The Green Executive Extract: Replacing Products with Information
It was 31 September last year that I submitted the manuscript for my second book The Green Executive. Last night I finally submitted the final comments on the final proofs (just 9 typos!) and the glowing endorsements from the great and the good eg:
“If you want to become a green business leader, this book is essential reading. Gareth Kane makes the business case most persuasively. This is a brilliant book full of practical advice showing the benefits of thinking beyond mere compliance.” Lord Shipley of Gosforth, OBE
Writing a book is a huge undertaking, but this last phase is undoubtedly the most frustrating because you just want to see it out there and there’s all this practical stuff to do. Anyway, to celebrate this little milestone (and help keep me sane), here’s a short extract from the chapter on creating new business models.
BTW: The book is out on 20 May, but you can pre-order The Green Executive now from Earthscan or Amazon. If you want a 20% discount and some other goodies, then make sure you subscribe to The Low Carbon Agenda before 12 May.
Replacing Products with Information
The product-service concept still includes a product, but one that is leased as part of a wider service. The next step is to remove the physical product altogether, by shifting from atoms to bytes. As we have seen, the digital economy gives a huge opportunity for such dematerialization, in the process saving up to ﬁve times the carbon that it uses, but also eliminating raw material use and the need for hazardous materials in product production. Examples include:
- Apple’s iTunes sells music in an MP3 format without that music ever becoming embedded in a physical object such as a vinyl record or a CD;
- Most cable TV companies now offer ‘movies on demand’ – the entertainment is provided without becoming a physical product such as a video tape or DVD;
- eBooks give you the information stored in a book without the paper, card and glue. On Christmas Day 2009, eBooks outsold paper books on Amazon.com for the ﬁrst time;
- Digital cameras remove the need to produce and distribute ﬁlm and processing prints and slides. The user decides which pictures, if any, are worth printing. This eliminates materials for the ﬁlm itself, photographic paper and hazardous printing chemicals;
- Smartphones and downloadable Apps are allowing users to buy many functions without purchasing new products. For example, the interviews in this book were recorded using an iPhone App, iTalk, rather than a physical Dictaphone.
The nature of the digital economy means that many of the risks we saw in product-service systems are minimized for digital products. Investment in capital is minimal and many modern physical products (CDs, DVDs, books) go through a digital stage in any case, so the digital product has little or no marginal cost to produce. Customer pull is strong given the hip image of the digital product (for example Apple products), the emergence of the portable multi-functional digital lifestyle device (iPhone and iPad) and the undoubted convenience of purchasing by downloading.