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Frankfurt International Airport has been expanding over the last decade into a self-described “airport city” to meet growing passenger demand, expected to jump from 61 million people today to as high as 73 million by 2021.
The airport city concept is gaining traction in numerous large gateway destinations around the world from Dallas to Doha. However, the consensus today is that these airports cannot maintain competitive advantage by the size of their infrastructure and volume of connectivity alone, due to the continual buildup of so many airports in today’s major markets.
That’s according to the House of Logistics & Mobility (HOLM) at Frankfurt Airport. The think tank is attempting to help Europe’s third busiest gateway also evolve — beyond just its infrastructure growth — into an advanced-industry knowledge cluster and high-tech business incubator.
The end goal is three-fold. One mandate is to drive more stopover traffic for business travelers and conference delegates into Frankfurt airport by providing a heightened value proposition relating to better networking and knowledge sharing opportunities. The second is to position the Frankfurt airport city as one of the world’s leading knowledge hubs in the logistics and mobility industry. The third is to position the entire Frankfurt Rhine-Main metropolitan area as a leading business capital for people and businesses in motion in the on-demand economy.
“The city of the future is an international, interdisciplinary knowledge-sharing machine,” Dr. Stefan Walter told me in 2011 when I first visited HOLM. Back then he was the managing director of the facility, but he has since moved on to consultancy work.
Dr. Walter explained that the global knowledge economy is grounded in the quality of so many different cities’ transportation networks, most notably their airports. In Frankfurt’s case, however, he said the fast-growing U.A.E. carriers (Emirates and Etihad) have been encroaching on Frankfurt-based Lufthansa’s dominance along many of its international routes for years. Therefore, that increasing competitiveness encroaches on the airport’s ability not just to fill seats, but to drive competitive advantage to the city in general.
“Dubai is trying to become the node between Asia and South America, which is affecting the future of logistics and mobility on a global scale,” Dr. Walter told me. “So this is about finding the strengths of our strengths, our core competencies, and for Germany, that’s knowledge and infrastructure. It’s also about connecting ideas.”
The infrastructure part of the equation has been established. The airport opened a fourth runway in 2011 to support the massive new CargoCity facility. Adjacent to the airport, THE SQUAIRE is a sleek conference, hotel and office complex that opened in 2012, positioned as a self-contained “New Work City.” Following that, the Gateway Gardens mixed-use community opened with more hotels, more office space, more R&D facilities, and the new HOLM building and conference space. Looking ahead, a third terminal is scheduled to open in 2021.
As for Germany’s other core competency — knowledge and advanced industry expertise — that’s where HOLM fits into the grand scheme of things as hub and central gathering place for the growing logistics and mobility cluster in the region.
“Clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that are present in a nation or region,” explains Harvard professor Michael Porter, who has informed HOLM’s strategy considerably. “Clusters arise because they increase the productivity with which companies can compete.”
Except complicating matters, he says, sectors are merging into one another due to the rise of technology and rapidly digitizing businesses. Automotive and information technology, for example, are no longer completely different sectors, requiring more enthusiastic sharing on knowledge than ever before.
Knowledge Sharing Machine
During a return visit to Frankfurt this year, I met with Jürgen Schultheis, senior project manager at HOLM, who explained how the think tank is developing its theories around knowledge sharing in alignment with the airport’s physical transformation.
In 2015, HOLM hosted 340 meetings, conferences, and other events for companies mostly from across Europe. A significant portion of those were involved in the logistics and mobility industry, which is big business in today’s rapidly globalizing economy, covering air, land and sea transportation. The field focuses primarily on developing new technology and value chain management systems to move people and things as efficiently and cost effectively as possible.
HOLM is leveraging its expertise globally to expand the logistics and mobility ecosystem locally. To drive that mission forward, the company is emphasizing the value of bringing experts across all business sectors together into Frankfurt Airport to share their knowledge in an interdisciplinary, international arena.
No other airport in Europe is more centrally located with as many inbound flights to support the strategy.
“We’re trying to develop Frankfurt as a hotspot for the knowledge economy,” said Schultheis, “and we believe that HOLM is an answer to that as it relates to a platform for face-to-face connection, accessibility, and event locations.”
In effect, the airport city strategy is really about funneling the most business intelligence and resources as possible into one location that’s accessible to as many people as possible. The challenge is managing all of that knowledge once it gets there.
“Every sector has their own language, their own dialogue, and they’re all trying to cooperate in today’s business world where collaborating across sectors is so important,” Schultheis told me. “So if you want to be successful today, you have to find a common language spoken by everyone, despite the sector. Except, that’s a challenge that’s not acknowledged in the way it has to be acknowledged, from our point of view. HOLM itself is a platform to develop this language as a result of collaborating here.”
Except, Schultheis admitted, that common language hasn’t really been identified by anyone yet. But, he said, the key to developing a common language, a common framework where disparate businesses can share knowledge productively, lies in tacit knowledge derived from “collective experiences.”
Explicit and Tacit Knowledge
HOLM’s strategy to bring business, government, and academic leaders together relies on the field of Knowledge Management (KM), which encompasses explicit and tacit knowledge.
Explicit knowledge is formal and codified. It’s learning based on having access to information, which can be fully understood on its own. Tacit knowledge is experiential knowledge. It requires experimentation in a physical realm and collective analysis with people of like interests. Broken down, explicit knowledge is “know-what.” Tacit knowledge is “know-how.”
Tacit knowledge, therefore, is required for complex challenges in any field of interest. So HOLM has collected research produced by leading thinkers in KM to show the value of collaborative person-to-person experiences — i.e., meetings and conventions — to develop new business strategies.
That can then be supported before and after face-to-face engagement with virtual engagement, more closely associated with explicit knowledge.
“That answers the big question today for so many people,” said Schultheis. “Is there any need for physical presence in today’s age of digitization?”
That is a question driving the efforts of the entire global meetings and conventions industry today.
“The problem is some people say digitization is the future, so there’s no need for face-to-face,” Schultheis told me. “The other side says, ‘I don’t want to have anything to do with digitization. I want to have my traditional conferences like I always have.’ We’re arguing at HOLM, let’s take the best parts of both sides and combine them, and we’re finding that Knowledge Management can facilitate that. There’s a lot of benefits if you can combine both worlds.”
So by contextualizing live face-to-face engagement around tacit knowledge, and virtual digital engagement with explicit knowledge, that then provides a starting framework for how to program and position airport cities as more effective, integrated, and interdisciplinary knowledge sharing machines.
The final piece of the puzzle is trust. According to a long list of researchers active in KM, the single biggest advantage of tacit learning is its ability to inspire trust among participants in any given collective experience. That speaks to the original question in this post about how airport cities can drive competitive advantage above and beyond the size of their infrastructure.
According the report, Trust and Tacit Knowledge in Sharing and Use, in the Journal of Knowledge Management:
“Face-to-face interaction often is the primary method for transferring tacit knowledge. The levels of risk and uncertainty that are associated with tacit knowledge transfer are reduced by trusting relationships. Some transfers of tacit knowledge are formal, resulting from training events, or conferences, while others are more informal, resulting from interdepartmental task forces, informal social networks, and employee interactions. Key to both formal and informal tacit knowledge transfer is the willingness and capacity of individuals to share what they know and to use what they learn.”
The challenge here is no one is really discussing this type of research in travel and tourism, especially in the meetings and conventions sector, and especially in the United States. The ideas put forth by HOLM could be a catalyst to spark a new conversation about the future of airport cities and global tourism development, revolving around the intersection of knowledge management and business travel.