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Is continuous service, or the lack of discrete, typically annualized product cycles, killing innovation in prevailing economic sectors? Can we spur growth by productizing more goods and services into annualized release cycles?
Seeing the recent headlines of large layoffs at tech companies, sometimes accompanied by snide comments that nothing of value was lost due to bloat at fat and efficient firms that enable quiet quitting, I thought about just how much innovation actually takes place in corporations that employ large numbers of knowledge workers.
Certain consumer products prominently feature measurable progress. Smartphones are constantly coming out with improved display (e.g., less bezel, more brightness/resolution), processing (speed), memory (size), camera (zoom, software magic) etc. Laptops can also boast longer battery life and lower weight, while gaming desktops have CPUs and GPUs with FPS improvements in major titles. EVs feature increasing range and acceleration.
But everything else in the economy just feels... stagnant?
Maybe a lot takes place behind the scenes and is invisible to laymen. But it's very unclear to me what all the white collar knowledge workers have created in most other large companies with all of their time. Some ad hoc examples that come to mind:
Banking: What has Chase, BofA, Wells Fargo, or Citi done in the last 5-10 years for the retail banking customer? Sure, everyone has a solid mobile app now. But how has core services improved? Is there anything measurable new or improved with checking, savings, or loans? Transfers still do not work over weekends or holidays. I guess maybe the public doesn't really expect innovation from the banks, but then what's with the massive payrolls? What does their R&D do all day/year/decade?
Tech services: Google search seems worse now thanks to SEO farms; Facebook is trying to innovate with Meta, but everyone seems skeptical; Instagram seems to be forever catching up to younger upstarts Snap or TikTok.
Shipping: Has FedEx/UPS/USPS improved in any measurable way in the last decade? Shipping fees and times for retail customers are as high as ever.
I think I could spend hours outlining all the sectors from the S&P 500. But I think my point applies broadly: when products are released in discrete, annual cycles, consumers can expect real improvements and even leaps. For everything else, mostly goods and services sold as subscriptions or free but supported by ads, real innovation seems intangible. The worst part is not only has innovation been slow historically, there is no real expectation that anything will change in the coming years either.
The cause seems fairly obvious--it's the lack of incentives: when you don't innovate a phone or car, consumers have no reason to buy the new thing, and you make no money. So you are forced to invest in R&D to deliver actual, marketable improvements. Meanwhile, Chase, Google, and FedEx will continue to make the same amount of money delivering continuous service at last year's SLA, and it's far easier to not churn than to convince someone to give you more money. Unfortunately for consumers, traditionally innovative sectors are catching onto the fact that it's easier to deliver continuous service instead--see how car companies are now charging monthly subscriptions for heated seats and remote unlocks.
What if we could change this paradigm entirely? What if a sufficient number of customers displayed willingness to pay more for substantially and measurably improved performance, and upstarts or visionary new CEOs of existing companies catered to this? Could that accelerate society into the future?
I admit it's hard to map out how this would work. Though I would have also said it's not possible for car companies to generate subscription revenue either, and here we are. So maybe the Motte has fun ideas for how at least some sectors can deliver much faster innovation than today by being incentivized to do so by moving from continuous service to discrete product cycles.
It's hard to say. Twitter got rid of half its staff , yet nothing seems different in regard to the user experience. I think it's a situation in which 10% of staff produce 80% of the value. The goal of public companies is foremost to generate profits for shareholders. Innovation is secondary.
Isn't this what apple does with its product launches. Same for Tesla. The changes seem continuous year over year, but the latest iPhone is vastly superior to the original 2007 phone. It makes sense to not change things too dramatically in the short-term, or else consumers may balk. It's too risky. For example, Microsoft in 2012 dramatically changed the interface with Windows 8, which consumers hated. Windows 10 restored some of the older interface.
Does anyone here actually get extra tangible uses out of the new iphone versions?
I have owned the 4, 5, 6, 8, and currently 11. Upon recent reflection, I that all the iPhones past the 5 have added nothing of meaningful value in terms of new features only minor quality of life updates like a better battery and camera, but nothing that has actively changed how I use the product. For this reason I won't be buying any of the newer versions of the iPhone.
So I'm curious if anyone here has an experience where there WAS a new feature added (past the iPhone 5) that has actively changed how they use their iPhone in some tangible way.
The LIDAR scanner is niche but sufficiently transformative (the FaceID camera can be used in this way as well due to the way its hardware works- and yeah, it actually does require special hardware for the required depth mapping). I'll likely be upgrading to a model that has it, because sometimes I want to 3D print things I find difficult to measure directly (curved internal surfaces are a real bitch to get right the first time).
Of course, that generally requires third-party applications to create and export the mesh as opposed to a first-party "we designed the phone to do this" philosophy Apple has always had, so I'm not entirely sure that counts. And it's not something I do every day, either.
The same conditions are true for most Android devices; the iPhone just has far more useful lifespan per dollar especially once you're in the sub-500 price range (I legitimately don't understand the point of buying a new phone before the hardware physically dies or the software is too old to run anything, but I'm probably in the minority here).
There is one exception to this, however, and that's the folding-screen phones: they're ludicrously expensive, but being able to have 2 apps open at the same time is a really big deal just like it was for PCs back in the 1980s.
I think Google is wise to go all-in on this tech, even though it's going to take a while to trickle down into the 400-dollar phone market, because this really does bridge the usefulness gap between phone and tablet, and it's easier to stomach replacing a 200-dollar phone every 2 years than it is a 1000-dollar phone because the screen physically can't hold up to being bent that many times.
It's also not something Apple is going to be able to match for a long time if ever; multi-tasking has always been an afterthought for them.
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