Frightening stats and trends
We were very taken by a book called “Leading from the emerging future”, which starts with some frightening statistics (with “Frugal innovation” adding a few):
- We leave an ecologic footprint of 1.5 planets
- Food prices are expected to double by 2030
- In USA 1% owns more that the entire bottom 90%
- 25% of kids in the USA live in poverty
- 90% of new cancers are caused by lifestyle and environmental factors
- The US healthcare wastes 600 billion a year
- In 2000 twice of many people died of suicide as died in wars
- There are 200 million people unemployed going to 600,000, most of them youth
- Every one in five people lacks access to safe drinking water
- One third of our soil has eroded and have become unproductive
- 90% of industrial production in health sector concentrate on diseases that are lifestyle driven
- 125 million phones end up in landfills every year
- The life cycle of US buildings accounts for nearly 40% of all energy use, 72% of electricity consumption, 14% of potable water use, nearly 40% of CO2 emissions and 30% of waste output
- 2/3 of carbon emission happens at the end of the food chain (that is you and me)
System break down
The conclusion of that book is that the current economic system has failed us and we need to move to an economy or business 4.0 model.
That is why “Frugal Innovation” is such an interesting book. Doing more with less. Real quality, real value and real purpose. In the developed world people are becoming not only more value conscious but also more values conscious. New methods of design, production and distribution allow for the continual reuse of parts and components, reducing waste and creating a so-called circular economy.
More with less
FRUGAL INNOVATION is the ability to “do more with less” – that is, to create significantly more business and social value while minimising the use of diminishing resources such as energy, capital and time.
Don’ t wait
Companies do not have the luxury of waiting and watching. Frugal competitors are already in the market. Particularly rivals from emerging markets.
Your company is breaking down too
Which means you need to understand how the current business practices do not work. Not enough return, too slow, high failure rate, underused IP, too complex and most important, not what the customer or your employees want.
Here is a checklist. Do you understand the following:
- Crowd sourcing
- The dangers of concept testing
- Immersion techniques
- Design thinking (over 70% of a product’s life-cycle costs and environmental footprint is determined during its design phase)
- Just in time design
- Continues manufacturing
- Frugal manufacturing
- Additive manufacturing
- Decentralised production
- Micro factories
- Local sourcing
- Shared economy at B to B level
- Last mile distribution
- Circular economy
- Cradle to cradle (good!)
- Lab to landfill (bad!)
- Sharing economy at C to C level
- Spiral economy
- Global recovery of waste (GROW)” companies.
- GDP versus GNH (Gross National Happiness)
- Emerging-market “MacGyvers
- Shared IP
- Horizontal economy
- Value co-creation
- DIY versus DIWO (Do It With Others)
- GAFAs (Google, Apple, Facebook and Amazon)
- Makers and 3D printing
- Shapeways, Fablab,Techshop and Quirky
- Agile marketing
- Dreamers, validators, makers, evangelists, fixers
- Mental model disruption
- Industrial symbiosis
- Jiejian chuangxin
- Innovation practices in China, Africa and India
- Enlightened self disruption
Sustainability as a success factor
If some of these do not ring a bell, you will be in trouble soon. Sustainability will be a decisive factor in terms of which businesses will be here in 20 or 30 years’ time. It is the future of business. Customers demand eco-friendly and healthy solutions.
GE is doing Quirky, local motors, Techshop, Firstbuild, crowd sourcing, speed, agility, entrepreneurship, shared IP and mavericks. IBM is doing it. BMW is doing it. Nike, Heineken, Philips, Kingfisher, Mars, Pearson, Pepsi, Coca Cola, BNP and many, many more are doing it. Your staff will demand it. Your customers will demand it. Government will insist on it. Every business book we cover with our clients is predicting it.
It is happening
The circular economy could save us 700 billion annually. Some 80 million Americans (around one-quarter of the US population) and 23 million Britons (nearly one-third of the population) consider themselves sharers; and in France 48% consider themselves to be active participants in the collaborative economy.
The authors estimate that 5% of businesses are involved in frugal innovation. Which means that it is a 95% opportunity. It is 100% threat for every business. Business 4.0 is coming at the speed of Moore’s law.
We don’t think you have 20 or 30 years.