“The value of products and services today is based more and more on creativity — the innovative ways that they take advantage of new materials, technologies, and processes. Value creation in the past was a function of economies of industrial scale: mass production and the high efficiency of repeatable tasks. Value creation in the future will be based on economies of creativity: mass customization and the high value of bringing a new product or service improvement to market; the ability to find a solution to a vexing customer problem; or, the way a new product or service is sold and delivered.”
Jack Hughes in this article on HBR.
First there were products. They became commoditised in the telecommunications industry (at least most have been).
Then there were services. These will soon become commoditised.
Many of our largest product vendors are in various stages of transition from product companies to service companies, knowing that most of their products are becoming commoditised by low-cost equivalents from developing regions. Some of these vendors are rapidly losing market share (and market capitalisation) because the culture change is so big. They are unable to develop a true services mindset.
But never fear, other faster, more nimble services companies will stand up ready to deliver lower cost, higher quality services. Or so the marketing blurb says.
What comes next after services are commoditised?
The next value-stream is art. Creativity, individual customisation, disruptive business or revenue models, unique customer service, innovation, beauty, elegance, simplicity – art. Can these be commoditised? As Jack Hughes identifies, this is where the next wave of value creation will come from. The question is, can it be institutionalised by our largest organisations?
Has the R&D lab ever been more important than it is now for these mega-vendors?
Just as the question of innovation can be posed to organisations, it can also be posed to individuals like you and I.Read the Passionate About OSS Blog for more or Subscribe to the Passionate About OSS Blog by Email