Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.
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How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought:
Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth.
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The Journal of 2020 Foresight
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Thursday, August 31, 2006
Wild West Tales and Products More Valuable Than Commodities Extracted
Chapter Four: The Tribal Territories
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
"The flattening process relentlessly trims the fat out of business and life, but, as Ken noted, fat is what gives life taste and texture. Yes, the consumer in us wants Wal-Mart prices, with all the fat gone. But the employee in us wants a little fat left on the bone, the way Costco does it, so that it can offer health care to almost all its employees, rather than just less than half of them, as Wal-Mart does. But the shareholder in us wants Wal-Mart's profit margins, not Costco's. Yet the citizen in us wants Costco's benefits, rather than Wal-Mart's, because the difference ultimately may have to be paid for by society."
Thomas Friedman, “The World is Flat”
DOUBLE NICKEL RANCH. The history of the West– and indeed for a much longer time before the opening and closing the West in the 19th Century – is a story of living off of the land, first for self-sufficiency and then for profit in trade.
Journal of 2020 Foresight: With hindsight we can look back and see successive eras of economic development.
Explorer: Most of our journey together throughout five of the eight western states revealed local stories about how Eastern whites explored and mapped the territories unknown to them (but home to Native Americans) – as they trapped fur and became sophisticated traders.
J2020F: That’s right. The world economy sought the products of the fur trade, but the customer purchasing a beaver skinned top hat could care less how the fur, a commodity, was trapped or by whom.
Explorer: It didn’t matter if you were John Colter, Jim Bridges or Kit Carson. An undifferentiated competitive position means the market sets the price because what you offer carries no brand value, loyalty or relevance to the ultimate customer.
J2020F: And, wasn’t the market price set in St. Louis?
Explorer: The fur trade put St. Louis on the map – literally. The trappers and traders exchanged pelts there, but as an outpost for the east coast and European aristocracy, St. Louis established the prices. Which became even more painful for trappers when silkworms replaced beaver pelts as “the thing to buy” in top hats and the bottom fell out of the fur trade market around the 1840s.
J2020F: Almost fifty years later, didn’t Buffalo Bill Cody sense his life straddled a “customized – commoditized” economic era?
Explorer: Yes. His Wild West show toured for three decades throughout the United States and Europe once he realized how to stage tall tales and the mythology of the western experience.
J2020F: One of the ironies was his troupe of entertainers relied on the railroads and other turn of the century industrial inventions to travel efficiently from one venue to the next.
Explorer: The industrial revolution put the West out of business. And, yet he sensed that his audiences hungered for the experience that could be no more.
J2020F: He made a better living at the higher end of the premium priced, customer-relevant, highly differentiated value chain glamorizing what was in reality a hard scrabble way of life scratching the dirt for an undifferentiated commodity, usually extracted from the ground, grown in the ground as in agriculture or raised above it as on cattle ranches, for instance.
Explorer: Throughout Colorado, Nevada and California extracting commodities in the mid-1800s provided prospectors and miners a living, but by mixing and processing commodities, the higher priced offering moved up the value-chain to those making the goods from the metals mined.
J2020F: They could charge a higher price and make a higher margin on what they produced.
Explorer: It was something Mark Twain experienced and wrote about in “Roughing It” as the first “Trapped and Permanently Temporary” drifter trying to strike it rich in gold and silver, but instead found a more valuable profession by spinning yarns and reporting about others like himself in booming Virginia City, Nevada.
J2020F: In severe cases entire communities, just like the 550 mining ghost towns in the Sierras, that couldn't adjust found themselves unable to compete on the world stage.
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Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
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