LIGHTS OF THE WORLD
Intangibles and the Global South
How many brands do you know, do you use, that are neither Western nor Far East Asian? I dare you to find some. Email me, if you do.
Here is a visualization suggestion. Everyone likes short cuts to seeing trends and big pictures: a timelapse of world conflicts, or a map of continents according to GDP. One you have surely come across before is the famous night view of the Earth. There are many stories in that image, one being the unequal nature of the world. But, also, how things change as the image gets updated; there are spots that used to be dark and no longer are.
Consider what a similar map of the world’s brands would look like. It’s one way to look at the last 400 years.
It goes hand in hand with this change in the market value breakdown of S&P companies:
IP owners live in rich countries of the North.
Which means that the vast darkness on the map, the Global South, is toiling to produce more, to make better, to do it cheaper, to lure you to send your production plans their way. This is the cornerstone of the development mantra. An ideology and an economic development prescription that has both a little post-conflict Bosnia and a big and very poor Ethiopia both praying to Economous, the god of commerce, to bless them this year, maybe next, with holy letters of FDI.
What the mantra leaves out is that all of the developing world is competing for the same slice of retail value of products they would produce – the production cost margin of 5%. What’s more, a slice that has been shrinking for the last 30 years. Ninety plus percent of value is left on the table to be controlled by distribution and retail.
An Ethiopia has huge transportation costs, a Bosnia is too ravaged and too educated and when it comes to Fiji one look at the map explains why your company will not be putting an assembly there. No Asian tiger dreams for them, but yet pretend they must there are. It is one of today’s great tragedies that the majority of the world is putting their hard work and hopes for better future in boosting production and getting less and less in return.
It’s not that these poor places don’t have intangibles. It’s that when they do, others either own them or own the margins these intangibles earn. The story of Fiji Water is one such example.
Entry filed under: collective branding, marca equatorial, margins & strategy, traditional knowledge. Tags: Bosnia, brands, Ethiopia, Fiji, Fiji Water, Global South, intangibles, IP colony, production cost, S&P.