Emerging Markets as a Source of Disruptive Innovation: 5 Case Studies

Hugo Spowers, Founder and Project Leader, Riversimple

Riversimple determinedly don’t think of themselves as a car manufacturer, although in terms of existing business models that’s probably how they are too often described. Founder Hugo Spowers believes, perhaps unusually for someone engaged in manufacturing, that an industrial society based on the sale of products will never be resource efficient. Which puts a big question mark over pretty much every industry you can think of.

The motor industry began with a notorious innovation, when Ford said something like ‘if I gave my customers what they wanted I would have had to invent faster horses.’ As we are all aware, the motor industry is no longer fit for purpose, modern-day constraints are very different to those faced by Ford, but we have yet to see another such step-change in response. Unfortunately, as a hugely advanced, mature, specialised, technology specific industry—it is now ill-suited to achieving a step-change.

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First session: How the change imperative will continue to shake business in the next three years

The Big Rethink has officially begun.

Vjiay Vaitheeswaran of the Economist and Martin Temple of the EEF opened, setting the agenda for the discussion for the next two days: how design can help us get out of the mess we’re in. It’s a good move to get two people who aren’t designers by trade to open by asserting the power of design in not just ‘business’, but in meeting the global challenges we face today – which obviously will affect, and be affected by, business. However, they are preaching to a room of the converted. It will be interesting to see how and if anyone disputes this view over the next couple of days, (but as most of the attendees will have paid 1.5k to be here: I think it’s unlikely.)

Attendees range from designers to business, economists and civil servants. We have a great line-up of speakers, and a slightly disappointing turn-out—the lecture hall is not full. It quickly becomes apparent that the format of discussion is better suited to the fast-paced presenters. And the first session of the morning has set the pace—very snappy indeed, perhaps to match the pace of change in the outside world on which we are here to reflect. (We’ve been given little remote controls to text in answers and questions.) Short shrift was given by VV to the lengthy intervention during Q&A.

Robin Bew: How the change imperative will continue to shake business in the next 3 years

Welcome to the new world of business, definitely not the same as the old world of business.

Robin Bew, Editorial Director and Chief Economist at the Economist Inteligence Unit, steps up to the platform and describes the scorched earth that is the world’s economy and reminds us of the recent traumatic past.

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Jeff Denby is Chief Creative Officer and Co-founder of PACT.

Jeff starts by sharing his ethical values and then follows up with a slide of two crotches. A guy and a gal. Could this be overshare? It turns out Jeff has developed a new business designing the underwear that encompasses the 12 foot high crotches we’re looking at. Now were looking at two generations for Calvin Kline undies ads. To date innovation in underwear has tended to focus on updating the advertising models who show off the items. In over 15 years we have only progress from Marky Mark to David Beckham it seems.

Jeff and his partner spent 18 months researching the market before stepping into it and is a firm believe that when you’re looking to innovate you need to leave the building – ‘the answer to your research is not on the Internet’. He also confesses he had to hang around in the underwear section of department stores to watch people buying and trying. Another nice gem shared was that being open about what you are interested in and researching, rather than keeping secrets, has a tendency to attract useful and generous people towards you and your business. (This is something I definitely recommend from personal experience.)

What Jeff’s company PACT do is create premium, ethically produced cotton underwear that brings three stakeholders together. Each new design is developed as a partnership between one charity (who gain 10% of all sales), a designer (who creates the pattern for the briefs) and the manufacturer, PACT (who manage, produce, distribute and sell the underwear). The value in their product lies in the stories that can, and are told, through the creative process and the connections between the stakeholders.

As Yves Behar says

• Design brings stories to life
• Stories bring design to life
• Life brings stories to design

Not content with just creating a demand for ethical undies Jeff and his gang have also focused on the packaging, designing cotton bags, created using the off-cut material from the underwear. Instead of throwing this packaging away many purchasers utilise the bags and even send photos of how they’re using both the bags and the undies back to the company (see the wedding above).

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Over the next couple of days my colleague Jocelyn and I’ll be blogging live from the Economist’s Redesigning Business Summit in London for Core77. Under the title ‘The Big Rethink‘ the event sets out to develop some fresh ideas on how design thinking can be used to seize business opportunities in our increasingly volatile world.

Over the two days we’ll be hearing from over 30 speakers from across business, academia and design. Take a look at the full programme and if you have any questions to the speakers or any particular workshops you’d like us to report on please share below.

If you’d also like to follow the event on Twitter the hashtag is #redesign2010.

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A newscast released today by CCTV discusses China’s industrial design boom. Unfortunately the newscast is poorly produced, poorly written (“industrial design” is written “industries design,” for instance) and laden with good ol’ Commie propaganda-speak (i.e. “highest levels of achievement,” etc.), although, if the figures are to be believed, there are some interesting takeaways:

Chen Dongliang, Director, Beijing Industrial Design Center, said, “The output value of industrial design in Beijing reached 80 billion yuan in 2008. Now around 250-thousand employees are working for nearly 20-thousand design companies in the city. Beijing is also expanding technology service and high-end manufacturing industries, both of them can help boost the industrial design sector.”

…The global financial crisis has made more and more companies realize that it’s not sustainable to depend on cheap and low-end products. They must think more about added value. The central government has also called for more attention on industrial design, pledging to change “Made in China” to “Invented in China”.

Chen said, “Industrial design is the key point of the value chain. Figures show that in Britain, 100 pounds of investment in design can yield 225 pounds of output. According to our survey, in China, one yuan investment could bring 13 yuan of output….”

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The past two years have seen a lot of upheaval in the auto industry, with some operatic rises and falls. Two of the world’s automakers that have been chugging along largely unnoticed amidst the drama (while quietly making profits and increasing in size) are Hyundai and Kia; and the good news for us is that in both companies, design is playing an increasingly significant role, particularly since they have each invested in design centers on three continents.

In an article looking at Kia, the BBC reports that

[Paul Philpott, Kia Motors Europe's COO] believes the key driver to future growth lies within the cars’ design, penned in Kia’s global design headquarters in Frankfurt, as well as in Seoul and in California.

“With the new products that we are now bringing to the market, the product design is coming together as one family,” he says.

Meanwhile the Wall Street Journal’s report on Hyundai points out that

Hyundai slowly beefed up its design capabilities over the past decade, adding staff in South Korea and building new design centers in Irvine, Calif., in 2002 and Russelsheim, Germany, in 2003…. Inside Hyundai, the designers battled a tradition that gave engineers and factory-process experts the final say in product design. In one recent instance where designers won out at Hyundai, the new Sonata has a thin line of chrome that stretches from the headlights along the hood and top of both doors to the back window. Keeping that lined up in production is a challenge for factory workers and, as a result, engineers resisted it, say company officials.

The article also points out that Hyundai, like BMW and the other big dogs, is seeking a unified design aesthetic across its fleet, the sort of “design DNA” we often hear about at lectures championing the importance of design in business.

Speaking of business, the already-giant Hyundai’s global sales grew 10% last year, while the rest of the industry’s declined by 2.5%; meanwhile up-and-comer Kia saw a staggering 1,200% (that’s not a typo) increase in net profits and a 270% increase in operating profits in 2009. So while there are currently tons of auto designers being downsized worldwide, hopefully they’ll soon have a place to go.

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MPs and senior construction industry experts Monday night attended a dinner hosted by the Associate Parliamentary Design and Innovation Group and engineering consultancy Buro Happold. The purpose? To thrash out a tricky question: How to make good design a central concern to the construction industry.

The assembled worthies, seated around a very long table at the Institute for Civil Engineers in London and overlooked by portraits of engineering ancestors, were addressed by the Shadow Minister for Construction Mark Prisk(pictured above) and the Government’s Chief Construction Advisor, before attacking the debate themselves over dessert and coffee.

The background: With some worthy and notable exceptions, the UK construction industry is accused of being resistant to change, motivated by cost, and adversarial in attitude. This is not only inconvenient, it is a major problem for a country with the massive challenge of meeting (legally binding) sustainability targets, in the midst of a recession, in the face of growing global competition. We are a small island, sinking in the wake of larger powers.

The APDIG assembled this group of concerned individuals with a view and leverage on the issue to try and identify a solution. Or, perhaps more realistically, a path towards a solution.

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Here’s a good example of design’s capability to shake up the supply chain for positive gain: Cambridge Consultants’ new Syreen, a green syringe concept “designed to ease the resource intensity and material wastage associated with traditional syringe development and manufacture.”

Instead of glass, Syreen syringes are made with COP (cyclic olefin polymer) plastic, which has enabled Cambridge Consultants to shed the need for secondary packaging altogether, a first in this medical device arena. The makeup of the Syreen allows syringes to clip together, nesting in a pack while the COP design doubles as the outer shell of the packaging itself. The Syreen therefore eliminates the need for wasteful fillers such as cardboard and styrofoam, reducing the packaging weight by 30 percent and volume by 50 percent from today’s standard packaging. The United States alone produces 6,600 tons of medical waste per day, equalling well over two million tons per year–approximately 85 percent of which goes to landfills throughout the country.1

“What makes Syreen so exciting is that while it is a sustainable alternative to the status quo, it can truly introduce a paradigm shift in the existing supply chain,” said Phil Lever, Commercial Director, Drug Delivery Devices for Cambridge Consultants. “We found that typical glass syringes use many materials from all over the world and that shipping costs are egregious due to inefficiencies in packaging. This marriage of economy and ecology shows that medical device companies will likely see competitive benefits by taking sustainability seriously.”

Cambridge Consultants is currently seeking a member of Big Pharma to team up with and get this thing into production.

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PriestmanGoode, a London design house that has worked on everything from cell phones to speakers to first-class cabins for Swiss Airlines, has developed — at the request of UK’s Design Council — a radical solution to how hospital wards should be designed. Fast Company reports:

“PG has just released their proposal today, in a “healthcare manifesto.” The central problems facing hospital design happen to have already been solved in the design of first-class cabins for airlines, they say. “

Strange though that the article and the manifesto don’t say a word about the quality of medical care.

>> Read article

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