Dissertation Project F. Kohlbacher

Florian Kohlbacher, German Institute for Japanese Studies, Tokyo CC Hang Division of Engineering & Technology Management, National University of Singapore

Disruptive Innovations and the Greying Market

2007 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM), 3 December 2007

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Agenda for today Brief introduction to the aging/ demographic “problem” Challenges and opportunities of demographic change:

The Silver market Disruptive innovations and the greying market

Copyright: Dr. Florian Kohlbacher and Prof. CC Hang

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Demographic Change

Source: IMF, 2006


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Population Aging…

Source: UN Population Division, 2002 Copyright: Dr. Florian Kohlbacher and Prof. CC Hang

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… and Shrinking

Source: The Economist, 2006

Source: UN Population Division, 2002 Copyright: Dr. Florian Kohlbacher and Prof. CC Hang

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Business Implications of Demographic Change Demographic Change - Aging - Shrinking

Challenges/threats - Workforce crisis - Lost knowledge - Shrinking customer base

Chances/opportunities - Silver market/ Silver business - New product offerings - New service offerings

Copyright: Prof. Dr. Cornelius Herstatt and Copyright: Dr. Florian Kohlbacher and Prof. CC Hang Dr. Florian Kohlbacher

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Business implications of demographic change The Silver Market


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What’s the silver market reality? Most today’s products and services are designed for young(er)

people (age is difficult to market, products have to be “sexy” etc.) Most companies lack processes, capabilities and tools (e.g.

appropriate market research) to identify and respond to needs and wants of the “Silver consumers”. Hence, companies are only slowly realizing the opportunities to serve elderly people Japanese and (some) US-firms are at the forefront of product

creation for the Silver Market, followed by firms in the Northern Part of Europe (Finland, Sweden, Norway) Academic research has started to look closer at the issue (e.g

www.wdassociation.org) Copyright: Prof. Dr. Cornelius Herstatt and Copyright: Dr. Florian Kohlbacher and Prof. CC Hang Dr. Florian Kohlbacher

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Areas to innovate for the Silver Market Improved Live and Autonomy

Needs and Demands

Active Participation, Social contacts and Fun

Easy-to-use products

Mobility and travel

Health and Safety

Pharmaceuticals, gerontechnolgies and supportive devices

Luxury products and services Transgenerational solutions Cars

Life long learning and education Travel, financial and insurance packages

Housing and sanitary equipments Microsystems, Software and Electronics Design and New Materials

Pharmaceuticals and Biotech

Nanotechnologies and intelligent textiles

Technologies Copyright: Copyright: Dr. Florian Prof. Dr. Kohlbacher Corneliusand Herstatt Prof. CC andHang Dr. Florian Kohlbacher

Robotics and Mechanics 9

Silver Innovation

“Concerning ageing, we are talking too much about technology and not about innovation. But what counts is not what is technically possible. What counts is what people want.” Professor Joseph F. Coughlin, Director, AgeLab, MIT


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Disruptive Technologies and Innovations


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Disruptive Innovation Framework

Performance

Incumbents nearly always win

Su

Disruptive technologies

ns o i t a nov n i g in stain

e of ical Pac nolog h Tec r ess g Pro

customers Performance that sorb can utilize or ab

Entrants have advantages (low-end and/or new markets)

(inferior; other unique features) Time


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2 Types of Disruptions 1) Low-end disruption: there are customers at

the low end of the market who would be happy to purchase a product with less (but good enough) performance if they could get it at a lower price. Æ Older consumers and workers are often overburdened by complex products and too difficult to use technology.


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2 Types of Disruptions 2) New-market disruption: there are customers

who had not had the money, time etc. to use/ consume certain products and services. Besides, changing conditions in people’s life and health give birth to new, unprecedented needs and wants. Æ Products and services for the greying market have to help potential customers get a job done that they have always been trying to get done – but have not yet been able to do so in a simple, convenient and/or affordable way. Copyright: Dr. Florian Kohlbacher and Prof. CC Hang

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Research Propositions Proposition I: The greying market is an excellent field of application for low-end disruptions as elderly customers will increasingly demand low but adequate performance – easy-and-safe-to-use – and low-price products and services


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Research Propositions Proposition II: The greying market is an excellent field of application for new-market disruptions as elderly customers will increasingly demand new products and services they had not demanded or had not been able to demand before.


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Research Propositions Proposition III: The greying market is an excellent field of application for combinations of new-market disruptions as elderly customers will increasingly demand new products and services to get jobs done that they have always been trying to get done – but have not yet been able to do so in a simple, convenient and/or affordable way.


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Research Propositions Proposition IV: Transgenerational and ageless products and services (solutions) will become an excellent field of application for disruptive innovations as elderly customers will increasingly be interested in consuming the same products and services as other age groups and will increasingly demand to consume them jointly with other age groups. Copyright: Dr. Florian Kohlbacher and Prof. CC Hang

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Disruptive Innovations and the Greying Market Case Examples


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Easy-to-use products: DoCoMo Raku-Raku Phone Ex a


mp les

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Easy-to-use products DoCoMo Raku-Raku Phone Examples Developed by Fujitsu in accordance with universal

design principles Easy-to-use (raku-raku = easy-easy) Not too many functions But: new optional functions such as pedometer e.g. Big screen (big fonts), big buttons

Æ Millions of units sold; already 4th release available


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Transgenerational Solution: Nintendo Wii, Nintendo DS Ageless product For the whole family

Ex a

mp les

Connects and integrates the whole family Brain-training and exercise games


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Wii-Party


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So what? Silver Markets are a salient area of application for

disruptive innovations Gerontechnologies and other products and services for

the elderly as corporate social responsibility/ social innovation for those at he bottom (top?) of the aging pyramid?!?!


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Further Research and Events Edited Book: “The Silver Market Phenomenon: Business

Opportunities and Responsibilities in an Era of Demographic Change”, to be published by Springer in 2008 (editors Herstatt/Kohlbacher) Workshop on The Silver Market Phenomenon,

Sendai-Finland Wellbeing Center, Sendai, Japan, 07 March 2008 International Symposium on The Silver Market

Phenomenon”, Tokyo, 2-4 October 2008 (together with Tokyo Institute of Technology, SIMOT) Copyright: Prof. Dr. Cornelius Herstatt and Copyright: Dr. Florian Kohlbacher and Prof. CC Hang Dr. Florian Kohlbacher

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Q&A Thank you! ご清聴ありがとうございました。

谢谢

Further information: www.dijtokyo.org [email protected]

95 years old: 100 meters in 57.58 seconds Copyright: Prof. Dr. Cornelius Herstatt and Copyright: Dr. Florian Kohlbacher and Prof. CC Hang Dr. Florian Kohlbacher

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