian National University where I was going to explore the frontiers of Virtual Reality, which already fascinated me at the time. Since then, my common thread has never ceased to be intimately linked to things digital.

A few months ago, I published an article in Harvard Business Review France that detailed the convergence of three key factors at the heart of the Metaverse.

Since Facebook’s announcements, a lot of ink has been spilled on the subject. The majority of published articles and reports serve more to fuel fantasies than to inform. We, at Arthur D. Little, have recently conducted an in-depth study on the Metaverse. Through a series of new articles, based on this study, we aim to help you go beyond the fantasies, better see through this technological fog, and so make the right business decisions about the Metaverse!

This article aims to provide an answer to the question “does the Metaverse already exist?” To answer this, we need to first define what we are talking about. We, therefore, offer our own definition and encourage you to contribute with your own  – don’t hesitate to challenge us :).

 

In the 90s, Internet users were prisoners of their access provider

When I think of the Internet in the mid-90s, I think of the mythical sound of the 56k modem. I also think of AOL and its famous “you’ve got mail” (and I’m sure some of you are thinking of the original English version!). Once connected to the internet via AOL, it was possible to access all sorts of strange things.  Unfortunately, this door to the Internet was in fact only a door to a proto-Internet surrounded by impassable walls. A walled garden, without any walkways to other gardens. An Internet bubble is not connected to other bubbles. Unable to share resources or communicate with other walled gardens such as Compuserve, Prodigy, etc.

Towards the end of the 90s, it became clear that the web browser had to allow communication and exchange of information with any other user, regardless of their Internet Service Provider (ISP). Users and usage defeated the walled gardens and the internet became interoperable – at least to some extent.

 

The Metaverse will emerge from the interoperability of proto-metaverses, or else it won’t exist

The Metaverse is in the same state as the Internet in the mid-90s. Today there is not a Metaverse, but a whole set of proto-metaverses – walled-garden Metaverses. The majority of companies aspiring to develop the Metaverse, such as Roblox, Epic Games, Nvidia, Microsoft, Decentraland or Meta, are actually developing non-interoperable proprietary platforms. This means that currently, it is impossible to exchange virtual assets or simply to communicate between one platform and another. Until there is interoperability, there will be no Metaverse – and we will discuss the critical uncertainties around interoperability in-depth in a future article.

Even in this embryonic state, it is still interesting to look at the definitions and long-term visions that these companies have for the Metaverse. Despite the heterogeneity of what they market today (and even the heterogeneity of the industries from which they come), there is a strong degree of convergence:

 

So, how do you define the Metaverse?

Here is the definition that we suggest to you for the Metaverse:

The Metaverse is the future version of the Internet that further blurs the boundaries between reality and virtuality, at the convergence of immersive spaces, social & collaborative experiences, and the creator economy.

“Future version of the Internet” emphasizes the fact that this is a new evolution of the Internet and not a paradigm shift or a particular private platform. “That further blurs the boundaries between reality and virtuality” aims to highlight that what we call reality is and increasingly will be, augmented by layers of digital information. Furthermore, our definition seeks to underline the fact that the Metaverse is at the heart of a great convergence. So, the future version of the Internet:

• Will be spatialized, increasingly immersive, and will take advantage of 3D environments from gaming, as well as simulations & digital models from industry (digital twins, etc.).
• Will enable more and more social experiences and will increasingly facilitate remote collaborative work.
• Will increasingly leverage the creator economy [1] to design and sell physical and digital assets.

 

***

What do you think of this definition? Does it correspond to what you observe around you? Would it apply to your industrial context?

So, our answer to the question in the title is “no, not yet… however, it is coming”. In the upcoming articles, we will explore further the great convergence mentioned above, we will introduce our framework presenting the building blocks of the Metaverse, and for each of these blocks, we will analyze the obstacles to be overcome. Finally, we will offer you some concrete actions to seize real business opportunities now – because they exist.

 

[1]The Creator Economy is an economy facilitated by applications and platforms that allow creators to earn revenue from their creations (virtual and real).

 

This article, written by Albert Meige, was originally published in French on Forbes France.

This article is the second in a series about Disruptive digital tsunami, after Digital barbarians: threat to the customer relationship.

Digital technology is quite different from most of the earlier technologies that contributed to the grand catalog. As such, it is taking by surprise many industrial players. Let’s examine the aspects of digital technology that are changing so dramatically the innovation process:

 

1. Very low entry cost

Compared to the earlier technologies that drove innovation a few decades ago, digital technology is very affordable. Beginning a development project based on digital technology costs little—with a few desktop computers and a reliable Internet connection, your development team is flying. The capital expenditure can be reduced to nearly nothing because most of the equipment can be rented and the cloud offers considerable computing and storage capacity.

 

2. Very low risk

The risk we are discussing here is the combination of the probability of failure and the cost of the project. Such innovation risk is much lower for the digital sphere than for previous technologies. The probability of success, however, is not necessarily higher for digital ventures than for other types of ventures. The success rate is similar to that for traditional innovation. The difference lies in the amount of money that must be invested in a digital venture up-front. This smaller investment, less money at risk, is what makes venture capital firms so fond of digital innovation.

 

3. Focus on service

Digital technology is about information, and information is brain food. Customers are very fond of this aspect of a product and they like the control and awareness provided by information. As we have already discussed, products are being transformed into bundles of functions and sometimes even into service packages. Digital technology has entered the grand catalog at the perfect time; it provides an efficient way to add a layer of service-related features to products. Most of the recent disruptive innovations of the digital wave are services. Instead of buying CDs, you now get a full music experience. Instead of renting a car, you now get a full transportation experience. And the list goes on. Digital barbarians focus on the human experience. They reach out to individuals to offer the best services. They disintermediate traditional players and capture the profit margins. Digital barbarians are reshuffling the “cards” of value chains at an incredible speed.

 

4. Easy market entry

Launching a digital product or service does not require building a sales network or educating of an army of salespeople and skilled workers. It can be done by simply using a laptop computer to create a website. Although creating the desired buzz is not easy, the cost of launching the product or service is very low. Furthermore, a digital offering can be launched as a working prototype when it is not yet finished. Most physical products would entail a high cost of a recall, but digital offers have no such barrier. Repairs and improvements can be made while the product is flying. In fact, an experienced digital expert can make such changes in real-time, benefitting from immediate market feedback.

 

5. Big Data as a secondary benefit

Nonphysical items like data and knowledge can be used without being destroyed. Most digital projects collect data while providing whatever service they are designed for. Such data is accumulated, and experience has shown that this massive amount of data (known as Big Data) contains valuable information. The data could include statistics on the reasons for a component breakage, the consumer habits of a segment of the population, you name it. Exploiting the value of Big Data is at the heart of most digital industries. The associated business models are not yet well defined, however.

 

6. Faster, faster, faster!

The digital economy is moving at an incredible speed. Development time and time to market are an order of magnitude shorter than the traditional industry was accustomed to. As digital becomes the driver of the pace in an increasing number of sectors, the sudden change of response time is taking by surprise many players who have not yet adapted their corporate cultures and organizations.

The stars of the economy are digital. In 2014, among the top five market capitalizations on Wall Street were Apple, Microsoft, and Google, elbowing their way to success alongside major oil companies and other industry giants. Google was incorporated in 1998 — it was a fast rise!

Again, we emphasize that, in the digital world, the success rate for innovation projects is the same as it was for historical innovation projects. Ironically, digital hype may be reducing the probability of success. Indeed, there is a growing crowd of candidates working on digital innovation projects; the combination of buzz generated by success stories and the goodwill of venture-capital firms is attractive. Yet, the digital industry is demonstrating, also very quickly, that the rule of the game is winner take all. With only one winner among so many contenders, maybe the odds are not so good in the digital industry. Not so long ago, around the year 2000, hasty speculators created the Internet bubble. We may be living in a softer and slower rebound of the same bubble. The future will tell us.

***

This article was initially published in the book Innovation Intelligence (2015). It is the third section of the fourth chapter.

 

This article is the first in a series about the Disruptive digital tsunami.

Fifteen years ago, Apple changed the way we listen to music. While the major participants in the music industry were fighting Napster and CD burners, Apple launched the iPod, iTunes, and the iTunes Store. Suddenly, a newcomer, an alien, a digital barbarian had decided that we no longer needed to buy CDs to listen to music, and worse, that we didn’t need to buy entire albums. We just needed to download the songs we liked. This change had significant consequences for the music industry. First, the era of the album containing one or two hits and 12 “filler” tracks was at an end. People would only buy the songs they liked, each for 99 cents. Artists who rejected the new rules were not required to make their music available in the iTunes Store, but they would miss what became the leading sales channel. Second, major participants in the music industry were disintermediated. For an extremely profitable industry, this was game-changing and, for some, game-ending. After Apple was comfortably installed in its dominant position, it was disrupted by the entry of the even younger digital barbarians, Deezer and Spotify. The new rules of the game according to these newer digital barbarians? We no longer need to buy music at all. We can either rent music or buy a monthly plan to listen to as much music as we want. Even better, the monthly plan is built into our mobile-phone plan. Unlimited music, legally, and with the impression that it is free or nearly free.

A few years ago, the retail sector was also attacked. Amazon, founded in the United States, and Alibaba, from China, to cite the major barbarians, have written the new rules. We can order anything on the Internet, without living our homes. No shipping cost. Fast shipping. Secure payment. Buy with one click. Consumers save time and money. While the retail industry was shaken by these barbarians for a few years, a new balance between online retailers and traditional returns seems to have been found.

Like Deezer and Spotify have changed the way we listen to music, Netflix has changed the way we watch films. We can buy a monthly plan and watch as many films as we want.

Uber has changed the way we hire cabs. BlaBlaCar is changing the way we share cars. Airbnb has changed the way rent lodging.

Price-comparison search engines represent a major development. A few years ago, a number of search engines were created to help consumers compare prices for flights, hotels, insurance, and so forth. Companies providing such services include Booking.com, Hotels.com, Travelocity, and Priceline.com, as well as many others in various domains. When these search engines debuted, everyone was happy. Let’s consider the example of hotel rooms. Consumers were happy because they could compare prices among hotels and then make a reservation, all with just a few clicks. Hotels and hotel chains were happy because these price-comparison search engines offered an easy new communication channel. Even a two-room bed and breakfast in a small village could get traffic. Suddenly, filtering a long list of hotels was possible. This enthusiasm was present at the beginning, but the hotels’ opinions changed over time. The price-comparison search engines became hubs, taking over all of the industry’s booking traffic. Hotels realized that they had to pay these search engines if they wanted to be visible to consumers. The hotels’ opinion of the search engines soured. Don’t want to pay the search engines? OK, then you will have no customers. So the hotels pay to be listed and they pay a fee for each booking made on the search engines. Finally, who has the relationship with the consumer? The hotel does not. What does all of this mean? Prices are imposed by the search engine and profit margins are captured by the search engine. With so much at stake, the French multinational hotel group Accor has recently announced that they will invest EUR 225 million in it digital strategy over the course of the next five years, in an effort to “reinvent the client experience.” Price-comparison search engines have focused mainly on B2C industries thus far, but, as we write this book, the first B2B ones are appearing. Let’s prepare for a new revolution.

The Laughing Cow: When traditional players are faster than digital barbarians at customer relationship. The famous French cheesemaker Bel Group (the manufacturer and distributor of the Laughing Cow, Babybel, Kiri, Leerdammer, and Boursin brands) is very active with regard to digital innovation. The first of the company that were affected were accounting and receiving, followed by ordering, production planning, and logistics. In parallel, the Bel Group built an attractive, interactive website. The company’s product development team was highly involved in the effort. The company has even used its website to solicit active feedback of customers; the product development team continues to work with customers of the Apericube product. Bel is one of the few cheese companies today that are driving innovation by collaboration with a social network of customers. There is more to come in the future: one day, cheeses will have radio-frequency identification (RFID) tags that allow automatic dispatching and communication with the refrigerator. In the future, your home refrigerator will most likely be connected to Internet, enabling easy ordering but also providing companies like Bel with information about their customers.

Apple has recently announced that the SIM card for future generations of the iPhone will be embedded. What does this mean? That Apple wants to save space in the iPhone? Yes, but it also means that the SIM card will soon be owned exclusively by phone carriers. In other words, Apple will soon play a role similar to that of a price-comparison search engine, enabling its customers to switch, in almost real-time, between phone carriers in order to obtain the lowest price for a given service.

In 2014, Google acquired Nest Labs, a 200-employee company that makes smart thermostats, for $3.2 billion. Panic ensued among the major players in the energy sector. Yes, Google has deep pockets and it has acquired many companies, but $3.2 billion is a lot of money. Why did Google make this acquisition? It followed the same strategy as digital barbicans do in any sector: forging a relationship with the consumer by offering a Trojan horse (a free service, a free product, or just something fun). Why smart thermostats? If consumers use Google’s smart thermostats, Google knows when the consumers are at home, how they use energy, what their habits are, and so forth. Armed with all of that new information, Google’s next step is obvious: provide new services to help consumers optimize their energy consumption. They capture the relationship that consumers previously had with energy providers, along with the associated profit margin. The energy providers are being either commoditized or, even worse, disintermediate.

***

This article was initially published in the book Innovation Intelligence (2015). It is the second section of the fourth chapter.

 

This article is the fourth in a series about commoditization, after Product complexity’s focus on service.

A lot of value can be created by finding original ways of assembling bricks. Two young architects, Fabio Gramazio and Matthias Kohler (see photo at upper left), from Zurich are masters of brick assembly. In addition to designing creative buildings from their firm’s office, they lead a research team at ETH Zürich’s architectural school. That research team creates elegant structures by assembling bricks (see photo at lower left). The team is also skilled at assembling knowledge, thanks to their relationships with ETH Zürich’s computer design and robotics departments. They have developed processes for assembling bricks very accurately by use of a robot (see photo at upper right). They are exploring extension of the concept, currently working on steel-mesh welding by robots and high-rise assembly of foam bricks by swarms of small quadricopter drones (see photo at lower right). This team, melding art and engineering, stands at the forefront of modern architecture. 

Products and services are becoming increasingly complex assemblies. Low-tech products, high-tech products, and services are combined and blended to create the most attractive package. The objective of the game is to find the best compromise between customers’ aversion to effort and cost and customers’ desire for personalization. Although customers appreciate the performance and breadth of service resulting from complexity, they do not want to have to struggle with complexity when using the product.

Finally, designing a new product is a combinatorial problem of how to select the appropriate technology “bricks” and combine them to provide an innovative service package that addresses customers’ needs and desires. In this combinatorial exercise, the most critical step is not a technical one, because the bricks are in the grand catalog and come with the required technology. The most critical step is selecting, from the countless combinations, the best offering from the perspective of a customer so that the offering addresses the customer’s basic and ancillary needs and desires while being simple to use. The creativity is in the act of selecting the right bricks and binding them to perform the desired service.

We believe that, surprisingly, in the current world of complexity, the brightest act of creative innovation is much closer to artistic skill than to technological engineering. Let’s consider poetry, for example. Poetry is simply the assembly of words in order to convey emotion. Words are just small bricks of knowledge with definitions; the value of a poem is in the combination of words.

In this art of performing innovation, there are rules and guidelines to be respected, the most important ones related to customer satisfaction and profitability. The winning innovation offers the most elegant combination of bricks, seemingly simple, almost obvious (after you have seen it), and as elegant as flowers arranged according to Ikebana. Steve Jobs can be described as an art designer, and, according to many Apple customers, it showed in his products.

***

This article was initially published in the book Innovation Intelligence (2015). It is the second section of the fourth chapter.

This article is the third of a series about commoditization, after Products becoming increasingly complex assemblies of components.

Building measurement has evolved from the mere folding meter stick to the spring-loaded measuring tape. Recently, far more sophisticated devices that rely on ultrasound or laser echoes have become available, and they allow digital sensing, by a single person, of distances of several meters. These handheld devices have memory and are able to calculate surface. Today, sophisticated 3-D laser scanners are able to map, from one viewpoint, an entire building. The resulting large quantity of data can be transferred via Wi-Fi, and then software applications can transfer the data to CAD systems for generating drawings, 3-D models, or virtual reality. The product has evolved from a mere tool to a service that can provide much more information with much less effort.

We selected distance measurement in the construction industry to illustrate how products meant to serve a basic customer need are shifting from a mere tool for that basic function to a more complex product or service with a wider range of purposes. The product or service remains centered on the basic need of the customer, but it now encompasses addition, peripheral needs, progressing from the initial basic functionality to a service-oriented package.

One approach to achieving this progression, and therefore improve customer satisfaction, is for the company to focus on reducing the amount of consumer effort required to use the product. There are many types of effort and potential solutions for reducing each:

• Physical effort: solutions include motors in chainsaws and lawn mowers, electric engines in toothbrushes, and power windows in automobiles
• Adjustment effort: solutions include automated focus and anti-shake for cameras, and cruise control for automobiles
• Attention effort: solutions include cooking timers and spellcheck for documents
• Waiting effort: solutions include instant cameras, print-on-demand, and instant pain relief
• Repetitive-action effort: solutions include robotic vacuum cleaners and teaching machines
• Recordkeeping effort: solutions include additional memory, customized parameters, and automatic saving
• Carrying and storage effort: solutions include miniaturization

Another way of improving customer satisfaction is to provide ways for the product to be customized to each customer’s preferences. This approach is particularly important for mass-produced products that run the risk of homogeneity. For a mobile phone, customization can include colorful cases, ringtone options, sophisticated parameter settings in the operating system and in individual apps, insurance against loss or breakage, and countless contract possibilities offered by phone carriers.

When creating a bundle by adding features to a product that is dedicated to performing a basic function, at each step the product designer must focus on customers’ needs, attempting to meet more than the basic need. As a result, the feature bundle, accumulated over the course of many innovation cycles, gradually inhabits a wider space around the customer’s basic objective, solving all possible ancillary problems. The product can then be seen as a full-service package around the product’s main purpose.

This trend of turning a product into a service package is widely applicable. As stated by Jean-Christophe Simon, Director of R&D and Innovation at Groupe SEB, customers want a total solution. Thanks to the large selection of technologies available, delivering a bundle that approaches such a total solution is increasingly possible.

The shift from a product to a service package is also changing customer expectations, which has consequences for business models. Providing a broader and better service to the customer should enable the company to reap a greater reward than it does for less elaborate products. To this end, it is often wise to change the business model and adapt the marketing approach for the new product or service in order to differentiate it from the former one.

A different business model for a more complex product that delivers a full-service package can be seen in the case of Nespresso. Nestlé was selling ground coffee in large packages. Then the company designed a new product for coffee drinkers. The machine, its compressor, and the sophisticated capsules of ground coffee form a bundle that provides quality single servings of coffee. Nestlé created a new business model, inspired by luxury shops, for its capsules. Machines were licensed to several high-end appliance companies.

 

The trend pushing industry players to innovate by enlarging the service aspect of their product is related to the permanent fight against commoditization. Development of service-oriented offerings is also occurring in B2B businesses. In the inset below, we recount the example of Air Liquide, a company that provides industrial gases to a variety of industries. Air Liquide has developed service-oriented packages around their basic product, industrial gases, with a different package for each industry. Oerlikon-Balzers, a company that provides hard coating for cutting tools for the mechanical industry, is another example of the transformation from product to service. Today, for large companies such as automotive plants, Oerlikon-Balzers’ coating service has evolved to a full-service package that includes the following services for worn tools: collection, cleaning, removal of former coatings, sharpening, coating with a dedicated hard-vacuum coating, control, packing, and delivery. The service package also includes rapid response, because Oerlikon-Balzers’ coating centers are located near the large mechanical plants.

Air Liquide is one of the world’s leaders in industrial gas distribution. Olivier Delabroy, VP, R&D, explains with a smile that Air Liquide’s business is based on a handful of very simple molecules that he calls small essential molecules (SEM), such as O2, N2, Ar, and so forth. Such gases are used along the value chain of nearly every industry, from medical to heavy industry and high-tech. Gas is used in quite different contexts by each of these customers, but a general trend is clear. Air Liquide’s old business model was the delivery of gas in containers in response to customer orders, but that business model is changing. Air Liquid is changing its business model to instead provide service packages that are customized to each industry. If a customer wants the gas to always be available, it can choose to engage Air Liquide to handle all of the ancillary duties, such as checking the gas level, ordering on time, handling the gas, maintaining gas-handling systems, and ensuring safety of operations. More and more customers, particularly large companies, prefer Air Liquide to provide a full “g
as always there” service package. Gradually, gas supplier is becoming a highly technical gas supply service. Gas-supply service packages are complex products, combining logistics, labor, control, and servicing, as well as the gas itself. The complexity of the service package is also related to its customization to a customer’s size and industry. The requirements of a semiconductor manufacturer are quite different from those of a polymer plant or a hospital.

***

This article was initially published in the book Innovation Intelligence (2015). It is the second section of the fourth chapter.