Tuesday, 18 September 2012

The Great Recovery versus the death of hardware

Yesterday saw the launch of The Great Recovery, a joint venture project between the Royal Society of Arts and the Technology Strategy Board to promote the role of design in accelerating the transition towards a circular economy. Designers came armed with examples of super-easy to recycle circuit boards that can be disassembled simply by immersing them in warm water and alarming statistics about the amount of e-waste we ship back to China which already controls many of the resources needed to make it.

To me, the role of design in promoting resource-efficiency is obvious – if we design products to both consume fewer resources and make the materials easier to recover at the end of the product’s life, then sustainability becomes systemic and the circular economy is a natural consequence. And yet a totally different design philosophy is being adopted in the far east, where the electronics industry is engaged in a race to the bottom.

Many of our most prestigious technology brands have become massively wealthy by outsourcing manufacturing to China and Korea where labour is cheap and policymakers less interested in workers’ rights. Their focus is on building the products as cheaply as possible so that they can boost their profit margin to the maximum their brand value can justify. Innovations like design for recyclability have no place in this business model – anything that adds cost is ruthlessly excised in the drive to minimise production cost and maximise revenue. As a result, those countries have developed a high level of expertise in low-cost manufacturing of electronic goods that is now becoming a serious competitive threat to the vendors that instigated it.

One blogger visiting China this summer was shaken to find that even for a one-off purchase, with no haggling, he could acquire a perfectly reasonable tablet running Android Ice Cream Sandwich – with wifi, a camera and all the appropriate trimmings – for just $45. Little wonder, then, that he was moved to conclude that hardware is dead. It’s impossible to make a profit on hardware alone when it becomes so commoditised; the only way to make money is to sell something else and convince consumers to pay for the whole experience of which hardware is only a constituent part.

The implications of this for product designers are profound, because every designer works to a brief and clients have to ensure that their products or services are commercially viable. Given a situation where one country both controls many of the raw materials and has perfected the art of manufacturing a product for a price nobody can beat, it’s just possible that China’s domination of the electronics industry could become absolute. Meanwhile, technology vendors face some tough challenges and a catch-22 situation: reducing reliance on rare earths requires innovation in product design, which is hard to fund when the country that dominates the supply of those rare earths is driving price erosion that reduces margins to levels which mitigate against investment in R&D.

Despite this observation, I remain optimistic about the ability of the design community to propel us towards a circular economy. It certainly has the creativity and passion for the challenge. But vendors will have to adopt a long-term view that properly values the risks associated with strategic materials and resource scarcity, and be brave enough to make investments in design innovation that may take many years to pay back.

1 comment:

Mike Pitts said...

great stuff Tracey!
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