Innovation is only one piece of the puzzle

So the Swiss are better than us. Well, goody for them. But the question for investors is whether the Swiss knack for innovation translates into remarkable stock market gains.

It should. After all, innovation gives companies an edge over their competitors, and that should lead to solid market share and fat profit margins. Unfortunately, this doesn’t seem to be the case.

Victorinox AG is a closely held company, meaning that you can’t invest in it through the stock market or track its interest among investors. But you can track the Swiss Market Index, which represents the country’s 20 largest stocks: Its performance has been lagging Canada’s benchmark index by a substantial margin.

Over the past one-year, three-year and five-year periods, the S&P/TSX composite index has consistently outperformed the Swiss index. Over the past decade, the Canadian index has risen a total 49 per cent after factoring in dividends, while the Swiss index has risen a mere 1 per cent.

Why? This isn’t a strike against innovation, but rather an indication that there might be bigger factors at work when it comes to driving stock prices – like, uh, luck and commodities.

For example, Swiss financial firms were dealt severe setbacks during the financial crisis, which translated into massive writedowns and quarterly losses. UBS AG shares remain 76-per-cent below their pre-crisis highs, and Julius Baer Group Ltd. shares are still down 52 per cent.

By comparison, Canadian banks largely escaped the carnage. The worst hit, Canadian Imperial Bank of Commerce, is down a relatively mild 28 per cent from its pre-crisis high, while Toronto-Dominion Bank is down all of 2 per cent.

Meanwhile, it’s hard to duck the fact that higher prices for crude oil, gold and fertilizer have helped drive triple-digit gains for Canada’s energy and materials sectors, which together represent nearly half of the composite index in terms of their weighting.


David Berman
http://www.theglobeandmail.com/globe-investor/markets/markets-blog/innovation-is-only-one-piece-of-the-puzzle/article1750632/

From Saturday’s Globe and Mail
So the Swiss are better than us. Well, goody for them. But the question for investors is whether the Swiss knack for innovation translates into remarkable stock market gains.

It should. After all, innovation gives companies an edge over their competitors, and that should lead to solid market share and fat profit margins. Unfortunately, this doesn’t seem to be the case.

Victorinox AG is a closely held company, meaning that you can’t invest in it through the stock market or track its interest among investors. But you can track the Swiss Market Index, which represents the country’s 20 largest stocks: Its performance has been lagging Canada’s benchmark index by a substantial margin.

Over the past one-year, three-year and five-year periods, the S&P/TSX composite index has consistently outperformed the Swiss index. Over the past decade, the Canadian index has risen a total 49 per cent after factoring in dividends, while the Swiss index has risen a mere 1 per cent.

Why? This isn’t a strike against innovation, but rather an indication that there might be bigger factors at work when it comes to driving stock prices – like, uh, luck and commodities.

For example, Swiss financial firms were dealt severe setbacks during the financial crisis, which translated into massive writedowns and quarterly losses. UBS AG shares remain 76-per-cent below their pre-crisis highs, and Julius Baer Group Ltd. shares are still down 52 per cent.

By comparison, Canadian banks largely escaped the carnage. The worst hit, Canadian Imperial Bank of Commerce, is down a relatively mild 28 per cent from its pre-crisis high, while Toronto-Dominion Bank is down all of 2 per cent.

Meanwhile, it’s hard to duck the fact that higher prices for crude oil, gold and fertilizer have helped drive triple-digit gains for Canada’s energy and materials sectors, which together represent nearly half of the composite index in terms of their weighting. Leer más “Innovation is only one piece of the puzzle”

Switzerland blazes innovation trail

A nearby flight instrument company, Flytec, approached Victorinox with a suggestion for a gadget geared to mountain climbers. Flytec now supplies the knife maker with electronics for an altimeter, barometer, thermometer and clock.

The company has made mistakes – a tool for in-line skaters that came with a separate pouch for different-sized keys wasn’t a success – but Victorinox continues to tinker and add new features to its products. Mr. Elsener’s top goal is to boost the appeal of Swiss Army knives among women, who tend to buy them more for the men in their lives.

In the global scheme of things, Victorinox is a small company. But like other Swiss firms – from online scheduler Doodle to Thermoplan, which supplies coffee machines to Starbucks – it has found its niche. And that’s reason to believe Switzerland’s economy may keep on thriving.

“I strongly believe in the future of Switzerland because of globalization, because open economies can play advantages in innovation even better than protected economies,” Mr. Gassman said. True, it costs more to make stuff there, but that “can be overcompensated by productivity – and even more innovative products and design.”


Victorinox logo.

TAVIA GRANT
http://www.theglobeandmail.com/report-on-business/economy/growth/switzerland-blazes-innovation-trail/article1750626/

IBACH, SWITZERLAND— From Saturday’s Globe and Mail

In a tiny town in central Switzerland surrounded by velvety green mountains and punctuated with whiffs of cow dung, a 126-year-old factory churns out 60,000 Swiss Army knives and other pocket tools each day for a hungry global market.

All the folding blades at Victorinox AG are still made in Ibach, population 3,500. The company is run by the founding Elsener family, now in its fourth generation. Its brand has, over the years, become synonymous with Switzerland itself: quality, precision, reliability.

Yet Victorinox is anything but static. Back in 1891, its main product was a heavy, wood-handled knife built for the Swiss army. Now, its knives come equipped with laser pointers and USB drives with biometric sensors. The factory has been upgraded to the latest high-tech gadgetry (machines that look like fingers do the finicky job of assembling the knives), leaving workers free to develop new tools. Sales are roughly $200-million a year, 90 per cent of its products are exported, and it is expanding into new markets such as Brazil, Argentina and China. All this, and employees still get 1½-hour lunch breaks.

Carl Elsener Jr., Victorinox’s approachable chief executive officer, proudly proclaims that his company has never outsourced production or axed jobs due to recession – in fact, it has a history of boosting investment, not cutting it, during economic downturns. He credits its endurance to innovation, which is helping Victorinox face its biggest challenge yet: competition from cheap Asian counterfeits.

“Innovation is in our blood here in Switzerland – since the beginning, we’ve always tried to make things better,” Mr. Elsener said in an interview at his company’s headquarters. “Maybe it’s because we were forced early to be global and to think about exports.”

Innovation seems to seep from Swiss pores. The Alpine nation of 8 million people was named the world’s most competitive economy in a recent ranking by the World Economic Forum, and regularly leads the world when it comes to innovation. The Swiss hold the most patents per capita in Europe – Albert Einstein once worked in the Bern patent office – and the country is a hub for global giants such as Swatch, UBS and Nestlé.

Canada, meanwhile, is still struggling to shed its hewer-of-wood image. The Conference Board of Canada slapped the country with yet another “D” in innovation this year, and it slid to 10th place in the WEC rankings. For Canada to thrive in a global, knowledge-based economy, it must focus on turning good ideas, of which we have plenty, into marketable products, which we’re not so good at. Switzerland offers plenty of lessons on how to do it.

“It’s about desire,” said Roger Martin, dean of the Rotman School of Management. “European countries are more practised in how to compete in sophisticated ways. They can’t chop down trees, dig out rocks, or fish. So they’ve been at it longer to upgrade their products.”

It’s tough to imagine it now, but in the late 1800s, as Victorinox founder Karl Elsener was training as a master cutler, Switzerland was one of the poorest nations in Europe. Its economy was largely based on agriculture, and robbers ruled the roads. It had no coal, steel or iron – no natural resources at all, in fact – and for a time, the industrial revolution bypassed the tiny mountain nation.

Out of necessity, much like Japan, it developed a knack for importing goods and putting them together in smarter ways, or copying other people’s products and making them better.

Over the years, said Oliver Gassmann, chair of innovation management at the University of St. Gallen, Switzerland developed a unique innovation policy.

“It’s bottom-up, science-based and market-oriented,” he said.

Education is key to the country’s position as an innovation hub. Its school system produces world-class scientists who are focused on the pragmatic implementation of new ideas, Mr. Gassmann said. And Swiss universities and technical schools collaborate with multiple partners, including businesses, to bring ideas to market. Leer más “Switzerland blazes innovation trail”

A radical pessimist’s guide to the next 10 years

From Saturday’s Globe and Mail

The iconic writer reveals the shape of things to come, with 45 tips for survival and a matching glossary of the new words you’ll need to talk about your messed-up future.

1) It’s going to get worse

No silver linings and no lemonade. The elevator only goes down. The bright note is that the elevator will, at some point, stop.

2) The future isn’t going to feel futuristic

It’s simply going to feel weird and out-of-control-ish, the way it does now, because too many things are changing too quickly. The reason the future feels odd is because of its unpredictability. If the future didn’t feel weirdly unexpected, then something would be wrong.

3) The future is going to happen no matter what we do. The future will feel even faster than it does now

The next sets of triumphing technologies are going to happen, no matter who invents them or where or how. Not that technology alone dictates the future, but in the end it always leaves its mark. The only unknown factor is the pace at which new technologies will appear. This technological determinism, with its sense of constantly awaiting a new era-changing technology every day, is one of the hallmarks of the next decade.

4)Move to Vancouver, San Diego, Shannon or Liverpool

There’ll be just as much freaky extreme weather in these west-coast cities, but at least the west coasts won’t be broiling hot and cryogenically cold.

5) You’ll spend a lot of your time feeling like a dog leashed to a pole outside the grocery store – separation anxiety will become your permanent state

6) The middle class is over. It’s not coming back

Remember travel agents? Remember how they just kind of vanished one day?

That’s where all the other jobs that once made us middle-class are going – to that same, magical, class-killing, job-sucking wormhole into which travel-agency jobs vanished, never to return. However, this won’t stop people from self-identifying as middle-class, and as the years pass we’ll be entering a replay of the antebellum South, when people defined themselves by the social status of their ancestors three generations back. Enjoy the new monoclass!

7) Retail will start to resemble Mexican drugstores

In Mexico, if one wishes to buy a toothbrush, one goes to a drugstore where one of every item for sale is on display inside a glass display case that circles the store. One selects the toothbrush and one of an obvious surplus of staff runs to the back to fetch the toothbrush. It’s not very efficient, but it does offer otherwise unemployed people something to do during the day.

8) Try to live near a subway entrance

In a world of crazy-expensive oil, it’s the only real estate that will hold its value, if not increase.

9) The suburbs are doomed, especially thoseE.T. , California-style suburbs

This is a no-brainer, but the former homes will make amazing hangouts for gangs, weirdoes and people performing illegal activities. The pretend gates at the entranceways to gated communities will become real, and the charred stubs of previous white-collar homes will serve only to make the still-standing structures creepier and more exotic.

10) In the same way you can never go backward to a slower computer, you can never go backward to a lessened state of connectedness

11) Old people won’t be quite so clueless

No more “the Google,” because they’ll be just that little bit younger.

12) Expect less

Not zero, just less.

13) Enjoy lettuce while you still can

And anything else that arrives in your life from a truck, for that matter. For vegetables, get used to whatever it is they served in railway hotels in the 1890s. Jams. Preserves. Pickled everything.


FOCUS
Douglas Coupland
http://www.theglobeandmail.com/news/national/a-radical-pessimists-guide-to-the-next-10-years/article1750609/singlepage/#articlecontent

From Saturday’s Globe and Mail
Coupland’s glossary of new terms (important)

The iconic writer reveals the shape of things to come, with 45 tips for survival and a matching glossary of the new words you’ll need to talk about your messed-up future.

1) It’s going to get worse

No silver linings and no lemonade. The elevator only goes down. The bright note is that the elevator will, at some point, stop.

 

2) The future isn’t going to feel futuristic

It’s simply going to feel weird and out-of-control-ish, the way it does now, because too many things are changing too quickly. The reason the future feels odd is because of its unpredictability. If the future didn’t feel weirdly unexpected, then something would be wrong.

3) The future is going to happen no matter what we do. The future will feel even faster than it does now

The next sets of triumphing technologies are going to happen, no matter who invents them or where or how. Not that technology alone dictates the future, but in the end it always leaves its mark. The only unknown factor is the pace at which new technologies will appear. This technological determinism, with its sense of constantly awaiting a new era-changing technology every day, is one of the hallmarks of the next decade.

4)Move to Vancouver, San Diego, Shannon or Liverpool

There’ll be just as much freaky extreme weather in these west-coast cities, but at least the west coasts won’t be broiling hot and cryogenically cold.

5) You’ll spend a lot of your time feeling like a dog leashed to a pole outside the grocery store – separation anxiety will become your permanent state

6) The middle class is over. It’s not coming back

Remember travel agents? Remember how they just kind of vanished one day?

That’s where all the other jobs that once made us middle-class are going – to that same, magical, class-killing, job-sucking wormhole into which travel-agency jobs vanished, never to return. However, this won’t stop people from self-identifying as middle-class, and as the years pass we’ll be entering a replay of the antebellum South, when people defined themselves by the social status of their ancestors three generations back. Enjoy the new monoclass!

7) Retail will start to resemble Mexican drugstores

In Mexico, if one wishes to buy a toothbrush, one goes to a drugstore where one of every item for sale is on display inside a glass display case that circles the store. One selects the toothbrush and one of an obvious surplus of staff runs to the back to fetch the toothbrush. It’s not very efficient, but it does offer otherwise unemployed people something to do during the day.

8) Try to live near a subway entrance

In a world of crazy-expensive oil, it’s the only real estate that will hold its value, if not increase.

9) The suburbs are doomed, especially thoseE.T. , California-style suburbs

This is a no-brainer, but the former homes will make amazing hangouts for gangs, weirdoes and people performing illegal activities. The pretend gates at the entranceways to gated communities will become real, and the charred stubs of previous white-collar homes will serve only to make the still-standing structures creepier and more exotic.

10) In the same way you can never go backward to a slower computer, you can never go backward to a lessened state of connectedness

11) Old people won’t be quite so clueless

No more “the Google,” because they’ll be just that little bit younger.

12) Expect less

Not zero, just less.

13) Enjoy lettuce while you still can

And anything else that arrives in your life from a truck, for that matter. For vegetables, get used to whatever it is they served in railway hotels in the 1890s. Jams. Preserves. Pickled everything. Leer más “A radical pessimist’s guide to the next 10 years”

Generate killer ideas with these 20 suggestions

The lightbulb. Bubble wrap. The Post-It. The iPod. The Snuggie. Facebook. Twitter.

These inventions, products, and businesses all started with an idea. Coming up with today’s equivalent of the lightbulb is a tall order, but great ideas can be as small as an updated logo for your business or as big as a new product line.

Peter van Stolk, founder of Jones Soda Co., is a good example of a business owner who wasn’t afraid to take a great idea and run with it.

Mr. Van Stolk boosted his $20-million (U.S.) business to $42 million in four years by coming up with an idea that generated $25 million in free publicity. Jones Soda was a small Seattle-based beverage company competing against Coca-Cola and Pepsi-Cola. Combined, those two monoliths spend a billion dollars a year on advertising.

One day in 2003, Mr. Van Stolk came up with an idea in his car to create a Turkey & Gravy-flavoured soda for release around Thanksgiving. His brand got a lot of attention by U.S. media, and the product began to sell out.

Generating useful ideas is a skill, and like any other skill it can be learned. The more you practice, the easier it will be to come up with ideas whenever you need them.


Jim Kukral | http://www.theglobeandmail.com

The lightbulb. Bubble wrap. The Post-It. The iPod. The Snuggie. Facebook. Twitter.

These inventions, products, and businesses all started with an idea. Coming up with today’s equivalent of the lightbulb is a tall order, but great ideas can be as small as an updated logo for your business or as big as a new product line.

Peter van Stolk, founder of Jones Soda Co., is a good example of a business owner who wasn’t afraid to take a great idea and run with it.

Mr. Van Stolk boosted his $20-million (U.S.) business to $42 million in four years by coming up with an idea that generated $25 million in free publicity. Jones Soda was a small Seattle-based beverage company competing against Coca-Cola and Pepsi-Cola. Combined, those two monoliths spend a billion dollars a year on advertising.

One day in 2003, Mr. Van Stolk came up with an idea in his car to create a Turkey & Gravy-flavoured soda for release around Thanksgiving. His brand got a lot of attention by U.S. media, and the product began to sell out.

Generating useful ideas is a skill, and like any other skill it can be learned. The more you practice, the easier it will be to come up with ideas whenever you need them. Leer más “Generate killer ideas with these 20 suggestions”