The innovation economy

From Davos: Development and Innovation - from Jan 26th, 2006
(forgot to publish... but I did send it to my team at work)

A Columbia University economist, Xavier Sala-i-Martin, spoke at a session on global competitiveness in Davos this morning. He offered what I think is the most succinct statement of the stages economies move through on their way to becoming innovation-based. First, he said, you concentrate on making something cheaper than anybody else. And when you can no longer make something cheaper than anybody else, you concentrate on making something better than anybody else. And when you can no longer make something better than anybody else, you concentrate on making something different than anybody else. That's the innovation economy.

http://blog.fastcompany.com/archives/2006/01/26/live_from_davos_development_and_innovation.html

The Confucian Consumer

The most fabulous posting on the Fastcompany blog!

http://blog.fastcompany.com/archives/2006/01/13/the_confucian_consumer.html

Twelve Facts about the Confucian Consumer
1. Chinese people put pineapple, not pepperoni, on pizza. All foods are divided into "heaty" and "cooling" foods, and the two must be balanced at all times. Pizza is heaty, so the pineapple cools it down.
2. In China, "fresh" means "alive." Daoism is still a force in the People's Republic. Daoists believe our natural state is the only "balanced" state. Therefore, Chinese have a deep aversion to manmade preservatives. For that matter, Chinese women get prickly about chemicals in shampoo.
3. Brands used inside the home are locally produced and cheaply made. Brands shown publicly are foreign made and expensive. In a Confucian society, social status is an investment, so consumers will pay a huge premium for mobile phones and high-end alcohol. At home, price sensitivity is extreme. There are no designer bedspreads. Victoria's Secret doesn't stand a chance.
4. Chinese people never have dinner parties. The home is a place of refuge, escape, and, every once in a while, self-expression. Comfort is key. But where you live is paramount, which is why apartment blocks sport such names as "The Gathering of All Heroes Under Heaven" and "Tycoon Court."
5. More than 80 percent of Shanghai couples now get married with an engagement ring, up from practically zero a couple of years ago. In an unsafe world, men have to demonstrate -- not talk about -- their love. Women are suspicious of guys who say, "I love you."
6. A powerful woman decorates her US$1,000 mobile phone with Hello Kitty stickers because she wants to be soft on the outside and like iron on the inside.
7. In China, feminine beauty is a tool that moves a woman forward. Cosmetic surgery is all the rage because it helps a young woman land a job, not a man.
8. Soy sauce can save lives. The thinking is as follows: "If my food tastes good, my family will eat more. If my family eats more, they'll get more nutrition. If they get more nutrition, no one will get sick. If no one gets sick, no one will lose a job. If no one loses a job, the family will be in harmony. If the family is in harmony, a new generation can be born." Unlike anywhere else in the world, great taste ladders to good health.
9. In 1995, the Chinese middle class virtually didn't exist. By 2005, there were approximately 100 million individuals in China with incomes in excess of US$4,000 [even in expensive coastal cities, purchasing parity power is at least 2.5 versus the U.S.]. By 2010, there will probably be 200 million middle-class folk.
10. The smartest guy in the class is the coolest guy in the class. Girls really and truly go for brains, not bodies. In a dog-eat-dog, hierarchical Confucian world, intelligence is the ultimate weapon. Health clubs will always be niche.
11. Chinese people squirrel away 40 percent of their income, despite making, on average, less than a tenth of U.S. per capita income. The Chinese believe the fickle hand of fate can turn against them at any time. And there's virtually no safety net.
12. Germs are the ultimate evil. A Chinese mother's primary role is to protect the child from harm and shield the family from invasion. That's why air conditioners, washing machines, soap, food, dishwashers, and television sets all scream, "germ-free."