Changeism

One-Day Workshop on Innovation in Emerging Economies

Scott Smith — Tue, 12 Jan 2010 16:38:45 +0000

To delve more deeply into the topics we discuss on Some Observers, Changeist + Emerging Futures Lab are collaborating on an upcoming event exploring near-future opportunities for innovation in emerging economies. The one-day exploratory interactive workshop will be held January 26th at Aalto Venture Park, Otaniemi, in the greater Helsinki area, and will explore the nature of the BoP consumer, technology behaviors, needs and barriers, and will allow participants to test their own assumptions and uncover new opportunities to serve these growing markets. For more information, contact Scott Smith at ssmith [at] changeist.com.

Just Good Enough, Again

Scott Smith — Mon, 11 Jan 2010 14:00:43 +0000

In light of the recent upsurge in discussion around "good" over "great," I thought it would be useful to repost an entry from August 2008 I wrote over at Changeism on the topic of Just Good Enough. The JGE phenomenon was taking shape even then, though the economic crash that manifested months later hadn't truly taken hold. We had been observing subtle signs of it for some time in both observational research, interviews going back as far as 2006-2007 with consumers, particularly at the low end of the economic spectrum, and of course via the constant horizon scanning we do as our foundational research. We took it on the road and raised it in workshops and briefings, though it was a hard time to get companies to let go of the "dominant logic" of Popu-luxe, and therefore be first-movers in delivering on this emerging need.

For better or worse, this idea is now making its way up to the stage as an major force in consumer lifestyle choices in the developed world. It has, of course, been a core factor in the lives of those in the developing world for decades—sufficiency versus luxury, getting by instead of getting ahead. It's a theme we continue to explore here from both sides.

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In the past year or so, we at Changeist have been talking about the concept of Just Good Enough, or what we call JGE for short. Thinking about JGE stemmed initially from study of how technologies are being developed or modified within the developing world for use there. Where resources such as energy, money or space are constrained, the lowest appropriate level of complexity, cost, functionality, or what have you, is what's needed. Anything else is a luxury--and expendable.

So, for example, why build a $20,000 luxury sedan when all the market needs is something slightly better and safer than a tuk-tuk? Hence, Tata has given us the Nano--the one lahk (100,000 rupees or about $2,500) vehicle that is suited to the needs of a growing sector of Indian society, somewhere below the middle of the pyramid, who need basic transportation that goes from point A to point B, at a minimal cost and with some basic trappings of safety. Pragmatism trumps the need for status in this sort of environment, the polar opposite of much of the developed world, particularly the US.

Or, when you have a house that is 75 square meters, share it with several generations of family, and don't have much privacy, why spend a huge portion of your salary for a desktop PC when your mobile phone does just what you need it to, well enough? If it carries an address book, has adequate basic Internet access for lo-fi text browsing, and allows you to stay in contact with friends and loved ones, then it IS a PC.

Only now, in the face of peaking technological and system complexity as well as against the backdrop of an entrenched economic downturn, is the idea of JGE catching in North America above the level of lower-middle class households. When disposable incomes are high, consumers are drawn to shiny premium features, always looking for a way to trade up to a higher level of product or service to show status. For the last 40 years, Americans bought because they could, even acknowledging economic trade-offs were being made by saving here for a premium service there, or Trading Up as Boston Consulting Group calls it.

Now, in the cold light of economic contraction, attention has turned to JGE: living with just enough money to get by, buying only what you need to be moderately happy or simply get through to the next paycheck. Buying vehicles in terms of tonnage has been replaced by buying ones that can do the basic job with a minimum of necessary styling. Basic coffee in a cup has moved into the space where exotic beans from obscure rift valleys used to sit. Inexpensive, low-end laptops look attractive alongside high-cost, bulky widescreen models. Consumers aren't going out buying expensive mountain or road bikes in the face of rising fuel costs, but basic cruisers are flying off the racks at bike shops.

These are only weak signals at the moment. The vehicles and laptops cited above are signals that have come from elsewhere. Europe and Asia have had low-impact city cars for some time, though R&D efforts to create not only cleaner but lighter vehicles for global markets has given this sector a boost. Lighter weight, cheaper basic laptops emerged in large part from efforts to create affordable devices for developing countries. Intel's competitive actions in the face of the OLPC helped spur OLPC clones for developed markets at just the right time.

Nonetheless these signals are coming in greater numbers, showing a growing demand for products and services that are appropriate for their circumstances and fit available resources in place of premium for the sake of premium. Prime areas of growth for JGE are housing, clothing, household items, personal care, consumer electronics, financial services, food and beverage: all areas where premium services exploded in the past decade, but which are seeing innovations in developing markets that can move to the developed world to suit the growing need in increasingly strapped developed markets.

Implications:

Slower replacement cycles for products. Consumers will hold on to both costly and everyday products longer, from smartphones to running shoes. Lower cost durability needs to be engineered in, with the potential to upcycle -- use the same platform and renew components as needed.
Greater interest in the simple choices. All-you-can eat services with high pricetags are set aside for basics at a manageable, transparent cost.
Greater need to focus points of delight. With most frills stripped away, companies will need to focus on points of delight such as hidden utility to provide consumers with clever functionality at a low cost. Think "virtual" GPS on the iPhone, or fold-up back seats in the Honda Fit.

Posted via web from Some Observers

The Rise of Chi-T: Chinese IT and the Developing World

Scott Smith — Mon, 04 Jan 2010 19:49:59 +0000

Many people already know China represents the largest Internet and mobile user base in the world: CNNIC put usage at just under 340 million midyear last year. Likewise, Chinese mobile penetration is at 54% and climbing. Both trends have fueled a voracious appetite for access devices—PCs, mobile handsets, laptops and now new lighter classes of devices, such has netbooks and early forms of MID/media players. Western device makers have historically been a major beneficiary of this growth, though homegrown OEMs such as Lenovo and Haier have become global names in the electronics business over the past decade. Meanwhile, China's low-cost labor and a growing base of bright engineers and designers have fueled the country's attractiveness as a manufacturing center for the world's gadget fetishes.

This is changing, and Chinese IT is poised to make the leap into a strong position of influence in the next decade, driven by several important factors: the aforementioned growing demand base at home and acquired expertise among its dozens of major contract manufacturers, and a desire to exercise its know-how on the global stage.

While the West remains focused on its own known brands—Intel, Nokia, Microsoft, Sony, LG, Samsung to name a few, Chinese contract manufacturers such as PC makers Founder, Tongfang and Great Wall are producing own-brand product for the domestic Chinese market, including the latest 3G netbooks, e-readers and other portable devices to meet the growing demand. And some are poised to follow other Chinese IT leaders like Lenovo, Haier, Huawei and ZTE into international waters with a wave of new, cheaper devices.

The great leap doesn't stop at hardware, but reaches into operating systems and processors to run these devices. A few weeks ago Wired covered the emergence of what it called the People's Processor, a government funded push to develop an alternative, "open" processor called the Longsoon chip, which has already found its way into a number of Chinese notebooks in recent years, and forms the cornerstone of a push toward domestically created open computing that frees Chinese developers and consumers from having to rely on high-price Western software, namely Microsoft Windows and other software dependent on x86 architecture.

The implications of this rise of "Chi-T," or IT formulated and brewed in mainland China, are potentially far reaching. Like Brazil's push into open source in the last decade (also partially a move to enable the people to attain technology with fewer licenses, and costs, attached), China's drive to create a multipolar IT world won't s top at its own borders. As it has done with automotive, energy, and other important sectors, China is looking to fill the gaps left by Western companies in the developing world, and sees an opportunity to be the provider of IT to these areas. The head of the Longsoon project himself recognizes this potential:

“Compared to Intel and IBM, we are still in the cradle,” concedes Weiwu Hu, chief architect of the Loongson. But he also notes that China’s enormous domestic demand isn’t the only potential market for his CPU. “I think many other poor countries, such as those in Africa, need low-cost solutions,” he says. Cheap Chinese processors could corner emerging markets in the developing world (and be a perk for the nation’s allies and trade partners).

This parallel IT world will be much more driven in its definition not by Western-style early adopters, but by the wants, needs and behaviors of a much greater proportion of what we might refer to as traditional late adopters—rural, less educated, lower income users, with functionality, applications and design dictated more strongly by these groups from the beginning. China-grown technology will be a central part of the fabric of the BoPNet, just as Chinese and Indian vehicles make up more and more of the wheels on the road in the BoP.

And, as open source technology gains further in the West with the rapid rise of new operating systems and new classes of devices that platforms like Windows can't evolve fast enough to keep up with, not just components but processors, software and applications of Chinese origin (and Brazilian and Indian) will become more prominent as companies seek to innovate freely, quickly and flexibly in the West, and take advantage of all of the building blocks that are available globally, not just from Redmond, Mountain View, Seoul or Espoo.

Posted via email from Some Observers

Making a New Design Fiction

Scott Smith — Wed, 30 Dec 2009 17:03:14 +0000

I had a great opportunity to kick off Lift@home Toronto a few weeks ago (thanks to a generous invite and lodgings from the excellent Tom Purves and Michele Perras), which for the occasion merged with DemoCamp and challenged all comers to demo a concept for 2019. Many of my favorite Torontonians were in attendance, and the evening's proceedings were set in the suitably retro Canadian Corps hall—something akin to a US Elk's Lodge hall, complete with bowling trophies and cheap beer.

My task was to set the mood, so I decided to go a little deep and psychological. Inspired by recent work by past Lift speakers like Bruce Sterling, Julian Bleecker, Nicolas Nova and Genevieve Bell, as well as Matt Jones and the folks at BERG, I built my talk around the journey from those influences that shape our worldviews about the future to the processes by which we extract and project those views through design fiction. After all, creating demos of products or services for 2019 requires a good deal of design fiction, whether we know it or not. We are taking what we believe, fear, hope for and expect about the future—our own biases, mental dots and loops—and putting them in physical form as we create scenarios, narratives, artifacts and experiences that communicate this future view to others. It's hard to be neutral when we talk about the future. We ultimately end up trying to persuade others to believe in our own internal stories.

Lift@Home Toronto

View more documents from Scott Smith.

Thinking about this process within myself, I realized some time ago that part of what drives me to do what I do is the experience as a child of living on the edge of the future as a citizen, beneficiary and occasional victim of the amazing new economy sprawl that was Atlanta in the 1960s—1980s. Since my childhood, the city has undergone more than a trebling of its population—from about 1.5 million to over 5 million. With that it expanded out into new suburbs, up in the the form of multiple cores of skyscrapers and highrises, and down in the shape of modern mass transit. It also grew inward, becoming one of the first reasonably integrated cities, mixing not only black and white, straight and gay, but fed by an increasingly international population of immigrants, businesspeople and money. All in all, it was what might be described as a post-modern American, and even world, city. Fittingly it ended the 1990s as an Olympic city, a few years after I left.

This experience of rapidly exploding growth, technology, social convergence, media (my hometown was after all the birthplace of CNN), politics, not to mention heat, humidity and distinctive red mud all shaped my path as an observer, interpreter, analyst and forecaster, in much the same way growing up in a post-90s Moscow or 2000s Lagos might. It colors the design fiction in my own mind. It makes me aware of the downsides of "progress" but it also makes me optimistic about what's possible.

I closed by asking the group what our future design fiction will be. What are the prototypes, situations and images we want to explore? Thirty years ago it was Omega Man and Soylent Green with their disease and decay. Twenty years ago it swung the other way to Blade Runner, an uncontrollable but undeniably sexy future. Lately it's been 28 Days Later and District 9, full of "The Other", internment camps and infection (again). What do we want it to be next? Time to make it happen.

Netbooks vs E-Readers for BoP Education

Scott Smith — Fri, 18 Dec 2009 19:44:40 +0000

Photo by aslakr

I started this post two months ago and it got lost in the shuffle of travel. Given this post by on the World Bank blog today, it seemed appropriate to finish it:

When it comes to digital tools for learning in developing countries, is it better to start with a simple, if less full-featured, approach that can act as a building block, or hold out for the dream of a fully connected information powerhouse in the hand of each child? This is sure to be a controversial topic, but one worth exploring.

It's also one which we've already had some conversations about with people on both the technology and the development side, which we want to open up to wider discussion. It is a discussion that centers on what kind of technology approach might best provide a boost to students in the developing world and goes straight to the heart of how we approach ICT4D issues.

Bright minds have spent the past decade mulling how to get PCs with Internet access onto the desks of students in the developing world, and in the past few years a small army has spent thousands of hours and probably millions of dollars creating and deploying pilot devices with this aim in mind (see an index of many of these devices here). With the falling cost of notebook computers, their lighter, mobile form factor seemed to make this device the focal point, culiminating in the grandiose vision that became the OLPC—a small, durable, long-life, connected device that could deliver education, communication and creativity the far corners of the world at an affordable price. As we have seen, this vision was never realized, and while some devices made it to their destination, they never reached the pipe dream of the $100 price point, and maybe as many ended up in kid's bedrooms in the developed world.

As mobile phone penetration exploded in the developing world in the meantime, it didn't take a genius to recognize that a potentially powerful platform was already present, or would be soon, in many pockets, bookbags and villages. Simple, networked, less expensive than a PC and far more attainable, the humble handset is being turned to as a new possibility for delivering education to places like sub-Saharan Africa.

But what about something in between, like an e-reader? With a larger screen size than a mobile, emerging e-readers sport connectivity (either Wi-Fi or cellular) that was optimized for downloading material for reading, and possibly other basic functions such as annotation, simple short messaging and pushing activity reports back upstream. The coming crop of e-readers have a number of things that make them attractive for educational use, particularly in less delicate environments:

They are being built to be more durable as designers get a better idea of usage patterns.
Functionality is being created around connectivity—not just for downloading books, but for more connection between booksellers and readers, and among readers.
They are being designed with low power consumption in mind.
Display technology is being optimized as well to aid in low power consumption and readability in many environments.
More of these readers are designed to take advantage of open publishing standards, making them open to a huge library of public domain texts or those distributed with an open license.
Touch-ready displays enable adding multilingual support and handwriting capture and recognition—a virtual slate in effect.

This list could go on, but you get the idea. Meanwhile, laptops and netbooks still suffer from various barriers:

Connectivity essentially makes them go, and larger processors invite the need for more bandwidth. Kicking the door open to the full Web isn't necessarily a good thing simply from the connectivity and support level alone.
Licensing fees for applications and operating systems often push the margin beyond the ability to afford these devices, even with the sweetest deals.
Many moving parts mean more servicing requirements.
Special "netbook" OSs often mean dumbing down a more powerful device. Why bother to introduce it if you can't use it to its fullest potential?

Again, many arguments rest on this side as well. And, of course, there are still many in favor of using a more complex device. My point here is to spark thinking about how these simpler devices that, unlike a mobile phone, is function- or application-specific: they are designed for reading and text, which a mobile is not optimally suited for.

So, this is an argument to look a little more carefully at that glass to see if it is indeed half full. Many different solutions should be explored, and now we have a new one with particular potential. Let's see what the next generation of e-readers brings us, and if these innovations can not only help those of us in the developed world pass the time in flight, but also might help accelerate connected learning where it is needed.

Posted via email from Some Observers

Understanding Wayfinding in India

Scott Smith — Fri, 18 Dec 2009 03:11:59 +0000

Photo by Anil Jadhav

Google announced on its official blog today an interesting revamp of the textual directions given by Google Maps India. Until now, GMaps has delivered dry, technical, and for some people, unhelpful turn-by-turn directions, simply instructing the travel to turn right or left after a certain distance, and/or at a certain road. This is okay if you are a surveyor armed with technical equipment, or have named roads to go by.

However, Google UX designers took a closer look at the needs and operating environment of Indian users and realized they were dealing with many situations where formal road names weren't available, or where users may have literacy issues or very different wayfinding habits. Landmarks, they discovered, play a critical role in orienting the traveler, and may be a more recognizable marker that indicates a turning point or correct progress--a gas pump , a seed store, a kiosk all may be better known markers of direction and distance than a formal road name (which may not be locally recognized) or distance traveled. The result is that Google has made these subtle but important changes to their text directions. It may also present a future opportunity to build a better database of locally important businesses and information nodes as it complies these marker points.

This change echoes research carried out by others around mobile and other computing or communications interfaces in markets where different modes of social communication--and levels of literacy--exist. It will be interesting to see if and how Google applies these learnings in analogous environments, and if it is applied at all in more advanced markets.

Posted via email from Some Observers

The Next Big Thing is Small

Scott Smith — Fri, 18 Dec 2009 00:05:03 +0000

In the spirit of gathering year-end predictions, last week the venerable Financial Times did a whip around of a few technology and innovation analysts (including Rob Gear of the UK's PA Consulting, whom I've had the pleasure of eating curry and bowling with in Brick Lane—another story for another time). The goal was to gauge the group's opinion on the Next Big Thing, that ephemeral creature which futurists, forecasters and trendspotters of all stripes are often ask to point out to journalists who wait with baited breath as they prepare the killer trend article.

Unsurprisingly, the group had diverse and nuanced opinions of what comes next, what we should all be on the outlook for. And being good pattern collectors, most painted a picture not of one NBT, but of its, or their, probable behaviors. The NBT may be changing behaviors, or expectations, maybe a group of disruptions instead of a monolithic gamechanger, or, as Kishore Swaminathan of Accenture puts it, the NBT is scale, by which he means exponential, probably rapid growth.

I blog this because I agree about scale, but not the same "end" of the scale. One of the core premises of our focus on the emergence of the BoPNet is that it is about utility and often about incremental change—about making small but useful things happen. And if the BoPNet is where the next important wave of change is happening, then the NBT is Small. Small functions, enabled. Small transactions, facilitated. Many, many small points of data collected and used in a meaningful way. Small actions that add up to big ones. Because of its scale and development within constraints, small is what HAS to happen, though by happening many, many times over in many parts of the developing world, small, a billion times, is in fact big. But big isn't the essence, it's small.

Posted via email from Some Observers

Comparing Information Appetites Between the DevNet and BoPNet

Scott Smith — Wed, 09 Dec 2009 20:22:11 +0000

A new study from the Global Information Industry Center at UC San Diego estimates that the average American consumers takes in roughly 34 GB of information per day, spread over about a 12 hour "feeding period" per day. If one assumes that the US consumer lives at the pinnacle of what we call the DevNet, with for all intents and purposes access to the greatest array of information sources and information delivery devices, this figure roughly measures the information diet at the top of the global info pyramid.

Skimming the report, my first question was how the BoPNet compares, given the assumed sources and modes of delivery measured for the US market. According to the research, television makes up the majority of bits consumed, roughly 60% on a daily basis. Other sources include telephones (fixed and mobile), the Internet, DVDs and other recorded media, radio, movies, printed media and video games, to name the big ones. While it would take an equivalent study and team of researches to calculate the exact figure for a country in the BoPNet, we could make the following assumptions about the information consumption conditions for BoPNet consumer:

The consumption "day" of the BoPNet consumer is shorter. Due to longer average work hours (long commute times in cities), time out of home dedicated to daily lifestyle upkeep (shopping in multiple markets, mainly on foot or public transport, care for family outside home), and time in home dedicated to domestic tasks, less time is available for total active information consumption, though the level of passive consumption may be significant (listening to TV, radio while doing other activities for example.) In some cases, access to steady power sources and high costs of power may limit use time as well.
Traditional media are dominant. This favors TV, radio and print. At the higher end of the BoPNet, DVD consumption would displace a portion of sources such as video games and Internet access. Lack of high definition TV, which has helped drive recent growth in density of information consumed in the US, would keep the total figure down and likewise slow its growth.
Telephony costs are higher. Again, while telephone use may be significant, this use is constrained by higher costs.
Radio, recoded music and print and more important. These sources may be passively as well as actively received throughout a longer day, and during transition times between locations.
Internet and other digital media are metered heavily out of home as well as in. Greater use of kiosks and Internet cafes, or mobile data on the move is balanced by higher costs again.
The Internet will deliver less dense media. As it grows, the Internet will be relied on to add more traditional media (games, video) to the mix, but this may not be dense as it will rely on less powerful delivery platforms (cheaper PCs) due to lower bandwidth availability and lower processor and storage specs on average.

So, it could be assumed that overall "exposure" time to information may be somewhat but not radically lower. Less information consumed in home is partly offset by density of information exposure out of home and in public places. BoPNet consumers may have just as much exposure to "interstitial" information in transitional moments, which has evolved in response to the constraints of "owned" in-home media in these markets over the years. Consider the average soccer/football broadcast watched in Thaliand versus an NFL game in the US. The Thai consumer will see hundreds of ad and information impressions on screen during the match due to the advertising models of a continuous sport (shirt sponsorships, ad boards in stands and 10-second TV commercials or other overlays in game), whereas the US consumer will get longer, but slower exposures to 30-second beer ad that is mostly visual.

This is all a qualitative thought experiment, but it is interesting to think out, and to consider where the two information cultures are headed. The DevNet has to expand in density, whereas the BoPNet is expanding largely in number of sources and "packets" due to the cost and technology structures. The US, and much of the DevNet, will grow in density through innovation such as DVRs (packing more information into the home), HD TV, Web 2.0, media-capable smartphones, and of course more broadband to carry more information to the consumer.

The BoPNet will grow in information "snacking" from mobiles, and other out of home media and information sources. Video games and DVDs will grow in use, but this isn't going to grow in density as much. Radio and print may decline in individual consumption terms over time, though these will continue to grow collectively as more eyeballs enter the market through both population growth and middle class expansion.

Implications? We can surmise that the DevNet consumer is possibly reaching (slowly) a consumption "peak," where, like a diet, density reaches a point of overload. The number of sources may continue to expand in the US home, for example, but at a point the amount of overlap in information becomes white noise and therefore doesn't get consumed. For the BoPNet, these consumers already live in information rich environments, but a fair amount of this is utility versus entertainment. Since utility correlates to economic value in a more pronounced fashion in the BoPNet, the type of information may lean to the factual, and bite-sized (think of Nokia LifeTools instead of Pandora). So, like nutritional diets, the differences may be in the amount of calories of information delivered and consumed effectively and efficiently. The BoPNet consumer's information diet may sit around half to two-thirds that of the DevNet consumer, constrained by greater need for ROI from this consumption and the shape of the delivery vehicles.

Your thoughts?

Posted via email from Some Observers

Resource Constraints Attracting Innovation

Scott Smith — Mon, 16 Nov 2009 15:53:01 +0000

As I was listening to a conversation with a Cisco exec this morning on BBC, an additional take on why the lower reaches of the pyramid are becoming fertile ground for innovation around technology and new business models emerged that is counterintuitive to the way business have thought about low-income consumers before. Cisco's Chris Dedicote, who I wrote about last year for Worldchanging, talked about how the fact that consumers have little extra money to spend is precisely what is making them potential early adopters of new technologies and models like smart energy meters and new forms of mobile banking (and one could add things like low-emission city cars, upcycled materials, and on and on the list goes).

Five years ago, that idea would have seemed strange when there were plenty of higher income consumers to be tapped with this sort of innovation. Dedicote was articulating (thankfully) a systems view which has been missing—there won't be resources or new consumers to tap unless we find ways to do more with less collectively, and help individual consumers do the same individually.

(Republished from Some Observers)

Lift@home Toronto and DemoCamp 2019

Scott Smith — Mon, 09 Nov 2009 20:01:55 +0000

Thanks to a kind invite from Tom Purves and Michele Perras, I'll be speaking at the upcoming Lift@home/DemoCamp 2019 dual event organized for November 17 in Toronto. The focus on the event will be an exploration of 2019 through design fiction, with a group of designer competing via concept demos for the year 2019. The event is one of a strong of Lift@home events organized around the world by the Lift conference community as a way of sparking home-grown explorations of technology, society, design and the future.

The event will be held at the Drake Hotel from 630PM.

Get your tickets before they are all gone.