value insights

Internet Content Services Innovation factors- Valutrics

The internet content services sector is a market of global proportions in the rapid growth  and take-off position within the business life-cycle.  In this sector, geographical boundaries are sometimes irrelevant; barriers to entry remain fairly low; and competition is fragmented and comes in all shapes and sizes – as do the buyers/users of internet services.

By its very nature, the sector is characterised by fast technological change in both processes and new product/service introductions.  The end user expects and demands ever increasing sophistication from the delivery of internet content, and is often spoilt for choice by the many and varied offerings available.  Not all meet the user’s needs, however, and it is
this constant push to innovate and exceed the user’s changing expectations that drives innovation in this sector.

The internet content services sector is subject to significant drivers to change.  Inevitably,  these forces impact on the nature of innovation in this sector and this report has identified the  most significant macro-environmental influences:

• A move towards re-use of public sector information
• Significant research funding
• Questions around the safety of sensitive information
• Strong links to, and influence from,  internet services activities
• A push towards transformational Government
• Possible short-term changes in Government?

• Rapid growth and take-off phase of business life cycle
• A drive to lower costs in all areas of industry
• Demand for faster, cheaper products and services
• Global nature of business in practically all sectors
• A rise in disposable income
• Rising budgets for internet services within business
• Relatively low unemployment
• Low barriers to entry/costs but shortage of seedcorn funding

• Sophisticated and changing user needs and expectations
• Collective ‘we’ of online users – Web 2.0
• Increasing online spend
• Increasing time spent online
• All age groups now online
• Expectation to use technology at work
• Migration of workers
• Shortage of ICT skills

• Growth of broadband usage, particularly in the home
• The move towards the semantic web
• Research funding and science parks
• Information/communication over the internet is the norm
• Disruptive nature of new business models

• Staff increasingly expect to use technology at work
• Growing culture of acceptance of need for ICT and its value
• Internet viewed as low-impact on the environment – cuts face-to-face time, promotes flexibility

•  legislation – sometimes unclear, sometimes restrictive
• Consumer protection and trust
• Security – applies to business and consumers
• Low competitive regulation

In the service sector, there are arguably three measures that could indicate whether firms/sectors have the capacity to innovate:
• Investment in ICT and Software (as a proportion of turnover or value added to standardize for size) – this indicates whether a firm has the capacity to collect and manipulate data;
• Investment in training per head and Investors in People status – this indicates if it is investing in its people around the goals of the business;
• Whether it is working to a business quality framework in the form of ISO standards or the EQF Business Excellence Model, and;
• Value added per head and profit margins indicators that demonstrate whether the management team is putting the above capability together in the form of real business performance.

However, whilst these are very credible markers, some figures do not address the speed of change in the internet content services sector.  It is sometimes useful to point backwards to a schema, such as the route map included earlier in this report, that will act as a benchmark of progress.  Where a company is on the  trajectory will indicate the rate of adoption of innovation.

The internet content services sector is such a broad area that it is difficult to conjure new measures of  innovation.  Below are some suggestions that would help to show whether a service is innovative by its impact on the user.

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