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S I T R A S T U DY M AY 2 0 1 7

THE CHANGING
RELATIONSHIP
BETWEEN PEOPLE
AND GOODS
A fresh perspective on our need for “stuff” and the
role of sustainability in emerging consumer behaviour
Oskar Korkman & Sharon Greene
© Sitra 2017

Sitra Studies 122

The changing relationship between people and goods:


A fresh perspective on our need for “stuff” and the role
of sustainability in emerging consumer behaviour

ISBN 978-951-563-995-0 (paperback)


ISBN 978-951-563-996-7 (PDF) www.sitra.fi
ISSN 1796-7104 (paperback)
ISSN 1796-7112 (PDF) www.sitra.fi

Erweko, Helsinki 2017 PEFC/02-31-120

SITRA STUDIES is a Publication Series which focuses on the conclusions


and outcomes of Sitra’s future-oriented work.
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Preface

Success in business requires understanding customers, getting close to them and analysing
their behavior. Figuring out what truly makes customers tick is key. This allows the creation of
tangible and intangible products that customers truly desire and the communication of these
benefits in the best way, in the right place at the right time.
Sitra received an opportunity to participate in an honestly international study on changes
in consumer behavior with Alice Labs. We were excited, because this type of broad under-
standing is precisely what is needed: the lessons from this study must be available to Finnish
companies. We also wanted Finland as a country to be included in the study, so that we could
compare Finland to other countries. Where are we lagging, where might we be front runners?
Where do the greatest opportunities lie?
It is our hope that this report will also provide the reader insights on the role sustainabil-
ity plays for consumers, as well as tools for bringing sustainability to the fore. A common
refrain is that consumers care about sustainability in surveys but only about price when in
stores. This study provides some thoughts on how sustainability often plays an important part
in creating a well-rounded product.

Helsinki, April 20th, 2017

Markus Terho Matti Aistrich


Project Director Senior Lead
Sitra Sitra
Sitra studies 122
The changing relationship between people and goods
May 2017

Contents

Introduction 4
The Stuff in Flux project 11
Flexible stuff 18
Perfect stuff 24
Stuff for pleasurable engagement 30
Familiar stuff 36
Summary and conclusions 42
Methodology and scope 46
References 48
The authors 49
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Introduction

Historically, abundant choices have defined more mobile, versatile and demanding. These
consumer society. Shopping for new and a consumers, with their grassroots market power,
greater range of goods occupies the core of are beginning to influence industries to change.
developed societies. In other parts of the world, Furthermore, this study serves to shift tradi-
emerging-market consumers have rapidly tional market assumptions from fast cycles,
adopted these habits. Collectively, we have come novelty and ownership towards ideals of selec-
to believe that access to and ownership of tivity, longevity, collectivism and resourceful-
products define our lifestyle and quality of life, ness.
as well as our happiness. The key component of this study is the
This philosophy drives many consum- identification and intense observation of a
er-goods businesses. Today successful goods group of consumers we refer to as the “leading
companies are developing new products at an edge.” On three continents (North America,
increasingly rapid pace, advertising them as the Europe and Asia), leading edge consumers share
newest and greatest. From technology to fashion a crucial set of values—that is, their curiosity,
and household items to fast-moving consumer open mindedness and desire to learn about
goods, innovation often draws upon novelty. what is new on the marketplace. These individ-
Novelty, however, quickly wears off, necessitat- uals believe in creativity and finding innovative
ing replacement with newer and better prod- solutions to today’s problems. They also exercise
ucts. their soft power in terms of leadership and
The technology industry offers a prime influencing change.
example of this trend. Replete with cycles of We believe the new direction these con-
programmed obsolescence, consumers expect sumers have shown us is not only valid for the
and “need” new models more frequently. Many leading edge, but will also become increasingly
products last only a couple of years, often three relevant for the mass market. Their consump-
at most. tion habits create new business opportunities,
Such is the modern mass-market reality. while simultaneously placing more pressure on
In early 2016, inspired by the belief that the established businesses to change and adapt to
market status quo was being challenged and meet a new set of expectations.
shifting, we set out to identify the nature of such
transformations and the potential impact on
business and society.
This study revealed an emerging story
about consumption, characterised by the emer-
gence of market-shaping consumers who are

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

A shift in our
relationship to stuff
A structural shift has changed consumers’ ­relationships
to goods. This shift is not an abrupt move away from
the existing model. Rather, it better reflects a new set of
behaviours, values and needs emerging in parallel alongside
those that already exist.

STARTING POINT

Stuff is inherently human


We organise our lives around stuff. Furthermore, stuff will continue to play an important
role as we move into an increasingly digital age.

The role of goods ­constantly changes


These changes lend increasing importance to the digitisation of everyday life and the
emergence of new business models. These changes relate, for example, to how we work,
environmental issues such as climate change, increased political and economic uncer-
tainty and the emergence of post-materialism values.

Change occurs from within the market


Shifts are occurring from within the current market and, therefore, can sometimes be
mistaken for simple evolution.

Change requires businesses to adapt, innovate, embrace new technologies and


develop new business models
For example, the “sharing economy” is a part of this development, but neither the only
nor the most dominant model.

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

The nature of the emerging ing specific goods can serve to externally
change express non-materialistic self-improvement
through the quest for items that correspond to
Stuff and owning stuff is important. Envisioning functional or aesthetic perfection or support
a future where stuff does not continue to play an our aim to achieve optimal performance. Such a
important role in people’s lives is difficult. That quest can include searching for the perfect work
role, however, is changing, and it is quite likely clothes, the ideal sport shoes or the perfect
that the overall amount of material goods will nutritional balance in a meal substitute. Con-
decrease, particularly in more developed markets. ceptually, consumers discriminate by finding
Leading edge consumers do not necessarily the item that perfectly corresponds to their
aspire to own goods associated with fast cycles, unique set of requirements. By removing
novelty and an individual’s status. In addition, unnecessary clutter, consumers can create a
changes can be seen in the mass market itself. space for calm personal development.
In essence, new consumer behaviours
come into play.
Possessing stuff for a long time is desirable New expectations and
and attractive. Keeping and using things for a opportunities
longer period of time and possessing things that
evolve or improve through use became valuable. These behavioral changes are creating new
This behaviour, characteristic of generations requirements and expectations in the market. In
past, represents a fresh approach among today’s this report, we introduce four opportunities to
consumers. Fast consumption is increasingly create new value in the market. We call these
seen as old school or “passé,” particularly among “value territories,” because they include differ-
leading edge consumers. ent attributes that create value when combined. 
Distinction comes from skills and autonomy; FLEXIBLE STUFF. This represents a
stuff tells a story. The quest for status symbols is value territory focused on constant innovation
being gradually supplanted by the quest for providing solutions to everyday challenges.
symbols of distinction. For today’s new con- Such solutions are multifunctional, flexible,
sumer, distinguishing oneself is not merely adaptable, resourceful and planet friendly.
accomplished through buying more exclusive This value territory combines personal
and more expensive products. Success is multi- mobility with the solidity and reassurance of the
dimensional, and the desire to acquire items as physical realm. This territory allows individuals
trophies indicative of economic success gives to reduce the volume of objects in their life,
way to a desire to possess items that tell a story while also providing the safety and security of
about one’s personal knowledge, experience and ownership.
acquired skills. For example, consumers may want multi-
Stuff helps make the world a better place. purpose clothing suitable for both work and
In the past, consumption of mass-market prod- sports.
ucts served to satisfy personal desires. Increas- PERFECT STUFF. This value territory
ingly, today’s consumers seek to connect with identifies the extraordinary in the ordinary,
collective interests and products that support providing the perfect version of the mundane
those interests. This collective interest can take object. Such perfection would reduce consump-
the shape of reflecting environmental values or tion while providing confidence to do and be
choosing to consume products that create con- more. Perfect things support the consumer’s
nections with others, such as local communities. quest for an optimised daily life.
Stuff helps us to achieve our personal best. Such consumption requires an extreme
Choosing specific goods and how people inter- selectivity. The perfect object is fit-for-purpose
act with things may also allow us to regain a and does not necessarily adhere to the latest
sense of control in a fast-moving world. Choos- trends. Perfect objects characterise a consumer

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

who choose based on skill, independence and change, the long-term ownership of objects that
wisdom. Such a consumer is responsible. A low age and evolve through use appears new.
negative impact on the environment is also For example, consumers want to buy a
becoming a significant component of the per- product that evolves with them and that ages
fection formula. gracefully. Such products include a kitchen
For example, one respondents described knife or a leather bag that with more use gradu-
his idea of a perfect backpack as having an ally fits its owner’s hand better.
integrated solar power panel and kinetic power THE ROLE OF SUSTAINABILITY.
generator linked to his walking shoes, providing Across all territories sustainability plays a
a source of clean energy to charge his smart- crucial role.
phone and to heat water. Sustainability emerged not as a stand-alone
STUFF FOR PLEASURABLE requirement for consumers, but as a characteris-
ENGAGEMENT. In this territory, priority is tic linked to other attributes.
given to a collective and shared value. Physical For instance, for flexible stuff, sustainabil-
objects represent means of expressing the ity is based on multipurpose products and
personal values of the “engaged” consumer. The materials. One example lies in Lynk&Co1,
value of things extends beyond material goods launched by Chinese manufacturer Geely in
and takes into account the human and environ- collaboration with Volvo. Leveraging the bene-
mental impact. Yet, goods also provide pleasure. fits provided by the internet, the carmaker’s
Enjoyment and removing the guilt associated system is described as the “smartest driving
with consumption help the conscious consumer platform ever made”, allowing consumers the
renew their collection of goods through pleas- option to buy, lease or simply borrow a car.
urable consumption. Among perfect stuff, goods are produced
This territory allows individuals to enjoy aimed at perfectly fitting a function. Here, a few
consumption, but in a responsible way. Here, high-quality products replace multiple lower
aspects of hedonism and luxury relate to sus- performance or quality items. One example of
tainability. perfect stuff lies with Ministry of Supply appar-
For example, consumers may seek to buy el,2 the founders of which are driven by their
premium goods, such as a pair of sneakers made desire to understand the problems individuals
from ocean plastics. Such an option makes the face related to formal workwear. Ministry of
purchase even more appealing. Supply was launched through a Kickstarter
FAMILIAR STUFF. Objects falling project aimed at making the perfect men’s
within this final value territory focus on longev- formal work shirt. Emphasising the use of
ity and familiarity. Such goods endure and innovative fabrics and tailoring methods that
evolve with the consumer and appear to reduce waste, the company’s founders claim to
improve over time. Consumption slows down, make the best workwear ever produced.
replacement cycles diminish and resources are Stuff for pleasurable engagement combines
protected. gratification, guilt-free consumption and sus-
This type of consumer choice renders tainability. For instance, exclusive carmaker
objects more valuable over time and creates an Tesla3 combines a premium driving experience
experience of newness or renewal. Perhaps with clean energy and societal benefits. Its
because we are conditioned to expect frequent appeal is undeniable, whereby Tesla’s most
affordable car, the Model 3, received 400 000

1  http://www.lynkco.com/en/
2  https://ministryofsupply.com
3  http://www.tesla.com

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

pre-orders.4 With Tesla’s electric models, we see Lessons for businesses


no evidence that individuals eschew consump-
tion for sustainability. New consumers no Consumers increasingly demand more in par-
longer seek a purist view of sustainability; ticular ways.
instead, they seek sustainability as a product Contemporary consumers, especially
benefit, one symbolising that they are responsi- leading edge consumers, adopt a multifocal
ble citizens while also satisfying their consump- approach when buying.
tion desires. Leading edge consumers expect many
Familiar stuff primarily signifies sustaina- things simultaneously. Merely branding goods
bility through reuse, repair and longevity, as ecological or sustainable is insufficient to sell
stressing the ideal that some things age beauti- a product. Ensuring that sustainability forms a
fully and improve over time. Companies such as part of the mix renders a product desirable.
Patagonia emphasise the repair and reuse of As illustrated in the value territories
their garments, as illustrated by their “Stories described above, consumers expect goods that
We Wear” video collection on YouTube.5 are at once both new and old. That is, goods can
Smart brand developers, product develop- be luxurious and sustainable, as well as unique
ers and marketers will recognise these opportu- to an individual, but also appear to universally
nities to establish additional value on the mar- satisfy some task in the best possible way.
ket. These include using sustainability as an In this study, we found an easy coexistence
integral part of any value proposition, rather among sets of seemingly contradictory ideals
than simply ticking a checklist item or meeting concerning business models and products.
a legislative requirement. Being culturally relevant today means
building tensions into a product. Satisfying one
or another benefit no longer suffices — often
two and even three sets of benefits must be
combined to create a competitive and clear
business model. The competitive edge emerges
more through systemic thinking than by nar-
rowing one’s focus.

4 http://www.theverge.com/2016/4/21/11477034/tesla-model-3-preorders-400000-elon-musk
5  For example, https://www.youtube.com/watch?v=llufipzI8_k

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

FOUR OPPOR-
TUNITIES FOR
CRE ATING
VALUE

Flexible stuff Versatile Mobile Innovative Non-ownership

Perfect stuff Perfect fit Great


Innovative Ownership
for function aestetics

Stuff for pleasurable Low


Company
environmental Guilt-free Luxury
engagement with a purpose
impact

Familiar stuff Longevity Familiarity Newness Basic/ordinary

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

WE MUST:

Understand changing consumer behaviours


Applying the perspective of the leading edge consumer represents an effective means
towards action while looking towards the future. In what follows, we describe how to
quickly identify market dynamics and interpret them as consumer requirements.

Revisit market definitions


Traditional tools do not allow for a pluralistic view of the market. Consumer segmenta-
tion, for example, is not necessarily the best way of understanding people’s seemingly
contradictory needs and values in the market. We encourage companies to apply alter-
native methods to understand today’s con­sumers. One option lies in focusing more on
understanding the dynamics of certain behaviours ins­tead of focusing on differences
between consumers.

Learn to manage new value propositions that create aspirations


New management requirements consist of various dichotomies, such as fast–slow, old–
new, personal–collective and luxurious–inclusive. Digitisation and digitally empowered
business models make possible the establishment of businesses that leverage and drive
multiple benefits. Airbnb6 — the successful sharing platform for renting rooms, flats
and houses — built their business on extreme convenience, global coverage and low
prices. Simultaneously, Airbnb allows for a truly local experience.

Emphasize sustainability as a part of the overall value proposition


Obviously, sustainability and its related values represent an important component
across all of the value territories identified. The leading edge consumer expects compa-
nies to have a purpose beyond serving its shareholders. What is good for society and the
environment as a whole needs to be a crucial component of what a company does and
sells.

6 http://www.airbnb.com/

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

The Stuff in Flux project


“The future is already here
— it’s just not evenly distributed.”
(William Gibson, 31st of August 1993)

The Stuff in Flux project aims to understand Third, we integrated thinking on new
how the relationship between consumers and technologies and business models with our
goods is changing and whether this change insights into the evolution of consumers. The
represents a systemic and structural shift away future is about more than simply replacing the
from what we call the “abundance model.” old with the new. In most cases, the future
The abundance model refers to a late 20th represents a reality where multiple values and
century mature-market form of Western consum- approaches coexist.
erism. This form of consumerism focuses on the Finally, and perhaps most importantly, this
idea that shopping and the acquisition of goods project ultimately aimed to establish clear
or things is hedonistic, pleasurable and linked to guidance for managers on preparing for the
enhancing individual identity and status. future. Whether a company is already directly
In this project, we sought to examine a or indirectly selling consumer goods, or plan-
cross-category perspective to evaluate whether ning to do so in future, this report was created
shifts in behaviours and requirements occur to help companies become and remain competi-
across multiple categories simultaneously or if tive, both in Finland and globally.
they only relate to specific product categories. The appendix provides further details on
First, we examined goods and consumers our methods and an overview of our approach.
holistically, focusing on an understanding of the After completing thorough background
overall change in how people value goods today research identifying the key themes of change,
and how goods are likely to be valued in the we interviewed 50 individuals under the age of
future. We studied big-picture dynamics in 35 in Stockholm (Sweden), Malmö (Sweden),
relationships between people, life contexts and San Francisco (USA) and Bangalore (India)
macro-level trends, and how these impact who fit our sociocultural definition of leading
expectations, attitudes and behaviours in rela- edge consumers. By this we mean that these
tion to goods. individuals are recognised within their circles as
Second, we applied a sociocultural lens to authorities in “knowledge about newness.” Such
investigate the relationship between people and knowledge and accompanying curiosity is
goods to explore how individuals interact with confined neither to a specific category nor to
stuff in the context of everyday life. By doing so, “stuff.” These consumers provide us with clues
we framed consumer opinions within a deeper regarding the type and direction of changes to
understanding of social and cultural contexts as come in the future.
a means to develop deep human insights and to We spent more than 350 hours in one-on-
answer our key research questions. one discussions and activity-based hackfests

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

with these individuals. Following an intense 3. The individual feels a connection to the
period of discovery, we formulated a series of world around them, and believes that all
qualitative hypotheses about the nature of this actions cause reactions and that their own
change. These were then tested in an online actions can bring about change. (Notably,
quantitative survey. This online study was this mimics a form of systems thinking.)
conducted in seven markets in September 2016,
and allowed us to quantify the leading edge Through the identification and quantifica-
consumer segment, leading edge consumer tion of the leading edge consumer category, we
behaviours and the degree to which such con- also identified and quantified the fast follower
sumers are already impacting the larger mass and mass adopter segments of consumers. In
consumer base. our quantitative analysis, we examine two
Leading edge consumers represent approx- primary dynamics within these segments. The
imately 11% of the four-county population first is the proportion of leading edge consum-
which form the perimeter of this report. They ers who are already adopting new behaviours.
were identified by the degree to which they The second is the proportion of mass adopters
correspond to a set of shared characteristics. lagging behind in the adoption of new behav-
These characteristics, previously identified iours. This contrast allows us to formulate
through a descriptive study, are shared among predictions regarding the adoption potential
leading edge consumers: and, to an extent, the relative speed of adoption.
In this report, we confine our discussion to
1. The individual is recognised by their social responses from individuals in four (Spain,
circle as a “go-to” person Germany, Finland and the USA) of the seven
for information on new stuff such as markets we studied.
music, culture and technology.

2. The individual dedicates time to creative


pursuits and activities. (Notably, creativity
has become a highly desirable attribute for
those who wish to stay ahead.)

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

QUALITATIVE
AND QUANTI-
TATIVE EXPLO -
RATION

Stockholm Finland

Malmö

Germany

United States Spain


San Francisco
and Silicon Valley

Bangalore

Qualitative exploration Collaborative work:

10
senior decision-makers
hours total leading edge participants
from 4 companies

Quantitative exploration:

4 2400
markets respondents
(7 total)

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

What is changing globally SKILLED, MOBILE AND AUTONOMOUS


To align with a volatile world in constant
Historically, post-World War II mass produc- motion, consumers actively experiment with
tion combined with a shift from a demand- decluttering. They become mobile and autono-
driven to a supply-driven economy drove the mous while simplifying and making parts of
abundance model within business. their lives more convenient.
For more than 50 years, marketing efforts
have focused on influencing consumers to feel a BETTER ME
need for larger volumes or greater quantities of Consumers seek goods as a way to focus and
goods. These efforts go hand-in-hand with the regain a sense of control in a fast-moving envi-
creation of a self-generating model — that is, ronment. Some goods also express the individu-
the more you have, the more you want or need. al’s quest for non-materialistic self-improve-
John Berger, in his 1972 book Ways of Seeing,7 ment or “betterment.”
described this process as making consumers
“envious of the selves we might become” once BETTER WORLD
the advertised product is acquired. Goods can connect to a larger narrative,
Although this theory still holds true, we whether environmentally or socially. Therefore,
find change taking place among leading edge consumers see their choices as carrying a long-
consumers. term impact.
We now see an ongoing shift from the
abundance model towards a multifocal model. STABLE AND ENDURING
This multifocal model seeks to satisfy Consumers seek to balance their need for
several different sociocultural needs and values mobility with things that provide a sense of
simultaneously. Previously, the consumption of stability and longevity.
goods was primarily a matter of personal iden-
tity and status, accompanied by a sense of We found these four disparate behavioural
security derived from occupying a “normalized” themes emerging alongside more familiar
position within society. Now, amid an increas- consumer behaviours. That is, they do not
ingly more fluid digital world, goods relate to oppose existing behaviours; they represent
behaviours that represent an entire spectrum of progressive alternatives.
needs. Among these behaviours, we identified
four predominant themes.

7  Berger, John (1972), Ways of Seeing, British Broadcasting Company and Penguin Books. London.

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Such consumer behaviours occasionally losophy driving Method9 household products.


advocate for brands that do not invest in mar- Method is committed to delivering products to
keting, preferring brands that give back to the create a clean home, but with the added innova-
community in some way. For example, the tion of doing so in a planet friendly way.
company Tom’s Shoes8 was created based on the These behaviours threaten any goods
idea that a company could develop a strong business that continues to rapidly push products
following through its ideals rather than through to market while adhering to late 20th century
marketing. In this case, for each pair of shoes formulae for success. However, these same
Tom’s sells, the company donates a pair of shoes behaviours simultaneously open up new oppor-
to a needy child. Given the success of this tunities and create new markets. In many cases,
approach, Tom’s later extended the practice to these behaviours disrupt existing aging markets
eyewear as well. that resist innovation.
Such behaviours could also lead to replac- In what follows, we examine all of these
ing existing purchases with products that carry new behaviours, and illustrate how these behav-
an inherent collective benefit, such as the phi- iours create new opportunities on the market.

Skilled, mobile
CONSUMERS & autonomous
HAVE A WIDE
SPECTRUM OF
NEEDS

MULTI-FOCAL Better
Better me
MODEL world

Stable & enduring

8  http://www.toms.com/
9 http://methodhome.com/

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

What is driving change value of goods. We will also illustrate the impact
of various post-material tendencies.
Since the turn of the millennium, we have Digitisation has become an integral part of
witnessed an unprecedented wave of change and everyday life. This change in the way we live has
instability, culminating in the last decade of been fundamental, ranging from communica-
economic turmoil. While technology (such as tion to shopping to entertainment. Digital
artificial intelligence and robotics) continues to goods have many benefits, but also create a
impact how we live and work, climate change is longing for alternatives to “streams” of content.
becoming an ever-present threat. Unsurprisingly, we also see a resurrection of
In the a world of volatility, uncertainty, vinyl records and old-style cameras. The most
complexity and ambiguity — the so-called advanced consumers revert back to a material
VUCA world — society’s attitudes and behav- world in search of stabilising rituals, local
iours are changing. In the face of uncertainty, connections and, in some cases, mindfulness. In
we see an increasing need for preparedness, a this context, some physical goods take on new
sense of mobility and a need for versatility meanings as explicit counter-reactions to the
sufficient to adapt to changing circumstances. digitisation of everyday life.
These newly dominant attitudes and behaviours The many benefits of digital goods are
are driving some of the major changes in con- undisputed. In many cases, digital goods have
sumers’ relationships to material goods. created more flexible relationships to various
The economic uncertainty following an products. We will discuss the sharing economy,
extended period of unrestrained consumption including its current limitations and future
and affluence has accelerated the emergence of possibilities. Furthermore, we understand that
post-material values, predominantly spear- sharing and more flexible arrangements involv-
headed by millennials — individuals born ing possessions remain impossible without
between 1982 and 1997. Instead of valuing digitisation. The promises of technologies such
ownership and possession, these new consum- as blockchains will only further enable such
ers are more interested in relationships, satisfac- tendencies.
tion with life and their health. The World Values Powered by an increasing transparency
Survey illustrates how these values have histori- afforded by the internet and better access to
cally evolved, where the Nordic countries tend technology, consumers are making better-in-
to top global charts on post-material values.10 formed choices and progressively opting for
In our analysis, we see how post-material products that carry some form of social or
values create new types of relationships between environmental benefit. Companies are under
people and goods on the market. But does an increasing pressure, both through legislative
increase in post-material values indicate that changes and consumer expectations, to provide
materialism is declining? Or is materialism goods that minimise any potential negative
being redefined? In late 20th century material- impacts.
ism, or what is sometimes called “terminal The convergence of these forces of change
materialism,”11 was ownership an end in itself? generates new and distinct consumption behav-
Is the 21st century about rejecting possessions iours. The rise of these behaviours shapes
or becoming more selective with regards to emerging sets of requirements, and in turn
ownership? frames value territories or opportunities for
In this report, we provide an answer to those capable of interpreting the signs.
these questions in the context of the changing

10 http://www.worldvaluessurvey.org/wvs.jsp
11  Csikszentmihalyi and Rochberg-Halton (1981), The Meaning of Things. Cambridge University Press

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

These new requirements can be grouped into In this section, we describe these opportu-
four value territories, which we label: nities, identified through our conversations with
—— flexible stuff leading edge consumers and quantified through
—— perfect stuff our quantitative survey among mass market.
—— stuff for pleasurable engagement
—— familiar stuff.

Skilled, mobile
CHANGING & autonomous
BEHAVIOURS,
CHANGING
REQUIREMENTS
AND NEW
OPPORTUNI- Flexible
TIES. stuff
Four interconnected and
overlapping value territories
Perfect
driven by predominant beha- stuff Better
vioural themes. Better me
world
Pleasurable
engagments
Familiar
stuff

Stable & enduring

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Flexible stuff
To align with a world in constant movement, Part of this lightness concerns the environ-
consumers increasingly exhibit a strong need to mental impact of products. We found that
be prepared to move, change and evolve. They leading edge consumers seek to combine spe-
develop strategies to remain light and agile, cific functional qualities with sustainability.
acquiring skills and seeking products that Such products minimise their negative impact,
enable readiness and mobility. including those that have an end-of-life solution.
This desire to remain mobile and flexible Furthermore, versatile and modular products
generates a complex set of requirements for the yield a larger range of functional benefits for
physical things in their lives. Desirable qualities consumers. Therefore, consumers need fewer
include lightness (mobility or compactness), products to create a sustainable future, while
flexibility and versatility. managing to do more with less.
These product qualities facilitate an ease of In this regard, constant innovation is
movement and experiences providing a sense of necessary, because the primary requirement
achievement. relies on providing new and intelligent solutions
One participant spoke about a favourite to everyday challenges, allowing individuals to
bag, illustrating how certain products enhance adapt their lifestyle to keep pace with their
one’s sense of personal capabilities. “Using that changing environment.
bag means that my hands are always free; it’s As such, new usage models without owner-
like I have another set of tools available to me.” ship find a natural home in this territory. Cur-
Leading edge consumers seek out products rently, however, many participants in our study still
that combine the promise of mobility and prefer ownership, primarily because the “sharing
versatility with products providing a strong economy” has not necessarily delivered on the
connection to what is physical and real, while requirements of easy access and convenience.
also providing assurance and comfort without
being weighed down.

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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

“The sum of the functions (of a product


or service) adds up to much more than
the number of its functions.”
(Male, 32, Stockholm)

19
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Key behavioural changes Many of the leading edge consumers in our


study relied on vocabulary related to a feeling of
External drivers including volatility and uncer- “lightness” and “heaviness.” One respondent in
tainty create a need for preparedness among San Francisco explained how she clearly distin-
consumers, as well as a desire to remain light guishes between furniture and camping gear.
and agile. The acquisition of skills and knowl- For example, for camping she will invest in a very
edge, instead of the accumulation of objects, high-quality jacket, providing her with a greater
contributes to this sense of preparedness. sense of preparedness, mobility and openness to
Currently, we are witnessing an important new experiences. By contrast, furniture purchases
evolution in values across mature markets, as left her feeling heavy and tied down.
well as a growth in markets characterised by Respondents referred to backpacks as
second-generation middle-class consumers.12 contributing to feelings of autonomy and light-
Individuals are redefining their social status not ness. The participants in this study considered
through late 20th century possession-driven smart bags, water flasks (rather than plastic
ideals, but through the acquisition of skills and bottles), multipurpose tools and versatile cloth-
knowledge that allow them to assert a degree of ing as valuable items contributing to a sense of
distinctiveness. Constant learning, skills acqui- lightness and mobility. Multifunctional objects
sition, flexibility and adaptability signify dis- empower individuals in their quest for adventure.
tinctiveness. Distinction, unlike more hierarchi- We found that 75% of leading edge con-
cal statuses, does not derive from ownership or sumers engaged in this the move from a focus
possessions; symbols of success consist of on acquisition and accumulation of goods to a
neither the quantity nor the value of one’s focus on acquisition of skills, knowledge and
possessions. experiences. From a mass-market perspective,
The link between flexibility, mobility and 33% of the four-country respondents have
distinctiveness stems from valorising the acqui- already adopted these new behaviours. The
sition of skills and knowledge rather than mass-market potential of adopting this attitude
material acquisition. This shift becomes visible is strong across the four markets we studied. At
in how individuals carefully select objects that 22%, Finns fall a little below the four-country
play a role in their life and their ability to reduce average; yet there is no evidence to indicate that
the number of objects they possess. The careful the mass potential in Finland is weaker than
and intelligent selection of an object supports that in other countries. Thus, the shift towards
an active and non-material lifestyle. This leads mass adoption may simply be a little slower
to a sense of self-improvement. among Finns.

12  Take for example China, where today’s young adults are the children of those who got ahead due to the opening up of the
economy and the first wave of economic growth.

20
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

ADOPTION OF
BEHAVIOURS
RELATED TO
FLEXIBLE
STUFF.
Key beh avio r d r iver :

STUFF Being mobile and


flexible increases
self confidence

75%
Leading edge
Consumers

33% Mass potential

4 countries High

22% Mass potential in Finland

Slower adoption
Finland

21
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

A new generation of products consumers, these brands represent business-­as-


usual alternatives to hotel and taxi services.
A new generation of products lives up to the Convenience, immediacy and accessibility
requirements of this value territory. The desire are important foundations for the contemporary
for mobility and autonomy touches upon all consumer. But these qualities do not always
aspects of life. stand at the core of the “sharing economy.”
Mobile phones — more specifically, smart- Ownership is, in many cases, more convenient
phones — represent the archetypical tools for an than various forms of sharing, such as lending,
autonomous and mobile lifestyle. During the swapping and co-ownership.
past five to ten years, smartphones have devel- Lynk & Co, a new brand, developed a
oped into versatile multipurpose devices. Lead- platform for car sharing as well as ownership.
ing edge consumers view smartphones as a For example, the company created a digital key
commodity (albeit an expensive one) and their allowing a consumer to rent a car when it is not
purchasing aspirations focus on different prod- in use. Lynk & Co aims not simply to transform
uct categories for example, backpacks and high automotive technology, but to create the notion
performance or technical outdoor clothing. of a car as a shareable product.
In addition, we found an increasing popu- Innovation also exists in the field of auton-
larity of drinkable “super meals,” such as omous vehicles. Starship Technologies15
Ambronite, Huel, Soylent and Joylent,13 as recently developed a robotised delivery vehicle
alternatives for consumers who want to spend — a small self-driving unit that can distribute
less time on preparing meals without skimping shareable tools and necessities — facilitating the
on nutritional content. Some brands have transportation and delivery of goods. In doing
developed subscription-based business models so, the temporary use of a hammer or a jacket,
to enhance convenience. In addition, traditional for example, becomes more convenient and may
product categories, such as rucksacks, bags and change attitudes related to ownership.
flasks, are being reinvented. Crumpler bags, Peer-to-peer micropayments, together with
Timbuk2 bags and Seatosummit are brands trust mechanisms such as blockchain, will boost
designed for the urban nomad whose goals are the sharing economy as payments become more
lightness and mobility.14 fluid. Blockchain allows for new and decentral-
The “sharing economy” is a core feature of ised structures. Similar to Wikipedia which
autonomy and mobility. Accessibility without does not have a central authority, blockchain
ownership partially fulfils such market expecta- build trust between unknown partners in new
tions. Until now, the promise of the “sharing ways. The technology created a dynamic “con-
economy” left this need unmet, with the possi- tract” system in which participants’ engagement
ble exception of brands such as Airbnb and in a contracted activity dynamically recalculates
Uber. However, in the eyes of leading edge the share of ownership.

13  https://ambronite.com; https://huel.com/; https://www.soylent.com/; https://www.jimmyjoy.com


14  http://www.timbuk2.com; http://www.timbuk2.com; http://www.seatosummit.com/
15 https://www.starship.xyz/

22
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Business implications The challenge is making money while


simultaneously reducing “weight” for consum-
Flexible stuff provides a business opportunity ers. The sharing economy forms a part of this;
for items produced around reducing the need but an inherent need for a sense of long-term
for new materials and for which production relationships to physical things exists, providing
negatively impacts the environment. a rich and immediate innovative ­opportunity
for companies.

SEVERAL ASPECTS OF FLEXIBILITY REQUIRE BUSINESS ACUMEN:

A modularity and ability to customise for a mobile lifestyle through compact


multipurpose products
This includes developing products that can be adapted to different uses.

Physical lightness
Lightness here represents a sense of lightness through independence and not weighing
one down. Physical lightness forms a part of this ideal

Multipurpose materials
How can the same materials be used for multiple purposes? By way of example, can
clothing be smart for work, as well as suitable for travel or biking, for instance, without
wrinkling?

Helping to reduce materials


Perfect products create interest and a commitment among consumers. Companies
should tap into this as a means of increasing their credibility on the market.

Helping individuals to move, store and remove stuff


This refers to the opportunity to reduce the weight of consumer materials without
necessitating disposal. Here, we refer to the convenient storage of, for example, seasonal
products, such as winter clothing.

23
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Perfect stuff
Above, we touched upon the notion of a quest need for a product that allows the consumer a
— a concept we will more fully examine in this slower-paced lifestyle and the ability to focus.
section. This quest reflects a relentless search to These types of products should generate
find the perfect fit-for-function item. That is, a more confidence, comfort and a sense of con-
product that will not only do what it should do, trol. This echoes the flexible living requirement
but will do it better than any other product for products that do not encumber or tie down
could. The ideal surrounding perfection builds the consumer.
on an expectation of constant innovation — This territory also creates a demand for
taking something good and making it even new brands that accept the challenge of perfec-
better, keeping it up to date, while incorporating tion, as well as highlights the need to provide
new and incomparably useful functions. This is consistent, high-quality products over time
not about “the latest,” but rather about “the best.” among more well-established brands. These
This area offers many creative opportuni- brands can ensure trendy and contemporary
ties. Requirements for this type of product products, while maintaining the characteristics
include innovation combined with a sense of of previous collections that carry a sense of
familiarity and comfort. Perfect stuff takes an familiarity and functional coherence.
ordinary object and renders it extraordinary. Sustainability is implicit in the idea of
Simultaneously, we find a tension in this perfection. For the forward-looking consumer,
consumer territory, characterised by balancing innovation is synonymous with finding solu-
impersonal access without ownership with the tions to collective problems. Part of the criteria
necessity of personalisation and customisation. for perfection should consist of a relentless
This value territory, similar to flexible stuff search to minimise any negative impact. The
described above, also encompasses a need for perfect object minimises the need for many
mobility and compactness. But, here, we add the objects; instead it reflects purpose and inten-
tionality in its fabrication.

24
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

“I need to tell you about my notebook. I’ve been looking


for the perfect notebook for so long. Then one day
I found it — this one. It only costs 15 kroner, but it’s
perfect for me — just the right size, the right number of
pages. I asked the store if they would be stocking them
regularly. They didn’t know, so I bought their entire stock.”
(Male, Malmö, 42)

25
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Key behavioural changes In this case, consumers expect incremental


improvements to their perfect t-shirt, for
Increased urbanisation and pressure on urban instance, but they do not want it to fundamen-
living spaces, combined with our VUCA 16 tally change.
context, push consumers to lighten their mate- “I always buy the same t-shirt from Uniqlo,
rial load through increased selectivity. This because it fits me well.” (Male, San Francisco, 29)
selectivity is a process — a journey of learning, Such consumers loathe possessing unused
knowledge acquisition and discernment. This objects that remind them of their poor choices.
selectivity also features a language of innova- They spend much time ensuring that they will
tion, aimed at being better, adaptable, functional actually use what they purchase. Some consum-
and comfortable. ers develop specific tactics to counter this.
The perfect object allows the consumer to When tempted to buy something, they do not
be at their best. In some ways, this represents a do so immediately simply to test their ability to
natural evolution from the old model that live without it.
promised a product capable of magically trans- In our survey, we found that 71% of lead-
forming our lives. ing edge consumers engage in this hyper selec-
The evolution here refers to a product that tive search for the perfect object. Collectively,
conforms to an ideal of perfection that enables 40% of the four-country respondents have
the user to enhance their capabilities. The object already adopted these new behaviours. The
does not replace the user’s effort. That is, it is not potential of the mass-market to adopt similar
magic. But, the right object — or the perfect behaviours is strong across all of the markets we
object — allows the user to further pursue their studied. Among Finns, 30% reported similar
personal quest. Certain material goods then behaviours, a proportion a bit below our sample
become a paradoxical form of expression of non-­ population average. Yet, the mass-market poten-
materialistic self-betterment or self-realisation. tial exists in Finland as well.
We found that respondents make long-
term commitments to certain ideals of perfec-
tion. Focusing on purposefulness rather than on
personal taste, they understand perfection not
as a trend, but as a personal perfect fit.
“I want to find the perfect black jumpsuit. I
must have 25 now, and I still haven’t found it.
When I wear one, someone will say, ‘Oh, you’ve
had that forever.’ But, no, I’ve just bought it. You
see, they all look so similar. Only I can see that
they’re not the same.” (Female, Malmö, 25)
“What will happen when I find the perfect
one? Then, I can stop searching.” (Female,
Malmö, 25)
Because choices abound, we found that
some consumers settle on a long-term choice
for basic objects that fit their needs. They often
purchase the same item again because it fulfils
the job, and see no compelling reason to choose
another product.

16  VUCA refers to volatile, uncertain, complex and ambiguous.

26
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

ADOPTION OF
BEHAVIOURS
RELATED TO
PERFECT
STUFF. PERFECT Key beh avio r d r iver :

STUFF Hyper selectivity


and seeking out the
perfect product/
function fit

71%
Leading edge
Consumers

40% Mass potential


4 countries Very high

30% Mass potential in Finland

High
Finland

27
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

A new generation of products Among larger companies, some consumers


view Dyson17 as designing and producing
Ministry of Supply, a new clothing brand, perfect objects.
focuses on redefining traditional work clothing. Dyson gained fame for taking everyday
When still students at MIT, the company’s objects, such as vacuum cleaners and hairdry-
founders met and developed a vision to create ers, and adapting technology to perfect them.
formal workwear that could be as comfortable After reinventing the common wheelbar-
and high-performance as sportswear. Launch- row in 1974, James Dyson bought a Hoover
ing a Kickstarter campaign in 2012, they sought Junior vacuum cleaner. That Hoover quickly
financing for the Apollo dress shirt, a tailored became clogged and lost its suction power over
formal dress shirt made from NASA-inspired time. Frustrated, Dyson emptied the bag
temperature-controlling material. In total, they attempting to restore the suction power, but this
raised more than US$400 000 (compared to had no effect. During a visit to a local sawmill,
their goal of US$30 000), and launched the Dyson observed how large industrial cyclones
company. removed sawdust from the air. He then hypoth-
Their approach to clothing focuses on esised that the same principle might work on a
usability rather than fashion, stating their smaller scale in a vacuum cleaner. To test this
commitments towards empathy and a deep idea, he removed the bag from the Hoover
understanding of their clients’ needs. Ministry Junior and fitted it with a cardboard cyclone.
of Supply aims to use high-performance techni- When cleaning a room, he found that his refit-
cal fabrics, innovative construction techniques ted machine picked up more dirt than his
and purposeful design to create pieces aligned original Hoover Junior bag machine. That
with how people live. adaptation became the first vacuum cleaner
Kickstarter and other crowd-funding without a bag.18
platforms are full of projects initiated by small The notion of the “perfect product” offers
teams who intentionally push the boundaries of an opportunity for reinvention. While certain
existing product categories. Armed with the basic products such as t-shirts or hoovers
ambition to develop “perfect products,” these already developed to such a degree that innova-
teams offer anything ranging from the perfect tion is difficult, companies are redefining
bag to the perfect kits to brew coffee. well-known categories of products in new and
Many consumers struggle to find large fresh ways.
companies that have a long term and intentional
approach to developing perfected objects. The
use of the word intentional is driven by the
frequency of its appearance in the language of
leading edge participants during the research
phase, when talking about their conception of
perfect objects or things. They consider that an
object that has been created intentionally is one
where there has been an intense focus on the
outcome or the purpose of the object and a
perfect fit between the object and its function.

17 http://www.dyson.com
18 https://en.wikipedia.org/wiki/Dyson_(company)

28
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Business implications

The company’s challenge is to present itself as


committed and intentional about developing
and making responsible products while creating
scale and a footprint on the market.

SEVERAL ASPECTS OF PERFECTION REQUIRE BUSINESS ACUMEN:

Set up innovation teams to reinvent the basics


A product itself is not the only thing being sold. A backstory about a committed and
focused team will, in the long-term, also attract consumers.

Relentless long-term commitment


Companies that repeatedly shift their focus offer no credibility in this value territory.
This territory demands an unwavering focus not driven by short-term business objecti-
ves or the stock market.

Combining fit-for-purpose, usability and aesthetics


Products must be relentlessly focused on a specific purpose. Sustainability must also be
added to the formula.

Crowd-sourcing to involve a skilful and selective audience


Perfect products create interest and a commitment among consumers. Companies
should tap into this as a means of increasing their credibility on the market.

29
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Stuff for pleasurable


engagement
The forward-looking 21st century consumer is reframe and align personal engagement with a
more aware than most about the paradox of the natural desire to feel good.
world in which they live. From a macroeco- This value territory features a vision for the
nomic perspective, such consumers understand long-term and the intentional. An opportunity
the necessity of continuing to buy, use and exists which combines the desire for pleasure
replace products they use in their daily lives. with responsible products showcased through
Simultaneously, these consumers are sensitive to socially engaged narratives. In this value terri-
the bigger picture: environmental damage tory, consumers seek products manufactured by
caused by the excessive consumption of companies with a deeper purpose. Such choices
resources, waste by-products and social inequal- provide consumers a sense of control derived
ities perpetuated by exploitative commerce. from providing social benefits and contributing
While slowly changing, the sustainability (however insignificantly) on a personal level to
and social-engagement narratives have often finding solutions to larger global issues.
focused on austerity, self-denial and guilt- laden Consumers often recognise this commit-
detachment from any notion of pleasure. ment in smaller, new-generation brands, or by
We, however, see a very different picture supporting companies committed to local
beginning to form. This picture suggests that communities. Here, we specifically refer to
consumers, who have become accustomed to brands that create personal connections to their
cold austerity and poor aesthetics from respon- products, such as Tom’s Shoes. New-generation
sible or sustainable products (e.g. brown paper companies that balance the desire for aesthetics,
bags, rough unfinished wood shelves, uninspir- quality and even luxury with a larger narrative
ing packaging…), desire guilt-free and sensual of engagement illustrate this paradigm.
pleasure and stylishness instead. A high natural affinity for such products
This in no way detracts from product exists in Finland, although Finns are not over-
requirements such as responsible production or represented. We found that 28% of Finnish
manufacturing, a low negative impact, the use respondents consider products with a low
of renewable materials, products with an end- negative-environmental impact as very impor-
of-life solution and products made from organic tant and 26% strongly prefer to buy from more
or natural materials, all of which represent responsible companies when the quality of
requirements for goods for pleasurable engage- products is equal.
ment. However, the opportunity exists to

30
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

“…but why do we still insist on associating sustainability


and sustainable products with brown paper bags and
rough string and raw wood, it’s like saying that to feel
less guilty about buying things they have to be ugly and
can’t be beautiful or create pleasure, this is not the way
forward”
(Female, Stockholm, 36)

31
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Key behavioural changes Forward-looking consumers are pragmatic


in the realisation that large companies can be a
Above, we discussed how late 20th century major force for good and bad. Such consumers
consumerism has enabled ego gratification and gravitate towards brands that support environ-
created a sense of hedonism. Mass-market mental and social causes, and often support
consumption focuses on fun, delight and aspira- local or niche commercial activities connecting
tion, but seldom represents a transformative them to communities with similar affinities.
drive towards the collective good. Today, consumption is no longer only
Today, however, societal concerns, such as about the individual. Instead, consumers expect
climate change, social inequalities and various companies to drive the ideals representing
forms of insecurity, have become more pressing collective interests, whether at the community
on the international stage. Among these, climate level or through large-scale actions ranging
change stands as the primary global concern, from energy conservation to eco-friendliness.
which fragments into local-level priorities. A new generation of internet-empowered
These local priorities in turn drive behavioural entrepreneurs who share values have brought to
change. For instance, water access and drought the market a new generation of products and
management, ocean plastics, waste manage- services that support this balanced vision. Such
ment, pollution, decreasing biodiversity, pesti- products provide social benefits while still
cide management and organic agriculture all focusing on individual advantages through fully
represent local-level concerns resulting in shifts articulated propositions. Neither sphere is a
in behaviour. pretext for the other.
As individuals become more intercon- In our survey, we found that 63% of lead-
nected and empowered, we move toward uni- ing edge consumers engage in the search for
versalism values akin to “self-transcendence.” consumption choices that balance personal
Feelings of empowerment, access to tools and needs and desires with positive impacts for the
platforms that unite people around common environment and society. We also found that
causes and an increasing awareness of larger 24% of the four-country respondents have
issues intermingle resulting in behavioural already adopted new behaviours by actively
modifications among consumers. These con- seeking out companies and brands that provide
sumers seek to change things in the world a balance between social and individual bene-
around them. fits. Given the inevitable increase in the impor-
Such changes are not focused on a revolu- tance of these ideals, this sphere offers a strong
tion, but rather on a shifting focus from purely mass-market potential across all four markets.
business and financial ideals to a balance Among Finns, 17% seek this balance between
between business and social concerns. Consum- societal and individual benefits.
ers increasingly seek to satisfy their consumption
desires (and needs) by finding products and
companies that embrace this ideological shift.

32
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

ADOPTION OF
BEHAVIOURS
RELATED TO
STUFF FOR
PLE ASURABLE PLEASURABLE Key beh avio r d r iver :
ENGAGEMENT.
ENGAGEMENT Preference for pur -
chasing product s
from companies
that combine con-
sumer and societal
or environmental
benefit s .

63%
Leading edge
Consumers

24% Mass potential

4 countries High

17% Mass potential in Finla nd

Slower adoption
Finland

33
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

A new generation of products lines its purpose of “making the world a more
welcoming place, one cup of tea at a time.” In
As personal values shift, brands attempt to doing so, Brooke Bond granted India’s transgen-
reflect these new values. Some brands enjoy der community a platform to challenge carica-
more success than others. A few new brands tures and stereotypes towards them through the
incorporated such new values from the outset, launch of the “6 Pack Band,” winner of the Glass
while others established new business models to Lion Grand Prix award for brands at the Cannes
coincide with shifting personal values. Lions Festival in 2016.25
For example, Angel Jackson, 19 a British Finally, Tesla, already mentioned for its
accessories firm, emphasises “that ethical pro- electric cars, keeps a larger goal in mind in
duction and fashion with a conscience needn’t relation to renewable energy. As such, with Tesla
sacrifice cutting-edge style.” Edun, 20 the fash- batteries, the company seeks to accelerate the
ion brand launched by U2 singer Bono and his move away from fossil fuels to a more sustainable
wife Ali Hewson, 21 aims “to source production energy future. According to the company, its
and encourage trade in Africa”. Honestby, 22 batteries will help “manage power demand, pro-
“the world’s first 100% transparent company” vide backup power and increase grid resilience.”26
launched by Bruno Peiters (former Creative
Director of Hugo Boss), seeks to combine
societal benefits with luxury offerings.
The Volvo Car Company’s vision for 2020
aims to improve road safety and ensure that
“nobody should be seriously injured or killed in
a new Volvo car.” As part of its campaign, Volvo
created Lifepaint, an invisible paint that reflects
in headlights and is designed to make pedestri-
ans, cyclists and bikers more visible at night.
According to Volvo, this paint “is a unique
reflective safety spray” making “the invisible,
visible.” 23
Additionally, the Ben & Jerry’s 24 ice cream
brand reflects a social mission: “To operate the
company in a way that actively recognises the
central role that business plays in society by
initiating innovative ways to improve the quality
of life locally, nationally and internationally.” As
such, Ben & Jerry’s promotes democracy and
the importance of voting.
Some brands risk venturing onto politically
thin ice in order to take a stand. For example,
the India-based Brooke Bond tea brand under-

19 https://angeljackson.com/
20 http://edun.com/
21  Luxury group LVMH acquired 49% of Edun in 2009.
22 http://www.honestby.com/
23 http://www.volvolifepaint.com
24  http://www.benjerry.com/values; https://youtu.be/vNzXxYnQI3s
25 https://youtu.be/blvOBnSRfVc
26 https://www.tesla.com/presskit/teslaenergy

34
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Business implications

Businesses can challenge the status quo by


creating ethical products that offers customers a
superior user experience with a social benefit.
This philosophy needs to be a part of any value
proposition adhering to collective responsibility
while addressing egoistic and aspirational values.

SEVERAL ASPECTS OF PLEASURABLE ENGAGEMENT REQUIRE


BUSINESS ACUMEN:
End-of-life solutions as an integral part of the business model
How a product is made and how its lifecycle ends are equally important.

Sustainability as the core of the business


Corporate social responsibility cannot be an afterthought, but should stand as an integ-
ral part of the company’s purpose and product definition.

Sustainability as desirable, fun and guilt-free


Responsibility has traditionally been viewed as boring. Now, it is desirable.

Breaking sustainability down as personal


The contemporary consumer feels a collective responsibility. But breaking sustainability

35
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Familiar stuff
In this section, we move into an area of oppor- exist to lead users towards confidently finding
tunities revolving around the ideals of easy, and expressing their own uniqueness through
sensual stability. These are defined by exacting their interactions with such products.
requirements regarding quality and longevity, Such features challenge current business
where products are familiar and offer the pleas- models based around programmed obsoles-
urable predictability of habitual use. cence and revenue generated through volume
Life is made easier through simple famili- and repeated purchases. This opens up avenues
arity. Physical goods become a vector for this towards service and usage-based revenue mod-
cultural shift by slowing down the pace of els, where a product is more valuable and has a
replacement. Slowing the pace of replacement higher resale value because of its quality and
thus becomes a quality; keeping things and durability.
using them longer becomes a source of newness. In this instance, sustainability is expressed
Using and interacting with objects then focuses both implicitly and explicitly. A product fabri-
our fragmented attention. cated from high-quality materials, designed for
An opportunity exists for the manufacture long-term use and that is reliable and repairable
of ordinary objects that become extraordinary when necessary is viewed as implicitly sustaina-
through use. When shaped by use, these prod- ble. But consumer requirements also remain
ucts become more personal. They establish a explicit because consumers demand responsibly
dialogue between the product and the user, a produced goods using renewable, natural and
dialogue guided by repetitive actions and inter- organic materials.
actions. That is, these goods and products A strong natural affinity for such products
become more beautiful with age and use. exists in Finland. As such, 35% of Finnish
Opportunities once again exist here for respondents reported that owning things and
creatively using such tensions. For example, using them for a very long time corresponds to
such products should be long-lasting and famil- their thinking. Yet, in Finland, considering price
iar, but carry a sense of newness. They may also elasticity also remains important, whereby 43%
combine fun or be unique and carry basic or of Finns strongly agree that affordability is
ordinary features. In addition, opportunities important.

36
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

“Personally, I don’t want new things all the time….


As a physical object, it is objectively better if it
does what it is supposed to do (for longer)”
(Female, San Francisco, 25)

37
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Key behavioural changes unchanged. Interacting with goods and their


use comes into focus. New glimmering,
In a constantly shifting world, people long for a untouched goods may feel “clean,” but the
sense of stability and seek opportunities to be product begins a process of appropriation
mindful through rituals offering balance. through its usage. Even ordinary goods become
While the need to slow down contradicts the more personal, unique and valuable. You can
speed and fluidity of flexible living, this need always buy items that look worn, but creating
does not reject change and newness. that wear is unbeatable as the ultimate form of
In fact, this philosophy signals a change in personalisation.
consumers’ relationships to newness. In the In our survey, we found that 65% of lead-
past, newness was hedonistic whereby novelty ing edge consumers are showing interest for
stood as a superficial facet of newness. The types of physical objects that last a long time
hunger for novelty has driven both consump- and engage repetitive usage over time and for
tion and business growth. The promise of the very personalised appeal of often used and
something new has fed and satisfied hedonistic time-worn objects. From a mass-market per-
needs. spective, 36% of the four-country respondents
Today, newness is less fun, becoming more have already adopted new behaviours, such as
of a necessity. New is functional; renewal, keeping products longer. The mass-market
however, is essential. Digitisation is important potential of adopting these types of behaviours
vis-a-vis renewal, but it fragments our atten- is strong across all of the markets studied.
tion. Therefore, individuals develop new, Among Finns, 35% have adopted such behav-
simple rituals in their everyday lives to provide iours.
necessary calm spaces allowing them to recover We also found that 58% of leading edge
and prepare for the next round of renewal. consumers engage in mindfulness behaviours.
For the most advanced consumers, we Among the four-country sample, 25% have
found that repetitive use gradually takes on adopted such behaviours, and 19% of Finns
spiritual value. Focusing on small rituals, such reported adopting such a change. The shift
as using a manual coffee grinder or playing a towards mindfulness will take longer to gain
vinyl record, provides a balancing ritual help- mass-market traction and may remain more of
ing individuals to attain mindfulness. a niche behaviour.
Such items also create spaces of familiarity
and stability through things that remain

38
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

ADOPTION OF
BEHAVIOURS
RELATED TO
FAMILIAR
STUFF.
Key beh avio r d r iver :

STUFF Keeping things for


longer, repairing
things .

65%
Leading edge
Consumers

36% Mass potential

High
4 countries

35%
Mass potential in Finland

High
Finland

39
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

A new generation of products three easy-to-change modules, eliminating the


necessity of buying a new phone when dropped.
Patagonia, 27 perhaps the best-known example of a PuzzlePhone is reliable, upgradeable and repair-
brand built on the notion of long-lasting, repair- able. We find here a clear aim towards longevity.
able products, features staff who tour with the The future, however, will tell us if the modular
sole purpose of repairing clothing for free. smartphone concept meets this need.
Because its styles change very little, Patagonia taps Another approach can be found with
into the idea of “normcore,”28 or “liberation in Cutecircuit.31 Based in London, the duo behind
being nothing special.” To dress normcore the company, Francesca Rosella and Ryan Genz,
means choosing ordinary, banal items (often believe that integrating captors, sensors and
with looks dating from the pre-internet era) and LEDs (IOT) into high-quality, durable clothing
using them as a fashion statement. provides an alternative to fast fashion. Using the
Other brands also promote the promise of garment as an ever-changing canvas of possibil-
longevity. Dr. Martens for Life, a concept for ities provides permanent newness in a single
shoes and boots with a lifetime guarantee, garment. This reduces the need to constantly
means that Dr. Martens either repairs or replenish one’s wardrobe.
replaces their shoes if damaged.29 Many of these brands and concepts remain
By contrast, the technology sector remains unproven on the market. In our research, we
notoriously inadequate when it comes to lon- found that playing on the attributes of longevity
gevity, although attempts exist to change this. adds value to products. Thus, products become
The Finnish concept Puzzlephone stands more personal and intimate with use over time.
as one such attempt to build technology that is
more durable over time. Puzzlephone30 features

27 http://eu.patagonia.com
28  “Normcore defined in 2013 by K-Hole (http://khole.net/issues/youth-mode/).
29 http://drmartensforlife.com/
30 http://www.puzzlephone.com/
31 https://cutecircuit.com/about-cutecircuit

40
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Business implications Creating new business models focused on


the lifecycle and extending it rather than selling
Novelty has remained at the core of most new goods challenges companies. Most
mass-market business models for goods. Now, mass-market companies producing goods focus
we find a clear need for goods produced for on fast production and short repurchasing cycles.
longevity and a sense of value accumulated over
the product’s lifecycle.

SEVERAL ASPECTS OF FAMILIARITY REQUIRE BUSINESS


ACUMEN:

Augmentation
Product purchase can only represent a starting point. Consumers should be able to add
possessions during the ownership cycle. These changes can be transformed into
value-added items, not just through their functionality, but also by providing a personal
touch.

Repairs as an aspirational attribute


Repairing fell out of style with the growth of mass-market consumables. Leading edge
consumers suffering from “novelty fatigue” increasingly view repairing and keeping
goods as aspirational and contemporary.

Hacking and repurposing


Consumers should be able to hack and repurpose products. Defining and redefining the
purpose of goods offers consumers an interesting opportunity. Rather than resisting
hackers, companies should embrace their creativity as active consumers.

Long-lasting equates with sustainability and responsibility


Long-lasting products allow brands to embrace environmental values with credibility.
Leading edge consumers increasingly expect sustainability to form the core of a brand’s
business model.

41
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Summary and
conclusions
In this report, we outline some key opportuni- Flexible stuff represents an opportunity
ties for businesses. These opportunities centre centred on the idea of creating value or earnings
on developing new types of products that con- revenue through reducing the “weight” of stuff
sumers perceive as valuable and aspirational. for a consumer. Consumers increasingly want a
We began this report with a short intro- flexible lifestyle where the same good may be
duction highlighting some of the key findings. used across a range of contexts. Goods become
We also provided a more generic view on how things individuals carry with them and satisfy
to prepare and act upon shifts in consumer multiple purposes. These products include, but
behaviour currently experienced on the market are not limited to, technological gadgets, multi-
— both globally and in Finland. purpose clothing and modular home solutions.
We identified a set of new behaviours Today, people feel the weight of things.
identified through our research. Not all of these Thus, we asked how that weight could be
behaviours are completely new, yet together reduced. What alternative exists to push more
they form a shift away from the consumption of products out to consumers? Should we produce
goods as learned and understood by the “con- items that are flexible and versatile and serve
suming classes.” multiple purposes? In this case, “more” refers to
We then identified four different territories combined features rather than the quantity of
of growth. These territories are described as things. As we focus on reduction, determining
types of products that both leading edge and how we can build upon the notion of sustaina-
mainstream consumers increasingly value and, bility in natural and appropriate ways becomes
in many cases, hope to own. simple.
We label these territories flexible stuff, We also briefly discussed the sharing
perfect stuff, stuff for pleasurable engagement economy. Currently, however, we do not find
and familiar stuff. overwhelming evidence suggesting that
Each territory allows for different ways of non-ownership should dominate this value
conducting business and offers opportunities territory, especially since many individuals still
for adjusting the standard business model. view ownership as more convenient than sharing.
Sustainability plays a crucial role across all value
territories.

42
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

FLEXIBLE STUFF represents an opportunity ­centred on the idea of creating value


or earnings revenue through reducing the “weight” of stuff for a c ­ onsumer. Consu-
mers increasingly want a flexible lifestyle where the same good may be used across
a range of contexts. Goods become things individuals carry with them and satisfy
multiple purposes. These products include, but are not limited to, technological
gadgets, multipurpose clothing and modular home solutions.
Today, people feel the weight of things. Thus, we asked how that weight could
be reduced. What alternative exists to push more products out to consumers?
Should we produce items that are flexible and versatile and serve multiple purpo-
ses? In this case, “more” refers to combined features rather than the quantity of
things. As we focus on reduction, determining how we can build upon the notion of
sustainability in natural and appropriate ways becomes simple.
We also briefly discussed the sharing economy. Currently, however, we do not
find overwhelming evidence suggesting that non-ownership should dominate this
value territory, especially since many individuals still view ownership as more conve-
nient than sharing.

PERFECT STUFF is perfected to fit a specific purpose or end use. Consumers


repeatedly expressed an ideal state where the constant cycle of search/purchase/
consumption/search/purchase… of a type of object would end because of the disco-
very of the perfect object. Consumers increasingly expect business to focus on the
development of new products, to have a clear purpose and to focus on producing
things or items perfectly adapted to their end use. Today, individuals feel that large
corporations do not focus their development efforts on creating new products.
Trust evolves when consumers rely on a company to consistently push the bounda-
ries of producing perfection, whether in a t-shirt or a smartphone.
How does a company appear committed and focused on developing and produ-
cing goods in a purposeful way? How can a company situate sustainability as a part
of the perfect product? It may appear simple, yet leading edge consumers feel that
precious few companies achieve this ideal.

43
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

STUFF FOR PLEASURABLE ENGAGEMENT encompasses items that combine


collective and shared values as a priority. These goods represent more than simple
objects of consumption; they are a means of expressing the consumer’s values as
an engaged citizen who takes into account the environmental impact of their con-
sumption. Such goods also provide pleasure and enjoyment to the consumer. The
value opportunity here lies in removing the guilt associated with consumption and
helping the conscientious consumer to renew their valuables through pleasurable
consumption. Increasingly individuals expect buying goods to positive impact the
world around them, or at least to carry a minimal negative impact. This portion of
our study demonstrates the value of a company skilful at combining a positive
impact with strong, pleasurable personal benefits.
How can a company combine personal values with collective commitments?
How can responsibility become pleasurable? How can sustainability be pleasurable
and not “guilt” consumers? This section of our study focuses on developing a model
that explicitly creates a demand for sustainability.

Familiar stuff combines the idea of long-term ownership with feelings of newness
and excitement. Opportunities here encompass things that endure and evolve with
the owner or user, that appear to evolve, change and improve over time. Consump-
tion slows down, replacement cycles diminish and resources are protected.
How do companies move from focussing on sales to an earnings-based model
reliant upon extending a product’s lifecycle? How can repairs and longer lifecycles
become desirable again? How can we link sustainability to extended cycles of
ownership?
Many opportunities to accomplish the above objectives exist. Most companies
do not have to choose one or another model. They must better understand the mar-
ket dynamics and the demands they create. Most likely, new combinations will form,
while consumption will shift further still. As elements emerge within existing mar-
kets, we witness old attributes meeting new preferences, leading to novel and int-
riguing market tensions.
We can merely encourage companies to explore these avenues for creating value
and to further explore these opportunities. Primarily, companies must be receptive to
market influences and maintain an intimate relationship with the market.

44
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

THE FOUR PRINCIPLES COMPANIES MUST DEVELOP TO


SOLVE VALUE EQUATIONS FOR THE FUTURE ARE:

1
Understand changing consumer behaviours. Applying the perspective of
the leading edge consumer represents an effective means towards action
while looking towards the future. In what follows, we describe how to
quickly identify market dynamics and interpret them as consumer require-
ments.

2
Revisit market definitions. Traditional tools do not allow for a pluralistic
view of the market. Consumer segmentation, for example, is not necessa-
rily the best way of understanding people’s seemingly contradictory needs
and values in the market. We encourage companies to apply alternative
methods to understand today’s con­sumers. One option lies in focusing
more on understanding the dynamics of certain behaviours ins­tead of
focusing on differences between consumers.

3 Learn to manage new value propositions that create aspirations. New


management requirements consist of various dichotomies, such as fast–
slow, old–new, personal–collective and luxurious–inclusive. Digitisation
and digitally empowered business models make possible the establishment
of businesses that leverage and drive multiple benefits. Airbnb — the suc-
cessful sharing platform for renting rooms, flats and houses — built their
business on extreme convenience, global coverage and low prices. Simulta-
neously, Airbnb allows for a truly local experience.

4
Emphasize sustainability as a part of the overall value proposition.
Obviously, sustainability and its related values represent an important
component across all of the value territories identified. The leading edge
consumer expects companies to have a purpose beyond serving its share-
holders. What is good for society and the environment as a whole needs to
be a crucial component of what a company does and sells.

45
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

Methodology and
scope
In this study, we relied upon a combination of We spent a total of six hours with each
methodologies as follows: leading edge participant, through a 1.5-hour
—— qualitative exploration consisting of one-on-one interview, followed by participation
in-depth interviews and hackfests in a 4.5-hour hackfest. The hackfest consisted of
—— quantitative exploration consisting of a a forum for leading edge consumers to exchange
seven-market study ideas with one another and the project team. We
—— collaborative work consisting of two work- focused on several predetermined themes and
shops with key individuals from participat- worked through more exploratory exercises
ing companies. aimed at identifying participants’ definitions of
value and attributes contributing to the value of
things and experiences.
Qualitative exploration The results of these interactions allowed us
to identify the key shared characteristics of
The qualitative component of this study began leading edge consumers we then used to repli-
with the identification of profiles and the geo- cate and quantify responses in the next phase of
graphic situation of leading edge consumers. our study. This also allowed us to develop a
For the initial phase, we carefully chose comprehensive list of value attributes to validate
specific markets. In most studies, Stockholm during the quantitative stage.
and Malmö (Sweden) represent extreme forms
of post-materialistic values, emphasising satis-
faction and quality of life rather than ownership Quantitative exploration:
and possessions. Seven-market study
San Francisco (USA) was chosen because
of its liberalism and openness to change. San The quantitative phase of this research consisted
Francisco and the Silicon Valley attract consum- of four objectives:
ers globally who experiment both through new 1. to categorise the leading edge consumer
business and emerging cultural ideals. 2. to validate and categorise the behavioural
We chose Bangalore (India) to represent an changes
emerging-market perspective for the leading 3. to determine the pace of change by meas-
edge consumer. Bangalore serves as a hub for uring the relationship between leading
Indian start-ups and an entry point for interna- edge and more mass-market consumers
tional influence that attracts talent and more 4. to identify the value territories created by
sophisticated consumers. Bangalore also pro- behavioural changes and to group the
vides an alternative perspective to San Fran- attributes of these territories in order to
cisco, Stockholm and Malmö, and allows for an define formulae for creating value.
understanding of how emerging-market con-
sumers adjust their consumption habits and the We structured our sample to represent 50%
degree of influence from and speed of uptake of to 60% of the consumers most engaged in
“global trends.” consumption and most receptive to change.

46
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

We carried out an online survey in Septem- Below, we provide some participant quotes:
ber and October 2016 across seven markets: “This makes us aware of the problems we
China, Finland, Germany, India, Russia, Spain will have with our business model.”
and the USA. In total, we recruited 600 respond- “We can already see how we need to change.”
ents per country, for a total 4 200 respondents. “This [project] provides us with the context
We only included the results from Finland, for how to think about new business.”
Germany, Spain and the USA in this report. “This is somewhat painful for us, but has
opened our eyes.”
“We have decided to set up a future labora-
Participants and tory.”
collaborative work “This makes us think that we need to
rethink our target audience.”
Stuff in Flux, a multiclient research project and
collaborative study, focuses on the future of We presented the project results to partici-
goods. Initiated in June 2016, the project con- pants in December 2016. We believe that we
sists of a small number of diverse companies have uncovered something fundamental about
invited to participate. Four of the most valuable how the market and climate around physical
brands globally, all of which indirectly or goods are changing and how they will continue
directly sell goods, joined this project. These to evolve. This report summarises the most
companies represent industries ranging from important findings from this project, specifi-
technology to fashion, with a combined annual cally focusing on Finland and how various
turnover of more than €200 billion. aspects relate to sustainability.
From the start, we learned that participat-
ing firms found cross-industry approaches
rewarding, affording them the opportunity to
discuss strategic issues with noncompeting
companies.
All project participants came together
twice — in Stockholm in August and in San
Francisco in October — to discuss the project
and agree upon the conclusions and findings.
These gatherings included senior-level corpo-
rate decision-makers directly influencing their
companies’ future strategies.

47
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

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https://www.youtube.com/watch?v=llufipzI8_k

http://www.airbnb.com/

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Csikszentmihalyi and Rochberg-Halton (1981) The Mea-


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vNzXxYnQI3s

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48
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS

The authors
Alice Labs is a Finland-based strategy consult-
ing agency specialising in market exploration.
The Stuff in Flux project was carried out in
collaboration with Informed Intuitions of Paris,
France.
Dr. Oskar Korkman, founder of Alice
Labs and former Director of Consumer Intelli-
gence at Nokia and Microsoft, brings to this
project more than 10 years of experience on
international sociocultural research and trans-
lating his insights into business decisions.
Sharon Greene, an Alice Labs partner
and founder of Informed Intuitions, has more
than 15 years of experience in business insight
and the development of innovation through
the application of cross-cultural and sociocul-
tural research. She is also the former managing
director of RISC International.
Alice Labs gratefully acknowledges the
assistance of Marcus Olsson, founder of Tech-
nium and an alumnus of Singularity University,
who lent his technological expertise to this
study.

49
SITRA STUDIES May 2017 SITRA.FI
The Finnish Innovation Fund Sitra provides multi-dimensional Itämerenkatu 11-13
information about developments affecting societal change. PO Box 160
Working papers are part of Sitra’s future work conducted by means 00181 Helsinki
of forecasting, research, projects, experiments and education. Finland
Tel. +358 294 619 991
ISBN 978-951-563-996-7 (PDF) www.sitra.fi @SitraFund

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