Glimpse of Chinese economy

Representing more than a fifth of world´s population, the economic effect of China is vast.

Despite slowdown of investments in China in 2009, the expected GDP growth rate in China until 2015 is predicted to grow. After this, the prediction is for it to decrease whereas rest of the world´s growth rate between 2015-2050 remains even. After the slowdown of 2009, China GDP growth rate early 2010 was 11.9% and expectation for next year 10-11%. Expectations of total retail sales of consumer goods maintain a huge growth rate of 20% in 2010. According to professor Sheriff from Hong Kong Polytechnic University this is crazy. Why is this growth rate a problem?

China´s growth is investment driven. Since the saving rate in China is above 25%, this will prove difficult in case of economic downturn. Should foreign investors stop investments, Chinese government is able to issue bonds to replace part of salaries. This development is not healthy. Growth should not be driven by investments but consumption. Question is how to transform the culture of China to support a higher standard of living. Part of this will be by governmental legislation, strenghtening the younger generation´s position in urban areas and improving their education and purchasing power. Another is the transformation of China to a service based economy through economic development programs.

Report from eMBA study trip in Hong Kong - Shanghai.

Service business opportunities by integrating megatrends and customer needs

Tekes, the Finnish funding agency for technology and innovation has published a report on the future of services business innovations. Tekes report is created for any organization who wants to challenge and renew their current thinking on services business. Tekes report wants to take a challenging and questioning role in businesses looking into their current assumptions.
The report itself is entertaining and provides a business minded and practical approach rather than a scientific one. For Finnish companies this opens good perspectives since Tekes takes a global view.
The key perspective from the service business innovation is to find opportunities in the crossroads of service innovation megatrends and the perceived customer needs. Through the opportunities identified, organizations come up with innovations that must be supported by high class organizational capabilities and implementation.
And what are the Tekes´s identified 10 megatrends?
* The cloud
* Web based delivery
* Mobile value delivery
* Everything as a service
* Experience design
* Sensing and monitoring
* Collaborative contributions
* Social networking and communication
* Climate change and sustainability
* Globalization with local reference.

Services becoming an essential element for engineering success

Services are becoming an element of future success for Finnish companies. Even the foundation of Aalto university in Finland is a decent example of logical way of introducing more commercial and arts related skills to engineers and vice versa. It has been argued in public discussions that we lack marketing, brand and design skills. But looking at the educational offering today, things are way different than 10 years ago. For the better.
Talouselämä magazine wrote an article on industrial engineering companies in Finland who are expanding their offering to services. But can Finns master services without the successful background of engineering?
Companies like Kone, Wärtsilä, Metso and Nokia Siemens Networks are now putting great emphasis on services. Offering maintenance, training and development provides further opportunities to acquire better share of the market and an improved relationship with customers. Kone is increasing their service culture through educating "ambassadors" who do not just offer services but are skilled to communicate and market the offering. These companies have built their success on engineering.
According to Talouselämä, Vectia´s Kaj Storbacka thinks the services business in Finland may expand but will be limited. According to Storbacka what Finns may concentrate on is service concepting and management.
Can we build companies will full scale service skills; combining our engineering skills and experience with a specialized service culture? What is it with our culture that limits offering turn key solutions based on our services skills? And if we cannot, what would limit us from acquiring needed skills from abroad and building the success on what we do well? IBM turned from an IT company to a service and consulting house. If engineering as an industry in Finland is showing the signals of providing improved offering through services, will we limit it based on our culture, or are we able to learn and grow globally, acquiring skills and experience needed to make a turnaround business?

Cultural business angels

There is a saying that during his life, a man should go to the army, build a house and write a book. The cultural elements of this humorous anecdotes may be changing.
The Finnish business paper Kauppalehti published an article (July 27) on Finnish former businessmen, who are currently working as cultural business angels, investing their money on old mills and mansions. The motivation of working with the old heritage sites is not to make profit but rather to contribute to common cultural and historic good and enjoy and value beauty and restoration. There is money spent on restructuring, rebuilding and refurnishing old sites.
I sympathize with these cultural businessmen. I don´t have a million to invest in an old mansion myself but did my share of cultural wellbeing ten years ago by organizing three big events in an area which I like: dancing. Arranging something on your own time took effort, time and money. These events were new, different from normal weekly dances and are still well remembered.
The negative effect with the cultural investments is that not everybody values and favours the changes and initiatives. There is criticism and complaint. Therefore motivation has to lie elsewhere than just public good.
Another interesting news was that the share of restaurant chains in Finland is decreasing to the benefit of more independent restaurants. Restaurants are eg providing more Finnishness, uniqueness and local flavour to their offering.
Even if Finland as a country may lack in service quality and culture, our skills may very well be in the cultural and coulinaristic content.

This years innovation trends by Trendwatching.com

Each year Trendwatching.com publishes its view on most promising innovations (www.trendwatching.com/briefing). This year, Trendwatching.com published a pool of 67 trendy ideas, inspiring on improving consumer living and understanding the mindset.
Trendwatching.com split the 67 ideas into various categories and encouraged maintaining a rough approach to innovation - we need not think of R&D labs of ultimate most astonishing innovations. Instead, innovations can be small, frivolous and inexpensive and yet succeed in enchanting and exciting people.
Reading through the 67 innovations following logics were no surprise:
* Innovations as service. Helping for self expression, excitement, making a statement, enjoyment, learning, giving for others. Hotels providing educational classes or sketching a travel accident through an online service.
* Sustainability and social causes. Innovations helping people to recycle, re-use, save energy, make donations and support less fortunate. ATM machines with charity donations, buying things and giving in return.
* Shopping made easy and local. Bringing a shop to the consumer eg at camping site, mobile soup delivery, providing regional flavours, online shopping preferences tools, navigation services, garden-for-rent.
* Personalization. iPhone and online applications for providing your preferences online and ordering unique. Yogurt, shorts, petfood, lingerie, crowdsourcing products, group buying. Having used an online photo album tool for creating a wedding gift, I was excited on BookOfFame. A custom made notebook on Facebook feeds. Having read endless funny email conversations between friends, we always keep laughing about saving the conversations and printing them out for a memory when we´re old. And we never do. Now somebody has actually thought of keeping track of these conversations just as having a photo album, a blog or a diary.
The most futuristic idea to me was RosettaStone: a tablet with an embedded microchip to represent key things of a deceased´s life in a grave. Readable through a mobile device. Is this the future of cemeteries? Will it become a true multimedia presentation in the future of what we were? Or will personal barcodes be a new way of expressing ourselves?
Most positively surprising for me was the limited number of iPhone applications in the briefing. Hooray, there are also other ways to innovate and enjoy life.