Embedding classic and digital economy Inventing a new prosperity trend

Abstract

Bordeaux, along with other cities, is promoting a “Great Junction” between classic economy and digital solutions to boost its long-term growth. Experts have been spotting companies in such various fields as real estate, consultancy, vegetables or jewelry, with unexpected growth (reaching more than 10% a year), in a context of flat European GDP.

This phenomenon, apart from the bright minds of the “entrepreneur behind the brand”, is tightly linked to a smart use of Internet tools and services to promote, sell, and improve productivity.

It puts once again in sharp relief the potential for a general growth of the economy, if smart and massive use of IT potential is developed and embedded in classic activity.

What is at stake here is not a specific initiative in Bordeaux: it will impact almost every western middle-size city. The e-train is passing by, and the bulk of tomorrow’s wealth is depenging on our ability to go on board.

Bordeaux City is making specific efforts, with noticeable results, to speed up the integration of IT in the core of the reactor. Thanks to a group of committed entrepreneurs, willing to share their experience, it has set up a series of activities, with a climax during its digital week, end of March: “The Great Junction”, an event designed as a tool to reach a tipping point and a significant level of awareness among the entrepreneurs of its territory.

Bordeaux is putting a certain emphasis on the fierce urgency and the crucial need, for any big, medium, or small size company to shift from a spectator position to a fast and big step towards IT, the new ability it provides us with, and the large new markets it reveals to every company.

 On March 29th, 12 Digital entrepreneurs and their partners from the classic activities will tell us about this “hidden growth”, and the way to reach it, in an innovative, fact&figures series of micro-presentations.

Project leaders and stakeholders will tell us about the new ways to speed up the movement, even in places were the lack of noticeable assets was sometimes the main characteristic at the beginning of the adventure : Herb Kim, from “Thinking Digital”, Kitty Leering, from “Pic Nic”, Guy Nicholson, from Hackney-East London.

Cities are fostering a "Great Junction" between classic economy and IT activities

The Untold Drama: How the bulk of our economy is missing the e-train

"One has to understand that our economy did not appear 20 years ago, but it has been existing for hundreds of years. Taking advantage of the digital era, creating the new growth is a matter of legacy and adaptation, as much as innovation".

For obvious might appear this statement by Alain Juppé, Mayor of the City of Bordeaux, our companies are still calling, in 2013, for a new model of progressive and incremental change when it comes to unleashing the power of IT for every business.

"We have strong, reliable examples of historical companies using e-marketing wisely today. Some are selling bricks. Others are delivering hand made products.” But it’s all about accuracy : a smart strategy on the web is bringing, in a few weeks, results you might not have dreamt of. Sales increasing by 20%. Costs reduced by 5% in a snap. The results are appealing, and do not deal only with sales growth, but include productivity improvements. 3D is reducing the design cost, while the cloud is bringing the needed flexibility to design the workflows our times are asking for.

Still, the integration pace of these methods and tools seems far from was is needed in a definitely open economy. Indicators are showing that the majority of SME have not migrated to the cloud, and that if more than 50% of companies are aware of the net importance, they don’t have a clear rationale about how to take advantage of it.

"Of course we’ve read “the” Mc Kinsey study (a report about the impact of the net on the whole economy in France, published last year), and yes, it was shaking” emphasizes Josy Reiffers, Deputy Advisor for IT and Economy in Bordeaux City Hall. “Other studies have lead to the same conclusions. But the main effort is still ahead".

Is Prophetism Overrated?

For a long time, various digital enthusiasts, in countless colloquiums and conferences, have announced new times, new civilization changes, with prospective visions of a future where neural bridges, serendipity and personal identity were high on the agenda. Small, medium as well as large companies, struggling for the next quarterly result, have long ago abandoned these talks.

"In business, it has always been about your customer, your products, and the way to make them match each other" reminds Marc, a Bordeaux entrepreneur in its mid-40′s. And according to him, we might be missing a large part of the promise of the potential of IT for growth, in various cases, because we haven’t found the way to transform the previously existing assets in Digital-world compliant offers.

A key factor in this mismatch is that a large part of IT new services and products have become a stealth phenomenon for classic companies. In a time of fast-changing moods and trends, hype might become a brake for integration, because even the biggest actors can’t afford to follow the pace of change in social networks, in communities and preferences-based services we are now all used to.

Another brake might well lie in the first experiences lived by many companies, often based on digital goodwill rather than on a clear strategy. It’s the so-called story of the “bright, still useless, website”, sometimes costly, delivered by a webagency that lacked the tools and sometimes the understanding of the client activity to make it more than an online, gorgeous business card. Here again, mismatching of two worlds, and in many cases, a consequence of "getting back to the basics" and associating digital solutions with inefficient expenditures.

 Bringing them together

Bordeaux City, a medium-size urban area worlwide known for its wine, is experiencing this phenomenon. Like many other cities, it has a fair concentration of talents, but is still far from the critical mass of innovation industries that creates the unbeatable spill-over effect. "We have to rely on both our innovative sector and on our traditional assets" puts Alain Juppé, a Mayor who has deeply transformed the urban landscape, with audacious limitations of the car presence in the core of the City, and a complete refurnishing of the buildings and transport system.

 Beyond its famous wine and urban success, Bordeaux might offer a paradigma of a well-known situation in many western countries.

On the one hand, strong companies dedicated to web analytics and intelligence, such as AT Internet or Systonic , Gamification champions such as ConcoursMania , 3D talents already working with aero-industry (www.immersion.fr ), or cloud national players such as Cheops Technology. Following a scenario already seen in many cities, these local stars come along with a myriad of small innovative companies and independent creative talents.

On the other hand, the mainstream of the economy is facing fierce urgencies, when competitors from remote regions, households struggling for their purchasing power, and merciless banks are adding a constant pressure to the day-to-day activity. "Before I turned digital, it was not only a matter of defiance" says Julien, a happy entrepreneur whose consultancy activity has been boosted by IT recently. "Of course, I was always reminding Warren Buffet’s quote of "don’t invest in what you don’t understand", and it was clearly the case with digital stuff. But it was also a question of available brain-time. I needed to be convinced, but you know, I needed to meet people, real entrepreneurs, and get a direct feed-back by someone I could trust. Someone having faced the same issues I was stuck in the middle of at that time. That time, in fact, so long ago now, was just last year."

 A new prosperity trend

"I’m growing by 16%. Twice China’s pace". Eric is showing us his ratings and position on a google’s result page. He has been popping out on so many screens in the area that a new wave of customers, with different profiles, living sometimes close to his shop, have come to him.

Eric’s trajectory has been stellar. But according to him, stellar can be reached by many. Starting by a "step aside" to escape the day-to-day urgency, he took some time to reflect. Now he sees his transition to digital tools above all as a way to rediscover the risks and to dare, as he did when he first started his restaurant. Low season is now a souvenir, and this is maybe one of the main results he wants to share with the community, in a simple formula : "growth is hidden to us, and so close still". For Eric, the first option to raise the curtain : to go digital Now.

"It’s working here in Bordeaux, it will work in Gateshead, it will work in Granada, it will work in remote places, you can connect with people you don’t even have a clue of" adamantly says Eric.

A Great Junction in Bordeaux

To go deeper in the assessment of this wealth potential, and to share real-world stories with the community, The City of Bordeaux, a group of entrepreneurs and various other cities have set up a new event, by March 29th : “The Great Junction”.

To do so, it has first gathered entrepreneurs from the Digital world in a one-of-a-kind exercise of success stories pitch.

12 companies from the Digital world, along with their client from the classic economy, have decided to play the game and reveal the potential of sales, productivity and anticipation at a glance in IT. Among the audience of this conference, no startup afficionados, no technofans or trends seekers, but sellers, managers, shop-tenders, marketing officers from large and tiny companies, entrepreneurs in demand for reliable examples and affordable scenarios. Here, the emotion will not come from new tech products or unseen features, but from the depth of the best practices and the potential of widespread economic growth they show.

This is « The Great Junction » between the IT world and traditional companies.

During this first edition, four majors challenges, four hot sources of value will be explored. Comprehensive, rather universal and widespread, they are four trends likely to bring value, growth and enlightening examples to any company, working in any field of activity.
They will include a set of presentations of the New Marketings, from the classic email, reloaded, to gamification and prospects targetting. From highly innovative crawlers, semantic tools, to more widespread mix-strategies of emailing, games and social interacting, the New Marketings are almost accessible to any entrepreneur, and still under-used. Their main characteristics is the growing accountability of the solutions, and the large number of real world best practices, announcing returns on investment, they can tell about today.

In France, the impact of web marketing has been assessed by a Mc Kinsey survey, showing that one euro invested in web marketing is bringing back 2,5 euros in net profit.

e-selling, an affordable eldorado. Customers are now massively connected to large bandwidth  DSL, and mobile Internet is reaching everyone’s pocket. While the Amazon giant is picking day after day clients from our shops and malls, daring entrepreneurs are identifying niches and segments where identity, quality, direct relations and marketing can make a difference. From hand made clothes, birthday giftboxes, to fashion selections, e-shops are allowing new demands to meet new offers, far from classic and intermediates-powered supply value chains. And because every shop tender, any entrepreneur can afford this low-entry-cost adventure, the “ecom33” association will invite new audiences to dare.

What can be sold in fact ? Almost anything. Including the possibility to attract new audiences to real places and tourism offers, for instance. Just ask GMT editions, a brilliant company from Bordeaux whose tailored advices have led to a spectacular growth in visit at the Val de Garonne Tourism Office, in South West France. Online tools and material devices, embedded in one coherent frame brought 39,000 new visitors in a one year span.

The Great Junction will also deal with new productivity tools, from the Cloud to 3D, and their best implementations to reduce costs, widen the possibilities and expand their possibilities not only for Big players but for the company at the corner of the street.

Light footprint, high value: when cities are sharing new models to foster innovation

The Great Junction will not only deal with direct B2B experiences of fast growth thanks to Digital solutions, but also have a look at the way to develop local digital clusters and innovation-friendly climates, taking into account the need for wise use of public money and the demand for lasting effects in favor of the growing innovation industries. Though, the growing demand for more efficiency in public expenses reaches everyone and every field, especially economy development projects.

In the digital local innovation field, public good practices are sometimes still to be invented, and the experience on existing projects can be scarce. One should also watch the fashion effect: it’s necessary to assess and to check before involving public powers, private partners, time and money.

The « Great Junction » wants to be a sincere exercise about good and less good experiences of local innovation development. It has chosen to review, through interactive panels, four challenges linked to the development of digital economy in various territories.

Thanks to experts from Paris, London, Amsterdam… We will review the following questions:

1 – « Living labs, living tales? »

The “living lab” concept has progressively gained audience. Today, it covers a broad meaning of “experiment territory”, or “test by users”.

What is lying under the living lab? Do we have examples of good practices?

Can we see real-world living labs having allowed the creation and spreading of innovative services?

How much does cost a living lab to local powers?

2 – « Cheap and chic? »

Some cities, or even some blocks, have benefited from a specific digital economy growth, because of the access of entrepreneurs to low cost real estate opportunities, for instance.

After the testimony from people in charge of the development in East London, we will answer the following questions:

  • How to take advantage of left-apart blocks in the city and make them attractive to the digital and creative “bohemia”?
  • How to keep the initial appeal when the majors are coming and the prices are rising?
  • How to ensure that social diversity will not disappear?
  • How can we maintain coherency despite the various experiences developed in these territories?

3 – « What’s left after the party? »

Many cities and regions have extensively promoted the use of digital tools, to disseminate public projects, foster business, highlight their clusters and their local champions. How have these congresses, festivals or meeting been designed? How do they contribute to the digital growth of the area? Managers and creators from Paris (Futurs en Seine), Pic Nic (Amsterdam), Gateshead (Thinking Digital) will tell us about the lasting effects of their events.

4 – «Attracting investors, opening opportunities»

Territories have to deal with the attraction of investors, and must ease fund raising, a cost-intensive activity for any rising company. Where must we put the focus on? How to avoid to ridiculously copy out-of-range models in our contexts? A landscape of the main startup shows, and perspectives for the future will be shown by an expert having recently benchmarked this subject.

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