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Garrett, Alexander, Wrigley, Cara, Russell, Nick, & Matthews, Judy(2015)Design-driven digital futures: The role of design-led innovation in the cre-ation of online connected communities for new mobility solutions. InIASDR Interplay 2015, 2-5 November 2015, Queensland University ofTechnology, Brisbane, Qld.

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Design-driven digital futures: The role of design-led innovation in the creation of online connected communities for new mobility solutions Alex Garrett, Queensland University of Technology, alexander.garrett@connect.qut.edu.au Dr. Cara Wrigley, Queensland University of Technology, cara.wrigley@qut.edu.au Dr. Nick Russell, Queensland University of Technology, n.russell@qut.edu.au Dr. Judy Matthews, Queensland University of Technology, jh.matthews@qut.edu.au

Abstract Online communities have fundamentally changed how humans connected and are now so common they are fundamental to the human experience. As the Internet developed for Web 1.0 to Web 2.0, the functionality of these communities has far exceeded initial expectations. These communities have shifted from simply places to share information to ways to access products and services that bridge the online and offline worlds. This shift has led to the disruption of many industries with the transportation industry being one such sector. Both private transport providers and public transport systems face competition from online communities who are able to link services providers and customers more effectively and innovatively. These types of communities fall under what has been popularised as collaborative consumption or the sharing economy. The aim of this study is to explore the role of Design-led Innovation in the creation of digital futures, specifically online connected communities for successful new mobility solutions. To explore this proposition multiple data collection methods are proposed; Content Analysis, ii) A Comparative Qualitative Study consisting of Qualitative Interviews and Focus Groups / Design Workshops and iii) An Action Research Cycle of Embedded Practice. The multidisciplinary nature of this study grounds this research in a novel position contributing to new knowledge in both the field of design, and also a deeper understanding of the larger fast-growing online community phenomena.

Online Community; Car Sharing; Ride Sharing; Design-led Innovation

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1. Introduction This research programme proposes an investigation of the concept of online connected communities for new mobility solutions through the lens of design and design-led innovation. At the core of this study are two interlinked phenomena, the growth and dissemination of online communities and new mobility solutions emerging as a result. Design and design-led innovation represent the view and knowledge base of the researcher. The first phenomena, the proliferation of online communities has been driven by the emergence of web 2.0 technologies. Porter (2004) describes two different types of online community, differentiating between (i) organisational sponsored and (ii) peer initiated. Although simplistic and a point of examination in the later literature review, both of these types of online communities have far reaching ramifications for traditional ways of doing business. The second facet of this study is the transportation industry, an industry currently witnessing these ramifications. The growth of online connected communities has had a yet-to-be understood impacts on traditional transportation. However, recent times have seen the rise of several new mobility services, connected via online communities, that allow users to achieve the effectively mobility without the disadvantages of ownership. With new services becoming available, innovation for firms is essential to survival. A design approach offers one potential avenue. 2. Literature Review 2.1 Online Communities and The Transportation Industry Online communities and new technology is constantly challenging the way humans interact and has helped change how business operates (McLure Wasko & Faraj, 2000). Through technological advances, new ways of interaction between consumers, marketers and firms have arrived. Not only has new communication methods fundamentally changed the way we interact with companies, new communication is also allowing customers to interact with each other (de Valck, van Bruggen, & Wierenga, 2009). These changes led to the creation of a different type of community, a virtual or online community, where interaction took place without any physical interaction. In the early years of computer-based communication these interactions took place on blogs and message boards. Over time, with further advances in technology the online interaction has become more rich, fulfilling and immersive (Bagozzi & Dholakia, 2002). This new type of community has lead to many factors, which have changed the way we live our lives. Among business literature, one of the most important is that customers now have increasing control over the way a brand and its products are communicated to the public. Even this paradigm is being quickly added to with not only consumers having a voice, but more a platform to create or facilitate an interaction (Casaló, Flavián, & Guinalíu, 2010). Central to this concept is the idea of collaborative consumption where the lines between product ownership is shifting towards a community as opposed to an individual and people trade in skills, time and space (Botsman & Rogers, 2010). The value in products is often bundled with services. Examples of this include new creative products such Kickstarter, Uber, Quirky and AirBnb. Many of these solutions are becoming a hugely successful and have the potential to severely disrupt existing solutions. One industry witnessing this disruption is the automotive industry, with academic considering the traditional of automotive business model of selling private transportation to individual owners as out dated (Cohen & Kietzmann, 2014). As such, some consider the future of the private automobile in developed countries is at a crossroads. Statistics present a clear downward trend in use by younger demographics (Kuhnimhof, Buehler, Wirtz, & Kalinowska, 2012). Researchers and industry leaders alike are still debating the validity of

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this downward trend and considering if it is indeed the end of private automobile ownership questioning if as a society we have reached the phenomenon of “Peak Car” (Goodwin, 2012). Regardless of whether this trend is a simple halt in sales or a sign of a long-term shift away from private ownership, the transportation industry has been shaken by research suggesting a fundamental structural change in the relationship between consumers and automobiles (Goodwin & Van Dender, 2013). Recent research by Kuhnimhof et al. (2012) explains this shift as the interplay between macro (global) and micro (local) variables. This structural change in the relationship between society and the automobile has challenged a largely oligopolistic industry with increased connectivity between individuals through mobile technology. The result is a rise of competitors to the automotive industry in the form of asset lean, IT-driven mobility solutions. Early examples include popular car and ride sharing services such as Zipcar and Uber. This wave of new and innovative business models fall under the banner of collaborative consumption (Botsman & Rogers, 2010) by offering a value proposition greater than any traditional retailer. Not only providing a cost effective solution by efficiently reorganising established assets, but also redefining customer value. These emerging companies act as the facilitator between different community members, exploiting an opportunity to engage with customers at a more intimate level (Botsman & Rogers, 2010). In addition to providing value for an individual consumer, these solutions are of great interest to governments and urban planners. Car and ride sharing services also present an interesting solution for congestion and pollution on macro scale, while also addressing rising vehicle ownership costs in many developed cities (Agatz, Erera, Savelsbergh, & Wang, 2012). In an age where the transportation industry is facing upheaval by new connected players it is becoming apparent that that innovation is required for a company to successfully sustain itself. Design and a design-led approach to innovation is one possible way to innovate. This field has grown as design has shifted from being a stylistic afterthought to a key strategic resource (Dell’Era, Marchesi, & Verganti, 2010), with many thought leaders promoting the methods (Brown, 2008; Liedtka, 2010; Martin, 2009). Large scale, quantitative studies have been undertaken to further prove this value. A study by the UK Design Council (2004), found that companies who successfully employed designers resulted in improved share prices and better returns for shareholders. Meanwhile, a study of Danish companies found that firms that invested in design returned revenue that was twenty-two percent higher than companies that did not (Ramlau, 2010). Building on these studies, specific strategies to capture this innovation have also been developed. These include Design-led Innovation (Matthews, Bucolo, & Wrigley, 2012) and Design-driven innovation (Verganti, 2009). Design is now seen as a way to bring success, financial gain and innovation to businesses large and small. This is done by not focusing on incremental innovation in products rather radically shifting the meaning in what businesses stand for (Brunswicker, Wrigley, & Bucolo, 2013) 3. Research Problem At its broadest, the research problem at the core of this study can be described as a distinct lack of design study in the investigation of online connected communities in relation to new and future mobility solutions. However, by delving deeper, this problem can be split into two sub problems. The first is the lack of knowledge surrounding new community based mobility solutions, specifically, how the aspect of community is affecting an individual’s attitudes, perceptions and behaviours in regard to personal mobility. Traditionally, many western countries have relied on the private automobile to obtain mobility. However, this habit is now being inhibited by a growing number of factors, most notably increased traffic congestion, increasing costs of ownership and connectivity between individuals. Users are turning toward community-led transport options to supplement or completely shift their mobility habits. Within this trend, little is known as to the user’s point of view.

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The second builds on the first and yet is more closely linked to the ramifications of this disruption for real companies. With new mobility services becoming increasingly available and their disruptive force widely acknowledged, little is known as to how these peer-to-peer business models are affecting the attitudes, perceptions and behaviours of individuals with respect to personal mobility. With growing exposure to these peer-to-peer or “sharing” business models, what will happen to an individual’s way of thinking in regards to mobility?

This problem is of keen interest to many real world firms. Besides disrupting sellers of transportation assets (i.e. car manufacturers), these new forms of mobility business models are also disrupting many sub industries and established systems within the wider value chain. One example is the car insurance industry, which like most of the insurance industry hinges on the concept of ownership. Traditionally, one party owns an asset and pays an insurer a fee to ensure said asset. The issue of ownership becomes ambiguous with shared assets and if as predicted the sharing phenomena takes off, how would a car insurer seek to retain revenue? This situation is currently being encountered by the insurance industry, a problem that desperately requires innovative problem solving and solutions.

One such potential solution can be found in the changing role and application of design. Although traditionally seen as a process in the manufacture of new products, the last decade has seen the role of design shift with growing literature suggesting that design offers a different way to innovate (Dell’Era & Verganti, 2010; Dorst, 2011; Holloway, 2009; Liedtka, 2010; Ward, Runcie, & Morris, 2009). This drive is coupled with a general acceptance that companies can no longer rely on incremental or technological innovation alone in order to survive (Kyffin & Gardien, 2009). Practical strategies to harness design have since been developed with one such approach, design-led innovation, gaining traction in both literature and industry in the past few years (Bucolo, Wrigley, & Matthews, 2012; Dong, 2014). Design-led innovation involves a three step process; (i) the learn phase where stakeholders are comprehensively studied and deep customer insights are generated, (ii) the design phase where solutions are prototyped with stakeholders and (iii) the integrate phase where solutions are executed and design reinforced within the firm (Krabye, Wrigley, Matthews, & Bucolo, 2013). A designer utilising a design-led innovation process is able to assess a business at a strategic level, capture customer value, develop strategies to realise and execute on this value and readjust the business model accordingly (Krabye et al., 2013).

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4. Research Gap To help demonstrate this gap, keys sources have been visually sorted below (Figure 1).

Figure 1: Literature Gap

5. Research Questions

Research Proposition: Exploring the role of Design-led Innovation in the creation of digital futures, specifically online connected communities for successful new mobility solutions?

Research Questions: 1. How have personal mobility offerings shifted from a product-centred to a service-based

proposition? 2. How could the concepts of community and community intensity affect individual attitudes,

perceptions and behaviours toward personal mobility?

3. How will these attitudes to personal mobility change in Australia with greater access to real time connectivity and peer-to-peer business models?

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6. Proposed Methods

This research will investigate the role of design-led innovation in the creation of online connected communities for new mobility solutions by deploying three distinct methodological approaches. Each research method answers a specific research sub question (ie. research method 1 answers research question 1). This is shown below in Figure 2. Each question has its own objective and the results are of each methodological approach are not meant for comparison.

Figure 2: Research questions and corresponding research method Research Method 1: Content Analysis Study 1 involves a content analysis into the business models of firms who currently offer ‘mobility’ as their key value proposition. These firms have been categorised by the researcher into three ‘horizons’. Firstly, the traditional industrial era provider such as a car manufacturers. Secondly, the new era peer-to-peer mobility providers such as Uber and Lyft. Thirdly, the oncoming wave of autonomous car business models. Each business will be mapped on the business model canvas (Osterwalder & Pigneur, 2010) as a way to compare business models. Research Method 2: Comparative Qualitative Study Study 2 comprises a comparative qualitative study that aims to directly address the second sub research question. This comparative qualitative study aims to examine what effects community and community intensity would have on the attitudes, perceptions and behaviours of individuals toward personal mobility The content of Study 2 aims to focus on the introduction of new, real life products and services such as car and ride sharing systems as these systems are rapidly changing the national and global transportation marketplace.

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Research Method 3: Embedded Practice Following the completion of the first stage of data collection, the second stage will involve an embedded, longitudinal study within a firm. It will take the results from Study 1 and 2 and actively engage with the firm to help create solutions that meet their needs while simultaneously seeking to answer the second research sub question. The content of this study will centre on how a specific firm aims to handle the radically changing landscape of personal mobility. The specific firm is a multinational insurance agency. The embedded stay will work as the firm in mind has a readily available online connected community and has expressed a strong desire in continuing research relating to mobility and future mobility solutions.

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(Doherty, Wrigley, & Matthews, 2013)

(Firnkorn & Müller, 2015)

(Nieuwenhuis & Wells, 2007; Orsato & Wells, 2007)

(Scheiner & Holz-Rau, 2007) (Anable, 2005; Banister, 2008, 2011) (De Vos, Derudder, Van Acker, & Witlox, 2012) (Spaulding, 2010) (Arnould, Schau, & Muniz, 2009)(Bagozzi & Dholakia, 2002; Lu, Zhao, & Wang, 2010; Rheingold, 1993) (Seraj, 2012)