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'Socially networked' small businesses could compete on global stage

A new generation of web environments could revolutionise the way small and medium-sized businesses work together online and help them compete with larger companies, according to researchers working on a European Commission funded project led by the London School of Economics and Political Science (LSE) today.

The OPAALS(1) project is working on the science, social science and technology that underpin 'Digital Business Ecoystems' – virtual business communities connected by an open and low cost peer-to-peer (P2P) infrastructure. Participants share computing resources such as processing, storage and bandwidth to 'become the network' and so are not dependent on intermediary hosts or servers.

Dr Paolo Dini from the Media and Communications Department at LSE, who leads the OPAALS project said: 'Digital Ecosystems – the combination of the technology and the communities that use them – represent the future of the connected world. They will allow small companies, for example, to offer loosely coupled services that are coordinated by the peers of the P2P network rather than by a centralised transaction server, and thus help them compete on the global stage. This will have a tremendous democratising effect.

'The distributed nature of the technology avoids the risks associated with the central server style networks that govern the internet at present. Not depending upon a central point of control and failure is a key advantage to small players such as small businesses, entrepreneurs and other virtual communities including those in the developing world.'

The University of Surrey, a partner in OPAALS, has developed a P2P infrastructure that will offer an online distributed transaction coordination function, allowing small businesses to save money on costly centralised transaction coordination services. OPAALS carried out a UK-based survey of small businesses and micro enterprises in the tourism sector and found transaction costs ranging from 13-33 per cent of the transaction value.

Dr Dini said: 'Companies will not have to disclose proprietary information, such as the details of their internal business processes, to the providers of centralised transaction servers, which are currently owned and managed by large corporations. Centralised transaction servers lead to a gross imbalance in information – and therefore power because it can then be used for a business advantage. In contrast our distributed approach to transaction coordination will help avoid monopolies and promote innovation.'

Digital ecosystems are highly adaptable and can, for example, be used to share and develop information and knowledge. OPAALS has developed an Open Knowledge Space – a similar environment to a social networking site – which sits on top of the P2P infrastructure. Its functions include web conferencing, the ability to collaborate remotely, in real time, on documents, a document publication environment, a distributed repository, and a semantic search and visualisation service, in addition to more conventional wiki and forums.

The idea is that the virtual communities that end up using the technology will help develop it to address their own needs. For example the first Open Knowledge Space is being used as a collaborative research space by the OPAALS researchers. In India research is being undertaken to adapt the technology to help farmers share agricultural information. In Brazil it is being seen as a promising tool to increase social and digital inclusion in the classroom and for poor communities.

All the technologies developed by OPAALS are open source – free to use and open for contribution and adaptation by other computer scientists, provided that the outcomes of that adaptation is then also made available to others. By contrast, the services that run on top of the OPAALS platform do not have to be open source, they can follow whichever licencing model is preferred by the SMEs which develop them.

Dr Dini said: 'This isn't a technology that comes out of a box and is ready to go. As is generally the case with open source software, those who will end up using it will have to invest time in building it, and customising applications and services that make sense to them in their socio-economic development context. You can't import democracy – it has to be built "for purpose" from the bottom up.

'Indeed a key aspect of our project is developing the technology in collaboration with those who will end up using it rather than imposing a 'solution' on them.'

OPAALS is a large inter-disciplinary network of researchers including computer and social scientists, linguists, mathematicians, and biologists.

Dr Dini explains: 'We are not just building Digital Ecosystems through collaborative technology development, we are also simultaneously studying ourselves as a case study of how Digital Ecosystems are built, grow and function.'


Notes to Editors

1. OPAALS is a research Network of Excellence funded under the European Union's 6th Framework Programme for Research and Development. OPAALS's main aims are to develop an integrated theoretical foundation for digital ecosystems research, the technology of Digital Ecosystems and a sustainable and open community of research. As an open, global network, OPAALS is characterised by a radically interdisciplinary research agenda combined with the emergence of a new paradigm that requires the development of new ways of working across discipline boundaries, in particular between social science, computer science and natural science. 

For more information the media should contact:

Sue Windebank, LSE press office, T: 020 7849 4624, E: s.windebank@lse.ac.uk

Neil Rathbone, OPAALS, T: 01664 852614, E: neil.rathbone@daventryhouse.com

21 October 2009