Tuesday, January 30, 2007

Future competitive advantage: Provenance?

Brad Burnham discusses the shift from hardware and services to data:

Later, it shifted to systems software, then applications software, and then networks. As more software functionality was delivered to a browser over the internet, the basis of competition shifted from features to service level metrics like reliability, accessibility and security. I believe that today, at least in the area of consumer web services, we have already moved on to a new focus of competitive differentiation based on data.

And then suggests that's not the end of the story, but the next elements "in the stack" could be governance, values and ethics. I like this approach, and would add one of my favourites to this pantheon: provenance. Provenance is about the place where things come from and the history and values associated with it. In answer to Brad's question, perhaps provenance is really the end of the line, since a company's history is pretty much impossible to commodify. How it uses its history as an asset is therefore up to them.

Oddly enough, on my first day at Nokia in November 2003 we had a brainstorming about future competitive advantages, and one of my suggestions was that in an era of commodification, the unique provenance of Finnishness could be an asset for Nokia. There is something unique about Finland's highly educated, disciplined workforce, the remarkable integrity and decency of its people, the bias to openness and transparency (if you see a car in the street you can find out the owner, address and how much tax they paid last year for the cost of a phone call), and the charming, empty, clean, open countryside. In a hectic world which in which the ultimate luxury is conversational currency and the ability to switch off, this could be rich seam. And in a world in which every technical innovation is replicated in the blink of an eye, this seems fairly defendable.


carlo said...

Interesting idea, Stephen. This is already playing out in the food and restaurant world, where people are becoming more interested in where their food comes from and how it's raised. But it could become more pervasive elsewhere, particularly as enviromental concerns grow. Certainly there are already "green" products, but they tend to be niche ones. Would be interesting to see a large, multinational consumer brand (be it in electronics or another industry) commit to environmental responsibility throughout their whole product portfolio, and see how consumers react -- particularly to see if such factors could be more influential than price.

Anonymous said...

INteresing idea