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The World Turned Upside Down

The World Turned Upside Down. Adrian Wooldridge 15 April 2010 The Economist. Auto Industry. Japan replaced U.S. as leader How did it happen? Price Reliability Lean Manufacturing relies on reducing waste Muda (non-value-adding work) Muri (Overburden caused by poor organization)

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The World Turned Upside Down

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  1. The World Turned Upside Down Adrian Wooldridge 15 April 2010 The Economist

  2. Auto Industry • Japan replaced U.S. as leader • How did it happen? • Price • Reliability • Lean Manufacturing relies on reducing waste • Muda (non-value-adding work) • Muri (Overburden caused by poor organization) • Mura (Unevenness caused by flow, the aim is to achieve Just In Time [JIT])

  3. Emerging World • Becoming Hotbed of Innovation (Japan of the 1950s) • They are looking / competing globally • The number of companies from • Brazil • Russia • India • China • On the Financial Times 500 List has quadrupled in 2006-2008 from 15 to 62 • Multi Nationals expect 70% of the World’s growth to come from emerging markets

  4. China and India • Pouring money into education • 40% of the growth expected from these two countries • Fortune 500 companies have 98 R&D facilities in China and 63 in India • Microsoft’s largest R&D facility outside the US is near Beijing • These companies need to appeal to the people at the BOP • Requires rethinking everything from products to distribution • These may be the toughest markets in the world • Riddled with problems

  5. Opportunities are extraordinary • Populations larger than the developed world and growing fast • Middle classes are growing • Few legacy costs • Brainpower is cheap • Emerging countries turning challenges into opportunities

  6. Innovation centers spreading • Western countries accepting Polycentric innovation • Not West to others, but innovation coming from all directions • Now seeing incremental innovations aimed at the middle class or BOP • Mobile phone payments • Online games • Smarter ways of designing products to meet the needs of the masses • Optimism is real (2009 Pew Study Shows Satisfaction with lives) • India 94% • Brazil 87% • China 85%

  7. What this all means? • “People who used to think of the emerging world as a source of cheap labor now recognize that it can be a source of disruptive innovation as well”

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