Last week the very first regular commercial drone delivery service commenced. It’s likely you have heard of many such experiments around the world over the last few years, but this was the first service to start running every day, as a real business operation. Ponder for a moment – where in the world did you expect to see that happen?
In the end it wasn’t Palo Alto, Seattle, London, Tokyo, Shanghai, Mumbai, Amsterdam or Sydney. The service started in Reykjavík in Iceland, a tiny nation of fewer than 350,000 people. That’s not an accident or an anomaly; it’s by design. If they play the game intelligently, some of the very smallest countries can take advantage of their size to be world leading petri dishes for new industry fomentation. This is not a new observation. For example in 2003, when I visited Zagreb in Croatia for the first time – they had mobile phone text based payment for car parking. That was about 5 years ahead of major European capitals such as Paris and London.
The President of Iceland Olafur Ragnar Grimsson explained this phenomenon to me when I had the privilege to interview him in 2011 (Gartner Report: G00212784)
“So here is a society that, although small, is sufficiently advanced and sufficiently complicated to be a kind of miniature of an advanced society anywhere in the world. What works in information technology inside Iceland is going to work in China, the United States and elsewhere. You can almost look at it as a small laboratory. You can connect social groups, economic groups and communities, which would be extraordinarily cumbersome and time-consuming in bigger societies”.
The key is in that last sentence. He was talking about something we call the ‘compound uncertainty’ that must be navigated when we want to test and introduce a real breakthrough digital business idea. Digital progress isn’t just about Moore’s law and technology. It also hinges on progress in both regulation and in culture. It’s not easy for a company to obtain the societal licence to experiment when an idea is so new it defies convention or simple explanation.
Do you think your company is the pioneer in its industry? Our last CEO survey suggests that over 30% of CEOs like to believe that. But to be a pioneer in the digital business age, you need to be the one that drives breakthrough ideas through the “triple tipping point”. That’s the moment when the technology is just about ready in cost-performance terms, the regulator will permit or not impede your idea and the wider market is culturally ready to accept or at least tolerate the concept. Drone delivery is a great example of that. You need a government and airspace regulator who are willing to collaborate on defining new operating space and safe experimenting rules. You need a population that can have the conversation and come to a conclusion about whether it’s OK with the impacts of these new machines flying overhead – whether those are real or imagined.
Next time you have a truly breakthrough digital business idea in front of you, and you are wondering whether it’s yet safe to risk the money, brand capital and personal reputations on an experimental foray into an unknown future, take second look at your map of the world. What is the very smallest country you operate in, where you have reasonable business and government contacts and networks? Maybe that’s the best place to make it work.
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