Wednesday, August 22, 2007

Innomediaries: The capabilities of intermediaries in (open) innovation networks

The intermediary is sometimes popping up in discussions on new business models and innovation strategies, such as 'open innovation' and 'connect & develop.' This already resulted in the term 'innomediaries' (Google search). Why would this be? The middleman has been proclaimed death many times, in particular with the increasing possibilities of ICT.

An intermediary brings together actors and facilitates demand and supply activities for the exchange of products (goods, services, ideas), information, and money. The term ‘intermediate’ refers to a position: being or occurring at the middle place, stage, or degree or between extremes (Merriam-Webster).

Being in the middle emphasizes that intermediaries can occupy a special position in the business network and build capabilities based upon:

1. Connectivity: Intermediaries can connect many customers with many suppliers. Therefore the intermediary can provide services that individual customers and suppliers cannot offer and gain efficiencies via the reduction of necessary contacts between customers and suppliers.

2. Specialization: Intermediaries can specialize in exchange activities and supportive production functions; an exchange is a task in itself.

3. Neutrality: Intermediaries can act as a neutral party, a buffer between the interests of customers and suppliers.

What are your ideas on this? Are intermediaries a dying breed? Or will they stay but do they have to adapt their role? Or will nothing change at all?

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