OXYGEN N.27: Customer 2.0. Consumers with superpowers by Enel Spa

27 12.2015

× CUSTOMER 2.0 Consumers with superpowers ×

oxygen | 27 — 12.2015

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editorial board Enrico Alleva (president) Giulio Ballio Roberto Cingolani Derrick De Kerckhove Niles Eldredge Paola Girdinio Maria Patrizia Grieco Helga Nowotny Telmo Pievani Francesco Profumo Carlo Rizzuto Francesco Starace Robert Stavins Umberto Veronesi

OXYGEN IS ONLINE oxygen.enel.com Follow us on / Oxygen Enel / @Oxygen_Enel / enelsharing/oxygen

editor in chief Andrea Falessi editorial director Vittorio Bo publishing coordination Luca Di Nardo Stefano Milano Anastasia Milazzo Dina Zanieri managing editor Cecilia Toso editing Cristina Gallotti editorial team Simone Arcagni Davide Coero Borga Michele Fossi Gianluigi Torchiani

translations Victoria Clifford Laura Culver Alessandra Recchiuti art direction and layout undesign picture editor white

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Oxygen is the brainchild of Enel for describing the everchanging world

SUMMARY

CUSTOMER 2.0 CONSUMERS WITH SUPERPOWERS The means of consumption are (almost) infinite. The economy has opened up to a broader range, presenting solutions that previously seemed to be simply fads. Today the consumer is at the center of the economy, and everything is changing: the way people are making purchases, the reasons for desiring an object, companies’ communication and marketing strategies. Technological innovation is operating in the background, facilitating the awareness of users, creating new opportunities – for both consumers and manufacturers – and generating positive revolutions. We are in the era of participation and the market is no exception: encouraging dialogue among its actors is the first step taken to usher in a new consumer model that is evolved and efficient, and which could be a stimulus for the developing world.

10 ˜ EDITORIAL SHARING EDITORIAL

14 ˜ INTERVIEW WITH

ARUN SUNDARARAJAN

THE AGE OF CONSUMER EMPOWERMENT by Cecilia Toso As a result of twenty years of change favored by technology, the market is now seeing a different kind of consumer: an individual who knows his/her chances, who knows what is worth owning, and what can be shared instead. This is a consumer who has an influence on business strategies and market development, and who has a responsibility and duty to make the world of consumption more efficient.

What we now want today is simply to have access to an object that we have often come to know about through the community, real or virtual, that we frequent 20 ˜ OPINIONS THE GEOMETRIES OF PARTICIPATION by Carlo Alberto Carnevale Maffè The power grid of tomorrow will be made up of not only technical but also social hubs: because consumers have now become protagonists in the energy sector, by establishing a direct dialogue with suppliers and putting themselves at the center of the network. The unilateral system no longer exists, and providers are learning to deal with the circular economy, discovering new services and means.

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24 ˜ SCENARIOS

36 ˜ CONTEXTS

THE POST-CORPORATE BRAND by Ije Nwokorie

THE ENERGY MARKET: A NEW CONNECTION WITH CUSTOMERS by Nicola Lanzetta

When we make a purchase, whether consciously or not, we are also buying a brand that represents the company, something which becomes a social status to own or an identification symbol strong enough to make us empathize with the values proposed. In any case, the brand influences our choices. But what will happen now that this pattern has been reversed?

A new era is upon us. With all this power in customers’ hands, what if we thought about the brand not as a corporate tool, but a tool for the customer? 28 ˜ IN-DEPTH FABLAB, THE REVOLUTION OF THE BRAND by Massimo Temporelli Individual ideas, projects, and tools are gathered together under the umbrella organization of the FabLab. And so the big brands could soon be facing competition from products created through open innovation, a universe of micro businesses facilitated by digital production, and specialized in customized goods.

30 ˜ IN-DEPTH MARKETING… IS YOU by Michele Fossi Today, companies maintain a continuous dialogue with their customers, who wish to customize a product, using the Internet to check the veracity of each promise, and interact in a personalized way. Thus, this “face-to-face” dialogue reveals the main trends that are revolutionizing the world of marketing.

There is nothing more dynamic than the market, and the energy market has changed radically in recent years. Today energy consumption is as quick and easy as a click on the screen of a smartphone, and companies must be able to quickly pinpoint what is being sought by customers, venturing also into new territories.

40 ˜ INTERVIEW WITH

ALESSANDRO CATTELAN

DISTINGUISHING FEATURE: CONSUMER by Andrea Girolami Identikit of today’s consumer: a serial filler of online shopping carts, a geek with a speedy finger for downloading the new app that delivers purchases in a nanosecond, a reader without a library thanks to the convenience of a Kindle. We asked Alessandro Cattelan if he recognized himself in this profile and we discovered many things, from his love of paper books to his quasi-pioneering attention to energy-saving.

44 ˜ CONTEXTS WIDE-RANGING SHARING by Luca Salvioli City governments, large corporations and even the financial world have all understood. Sharing is not an isolated romantic attitude found in society, it is one of the instruments on which the quest for efficiency – as well as profit – can rely. From the pooling of heavy vehicles in Oregon to that of Finnish minibuses, as well as trucks for transporting goods along the American highways: resources are being pooled everywhere, and it is often start-ups that inaugurate the trends.

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48 ˜ CONTEXTS

54 ˜ PASSEPARTOUT

THE THOUSAND FACES OF SHARING by Gea Scancarello

SHARING: EVERYTHING AND MORE Edited by Oxygen

There are those who offer their time, others their skills; some give away their excess food, perhaps bought in expectation of a dinner that never happened and which would have gone from the refrigerator to the trash bin. And then there are those who volunteer their living room for sharing an experience: here is a report on the global sharing economy to discover who is using their common sense to make it possible.

56 ˜ INTERVIEW WITH

The sharing economy could be worth 335 billion dollars between now and 2025 for those sectors and companies that embrace a new collaborative approach 52 ˜ IN-DEPTH IDEAS SEEKING FOR RULES by Cristina Gallotti We all remember the fuss that arose a few months ago regarding the alleged illegality of Uber, which resulted in its being shut down. But what about other start-ups which have become firmly established in our daily lives? Here is an overview of how, and if, the rules are changing for them.

JOSEPH PINE

by Maria Chiara Voci Physical objects alone are no longer enough, we want more. So are companies despairing about that? Not all: the most enterprising businesses have decided to create an experience for their customers, a moment that is related to the act of purchasing but is also connected to other factors: feelings of pleasure, sharing, and the uniqueness of a day. Welcome to the age of the Experience Economy: are you sure you haven’t already experienced it?

60 ˜ CONTEXTS A NEW ENTERTAINMENT by Luca Castelli Death of the physical music formats (apart from vinyl!), digital use, peer to peer, and streaming: in short, this is the evolution of our approach to entertainment in the Internet age. But it is not just a matter of music formats: smartphones that are increasingly faster and well-designed are multiplying their content and making it accessible at all times. How can you choose from among the huge range of offers available via this pocket-sized device?

64 ˜ FUTURE TECH WELCOME TO THE FANDOM! by Simone Arcagni You wrote it but I’ll carry the story on. Gone are the days when, upon closing a book, we’d say good-bye to our favorite character forever, or a movie was truly finished after the words ‘the end’ appeared on the screen. Today fans are re-writing and re-editing, continuing to narrate and live out their passion in everyday life, by participating in events and flash mobs, dressing up as their heroes and sharing these experiences with each other. In a nutshell, something has changed.

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66 ˜ SCENARIOS

76 ˜ DATA VISUALIZATION

HOW WILL WE MAKE PURCHASES IN THE FUTURE? by Alice Pace

DIGITAL LESSONS edited by Oxygen

Let’s forget about futuristic visions of a world of lazy people sitting in armchairs, who are making purchases or doing their shopping and paying via iris recognition software. The universe of buying is much more complex than that: it is a social experience that requires time, people, places, and thoughts. And we are redesigning it precisely so that these basic elements are not lacking. Future scenarios will be far more complex than we think.

70 ˜ INFOGRAPHIC CONSUMER 2.0

72 ˜ CONTEXTS DIVIDED BY THE INTERNET by Marco Cosenza It is not just a geographical problem: sometimes the exclusion of whole sections of the population from the technological world depends on factors such as age, social background, or the actual reasons for using the Internet. Here is a journey to discover the digital divide and the solutions adopted to reduce the gap as much as possible.

Mobile technology, available more and more cheaply, becomes a powerful tool of inclusion and democratization: there where a cable will not reach, a signal can arrive

78 ˜ CONTEXTS IMAGINING SOLUTIONS by Gianluigi Torchiani From Chiapas to Cambodia, from Brazil to Europe, energy needs could not be more different. And the same can be said for the solutions. Hence, projects are shaped according to the characteristics of the local territory and customers; and we’re just not talking about electricity. There is an evolution of the market where energy literally goes and meets the users.

82 ˜ SCENARIOS AFRICA: THE DAWNING OF ENERGY by Ignacio J. Pérez-Arriaga and Robert Stoner The energy issue takes on very specific characteristics when it comes to Sub-Saharan Africa, a region of the world where access to energy is dramatically low and the conditions for expanding the electricity grid are often prohibitive. So here is an overview of viable solutions and the conditions necessary for the development of an electricity market that is also available to the private sector.

86 ˜ OXYGEN VS CO2 THE FUTURE IN BLOCKS by Davide Coero Borga There’s no denying it, the reputation of large companies also depends on the trust established with their customers, as well as on issues such as the environment and human rights. Today’s consumer carefully weighs up these factors and, thanks to the Internet, has gained yet another way to be heard and to influence the course of events.

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CONTRIBUTORS

Contributors to this number 01˜ Carlo Alberto

02˜ Luca

03˜ Alessandro

04˜ Marco

05˜ Andrea

Carnevale Maffè

Castelli

Cattelan

Cosenza

Girolami

Professor of Strategy and Policy at SDA Bocconi School of Management, from 2003 to 2007 he coordinated the school’s Master in Strategic Management. He is an expert in competitive intelligence, noncompetitive international strategies, and technological innovation.

A journalist dealing with the relationship between music, communication, and technology for newspapers (La Stampa), magazines (Focus), and websites. He published Liberated Music in 2009. He teaches communications, journalism, and digital writing at the Holden School in Torino.

Radio and TV host, he has worked for Radio Kiss Kiss, All Music, and MTV, and hosted TRL and Lazarus. Originally a comic foil, he has hosted X Factor for five years. He presented the radio show 105 at One, Catteland on Radio Deejay since 2013, and hit parade show 50 Songs since July.

Marco started out at Radio 24, preparing radio news. He now writes for Wired on issues of technology and economy, and for the agency ANSA, regarding innovation ... and basketball.

At sixteen, he fell in love with the Internet. After working for Tiscali, MTV Italy, and Wired Italy, he is now Content Director for the agency Better Days, and author of the Atlas of New Things (Indiana Publishers, 2015).

06˜ Nicola

07˜ Ije

08˜ Alice

09˜ Ignacio J.

10˜ Joseph

Lanzetta

Nwokorie

Pace

Pérez-Arriaga

Pine

Head of Italy Market of Enel since 2014, he has worked in marketing and sales and general management for many companies in telecommunications, energy, and computer sectors, collaborating with NCR, AT&T, Telecom Italy, Infostrada, and Camuzzi Gasometers.

After studying architecture at Columbia University, he worked in various sectors and locations, from Africa to New York and London. In 2006, he joined Wolff Olins as a senior strategist, becoming managing director and, then, CEO in 2014.

She holds degrees in chemistry and pharmaceutical technologies, a doctorate in nanotechnology, and a master’s in science journalism. She was named a Science Writer Fellow of the Giovanni Armenise-Harvard Foundation, and of the UGIS.

Director of the BP Chair for Energy and Sustainability at Comillas University, he earned his doctorate at MIT. He is a life member of the Spanish Royal Academy of Engineering and the Institute of Electrical and Electronic Engineers, and a member of the EU Agency for the Cooperation of Energy Regulators.

Writer, creator of the Experience Economy, and business consultant, he specialized at the Sloan School of Management at MIT, developing the theories expounded in Mass Customization, and founded Strategic Horizons LLP with Jim Gilmore in 1996.

11˜ Luca

12˜ Gea

13˜ Robert

14˜ Arun

15˜ Massimo

Salvioli

Scancarello

Stoner

Sundararajan

Temporelli

A journalist for Il Sole 24 Ore, and its supplement Nòva24, he writes about technology, the Internet, and startups, and is the editor of Sole24ore.com, following technology fairs in the United States and Europe.

A freelance journalist educated in Italy, the US, and Spain who has worked for several national magazines and as a correspondent reporting from numerous countries for Lettera43.it; she published I Trust You, a book on the sharing economy, and has a blog Pane e sharing.

Deputy Director of the MIT Energy Initiative and head of the Tata Center for Technology and Design, he works on research to invent technologies for the unresolved needs in India and countries in the developing world. He was previously an executive at Intel and Zygo Corporations.

Professor at the Leonard N. Stern School of Business at New York University, he studies how digital technologies transform the economy and society. With fifty publications to his name, this award-winning expert is considered an authority on the sharing economy.

Physicist and founder of The FabLab, he teaches in schools and universities, on Oilproject and on TV with X-Makers. He also organizes scientific exhibitions, directs Hoepli’s Microscopes series, and wrote Innovators. How the People Who Are Changing the World Think.

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SHARING EDITORIAL

CONSUMERS

I make purchases both ways. If I want to buy a technological object, I find information on the Internet because I’m looking for technical specifications; but later I can go and buy it in person. Sometimes I try on clothes in a store, then I’ll look for sales online and buy them. Davide I realize that things are changing, but my life as a consumer hasn’t changed very much as yet. I’m still wondering how I can take advantage of this new trend. Francesco

Marta Today I feel more protected and independent. If I want, I can make purchases that are delivered in a sealed box to my home, without anyone else knowing what I have bought. Roberto I often get information from the Internet before making an expensive purchase, but not for the rest: it would take too long. I buy my clothes at stores, but I’d buy a blender online. Chiara The Internet has created new opportunities for consumers because it allows you to buy things that previously had no market in some countries, and would never have been distributed. Enrico 010

Marta Anything that would be boring to do in person, I buy online, such as train tickets. But everything I need to see, even if it’s just some little thing, I go and buy in person, I need that visual contact. Claudia For me, being aware means buying food directly from producers and using peer-to-peer platforms for traveling.

Silvia

My doorman has become my personal store. When I get home from work, I find my purchases waiting for me in his office. I go up to my apartment, open the packages, deal with any returns directly by phone, and order other things. When I go out in the morning, I leave anything I want to return in his office, to be picked up later by the courier. Now I can’t imagine going to do something in person that I’m able to do online. Why would I want to get caught up in the city traffic to go and see some store on the only free day that I have? Instead, I go cycling or relax on those days. I almost feel liberated. What I do in person, and when I do it, is done by choice and no longer because I have to. Anastasia I have often consulted sites like Amazon to check out prices and comments while being in a store. I could choose – and this has happened – to buy something right away at a higher price, because the wait was not worth the price difference; and I was able to compare user reviews in order to choose the best product. Laura If consumers understood the political potential they hold, they could significantly affect brand policies. Elena Today I know more about the brands that I buy. Many online purchasing platforms allow you to select the designer/company, highlighting an aspect that previously might have been overshadowed. Cristina Today’s consumers have more freedom of choice because they are more informed: they buy what they want, wherever they want. Because people give their opinions and write whatever they think, there is pressure in general to improve a product’s quality/ price ratio. Whereas retailers may be tempted to hide these details from the public. Daniela 011

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Filippo

Technologies allow us to be connected with many more people and, therefore, to find more resources, for sharing or buying. Michela I have all kinds of apps on my phone, and use them to look for places to share, an entire apartment, or a hotel room depending on how long I’ll be staying, what services I need, and so on. If you share a place, you can do your laundry more quickly and cheaply and the Internet is better than in a hotel. But in a hotel, there might be a swimming pool, or even a spa. And if you’re tired after work, or if it’s cold outside, a little time in the turkish bath or sauna at the end of a day of meetings is not a bad idea, all for the same price. Emanuela When I am in the city, I live in this house. When I’m not here, someone else stays here. Gabriele Paypal has changed my life: you just enter your information once and that’s it. You don’t need to do anything else, all the other apps depend on that one. Pietro ENTREPRENEURS ECONOMISTS

The more you share something, the more costs can be cut. And this is advantageous both for the individual and society as a whole. Andrea, user of the co-working platform Talent Garden in Genoa People invest money in what you are doing. For the first time, I’m beginning to feel that my ideas are important and that there is more mutual respect. Alchemy Collective, an idea achieved with crowdfunding How can I work all day and go see my clients as well as attend to all the bureaucracy? The only solution is to create a network, reducing waste and inefficiency at the same time. Andrea Cattabrica, founder of Slowd, a design sharing platform

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Serena You can’t accuse innovations of killing the things that were there before. That is equivalent to accusing the postal services of trying to curb the spread of e-mails. Gian Luca Ranno, founder of Gnammo You cannot invent or think about the future by thinking that our best days are behind us. What companies need for innovation is confidence in the future and in openness. GE, BMW, FIAT, Unilever, Castorama, and other companies I have worked with realized that most of their innovations came from outside the company; therefore their main activity has started to focus on developing receptors for attracting, learning, and collaborating outside their core business. Lisa Gansky, American businesswoman Our platform will help the world to become once again like a village, a place where you know a lot of people and trust one another. Brian Chesky, co-founder of Airbnb I sell drills, but today people rent them from their neighbors or ask someone they don’t know to give them a hand. I either have to do away with the services or find a new way to rethink them. Stefano Grisenti, Vision project manager for Leroy Merlin The economy is not something abstract out there. It is something that we have created and that we are now changing. Neal Gorenflo, co-founder of Shareable We all know that life is what we make of it. We are changing the rules, based on the strength of the different priorities of society. Bryant Walker Smith, Attorney and Stanford Legal Fellow In the end, there won’t be a peer economy or a sharing economy or a collaborative economy. It will simply be called the ‘economy’. Jeremiah Owyang, Industry Analyst 013

INTERVIEW

The age of consumer empowerment Interview with Arun Sundararajan Professor at New York University by Cecilia Toso

As a result of twenty years of change favored by technology, the market is now seeing a different kind of consumer: an individual who knows his/her chances, who knows what is worth owning, and what can be shared instead. This is a consumer who has an influence on business strategies and market development, and who has a responsibility and duty to make the world of consumption more efficient. 014

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If income is no longer a discriminating factor, it is easy to think that sharing will be the answer for developing countries with people on a lower income

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Is there such a thing as the instinct to possess? Maybe it is in fact just an inefficient way of managing our consumption in recent years because, apparently, we are actually able to generate more consumption by possessing less. The challenge, arriving from the digital world, has aroused a wellknown debate about consumption models; in this case, we are not among the leaders who have an unbridled optimism about what is made possible by the Internet, nor in a utopian fantasy where the world can stop producing new items constantly and become instead a place where an exchange of services or products between users is the sole currency. We spoke with someone who has been observing the emergence of a new model: one that is more efficient, varied, and – thanks to the new role of the consumer – has an effect on production strategies. We talked to Arun Sundararajan, a professor at the Leonard N. Stern School of Business at New York University, specializing in how digital technologies affect the economy and society.

Companies have gone from being suppliers of a message to becoming, in a certain sense, mediators of a conversation

According to Professor Sundararajan, over the last fifty years we have managed our consumption individually: we have personally chosen what we wanted (influenced by advertising), and left our homes to go out to buy it and own it. This is a model of consumption that establishes who is able to achieve a commodity, based on their income and ability to purchase it. However, what we now want today is simply to have access to an object that we have often come to know about through the community, real or virtual, that we frequent. Sometimes we may use it in a shared manner, drawing what we need from it and then putting it back into circulation; our ability to access it is not dictated by our income but by our reputation within the community. This is an evolution of consumers that has been nicknamed ‘Data Darwinism’ – in this new reality, the survivors will be those who are able to adapt to the rules of the Internet and establish a relationship of trust with others. Utopian? Not exactly. According to Professor Sundararajan, the concept of sharing has always been with us and today it is increasingly influencing the real world, thanks to the existence of peer-to-peer platforms. “This is a natural evolution of the consumer.” And evolved consumers are hybrid consumers: “They will purchase some things from companies, whereas for others, they will make an appeal to individual suppliers, via the market and platforms. There will be a greater sharing than sixty years ago, of course, but it will still be a mixed system.” The new protagonists Let’s take a step back. How did we get here? “In the last twenty years, consumers have taken on a central and influential role in our economy. Businesses have begun to involve them in the design of their products, to consult them about brands and objects through social media, and to win them over as supporters of the brand or pre-sales consultants via blogs 017

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and company websites. This way, companies have gone from being suppliers of a message to becoming, in a certain sense, mediators of a conversation. “This central role of consumers, along with the emergence of a sharing economy, means that more people have been able to obtain items and services from other people through the market or community, without necessarily having to go to a manufacturer.” We have been accustomed to thinking that it is the amount of items produced that leads to an increase in consumption, but Sundararajan explains that “when new ways of accessing goods are created, consumption tends to increase. If everyone had to own a car in order to drive one, the number of people who drive would be equivalent to the number of those who can afford to buy one. But if you can also rent someone else’s car, then the number of people who will be able to use it increases. When barriers are removed, consumption increases; but if property were sine qua non for consumption, the number of people who could afford to derive value from an object would be smaller.” Thus, more access is equivalent to more consumption; but what does this entail for corporate profits? “That depends on the decisions we make in the next few years,” says Sundararajan. “I believe that a higher consumption generates more value and more profit, but what we do not know is who will benefit from this value, whether it is the companies, the consumers, or someone else. Car manufacturers such as BMW, Mercedes and Fiat are working to integrate their cars into the car sharing market. Platforms where consumers can exchange goods are being created in every country in the world. Maybe it is precisely these platforms – and their creators – that will profit the most. With Airbnb, millions of people have become providers of accommodation and soon individuals will become providers of services: from energy to medical consultations, from web design to knowledge of all sorts. These new companies, instead of employing thousands of workers, will create a franchise between people.” 018

BIG SCREEN HEORES In the big screen heroes come in all shapes and sizes. In this pages, screenshots from: Batman Returns, Kick-Ass, Interstellar, Guardians of the Galaxy, Superman, Thor, Capitan America, Ghostbusters, Iron Man, Batman Begins.

Changing sectors Cars stand out in the professor’s examples and he believes it is the automotive sector that will undergo the greatest change. This is simply because “it is one of the sectors that most greatly affects a country’s GDP but which has a very low efficiency. On average, a car is used for an hour and a half a day and, even when it is used more, there is always some remaining time when it is not being used. For an industry in the United States and Europe that invoices hundreds of billions of dollars, an efficiency rate of only 2% is absurd. It is not surprising that this sector is in turmoil, and driverless cars fit perfectly into this scenario: there will be no need for a driver and we can access a car on demand at any time, without having to own or drive it.” There’s more. In the automotive industry, the change is being facilitated by two intersecting characteristics: “The high value of the good and the low efficiency of its utilization. Expensive clothes, expensive accessories, all the objects that are characterized by a high value but sporadic use, will make the sharing platforms successful.” What Sundararajan imagines is not just sharing alone, but a balanced assessment of what should be done on both the consumer’s side and on the manufacturer’s side. For objects of everyday use – such as a vacuum cleaner – as long as the ‘cost’ of sharing is higher than the cost of ownership, people will prefer to spend a higher figure all at once instead of having to deal with the inconvenience of renting one every single time they need it. Countries headed towards sharing If income is no longer a discriminating factor, it is easy to see how sharing could be the answer for developing countries with people on a lower income. “They will be able to gain access to better things because, thanks to the new ways of accessing them, their power as consumers will increase. Since the advent of house sharing websites, the number of people going on holiday has increased and now those who wouldn’t have previously been able to afford a hotel

room can travel, even with their whole family. A new group of people has access to a range of services that they were excluded from previously. This is demonstrated by the fact that in countries like China, India and elsewhere, there are car pooling companies such as Didi Kuadi and Ola that are much larger than Uber in terms of number of users. “Investors know that it is an important market, because the purchasing mentality of consumers in these countries is not yet mature. In the United States or Germany, there is a large proportion of the middle class that has bought and owned products for many years, and for whom sharing would require a decisive change of behavior. In emerging markets, there is a new middle class that has just learned to consume and has not yet adhered to the model of possession: its members will become consumers of the sharing economy much more easily (and faster) than we will. Soon there will be millions of people in China and India who can afford to buy a car but won’t, because there are alternative solutions – they may begin their consumption directly through sharing, without ever owning a car. “This is one reason why many investors see a great potential in these countries.” Therefore, the movement is universal: consumers are acquiring independence, companies are mediating among their customers, and technological innovations are dictating the times.” What cannot be lacking in all this, is a certain amount of trust in those who produce, in those who share and in technology. According to Sundararajan, the recent case of Volkswagen should give us pause for thought: “Cars are becoming increasingly digital. The big challenge for the car industry in the coming years will be maintaining their customers’ trust. The moment a product becomes technological, it is no longer just its producer or brand name that has to be recognizable, but also its technological safety.” So, producers and consumers are re-adjusting and preparing new avenues for consumption that are much more varied than we’d ever imagined. 019

OPINIONS

THE GEOMETRIES

of participation by Carlo Alberto Carnevale MaffĂ¨ School of Business Administration, Bocconi University

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The power grid of tomorrow will be made up of not only technical but also social hubs: because consumers have now become protagonists in the energy sector, by establishing a direct dialogue with suppliers and putting themselves at the center of the network. The unilateral system no longer exists, and providers are learning to deal with the circular economy, discovering new services and means. Science has revealed that the electron is a hybrid of mass and energy. Today the technological and socio-economic advances that are upsetting the traditional and sluggish energy market are simultaneously transforming the consumer into a ‘hybrid’ entity, not just a passive recipient but a direct participant in service processes that are increasingly shared and co-operative. Energy is no longer simply a physical commodity to be distributed and consumed, but the subject of a pact of responsibility, participation, and sustainability, mutually agreed upon according to the requisites of both supply and demand. The end user’s role is changing: the convergence of technological innovation and communication networks concerning energy is gradually transforming the economic contract, by assigning tasks to end users and making them active participants in a sharing of processes hitherto practically inconceivable on a large scale. The change is clearly visible in two sectors somewhat similar and complementary to that of energy, where the sharing economy is having significant impacts: the housing market and the car market. In the first case, thanks to global marketplaces which ensure visibility, comparability and a high degree of safety in transactions, each participating family becomes involved in the hospitality market as suppliers (as opposed to being simple clients) by making part of their real estate assets available to guests (often foreigners and mostly strangers), in solutions rang-

ing from a simple room to an entire house. An even more dynamic and complex state of affairs is invading the car market – urban car sharing is taking off, with the likes of Car2Go, Enjoy, and municipal fleets of electric cars taking their place alongside forms of shared journeys, in addition to genuine innovations in patterns of entrepreneurship in the logistics sector, such as Uber and Letzgo. All of this is thanks to the spread and standardization of communication protocols, the interoperability of systems of access, reservation, and payment of services, as well as the increasingly mature and conscious role of final consumers. Having abandoned their role as passive recipients or users, today’s consumers are motivated and prepared to actively participate in the process of providing a collective service, thereby learning and respecting rules which may not be sanctioned by state laws but derive instead from the voluntary adoption of simple behavioral practices proposed by the social network or community concerned. In this context, there is the developing role of new intermediaries who take on innovative forms of legislative and judicial pseudo-power: they lay down rules and apply penalties – such as expulsion from the system – in case of violation. Like the automotive transportation and hospitality markets, the energy market is also involved in this tumultuous evolution of the consumer’s role, after a decade of acculturation of the sharing economy aid-

Physical energy in exchange for information flows and behavioral choices: as has already happened in the Internet access market, tomorrow’s energy will be purchased also through the exchange of customer data

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ed by subsidies for the installation and use of domestic photovoltaic energy systems. Up to now, the fitting of solar panels to the roofs of houses has been carried out by families mostly as a bland form of fiscal opportunism, but the end of the era of easily-available funding has marked the beginning of a new cycle of economic and social development. Thanks also to legislative developments on energy units and criteria for billing, and technological progress regarding smart homes, hybrid power networks, and communication in the scenario of the Internet of Things, a new approach of consumer-participation is being established. The entire value chain of the sector is being radically overturned, and what first appeared as a linear and unilateral sequence of production and delivery has now been reconsidered in view of a circular economy, where sustainability and innovation are combined in a new cycle of services. The rigid distinction of phases between generation, distribution, and consumption, which has shaped generations of industrial models and informed the enactment of rules and regulations, is being put into question by the smart grids and projects for the use of distributed energy storage systems. The bill, legacy of a unilateral and asymmetrical delivery model with a mere bureaucratic reporting of units and figures which is incomprehensible to the consumers (concealing tax and tariff practices bordering on the arbitrary), has 022

now become a contract of awareness and exchange. Physical energy in exchange for information flows and behavioral choices: as has already happened in the Internet access market, tomorrow’s energy will be purchased also in non-monetary ways, through exchanges in nature and in exchange for customer data. Payment directly related to actual consumption, exchanging data on their consumption behavior (possibly in real time, as already occurs through mobile phones) is a great behavioral school: the practice is rational from both economic and technological points of view in order to properly address the incentives for responsible choices made by consumers and businesses. Thus, the consumers emerge from their isolation as a passive and terminal actor, and become part of a network. Physical and logistic systems configured in the form of networks, as in the case of energy, usually have correlating organizations and services also structured within the network. The essential criterion of a network is interoperability, which results in interdependence. Today this also applies to consumers, in a new interoperability between supply and demand. Energy is not a stand-alone service; rather, it has a set of physical, economic, and regulatory constraints that make it a service network. Tomorrow’s energy network will no longer be made up solely of cables and meters, but of social nodes – customers – that are increasingly aware and participatory.

Energy is no longer a physical commodity to be distributed and consumed, but the object of a pact of responsibility, participation, and sustainability mutually agreed upon by the requisites of both supply and demand 023

SCENARIOS

T H E P O S T - C O R P O R AT E

BRAND by Ije Nwokorie CEO, Wolff Olins

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Recently at Wolff Olins, we partnered Flamingo to produce a report on The New Mainstream behaviors (http://gamechangers. wolffolins.com) that define a new set of behaviours by customers that are confounding the modern corporation. While few of these behaviours are entirely new, they have become more widespread and mainstream, adopted by the young and old, the digitally savvy and those more confortable with traditional ways of interacting with corporations, and in established economies and growth economies alike: 1 . People are side-stepping corporations: Everywhere in the world, people are questioning authority – and finding ways to sidestep it. 2 . People are making their own meaning: With so many ways to create, use, adapt, mix things up, sell things and even build their own businesses, people are now creating their own meaning and purpose. 3 . People are taking control: Faster and more frequent communication has allowed brands to push too much at us – and people are looking for ways to control that flow, to get things when

they want them, where they want them, and on their terms. So we no longer just consume – we sidestep, make our own meaning and deepen the value of our time, swinging the balance of power away from corporations to individuals. The corporate response However, it is not as if corporations have just sat back and done nothing. The same tools that customers believe give them power are being leveraged on the behalf of the corporation. Three corporate behaviours represent the wrong response:

A new era is upon us. With all this power in customers’ hands, what if we thought about the brand not as a corporate tool, but a tool for the customer?

Brand for price advantage The incredible amount of data that corporations hold on us, and their ability to crunch it, means they can price more opaquely than ever. In this reality, pricing is increasingly a cynical exercise in charging what they can get away with, not what’s fair. It’s the airline charging a higher price because they know you are

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ready to fly and the supermarket giving you an ‘offer’ that is more expensive than their best price because they know you are used to paying more anyway. While this behaviour is as old as selling itself, it has become turbo-charged by the growth in data, data storage and data crunching, using the brand to extract the highest possible price each and every time. Brand for data We no longer expect to pay for things. No booking fee, interest free, all the music, film and minutes you want, for little or nothing. Sounds like a wonderful world. Yet, customers are still largely unaware that if they aren’t paying for the product, they are the product. It is not just that our data is being sold – privacy is one area where customers are able to weight up the pros and cons – but large swathes our life, our time, habits, content, are being taken over, often without our knowledge, rarely with any real sense of to what extent and with what implications. With individuals creating much of the value in the connected world, what happens when people realise that their content, ideas and hard work do not really belong to them, but to the free platforms they’ve been using? Brand for unfettered access Social, local and mobile are incredibly powerful for customers. And corporations are getting increasingly sophisticated about building compelling offers from retail to music to money that leverage the power of these utilities to create new value for customers. What customers are less aware of, and corporations don’t share, is how more 026

All companies, to remain relevant, will have to rethink the brand around the customer. And nowhere is this more important that in the critical sectors that have a big impact on people’s lives power these utilities give corporations. To target. To segment. To control. Society is still not entirely comfortable with being watched at all times, regardless of how much better this makes the products and services we use, and brands that play with this are taking risks with their reputation long-term.

A better way to think about brand? The post-corporate brand What if all this power that people and corporations have was put to use to create a new kind of relationship? One of exchange, not of manipulation. One of give and take. Branding has always been about the owner/company/corporation. First, it marked ownership, a mark on the side of a cow, a horse or a barrel. Then it marked quality, on a bottle, a can or a packet. Think of Bass or Kellog’s. After that, it marked the desirability of a product, on an ad, in a store. Think about the great TV ads of the Sixties and how they defined culture. And finally, brands came to mark our allegiances. We were Nike or Adidas, Coke or Pepsi, Fiat or Peugeot people. All of those were about the owner, the company, the corporation. However, a new era is upon us. With all this power in customers’ hands, what if we thought about the brand not as a corporate tool, but a tool for the customer? In this world, we would be less obsessed with positioning, audiences and targeting, and more obsessed with creating value, participation and connection. It means handing over the keys to the ecosystem to the customer and using the brand as the connective tissue that unites the objectives of the corporation with those of the individual. Brands that do this will outperform and outlast those who exhaust themselves chasing the customer as a target (enemy), instead of as a genuine partner in the value exchange. However, this is not just an idea for a new breed of brands from California. All companies, to remain relevant, will have to rethink the brand around the customer. And nowhere is this more important that in the critical sectors that have a fundamental impact on people’s lives: energy, food, money, education and health. Fail to do this, and these com-

panies will be cannibalised sooner or later. Get it right, and we will see a golden age of important, admired and strong brands that have a positive impact in the world.

Branding has always been about the owner/company/ corporation. First, it marked ownership, then it marked quality, and finally, brands came to mark our allegiances

BRANDED In English, the word ‘brand’ is agricultural in origin. Formerly, it indicated the hot iron mark made on cattle, to identify one’s property. The expression ‘brand new’ actually means ‘newly baked’. Instead, the Italian word for brand, ‘marca’, has territorial origins, meaning boundaries (like margin), and was already used for delimiting geographical areas in Charlemagne’s time.

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IN-DEPTH

FabLab

the revolution of the brand by Massimo Temporelli Journalist

Individual ideas, projects, and tools are gathered together under the umbrella organization of the FabLab along with, in all likelihood, a new way of doing business. And so the big brands could soon be facing competition from products created through open innovation, a universe of micro businesses facilitated by digital production, and specialized in customized goods. I like to think that, in a few decades, when historians talk about industrial revolutions they will list the following chain of milestone events: 1. End of the eighteenth century â&#x20AC;&#x201C; the shift to steam power. 2. End of the nineteenth century â&#x20AC;&#x201C; the shift to electricity. 3. End of the twentieth century â&#x20AC;&#x201C; the shift to digital technology. There is a certain elegance in the progression of this sequence, a progression that in just a few centuries has redesigned (and will continue to reshape) our relationship with objects, with that set of atoms and molecules we now call products. In particular, the most recent and current industrial revolution, when it reaches its peak (a few decades from now), will change our way not only of producing objects but also of buying them. What exist as two distinct figures today, the producer and the consumer, will fuse together, thereby creating what is called the prosumer, for now still just a term used to provoke a reaction. The technologies of digital production or digital fabrication (especially 3D printers) were created in the final decades of the last century (the first patent was issued in 1982) 028

but it is only in recent years that, thanks to the expiry of some patents and the birth of the Maker Movement, they really have spread to all levels of the production system and, in Italy, have even begun to penetrate the famous SMEs where according to many, they will find fertile ground in which to flourish and produce great benefits. Although today these technologies are used only, or mainly, by insiders (makers or designers) and only within the industry and various FabLabs (laboratories of digital production which we will talk about shortly), it seems that the potential and flexibility typical of digital technology (and fully integrated into these machines) are really aimed at giving rise to the prosumer, consumers who will produce and modify (edit) products offered and sold by the companies. We do not know where 3D printers will wind up: in a manufacturing district, in local stores, a garage, or in the living room of the end customer, but it is almost certain that, as with the personal computer (born in 1975 and now pocket-sized) these technologies are likely to become more and more easy to use and affordable for everyone. In this not-so-futuristic scenario, there will be two types of prosumers: those who

The FabLabs are a sort of training ground where these innovators (as well as future customers and citizens) can practise and experiment in this new paradigm places where all the digital technologies for the production and customization of products are available to those who intend to propose their new vision to the market slavishly print the products as proposed by large established companies, and those who, in a welcome context of open innovation, choose instead to modify and propose new versions of the product, thereby contributing to its innovation and perhaps even earning a little from revenue sharing. Both of these approaches to the world of products and design are being tested every day within the FabLabs, proving to entrepreneurs and designers (as well as ordinary citizens) the benefits of this new philosophy of the production, distribution, and sale of a product. Interestingly, the most important result arising from the spread of these revolutionary technologies will be the arrival of many micro-enterprises, to flank the big players that currently dominate the product world. Thanks also to the availability and aid of affordable machines of digital production, these small businesses will meet the needs of niche markets and/or promote production of customized goods which large businesses cannot provide yet today. In this article we have adopted the expression micro-enterprise revolution, but the Americans, perhaps in a more revolutionary

approach, call it the desktop manufacturing revolution, thus giving greater emphasis to the lightweight qualities and small dimensions of these digital printing and production machines. Nearly three years ago, the writer of this article founded the first FabLab in the city of Milan (www.thefablab.it). Today, more than ever, he is truly convinced that a new generation of designers and entrepreneurs is emerging who will (and sooner than we might think) establish new businesses, invent new ways to distribute physical assets online, offering new products and services that will become commonplace in the future. In fact, the FabLabs are a sort of training ground where these innovators (as well as future customers and citizens) can practise and experiment in this new paradigm, places where all the digital technologies for the production and customization of products are available to those who intend to propose their new vision to the market. FabLabs are the future, the concrete representation of the era of open innovation and a new product chain. 029

IN-DEPTH

MARKETING... IS YOU by Michele Fossi Journalist illustrations by UNDESIGN

Today, companies maintain a continuous dialogue with their customers, who wish to customize (if not actually co-design) a product, using the Internet to check the veracity of each promise, and interact in a personalized way. Thus, this ‘face-to-face’ dialogue reveals the main trends that are revolutionizing the world of marketing in the age of “consumer empowerment”.

Collaborative design The restaurant chain Domino’s Pizza International asked its Australian fans, via its fan page and a Facebook app, to choose the name and ingredients of a new variety of pizza to be included in the official menu, with excellent results in terms of sales. Many international sports apparel and accessory giants, such as Nike and Oakley, have recently embraced the practice of adapting the design of their products according to consumer feedback, collected through systems of online voting and sweepstakes. Involving customers in product design is an increasingly common marketing strategy which responds to the growing need of empowered consumers to enter into dialogue with the company. What we are seeing is 030

a double metamorphosis: on the one hand, consumers are becoming co-designers, and on the other, the brand is becoming a ‘listening platform’, appointed to gather feedback from customers eager to have their say about the products. In this way, the company transfers part of its decision-making power, but increases the likelihood of having satisfied and motivated customers.

Brand Evangelists One of the primary purposes of marketing in the era of consumer empowerment is to turn consumers into Brand Evangelists, in other words, to induce them to speak positively of the brand on social networks or when talking to their friends and family. This is a form of ‘horizontal’ advertising that does not come from above, from the mouths of traditional advertising channels like TV and radio, but proceeds through consumers’ word of mouth and which, if well thought out, can be extremely effective. A common practice for triggering the buzz is to create ad hoc platforms on the Internet that, with different gimmicks, provide the right conditions for consumers to become ambassadors of the brand via their contacts on social networks (on a more or less conscious level). For example, in April 2013 for the launch

of the new Karl Lagerfeld Store in Amsterdam, the fashion house created an app with which store customers, by means of tablets fixed to the walls of the dressing rooms, had the chance to instantly share the different looks proposed by the brand with their friends, with a picture and attractive graphics, and ask their opinion before buying. The big question “Do you think it looks good on me?” addressed to an entire network and not just a bored shopping companion in the flesh has guaranteed an extraordinary amount of visibility to the fashion house.

Advertising that teaches Good news for journalists: in spite of the crisis in the printed newspaper industry, it seems that companies will increasingly need these professionals, at least according to the rapid growth of content marketing. This advertising which is based on content (text, video, images etc.) can awaken a genuine interest in its audience. “In order to gain recognition on the market, consolidating the relationship of trust with its customers and attracting new consumers, more and more companies are turning into real entrepreneurs of mass media, regularly producing contents that can be of interest to the user base whose awareness of the brand they want to raise,” explained Joe Pulizzi, the CEO of the Content Marketing Institute and author of the bestsellers Epic Content Marketing and Content Inc. “This can happen, for example, in the form of posts on social media, articles on the company’s homepage, and an engaging newsletter. In the era of consumer empowerment, in order to create a lasting relationship between the customers and the brand, hammering them with advertising slogans is not enough, we need to really interest them, involve them, and give them something in return.” Some companies, like Moleskine, have managed

to create a platform of contents generated not by a corporate team but by the users themselves through mymoleskine Community, dedicated to sharing drawings and videos made of and with the pages of the renowned travel notebook. In just a short time, the platform has been able to attract a large number of users contributing regularly with original material, while at the same time managing to strengthen the association between the brand and a positive value, such as creativity. Pulizzi adds: “And, above all, to attract and retain those customers who are more sensitive to the purchase of their products or services: creative people and travelers. It is no coincidence that our motto at the Content Marketing Institute is: ‘Build your audience first. Then create your product.’ Or, to quote the words of marketing guru Gary Vaynerchuk: ‘I’d rather have 10,000 followers, 9,000 of whom buy my products, than have 100,000 of whom only 2,000 are willing to open their wallets’.” 031

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Popmarketing If we look at the ability to act as a sounding board of an advertisement on the Internet, pop stars outshine the performance of their colleagues in the sports, movie and tv worlds: in fact, Katy Perry and Rihanna can boast respectively of 77 and 90 million followers on Facebook, while Brad Pitt’s and Robert Pattinson’s shares do not exceed three million. It’s no wonder that the underwear brand Calvin Klein has chosen the undisputed king of social media, Canadian pop star Justin Bieber (more than 59 million followers on Twitter and 77 on Facebook), for what has been billed as the “most digital campaign ever”, launching a series of initiatives aimed at his fans. These include #Calvinkleinlive: a live broadcast by Bieber on calvinklein.com and other social channels such as Facebook, Tumblr, Twitter, Google+ and of course, YouTube. Thanks also to a minor “scandal” related to the authenticity of Bieber’s muscles (photoshopped or not?) which gave more visibility to the campaign, Calvin Klein ended the season with an impressive 3.6 million new followers on Facebook. “In the age of social media, rather than male and female models, we will see the increasing importance of stars with a large following on the Internet as the face of campaigns, in the hope of directly transferring the star’s followers to the company,” explained Hamish Pringle, a strategic consultant at 23red, an integrated creative communications agency in London. “In order to engage increasingly demanding consumers, it is necessary to build on their interests and passions, and judging by the extraordinary results of pop stars on the platforms, music is something that has the potential to generate more traffic.”

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Dazzling Selfies A recent digital campaign for Calvin Klein is #mycalvins, in which the US brand invited customers to post a selfie wearing an undergarment of the brand. For its Smile campaign on Facebook last summer, Colgate also asked its customers to upload selfies that portrayed them in the act of showing their dazzling smiles: the best were made into large collage posters displayed in supermarkets and shopping malls. According to data provided by WaveMetrix, a company that deals with buzz analysis, the campaign had the desired positive effect: not only was there 2.5 times more talk on the Internet about the brand, but thanks to the many smiles, its name gained in terms of image. The affirmation of the selfie as a marketing tool is now certain: more

and more often, the final consumer may even become the ‘face’ of an advertising campaign. A good example is the Philips campaign Express Yourself Every Day, which quickly went viral, where customers of the famous razor blades were invited to upload a selfie and then virtually try many different styles of beards, sideburns, and goatees on their own face, thanks to a specific app. It is hard to resist the temptation to discover our friends’ opinion or, in the case of a lousy look, have a laugh while sharing images on the platform with just a click.

Just for you The days of mass marketing, focused on a single message indiscriminately sent to millions of consumers, seem ever more distant. Thanks to revolutionary innovations such as Google AdWords, 1:1 marketing, i.e. marketing that is tailor-made based on the individual consumer’s profile, is one of the most significant trends in the advertising world today. “Consumers today are clamoring for personalized shopping experiences, and companies aim at intercepting specific needs and desires by monitoring the online activities of its customers.” Created online with the diffusion of smartphones and e-commerce and the resulting accumulation of vast amounts of client-specific

data, the marketing trend of customization now confirms a generalized need generated by the empowered consumer, and also an offline asset. A company like Sephora, for example, has increased sales thanks to its IQ Color System, a system for automatic recognition of skin tones with which the cosmetics giant was able to promise (and much earlier than its competitors) a personalized experience. “We were aware that many of our customers were fumbling in the dark to find the foundation or lipstick shade most suited to their complexion, buying up to seven different shades before finding the one that did the trick,” stated Bridget Dolan, VP of Interactive Media di Sephora. “Today we are able to offer the most suitable products to each person. The campaign has had a significant return in terms of sales. Customers today prefer to talk with a company in a relationship that is as direct and personalized as possible, rather than suffer the onslaught of generic slogans and advertising aimed at the masses.” 033

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Everyone can be Superman Experts have observed that entering a competition, crossing one’s fingers, and hoping to win a prize is an electrifying experience, an activity that reminds many people of the excited childhood anticipation of unwrapping presents. Those who deal with marketing know this and they are increasingly riding the wave of competitions and other forms of playful interaction to gain the attention and sympathy of the general public. A good example is Arduino, the widely-known open source platform for the creation of electronic prototypes, which regularly launches competitions for inventors interested in presenting new gadgets that can interface with the platform. In most cases, the marketing contests take the form of a photo con-

test. This is the case of the advertising strategy employed by Warner Bros. For the release of the Superman movie Man of Steel: visitors to the movie’s Facebook page were encouraged to upload images of themselves dressed as the superhero, behind the promise of prizes for the best and funniest photos. These kinds of systems quickly go viral: users are encouraged to share the initiative on the Facebook pages of their friends in order to win more votes with the result that, even before its release, an enormous Internet community and great expectations are created around the film. The competition Their Real Beauty Should Be Shared was highly successful on the web page of Dove, the famous brand of body products. The brand asked its followers to post the pictures of their acquaintances that they consider examples of ‘real’ and not artificial beauty, promising to use the winners as the face of future campaigns.

Sharing marketing Following the lead of competitors such as Daimler, Ford and BMW, some months ago Opel also announced its entry into the world of urban car sharing. The transformation of the automakers from mere manufacturers to service providers should also be viewed as a new form of marketing, the benefits of which are clear: through a paid service, with which ulterior profits are made, the company also acquires millions of potential buyers who can familiarize themselves personally with the product, without feeling as though they are being involved in an advertising operation. Since last June, with the advent of its app Car Unity, Opel has been promising to revolutionize the world of car sharing by extending 034

the possibility of sharing also to private cars. In other words, it will apply the model of Airbnb, which has changed the world of hospitality forever by allowing the sharing of apartments, to the world of urban mobility. Will it prove to be just as successful? It will certainly multiply the visibility of the automaker by increasing the number of Opel vehicles available to the community and, above all, the variety of models that citizens will be able to test.

Social brand According to the website of economic information Bloomberg, social-media spending (the expenditure of companies to advertise on social networks) will rise from nearly 5 billion dollars at the end of 2012 to 9.8 billion in 2016. Specifically, experts say that the increase will derive mainly from marketing initiatives involving ‘minor’ social media platforms such as Pinterest, Google+, Tumblr and Instagram. “The diversification of social media marketing on multiple social networks promises to be one of the biggest trends in the coming years,” said Lauren Kaye, Marketing Editor of Brafton Inc. “Mind you, it is not so much a matter of being present on all the platforms, as it is about supplying the messages and information that increasingly exacting consumers expect to find on each of them.” To be precise, this means the funny and interesting pictures on Pinterest; images with a high aesthetic impact which act as the premise for telling a story on Instagram; catchy and easy-to-share tidbits of information on Twitter, and so forth. “Moving from one platform to another, the brand needs to find ways to modulate the form and content of the message appropriately, and at the same time, still be recognizable.” The change in marketing strategy must be interpreted as a reaction to the fact that a growing number of consumers now regularly move across multiple social media. According to a study by Pew Research on a sample of 1,000 American Internet users, in 2014, 52% of respondents had a profile on several social networks; 36% on at least 2, 16% on 3, 8% on 4, and 4% on 5. While all of these overlapping percentages are clearly increasing, the users present on only one platform dropped from 36% to 28% in just one year.

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CONTEXTS

THE ENERGY MARKET: a new connection with c ustomers by Nicola Lanzetta Head of Italy market, Enel

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Diversify and innovate are therefore the watchwords to meet the challenges of a market in which the role of the customer is increasingly active and aware

Driverless cars are being tested on the streets of California, a newspaper without an editorial staff has become the most important newspaper in the world, and a network of homes to rent provided by private owners is undermining the big hotel chains. These are just a few examples which demonstrate the current market situation, consisting of small start-ups and new competitors who are challenging industry leaders. This upcoming generation is breaking down barriers in the (short) time it takes to develop an app and is prompt to snap up todayâ&#x20AC;&#x2122;s customers who are always online and ready to welcome the best proposal with a single click or, increasingly, at the touch of a fingertip on their smartphone.

These trends are undoubtedly accelerated by the development of digital technologies, whose decreasing costs make it increasingly easy both to compete on a delocalized scale and attempt forays into various diverse sectors. Moreover, the customer types reachable through digital channels are no longer confined to the niche of â&#x20AC;&#x2DC;geeksâ&#x20AC;&#x2122;: in Italy more than 85% of households now have access to the

Internet and this year mobile navigation exceeded the volumes of navigation traffic on home PCs. In fact, it appears that smartphones and tablets, thanks to the easy immediacy of a click and an app instead of a clumsy mouse and software, have helped in removing residual resistance in older sections of the population and amongst those who resist change and innovation. It is expected that in the coming years (aided by further cost reductions for devices and Internet service, and the arrival of a new digital generation), no sector of the Italian population will be without Internet connection. In this context, any company operating in any sector runs only one real danger to cite Jeff Bezos, the 037

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FUTUR-E Futur-E is a competition to revitalize 23 Enel sites that are no longer in use: this is an important step towards improving the land, and a renewal of the Italian energy landscape that is centered around the needs of the community. Through its website, stakeholders and operators in the business sector become agents of change by responding to Enel’s call to action, in collaboration with the Polytechnic University in Milan. The first site to face the challenge has been the one located in Alessandria.

CEO of Amazon: “The danger of not evolving”. Especially today when, even though household demands have remained essentially the same as those of the times of our parents, we are seeing a rapid convergence of sectors amongst firms supplying these demands, i.e. an attempt to assault the margins of other companies by entering markets not closely related to their core business. This is certainly true of the commodities sector, although to date it has not undergone substantial upheaval regarding either its competitive model or demand structure. What we, the marketing people and leaders of the free market, wonder is not so much ‘if’ or ‘when’ to expect a discontinuity, but how to create a change, starting with the current strengths of our business. Enel already has three major assets that ensure a competitive advantage. The Enel brand is among the most popular and credible in Italy: about 30 million customers use its services (10 038

million of them have chosen it on the free market as their supplier) and its presence in Italy is both widespread and deeply rooted. On this basis, in recent years we have begun to lay down a path that will lead us to become the supplier of choice regarding all household energy needs, a service extending well beyond the simple sale of electricity and gas, in much the same way that the champions of innovation are transforming and diversifying their activities thanks both to the reputation of their brands and customer loyalty gained by the quality offered in their core business. Already today a customer can buy air conditioning systems with the guarantee of a higher energy class and ‘keys in hand’ service directly from Enel Energia; you can choose to create your own energy yourself via renewable sources produced and installed by expert technicians; you can revolutionize your approach to mobility and minimize your ecological footprint by purchasing an elec-

tric car made by Enel and recharging it at our stations. The next step that lies ahead is to extend our range of products and services available to customers. An experiment is already underway to include a complete range of efficient appliances, alongside the devices for hot water and air conditioning/heating systems currently being sold. While the catalogue of electric vehicles has already been expanded with the offer of twowheeled vehicles such as scooters and bicycles, the next areas to explore are urban car sharing with zero emissions and maximum circulation. Our household package is enhanced by all-inclusive warranty services and a broader spectrum of insurance solutions. Finally, in a context in which the ‘Internet of Things’ is the new frontier of innovation, we are launching into the field of home automation systems through smart metering and remote control facilities and appliances. Therefore by diversifying its

product portfolio, Enel Energia has become a one-stop supplier of integrated solutions for families. Furthermore, the world of business customers, increasingly demanding in terms of simplification and energy consulting, is made up of individuals who are especially eager to secure an offer from their supplier that goes well beyond the installation of a meter alone. There will be a shift, from just being a simple supplier to becoming a real partner, by targeting companies with proposals designed according to the specific needs of each sector. Enel Energia will also become a point of contact between the two worlds that make up its customer base, that of households and that of businesses, in the logic of the current platform systems, i.e. providing residential customers with a privileged access channel to products and services for business customers and vice versa, thus providing the latter with an opportunity to contact potential new clients. Diversify and innovate are therefore the watchwords to meet the challenges of a market in which the role of the customer is increas-

ingly active and aware. Keeping the customer firmly at the heart of its strategy and at the end of each path of innovation is, after all, the choice that has made these socalled great innovators great: the first strategic principle of Amazon is literally “customer obsession” and Apple has designed every single aspect of its devices with the concept of experience rather than that of fruition in mind. Being guided by the clients is a choice that requires a total change of perspective compared to traditional marketing: for example, the fact that, thanks to a smartphone, a child in Africa can have access to more information than the President of the United States had 15 years ago is something we should bear in mind, even in sectors like ours, which are seemingly far removed from the digital and hi-tech worlds. In Western markets we have already moved beyond the simple accessibility of information, since customers participate directly and without filters – mainly through social platforms – in the production and spread of information and contents, actually becoming a medium themselves. Looking

to customers as one of our levers of communication is another one of the many paradigm shifts that we have been called upon to make. The success of our journey towards change will depend on the ability and, of course, the speed in our internal re-programming so as to dedicate efforts to innovation and undertake the risk of new approaches, but these efforts must also be appropriately focused: if the principle holds that 20% of the assets determines 80% of the results, it will be crucial to identify – quickly and always attuned to the needs of our customers – the 20% that makes the difference in the markets.

Any company operating in any sector runs only one real danger, to cite the CEO of Amazon, Jeff Bezos: the danger of not evolving

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INTERVIEW

DISTINGUISHING F E AT U R E : CONSUMER Interview with Alessandro Cattelan Television Show Presenter by Andrea Girolami Journalist

Identikit of today’s consumer: a serial filler of online shopping carts, a geek with a speedy finger for downloading the new app that delivers purchases in a nanosecond, a reader without a library thanks to the convenience of a Kindle. We asked Alessandro Cattelan if he recognized himself in this profile and we discovered many things, from his love of paper books to his quasi-pioneering attention to energy-saving. Surveys would appear to reveal consumers in search of information who walk around stores photographing QR codes, others who consult blogs while choosing which product to buy, and yet others who don’t have time to physically go to a place and so end up simply making their purchases online. If this is true, these are consumers who should be evolved, aware, informed, and equipped with the latest technology. But are they really? Are we still evolving or have we already reached a consumer 2.0 standard? We asked Alessandro Cattelan to answer a survey regarding his con040

sumption habits and the extent to which technology affects them. Everyone should give Alessandro Cattelan a call once in a while. The presenter of X-Factor (and speaker for Radio Deejay, as well as a writer, actor, companion, and father) is a person capable of inspiring extraordinary serenity. In these frenetic days filled with instant messages, tumultuous visions of the future, and millenarian fears (even though the year 2000 is long gone), Alessandro is surprisingly very downto-earth, right from the start. “I’ve never learned to use technology effectively,” he confesses candidly. “I

use the phone in a pretty basic way: for phone calls, WhatsApp, and two or three other apps, but not much else.” And that’s just the beginning: Cattelan seems impervious not only to whatever technological craze seems to have enchanted the rest of the world, but also to turbo-consumerism (“I do this crazy thing: I buy what I need”), the use and abuse of organic foods, zero kilometer products and the like. “I’m still old school, I don’t go much beyond whole wheat pasta, but I discovered that I like the way it tastes better and I’ve been told it’s also better for us, so that’s perfect.” All

Alessandro almost always does his shopping in person: â&#x20AC;&#x153;It is also a chance to spend time with my daughterâ&#x20AC;?

distinguishing feature awareness

in-store purchases time value

hobbies

food

not flying drones

not necessarily organic

online purchases oddities

2.0 down-to-earth consumer

041

energy green and efficient

means of transport those of others

of which seems to suggest that perhaps the consumer of tomorrow is not necessarily someone who is influenced by trends or obsessed with technology, but a conscientious person, someone who uses technology when strictly necessary, so as to be informed and to have the right tools for making decisions. His ‘good guy’ face, which has turned him into the darling son that every mother would wish for (as well as the smart and kind grandson in a famous series of commercials), does not seem to be make-believe but actually genuine. From a celebrity like him, we would expect a more covert purchasing behavior, strictly online in order to avoid potential legions of aspiring pop stars thronging the local supermarket, desperate to grab the opportunity to audition in the aisles among the frozen foods and toilet paper. But Alessandro almost always does his shopping in 042

person: “It is also a chance to spend time with my daughter.” He doesn’t buy online very much, indeed very little. And what might that be? Various things, such as a box set of the TV series Friends purchased several years ago (“you couldn’t get it here in Italy”) or a strange tongue-cleaning device, which he is pleased to explain to us: “It’s a copper bar you rub on your tongue in the morning before brushing your teeth or in the evening before going to sleep and it sanitizes your mouth and prevents sore throats. But I should probably have just bought it in person from a shop, seeing as I spent more on shipping than anything else.” Yet even in the life of Alessandro Cattelan, there are ‘collateral victims’ of the digital revolution: the music media. “In the end, I only feel the need for ‘physical’ records when I’m at home. I listen to music and store it on my phone.” What about

books? Does the same hold true? “That’s different, the readers of digital books are almost disagreeable to me: I’ve tried but I just cannot manage to warm to them. When I go on vacation I still fill my suitcase with four or five books; maybe there’s no space for my underwear, but seeing a book’s pages turn gradually towards the end as I read it is something that gives me satisfaction. This doesn’t happen on Kindle, everything is static: I can continue to browse or scroll endlessly without there being any real change.” So far, these are objects that all of us are using already. But what about the futuristic visions we were talking about earlier? Drones that can deliver an order placed online to our home in a matter of minutes, and not only that: cars that drive themselves (Google has already shown off its first prototypes, and which it seems that Apple is working

on too). “Actually, this thing about drones makes me smile,” Alessandro chuckles over the phone. “It’s one of those things that is absolutely amazing at first and then immediately becomes mainstream.” He continues: “For example, in the world of video production, it seems as if filming is no longer possible unless you have a drone. A few years ago, the same thing happened with people who thought they were photographers just because they had the app to put three filters on their photos. Now they are all avant-garde directors because they have a drone; they might not even be able to focus the camera, but they know how to fly this thing.” The day we made our call coincided with the peak of the Volkswagen emissions scandal, so there was an irrepressible urge to question him about a possible utopian solution to such problems – a world where there will be only electric cars, which drive themselves as well. What does the X-Factor presenter think about this? “Personally, I don’t really like to drive, I can’t wait for cars that can drive themselves and park on their own. Although, after hearing about them for years but never having seen one with my own eyes (nor do I know anyone who has ever driven one), I’m beginning to wonder if it’s not just something out of Back to the Future...”. X-FACTOR Broadcasted last Autumn on Sky One HD, Alessandro Cattelan was hosting the ninth edition of X-Factor Italy, for the fifth year running. He presented the competition between twelve young musical talents, judged by an exceptional team: Elio, Mika, Fedez, and Skin. This series of the talent show, an originally British format which has now been franchised worldwide, ended in Italy on December 10th.

Energy, as well as being increasingly the subject of global discussion, is also one of the services in which consumer awareness is a way to achieve efficiency. Alessandro feels particularly strongly about the issue of energy and he is the protagonist of the aforesaid commercials which feature him at work in everyday scenarios, explaining to us that it really doesn’t take much to avoid energy waste. Is the evolved consumer therefore an observant consumer? Maybe so. “As for energy saving, I consider myself a kind of pioneer. It is more difficult regarding my home in Milan, of course, because it is a condominium, but in Tortona, where I built a new house, I had solar panels installed ten years ago already, and the cork coverings for the walls have reduced heat and energy loss. This is a topic that I’ve always taken to heart because I am firmly convinced that, the further forward we move, the greater the need will be to efficiently manage the resources we have, such as energy and water.” Perhaps this is the new consumer: someone who is more focused on substance than on trends; who uses technology as a means and not as the only resource possible; a person who thinks, innovates, makes choices, and who reasons by aiming for efficiency.

Energy is a topic that I’ve always taken to heart because I am firmly convinced that, the further forward we move, the greater the need will be to efficiently manage the resources we have

technology a useful tool

books some digital but mostly paper

043

CONTEXTS

WIDERANGING SHARING by Luca Salvioli journalist

City governments, large corporations and even the financial world have all understood. Sharing is not an isolated romantic attitude found in society, it is one of the instruments on which the quest for efficiency â&#x20AC;&#x201C; as well as profit â&#x20AC;&#x201C; can rely. From the pooling of heavy vehicles in Oregon to that of Finnish minibuses, as well as trucks for transporting goods along the American highways: resources are being pooled everywhere, and it is often startups that inaugurate the trends.

044

During the freezing cold winters in Oregon, on the north-west coast of the United States, even when the snow is thigh-deep, the transportation department does not lose heart. After all, it wonâ&#x20AC;&#x2122;t have much of a problem finding the means to solve its urban road network problems. All it needs to do is visit the Munirent website, search for a snowplow, and see if any nearby county has a vehicle not currently in use and therefore available. The same goes for snow-blowers, sand-spreaders, and so on. Basically, the website allows public authorities to share resources that otherwise would not be in use, and the case of Oregon is one of the most interesting examples. This too is the sharing economy and, in fact, it is in local authorities and public administration that the most virtuous cases can be seen of sharing resources to optimize investments (nothing in stock remains unused) and to reduce the pollution and congestion of the city, with the important consequence of creating fertile ground for new businesses (such as Munirent). While worldwide attention has focused on the multimillion business Uber (particularly because of its groundbreaking effects on traditional transport businesses) and questions are posed about whether this new practice is nothing more than an ephemeral modern novelty, in cities technology is enabling new participatory models in the name of sustainability and quality of life. The basic context is that of a period of momentous change, marking the passage from exclusive possession to shared use. Why should a public administration have to spend hundreds of thousands of euros in purchases for their own exclusive use, when the ordinary man/woman on the street is able to relinquish their second (if not their first) car, thanks to the joys of car sharing? The consumer world is often a training ground for practices which can then be adopted in public and private companies, both large and small. In yet another case concerning public administration, citizens in Fin-

land have been given a new alternative for getting around the streets of Helsinki. Kutsuplus is an on-demand minibus service that is more expensive than a bus but cheaper than a taxi, with the objective of reducing the number of cars in circulation. It is a kind of bus sharing that can bring together up to nine people, as well as giving directions via an app on how to reach their destination on foot or by other means once the bus has arrived at their chosen bus stop. Moving halfway around the world to South Korea, we find one of the most enduring examples. Seoul has about 10 million inhabitants, a very high

In September 2012, the authorities launched the project Sharing City Seoul. The city allocated funds for the creation of start-ups that could favor an efficient management of public resources 045

oxygen | 27 — 12.2015

population density, and probably the best infrastructure in the world with nearly 100% broadband penetration. However, it also needs to combat the city’s pollution. Back in September 2012, the authorities launched the project “Sharing City Seoul”, consisting of several stages. The city allocated funds and facilities for the creation of start-ups that could favor an efficient management of public resources. Then it made available unused public spaces and the administration’s large database. As a result, services were created for the intelligent management of parking lots, for filling empty rooms, and for exchanging used clothes for children, school books, and even meals. Obviously, in order for the model to function, there have to be the necessary technological infrastructures, starting with broadband. Companies that have been quick to recognize and absorb the change have become wealthy very quickly: a study conducted in June by VB Profiles estimated that this whole world of sharing is represented by a number of companies worth 17 billion dollars. So what are the consequences for large companies? Firstly, they have the opportunity of incorporating innovations that come from the start-ups. This is the case of Daimler: the German manufacturer – which controls the brands Mercedes and Smart – has long been active in the new transport business through its subsidiary Moovel which owns, among others, the car-sharing service Car2Go and myTaxi. The latter is a start-up founded in 2009 – the same year as Uber – by Niclaus Mewes and Sven Külper, and it was acquired by Daimler just over a year ago. BMW launched the car-sharing service DriveNow and invested in the app JustPark: this has been installed in its Mini cars to notify drivers in advance where there is free parking. Meanwhile, the lux-

The consumer world is often a training ground for applications in public and private companies, both large and small

046

ury hotel chain Hyatt has invested in OneFineStay, a rental service of prestigious homes offering a kind of luxury Airbnb. There are also cases (most of them in America) that have been created for business needs, ranging from larger industrial companies to those that are more crafts-oriented. Cargomatic is an American company that is transforming road transport by connecting the trucks that deal with freight with the companies that deliver their products and pay orders. The idea is to optimize the service: if a truck has to do the same route and has unutilized space, it can be made available to others, thereby adding to the original contractorâ&#x20AC;&#x2122;s turnover by loading other merchandise and at the same time ensuring a savings to the counterpart company. A similar case is that of TwoGo, a carpooling service for commuters which, thanks to a smarter algorithm, helps in the sharing of daily journeys back and forth to work (or even just for errands outside the office). Meanwhile, Wikispeed is a kind of Wikipedia for building cars more quickly: the projects are shared as open source content by engineers and mechanics, and then carried out by Wikispeed-registered garages throughout the United States. The result is a 2.0 car. Looking towards the future, according to analysts, the sharing model appears to be growing and we can expect still quite a lot more, seeing as the corporate world has made its move relatively late. One particularly dynamic sector is the financial field, which for the moment has one of its greatest examples in distributed finance: the exchange of money and funding without intermediaries, as happens with Zopa, Prestiamoci, Kickstarter, and Indiegogo. These platforms have allowed anyone to collect hundreds of thousands of dollars if their project is interesting enough. Now that truly is a revolution, and it has only just begun.

Large companies have the opportunity of incorporating innovations that come from the start-ups

047

CONTEXTS

THE THOUSAND FA C E S O F SHARING by Gea Scancarello Journalist and author of the book â&#x20AC;&#x153;Mi fido di teâ&#x20AC;?

LISA 28 years old

048

The culprit was a Greek yogurt, and a dinner that never took place. It was all thanks to that yogurt pot, a plastic alien in a refrigerator usually populated only with vegan foods, that Paola B. (a 26-year-old architect from Bologna) decided to jump into the world of foodsharing. This practice involves exactly what the name suggests, with the highest of good intentions: to avoid waste, redistribute surplus, and consume (better) collectively. Basically, instead of succumbing to the habit of throwing out leftovers or excess purchases, the food is given to someone else. How? By posting an offer on a website, one of the many that are springing up in countries all over the world precisely for this purpose. “I am vegan and I pay a lot of attention to everything concerning food. When the friend I bought the yogurt for did not show up for dinner, I decided to give it away,” says Paola, bursting with an emotion that exudes good intentions. “I felt I was doing the right thing. It’s not important that it was just a cheap pot of yogurt: what matters is the fact that it was a sign of change. In fact, a girl who wanted it wrote to me shortly afterwards.” This is the good side of the sharing economy, a phenomenon which is perhaps less popular than other well-known platforms but is equally revolutionary. Especially when you consider that, according to FAO data, one third of the food produced in the world each year ends up in landfills, often without even reaching the dinner plate. These statistics, probably little-known, are staggering and were what pushed Ilaria Venturelli, an engineer from Bologna in her early thirties, to create the platform S-cambia Cibo (Ex-changing Food). “I was asked to design a restaurant in Moscow. To do so, I decided to read up on food consumption in the area, and during this reading I came across the data on waste in the world. I became really indignant and decided that in my own small

blablacar.com

Accessibility is one of the keywords of this wave of ideas generated in the name of the sharing economy: extending possibilities, bringing people closer to worlds far removed from their own, and collectively managing assets, skills, and energy

PAOLO 20 years old

teatroxcasa.org

049

oxygen | 27 — 12.2015

way I had to try to do something,” she says. Thus S-cambia Cibo was created – operating today primarily in Bologna, the aim is to try to establish good habits which may then take root everywhere. But it is not an isolated effort, nor the only one to indicate a change of direction and budding hope in the field of cooperation. For example, Paul R. was a sales manager for an electronics company when a reorganization of the business left him jobless. “I was 50 years old and I had the distinct feeling of being finished. But, fortunately, I also had a load of hobbies and goodwill. So I tried to give myself another chance.” Not by sending out resumes, but by offering his skills: to be precise, by making them available to others on TimeRepublik, the first international bank of digital time and active in 110 countries around the world, where one asks for and finds a little of everything in terms of skills and services, from computer experts to dog sitters. Platform users pay one another in ‘time’, not money: in fact, when you sign up on the website you receive a capital of minutes that can be used to remunerate services from others, while you can do things for other people to increase your capital. “I had a passion for electronics and DIY, but I also have a boat license and I declared myself available to relocate boats from place to place. So I was contacted by an owner and I ended up having free boating holidays.” The paradigm shift is not easy to digest according to Karim Varini, co-founder of the platform, who managed investment funds in Lugano in his pre-sharing life. “By eliminating the problem of money you can do great things: an idea that someone is unable to bring to life alone may be achieved with help from others.” Not surprisingly, 70% of trade on the platform concerns graphic work, computer science, management/creation of Internet projects, and company consulting: a pool of skills to use in a collaborative way, also creating new jobs. And “collaborative intelligence” is the very expression Fabrizio Gasparetto uses to explain the platform Oxway, the first of its kind, which he created and put into operation between Milan and London. Via the Oxway website, companies, institutions, and organizations of various kinds can ask the online community for help in solving problems, thus overturning the logic of decision-making processes which are often governed more by roles and definitions than by clever insight. “Those who participate receive recognition, which may also be 050

timerepublik.com

LIVIA 32 years old

The sharing economy could be worth 335 billion dollars between now and 2025 for those sectors and companies that embrace a new collaborative approach something very prestigious: for example, they may be selected as a member of the jury in a festival they have helped to re-shape,” explains the founder. In short, accessibility is one of the keywords of this wave of ideas generated in the name of the sharing economy: extending possibilities, bringing people closer to worlds far removed from their own, and collectively managing assets, skills, and energy. This is a revolution in thought and practice that has significant economic consequences, even when not strictly profit-driven. According to a study by PricewaterhouseCoopers, the sharing economy could be worth 335 billion dollars between now and 2025 for those sectors and companies that embrace a new collaborative approach. But although the public view of a sharing economy often only comprises forms of private rental, the potential possibilities are actually much wider, with the only limits being one’s imagination and the ability to

perceive emerging demands. For example, all you need are 25 chairs and/or cushions in order to turn a room into a theatre where selected companies can put on shows for a private audience. This idea came to Raimondo Brandi, an actor himself, who then created the website TeatroXcasa (Theatre at Home). “Those who cannot go out to the theatre, (perhaps because they have young children) can get together and decide to host a performance, to see quality productions; the theatre companies expand their audiences and create an intimate and unusual relationship between actors and audience,” he explains. In one year, the website has facilitated the organization of 90 events for a total of 2,800 viewers, in venues that are often unusual: up to 30 people in a studio apartment (the minimum for appearing on stage is 25) and 74 in the garden of a villa, crowded together to see unique productions. This is a small triumph of culture, but also a joy for your pocket: at the end of each performance, audience members make a donation to the actors, paying them for the work done. A percentage of the proceeds (about 10%) is paid by the actors to the platform, which can continue to work and to organize other shows. Individual resourcefulness, therefore, replaces the traditional channels which are often backlogged and too bureaucratic. In-

deed, the logic is the same as that which has made the fortune of BlaBlaCar, one of the ‘good’ champions of the sharing economy: bringing supply and demand closer, with one eye on the environment and another on savings, while keeping for itself a percentage of the total trade. Today about 20 million people around the world offer and look for lifts by car on the platform, and not just because they want to spend less – in Italy, for example, only 21% of members are students, the rest are people in employment for whom sharing travel expenses may be handy, but not a necessity. “In the last year, I have given 37 rides, I published all intercity trips I’ve done on the website,” rounds off Chiara S., aged 35, the owner of a shop in Milan. “It’s not as if the 10 euros I receive for costs will change my life, but having some company in my car does make a big difference: a few weeks ago, if it hadn’t been for one of my passengers, I wouldn’t have seen an obstacle in the road and there would almost certainly have been an accident.”

scambiacibo.it

ARON 38 years old

Via the Oxway website, companies, institutions, and organizations of various kinds can ask the online community for help in solving problems, thus overturning the logic of decision-making processes

LARA 46 years old

051

IN-DEPTH

Ideas seeking for rules by Cristina Gallotti

We all remember the fuss that arose a few months ago regarding the alleged illegality of Uber, which resulted in its being shut down. But what about other startups which have become firmly established in our daily lives? Here is an overview of how, and if, the rules are changing for them.

It all starts with an idea: one that’s innovative and original, and above all, achievable. But it doesn’t matter if it’s not perfect; there will be time and room later for optimizing it. Most of the companies included in the spectrum of the sharing economy have come into being this way, i.e. as small entities straddling the more simplified bureaucracy that governs startups and the lack of regulations that still lingers in the sharing economy. It is hard to define this area, where the boundaries between exchange initiatives and real businesses, tax regulation and consumer protection are unclear. Europe is taking measures and there are numerous ongoing studies to map the many types of businesses that have arisen and to proceed toward a normalization of the system. The rules are being made in the field, rather than on the theoretical level, as practical cases involving some of the major players in the sharing economy (Uber, Airbnb, and BlaBlaCar) have made quite a stir, and continue to do so. In fact, only a few weeks ago, an appeal was made to the Antitrust Authority for a 052

law that governs transport services offered through platforms like Uber. Uber has no longer been active in Italy since July, when the Court of Milan upheld an appeal by taxi drivers accusing the company of unfair competition, but union protests, mainly addressed to UberPop (a carpooling service that regulates car-rides among individuals), ended up having an effect on all the services of the portal. This is a unique case in Europe, as to the scope and intensity of the protests, and it has placed under scrutiny those aggregators of demand and supply among citizens who base their business on the percentage retained from the transitions. For example, Uber’s percentage is 20% and BlaBlaCar has also recently aligned itself with that model. At first, the company did not earn anything from the sharing of driving time, but after a couple of years, first in France and Spain, and since last May, also in Italy, it established a variable percentage (12% in the case of an average journey of 340 km) on payments, which is paid in advance by credit card. On the one hand, this protects vehicle owners from any misconduct

of passengers who, by paying at the time of booking, are encouraged to honor the contract; on the other hand, the company earns something, and it’s not just small change if we consider that the platform has over 20 million members. Another sector, same growth: there are 20 million users spread across 190 countries around the world who are registered to Airbnb, the portal of temporary property rentals founded in San Francisco in 2008 thanks to the intuition of three students, and which today is worth an estimated $24 billion (three billion more than a hotel chain such as Marriott, which operates more than 4,000 hotels). In the case of Airbnb, the guests are charged a commission fee ranging from 6 to 12% per booking, whilst the hosts pay a service fee of 3%. Even though Airbnb has never been in open competition with the traditional hotel industry – completely focusing on the relationship between host and traveler – there is no lack of examples of use that depart from the spirit of the original project, specifically to exploit the partial fiscal flexibility. So that is why an increased regulation of the service is now being requested by many people. On November 3rd, voting took place in San Francisco with a referendum, which resulted in the rejection of Proposition F – a bill that aimed to tighten up the rules on the rental of rooms and apartments for short periods. If the proposal had passed, the number of nights people are able to rent out their home would have dropped to 75, against the current 90. And not only that: every four months, hosts were supposed to submit reports of their activities and, in case of violation of the rules, residents and organizations would have been able to sue them. In short, this would have meant a halt to the speed and simplicity of the portal and a greater control that closely affects the right to privacy. Beyond the reasons that led to Proposition F – renting an apartment for a long period has become more difficult, seeing as many are intended for short term rentals – and the fact that it was rejected by popular vote, November 3 is another important date in the history

of the sharing economy because it marks the need to find a regulatory structure that is different than the economic model it wishes to disassociate itself from. With a number of platforms that continue to grow alongside the number of users, it is necessary for the standards to be streamlined, but also clear-cut. And those who are asking for them are the players of the new businesses themselves: Gian Luca Ranno, one of the founders of the Italian “social eating” start-up, Gnammo, recently spoke in favor of a single set of rules for all activities of the sharing economy. In other words, shared, yes, but conforming to standard.

Even though Airbnb has never been in open competition with the traditional hotel industry, there is no lack of examples that depart from the spirit of the original project, exploiting the partial fiscal flexibility 053

PASSEPARTOUT

SHARING: EVERYTHING AND MORE edited by Oxygen

BIKESAUCE

REWEAR

Repair your bike with the right tools and the help of expert volunteers. www.bikesauce.org

Why buy designer clothes when you can rent them? www.rewear.co

SWAPSITY

CANADA

GIRLS MEETS DRESS

An exchange of items, services, and skills. www.swapsity.ca

United Kingdom and Europe, clothing rental. Order three and choose one. www.girlmeetsdress.com

BAGHITCH

A reliable private courier service for the transport of objects throughout the entire country. www.baghitch.com

SWEDEN UNITED KINGDOM NETHERLANDS

FRANCE

USA

MYNEIGHBOR

PRETACHANGER

Sharing of objects and services between residents of the same neighbourhood. www.myneighbor.com

PAX

HUERTOS COMPARTIDOS

Putting those who own land into contact with those who wish to cultivate it. www.huertoscompartidos.com

BRAZIL

LOC LOC

Private rental of everything from drills to camping gear. www.locloc.it

CABE NA MALA MOVIE DAY

Do you want to see a movie, but it’s not playing anywhere? Find a group of friends and organize your own screening. www.movieday.it

KOINZ

You don’t use it anymore? Swap it! www.koinz.me

OIL PROJECT

The online school without desks or schedules: access it, choose your subject, and learn. www.oilproject.org

054

ITALY GREECE

Exchange and sale of used clothes and accessories. www.pretachanger.fr

Customized charter flights and flights shared with other travelers. www.personalairlineexchange.com

Choose a product that costs less abroad, look for a traveler headed for your city. Buy the product on Amazon, and have them deliver it to you. www.cabenamala.com.br

SPAIN

YIUCO

Exchange of recycled, re-used or re-manufactured items. www.yiuco.com

YOLYOLA

The BlaBlaCar service that is made in Turkey. www.yolyola.com

TURKEY

WOR LD

LEGEND CLOTHES exchange, rental, and sale

OBJECTS

E D I W

exchange, rental, and sale

TRANSPORT AND COURIERS

TRAVEL AND ACCOMMODATIONS

COLIS-VOITURAGE Courier-sharing is the new frontier of road sharing. www.colis-voiturage.com

SKILLS spaces, culture, and abilities

CAMP IN MY GARDEN Rental of orchards and gardens for camping enthusiasts. campinmygarden.com

CHINA

HUTSTORAGE

DIDI KUAIDI

The Made in China Uber. www.xiaojukeji.com

EAT WITH A LOCAL

INDIA

Share a meal with a local person and feel less like a tourist. eatwithalocal.socialgo.com

PET SITTER JUGNOO

Rickshaw sharing. As quintessential as you can get! www.jugnoo.in

Those who have no space at home can always rent it from those who do. hutstorage.com

MALESIA

ROOMALA

The online community for finding a pet sitter. www.petsodia.com

Shared accommodations for short and long periods. en-uk.roomlala.com

KRRB

Furniture, objets d’art, and furnishings for sale by private individuals. www.krrb.com

SINGAPORE

TRAMPOLINN

WASTE IS NOT WASTE One company’s waste is another company’s resource. www.wasteisnotwaste.com

RENT SHER

Rent anything, with home delivery and pickup service. www.rentsher.com

SECRET WARDROBE

SHIPIZY

A sender, a receiver, and a parcel to be transported. A driver who has the same destination is found, and mission accomplished… www.shipizy.com

Make your house available to accommodate a traveler and earn points for your next trip. trampolinn.com

TRIPDA

The BlaBlaCar service of Latin America, the United States, and Asia. www.tripda.com.ph

A rental service of formal wear for all tastes, whether Indian or Western. www.secretwardrobe.in

055

INTERVIEW

EXPERIENCE IS MARKETING Interview with Joseph Pine

Theoretician of the Experience Economy by Maria Chiara Voci Journalist 056

Physical objects alone are no longer enough, we want more. So are companies despairing about that? Not all: the most enterprising businesses have decided to create an experience for their customers, a moment that is related to the act of purchasing but is also connected to other factors: feelings of pleasure, sharing, and the uniqueness of a day. Welcome to the age of the Experience Economy: are you sure you haven’t already experienced it? It was the end of the Sixties when Lego, the famous Danish company known throughout the world for its toy building blocks, understood that in order to grow it would have to broaden its horizons. Thus, in the small town of Billund, near the company headquarters, Legoland came into being: a miniature city where there are scale replicas of famous world monuments made with millions of its multicolored bricks. Every toy is fun, or provides a place where little ones can learn new concepts such as learning to drive a car or sail, or simply find themselves in a forest or fantasy realm. This amusement and theme park, perfect for families with children – especially the very young – was then replicated in five other countries, from England to the United States to Malaysia. “Lego understood before other multinationals that to launch its new product, it would need to arouse enthusiasm in its audience of potential buyers. Because today people no longer ask for things to buy, but for firsthand experiences which involve them on an intimate and personal level,” said Joseph Pine, the founder of Strategic Horizons LLP, and strategic advisor and theoretician of the Experience Economy.

goods, and then to a service economy. Today, on the contrary, what dominates the market is experience. This is the principle that will be at the basis of employment growth and the gross domestic product of our countries in the coming years. What is this belief based on? Compared to the past, today there is a myriad of choices for buyers. Hand in hand with the increase in offers and advertising, the real difference is not ‘what’ you buy, but ‘where’ you buy and in which way. What do consumers want today? Consumers are driving the market in two different directions. On the one hand, they tend to want useful products and services at ever more attractive prices so they can be sure of spending their hard-earned money well. On the other hand, they want to live exciting moments in order to get hold of these goods. Again, they do not want to waste their time, having often had to take time from their daily commitments.

Today people no longer ask for material things to buy, but for firsthand experiences which involve them on an intimate and personal level

Joe Pine, you are the author of numerous publications that analyze market changes and new trends and consumer needs. What do you mean by the Experience Economy? It is the economic phase we currently find ourselves in. Over the years, we have gone from an agrarian-based economy to an industrial economy based on

Do you think that today’s citizens are more willing to spend money on a pleasant experience than for a good product? Yes, absolutely. Numerous studies have shown that today buying an experience makes us happier than buying a product. Also because, due to the economic crisis, most people have realized that we have more than enough material things, while what we lack are experiences and emotions. 057

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MARKETING IN THE MOUNTAINS Vrin, a Swiss municipality in the canton of Grisons with approximately 270 inhabitants, is aiming to increase mountain tourism. To drum up publicity – by means of a webcam and a panel in the Zurich train station – one of its inhabitants (sitting on a lawn with their laptop) would sit and converse this summer with astonished travelers, who ended up with a complimentary ticket to Vrin to be used that same day. And the video went viral.

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Geek Squad turned a trivial computer consulting service into an engaging meeting; Starbucks manages to sell a cup of coffee that has two or three cents’ worth of raw material at a price ranging from three to six euros

So, aren’t brand-names leading the market any more? In some cases, our spending decisions are still tied to the big known brands that are a guarantee of reliability. Nevertheless, I believe that, with some exceptions of historical ties of affection, experience will prove to be a more determining factor than the brand in orienting buyers’ choices. Lego was one of the worldwide frontrunners in this new trend. What other famous companies have moved or are moving in this direction? There are many examples. Geek Squad turned a trivial computer consulting service into an engaging meeting on the principle that “work is theatre”. It has since expanded its business, thus spawning a network of 20,000 agents around the world. Starbucks manages to sell a cup of coffee that has two or three cents’ worth of raw material at a price ranging from three to six euros by focusing on a comfortable environment, creating a place people go to because they like to spend their time there. And then there is Apple which has long understood that the experience is marketing, and that it is necessary to focus on the design of objects and the stores that sell them in order to succeed and make a difference.

What impact do consumers’ demands have on the sharing economy? The sharing economy is essentially a demonstration of how today’s consumers have realized that there is no need for them to actually own all their goods. Instead, they may still access goods belonging to others by paying a fee that gives them the right to live the experience of owning something but only in due course, when and how they need it. Can the principle of the experience economy also be applied in fields such as tourism, architecture, and healthcare services? There is not a productive sector or service that has not been touched somehow by the need to offer new and effectual experiences. Tourism has always been based on this concept and it is, in fact, the leading industry in the world, employing 10% of the world’s population. However, what is changing today for tour operators is the need to compete on the type of experience offered to the customer, which must be increasingly sophisticated and unique in order to emerge and prove successful. In other sectors, such as architecture, the focus today is less and less on designing a physical building and more and more on how to create a place where people can feel at ease, live, and spend time. Even more than other sectors, medicine and personal care have had to deal with the fact that the better the experience a patient has, the better the subsequent treatment results will be. And if we consider all the other economic sectors, there are plenty of examples.

There is not a productive sector or service that has not been touched somehow by the need to offer new and effectual experiences

Are there any examples of Italian companies that are focusing on the complete experience? One of my favourite examples is Eataly. This food business has turned its store into an extraordinary location thanks to its design, cafes and specialty restaurants, cooking school, and even a museum, in which to experience Italian cuisine and food. It is definitely a place where those who enter have a complete experience. What are the basic aspects that make an experience successful? In some cases, when an experience has a well-defined concept, its strength lies in the ability to create cohesion among those who are called upon to live out a certain situation. In other cases, the key lies in a well-balanced mix of entertainment, education, escapism, and aesthetics. In the end, however, success lies in those moments experienced by the consumers that give them the illusion of authenticity.

The United States and Europe: it is still a question of two continents with different cultures and habits. Is what holds true in the US market also applicable to the European market? Yes. The principle of the experience is valid in Europe too, although, of course, with different approaches designed to respond to the culture and mentality of a population. For example, in EU countries, the level of experiences required is generally more intimate and profound. But the basic concept remains unchanged. All around the world, offering a moment to experience, possibly something new and unusual, will be the real frontier for the foreseeable future. 059

CONTEXTS

A NEW ENTERTAINMENT by Luca Castelli Journalist

Death of the physical music formats (apart from vinyl!), digital use, peer to peer, and streaming: in short, this is the evolution of our approach to entertainment in the Internet age. But it is not just a matter of music formats: smartphones that are increasingly faster and well-designed are multiplying their content and making it accessible at all times. How can you choose from among the huge range of offers available via this pocket-sized device? 060

The arrival in Italy of Netflix, the world’s leading provider of on-demand streaming for online movies and TV series, adds yet another piece to the rich mosaic of new methods of enjoying digital culture and entertainment. Not only is the perspective in 2015 radically revolutionized compared to the beginning of the Nineties and the period prior to the advent of the Internet but it is also significantly different from the situation during the first few years of Internet expansion and popularity. The most interesting change (to which the public has become accustomed quite rapidly) is the shift from the paradigm of possession to that of access. From 1999 to 2007 – i.e. from the launch of Napster (the first software that allowed for the unauthorized sharing of online music) to the launch of the iPhone – entertainment via the Internet developed almost as a simple upgrade and expansion of the typical dynamics of the twentieth century. Instead of records, videotapes, or books, the industry tried to sell digital files, replicating the model of trade in product units. Emblematic of this practice was iTunes, the store launched by Apple in 2003, which for many years managed to monopolize the e-commerce media, distributing millions of songs (followed by podcasts, movies, video games, and applications) and collecting an immense and valuable archive of customers and credit card numbers. For several years, iTunes was considered to be the solution to the commercial ills and anxieties of the Internet: for one thing, it was a legal antidote to the piracy of albums, films, and software, and furthermore, it represented a way to regain control of the branching channels of entertainment without being forced to make major structural changes (in music, the only significant innovation was the move from albums to singles). But it turned out to be a parenthesis, a rather short interval between the old analogue world and the new dimension created by the latest technological advances. These innovations regarded two main elements: the universal spread of smartphones and improved wireless connections. Smartphones have transformed the average user’s consumer experience, marking a shift from the absolute stationary position of their home computer (or the only partial mobility of a laptop) to a purely nomadic mobile device. The operating system of smartphones – less ‘free’ than that of a computer, in that it is detached from browser-based navigation and anchored instead in a network of proprietary apps – has also led to a significant change in management of the interfaces between providers and end-users. Compared to the somewhat anarchic peer-to-peer-years, we have now re-

Today we could call it a 2.0 update of the vertical model of TV and radio, enriched with interactive features and inevitably connected to the social media

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Smartphones have transformed the average user’s consumer experience, marking a shift from the absolute stationary position of their home computer to a purely nomadic mobile device

turned to a more rigid control from on high and to a user-experience channeled into tools and options decided by the provider. We could call it a 2.0 update of the vertical model of TV and radio, enriched with interactive features and inevitably connected to the social media (as entertainment is now ‘shared’ much more than in the past). Thus the exponential increase of coverage guaranteed by the Wi-Fi and 3G/4G networks has provided this new man/machine configuration with the ideal ground for developing the consumption of universal contents. Thanks to smartphones and mobile networks, today the user is always connected to the multimedia jukebox: at all times, in all places. This has made it almost inevitable for entertainment systems to become more innovative by transforming from vendors of contents to providers of access to the same contents. Hence, the explosion of services like Spotify and Netflix who base their offer on a subscription model where there is unlimited access – generally costing less than ten euros per month – to millions of songs and thousands of movies. This obviously contrasts with the sales models of individual products, so typical of traditional offline stores and iTunes. At this point, another keyword must be mentioned, one with more technological 062

connotations: streaming. The decade of iTunes and piracy via P2P was characterized by the domination of downloads (files that you store on your hard drive, to be used only on your PC or portable devices like an iPod music player), whereas today we are witnessing the triumph of a model in which the idea of ‘access without ownership’ has also been achieved from a technical point of view. With streaming, architrave not only of the aforementioned Spotify and Netflix but also of YouTube’s video reservoir, the file is still downloaded to your device (PC, laptop, smartphone, tablet) but only allows immediate consumption by the user: unless one resorts to illegal tricks, it cannot be stored and disappears as soon as you have finished watching or listening. Market data seems to confirm the magnitude and possibly even the irreversibility of this process. The statistics regarding music are most clear: for the past two years, almost all the countries that are more mature in terms of digital consumption popularity (the United States first and foremost, but also Italy), the world of pay-per-download of songs and albums has begun to collapse, outstripped by the emerging power of streaming services. Given the figures for the first six months of the year, 2015 will confirm this trend.

Thus there is no doubt that we have entered a new era of entertainment, strongly influenced by technological progress. However, it is difficult to predict if and how this will develop, and whether or not it will follow the tracks laid down by streaming. What clouds the crystal ball are the complexity of the market, the ambiguous effects of digital synergy (resulting in a very large number of competitors in the same arena – big and small, old and new, local and global – and the impossibility of knowing in advance what the next inroads made into technology will be (as the only certainty is the innate tendency to change). There are many economic unknowns, due both to the need to redefine the relationships and agreements inside the creator-distributor-user chain, and the presence of variables that could have a decisive influence on people’s habits and choices. For example, for years there has been an ongoing debate on how to reconcile songs being distributed for free on YouTube with hybrid solutions such as Spotify’s freemium (some services are free, others are available for a fee) and with others that are ‘subscription only’ such as the newly created Apple Music. There is significant doubt also regarding the field of law and legislation, both regarding elements of disruption introduced by the new services, and for the complicated national and supranational dynamics that are inevitably triggered in a global system like the Internet.

Not to be underestimated is another aspect, perhaps the most fascinating one, which is always decisive in determining the success (or failure) of a business model: the psychology of consumers. From this point of view, surprises are just around the corner. For example, it may happen that at the acme of this century of digital dematerialization – involving smartphones, Wi-Fi, and streaming – the public will resume regular purchasing of purely analogue and twentieth century objects such as vinyl LPs (2015 will be the eighth consecutive year of growth for sales in the sector of the vintage music form, records). Moreover, there is still no way of knowing know how the public will react to the truly Copernican revolution of entertainment in the twenty-first century: the transition from scarcity to abundance. If the entertainment industry of the last century was dictated by the rhythms and limits of the shortage of products, that of the new millennium is following the ebullient expansion of digital abundance. Every time we turn on a smartphone and connect with the Internet, we have at our fingertips millions of songs, movies, apps, e-books, and countless other stimuli. What will we grant our time to? What we will discard without even bothering to take a look? What criteria will we use to guide our experience in the digital ocean, as we pass from a movie to a tweet, from listening to a song to clicking ‘like’ on Facebook? These are the issues which will define the future of the new entertainment.

There is no doubt that we have entered a new era of entertainment, but it is difficult to predict if and how this will develop, and whether or not it will follow the tracks defined by streaming

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FUTURE TECH

Welcome to the fandom! by Simone Arcagni Journalist

You wrote it but I’ll carry the story on. Gone are the days when, upon closing a book, we’d say good-bye to our favorite character forever, or a movie was truly finished after the words ‘the end’ appeared on the screen. Today fans are re-writing and re-editing, continuing to narrate and live out their passion in everyday life, by participating in events and flash mobs, dressing up as their heroes and sharing these experiences with each other. In a nutshell, something has changed.

According to Nick Bilton, the American journalist who “lives in the future”, we are now “consumivores”, i.e. beings who want to continuously consume content, particularly digital content. We want to have this content on our devices, to comment on and share. Our society of connected digital media must accept that something has changed: for Lawrence Lessig, founder of the Creative Commons, we are in the remix era, where everything can be manipulated and modified. We select our digital content with personal navigation, we take it, circulate it amongst groups of ‘friends’, then comment on stories or articles and help them to go viral. We then store our digital content in a personal library and may even do mash-ups or remixes, tributes, or parodies, creating personal sagas. We are in a state of fandom, as the American scholar Henry Jenkins would say, where the fan who wants to be a leader reigns... so now there are movies, commercials, and games that require users who are active and completely immersed in the stories. A little like the fans of Lost who independently created Lostpedia, the online encyclopedia of the series,

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through a ‘grass-roots’ movement. Or the The Walking Dead fans who post details of the various ‘dead’ in the series on the ‘cemetery’ pages of Facebook. And fans of the Harry Potter sagas have created all kinds of spin-offs. The fans want to belong to the narrative world that a writer, director, or brand has created. And while the owners of the Harry Potter brand were initially infuriated by this interference, even trying to protect their rights against the brand name or characters being used in children’s works (yes, they took legal action against children!), George Lucas has instead sought to embrace the phenomenon of his ‘writer’ fans, although he has set limits on the use of content from the Star Wars saga. Meanwhile, fans have invented a thousand ways to participate in the narrative. Hence we have the theme-based flash mobs that suddenly animate streets and squares, and the ‘craze’ for cosplay, where people dress up as their favourite fantasy characters (anything from Lord of the Rings to Marvel superheroes). And even the big Hollywood studios have created ARGs (Alternate Reality Games) to challenge fans, the most import-

Cosplay × It is not Japanese: the origin of the phenomenon of people dressing and acting like their favorite characters is an allAmerican pastime and comes from Forrest J. Ackerman, collector of memorabilia and editorial director of sci-fi magazines. The year was 1939 and the costume was inspired by the movie Future Life.

ant being the launch campaign of The Dark Knight, with the protagonist Joker and his line «Why so serious?». And so the fans were immersed in a complex network of phone calls, appointments and puzzles to solve, in an attempt to win a highly sought-after free ticket for the film premiere. In the meantime, for weeks the network talked only about the game, the movie, and public expectations, thereby involving not only fans but also the media. Oh yes! Because marketing people know very well that involving the user means exploiting a viral campaign of potentially enormous proportions. Judging by its campaigns in recent years, Coca Cola has noticed this too, as has McDonald’s, and even the Italian Post Office and company Maxibon... Meanwhile, users have been commandeering an increasing number of narrative worlds (such as those of games, for example) and they do this by modifying the existing software to create their own short films, one example being in the world of The Sims. This technique is called machinima (machine + cinema) and it has had huge online success. But participation may also concern the opportunity to become producers, perhaps with a crowd-funding campaign, and so there are also crowd-sourcing campaigns to actively take part in the making of a movie such as in the case of fan fiction: everyone puts in something of their own, offering assistance, a creative idea, or a professional skill. This new approach is called the ‘Me’ economy, and the marketing sector is already gaining a foothold. It obviously appeals to marketing professionals who believe in communication by way of digital media and social networks, those who see potential in the sharing economy, and above all, those who are well aware of today’s consumers, i.e. consumers who want adaptable, customizable, and ‘socializable’ contents. In other words, an experience economy, which is set in an increasingly converging media ecology – just look at the emergence of all those new advanced platforms that are connected, personal, interactive, and immersive such as those of augmented reality (and wearable devices) and virtual reality.

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SCENARIOS

H OW W I L L W E MAKE PURCHASES IN THE FUTURE? by Alice Pace Journalist

Letâ&#x20AC;&#x2122;s forget about futuristic visions of a world of lazy people sitting in armchairs, who are making purchases or doing their shopping and paying via iris recognition software. The universe of buying is much more complex than that: it is a social experience that requires time, people, places, and thoughts. And we are re-designing it precisely so that these basic elements are not lacking. Future scenarios will be far more complex than we think. 066

So, the heel of your shoe breaks when you’re running to catch the bus – this is sheer bad luck, the perfect event to share immediately on social networks, complete with photos to entertain your friends. And, just a few seconds later, there’s a notification on your smartphone: do you want a new pair sent to the office, just in time for the meeting with your boss? Click. Done. After all, it’s easy enough – all your personal information is already in there, such as your appointments, sizes, and tastes. Surreal? Not entirely. In fact, the digital market has been embracing us for some time now, all eyes and ears to suss out our every desire and come to our aid at the first sign of ‘need’. We already have the Dash Button by Amazon, a domestic Wi-Fi connected device that provides us with sugar, toilet paper, and all household supplies at the touch of a button. For a while now, Tesco has been experimenting with virtual supermarkets around the world: use your phone camera to scan barcodes of products you want from a screen at the underground station or even the airport, so that whether you are returning from a trip overseas or just finished late at work, your purchases will be delivered when you get home. What will happen tomorrow? For teenagers today, a generation inseparable from their smartphones and tablets, shopping with a ‘click’ will be the norm. The market is becoming increasingly focused

on mobile phones: intuitive apps, simplified payment systems, geo-location, keyword search functions. And the numbers speak for themselves – in Italy alone, sales of smartphones have risen 68% over the last year, with a turnover of approximately two billion euros. One out of four purchases is already made using mobile devices, and it is expected that by the end of the year these operations will account for 25% of the total e-commerce business (source: Observatory eCommerce B2C of Netcomm – Milan Polytechnic University). And what will the fate of traditional stores be? Will we just walk straight past shop windows? Will salespeople disappear, supplanted by an army of express carriers zipping up and down the roads? No more fruit stands at markets, afternoons of shopping with friends, or naughty children running in the aisles of the toy department? Some think this is what we can really expect. However, there is another more likely hypothesis. Making a good purchase is a complex experience which takes time and words, it is not simply a case of wishing for something and getting it. History teaches us that commerce

The market will be increasingly focused on mobile phones: intuitive apps, simplified payment systems, geo-location, keyword search functions

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and shops or markets have always been an essential part of human and social relationships, not just places where someone sells products and someone else buys them. It is where people come together, make comparisons, and tell their stories: all aspects of making a purchase that can hardly be digitized. That is why it is very difficult to imagine a society without the physical presence of stores in the future. What would be the ideal scenario? Perhaps a solution where the two channels fit together in perfect synergy. Shops could be adopted more and more as exhibition spaces, for example, as places where people can try things out and actually touch or check the goods and then complete their purchase online. Supermarkets could have our shopping bags ready and waiting to be picked up. Is it possible to predict what we will be purchasing more and more online through websites and apps, and what instead we shall continue to visit stores for in person? “Until a few years ago, Italian e-commerce was dominated by services, mainly regarding travel and insurance, but today products have also gained their share, which is currently standing at 50%”, states Riccardo

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Mangiaracina, head of research of the Observatory on eCommerce of Milan Polytechnic University. Among these, technology and consumer electronics, as well as clothing, are the fastest growing sectors. Growing more slowly, but in continuous expansion, are the publishing and grocery sectors. “In the near future, we expect the emergence of sectors such as the food and wine of our regions, cosmetics, furniture, and home design, while the DIY and toy sectors are also promising”. The reasons that lead us to buy increasingly online are easy to understand: first of all, there is the search for the lowest prices. Secondly, convenience: we can buy quickly at any time of day or night or at weekends, or directly from our couch, with home delivery often free of charge. Another factor is the almost boundless choice of retailers and products at our disposal. And yet it is still difficult to imagine how we really will choose our purchases in the future. On the one hand, we are showered with tools that convince us to dive into impulse buying immediately. We will increasingly be able to make purchases via the blogs and social profiles of an athlete, chef or model that we admire,

just by clicking on the watch they’re wearing, on the tray they have in their kitchen, or on their surfboard. But the goods themselves are moving en masse to find us too: Google, Facebook, Instagram and all the websites with which we are registered have learned to know us well, even our personal tastes. “Our online life is increasingly the mirror of our offline activities, and trends and fashions change so fast that the tools that follow them are also being updated constantly, faster and faster,” says Luca Morena, creator of iCoolhunt, the social network that analyzes and maps trends. Will we ourselves become faster at skimming through the things we like, or will we be increasingly led by the algorithms? This still seems incomprehensible. “Maybe, simply, the two possibilities will embrace one another.” Surely one of the most imminent shifts will be in the payment systems, where both large established businesses and start-up companies are working to eliminate all the less pleasant and more boring features of our shopping: waiting in line, the check-out process, and the use of a credit card (not to mention cash) are all probably currently ex-

isting on borrowed time. “Already today, you cannot use a credit card for many purchases, especially regarding small expenses such as a coffee, a newspaper, or an exchange of money between private individuals. Smartphones, or other similar mobile devices, will be the solution,” muses Alberto Dalmasso, co-founder of the Italian app Satispay, which (just like a prepaid card) facilitates the exchange of money without being tied to the circuit of credit cards. And what about the long-awaited use of retina recognition? Or payment with fingerprints? These almost certainly won’t be used, as authentication will be carried out through even more real-time strategies. And we cannot exclude that some new hi-tech phenomena will come bursting onto the scene to revolutionize our habits in a completely unexpected way. Take, for example, 3D printing – maybe in five or ten years, we will manufacture our own plates and glasses, or even coffee tables. Or (why not?) virtual reality, for us to test products before they actually exist. After all, given the opportunity, who would say no to a tour of their future home before it is even built? And, are we quite sure that it cannot already be done?

The digital market has been embracing us for some time now, to suss out our every desire and come to our aid at the first sign of ‘need’

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2 . 0 CONS U M E R S The digital and in-store purchases of consumers do research online before they go to any shops

81%

66%

by 15% by computers mobile phones

Influence on purchases in stores Figures in %

49 36

Digital (PCs, tablets)

14 Mobile phones

Purchases most influenced 59 37

55 29

52 29

2012

2013

Buying online

070

consider it important that retailers have a website for finding information on:

warranty 66% price 52% technical specifications 51% financing 47%

62 28

19%

2014 electronics

furniture

automotive

entertainment childrenâ&#x20AC;&#x2122;s items

The development of the digital sphere and social media are increasingly influencing consumer choices and ways to make purchases

Deloitte; Synchrony Financial

SHOPPING CENTER

of consumers think that a direct relationship with the shopkeeper still plays a crucial role in their purchasing decisions

85%

Sources: elaborated by Codice/Infolab on data GE Capital Bank; PWC; Google;

42%

of buyers look for information online while they are in stores. And they use: of those who buy in stores search engines 64% the retailer's website or app 46% insist that phones have the website of rival retailers 30% become important for another website or blog 26% their purchase in stores

71%

Buyers who use social media to purchase: Figures in %

clothing

electronics

automotive

health & wellness

entertainment

food & beverages

62%

81% Denmark Belgium

54%

21%

17% Switzerland

Italy

29%

71% 31%

Turkey

78%

68% 43%

41%

China

51%

65% Brazil

36%

Russia

20%

70% 22%

They find out things on social networks

96% 56%

France

children's items

63%

Germany

72% USA

81%

18%

59% 27%

Canada

42%

20%

furnishings

They buy online at least once a month

18%

South Africa

24%

Japan

38%

India

42% The Middle East

27%

Australia

18%

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CONTEXTS

D I V I D E D BY

THE

INTERNET by Marco Cosenza Journalist

It is not just a geographical problem: sometimes the exclusion of whole sections of the population from the technological world depends on factors such as age, social background, or the actual reasons for using the Internet. Here is a journey to discover the digital divide and the solutions adopted to reduce the gap as much as possible. 072

Paying a bill with your smartphone or through the Internet should not be a prerogative only of the young but an opportunity for everyone, especially for those with restricted mobility, such as the elderly. But there is a lack of education concerning technology, so how can that be remedied? What can be done so that everyone can enjoy the same access to technology and its benefits? “We urge the nation to ensure that our children are never separated by a digital divide.” It was 1996 when the Clinton administration and its spokesperson Vice President Al Gore brought this expression into the political arena, a term that was coined in the early Nineties but destined to remain at the centre of discussion for many years ahead. The digital divide refers to the differences between those who have full access to new technologies, (particularly to the Internet), and those who are instead excluded. Almost two decades later, however, those children are still separated by a digital divide. 90% of American households where at least one parent holds a degree has Internet connection but in the homes of non-graduates, that figure is halved. It is not much better elsewhere in the world, in fact not better at all. More than half the world’s population has no access to the Internet: there are 4.4 billion people who lack the ability to take advantage of the web and its consequent access to the opportunities for cognitive, communicative, and economic growth. Being excluded therefore means further fueling the causes of the great gap (constituted not only by the digital divide), between developed and undeveloped countries. The issue is diversified and complex, just like the ganglia of the network itself. On the one hand, there is a problem of infrastructures, and on the other, there is a problem of knowledge. First of all, there is no inclusion without connectivity. However, expanding coverage means dealing with remote and rural areas, which are full of orographic (mountainous) and technical obstacles. This is a scenario in which mobile technology, available more and more cheaply, becomes a powerful tool of inclusion and democratization: there where a cable will not reach, a signal can arrive.

90% of American families with a parent who has a degree uses Internet

MILLION Italians have never connected to the Internet

Overcoming the physical barriers is not enough if you can’t break down the mental ones: otherwise, even in connected online countries, a domestic divide is created between those who are capable of using digital devices and interfaces, and those who are not

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In strictly technological terms, therefore, alongside the digital divide there exists a kind of digital apartheid, a technological segregation in which precisely what should be the powerful means of inclusion instead becomes a reason for exclusion

The number of smartphones overtaking traditional phones occurred in 2014 and there are now more active SIM cards in the world than people. Over the next five years, 90% of these will have a network available to them. The giants of the Internet, the Internet with a capital I, have realized this and they are certainly not sitting around twiddling their thumbs. Google has launched Project Loon, an initiative to bring cheap Internet to developing countries by way of hot air balloons which are freed into the stratosphere and equipped with special antennas, capable of transmitting a broadband signal in the territories below within an area of about 40 km in diameter. Facebook’s approach is not so different: it will substitute the balloons with solar-powered drones but the result will be the same. Equipped with a wingspan superior to that of a Boeing 737 but lighter than a common car, they will be able to fly for months at an altitude of 18 kilometres, scattering the seed of the Internet. Elon Musk is looking and aiming even higher. The father of inventions such as the electronic payment method PayPal and the electric car Tesla intends to launch hundreds of satellite modems using the aerospace company SpaceX. The company is worth 10 billion dollars and blends philanthropy and business, looking towards both the infinite interplanetary frontiers and the wide grasslands of Internet users in the future. This is a 074

slice of the market that is tempting to many, including Richard Branson who, through a partnership between his Virgin Galactic, Qualcomm, and the start-up OneWeb, is paying for a project similar to that of the South African tycoon. The launch of the first mini-satellites (their weight will be about 150 kg) is planned for 2018. Overcoming the physical barriers is not enough, however, if you don’t manage to break down the mental ones. Otherwise, even in connected (online) countries, a domestic divide is created between those who are capable of using digital devices and interfaces and those who are not. Defining the concept of ‘access’ only in terms of connection speed is irrelevant if in the presence of an ultra-broadband you encounter only very limited knowledge. In Italy almost all of the territory is covered but the average speed (less than 10 Mbps) is still one of the lowest in Europe and a far cry from the objectives set by the Digital Agenda for Europe, according to which everyone should achieve 30 Mbps by 2020. However, it’s not only in Brussels that concern has been raised. There are more than 20 million Italians (23 million in 2014, according to ISTAT) who have never connected to the Internet, just under 40% of the population. This threshold jumps to 90% for those over 65, an age range that is very closely affected by the many services that digitization can provide, especially in terms

ULTRA BROAD-BAND This is not something to be under-rated or viewed as superfluous: the economic recovery could be based on the spread of ultrafast broadband (at a speed greater than 30 Megabits per second). And while South Korea and Japan are aiming for connections of 1 Gbps, the Italian goal is to bring a band of over 30 Mbps to the entire population by 2020, a standard currently restricted to only 36.3% of users.

of contact with local public administrations and healthcare services (a high figure, even taking into account the delays by both fields in equipping themselves for this new context). The fracture created can be healed but first there must be recognition of the causes, often linked not so much to the lack of electronic devices as to a sense of distrust towards a world that is unknown. The situation is different in less developed countries, where economic factors continue to play a primary role. The Internet for many is not just a luxury but also likely to be an irrelevant luxury. If the contents are not considered useful or are unavailable in your language, you will not see any need to connect, despite materially having the opportunity. Meanwhile, the world is evolving ever more rapidly, with an application of Moore’s Law which can be read both positively (first of all, the ability to exponentially mend the divide) and negatively (i.e. widening it just as quickly). In strictly technological terms, therefore, alongside the digital divide there exists a kind of digital apartheid, a technological segregation in which precisely what should be the powerful means of inclusion instead becomes a reason for exclusion. These are forms of digital illiteracy which, like the traditional forms of illiteracy, can be solved with processes of schooling. This education is essential, be it early or late, so that youngsters do not risk being excluded from a world of work linked hand in glove to the technological element and older people can find the Internet to be a cane they can lean on, a help with regard to their limits of autonomy and mobility, in the form of home automation and systems for wearable health monitoring, remote medical consultations, and shopping delivered to the door. The above reasons are why solutions such as CoderDojo and ABCdigital were created. The first is essentially a technological ‘gym’ that aims to teach even the youngest children, in a playful way, how to program and become familiar with the language; the second is an initiative that brings together grandparents and grandchildren, retirees and students, so that for once it is the younger generation who take the stand to teach something to their elders: namely how to use computers, smartphones, and tablets. In fact, in order to reduce the digital divide there needs to be a joint effort, of the old and new generations, of the public and private, and of the institutional and the corporate, with an investment of both financial and mental resources. Indeed, it is a challenge that is feasible: it is never too late to roll up one’s sleeves. Nor to learn how to surf the Internet.

Mobile technology, available more and more cheaply, becomes a powerful tool of inclusion and democratization: there where a cable will not reach, a signal can arrive

OVER

The most marginalized age range, with 90% who cannot use the Internet

MBPS This is the speed goal to reach by 2020 according to the Digital Agenda for Europe

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Dv VISUALIZATION oxygen |DATA 27 — 12.2015

DIGITAL LESSONS 2-5

edited by Oxygen Who is the Consumer 2.0? The market today is still dominated by the needs of the digital immigrants, the “born before (technological revolution)” generation, but soon it will be the turn of the digital natives, those who have grown up with personal computers and tablets (96% of all fifteen-year-olds in the world have a PC at home), with all the subsequent implications for their cognitive structure. And it is in fact the question of schools and their openness to technology, which is generating interest, according to the OECD

LESS THAN

Students per PC in Australia, the United Kingdom, and the United States

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Pisa study mapping the number of students per computer. And the average in Italy is 4.7, a figure which makes you think, when compared with the outer extremes of 53.1 students in Tunisia, and Australia where each child has more than one PC available. However, it must also be said that, perhaps due to the fact that the current generation of teachers are digital immigrants, the computer still remains switched off for most of the day, with an average of 25 minutes spent online in OECD countries and 19 minutes in Italy.

STUDENTS Countries resulting within the OECD average of 4.7 are Ireland, France, Russia, Japan, Poland, Italy, and Germany

5-10

STUDENTS South Korea and Greece have a surprisingly similar result

Energy X today ×

MORE THAN

99%

Resulting between the average of 15.5 in Mexico and 50+ in Tunisia, students in Brazil and Turkey are also flocking to PCs

Percentage of Italian fifteen-year-olds who have a PC at home

66,8% Percentage of students in Italy who use the Internet at school, just under the OECD average of 72%

Energy can help the digitization of schools. Enel Energy’s new offer for each electronic bill activation includes a donation of €2 made to Enel Cuore, which helps finance digital supports in primary and nursery schools. An energy bill that is sustainable for the environment and society.

MINUTES The amount of time that Italian fifteenyear-olds spend on the Internet outside of school

Source: OECD “Students, Computers and Learning”, 2015

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CONTEXTS

IMAGINING SOLUTIONS by Gianluigi Torchiani Journalist

From Chiapas to Cambodia, from Brazil to Europe, energy needs could not be more different. And the same can be said for the solutions. Hence, projects are shaped according to the characteristics of the local territory and customers; and weâ&#x20AC;&#x2122;re just not talking about electricity. There is an evolution of the market where energy literally goes and meets the users. 078

Energy production is not an abstract activity, unrelated to the social and economic context that surrounds it. On the contrary: it is so much connected to its surrounding environment, and so influenced by the recent spread of modern technologies of generation and transmission, that more and more often the construction of power plants and networks goes hand in hand with the construction of important development opportunities for local communities, focusing on the needs of the consumer and territory. In short, the users are becoming the real protagonists of the energy revolution of the twenty-first century. In fact, one could say that practically all innovations and projects in the energy field now cannot help but ascribe a key role to all of us and our experience. Concrete examples around the world are not in short supply: for example, letâ&#x20AC;&#x2122;s consider Brazil, where the company Intersolar has set up a project in the favelas of Rio de Janeiro, an initiative that goes beyond the simple installation of photovoltaic panels on the roof of the nursery school of the Community of Santa Marta (although this too ensures a substantial economic advantage). In fact, the company has furthered this intervention by investing a substantial amount of money to provide training and certification of professionals sourced locally. In other words, this is a real social challenge, set within a difficult environment, which revolves around the world of energy. While the availability of electricity in a city like Rio de Janeiro may be taken for granted, the same cannot be said for the rural regions of Chiapas, Mexico. Here, thanks to a major project managed on a federal level and with the assistance of the University of Science and Arts of Chiapas (UNICACH), an attempt is being made to supply electricity to Nuevo Amanecer in the regions of Tejenapa and Mount Horeb in Cintalapa. The indigenous communities living in these areas are traditionally accustomed to using wood for their energy needs, thereby worsening their quality of life and increasing the problem of deforestation in the region. The solution lies in the use of photovoltaics, capable alone of charging a large number of appliances, ecological stoves, and systems of outdoor lighting and water pumping, thus guaranteeing these indigenous communities an energy supply at an affordable price. Globally, there is no shortage of

Globally there is no shortage of projects where the Italians have been able to offer their valuable contribution, such as that of young architect Matteo Ferroni, who designed a portable solar power lamp for rural communities in Mali

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oxygen | 27 â&#x20AC;&#x201D; 12.2015

Not just electricity: much can also be done regarding the production of thermal energy, which is necessary for cooking and heating

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projects where the Italians have been able to offer their valuable contribution. Particularly interesting is the experience of young architect Matteo Ferroni, who designed a portable solar power lamp for rural communities in Mali, based on his observation of community life in some villages of that African country. This gave rise to his idea of the lamp, built in collaboration with local artisans and using recycled materials such as bicycle frames, pipes, and telephone cables (although the LEDs are imported from China), while also paying attention to design. Thus a project was created that combines the lighting requirements for social activities in the villages, and the self-organization and self-sufficiency of energy for rural communities. The success was immediate because the portable lamp (known as foroba yelen in the local language) facilitates work carried out at night, such as the vaccination of animals, fishing on the river with canoes, and the renovation of buildings. Another interesting aspect of this project is the collective management of the lighting. Every village that makes a request receives four lamps. A committee to manage them is set up with representatives from different groups: there are always a woman, an old man, a young man, and a technician. The committee rents out the lamps and the proceeds go into a common fund, which is then used to finance other micro businesses. So far we have talked almost exclusively about electricity, but a lot can also be done regarding the production of thermal energy, which is necessary for cooking and heating. In the heart of Asia, namely in Cambodia, there is a project now proving very successful which involves another Italian, Carlo FigĂ Talamanca, a technician who heads the Sustainable Green Fuel Enterprise. Like Mexico, Cambodia too has to deal with deforestation, with its forests currently decreasing at an annual rate of 0.8%. Unfortunately, this problem is largely caused by the Cambodians themselves who are using the wood from forests for cooking and heating (in the absence of other resources), with serious consequences in terms of air pollution and safety. The remedy developed by Sustainable Green Fuel Enterprise consists of

Users are becoming the real protagonists of the energy revolution of the twenty-first century transforming coconut shells and other organic remains into real charcoal to be used for cooking in homes and restaurants. A kilogram of sustainable charcoal can prevent the consumption of 6.6 kilograms of wood from forests, at a reasonable cost for the local population and with the emission of a smaller amount of smoke and substances harmful to health. This has proved so successful that the company, which before the invention of the charcoal was at risk of closure, has rapidly increased production and sales, thus managing to make its business model sustainable. Finally, coming back to Europe, there are many initiatives related to the relationship between energy, local commu-

nities, and users. Probably the richest in historical and cultural reasoning is the project Restor (Renewable Energy Sources Transforming Our Regions), aimed at increasing the production of renewable energy in micro and small hydropower plants through the identification and reactivation of historic mills and small hydro-electric plants currently not in use yet present in thousands of exemplars along rivers and streams throughout Europe. The goal is to provide clean energy to local communities and the European electricity grid, as well as raising awareness concerning environmental sustainability and the beneficial role played by small hydropower plants in our energy mix. 081

SCENARIOS

AFRICA:

the dawning of energy by Ignacio J. PĂŠrez-Arriaga Director of the BP Chair of Energy and Sustainability Comillas University of Madrid and Robert Stoner Deputy Director of the MIT Energy Initiative

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The energy issue takes on very specific characteristics when it comes to SubSaharan Africa, a region of the world where access to energy is dramatically low and the conditions for expanding the electricity grid are often prohibitive. So here is an overview of viable solutions and the conditions necessary for the development of an electricity market that is also available to the private sector.

The provision of electricity access is a very complex problem that cannot be reduced to simple terms, and the success of any given approach strongly depends on the local context The electricity access statistics for Sub-Saharan Africa (SSA) are well known and appalling: 620 million people â&#x20AC;&#x201C; nearly half of the total population in the entire Africa â&#x20AC;&#x201C;Â live without access to electricity; 80% of the un-electrified population lives in rural areas; and, in these areas, only 14% of the households have access to critical electricity services. The SSA is the only region of the world where the number of people without electricity access is increasing. The level of awareness of this problem has increased substantially over the last decade, as indicated by a slew of announcements of electrification initiatives by many

of the regions governments and the increasing level of available international funding. While these developments are vital, they are far from what is needed. Populations lacking access to energy is an unacceptable bane on our 21st century society. Luckily, it seems the challenge of universal electrification may be overcome in less than two decades. What stands in the path towards achieving universal access? We argue that the absence of a sound regulatory framework and of a comprehensive electrification planning approach are major impediments for the success of any serious attempt at providing the electricity access that could dramatically improve the lives of so many people. According to the International Energy Agency, SSA will require more than $300 billion of investment to achieve universal electricity access by 2030. Sound regulation is required to give private investors confidence that the financial risk is manageable. Given the scale of the challenge and the diversity of options for electrifying vast regions, effective planning tools are necessary to help governments, electrification agencies, donors and other stakeholders plan and allocate their limited resources wisely. The following sections will briefly discuss these issues. Why is planning needed? The provision of electricity access is a very complex problem that cannot be reduced to simple terms, and the success of any given approach strongly depends on the local context. Nonetheless, there is overwhelming agreement that a comprehensive electrification plan in SSA, and in virtually every developing country, consists of a combination of grid extension and off-grid solutions (i.e. micro-grids and stand-alone systems). Off-grid solutions may take advantage of local resources and are often the lowest cost option for dispersed and low demand located far from existing grids or in places with difficult grid access. Off-grid solutions also offer flexibility: in some situations where grid connection is ultimately the least cost option, off-grid solutions can act as a bridge, electrifying areas until the utility (typically publicly owned and often in dire financial situation) reaches the site. These off-grid solutions are often privately funded by small entrepreneurs and large firms alike. The regulatory frameworks of SSA countries often allow entrepreneurs to negotiate freely the terms of off-grid supply with small villages or other consumer groups. Two obvious questions emerge: when should each option (i.e. on-grid and offgrid) be utilized, and how should priorities over the allocation of financial resourc083

oxygen | 27 — 12.2015

es and the timing of deployments be established? A well designed planning tool can provide a rigorous techno-economic assessment of various electrification alternatives. These assessments can then be used by different interested parties, together with other political, social or regulatory considerations, to arrive at informed decisions on electrification strategies. Consumer preferences – regarding the reliability of supply, convenience of use, the potential for demand growth and affordability – must be at the core of any electrification plan. It is currently possible to develop inputs to sophisticated power system planning tools from geo-referenced databases and computer vision techniques that can identify buildings from satellite imagery. These tools integrate the geographic distribution of customers, their estimated electricity needs, the layout and reliability of the existing grid, and the availability of local energy resources to determine the best electrification option (i.e. grid connection, microgrid, or stand-alone system) for every consumer within a region, as well as the technical specifications and cost of each option. Further, these tools can determine any needed upstream reinforcements to the existing grid. These planning tools can be applied to a region of any size, from counties with a few thousand families to entire countries with millions of unelectrified households. As stated by World Bank experts “available tools, properly used, can inform policy interventions by governments and support the mobilization of resources (public, private, and donor-funded) behind access initiatives. There are many potential impediments to successful implementation of such initiatives, including political and social barriers. But a case backed by scientific data, rigorously gathered, will always have a better chance of overcoming these barriers.” Why is sound regulation so important? An overwhelming majority of experts agree that sound regulation is an indispensable condition to attract the vast amount of investment that universal access to electricity in SSA will require. Rural electrification, on-grid and especially off-grid, is substantially more expensive than electrification in urban areas with much higher demand density. Cross subsidization of rural electrification by existing grid-connected consumers – an approach widely used in other parts of the world – is not possible in most SSA countries, as the

084

vast majority of households are not electrified and the required subsidy would be too large. The existence of a ‘viability gap’ between the electrification cost and what the beneficiaries can afford – except for perhaps a bare minimum service of a couple of lights and a phone charger – has to be acknowledged. And we need the electrification planning tools that were described earlier to help governments, planners and private investors to make better assessments of the volume of financial gaps and of their financial needs for specific projects. As the quintessential London subway recording reminds us, we must “mind the gap!” Sound regulation has to make sure that the viability gap will somehow be filled, and that the risk to private investors of not being able to obtain a reasonable rate of return is acceptable. Furthermore, regulation must be stable, effective and enforceable, and free of major flaws. Grid compatible micro-grids need regulatory support since they are more expensive than the most basic ones (the best electrification option that the poorest households can generally afford). Thus, the developers of grid-compatible micro-grids need to be compensated for the viability gap. These grid-compatible and predominantly renewable-powered micro-grids deserve to be supported by regulation for several reasons: a) their assets are less likely to be discarded when the grid ultimately arrives, thereby reducing the risk for the potential microgrid investor; b) if the original renewable-powered generation assets remain, they will not be replaced by the grid-connected generation mix, which is predominantly based on fossil fuels in most countries, setting the path for a less carbon-intensive model for the power sector; c) since grid-compatible micro-grids can provide a level of service similar to (or in many cases, better than) that of the existing grid, they reduce the consumer concern that establishing a micro-grid will only tend to delay the arrival of the grid (a not-uncommon concern); and c) in those places that can be eventually reached by the grid, privately financed micro-grids reduce the pressure on the incumbent distribution company to extend the grid, delaying the utility’s financial burden until the best time for connection to take place. We are now at the right time to guide the adoption of a long-term electrification path in SSA countries that is based on economically and environmentally sustainable systems, leveraging close cooperation among governments, international organizations and electricity players.

We are now at the right time to guide the adoption of a long-term electrification path in SSA countries that is based on economically and environmentally sustainable systems, leveraging close cooperation among governments, international organizations and electricity players

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COLUMN

| OXYGEN VS CO2

The future in blocks by Davide Coero Borga Journalist

There’s no denying it, the reputation of large companies also depends on the trust established with their customers, as well as on issues such as the environment and human rights. Today’s consumer carefully weighs up these factors and, thanks to the Internet, has gained yet another way to be heard and to influence the course of events.

The general public can play an extremely important role in ethical, scientific, and environmental issues, at times forcing a company to make very tough decisions. Even when it comes to simple toys. This is in fact what happened to the LEGO company, which (after much debate) dissolved a longstanding partnership with the Shell Group, sacrificing an estimated budget of 87 million euros. It had already happened to Mattel in 2011: on that occasion, the world’s largest toy maker had to hastily dissolve a controversial contract with Asia Pulp and Paper, a company discovered to be responsible for the destruction of thousands of hectares of Indonesian rainforest. In this case too, millions of euros were thrown down the drain. But, first things first… In LEGO’s case, the casus belli was a viral video, widely distributed and shared on social networks. The plot: a fascinating diorama of the Arctic, made out of LEGO toy bricks and populated by LEGO mini-figurines – a drill begins to extract oil, and the Arctic is soon engulfed by an ominous black tide. In fact, LEGO had been selling a range of products with the Shell logo in various countries around the world ever since the Sixties:

086

toy cars, colorful gas stations, and Formula 1 race cars. But when the multinational oil company made its controversial decision to drill in the Arctic in search of deposits, Greenpeace dredged up this video, exploiting the toys’ fame in order to attack the oil giant. Jørgen Vig Knudstorp, CEO of the LEGO Group, felt he was being somewhat coerced but he was eventually forced by strong public pressure to announce that his company would not be renewing its marketing contract with Shell. End of story. Then there is also the case of Barbie. Yes, that’s right, Barbara Millicent Roberts. The beautiful blonde doll, eternally engaged to Ken Carson (also young and attractive) whom she met in 1961 on the set of a TV commercial. It was June 2011 when, in the middle of an interview, the Ken doll was alarmed by a terrible revelation: Barbie was contributing to the destruction of the Indonesian rainforest. The shock-video, shot with sophisticated animation techniques was broadcast on Internet to underline Mattel’s involvement in the purchase of products from Asia Pulp and Paper, a company that does not respect the criteria established by the Forest Stewardship Coun-

Icon power × It comes as no surprise that Barbie could dictate a change of strategy for Mattel; yes, because not only is she the most famous doll in the world, she is also a true icon. This has been made crystal-clear with the opening of the significantly-titled “Icon” exhibition at the Mudec in Milan in late October.

cil (the brand of certified forests) but instead wrangles contracts for the supply of low cost packaging paper. Greenpeace investigations, data mapping, and the company’s certificates showed that the packaging of toys around the world – including those made by Disney and Hasbro – was directly connected to paper supplies derived from rain forests. Activists unfurled a giant poster on the fifteen-story facade of the Mattel headquarters in El Segundo, California with the image of a sullen Ken and the written message: “Barbie, it’s over. I don’t date girls that are into deforestation”. Thousands of ordinary citizens from all over the world began to flood Mattel with e-mails. The Barbie Facebook page was closed temporarily due to the barrage of posts. The scandal spread throughout the world, while Barbie and Ken attempted to make up on Twitter. The news spread like wildfire over the Internet and thousands of visitors jammed the switchboards of the US company. Moral of the tale: in October, Mattel, the largest toy manufacturer in the world, announced a global strategy for its supply of paper in accordance with regulations for conservation of rainforests, by reviewing its relations with suppliers, dramatically reducing the amount of packaging used, verifying that the paper is obtained entirely from certified forests, and increasing the recycling of materials. This is the epilogue of an unconventional public mobilization. Paying more attention to your choice of business partners is the most moral and strategic thing to do. On the market, a good reputation must be earned and maintained. And there’s more. A reprimand by consumers can become a stimulus for new and bold initiatives, such as that undertaken by LEGO as a result of the Shell affair. The Danish company has since set up a research project to build their own bricks of sustainable raw materials, with an initial investment of 130 million euros. In Danish, LEg GOdt means “play well”. It seems that everyone is now keeping this in mind.

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Oxygen 2007/2015 Andrio Abero Giuseppe Accorinti Amylkar Acosta Medina Andoni Luis Aduriz Emiliano Alessandri Nerio Alessandri Zhores Alferov Enrico Alleva Colin Anderson Lauren Anderson Martin Angioni Ignacio A. Antoñanzas Paola Antonelli Simone Arcagni Marco Arcelli Ben Backwell Antonio Badini Roberto Bagnoli Andrea Bajani Pablo Balbontin Philip Ball Alessandro Barbano Ugo Bardi Paolo Barelli Vincenzo Balzani Roberto Battiston Enrico Bellone Mikhail Belyaev Massimo Bergami Carlo Bernardini Tobias Bernhard Alain Berthoz Michael Bevan Piero Bevilacqua Ettore Bernabei Nick Bilton Lorenzo Bini Smaghi Andrew Blum Gilda Bojardi Angelo Bolaffi Aldo Bonomi Carlo Borgomeo Albino Claudio Bosio Stewart Brand Franco Bruni Luigino Bruni Giuseppe Bruzzaniti Massimiano Bucchi Pino Buongiorno Nick Butler Tania Cagnotto Michele Calcaterra Gian Paolo Calchi Novati Davide Canavesio Paola Capatano Maurizio Caprara Nicholas Carr Carlo Carraro Bernardino Casadei Federico Casalegno Stefano Caserini Valerio Castronovo Ilaria Catastini Marco Cattaneo Pier Luigi Celli Silvia Ceriani Marco Ciurcina Corrado Clini Co+Life/Stine Norden & Søren Rud Davide Coero Borga Emanuela Colombo Elena Comelli Ashley Cooper Barbara Corrao Paolo Costa Rocco Cotroneo Manlio F. Coviello

George Coyne Paul Crutzen Brunello Cucinelli Roberto Da Rin Vittorio Da Rold Partha Dasgupta Marta Dassù Andrea De Benedetti Luca De Biase Mario De Caro Giulio De Leo Michele De Lucchi Gabriele Del Grande Domenico De Masi Ron Dembo Gennaro De Michele Andrea Di Benedetto Marcel Dicke Gianluca Diegoli Dario Di Vico Fabrizio Dragosei Peter Droege Riccardo Duranti Freeman Dyson Magdalena Echeverría Daniel Egnéus John Elkington Richard Ernst Daniel Esty Monica Fabris Carlo Falciola Alessandro Farruggia Antonio Ferrari Francesco Ferrari Paolo Ferrari Paolo Ferri Tim Flach Danielle Fong Cary Fowler Stephen Frink Antonio Galdo Attilio Geroni Enrico Giovannini Louis Godart Marcos Gonzàlez Julia Goumen Monique Goyens Aldo Grasso Silvio Greco Maria Patrizia Grieco David Gross Sergei Guriev Julia Guther Giuseppe Guzzetti Jane Henley Søren Hermansen Thomas P. Hughes Jeffrey Inaba Christian Kaiser Sergei A. Karaganov George Kell Parag Khanna Sir David King Mervyn E. King Tom Kington David Kirkpatrick Houda Ben Jannet Allal Hans Jurgen Köch Charles Landry David Lane Karel Lannoo Cecilia Laschi Manuela Lehnus Johan Lehrer Giovanni Lelli François Lenoir Jean Marc Lévy-Leblond Ignazio Licata

Armin Linke Giuseppe Longo Arturo Lorenzoni L. Hunter Lovins Mindy Lubber Remo Lucchi Riccardo Luna Eric J. Lyman Tommaso Maccararo Paolo Magri Kishore Mahbubani Giovanni Malagò Renato Mannheimer Vittorio Marchis Carlo Marroni Peter Marsh Jeremy M. Martin Maurizio Martina Paolo Martinello Leonardo Martinelli Gregg Maryniak Massimiliano Mascolo Mark Maslin Tonia Mastrobuoni Marco Mathieu Ian McEwan John McNeill Daniela Mecenate Lorena Medel Joel Meyerowitz Stefano Micelli Paddy Mills Giovanni Minoli Marcella Miriello Antonio Moccaldi Renata Molho Maurizio Molinari Carmen Monforte Patrick Moore Luca Morena Javier Moreno Luis Alberto Moreno Leonardo Morlino Dambisa Moyo Geoff Mulgan Richard A. Muller Teresina Muñoz-Nájar Giorgio Napolitano Oriol Nel·lo Edoardo Nesi Ugo Nespolo Vanni Nisticò Nicola Nosengo Helga Nowotny Alexander Ochs Robert Oerter Riccardo Oldani Alberto Oliverio Sheila Olmstead Vanessa Orco James Osborne Rajendra K. Pachauri Mario Pagliaro Francesco Paresce Luca Parmitano Vittorio Emanuele Parsi Claudio Pasqualetto Corrado Passera Alberto Pastore Darwin Pastorin Federica Pellegrini Gerardo Pelosi Shimon Peres Ignacio J. Pérez-Arriaga Matteo Pericoli Francesco Perrini Emanuele Perugini Carlo Petrini

Telmo Pievani Tommaso Pincio Giuliano Pisapia Michelangelo Pistoletto Viviana Poletti Jason Pontin Giovanni Porzio Borja Prado Eulate Ludovico Pratesi Stefania Prestigiacomo Giovanni Previdi Antonio Preziosi Filippo Preziosi Vladimir Putin Alberto Quadrio Curzio Marco Rainò Virginie Raisson Federico Rampini Jorgen Randers Mario Rasetti Carlo Ratti Henri Revol Gabriele Riccardi Marco Ricotti Gianni Riotta Sergio Risaliti Roberto Rizzo Kevin Roberts Lew Robertson Kim Stanley Robinson Sara Romano Alexis Rosenfeld John Ross Marina Rossi Bunker Roy Jeffrey D. Sachs Paul Saffo Giuseppe Sala Gerge Saliba Juan Manuel Santos Giulio Sapelli Tomàs Saraceno Saskia Sassen Antonella Scott Andrea Segrè Lucia Sgueglia Steven Shapin Clay Shirky Konstantin Simonov Cameron Sinclair Uberto Siola Francesco Sisci Craig N. Smith Giuseppe Soda Antonio Sofi Charles Spence Donato Speroni Giorgio Squinzi Leena Srivastava Tom Standage Francesco Starace Robert Stavins Bruce Sterling Antonio Tajani Nassim Taleb Ian Tattersall Paola Tavella Viktor Terentiev Chicco Testa Wim Thomas S tephen Tindale Nathalie Tocci Jacopo Tondelli Chiara Tonelli Agostino Toscana Flavio Tosi Mario Tozzi Dmitri Trenin

Licia Troisi Ilaria Turba Luis Alberto Urrea Andrea Vaccari Paolo Valentino Marco Valsania Giorgio Vasta Nick Veasey Matteo Vegetti Viktor Vekselberg Jules Verne Umberto Veronesi Alejo Vidal-Quadras George Vidor Daniela Vincenti Marta Vincenzi Alessandra Viola Mathis Wackernagel Gabrielle Walker Elin Williams Changhua Wu Kandeh K. Yumkella Anna Zafesova Stefano Zamagni Antonio Zanardi Landi Edoardo Zanchini Carl Zimmer

Testata registrata presso il tribunale di Torino Autorizzazione n. 76 del 16 luglio 2007 Iscrizione al Roc n. 16116

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CUSTOMER 2.0 CONSUMERS WITH SUPERPOWERS

The means of consumption are (almost) infinite. The economy has opened up to a broader range, presenting solutions that previously seemed to be simply fads. Today the consumer is at the center of the economy, and everything is changing: the way people are making purchases, the reasons for desiring an object, companiesâ&#x20AC;&#x2122; communication and marketing strategies. Technological innovation is operating in the background, facilitating the awareness of users, creating new opportunities â&#x20AC;&#x201C; for both consumers and manufacturers â&#x20AC;&#x201C;and generating positive revolutions. We are in the era of participation and the market is no exception: encouraging dialogue among its actors is the first step taken to usher in a new consumer model that is evolved and efficient, and which could be a stimulus for the developing world.

Oxygen is the brainchild of Enel for describing the everchanging world