Author
Denic Mancevič, PhD
Why? Because they are less labour-intensive (yes, those diligent hands of ours), thus reducing many business risks (including, not least, the risk of labour shortages, as we can already see today) and allowing for a global breakthrough. Just look at examples across the border: in Austria, there are companies like Red Bull and KTM, and in Denmark, of course, LEGO, and we could find more...
For those of you who are interested in a more detailed explanation, I recommend this article from the Harvard Business Review; if I simplify a bit here, it's about “the value of a product or service based on the technical, economic, service, and emotional benefits the customer receives in exchange for financial compensation.” The mentioned benefits of most products and services (with the exception of the essentials necessary for the physical survival of Homo sapiens) are a matter of perception; this is especially true when it comes to the economic and emotional benefits of the products or services we buy. We all know what we are talking about: in a consumer society, buying is the fulfilment of desire, it can be about prestige, a status symbol, building a reputation, boosting self-esteem, and so on. It can be just a part of this or all of it combined. Even economists, who like to align themselves with the so-called hard sciences, have admitted that people do not make economically rational decisions, so there must be something to it (there’s even a scientific field within economics that deals with this – it's called behavioural economics).
We still predominantly see higher benefit in increased productivity (i.e., how to produce the same product with fewer input resources, whether materials or labour), rather than in increasing benefit.
The above is nothing new for most decision-makers in developed economies, but unfortunately, its different here. Only now is awareness slowly seeping into public discourse about where value is actually created in the 21st-century economy, but we are still (very) far from full awareness and directed action. We still predominantly see higher benefit in increased productivity (i.e., how to produce the same product with fewer input resources, whether materials or labour), rather than in increasing benefit. We view automation as the opportunity, not a qualitative leap in supply chains and the transition from component suppliers to (at least) semi-finished and eventually final products. Ones with higher benefit.
Such a leap would also require a complete reset of our understanding of what innovation, design, and marketing mean today. This includes, of course, the field of communication, not just in marketing but also in public relations. All of these activities can decisively influence the perception of the value of products or services. Just look at Rimac, where the benefit may seem to come primarily from technology (e-supercars) at first glance, but branding, design, and communication are also key pieces of the puzzle. In addition, let's not even get started on Apple.
Are you wondering where electric cars fit into this story, as mentioned in the title of this blog? Iztok Seljak, in an excellent interview for Slovenian newspaper Finance, hit the nail on the head by acknowledging that the entire European automotive industry has fallen behind and is losing the competitive battle to (new) Chinese brands. In addition, it’s not just about price, as politicians like to emphasize, but also about development. This is why Seljak is calling for an urgent course correction toward a “more developmental, breakthrough, innovative, and creative direction.”
I've been following and working in the Slovenian economic and media environment for nearly two decades now, and I can't recall any head of a Slovenian manufacturing company, focused on supplying components to the global automotive industry, speaking so loudly (also) about a breakthrough and creative direction.
Maybe it is not too late after all.