Thursday, 8 January 2009

Innovation in a Material World?

While driving this afternoon I was listening to the BBC's Book Club programme on the radio.  This edition featured psychologist Oliver James, and his book "Affluenza".  He defines this as a virus sweeping through the English-speaking world, where the emotional attraction of material things possible through affluence is deeply harmful to social cohesion and people's well-being.  Indeed he points out that a general increase in affluence in such societies has led to people feeling less happy and to more sickness.  

Some of the examples he gave were interesting anecdotes from his travels interviewing people from different cultures and contrasting the English-speaking world from others.  One such was whether women look at themselves in the mirror and ask if they are happy with what they see, or whether they are more concerned if others and especially men will like what they see. 

Another example contrasted the iPod type consumer gadget adoption in a place like the UK and USA with that in somewhere like Denmark.   He pointed out that hardly anyone will pay for a new luxury device like that until it becomes mass market and cheap enough for most people to buy in the Danish culture.  Unfortunately he omitted to remind people that such innovation would never become that cheap if there were not people (perhaps from particular cultures) who will buy at the leading edge and be early adopters.  Companies that launch innovative products need to charge a premium at first until the scale of return allows for a lower price point at a later date, as the component costs reduce.  Perhaps I need to read the book to see if this and other market related truths are explained.

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