Economics or the dismal science was something I felt that I needed to include as it provides the context for business and consumption.
Prior to the 20th century, economics was the pursuit of gentleman scholars. The foundation of it is considered to be Adam Smith when he published is work An Inquiry into the Nature and Causes of the Wealth of Nations. Smith outlined one of the core tenets of classical economics: each individual is driven by self-interest and can exert only a negligible influence on prices. And it was the start of assumptions that economists model around that don’t mirror real life all the time.
What really is a rational decision maker? Do consumers always make rational decisions? Do they make decisions that maximise their economic benefit?
The problem is that they might do actions that are rational to them:
Reducing choice when they are overwhelmed
Looking for a little luxury to comfort them over time. Which was the sales of Cadbury chocolate and Revlon lipstick were known to rise in a recession
Luxury goods in general make little sense from a ration decision point of view until you realise the value of what they signal
Having a smartphone yet buying watches. Japanese consumers were known to still buy watches to show that they care about the time to employers when they could easily check their smartphone screen
All of which makes the subject area of high interest to me as a marketer. It also explains the amount of focus now being done by economists on the behavioural aspect of things.
London 2012 brought into sharp focus the high cost and low benefit of hosting the Olympics. The Olympics has a low to negative economic impact. London 2012 was a way of seizing land for redevelopment that benefited a few investors. To do this the organising committee of London 2012 closed down a plethora of small businesses and a previously affordable London neighbourhood was priced out of the reach of many Londoners.
So, you thought London 2012 was for spectators? Wrong | guardian.co.uk – In 2005 the International Olympic Committee passed a 109-page document to the British Games organisers in which they described, in mind-bending detail, how Lord Coe and his colleagues at the London Organising Committee of the Olympic Games (Locog) should run the media strategy for London 2012. “The preparation period is likely to be the most difficult for Locog in terms of communications,” it explains. “Popular support may decline … soft targets should be identified … Meanwhile, there will be an enormous range of milestones that can be taken advantage of to demonstrate positive progress.” We are now well into what the document calls the operational readiness phase, during which every celebrity “honoured” to carry the Olympic torch has helped Locog satisfy their requirement to show “positive progress” with the Games. The torch run is a truly inspired PR tool. Alas, the hourly stories of its ponderous progress have not yet drowned out all coverage of those “soft target” stories which, with equally ponderous regularity, are beginning to reveal who may stand to benefit most from the Olympics – the corporate sponsors and the IOC themselves. – Not terribly surprising, just emphasises how huge a mistake of having the London 2012 Olympics was. However The Guardian misses the big picture. The Olympics sees the city captured by a non-governmental body that answers to elites of a criminal or authoritarian nature. They dictate media laws, traffic laws and planning laws. They provide a detailed guide on media manipulation like the example quoted above for London 2012.
Dazed Digital | East London 2012: Is It Dead? – to give an idea of how London 2012 is facilitating a real estate ponzi scheme: Reuters reported that Shoreditch was on course to become a “mini Bond Street” that would welcome luxury retailers eager to capitalise on Shoreditch’s “edgy image”. Property values in areas such as gallery-strewn Redchurch Street have doubled in the past decade, and have the potential to do so again in the next five years as the retail giants move in. For those stores that chose east London as a cheaper, dirtier alternative to the Royal Borough of Kensington and Chelsea, the unthinkable has happened – the east is now mimicking the west
Why I left Google – Spencer Tipping – probably getting more attention than its worth at the moment, but an interesting point-of-view none the less. Interesting how Google’s engineering culture in some ways conflicts with trying to build a social application / platform
Ellen Pao, the protagonist in the Kleiner Perkins law suit doesn’t sound like the typical kind of person one would think of in terms of coercion and harassment. She is the child of middle class Taiwanese immigrants to the US. Ellen Pao has an educational background in law and technology topped with an MBA – so a high achieving executive. All were from Ivy League schools. According to the egalitarian myth of Silicon Valley Ellen Pao should have been an insider. Pao had worked in legal and strategy at various blue chip Silicon Valley firms before she started at Kleiner Perkins. Instead Ellen Pao was past over for roles and dragged through the mud for a relationship that she was coerced into continuing by Ajit Nazre.
Spotlight turns on Hong Kong graft agency – FT.com – (paywall) the ICAC is the jewel in the crown of Hong Kong. It is unfortunate that there isn’t a similarly robust service to fight corruption and graft in other countries like the UK and Ireland – we wouldn’t have needed the Mahon and Leveson investigations
Why Microsoft Killed Windows Live – It’s basically admitting that “Windows Live” branded products cannot compete with Facebook, Twitter and other successful online services. (So why did Microsoft launch a new social network this month, named So.cl? Yes, exactly…)
Google+ wants to be your new Flickr | VentureBeat not likely to happen whilst I have 1000s of photos on Flickr, use it for my blog image hosting service and Google+ doesn’t offer similar things cheaper. Also Flickr’s APIs continue to enjoy developer usage
‘The Golden Age of Silicon Valley Is Over, and We’re Dancing on its Grave’ – Derek Thompson – Business – The Atlantic – the golden age of Silicon Valley is considered over because it is now chasing the easy money. In reality this decline from the golden age is an evolution rather than a radical change. The golden age started its end when anufacturing left the valley decades ago. A sign of the golden age being over is that no one owns a silicon fab anymore. The reality is that the knowledge of design is wrapped up in the knowledge of making. A bigger end of the golden age sign is that even coding is outsourced to India. The migration from the golden age, to funding cheap low-hanging innovation over hard innovation is long-term. But the decline of the golden age isn’t anything you can blame Zuckerberg for, he’s merely a beneficiary
Business
Panasonic loss balloons 10-fold ‹ Japan Today: Japan News and Discussion – betting on convergence (doing it badly) and forgetting about quality. They made the mistake of thinking that people buy their brand for being the company logo rather than a complex sum of ‘Made in Japan’ quality, product design that delighted and high performance. They also tried to go for blockbusters rather than niches
Goodbye, hardwired switches and circuits: we’ll miss you (maybe) – “But there’s a downside to the indisputable efficiency of the soft key and touch screen approaches: it’s a much longer path, functionally, from initiation to final action. Perhaps we feel more removed from the consequences of our actions and how they are implemented; that’s a psychological aspect which is hard to assess.” – interesting that EET is talking the man machine interface so seriously on this
Is the 1,9,90 Rule Outdated? – Only Dead Fish – models aren’t accurate predictors but ways that we get our heads around concepts, we take them too seriously. Despite this premise some interesting data here consumer behaviour
The Dishonored Sex: German Writer Pleads For Male Emancipation – Worldcrunch – Men’s greatest mistake was not claiming a place of their own. Three words sum up the male life story: career, competition, collapse.” This may sound subjective, perhaps a tad sniveling, but statistics back up what the author writes. On average, men in Germany die six years earlier than women. Interestingly, the author points out that where the lifestyle of both sexes is equivalent — among monks and nuns, for example, or those living in Israeli kibbutzim – there is no such difference in life expectancy. Interesting perspective.
How Yahoo Killed Flickr and Lost the Internet – its not dead but its not growing and its attached to a rotting corpse, a bit like Yahoo! Finance and Sports. Everything else outside Asia should be lit up and burnt
Worries mount as Nokia burns through cash | Reuters – bit of a non-story. If Nokia doesn’t turn things around in the next 24 months, it’s game over anyway whether they still have cash in the bank or not. Microsoft can’t wait that long
Ferdinand A. Porsche, 76, Dies – Designed Celebrated 911 – NYTimes.com – Butzi Porsche dead. Butzi Porsche came from a family of engineers. His grandfather led the original team behind the Volkswagen Beetle. His father had been part of that engineering team and went on to found what we now know as Porsche. However, Butzi Porsche wasn’t engineer but a designer with technical chops. After an infamous meeting of the Porsche family, no members were allowed to work at Porsche. Butzi Porsche didn’t get to do more after he designed the 911. Instead Butzi Porsche started Porsche Design. Butzi Porsche did product design for other companies. Porsche Design also came out with its own products with Butzi Porsche designing watches, glasses and more. Butzi Porsche resigned from Porsche Design in 2005 due to ill health.
Why Are So Many Americans Single? : The New Yorker – single living was not a social aberration but an inevitable outgrowth of mainstream liberal values. Supported by modern communications platforms and urban living infrastructure: coffee shops, laundrettes
Kraft break-up yields marketing shift: Warc.com – the break-up is ironic when you look at the trouble they went to, in order to buy Cadburys and then break their business down broadly into Cadburys + Jacobs Suchard vs Kraft US.
HK’s rich hesitate to have babies | SCMP.com – interesting takeaways: didn’t want the emotional commitment, time poverty, financial stability / too small a living space and concerned about the local environment not being suitable for children. It was interesting that the education system was given such a hard time, given that it’s better than the UK system (paywall)
agnès b. | VICE – great interview with French fashion designer agnés b
Marketing
Fueling the hunger for The Hunger Games – The New York Times – really interesting comment: …during the 1980s you bought the poster and once a year went to a convention and met your people for something like Star Trek (and Star Wars). It misses out the fact that you are likely to have had real-world friends that you would have talked about it with as well – marketers now seem blindsided to the real-world
The Great Reset is a North American financial crisis tinged refresh of Richard Florida’s earlier work Who is your city? which looks at the way the knowledge economy and the creative classes who work within it tend to cluster in certain cities. Florida sets the scene by looking at the way two different financial recessions had affected the American landscape. Changes in 1870, saw emigration from the countryside to the cities to participate in the US version of the industrial revolution.
The 1930s with the rise of the motor car was the start of the suburb as an easier commute to work and a more pleasant environment than the inner city.
The financial crisis Florida posits will herald a reinvention of the city. Young people in the creative classes no longer own a car and have different aspirations including a lower propensity to buy luxury goods; they want to live closer to work and amenities. In an energy poor future local will become much more important, so high density urban living will happen in city clusters where the knowledge economies congregate.
Whilst interesting The Great Reset felt as if Richard Florida was phoning this book in rather than shaking the tree. Whilst his ideas were interesting there wasn’t the sense of discovery there. Secondly the book much more more North American centric than before. If you’ve read Who is your city? leave this one on the shelf and walk on by.
