Credit was fairly well available in their communities, and payment services such as check cashing, money orders, and debit cards , while costly, were also available. Savings was the "missing market. Q: There are structural barriers to a lack of savings. What other barriers make saving money difficult?
The most obvious barrier is that they simply have too little income. In addition, there is a whole host of reasons why people put off savings, especially in the context of an economy where consumerism is common. A variety of levers can be used to support people who want to save not to force someone to save who doesn't want to. Some of these levers are simple changes in what I call the plumbing, making the process of savings easier. Others involve providing various incentives, be they financial or sociological.
The most interesting ideas—indeed the oldest—try to make savings a fun or satisfying experience. Taken together, these approaches run the gamut. There is no one solution, but different solutions will appeal to different people. Q: Let's talk about prize-linked savings. What are these savings vehicles?
Why are they so difficult to introduce in the United States? A: Prize- or lottery-linked savings programs have been in existence since and are currently in use in a host of countries around the world. They blend elements of lotteries and savings programs. In particular, these products offer savers protection against principal loss and liquidity, but instead of paying interest proportional to savings balances, they essentially "raffle off" the interest pot each period.
Savers give up a large chance of a small return for a small chance of a large, life-changing return. I have studied these programs in England, where they have been run for over 50 years, as well as in South Africa. They channel some of the demand for lotteries into a demand for savings. These so-called prize-linked products have been extraordinarily effective in generating savings over many centuries, and one wonders how successful they could be in the United States.
In the Clarksville survey, there were four characteristics that define people who were most interested in the product:. MaMA was remarkably successful, generating , accounts over two years. Unfortunately, this past spring the highest court in South Africa ruled it an illegal lottery and shut it down. In South Africa as in America, the state has a monopoly on what can be considered a lottery. A lottery is used as a source of public revenues. I'd be happy to have a debate about whether it's healthier for families to play the lottery or to save in lottery-linked savings programs.
In one case, the losers have worthless bits of paper; in the other, they have their savings. In the United States, if you were to roll out such a product exactly as it exists in other countries, you would likely be in violation of both state lottery laws and federal banking regulations. Fortunately, one can test the structure under sweepstakes laws. Preliminary results for the market research in Indiana show remarkably strong interest in the product.
87 Super Easy Ways to Save Money
We can't say there is a demand at this point, but there is interest in the product from low- to moderate-income households. I don't know if more than half of Americans or even half of low-income Americans would find this product of interest—but I am heartened by the fact that it has generated strong interest in South Africa, the United Kingdom, northern European countries, Middle Eastern countries, developing countries, and Central and Latin America. Senseless spending averted by laziness? By intentionality.
Oh, yeah. It turns out, even mild levels of dehydration can affect our thinking and our moods. You can save money by eating out less or by restaurant-ing smarter. When you do go out, take advantage of happy hour specials. Or eat apps only! You can earn discounts or free food in exchange for a couple minutes of your time. You can snob it up on a few items. But look into generic medications, trash bags, basic pantry items, cleaning supplies, and more.
This is a quick and incredibly simple way to save money every time you shop! Just like you need a plan for your money overall by making a budget , you also need a plan for your shopping by making a shopping list. Stick to the list!
Innovative Ways to Encourage Personal Savings
It keeps you from forgetting things and from overspending each month on your grocery budget line. Stores with BOGO offers are begging you to save money. Okay, not that far. But they are setting out the offers you need to sweep in and grab up. You can even stock up the pantry and freezer for the future. And guess what. You can sign up for an EveryDollar account today—at literally no cost—and set up your first budget in around ten minutes. Ready to start saving money with EveryDollar?
Download money-saving apps. Check in on your subscriptions. Go green er. Buy used. Plan creative dates. Evaluate your TV choices. Work out online. Ditch your credit cards. Wait before you buy. Enjoy the great outdoors. Brew your own coffee.
- Here are 20 easy ways to save some money every day.
- Raw Act of Possession.
- HISTORIAS DEL CHAT (Spanish Edition)!
Sell stuff. Search for free entertainment. Remove your debit card info from websites. Drink more water. Restaurant smarter.
You Need an Innovation Strategy
Buy generic. Innovation initiatives frequently fail, and successful innovators have a hard time sustaining their performance—as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy.
A strategy is nothing more than a commitment to a set of coherent, mutually reinforcing policies or behaviors aimed at achieving a specific competitive goal. Good strategies promote alignment among diverse groups within an organization, clarify objectives and priorities, and help focus efforts around them. But during my more than two decades studying and consulting for companies in a broad range of industries, I have found that firms rarely articulate strategies to align their innovation efforts with their business strategies.
There is nothing wrong with any of those practices per se. Individual best practices involve trade-offs. There is no one system that fits all companies equally well or works under all circumstances. An explicit innovation strategy helps you design a system to match your specific competitive needs. Sales representatives hear daily about the pressing needs of the biggest customers. Marketing may see opportunities to leverage the brand through complementary products or to expand market share through new distribution channels.
Diverse perspectives are critical to successful innovation. But without a strategy to integrate and align those perspectives around common priorities, the power of diversity is blunted or, worse, becomes self-defeating. A good example of how a tight connection between business strategy and innovation can drive long-term innovation leadership is found in Corning, a leading manufacturer of specialty components used in electronic displays, telecommunications systems, environmental products, and life sciences instruments.
Kent Bowen and Courtney Purrington. Over its more than years Corning has repeatedly transformed its business and grown new markets through breakthrough innovations. It invests a lot in basic research, a practice that many companies gave up long ago. And it invests heavily in manufacturing technology and plants and continues to maintain a significant manufacturing footprint in the United States, bucking the trend of wholesale outsourcing and offshoring of production. Executing this strategy requires Corning to be at the leading edge of glass and materials science so that it can solve exceptionally challenging problems for customers and discover new applications for its technologies.
That requires heavy investments in long-term research. Sullivan Park has become a repository of accumulated expertise in the application of materials science to industrial problems. Because novel materials often require complementary process innovations, heavy investments in manufacturing and technology are a must. About 10 years ago Bristol-Myers Squibb BMS , as part of a broad strategic repositioning, decided to emphasize cancer as a key part of its pharmaceutical business.
Recognizing that biotechnology-derived drugs such as monoclonal antibodies were likely to be a fruitful approach to combating cancer, BMS decided to shift its repertoire of technological capabilities from its traditional organic-chemistry base toward biotechnology. The new business strategy emphasizing the cancer market required a new innovation strategy shifting technological capabilities toward biologics. I have consulted for BMS, but the information in this example comes from public sources.
Like the creation of any good strategy, the process of developing an innovation strategy should start with a clear understanding and articulation of specific objectives related to helping the company achieve a sustainable competitive advantage. Rather, a robust innovation strategy should answer the following questions:. Unless innovation induces potential customers to pay more, saves them money, or provides some larger societal benefit like improved health or cleaner water, it is not creating value.
Of course, innovation can create value in many ways. It might make a product perform better or make it easier or more convenient to use, more reliable, more durable, cheaper, and so on. Choosing what kind of value your innovation will create and then sticking to that is critical, because the capabilities required for each are quite different and take time to accumulate.
For instance, Bell Labs created many diverse breakthrough innovations over a half century: the telephone exchange switcher, the photovoltaic cell, the transistor, satellite communications, the laser, mobile telephony, and the operating system Unix, to name just a few. But research at Bell Labs was guided by the strategy of improving and developing the capabilities and reliability of the phone network. The solid-state research program—which ultimately led to the invention of the transistor—was motivated by the need to lay the scientific foundation for developing newer, more reliable components for the communications system.
Research on satellite communications was motivated in part by the limited bandwidth and the reliability risks of undersea cables. Hence its emphasis on integrated hardware-software development, proprietary operating systems, and design makes total sense. Value-creating innovations attract imitators as quickly as they attract customers.
Rarely is intellectual property alone sufficient to block these rivals. As imitators enter the market, they create price pressures that can reduce the value that the original innovator captures. Moreover, if the suppliers, distributors, and other companies required to deliver an innovation are dominant enough, they may have sufficient bargaining power to capture most of the value from an innovation.
Think about how most personal computer manufacturers were largely at the mercy of Intel and Microsoft. Companies must think through what complementary assets, capabilities, products, or services could prevent customers from defecting to rivals and keep their own position in the ecosystem strong. And by controlling the operating system, Apple makes itself an indispensable player in the digital ecosystem. One of the best ways to preserve bargaining power in an ecosystem and blunt imitators is to continue to invest in innovation.
I recently visited a furniture company in northern Italy that supplies several of the largest retailers in the world from its factories in its home region. Depending on a few global retailers for distribution is risky from a value-capture perspective. Because these megaretailers have access to dozens of other suppliers around the world, many of them in low-cost countries, and because furniture designs are not easily protected through patents, there is no guarantee of continued business. The company has managed to thrive, however, by investing both in new designs, which help it win business early in the product life cycle, and in sophisticated process technologies, which allow it to defend against rivals from low-cost countries as products mature.
Certainly, technological innovation is a huge creator of economic value and a driver of competitive advantage. But some important innovations may have little to do with new technology. In the past couple of decades, we have seen a plethora of companies Netflix, Amazon, LinkedIn, Uber master the art of business model innovation. Thus, in thinking about innovation opportunities, companies have a choice about how much of their efforts to focus on technological innovation and how much to invest in business model innovation. Routine innovation is often called myopic or suicidal.
That thinking is simplistic. Although each dimension exists on a continuum, together they suggest four quadrants, or categories, of innovation. Other examples include new versions of Microsoft Windows and the Apple iPhone. Disruptive innovation, a category named by my Harvard Business School colleague Clay Christensen, requires a new business model but not necessarily a technological breakthrough.