The next wave of sourcing in China

There's an interesting article by Jim Hemerling of BCG's Shanghai office about China's migration to the next wave of sourcing, in which China emerges "as a global R&D and innovation hub in its own right."

He breaks the history of Chinese sourcing into three waves. The first focused on low-cost procurement. The second wave saw the very same suppliers who participated in the first wave mature to the extent that they could participate in product innovation and design. The numerous announcements of new R&D centers being set up in China are evidence of this wave. These R&D centers not only localize for the Chinese market, but have evolved to develop products for global markets as well. See also previous discussion on this blog here.

Hemerling's interest is in the third wave, of which he cites IBM's recent relocation of their global procurement organization from New York to Shenzhen and GM's relocation of its power-train electronics procurement organization to China as examples. He argues that the third wave -- China becoming a global center of procurement -- may make sense for some companies, but that there are numerous performance issues to consider for most.

I find the third wave to be more an issue of cost savings that result from scale and from being a multinational organization that can truly function in an integrated way across regions -- no small feat and a positive reflection on the company's (e.g., IBM's) structure and operations.

That said, I find the second wave's transition of Chinese R&D centers from product development for the local market to global markets more interesting. The development side (the D in R&D) is straightforward, but how does the research side (the R) do this? That's the difference between China becoming a global R&D hub and becoming an innovation hub. The latter emphasizes understanding users and markets and the design of products -- this capability is much harder to centralize (and doesn't need to be anyway).

Context Is King

What can we learn from a street musician flopping in front of a busy commuter crowd in Washington D.C.? Tons, if that musician happens to be Joshua Bell, recipient of the Avery Fisher Prize.

On January 12th, 2007, the Washington Post set Bell in a busy commuter station as a street musician to see how the crowd would react to having one of the greatest classical musicians on earth delivering a free concert to no one in particular. The resulting article's findings are astounding.

Bell was virtually ignored.

Aside from this being a fascinating cultural experiment, there is an excellent lesson embedded within it that designers of any ilk should heed: context matters more than you would like to believe. In one setting Bell can fill halls with people who gladly pay hundreds of dollars to see him and stifle their coughs in reverence to his craft. In another, more than 1000 people pass him by without even the slightest acknowledgment.

No matter how good your idea is and no matter how well you execute on it, if you get the context wrong you will miss your audience entirely. Like Bell, this will be hard for you to stomach because the mastery of your craft is no different between the varying contexts, only the environment has changed. Because of this it is tempting to blame the commuters for their cultural ineptitude, just as it is tempting to blame users for not fully understanding our systems.

Accounting for context is, and should be, an integral part of understanding the user experience. If we are designing a mobile application, we must be aware not only of the diminished screen space, but also of the environments users may be in. These environments may cause them to only use one hand, only have half an eye available, or may require them to operate the application blindly. If we don't take these factors into account, even the sexiest, most kickin' application ever put together falls flat.

Education and English Proficiency Preclude Wider Hispanic Internet Use

– from center for media research –
A report released in March, 2007, entitled Latinos Online by PEW Research, finds that 56% of Latinos in the U.S. (comprising 14% of the U.S. adult population) use the internet. By comparison, 71% of non-Hispanic whites and 60% of non- Hispanic blacks use the internet.
Mexicans are the largest national origin group in the U.S. Latino population but only 52% of Latinos of Mexican descent use the internet. Even when age, income, language, generation, or nativity is held constant, being Mexican is associated with a decreased likelihood of going online.
> the whole story….

Brave New Transparent Business World

"Radical Transparency" is what Wired author Clive Thompson considers the new paradigm of the "reputation economy." He envisions the workplace of the future like this: "Perhaps on the first day of your job, you'll be given a laptop, a keycard - and a public blog you'll be expected to post 10 times a day." Thompson argues that the reputation economy creates an incentive to be more open, not less, and refers to the power of Google: "Google is not a search engine. Google is a reputation management system.

loyalty programs promote higher spending

-- from clickz -- Members of retailer loyalty programs tend to spend more and shop across more channels, according to "The Loyalty Effect: Retail Loyalty/Reward Programs' Impact on the 2006 Holiday Season" published by Epsilon. The report calls for retailers to begin loyalty membership campaigns early in the year and build toward the holiday in the fall.

> the full story...

t-mobile and sony’s gaming experiment

-- from telephony -- For all the talk of Sprint’s new WiMAX business model, rival carrier T-Mobile is paving the way for just the type of service Sprint is likely to launch over WiMAX using a much lowlier technology: Wi-Fi.
T-Mobile just isn’t offering unbridled dumb-pipe access to the Internet wirelessly. It’s wirelessly enabling a specific data service, used by specific device. (The PlayStation Portable)
> the story... April 3, 2007

a different way to categorize

-- from information today, april 2007 --

The London Library is a rare and different thing in the modern age of information management. Essentially, the institution stands very much apart from many of the mainstream pressures and concerns of similar-sized sites. As a self-funding charity, it is completely free of what its head librarian Inez Lynn calls “trends” in library science, such as replacing the entire stock every 5 years or responding to the latest governmental “diktat” about the role of the library. Instead, she said, the focus is on knowledge, not information.

Users can look in vain for any Dewey system here. The library uses its own idiosyncratic cataloging technique, based firmly on the principle of serendipity. “We try to have all the major works in the field on show but also in the same place things that might also be of interest,” according to Lynn.

Users like the fact that there just might be something on the shelf other than what they thought they wanted.

Lynn, who became librarian in 2002, outlined what can happen. “We are primarily about the arts and humanities,” she said. “So we don’t really have a science section. What we do have though is a science and miscellany place, where among other things we have lots of books on camels: camels in California, camels as means of transport, lots of different camel-related material. Writers who want to research camels love this—that section is one of our most visited, in fact.”

> the story...

What’s the message with HD Radio?

A few local stations around here in the Bay Area have been running heavy rotations of commercials for HD Radio - a new digital broadcast method for radio that allows "CD-quality" sound. While HD radio does require purchase of new equipment, it does not require a subscription fee, as does satellite radio (XM, Sirius), which make the same sound-quality claims. HD Radio has additional benefits over analog radio in that text streams can be embedded into the signal, such as sports scores and news tickers.

Consistency to the max

As a counterpoint to my earlier post on inconsistency as a design strategy, here's a billboard in SF for, well, you know who:


do you see yourself as others see you?

What your online profile says about you may not be what you expect. Psychologist Sam Gosling of the University of Texas, Austin, has found that while profiles on social networking sites like Facebook present a generally accurate portrait of their owners, this is often at odds with the impression they think they are putting across.

> more of the story..., from the new scientist, march 31, 2007