Innovation, alongside disruption are two of the most overused words in business at the moment. Like obscenity, many people have their own idea of what innovation is.
Judy Estrin wrote one of the best books about the subject and describes it in terms of hard and soft innovation.
Hard innovation is companies like Intel or Qualcomm at the cutting edge of computer science, materials science and physics
Soft innovation would be companies like Facebook or Yahoo!. Companies that might create new software but didn’t really add to the corpus of innovation
Silicon Valley has moved from hard to soft innovation as it moved away from actually making things. Santa Clara country no longer deserves its Silicon Valley appellation any more than it deserved the previous ‘garden of delights’ as the apricot orchards turned into factories, office campus buildings and suburbs. It’s probably no coincidence that that expertise has moved east to Taiwan due to globalisation.
It can also be more process orientated shaking up an industry. Years ago I worked at an agency at the time of writing is now called WE Worldwide. At the time the client base was predominantly in business technology, consumer technology and pharmaceutical clients.
The company was looking to build a dedicated presence in consumer marketing. One of the business executives brings along a new business opportunity. The company made fancy crisps (chips in the American parlance). They did so using a virtual model. Having private label manufacturers make to the snacks to their recipe and specification. This went down badly with one of the agency’s founders saying ‘I don’t see what’s innovative about that’. She’d worked exclusively in the IT space and thought any software widget was an innovation. She couldn’t appreciate how this start-ups approach challenged the likes of P&G or Kraft Foods.
The Wall Street Journal explores the history and technology behind Google Maps. The mapping equipment decrease in size over time is particularly interesting to see. The origin of Google Maps starts with a PC app developed the Rasmussen brothers. Jens went on to help found Apple’s map application as well. What quickly becomes apparent when you look at the camera and mapping equipment is the lack of designing for operator comfort. Even these are produced in commercial amounts, the Google Maps camera and LIDAR equipment still looks and feels like an engineering student project. Google Maps is now 17 years old from launch. It spurred a large amount of development on what was termed ‘where 2.0‘.
The impact of where 2.0 in our world today can be seen in local recommendations from Siri on your smartphone to the Institute for the Study of War, which has created the defacto map for what’s happening during the Russian war of aggression in Ukraine.
Aquafresh fortune-telling
Grey Japan based the campaign on a behavioural insight. During COVID, Japanese toothbrushing habits changed. While brushing your teeth morning and night was common within the Japanese lifestyle prior to COVID; the emphasis has also slowly shifted to brushing in the night and less in the morning.
The campaign asked Aquafresh users to upload a photo on Twitter showing the toothpaste applied to their toothbrush. They would then receive their fortune-telling results from the famous Japanese fortune teller Johnny Kaede based on the colour and shape of the toothpaste on the brush.
Brabus Invicto
German Mercedes tuner and the sultans of bling Brabus have got into the armoured G-Wagen business with the Invicto. I am not quite sure who it will be marketed to since the security sector is already well catered to by the likes of Alpha Armoring. But if you need a team of armed bodyguards to rollout and deploy rapidly on the Kings Road in Chelsea, be reassured Brabus have the gun truck for your ex-special forces types.
The engineering and manufacturing processes that go into making the vehicle is very interesting. It contrasts with the process that Jankel uses for its Land Cruisers. The main challenge I see is the large number of pieces that Brabus has to use compared to Jankel’s hot forming process.
Lyle Goldstein on U.S. Strategic Challenges
Goldstein is a director at a dovish US think tank and formerly taught as the US Naval War College. I don’t necessarily agree with Goldstein since I view the challenges that the west faces more apropos to the Axis powers, rather than the cold war.
Manulife Hong Kong
Manulife insurance for personal injury and health costs is what this ad is using. The actors are famous in the Hong Kong film industry and the ad uses tropes from police and spy films.
Riding The Wave Into China’s Latest Hype — Land Surfing | Jing Daily – land surfing is what a lot of people would know as a long board in skating. I first came across them 20 years ago, when I used to know a dreadlocked German photographer who got around London on one. South Korean app developer Ko Hyojoo, brought style and strong Instagram game to long boarding. From her style cutting and spinning on her board, I can see where land surfing came from. She has collaborated with a lot of fashion brands, getting an international profile with her land surfing.
Films like this one from Vogue in 2016 blew long boarding / land surfing up across Asia. I have former colleagues from Hong Kong who took up land surfing in the winter as they missed the feeling of water-skiing which they did some summer weekends.
It was only a matter of time before China’s Taobao culture picked up on the idea of land surfing.
The Professional Try-Hard Is Dead, But You Still Need to Return to the Office | Vanity Fair – It’s Malcolm Gladwell waxing emotional about how much he loves return-to-office and pleading, “Don’t you want to feel part of something?” as if the man has never heard of, like, recreational softball. It’s Mark Zuckerberg reportedly getting mad about an employee asking if Meta Days (extra vacation days introduced during the pandemic) are still on this year because, shouldn’t the pleasure of working for Meta be enough? It’s any number of investor-type herbs who’ve been warning about how quiet quitting will cause you to lose out on x dollar amount of earnings later in life
Pro-China media slam ‘minority’ of Hong Kong mourners in wake of Queen’s death — Radio Free Asia – Hong Kong historian Hans Yeung, who now lives in the U.K., said Hong Kongers’ nostalgia for colonial times was a complex emotion. “The reason we are seeing these mourning activities is that the current way of governing is different from the way it was in Hong Kong more than 20 years ago, and the emotions that result from that difference between the old and the new,” Yeung told RFA. “It’s not necessarily the idea that we miss colonial times because things were so good back then, but because the current government is so poor,” he said. Yeung said some mourners were too young to remember an era in which the Queen’s portrait was in every classroom, and TV stations shut down every night with “God Save the Queen.” He said younger people likely have read about Hong Kong before the 1997 handover to Chinese rule, and drawn their own conclusions
Ideas
Simple models predict behavior at least as well as behavioral scientists – we analyzed data from five studies in which 640 professional behavioral scientists predicted the results of one or more behavioral science experiments. We compared the behavioral scientists’ predictions to random chance, linear models, and simple heuristics like “be- havioral interventions have no effect” and “all published psychology research is false.” We find that behavioral scientists are consistently no better than – and often worse than – these simple heuristics and models. Behavioral scientists’ predictions are not only noisy but also biased. They systematically overestimate how well behavioral sci- ence “works”: overestimating the effectiveness of behavioral interventions, the impact of psychological phenomena like time discounting
How China Has Added to Its Influence Over the iPhone – The New York Times – More than ever, Apple’s Chinese employees and suppliers contributed complex work and sophisticated components for the 15th year of its marquee device, including aspects of manufacturing design, speakers and batteries, according to four people familiar with the new operations and analysts. As a result, the iPhone has gone from being a product that is designed in California and made in China to one that is a creation of both countries. The critical work provided by China reflects the country’s advancements over the past decade and a new level of involvement for Chinese engineers in the development of iPhones. After the country lured companies to its factories with legions of low-priced workers and unrivaled production capacity, its engineers and suppliers have moved up the supply chain to claim a bigger slice of the money that U.S. companies spend to create high-tech gadgets. The increased responsibilities that China has assumed for the iPhone could challenge Apple’s efforts to decrease its dependency on the country, a goal that has taken on increased urgency amid rising geopolitical tensions over Taiwan and simmering concerns in Washington about China’s ascent as a technology competitor.
I worked peripherally on And1 early on in my career, but it didn’t catch fire in Europe than it did in the US. I hadn’t known the full extent of the buzz marketing campaign that backed up the brand in the US. Here’s the early versions of their ‘mix tapes’, which did for street football what skate videos did for skateboarding in the 1980s. They blew up street basketball in the US, in a similar way to the X Games blowing up extreme sports. ESPN got on board with a sports related reality TV show with players competing for an And1 team contract.
But all the buzz marketing didn’t get the cut through that Wieden + Kennedy’s Freestyle TV advert did, effectively depositioning And1 from its street ball territory. Then there was a tie-up show on MTV2 that was similar to the And1 | ESPN show of the previous year. The lesson I took away from And1 was that product and reach both matter. Nike could buy reach and And1 didn’t have any product of note after the Tai Chi.
Opinion: Intel’s ‘smart capital’ is a warning from the past | eeNews Europe – the author considers the rise of private equity to fund new silicon fabs as a warning of peak semiconductors. Similar things happened in the 1980s and 1990s when large businesses like Coca-Cola helped fund manufacturing facilities. The key difference this time is how globalisation has been thrown into reverse by ‘Made in China 2025’ and hostile moves against Taiwan
Loss of Chinese tourists forces Europe’s luxury retailers to rethink | Financial Times – A recent surge in Middle Eastern tourists, as well as US visitors buoyed by the strong dollar, has helped fill stores. Eduardo Santander, CEO of the European Travel Commission, said the lack of Chinese tourists left the many luxury retailers that relied heavily on them with “a huge feeling of loss”, but had spurred “a huge effort to diversify”. Retailers have personalised their services. During Europe’s Covid lockdowns, shop assistants contacted customers via WhatsApp with tailor-made recommendations. Berg sees a “possible return to the old idea of service and store management from the 1990s, the little black book with all the customers’ addresses and preferences in it”. “You have to do much more to attract local customers,” Berg said. “They can come back, they have more time to spend, versus an international customer that was determined and straightforward.” – A few thoughts on this: The article asserts that Chinese tourists are straightforward and not picky. I think Chinese tourists are very picky by comparison, although the diagou’s supplying lower tier cities or buying to order might appear to be ‘luxury hoovers’. Secondly, luxury brands have treated non-Chinese customers abysmally (in particular the watch makers like Rolex and their retail partners like the Watches of Switzerland group) and they deserve all the problems that they get. Only focusing on the Chinese market has allowed the Chinese customers to blow up the secondary market. A straw poll of people that I know who have a Rolex from the past 10 years or so:
All of them had to buy their watch on the secondary market
About 80 percent of them had original warranty cards with Chinese family names, which is far higher than the 30 to 40 percent share that Chinese consumers make of the global luxury market
Finally, I don’t see the market coming back in the same way given Xi Jingping’s focus on common prosperity which will make luxury consumption increasingly problematic.
This New Study Reveals How Brand Loyalty is On the Decline / Digital Information World – I see this as more indicative of economic recession rather than any major change. Gallup showed that traits such as preference for green products decline in a recessionary environment, it would make sense if brand loyalty took a similar battering in favour of private label brands and substitute products
Industry Structure: Fabs are in Favor – LTAs are the Tell – Fabricated Knowledge had this interesting article on the role of NCNRs – which means non cancelable, non refundable orders. Chip foundries have to spend an enormous amount of money to be at the cutting edge of manufacturing. They also need to retain staff who understand the best way to use this capital and the machines that it buys. So they spread the risk, which is where NCNRs come in. NCNRs provide the chip foundry with guaranteed revenue and remove the foundries dependence on all the other aspects of the customers supply chain. Don’t long term agreements do the same thing? Long term agreements do guarantee revenue over a set number of years, but it might not be delivered in an even manner, for instance Apple might half orders in one quarter and push back up again in the next. But if you combine NCNRs within an LTA you end up with an entirely predictable revenue stream. NCNRs mean that you capital expenditure becomes more predictable and your operating expenses have money to meet them. The foundry has worked to derisk this business by moving it on to the customer.
NCNRs works for the largest cutting edge foundries and their clients. But it could be also used to keep legacy foundries alive for the likes of car manufacturers.
Economics
Economists must get more in touch with our feelings | Financial Times – Jon Clifton, the head of Gallup, which has been tracking wellbeing around the world for many years, notes a polarisation in people’s life-evaluations. Compared with 15 years ago (before the financial crisis, smartphones and Covid-19) twice as many people now say they have the best possible life they could imagine (10 out of 10); however, four times as many people now say they are living the worst life they can conceive (0 out of 10). About 7.5 per cent of people are now in psychological heaven, and about the same proportion are in psychological hell.
Xi’s Great Leap Backward | Foreign Policy – Amid China’s worsening economic crisis, nearly one-fifth of those between the ages of 16 and 24 are now unemployed, with millions more underemployed. One survey found that of the 11 million Chinese students who graduated from college this summer, fewer than 15 percent had secured job offers by mid-April. Even as many U.S. and European workers are seeing their salaries surge, this year’s Chinese graduates can expect to earn 12 percent less than the class of 2021. Many will make less than truck drivers—if they are lucky enough to find a job at all – so much in this to unpack
Why banning Huawei is proving easier said than done | Business | The Sunday Times – Huawei remains in the UK, with 1,000 or so staff working at offices including an HQ in Reading and a research and development centre in Cambridge, where it is investing £1 billion. It provides funding to universities and has a small stake in Oxford Sciences Innovation, which commercialises research from Oxford University. The BBC still shows Huawei adverts on its websites outside the UK, even though the company is alleged to have provided Chinese authorities with surveillance technology to target the Uighur population.
Chinese secret police warned exiled Hong Kong businessman over parliament plan — Radio Free Asia – China’s state security police threatened an overseas Hong Kong businessman who recently announced plans to set up a parliament-in-exile with repercussions for his family members who remain in the city, RFA has learned. Hong Kong’s national security police said last week they are investigating former pro-democracy lawmaker-elect Baggio Leung, overseas businessman Elmer Yuen and journalist Victor Ho for “subversion of state power” under a draconian national security law after they announced plans to set up the overseas parliament. “They warned me in advance [not to go ahead with the plan], but I ignored them,” Yuen told RFA in a recent interview, saying he had been contacted by state security police in Beijing, not the national security unit of Hong Kong’s police force. “They gave me a number of warnings, [including] saying I still have family members in Hong Kong,” he said, adding that there “no point” in worrying about it. Yuen’s comments came as his daughter-in-law Eunice Yeung, a New People’s Party member of the current Legislative Council (LegCo) whose members were all pre-approved by Beijing ahead of the last election, took out an advertisement in Hong Kong’s Oriental Daily News, publicly severing ties with her father-in-law – a couple of things. 1/ This will drive awareness and consideration of the parliament. 2/ It is very similar to the cutting ties done by Myanmar families of opposition members
Hong Kong’s shortened covid quarantine won’t revive its economy — Quartz – the Hong Kong government this week finally shortened mandatory hotel quarantines for inbound travellers from three days to seven. But the city remains as cut-off from the world as ever. Tourists and business travellers are deterred by Hong Kong’s stringent, costly, and often unpredictable quarantine measures. As a result, Hong Kong’s economy has taken a hit, sliding into a recession last month following two consecutive quarters of negative GDP growth. The outlook is clouded with uncertainty, as zero-covid policies locally and on mainland China continue to weigh on consumer demand and trade.
Innovation
Interesting view on DARPA’s Gambit project. It builds on scram jet technology to build a more efficient energy.
MoFi sold high end vinyl pressings and claimed that they had a high-end analogue only chain from master tape to vinyl pressings. The reality is rather different. That doesn’t mean that the records are not great quality recordings, but they aren’t what they claim to be.
Millennial Internet Tics Have Gone From Cool to Cringey – The Atlantic – I’m still guilty of the “Millennial pause.” After hitting “Record,” I wait a split second before I start speaking, just to make sure that TikTok is actually recording. Last year, @nisipisa, a 28-year-old YouTuber and TikToker who lives in Boston, coined the term in a TikTok about how even Taylor Swift can’t avoid the cringey pause in her videos. “God! Will she ever stop being relatable,” @nisipisa, herself a Millennial, says. Gen Zers make up a larger portion of TikTok’s base, and have grown up filming themselves enough to trust that they’re recording correctly. Which is why, as short-form video comes to Instagram (Reels), YouTube (Shorts), and Snapchat (Spotlight), the Millennial pause is becoming easier to spot
China National Intelligence Law – article seven makes for particularly grim reading if you are engaged in the Chinese market, have Chinese employees or use Chinese products
Interesting dig into the US aid being sent to the Ukraine and what it implies about strategy.
The Line or Neom is a building project in Saudi Arabia. It is a 110 mile or 170 kilometre long building. It will be 200 metres wide and 500 metres or 1,600 feet tall. Inside the structure will be a city to house 9 million people, amenities like school and leisure, their work and public transportation.
NEOM advert in the FT
The Line will be run on renewable energy and involve some sort of smart grid to optimise the living experience. They’ve apparently already started the earth works on construction and expect to have it completed by 2030.
Dystopian
The Line has been criticised in western media as dystopian. The mind immediately turns to science fiction visions like Judge Dredd’s Mega City One or William Gibson‘s cityscapes in his sprawl trilogy books: Neuromancer, Count Zero and Mona Lisa Overdrive. They would likely consider ‘ideal’ to look more like the Bosco Verticale in Milan, or the STH BNK in Melbourne, Australia, both of which look very nice. However, isn’t necessarily a panacea as one forestry expert noted.
″I think it’s very important that trees are given space,” Cecil Konijnendijk, from the University of British Columbia’s Faculty of Forestry, told CNBC.
“We know that soil — what we call soil volume — is really important, so the trees have to have space underground, maybe even more so than over ground,” he added.
“And then of course trees will have to have time to develop, so you won’t have instant trees. You’ll have to take the time to make sure they grow up and then they provide the benefits that we want to get from them.”
And it wasn’t just the media who were critical, there were people who spoke out on social media or wrote to the FT like Mark Hudson of Blandford Forum, Dorset.
While the developers claim that it has green credentials and is a harbinger of a low carbon future, there are concerns about its effect on local fauna, flora and migrating birds.
Retrofuturism
Moonwalk 1 Artist: Andy Warhol, 1987 Media: Silkscreen on paper Description: The famous image of astronaut Buzz Aldrin standing on the Moon has become an icon of popular culture. It became material for Warhol’s silkscreen series of nationally known images printed on vibrant, retro, poster colors. Image Credit: Andy Warhol for the NASA Art Program
When I saw the adverts for The Line, I was reminded of two things. NASA’s Art Program and the visual futurism of Syd Mead.
A poster apparently designed by Syd Mead for the 1983 World Sports Fair in Japan
Syd Mead created designs and conceptual art for clients including Ford Motor Company and Philips Electronics.
In the 1970s and 1980s, Mead and his company provided architectural renderings, both interior and exterior, for clients including Intercontinental Hotels, 3D International, Harwood Taylor & Associates, Don Ghia, Gresham & Smith and Philip Koether Architects.
As the 1980s came around Mead developed working relationships a number of Japanese corporations including Sony, Minolta, Dentsu, Dyflex, Tiger Corporation, Seibu, Mitsukoshi, Bandai, NHK and Honda.
Mead cemented his place on popular culture with his work on
Mead’s world, was the world that my generation were promised but was never delivered. Instead we got social media. (If you want to see more of Mead’s work I suggest Sentury and Sentury II.)
NEOM advert in the FT
NASA has an art program that is still running, all be it in a diminished form today. During the 1970s NASA Art Program artists and researchers at the NASA Ames Research Center explored what a future space colony might look like.
Toroidal Colony – Cutaway view, exposing the interior. Art work: Rick Guidice. NASA Ames Research Center
Torus Interior. Interior view. Art work: Don Davis. NASA Ames Research Center
That feeling of retrofuturism might not be accidental. An architect writing in the FT commented on the similarity between The Line and a concept proposed (as more a provocation or thought experiment) by a group of Italian artists called Superstudio who proposed a white gridded wall across the Arizona desert in the late 1960s called Il MonumentoContinuo or Continuous Monument in English.
The case for a city like The Line
Firstly, Saudi Arabia has to do something, doing nothing isn’t an option.
At the moment, the population is growing at about 1.65% a year and the average age of the population is just below 30 years old. By comparison the population in the UK is 43. Energy consumption tripled from 1981 to 2010 and if things carry on like this the country will soon move from being the worlds largest energy exporter, to a net importer.
The Saudis only have so much time to do something before the favourable petro-economy conditions turn against them.
The demand for oil won’t dry up completely, but the economics change when oil becomes about supplying legacy transport in the developing world, which will likely go on for a long while, together with a small amount of vintage vehicles run by enthusiasts.
To give you an idea of how long this can be. Leaded petrol started its phase out in cars back in 1975, in the US, and only stopped being sold in 2021. Leaded fuel is still used for some aviation power plants.
Then there will also be a continued need for chemical feedstocks for the likes of the pharmaceuticals sector and manufacturing. At the moment Saudi Arabia’s GDP is just under 600 billion pounds a year, but that doesn’t mean that it will stay at this level for long, or by how much it will decline.
Then there is the challenge of making Arabian peninsula liveable during climate change. They’ve seen the Arab spring in Egypt and Tunisia, or the Syrian civil war and they don’t want it to happen in Saudi Arabia.
Concentrated populations in cities are better for the environment than having them spread out homesteading or living in suburbia. Less environmental impact delivering services. All of which Stewart Brand puts the case for; far more elegantly than I could in his Whole Earth Discipline: An Ecopragmatist Manifesto.
Where does my own opinion lie on The Line?
I can understand why the Saudis have gone there. They have sound pragmatic reasons for doing something.
I also feel nostalgic about the childhood future I dreamed of seeing when I looked at Syd Mead and the NASA space colony art work in children’s science books and a sense of a bright future lost.
But I don’t know how much of it will actually work.
Will the Saudis be able to find design fixes for migrating birds or animals in the same way that roads have developed overpasses or underpasses in the west?
Will the smart city systems work?
What about the renewable energy capacity?
Will there be an economy inside The Line? What will it look like?
What kind of society will be constructed inside The Line?
Will The Line be able to cope with an extreme weather event like a sandstorm, or the flash floods from rare rainstorms that occasionally happen even in the desert?
How will the infrastructure be repaired or upgraded once its all built?
Will the Saudis be able to afford completing The Line, or will they run out of money? The 2008 financial crisis crushed development in Dubai the following year and the aftershocks are still being felt through stretching out debt deadlines. Dubai property developers like Limitless went through successive rounds of financial restructuring. The Line is a project on a far grander scale.
