We questioned about the turnaround in the economy way back in late 2009. Now we are in early 2011 and have seen signs of economic recovery. Looking at the job numbers it is more of what can be called as “jobless recovery”. Corporations have started doing well (atleast many of them), many of them show profits but most of them are not hiring to the levels they did earlier. Based on the analysis of the job numbers it is clear that the number of people who are applying for jobless benefits are growing lower. Many have given up the idea of looking for jobs or have landed themselves in low paying and part time jobs. For the numbers sake we do need more jobs to be created but for the economy’s sake they need to be quality jobs and permanent ones. I am sure the jobless recovery leaves behind a scar in the generation that is going through it and also in the one who is entering the job market in an unfortunate period such as where we are in!
Who is poor?
Poverty is defined differently in various parts of the world. In some countries it is defined as a certain % at the bottom and no matter how the country does, there would always be a fixed percentage at the bottom. In the United States it is defined as someone who earns below a certain $ income per year.
Now coming to what poverty does to the individuals, we have seen the trends in the world due to various depressions and economic downturns. Here’s an interesting study on the “New Poor” in the U.S. http://nyti.ms/auwxak/ It throws light on what the downturn and unemployment does to individual’s lives.
What is “green”?
I would like to spend more time understanding the various concepts and the work done so far in this area. Fundamental question – “what is green”?. We read and hear about this everyday in all aspects of life. Is it a fad or a revolution? At the outset I tend to believe that doing good to the environment and the earth can’t be wrong. However how much is too much and what do you actually get out of it?
For example in some areas, what is good for a small sub-system may not be that good when you look at the overall system. Also are some of the decisions made in certain areas supported by data that is enough, can we extrapolate from them? I guess there are several questions in my mind for which I will strive to find some answers.
Let me take a simple example of say “hybrid car & electric car”. Of course the hybrid car produces relatively less emissions and the electric close to none. This is what I call a sub-system level approach which is good from an individual’s perspective. If it works out economically viable (ROI is so good that I buy one) I feel comfortable making such an investment. Now let’s look at it from the overall system perspective (or at least a larger system). Where does the battery gets its charge…if its from some form of energy that needs say fossil fuel, nuclear power or something that’s probably not renewable, then what happens to the overall balance?
Empathic civilization
Read an article on this topic at http://www.huffingtonpost.com/richard-restak/empathic-civilization-our_b_460845.html. Very interesting from a scientific perspective. Would like to follow up more reading on this topic and understand better.What I got from this is “Our brains are constructed to feel each other’s pain”…haven’t we been saying this for years, though now with scientific evidence. Can we care for other’s feelings?
Generation Y
Its very interesting to read about Generation X and Generation Y and the population that belongs to each of these generations (and also the early baby boomers). People have done analysis. Need to read the book “Gen Buy” by Kit Yarrow. Listened to her on the radio today and found the analysis and rendering very interesting.
Turnaround in the economy?
There are so many discussions on the market turning around, when, how and lot of other predictions based on models. In my opinion, these models are evolved based on data points of economic conditions over the several years since such data has been recorded. Now we are talking about turnaround. What kind of turnaround to expect and to what level will the economy return / bounceback? I guess there are several unanswered questions and economists are trying to tie the loose ends to help come up with a reasonable prediction.
Looking at how things are proceeding, my prediction is that the economy will rebound and turnaround, no doubt, but to what level will we come back. In my opinion it would reset to a different level with different expectations and different job roles and definitions.
No doubt innovation and pure research is what will get us moving forward, however it is closely related to money and how much of it is available to be spent on such efforts. Could we have done things differently to not have reached the situation where we are at? Sure we could have done a lot better in hindsight. There are things which need to be learnt during such times and could be applied in other contexts too.
One size fits all doesn’t apply to all products
I read an article today in the Businesweek. Don’t want to name the product. A consumer product which has created waves in the US hasn’t been able to make its presence felt in India and is on its way to China. Its an eye opener for the developer as it proves the point that you can’t have the same product with same cost (or more) for different markets. One of the key take aways from applying BoP principles, is to develop a product ground up for a particular market, not use the one that was introduced in another market.
The article also mentions that 3 of such products could get an Indian consumer a Tata Nano ($2000) car. It states that the cost, product positioning, product features all summed up to the cause for failure.
One of my osbervations in this area is as follows. You need to come up with a product innovated for the BoP (also price sensitive) market. If not you are fueling sales of other products which are easily available through alternate markets at lower costs. This is prevalent in India and China. We also saw this in another article on Shanzhai.
Innovation during an economic crisis
Tata is rolling out its $2000 car Nano, which is a clear example of innovation during a crisis. It is nothing but product development driven by “affordable cost of ownership” and hence a completely ground up approach.
This is exactly the approach taken in an innovation that’s intended to address the BoP market. It wasn’t repricing (which actually doesn’t hold for long) instead a new development with different underlying requirements. There’s a lot of media attention from Nano, from the perspective of what the CEOs in general and Detroit in particular, can learn during these tough times.
Now Tata is planning to build houses for less than $8000. One of the news articles points to this being exactly what C.K.Prahalad refers to as BoP approach to solve problems. Good to see this concept in action
- to be cont’d
Literacy, education, knowledge …
In my opinion, literacy is more than just being able to read and write. I strongly feel that literacy is just the beginning and is the engine to acquire knowledge and harvest its potential to make the right decisions. The process of thinking has to accompany literacy to be able to argue and come up with informed decisions.
- to be cont’d
Eradicating poverty by empowering the poor
I read the book “Creating a world without poverty” by Dr Muhammad Yunus, a nobel peace prize recipient. His concept of “microcredit” and his ideas of providing capital to the poor, help them become self sufficient in life. The Grameen Bank founded by Dr Yunus in Bangladesh is a very successful organization and he believes in social business. Again it ties into the BoP where a sizeable population lives in less than $2 per day income. The Grameen Bank is built on trust and has a very high (98.6%) repayment rate.
The concept of Social Business is interesting and it applies to the poor. May be the percentage of poor could vary from a developing to a developed country (this is another topic of discussion) however poor do exist and they need inclusion. He differentiates the concept of Soical Business from Profit Maximizing Business (PMB) and how they operate.
