[Dave Birch] The technology guru Clay Shirky said in a recent interview in The Guardian that "more interesting than thinking about what's possible in ten years is thinking about what's possible now but that no-one has built". If we look at payments, we can see that there are a great many products that are possible but that no-one has built. Why? Well, the business case, obviously...
No, it's not that simple. I've been in meetings where everyone around the table has conclusively decided that there was no business case for something, only to see the same idea blossom somewhere else. One possibility is that the "not invented here" syndrome is a real effect and that because of the network efforts in payments it has much more of an effect than in other industries: Apple didn't have to get 200 other consumer electronics companies to agree to the iPod. The "not invented here" syndrome runs pretty deep and is not an emergent property of business, but of culture.
Anthropologist Pierre Petrequin once noted that the Meervlakte Dubele and Iau tribes in Papau New Guinea had been using steel axes and beads for many decades but their use had not been adopted by the Wanos tribe a “mere day’s walk away.” Another example: the adoption of credit cards is wildly uneven among the developed world. But that unevenness is not for a lack of plastic, or electricity, or banks.
[From The Technium]
Kevin's article is well worth reading, by the way, and not just because it mentions credit cards. It caused me to reflect on a number of issues around the cultural basis for innovation and the relationship between technology and culture.
Isn't there another aspect to this issue though? Payments, and banking, are very conservative businesses. Thus, it may well be that things that could be built are not being built not because of a difficult business case but simply because no-one in the product development, marketing or corporate strategy parts of a banking business thinks that they are possible. This is what stops them from becoming probable. If no-one in marketing has played around with an NFC mobile phone, to take a current example, then how will they imagine products that can exploit proximity? In addition to the exposure to the new technology, however, a large and conservative institution such as a bank needs its own culture of innovation. That clearly means something more than sending round a memo telling people to be more innovative.
Being unable to innovate because you've never had a culture of innovation means you're stuck.
[From Credit crunch: I'm worried about Dell. Dell should be too | Technology | guardian.co.uk]
This seems like a plausible core for a strategy that can work in the payments world. We need to move from a culture where the basic products, the market structures and the dynamics are seen as almost laws of nature to one in which the products are seen as being instances of an evolving business model. In practical terms, though, there is a problem with trying to shift to a culture of innovation right now even though (as many commentators have observed) times of financial turbulence are good times to create new business models. Why? Well it's because of the "retreat to the core" that is the typical large organisation's response.
This is because, in the short-term, innovation will suffer as technology investments are focused upon the modernisation of legacy infrastructures.
[From swiftcommunity.net]
There's a really interesting balance to be struck: so to put it into an obvious formulation that impacts a number of banks right now, what proportion of spend should go on building on the EMV infrastructure and what proportion should go on building the next infrastructure?
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