🌱 Why does the market focus on rapid new product development?
“[E]stablished firms are often replaced by innovators (through a “creative destruction” process), [therefore] today’s strategists focus on rapid new product development to defend their competitive space.”[i] “When marketing new products, the focus is not sustainable innovation, but predominantly on continuous improvement”.[ii]
🌱 What is the Osborne Effect?
“When the producer of the first portable computer, Osborne announced the ongoing development of a new, improved version of its portable computer, sales for the (best-selling) current computer instantly plunged and the company soon went bankrupt. As customers anticipate the release of a new product – with a higher performance and a lower price, they will pay less or are less willing to buy the products currently on stock. Therefore, the product life cycles of electronics are extremely short.”[iii]
🌱 How can the Osborne Effect be countered?
“The “Osborne Effect” can be countered by slowing down the introductions of new products. The slowing down of introductions of new products gives manufacturers additional time to develop their products, in terms of both product capabilities and product quality – this, in turn, assures that new products are notably better than previous ones. When consumers expect to be using a product for longer, they are willing to pay a higher price.”[iv]
🌱 What role can disposal or recycling fees play?
“When consumers need to pay disposal/recycling fees at purchase, the increased cost of the product to the consumer can slow down the rate of repurchase. The additional cost to consumers at the beginning of the product life cycle leads to the formation of a new equilibrium. Disposal/recycling fees can increase manufacturers' profits as their products do not become outdated as quickly. Through disposal/recycling fees, consumers may benefit as products become more durable – in response to there being a demand for products that do not need to be disposed of as frequently – and therefore the generation of e-waste may be reduced.”[v] “More durable products may also be passed onwards through the second-hand markets.”[vi]
This post is based on Christine Nikander’s research on e-waste and planned obsolescence at Leiden University College The Hague in 2015-2016. It entails extracts from her thesis titled “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”. This content is protected by Dutch copyright law (©2016 by Christine Nikander) and all rights are reserved.
[i] Joseph Guiltinan, “Creative Destruction and Destructive Creations: Environmental Ethics and Planned Obsolescence”, https://doi.org/10.1007/s10551-008-9907-9, 20; Christine Nikander, “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”, https://hdl.handle.net/1887/60627, 48.
[ii] Joseph Guiltinan, “Creative Destruction and Destructive Creations: Environmental Ethics and Planned Obsolescence”, https://doi.org/10.1007/s10551-008-9907-9, 20; Christine Nikander, “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”, https://hdl.handle.net/1887/60627, 48.
[iii] Alice LaPlante, “Slowing Introductions of New Electronic Products Reduces E-Waste”, http://www.gsb.stanford.edu/insights/slowing-introductions-new-electronic-products-reduces-e-waste; Christine Nikander, “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”, https://hdl.handle.net/1887/60627, 40.
[iv] Alice LaPlante, “Slowing Introductions of New Electronic Products Reduces E-Waste”, http://www.gsb.stanford.edu/insights/slowing-introductions-new-electronic-products-reduces-e-waste; Christine Nikander, “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”, https://hdl.handle.net/1887/60627, 41.
[v] Alice LaPlante, “Slowing Introductions of New Electronic Products Reduces E-Waste”, http://www.gsb.stanford.edu/insights/slowing-introductions-new-electronic-products-reduces-e-waste; Christine Nikander, “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”, https://hdl.handle.net/1887/60627, 41.
[vi] Joseph Guiltinan, “Creative Destruction and Destructive Creations: Environmental Ethics and Planned Obsolescence”, https://doi.org/10.1007/s10551-008-9907-9, 21-22; Christine Nikander, “E-Waste Trafficking as an Environmental Crime: Countering the Transboundary Movement of E-waste by Legally Limiting Planned Obsolescence”, https://hdl.handle.net/1887/60627, 41.