Archive for the ‘Articles on Design and Innovation’ Category

The Informal Industrial Ecosystem: An Introduction to REculture

The Art of Seeing Beauty in Garbage, Kenya, September 2010

This article introduces and explains some things I’ve been seeing in the informal industrial ecosystem in the developing world context for almost a decade now. First noticed in 2009, I then named it REculture, a neologism to capture the vast and complex ecosystem I saw in the revenue generating facility of recycle, replace, repurpose, reuse and resale. Given contemporary interest in developed country concepts such as the circular economy, and other sustainable and ecological initiatives, I thought it timely to sit down and attempt to synthesize the past work before proceeding to write more on current events.

What is REculture?

I thought I’d start from the beginning – is there, for example, a difference between “the entrepreneur” and “the producer”, “the creator” and “the innovator”, if at all? And if none, then perhaps start to fill in some few blanks based on our earlier thinking on the BoP “consumer” and their mindset, worldview or value system.~ June 2009

In July 2009, I was inspired by my observation of a man sitting under a tree in the administrative district of New Delhi with a visibly large bag of buttons by his side. His service, to the civil servants rushing to and fro from important governmental meetings, was to quickly repair a missing button from their suit jacket or shirt. Not unlike a shoeshine boy, this gentleman’s service was on demand, while you waited, his fingers flying rapidly with the needle as he sewed a reasonable facsimile of your missing button back on for you.

Look at the unusual yet welcome niche he had found for himself! A repair service that could only work in this part of the city where the common uniform was a suit and tie and important visitors the norm.

Once he opened my eyes to what it was I was seeing on the streets – the entrepreneurial opportunities squeezed out of the margins of daily life – I began noticing such services more and more. Repair, re-use, re-purposing, resale, and, in their own inimitable way, recycling of used up or abandoned products of industrialization were turning out to provide a significant chunk of the revenue streams of many of the informal sector’s service providers who now became visible to me.

In June 2009, I wrote:

…many other such observations got me thinking about the whole RE culture among the BoP. Stepping back, if you take the broad space of REuse, REpurpose, REpair and REcycle – its the low hanging fruit for the BoP entrepreneur’s opportunities for income generation. In fact, REpair is an entire professional service area in its own right, perhaps a subset of the opportunity space in the informal economy with varying degrees of skill and ability required.

But coming back to the other three, it seems at first glance that they look to be more or less the same thing i.e. how different is it to reuse a plastic bottle to contain some liquid from recyling it? particularly if the manufacturer had intended for it to be a disposable container? Yet, from the big picture perspective, one can say (and it has been said before) the whole concept of recycling is a cost in the OECD world whereas its actually a source of income, in a myriad ways, among the BoP.

The second thing that struck me, when I pondered these signs of a post-consumption economic ecosystem, was that the actors in the informal sector – whom we now discuss as traders, fabricators, service providers – were still then thought of as the “Bottom of the Pyramid” or the BoP – the economically vulnerable, the marginalized, the low income barely making ends meet on a dollar or two a day. There was no attempt at segmentation, this was the lumpen mass of the next 4 billion. Even though the late CK Prahalad had called them out as micro-producers, creators, and innovators, in his seminal book The Fortune at the Bottom of the Pyramid, those who had grabbed the label with both hands and run with it were still thinking in terms of consumption. “How do we make products profitably for the poor?”

What about the creators, the makers, the innovators, and the producers in the informal economic ecosystem?

Again, back in June 2009, I wrote:

I am attempting to evaluate whether all our previous observations and learnings viz., “Life is hard” (the mindset and values of a customer at the BoP particularly one living on an irregular income) can help us begin to understand the other side of the coin, that is, the “innovator” or “creator/maker” or simply, the “informal business owner or service provider” at the BoP.

At this point at least, it seems to me, that rather than quibble about each individual word choice to describe “who” or “what” they are, perhaps we’re better off looking at the “why” and “how” – by this I mean, that the driver of motivation is to generate an income stream (the why) and the gaps observed, as mentioned above, are the opportunity spaces (the how). That is, the BoP seem to display more of a tendency towards ‘opportunity spotting’ (not quite the same as the word opportunists, though that may also apply in many cases or situations), filling the niche quickly with a service or product. Some of these services have arisen spontaneously around the developing world, mobile phone repair comes to top of mind.

It feels as though its a far more active than passive quality – poverty and hardship can be a powerful motivational driver in itself, though we tend to overlook the ingenuity and creativity involved.

That is, back then, just over 9 years ago, I connected the dots I was seeing in this space – the mindset and values of the low income customers and their post consumption behaviours, taken together with the “RE” space where visibly they were earning income – and framed it so:

That is, the lower income market tends towards maintenance and extending the lifespan of the products (through repair or repurposing it) they purchase rather than disposing it for convenience or replacing it for a trendier style. All very obvious, you say, but its this very same quality that leads to the wide variety of opportunities for the entreprenuerial or the innovative to make some money (or even a living). From the very basic, in terms of skills and ability such as the button repair guy to the complex, such as the mobile phone hacker, all of these services meet an ‘unmet need’ in the market, an opportunity gap which they can fill.

However, what’s interesting about this is the fact that these opportunities would very rarely be either a) spotted as one in mainstream consumer culture; b) not be a gap per se due to a difference in mindset/worldview OR even c) not be profitable enough, given the comparative cost of labour vs the price of the product involved. These conditions for making money, and more so, making money that is deemed a valid ROI seem only to be available among the lower income demographic and in the developing world.

For the precondition to their success is also a sufficient customer base seeking such a service and their willingness to pay for it, and that, imho, emerges from their mindset as BoP consumers, one quality of which is their need to Maximise the return on their investment (purchase). This shows up in this context as a wish to REpair, REuse, REsell (for REpurpose or REcycling or whatever along those lines) – I doubt if they’ve stopped coming by from door to door among the ‘consuming classes’ in India to buy old bottles, newspapers and other sundry junk. (A sign of development if it stops?)

Once I could “see” the entire post consumption entrepreneurial activity in the informal sector, I went back to my research documentation conducted in rural Philippines and India for the original ‘prepaid’ economy work, and pulled out the patterns seen in the photographs that, when fitted together, showed all the evidence of an entire industrial ecosystem. As a working title for this seemingly vast economic space within the informal economy across Asia and Africa, I had called it REculture – the group blog went on spawn a magazine.

An entire industrial ecosystem within the informal economy based on the discards of the consumer lifestyle

A discarded Kraft cream cheese bottle would be picked out of the garbage by a waste picker and sold to an intermediary who would clean and sort these by colour and size and sell them on to a fabricator, who in turn, would convert these into affordable – and handmade mass produced – kerosene lamps, completed with spot welded wick tube.

An entire industrial life cycle from “raw material” through to “mass production” supported by distribution and retail. The only difference? The informal nature of the entire value chain and the post consumption adaptation of the materials and discards.

My concluding thoughts at the stage in which I’d left my explorations almost a decade ago can be summed up thus:

So, at this point, early stages of exploration though it is, one could say that the whole area of “post consumption” consumer practices – most of which have withered away like the appendix in the ‘rich’ world – forms one major basis for both products and services, with value addition to varying degrees, in the ‘informal economies’ of the developing world.

There are insights to be teased out here on flexible, adaptable, ‘on demand’ business models ~ but applied outside the virtual world. Scarcity of resources and circumstance force lean overheads and inventory. Constraints of demand and customer purchasing power create their own flows in the chaos. Is there a pattern to the flow of the informal after all?

What next?

I summed up this history so as to provide me with the foundation and backdrop to pick up the threads of this conversation, now with the added insights of the past decade, and the increasingly sophisticated frameworks of framing the informal economy as a commercial environment in its own right, populated with entrepreneurs and niches that the mainstream overlooks.

As the topics of sustainability, resource conservation, and the circular economy become top of mind and critical, the early lessons from the developing world will only become more important going forward. I’ll be writing more under the category and tag “REculture” for old times’ sake.

Stepping up human centered innovation planning for financial inclusion

Two Ugandan analysts from the Financial Sector Deepening (FSD) programme in Uganda write on the need for more human centered product development approaches in the design and delivery of financial services for rural Ugandans, especially the rural poor. One of their suggestions caught my attention in particular:

(iii) Third, to increase the introduction of new game changing solutions by financial institutions the government needs to put in place policies, laws and regulations that allow for new business models and approaches to financial delivery.

Innovative regulatory approaches like “sandboxes”, where startups are allowed to conduct live experiments in a controlled environment, have demonstrated success in developed markets. Regulators can therefore play a crucial role in being financial inclusion catalysts.

The late C.K. Prahalad, guru of serving the poor profitably, first mooted the concept of an innovation sandbox back in 2006, and the essence of his concept has remained an integral part of my own work ever since.

This approach could be called an innovation “sandbox” because it involves fairly complex, free-form exploration and even playful experimentation (the sand, with its flowing, shifting boundaries) within extremely fixed specified constraints (the walls, straight and rigid, that box in the sand).

The value of this approach is keenly felt at the bottom-of-the-pyramid market, but any industry, in any locale, can generate similar breakthroughs by creating a similar context for itself.

What Jimmy Ebong and Joseph Lutwama, the co-authors of the original article linked above, are mooting, however, is an extrapolation of the concept, where the regulatory and policy framework forms the boundaries of the “sandbox” within which various financial services pilots can be tested in the real world.

Committed and forward thinking governments can make the difference overnight for the ‘wicked problem’ of financial inclusion of the rural poor, inspiring innovative human centered solutions to citizen service delivery where its most sorely needed – the resource constrained and inadequate infrastructural operating environments of rural Africa.

Note: “Mooting” is a favourite word of East African newsmedia, meaning the specialised application of the art of persuasive advocacy.

IKEA in India: Culture Centered Design Strategy

Its taken more than 10 years for single brand retail stores to enter the Indian market, and this year sees India’s first IKEA opening in Hyderabad. TS Ninan introduced their retail challenge succinctly, though he left me wanting more. And this snippet from an interview with the market opening CEO of IKEA in India (who, having laid the groundwork for 6 years, has now left – an interesting and thoughtful strategy right there imo) caught my attention.

In Europe, businesses look at the past, their systems and processes to plan ahead. India does not have a legacy. People don’t look backwards. Here you create the future as you go

Was IKEA’s product, design, and brand strategy going to be as human centered as reports of their 1000 home visits made it seem, or, as the groundbreaker Juvencio Maeztu implies, committing to India means a “culture centered strategy” – that too, one that is customized for each different culture, centered around a metropolitan area. For those who think India is a country, I like to remind them that its closer in concept to the EU, its a single market and currency, but each city has its own languages, culture, cuisine, and clothing, not to mention each state.

Ikea’s global designers meet artisans in co-creation workshops to handhold local artisans design products that meet global quality and design standards.via

I see familiar names in the design article. And I do like the photographs though I recognize my eye is taken aback because the years in Finland have influenced my aesthetic sensibilities closer to the Nordic norm. What I can say is that if this what the Swedes came up with after distilling down their hundreds of home visits, its an excellent integration of two extremes of design language. IKEA will have fun in India, and I suspect they intend to. The takeaway for culture centered design isn’t that “India” will receive one singular design aesthetic or product line but that each one of India’s cultures, both traditional and modern, will be catered to. That is powerful.

Moving from Unbranded to Branded

There’s a larger story here as well. The changes occurring in the Indian consumer market, for instance, and the increase in aspiration, purchasing power, and most importantly, design sensibilities. Back in 1990, during my first job after leaving the National Institute of Design, Ahmedabad, I faced barriers to marketing industrial design services that I suspect don’t even exist now. Product design was imitable and not something one paid good money for oneself. There were corporates who understood our value as a design studio but they were few and far between. Now, IKEA’s entry isn’t into a completely untapped market – there’s competition that’s been born in the last decade, both online and off. And, finally, there’s the handmade artisanal informal sector, who have long copied IKEA products from hand me down catalogs. On the other hand, unlike most consumer brands entering the Indian (or the African market) IKEA recognizes the competition offered by the informal (unorganized, as its known in India) economy, and seems to have addressed it.

What’s interesting about the Wharton analysis from October 2017, is that all the issues it raises seem to have been covered now that IKEA is finally revealing its India strategy as the first store prepares to open this month.

Unlike my concerns back in 2006/7, this time I’m a lot more confident that IKEA will achieve something wholly unexpected in India. I look forward to visiting.

Ecodesign, Ecolabels and the Environment: How Europe is redesigning our footprint on earth

What do chopped fresh green beans have in common with high definition flat screen TV’s? And how does this relate to design? In Europe, they’re both considered consumer products whose journey from raw material to shopwindow requires energy to process—emitting greenhouse gases that can have an adverse impact on the environment—and are considered to possess a ‘carbon footprint.’ In other words, they are products of a larger global industrial ecosystem.

When the postal service is setting down guidelines on the creativity and production of direct mailers so that their customers can better recycle them, it signals that graphic design needs to evolve the way its practiced entirely.

Acronyms and Initiatives
The European Union’s chosen approach to address the issue of environmental degradation and climate change is a combination of regulations, directives and voluntary activities. Industrial designers and engineers around the world are familiar with many of many of these already in effect—the EU Directive on the Restriction of Hazardous Substances (RoHS) and the EU Directive on the Waste from Electrical & Electronic Equipment (WEEE) are top of mind in the field of consumer electronics and other energy consuming products (EUPs)—the first sector to be addressed by these rules.

Just ratified is the new European law on chemicals, REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), which covers the toxicity and hazards of chemical substances, touching the nascent field of green chemistry. Also to be enforced is the EU Directive on the Ecodesign of EUPs – this will directly regulate the negative contribution to the environment across the entire lifecycle of the product, not just the use phase.

Supporting activities include the Ecolabel—a voluntary certification for a wider range of products beyond those that merely consume energy during their use—helping consumers identify products that have considered all aspects of environmental impact toward minimum ecological footprint, compared to other products in the same category. This includes the chopped green beans, as their total carbon footprint assessed across the supply chain would take into account the energy expended to grow them, process them, package them and deliver them to the neighbourhood supermarket.

All of these and more come under the holistic approach of the Integrated Product Policy (IPP), which can be considered the foundation for such decision-making and the design of the various directives, programs and certifications. The IPP is a systemic look at the environmental impact of the entire supply chain and life cycle of any given product, taking all aspects of the global industrial ecosystem into account: raw materials, manufacture, transportation, distribution, marketing, sales, delivery and waste treatment at the end of life.

The Power of Design
While design has been picking up speed in addressing issues of sustainable development, a quick purview of the larger ecosystem helps in understanding the long-term consequences of the decisions made in the studio. It is recognized that a significant proportion (ranging from 70% to 90%) of any given product’s ecological footprint can be addressed at the design stage. But the considerations mentioned above take into account factors all along the product chain that can directly or indirectly contribute to environmental degradation; decisions made at the design stage now become crucial in ensuring the best outcome throughout the entire system.

Carbon Trust UK‘s simplified diagram of the lifecycle of a typical can of cola, for example, enables us to visualize and correlate the relationship between product design choices and energy consumption at every stage of the supply chain.

Read On…

Shopping for Innovation: What you need to know before hiring a design firm

This guide was written for Core77 in late 2006, co-authored with Steve Portigal. I was looking for it today, as I wanted to share the distinction between a Vendor of innovation and design services and a Partner who goes beyond the requested task to discern and perceive the real challenge to be solved. I couldn’t find it online, Core77 having redesigned their site from the ground up, so I’ve reposted it here from the Wayback Machine.

Getting Started
You’ve read all the articles and can’t possibly stomach one more column on the iPod. It’s clear that design+innovation is the hot topic for business—with businesspeople taking more active notice of the design scene, and designers focusing more on strategy. (It’s not like business and design were so far apart to begin with, of course.) But what about those new to the conversation? If everyone is telling you that design is the differentiator, how do you get started? What are the considerations when bringing on strategic design services?

There are many things you need to consider before hiring a design firm, but we’re going to start with three: The Problem (defining your needs), the People (who the players are), and the Partnership (the nature of the engagement). Design firms are businesses, but with unique perspectives and unique work processes. Understanding a bit of the industry culture will go a long way in helping you to establish a successful engagement.

The Problem: Defining your goals
As with any initiative, you first need to define your problem and your goals. Having these goals well-articulated and written down on paper as a starting point for the discussion is crucial. You may find that your reasons for bringing in design services differ from others in your organization, so you need to get your story straight before you begin talking to creatives. You should also understand that that story is likely to be pushed and pulled.

Design can be brought in as a service, but it’s important to remember that it’s a creative service. Designers are smart and talented people who typically do “think out of the box” (a phrase more derided inside the design community than outside, yet still requested in more initial meetings than you can imagine). So although your desired outcome may be very specific, the designer’s process to delivering your outcome will inevitably involve challenging its very foundations. Here’s an illustration:

Q: How many designers does it take to change a light bulb?
A: Does it have to be a light bulb?

In real terms, this can be the difference between asking a designer to create a new vase, versus asking for a new way to display flowers in the home. The first problem statement already converges on a solution—perhaps prematurely. The second opens up new design opportunities, new target markets, and ultimately potential new revenue streams.

So though you’ll want to define your problem as clearly as possible to begin with, you should also be willing to engage in discussions with designers in order to craft a more open-ended, innovative, and ultimately actionable problem statement. This is the way designers think, but being prepared for this potential frame shift can be a tremendous challenge. You are likely to learn things that you didn’t want to know, that you aren’t even prepared to know, and that challenge your closely-held beliefs. (On the flip side, you should be aware that designers have a healthy skepticism about just how much “paradigm-busting innovation” a given company is prepared to make. The design consulting bar-tale of the client who proclaims, “I want something completely innovative, but I want to keep making my stuff exactly the same way I do now” is legendary, but it’s also true.)

Nevertheless, it is often difficult for clients to think like the designers they hire, and to not see them as threats. This is something you need to consider when you’re bringing in a design consultant: you’re hiring someone to tell you something you don’t know; to provide you with something that you don’t have. But will you be ready to take their advice?

Read On…