Product Map, The Wealth of Nations, and Innovation

Product Map, The Wealth of Nations, and Innovation. The economic growth of poor and developing countries is dependent upon their ability to move from their first successful product to the next. Recent research revealed that traditional economic theory linking success to factors such as transportation networks or the availability of skilled/non-skilled labor is wrong. Conventional economic theory predicts that if you successfully make computer chips you should also be able to successfully make cars, because they both require skilled labor. When one looks at real life, however, the supporting data doesn’t exist; producing a car is very different from producing a computer chip. To figure out what DOES exist the researchers mapped out product maps to see what does correlate for countries that successfully transition from poor or developing to industrialized. They used the same techniques you’d use to map the internet. What they found is the same thing Chris Zook expounds upon regarding innovation in Beyond the Core. It’s about adjacencies, about taking what you’re good at and expanding it to the next logical thing. For example, if you’re good at exporting fish, a good next step is exporting fresh produce. Many of the skills and infrastructure requirements are the same: you need refrigeration for the food, inspections assuring safety, and roads to get it there before it spoils. 

The thought from branes: Step outside to the next adjacency, and leverage your strengths.

Leave a Reply