Make it pretty bhaiya, The word bhaiya refers to brother in Hindi - India
David Ricardo, British economist at 18th Century, could not have said it better: countries have a comparative advantage over other countries in certain areas. Whether it is coffee, copper, steel or cacao, each country “should” have a surplus, given its highly specialized labor force and its ability to produce more, better and cheaper products.
Let’s take Chile for example. My country currently lives out of copper. Our national wage depends directly on the exports of this mineral. Similarly, some Middle East countries depend on oil and others on rice, its perfectly normal. However, I cannot forget a few regrettable stories associated with comparative advantage theory. The most important, related to my country itself.
Before copper, we lived on saltpeter. We were a huge exporter by the late XIX Century. Our neighbors were buying from us and the entire surplus was highly valued abroad. However, after the 1st World War, Germany developed a synthetic saltpeter replacement. Our economy went on a tremendously negative downward spiral.
It took time to recover and “discover" copper.
However, it is unavoidable to think: “What will happen when China (our main copper buyer) finds a replacement for this mineral? What are we going to do? Are we going to delay development because of this?
Living for the last two months in India, I have seen a similar reality but from a different perspective.
The country is trying to re-allocate agricultural resources to feed the -soon to be- largest country on the planet. Roads are being built and e-governance is taking literally, a leapfrog with its Unique Identification Authority of India (UIDAI) project. The country seems to be finally, on the right track to move forward at a faster pace.
Its closest neighbor (and competitor), China is doing quite good as well. The country's average annual GDP growth in these last 32 years was 15.8% reaching a peak of 36%.
But at what cost? Both countries are polluted, overcrowded and a huge part of their population is poorly educated. It doesn't seem to matter how they are governed, both giants are on a race towards depletion of its natural recourses (and they will take us with them).
Water in India is truly scarce and yet, they have to feed this huge amount of people. The companies in China are supplying the world with cheap products and labor, but you are completely nuts if you plan to go jogging in Beijing. Pollution would make you dizzy and sick from the get go.
If the biggest consumers in the world are doing it wrong. What’s left for the rest?
Are we going to learn something from them? Are we going to keep on doing the same exporting that is also depleting our natural resources? Are we going to depend only on one good? Are we going to keep on feeding this huge consumerist monsters?
Actually, the definition of the word consumer itself tells it all: To waste; squander. To destroy totally; ravage
The again, in any MBA classrooms all over the world, professors will drool talking about a company like Apple. Praising the walled garden they have built and its incredible revolutionary schedule obsolesce system.
However, it seems as no one thinks beyond the fact that the iPhone I am using to write this post (yes, I do use the brand) will be obsolete within 2 years. What will happen with it after that? It is a mere waste.
So what do we do to tackle all the challenges?
NEST might be a good starting point.
Some of you might recall the first biggest acquisition of this year. Google buys Nest, a small startup doing a beautiful and smart thermostat for our house.
I don’t know how many of you went deep on the story or knew about NEST before, however, I would like to highlight a few details I really think contributes to the story.
Aesthetically, NEST comes from Apple. Its CEO was directly involved on the first iPod designing process. The product is tiny. It might fit in your pocket. From the design and conceptual work, NEST was meant to be tiny. Using less material which means less weight and also less building costs.
Its energy consumption its low and after being used for a while, it will learn your behavior so it will only work at certain moments of the day. This is where the “smart” kicks in.
Its visually pleasant.
Come one, admit it, its beautiful!
I truly believe that now, on the era of intellectual capital, those companies willing to do circular economy will perform way better than those who do not. And by circular economy I just don’t mean creating a trade-in program to take your old devices, but a true circular economy, which embraces all the principles proposed by the McCarthur Foundation.
But that’s not it.
Design plays a huge role (yes, that’s why I said that its beautiful a trillion times).
I think that the way a product looks plays a major role on consumer behavior. If the company knows “what” is sells, “how” it does it, and most importantly “why”, its several steps ahead of competition. If -on top of that- they design beautiful products, people will pay, unavoidably, attention.
Now that Google owns NEST and everyone is taking about the Internet of things, a complete new revolution could come our way. Smartphones will turn into Smart houses and so on. It is just a matter of time.
But then again, if everything goes fine and demand skies rocket, will Google will built its own walled garden? Hopefully, those of us who own a NEST will be able to send our product to a reliable and fast technical service for repairmen and we don’t need to get a new one.
If companies and countries get a few new ideas for its overall picture, we might start reversing the awful impact our consumerism is causing.
A few thoughts to wrap up. I know I got to inspired and I might have wrote too long. However, if your still with me, go on.
- Do not depend on one product. Best case scenario we sell all, but we deplete a natural resource. A resource will not come back again.
- Rely on intellectual capital. You won’t run out of this one.
- Design new products that use less material. Brainstorm having "less is more” always in mind.
- Do not create any more walled gardens. Sharing is caring, boy.
- Embrace circular economy. Keep the value creation inside the loop. Profit and do social good at the same time.
- Encourage healthy practices to all of your stakeholders. Do not keep on over exploiting your labor force. When Asia starts dominating ad doing intellectual work, only Africa will be left to do the “dirty job”. However, will they?
I do believe that we should look back and learn from what happen to Chile 100 years ago. I also believe that we should -as the Iroquois tribe does- look for the next century as well. A little bit of vision won’t kill us, right?
I also believe we should be responsible as managers and consumers. Remember this one sentence and think about you:
"Do not buy things we don't need with money we don't have to impress people we don't like.”
There is only one world. One limited amount of resources. Only one of us. And so much to be done ahead.
By Aumkar Navare on in Energy Club