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Continuing our series of conversations between friend and fellow futurist Gerd Leonhard and myself, here are some discursive thoughts on open versus closed systems. Given this issue’s central role in virtually all business strategy today, we find that our clients are consistently asking us about how to think about and build strategies in this context.

Here are a few of the points we make in the video:

* Many executives want to know whether and why they need to open up their business models and customer interactions
* Open systems are faster, more viral, have more innovation, and are more fun to work in
* Apple is the only prominent example of a closed system that is working well
* There is a long and gradual trend to open systems, but progress is rarely linear and it hasn’t shifted as fast as we may have expected
* Platforms and open source have been significant wins for open systems
* There is a battle between ecosystems – you want to be open within the space but compete with other ecosystems
* Android within the platform is open – arguably too open – yet it competes with other mobile platforms it in fact so has boundaries
* Being too open can make things slower to progress, for example with quality assurance issues
* The development of a highly interconnected world creates more need for open systems
* APIs have provided a huge boost to the Internet economy
* Google’s early move to expose APIs to many of its products provided the impetus for this to become standard practice across the net
* A key issue is the pace at which commercial organizations should open out their models
* Facebook has become more open over time due to customer pressure, however now that Google+ has provided a ready way to export personal profiles that changes the competitive landscape in social networks
* In music, for example, without open rights licensing platforms the system will crash, however financial systems need substantially closed systems
* Creative Commons provides more finely tuned ways to license content, enabling more innovation and richer creation
* Companies need to recognize that there is a fundamental shift to openness, however that doesn’t mean they need to be completely open immediately
* The relevant strategy for every company is unique

For the most current insights and trends in the living networks, follow @rossdawson on Twitter!

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Ross Dawson is globally recognized as a leading futurist, entrepreneur, keynote speaker, strategy advisor, and bestselling author. He is Founding Chairman of AHT Group, which consists of 3 companies: consulting, publishing, and ventures firm Advanced Human Technologies, future and strategy firm Future Exploration Network, and events company The Insight Exchange.

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