Fight To The Top: Is Collaboration The New Competition?
The S&P 500 looks very different today than it did only a decade ago – with tech companies dominating the top 10. The Fortune Global 500 tells a similar story of established market leaders fighting for top spots among new, nimble entrants.
But amid this traditional, cutthroat competition, companies across industries are working collaboratively to tackle broad challenges. Recent reports that a large U.S.-based ride-sharing company planned to publicly share research data on driverless cars with academics, automakers – and even rivals – were surprising for some. After all, data ownership is the lifeblood of business, especially in tech.
The company’s rationale, however, makes sense: data and information sharing – with industry outsiders and traditional competitors – could accelerate product development. In a statement about the decision, the company said data sharing would “help level the playing field” for all those interested in such technology.
“There’s growing acceptance of competitors working together to share data that helps solve challenges for an entire ecosystem,” says David Bowcott, global director of Growth, Innovation and Insight at Aon’s Global Construction and Infrastructure Group. “A rising tide can lift all boats.”
Whether to encourage broader product development, protect companies against cyber attacks or develop tomorrow’s workforce, organizations are seeing the benefits of working together to achieve common goals and build resilience. Faced with today’s business challenges and emerging risks, for more and more industries, collaboration – not competition – is the new path to solving large-scale challenges.
For many businesses, shifting business landscapes and growing threats – such as industry disruption, talent shortages, risks from a connected and technology-based world and industry-wide challenges – are often too large and complex for a company to solve on its own.
“In the past, there’s been a big reluctance to share information in the traditional capitalist market,” Bowcott says. “But now we’re beginning to see industries come together, sharing select data sets with competitors. Business leaders are willing to do this because sometimes the overall benefits far outweigh the risks.”
Working Together To Tackle Cyber Threats
According to IBM and the Ponemon Institute, the global average cost of a data breach is $3.9 million. And the risk is significant – with cyber attacks and data breaches listed as the sixth-highest risk in Aon’s 2019 Global Risk Management report.
As companies look to address this rising cyber risk, many see benefits in sharing data and partnering to find solutions.
“While some industries are more advanced in how they approach cyber security, no industry is immune,” says Christopher J. Bruno, director of strategic products and partnerships at Aon’s Cyber Solutions Group. “As the threat grows, we’ll likely see a growing number of partnerships emerge to address the rising threat, whether to bridge a cyber gap across specific industries, or broadly tackle the issue with cross-industry partnerships. ”
Several automakers, for example, have begun offering “bug bounties” and are working with researchers and software researchers to identify vulnerabilities in their software. Some have joined an Automotive Information Sharing and Analysis Center (Auto-ISAC), intended to be a community for sharing and analyzing intelligence about vehicle cyber-security risks and developing solutions across the automotive industry.
The financial services industry has created a similar organization, FS-ISAC, to address cyber threats and share best practices. Several other industries, including aviation, maritime and health care have also formed their own ISACs to share data that addresses both cyber and physical-security threats.
Such information-sharing centers demonstrate the growing threat cyber poses and provide an opportunity to come together and share information about this emerging threat.
Collaborating To Protect Innovation And Combat Intellectual Property Risks
Even though intellectual property (IP) represents an ever-larger share of business value, only 16 percent of companies adequately protect their intangible assets with insurance coverage. Because IP is at constant risk from theft, infringement and other perils, protecting it has become a team exercise in IP-driven industries, such as tech and pharma.
One reason for this collaboration is the “patent troll” (also known as a “nonpracticing entity”) a company that, rather than producing and selling its own goods and services, obtains the rights to patents to license or litigate them against operating companies. These entities can affect an entire industry and have proven to be a very costly distraction for operating companies of all sizes across all industries.
“Patent trolls intentionally go out and buy portfolios of patents with the goal of patent assertion against operating companies that may be violating the claims of those patents,” says Brian Hinman, chief commercial officer at Aon Intellectual Property Solutions. “The patent trolls typically have no operating business for these operating companies to countersue against, making corporate recourse time-consuming and expensive.”
The risk can be particularly acute for startup or emerging companies, especially in tech, that focus on product development and may lack the resources to fight patent trolls on their own.
To conquer such risks, companies are discovering the benefits of working together across industries through organizations such as Allied Security Trust, the LOT (License on Transfer) Network and Unified Patents, each of which employ various strategies to defend against patent trolls.
Battling Talent Shortages Requires Cross-Industry Effort
Businesses across industries face a shortage of qualified workers, especially as workplaces and technologies evolve and demographics shift. These labor shortages can prevent companies from realizing their potential and achieving strategic goals.
As a result, many businesses are recognizing the value of cross-industry collaboration and working with governments and academia to develop the talent needed.
“Working alongside governments, regulators, universities and large businesses is critical to solving tomorrow’s talent shortage,” says Michael Burke, chief executive officer of Human Capital Solutions at Aon. “It’s a collective responsibility rather than one resting on the shoulders of universities alone.”
The Federation for Advanced Manufacturing Education is a collaboration of employers focused on equipping workers with the necessary technical skills for manufacturing and other industries. The organization seeks to be a bridge between industry and education.
To help develop the right skills in workers, several major technology companies are teaming with community colleges, while others look to the apprenticeship model.
“Companies are looking in new places to help fill the gap,” says Paul Schultz, CEO at Aon Securities and executive sponsor of Aon’s Apprentice Program in the U.S. and U.K. “Public-private partnerships with city schools, nonprofits and large firms can help change the pipeline to fit what’s out there.”
As Challenges Grow More Complex, Answers Lie In Collaboration
The challenges facing businesses are becoming increasingly complex. Many of them have grown too large or evolved too rapidly for businesses to handle alone. Collaboration within or across industries, powered by the growing ability to collect and analyze data, might be the key to addressing many of today’s complex business challenges.
“We’re at a time when a company’s competitors may not be who they expect or see coming,” says Bowcott. “Sharing data and finding new ways of working together is just another way to stay agile – and relevant.”