Globalization — 1980–2000
Global Business and the World Wide Web
Globalization
Globalization and the emergence of China as a manufacturing economy impacted societies around the globe. Trade and the spread of western brands and services created new opportunities for designers. The service economy and service design became hotly debated topics, in the face of manufacturing job losses. McDonalds and Walmart used new tools to engage and serve customers. Michael Porter published his 5 Forces in 1979, just before the beginning of the 80s. His ideas encapsulated the need to consider the strategic factors of competition. The 1990s brought a powerful new communications technology to our homes and businesses. The Internet created new demands of designers with opportunities for applying our skills to everything from computers to websites. New businesses emerged to solve problems for people that never existed prior to this time.
Image: IBM Personal Computer
Header image: Apple 1984 Ad
Assignments for the Class
Readings & Assignments
The readings for the week include the following:
ASSIGNED READING: Welcome to the Experience Economy, Pine and Gilmore, 1998 (Harvard Business Review)
Add a key point or two to the Mural board
Add a relevant question raised by the topic
Review the current class website page
ADDITIONAL READING (SCAN): How Competitive Forces Shape Strategy, Porter, 1979, (Harvard Business Review)
Assignments for the week are as follows:
Product Portfolio
Locate a relevant and impactful product from the period we are discussing (1980-2000). Please discuss:
Why does the product exist and what needs were met?
Why is the product important?
Who did the product empower/disempower?
What behaviors did the product change or create?
Don't feel the need to create a PowerPoint deck. Be creative. The point is discussion.
Method Toolkit
Map experiences (Experience Map Exercise):
Identify some common or interesting experiences (i.e. Disneyland)
Think about how they might fit on the map
Identify missing experiences to fill each quadrant
Place a relevant experience in each quadrant of the map
Be prepared to talk about the exercise
The Context
This period saw the recessionary pressures and inflation of the 1970s extend into the beginning of the 1980s. “The debt crisis of the 1980s led to a severe recession in almost all African and Latin American countries.” The response was coordination among world’s lending organizations. Globalization of commerce and finance grew throughout the period. Japan competed with the U.S. in automobiles and other durable goods, as we off-shored our manufacturing capabilities. Shenzhen also began to become a prime location for manufacturing. We also discuss the evolution of technology and the introduction of the World Wide Web which connects us all in ever new ways.
Image: Gordon Gekko from Wall Street (1987)
A Period of Financial Challenges
The period saw sustained growth, although not without two recessions in the early 1980s and 1990s. Reagan brought a market focus to economic policy, a perspective mirrored by Thatcher in England. In the United States, a budget deficit grew and a Savings & Loan crisis compounded problems. Fiscal challenges occurred on a global scale. Still, globalization continued.
Chart: World Bank
Economic activity tells us a story of the financial state of the world, however, we must also consider other important trends in global poverty.
Divergent Economies
The economies in Africa, Latin America, and Western Asia experienced a lost decade of growth in the 1980s. In contrast, China and East Asia grew at strong rates. Strategy and policies account for some of these differences. IMF and World Bank growth policies and financial support tied to these narratives also provide insight into the challenges faced by some economies.
Chart: UN
Neoliberal Prescriptions
“In Africa, the average household consumes 20 percent less today than it did 25 years ago. Worldwide, more than 1 billion people saw their real incomes fall during the period 1980-1993. Meanwhile, according to the United Nations Development Program’s 1998 Human Development Report, the 15 richest people in the world enjoy combined assets that exceed the total annual gross domestic product of sub-Saharan Africa. At the end of the 1990’s, the wealth of the three richest individuals on earth surpassed the combined annual GDP of the 48 least developed countries.”
The Thistle, Volume 13, Number 2: Sept/Oct, 2000
Urbanization continued to accelerate during this period. Shortly after the turn of the millennium (2007), the percentage of people living in urban areas surpassed those living in rural areas. This trend continues.
Fast Urbanism
The Pearl River Delta became the fastest expanding urban area in human history beginning in the 1980s. From a small fishing village in the 1970s, the area grew to a population of 7 million in 2000. The special economic zone was driven by new market-oriented reforms initiated by Deng Xiaoping. The combination of economic planning and the needs of business brought a rural population to this new urban center for jobs and opportunity.
Image: Shenzhen
Thoughts to Consider
Consider whether monetary policy is a design challenge.
The Brandenburg Gate (1989)
The Flavr Savr tomato was the first genetically engineered food to reach the market. The produce was engineered to provide a longer shelf life supporting long distance shipping. The tomato was approved by the FDA in 1994, and was sold between 1994 and 1998. (Image: Genetic Engineering & Biotechnology News)
Image above: Sony Walkman, 1979 (Sony)
Competitive Forces
In 1979, Michael E. Porter published How Competitive Forces Shape Strategy, which introduced his Five Forces model. With contemporaneous discussions of the “service economy,” the model created a framework for discussing the vast changes in the economy which were occurring. Awareness of these forces helps designers explore and articulate differentiated visions for the products and services they create:
“Whatever their collective strength, the corporate strategist’s goal is to find a position in the industry where his or her company can best defend itself against these forces or can influence them in its favor. The collective strength of the forces may be painfully apparent to all the antagonists; but to cope with them, the strategist must delve below the surface and analyze the sources of each. For example, what makes the industry vulnerable to entry? What determines the bargaining power of suppliers?”
Social and business change requires that businesses think broadly about the future of the company as well as society. Porter discusses how the disparate forces of competition can be harnessed to successfully position products within an industry. As we will see in the period of 2000-2020, this positioning model has been expanded to cope with technological change.
Image left: Porter’s Five Forces (HBR)
Fourth Order Design
The topic of Design Thinking was discussed in our previous class. As we saw, the term evolved from the dialog associated with design methods and the needs presented by Wicked Problems. In “Branzi’s Dilemma,” Buchanan, describes Four Orders of design. The first two are associated with the craft of design. The third order, finds the designer engaging in the interaction between “producer” and the “public” expanding the “accountability” of the designer. Lastly, designers find themselves “culturing” in order to find “identity” and “purpose.”
“Culture is not a state, expressed in an ideology or a body of doctrines. It is an activity. Culture is the activity of ordering, disordering and reordering in the search for understanding and for values which guide action.”
The act of “designing” incorporates a series of processes and needs. “Culturing” as applied to design and designers, concerns itself with the “meaning” of design as practiced and applied. Designers seek meaning for their practice. Integrating systems in the service of communities requires “invention” as well as “evaluation.” Dialog allows designers to facilitate cross-functional participation, which allows the process to transcend the outcomes.
Source: Fourth Order Design, Golsby-Smith, 1996 (Design Issues)
Diagram right: Four Orders of Design
Image: McDonald’s in Beijing, 1992 (Photographer: Mike Fiala/AFP via Getty Images)
The Service Economy
With the collapse of the Soviet Union and liberalization in China, globalism was unhindered during the 1990s. Monetary policies supported by stable energy prices and low-inflation allowed the US economy to accelerate. Services became a more prominent portion of the economy with the off-shoring of low-skilled manufacturing jobs. These forces came together to create an environment of growing productivity, with shifts in where value was created. “Between 1986 and 2000, 90 percent of the 21 million jobs added to the economy will be service jobs.” These jobs represent:
Transportation
Healthcare
Education
Retail
Marketing/Advertising
Engineering/Design
By 1990, Walmart became the largest US retailer with sales of $32B. McDonald’s grew at record levels due to overseas expansion, but struggled strategically. As the service economy grew, new models of service which provided a holistic view into the company and its strategies evolved. Service Design became a discipline of its own, offering companies new means of differentiation.
Source: Service Sector Means Business in the ’90s, Kleiman, 1990 (Chicago Tribune)
Image left: Walmart Greeter, 1995 (Click Americana)
Thoughts to Consider
Consider the new strategic needs of products and services.
Image: Lunchables (The Atlantic)
Silicon Valley
The story of Silicon Valley begins with the the MOSFET (metal-oxide-silicon field-effect transistor), and the formation of Fairchild Semiconductor by the “traitorous eight.” Along with other component manufacturers, including INTEL, the valley became synonymous with computing and software. Our story begins with the research, computer software, and gaming industries which resulted.
The Homebrew Computer Club began meeting in 1975 in French’s garage in Menlo Park. Computing culture was already established within the academic, corporate, and government research organizations in the area. Xerox Parc is perhaps the most famous research group of the period. Its most productive period was in the 1970-80s. Gaming was an influential segment which began most popularly with Atari. These industries formed the foundation from which modern design culture emerged. The disparate skills required to design for these emerging industries drove the need for new categories of design.
Image left: The birthplace of Silicon Valley — The Hewlett-Pacckard Garage (Wikipedia)
MAKE IT NEW
“New product categories—interactive video games, educational software, telepresence surgical equipment—called forth new methodologies and even whole new fields of design practice. Industrial design, having exhausted the modernist dogma that ‘form must ever follow function,’ incubated the field of interaction design. Market research was supplanted by user experience design. Ergonomics, with its preponderant focus on physical affordances, evolved into human factors, which extended the field of analysis to the cognitive, emotional, and behavioral dimensions of product use. In successive waves, a new cast of specialists trained in the social and behavioral sciences took their seats alongside the artists and engineers who had already laid claim to the title of ‘designer.’”
Barry M. Katz
Xerox Parc
In 1970, Xerox opened their Palo Alto Research Center (PARC) to support scientists in more freely exploring their work. The environment was execute to remove research from the day-to-day operations of Xerox. This may have worked too well. Through the 1980s and 90s, Xerox PARC explored advanced research topics including:
Graphical user interfaces
Object-oriented programing
Ubiquitous computing
Ethernet & Internet propocols
And yes, laser printers
The Xerox Alto was PARC’s attempt to envision the future of the personal computer. The Alto utilized a GUI (graphical user interface) and was controlled by a mouse. “In 1979, Steve Jobs arranged a visit to Xerox PARC, during which Apple Computer personnel would receive demonstrations of Xerox technology in exchange for Xerox being able to purchase stock options in Apple.” Job said, “Xerox could have owned the entire computer industry, could have been the IBM of the nineties, could have been the Microsoft of the nineties." Xerox was unable to act on many of the innovations researched during this period, and was spun off as an independent research organization in 2002.
Image right: Xerox Alto (Wikipedia)
West Coast Design
Designers flocked to the West Coast from Europe to partake in the work that was being offered by Silicon Valley companies. Bill Moggridge, David Kelley, and Hartmut Esslinger received so much work from these companies that they had to build design organizations to support client needs. IDEO, frog design, Lunar became the go-to design offices for companies like Apple, 3com, and Palm. New design skills were needed to design the disparate products and services that were required.
New design skills emerged from these partnerships. Interaction Design, human factors, user research, game design, and information architecture, amongst other skills became important disciplines to explore and within which to specialize. Free movement of designers led to new design offices, as well as to a proliferation of clients resulting from designers goin in-house. Robert Bruner in particular was recruited by Apple to build a new, internal design organization. One that would later be handed to Jony Ives.
Image left: Mouse for Apple Computer (Wired)
“Kelley, who had simply wanted to work on ‘cool stuff with a few friends,’ found that he was forced to grow his firm because the work kept coming: ‘You were just inundated in those days. Somebody comes in the door—you don't know who [he] is—saying, ‘Could we put a case around their computer boxes?’ and they turn into 3Com or Rolm or Zilog.’”
Barry M. Katz
Apple Design
Apple launched the Mac in 1984. The computer was based largely on the ideas that Steve Jobs absorbed from Xerox PARC. The computer differed markedly from those that existed previously, particularly in its aspirations to become truly useful “personal computer.” Typical computer-oriented activities such as number crunching were supplanted by creative pursuits like illustration and desktop publishing. Other software efforts were equally influential.
HyperCard, developed by Bill Atkinson, supported an index-card model of multi-media. Apple’s Multimedia Lab created numerous examples of potential products, begging the question of consistency in software design. Apple’s Human Interface Group (HIG) created a vision of consistency across Apple’s software products with their Apple Human Interface Guidelines. Aligning the organization on an approach to design was critical. Ensuring that products were usable, was to become an important conversation for designing on the World Wide Web.
Design has remained an important aspect of the Apple culture as a result of its embrace from Steve Jobs. Maintaining a vision for design in an organization is challenging without executive sponsorship. John Sculley needed to provide his own vision while leading Apple. His vision for the future of personal computing was the “Knowledge Navigator” video from 1987.
Image right: Apple Iic demonstrating “Snow White” design language (Wikipedia)
The Design of Everyday Things
In the 1990s, Don Norman coined the term “user experience.”
Apple Knowledge Navigator Video, 1987 (Apple)
Thoughts to Consider
Consider the skills needed to design for these new technologies.
Palm Pilot circa 1999 (History Computer)
