Innovation

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Innovation in commercial banking is doomed because the upside is so limited

Think about a commercial bank, the kind you see sprinkled throughout most large cities. Its business model has two parts: accepting deposits and issuing loans. The key to a commercial bank as a business is that it pays less to depositors than it collects from borrowers, in the form of interest. Commercial banks are commodity
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A headline about Amazon that should scare scientists and engineers

“Amazon stock tanks after disappointing profit” That’s the headline. The article is about Amazon’s most recent quarterly financial performance. You can see what happened to Amazon’s profitability by looking at one of its own charts: Earnings sank, after three consecutive quarters of growth. Investors hate that. Rewind the clock in your head. Imagine you’re anxiously awaiting Amazon’s
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The Apple car failure shows one of Apple's strengths

Apple appears to be shiftings gears. On Monday, Bloomberg reported that Apple, at least for now, is pulling back on building its own car. (I’m sorry for the pun. But not really. I can’t help myself.) Apple is on pace to have spent about $24 billion in research and development, from fiscal years 2014 through
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Razors and generic drugs - the yin to innovation's yang

Yesterday, Unilever announced its purchase of Dollar Shave Club, reportedly for $1 billion. The rationale is clear. Dollar Shave Club avoids the huge fixed cost structure that Proctor & Gamble (the parent of Gillette) has. Without a huge fixed cost base, Dollar Shave Club can charge less for their razors.  On top of the price advantage,
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Services and innovation are the answer to commoditization

BCG Perspectives published an article last week titled “The Art of Embracing Commoditization”. The gist is that everything is becoming commoditized. What’s new and exciting today, will be old and boring tomorrow. The BCP Perspectives authors describe three possible responses: Establish a cost-based advantage Exploit market inefficiencies Redifferentiate the existing offering The first avenue is
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Dow, fish oil, and the untapped innovation around nutrition

Quartz reported on a cool development from scientists at Dow. These scientists found a way to genetically engineer a plant to develop the healthy fatty acids we most commonly find in fish.  Why is that so cool? Because we encounter tons of sustainability concerns when we eat animals. It’s costly. It creates real health risks,
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Stolen cars and our fear of artificial intelligence

My family and I live in Houston. We’ve heard about a rash of recent nearby car thefts, specifically of Jeep and Dodge models. The problem has become big enough that The Wall Street Journal reported on it Wednesday. These aren’t just normal, run-of-the-mill car thefts. In these cases, thieves use laptop computers to hack into
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Pharmaceutical companies can learn something from Apple

I read an article recently from Strategy and Business called “Pharma’s Identity Crisis”. The authors gave a high-level take on what  pharmaceutical companies must do to keep up with a rapidly changing market. Here’s one bit I found interesting: But pharma companies don’t have much experience in the delivery of care. In addition, generating positive
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Looking to innovate? A simple conversation is half the battle

Conor Friedersdorf wrote a short piece for The Atlantic introducing this year’s Aspen Ideas Festival. I had never heard of it before. Here’s the first sentence on the About page for the festival: The Aspen Ideas Festival is the nation’s premier, public gathering place for leaders from around the globe and across many disciplines to
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Will 3D printing save American manufacturing?

James Fallows published a piece in The Atlantic about the “maker movement”. The maker movement is the push to manufacture things in the US again, except on a small scale. 3D printers are probably the best known example, though Fallows dives more deeply. It’s not surprising to find this manufacturing discussion near the time of
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