In response to the increase in wages in Western countries that is driving the relocation of industrial activities to emerging countries, Denmark has launched the REMODEL programme to help its national companies create business models based on an open source logic. An experiment has been launched with ten Danish companies. Let’s see what has been the experience of these pioneers.
In 2016 the Danish Design Center, an agency of the Danish government, met to discuss how Denmark could position its industry to face the problem of massive outsourcing of its production abroad, with the pressure that this implies for the labour market.
How can we meet the challenges of having a small country that can no longer afford to manufacture at home because of high wage costs, but has an extremely powerful design culture?
The answer: Help Danish companies to grow with open source models. These models allow anyone to study, modify, reuse and even distribute a product as companies such and are used to varying degrees by companies like car manufacturer Tesla, Baidu, the Chinese giant that develops autonomous cars, or Opendesk that sells furniture designed by its community of designers and manufactured by the fablabs networks.
Open source models generally generate as much curiosity as scepticism and insecurity.
That is why, in 2018, the Danish Design Center took the challenge to gather concrete and inspiring examples of international open source success, and to launch the REMODEL program to help product companies experiment and develop open source business.
10 manufacturing companies were recruited to test the program:
- Novozymes, manufacturer of industrial enzymes and one of Denmark’s largest companies
- Thürmer, a long-standing manufacturer of industrial drilling equipment
- Stykka, a digital platform for making custom office furniture
- Or Husum & Lindholm, designers who make urban gardening systems who’ve partnered with IKEA
Companies have used the program to learn how to improve their competitiveness, innovation potential and ability to reach new markets in a profitable way through the principles of open source.
By the end of the program they had clarified the key issues of their strategy:
- What can be opened?
Is it the company’s designs, software, hardware, data, procedures…
- How can open source benefit the company?
For example, does it mean developing and innovating faster and cheaper, does it mean having a community that helps to spread faster or identify high-potential employees in the community…
- Which communities could contribute to the project?
- What will be the motivation of external communities to contribute to the development of your project? Is it because they gain a new technology? Because they gain visibility? Because it allows them to earn money? …
- What communication channels should be created to interact and create value with these communities?
- Where can the company make money if it opens its intellectual property to the outside world?
Is this about selling physical products? Is it the creation of tailor-made projects or maintenance? Is it the sale of additional closed bricks for professional actors?
Two notable results
At the end of the first experience two remarkable things happened.
The first: Out of 10 companies that volunteered, 8 decided to take the plunge and create a real open source strategy for at least one of their products.
And the second: All the companies testified that this new strategy would bring them between €130,000 and €1,300,000 in additional turnover in the coming years OR that it accelerated the adoption of a development and cooperation strategy that would have taken them several years.
Let’s look at two examples.
The first, Novozymes, a manufacturer of enzymes and micro-organisms for industrial use, has long been aware that they cannot solve all their problems alone. One of their major obstacles is working in an industry where aggressive intellectual property protection often prevents openness.
Novozymes had already tried to create a knowledge sharing platform, but without success. Their objective in participating in REMODEL was therefore to reconsider this project in depth and by integrating all the stakeholders of their ecosystem.
The program helped them move beyond a one-way understanding of open source and understand how it could apply to their business.
The result of their thinking is a community platform, Hello Science, that solves challenges through knowledge sharing between academic actors, start-ups and companies to break knowledge silos that slow innovation and partnership creation. This platform is a unique way for them to create connections between the organization and the outside world that can ultimately help solve challenges that affect the entire industry.
The second example is the furniture company Stykka, which provides tailor-made furniture through its online platform to large companies such as Carlsberg, Ebay or SAP. Their production system integrates building blocks that allow them to produce high quality custom products at mass production prices.
Even though Stykka had long had the idea of creating an open source strategy, the idea remained intangible and difficult to implement operationally.
So they used the REMODEL method to explore the potential of open source for them and see how an open source strategy could look like for them and how it could improve their business.
The program allowed them to develop their idea so that new opportunities became clear, concrete and rooted in their existing business, such as allowing designers to take over their designs, but to enrich and make the furniture catalogue more attractive.
In return, designers, in addition to having access to quality designs, can also make their work more visible and collect royalties on furniture produced on their designs.
The REMODEL method is obviously replicable and can equally benefit manufacturing companies outside Denmark.
If you are curious and want to develop your own open source strategy, you can go to Remodel.dk to find the sprints compiled in a toolbox, whose use is open to everyone and available in Open Source.
With the help of the toolbox, you will have a better understanding of how open source works and access to materials, videos and guides that will allow you to do the program yourself.
This post was originally published in French at lafabriquedesmobilités.fr on December 19, 2018.