Free love - the hidden costs....

"The ever-decreasing cost of physical production makes it easier to offer more (nearly) free goods in the offline world too. In fact, many goods have actually become insanely cheap. Just one example: the price of televisions has fallen, on average, by 9 percent each year since 1998, according to U.S. Dept. of Labor data." So says Reinier Evers in this excellent trend piece, Free Love at : http://www.trendwatching.com/ (click title above for the full article).

So What?

But this trend is set to stall and then reverse in the coming years as energy and material costs continue to rise faster than possible incremental cost savings. Or is it possible that radical innovations in the way we design, make and distribute things such as TV's can continue the downwards price curve indefinitely? The reality is that the true cost of TV's (or indeed most products) is not reflected in their pricing, what economists call the 'externalities'. This may include the cost of cleaning up the pollutants, un-taxed aviation fuel and congestion costs of transportation etc. Once these true costs are measured and accounted for then the product cost will be much higher and "free" much less of an option.

As my mother said in the 60's, "Brendan, no such thing as a free lunch, and certainly not free love......".

The future of innovation may be elsewhere.....

This article is a good summary of the research on innovaion in India conducted by Demos in the UK as a part of 'The Atlas of Ideas 2.0'. It summarises 3 specific innovation approaches that appear to be succesful and may have relevance elsewhere....click the title to read.

So What?

One of the tenets of the "How To Farm Lightning" program is the democritasation of innovation (from high-priests or gurus to democracy and teams) and another is to raise the innovation bar beyond the product to challenge the very eco-system of business models, processes, customers and suppliers that we have today (business unusual rather than business usual). As this article suggests, India is proving to be a test-bed for these and other "age of scarcity" innovation concepts and I do not think it will be long before we see the products of these approaches as well as the approaches themselves appearing in developed consumer markets.

The need for radical innovation is much greater in developing economies such as India, China and Brazil than in the satiated West (where evolutionary change is the norm - lets maintain the status quo) and this can only mean one thing - the USA, Europe and Japan will lose their innovation monopoly. The future of innovation may indeed be elsewhere.....

Nokia's future is green

According to the Guardian and reported elsewhere, "Nokia has developed a "green" phone using recycled steel and bio-materials. Olli-Pekka Kallasvuo, the Finnish firm's chief executive, pulled the clamshell handset out of his pocket during his speech at the Mobile World Congress trade show in Barcelona yesterday, pictured above. "It shows what can be done with materials," he said. "It is only a concept now but it gives you an insight into how we think we can break new ground." Nokia, which last year made four in 10 of the more than 1bn handsets sold worldwide, has been developing the handset - branded Remade - at its laboratories.
The metal casing and keypad are made from recycled steel, while inside the phone Nokia has been working on materials with an organic origin, such as polylactic acid plastics(My note: corn starch to you and me....).

So What?

I thought the idea of recycling was not to "...break new ground"? Evidently not in Nokialand! And that name was created by whom on the plane to Barcelona? I love you Nokia for trying but its the marketing thing and words and names and soft stuff are important too.....please try harder!

Google's Answer To MicroHoo: Buy Adobe

This article summarises alternative acquisition strategies for Microsoft and Google and ignores the pending mobile wave.

So What?

"The future is mobile and there is no mention of that here. These potential consolidations say it all; its the end of the cycle and the incumbents need to squeeze as much as they can from the existing business model before failing to grasp the next. The king is dead, long live the king!"

Please, no business-as-usual....

Collaborative and industry-wide responses to the growing sustainability agenda are appearing by the day, as this Business Week article identifies. On the surface they seem to make sense but dig a little deeper and they can be seen for what they are - a fear-driven and defensive strategy in the face of impending disruption. They are designed to maintain the status quo and the predictability stakeholders seek against what otherwise would be a major opportunity for increased competition within the industry or externally-driven disruption from outside.

The business models and product lines of many industries (think automotive as an example) have long exceeded their ‘sell-by date’ and require massive disruptive innovation in order to meet the future transportation needs of the planet and in a sustainable fashion. The same is true of almost all other industry business models conceived in the ‘industrial era’, a pre-sustainability era where waste and inefficiency is acceptable because the market can bear it and the 'consumer is king'.

Just as a "rising tide lifts all ships", so these well-meaning but naive government and NGO-aided and abetted industry initiatives will only serve to rise and sustain the very business models, thinking and attitudes that have got us into this position in the first place. Even worse, these initiatives will serve to kill, delay or obscure the sort of radical innovations we truly require in order to meet the global challenge of sustainability and ensure it benefits not just developed, but emerging and survival economies as well.

Existing corporate leaders fear these fundamental shifts in the competitive landscape more than they fear their existing competitors; they would rather cooperate with the 'devil they know' than risk the consequences of termination in what they increasingly recognise as a major challenge to ‘business as usual’.

This does not mean that all such initiatives should be discouraged but rather that policy-makers and NGO's should recognise them for what they are - the corporate king has no sustainable clothes. The focus needs to be longer-term and we need to recognise the short shelf-life of these collaborations and the need for more radical innovations in industry structures, business models and markets if we are to succeed. In this domain, like all others, disruptive innovatuon will not be from within.