Why These Times Are Calling For 'Coopetition'

Recently, a friend told me about an interesting paper in Scientometrics, a journal on science, communication in science, and science policy. This paper by Caroline Wagner, Travis Whetsell and Loet Leydesdorff on collaboration in the scientific community states that cross-national collaborative research papers have doubled from 1990 to 2015. This increasing collaboration has been caused by the need to exchange and share information for scientific progress. One can well understand the reasons for collaboration, say in astrophysics, where expensive and specialized equipment are used, or in virology as viruses know no national boundaries. The paper notes that there is high level of collaboration in other sciences too, such as in social sciences and mathematics.

Collaboration, however, does not elicit the same response in the corporate sector. Rather, it makes many cautious and wary. Here we thrive on competition - for market share, mind share, wallet share. Yet I feel this sentiment is changing and the days of competition as we know it are numbered.

In order to compete successfully, massive investments are required - in people, training, R&D, technology, and infrastructure. On the other hand, production cycles are shrinking, technologies are rapidly improving, consumers are demanding more, and profit margins are thinning. Conventional competition is becoming increasingly unviable. Could collaboration then, be an effective approach to succeed in the new market dynamics?

Collaboration in telecom, consumer goods and other companies

One competitive industry that has understood the need for collaboration and developed a fine balance between competition and collaboration is telecom. Being big on infrastructure and investments, as well as being restricted to specific geographies, a telecom company is compelled to collaborate with its counterparts in other regions. Such collaborations have resulted in better services to consumers, and stronger, deeper partnerships among erstwhile competitors.

In other industries, General Motors and Toyota have joined forces to assemble automobiles, Siemens and Philips have partnered to develop semiconductors, and Canon supplies photocopiers to Kodak. Collaboration with a competitor, when based on trust, is a great way of engaging. The driving force is the desire to learn and bridge the gap - in skills, investments, technology, infrastructure and access to certain customer segments. While collaborating externally, an enterprise needs to encourage healthy competition within itself, in order to elevate its quality of offerings.

Why IT industry needs to replace competition with 'coopetition'

Today, consumers are demanding a segued product experience from the very first touch point, across channels, and this journey may be owned by different entities. Hence, competition will not help so much as collaboration and 'coopetition' (act of cooperation between competing companies).

Often, a software product is developed using a number of technologies, on multiple platforms, and once ready, it may be used across industries. Cloud and mobile technologies offer increasing possibilities for software developers. With Agile and DevOps, large products can be broken down into sub-sections and developed iteratively yet independently. Companies are also turning to open source and sharing their APIs in order to collaborate. A single enterprise may be unable to develop the entire product and it would need to collaborate with others, as in the case of blockchain. Technologies such as blockchain require shared investment to access relevant skills, work faster and cost effectively. In banking and financial services, consortiums are being established to harness the power of blockchain. And similar consortiums would likely work for large industries as well, such as, logistics, supply chain, and retail.

Competing with oneself, collaborating with peers

We are social beings and collaboration comes naturally to us. Rather than stoking competitiveness between individuals, I think these times call for stimulating the competitive spirit within and encouraging collaboration as a method of working with others. This will raise the benchmark on both personal performance and enterprise-level innovation. Today, the kind of problems we are ready to address are so massive and complex that no person can solve any problem single-handedly. There must be a collaborative, peer-to-peer engagement, which comes quite easily to millennials. This is why hackathons and bootcamps are attracting colossal attendance.

Due to pervasive interconnectedness and interdependencies, global problems and concerns are increasing in scale and dimension. Collaboration across skills, industries and organizations is necessary to develop new ideas and different perspectives. For instance, Schneider Electric and Blue Chilli, a startup accelerator, recently organized a hackathon in Sydney to address the problem of congestion in the city's trains. The trains are overcrowded, and this situation will only deteriorate as the city continues to expand. The winning idea was both simple and easy to implement: Cameras would detect the occupancy in each coach and relay this information to the station ahead. Commuters waiting to board the train would then be able to get into coaches that are less crowded. Making travel slightly better.

Even though coopetition is currently not a very well recognized term, unknowingly more and more companies, particularly, in the technology industry, are collaborating to draw on each other's strength and complement each other’s drawbacks to form integrations that promote growth for everyone. And the best outcome of this model is that the end customer gains the most.