Apple Inc, as a model for western economies

A few days ago (August 24, 2011), Steve Jobs announced his resignation from the position of Apple's Chief Executive. Steve is probably the most legendary business leader of our times often compared to Thomas Edison. He has introduced products which created new industries and literally changed our lives. Most of people associate him with his recent successes (iPad and iPhone), but some of us who have used all his products remember him too for creating the personal computer industry with Apple II and the Macintosh in the early 1980s, setting the stage for future Apple products by developing creative software (through NeXT, Inc.), integrating music-computer-phone with iTunes and revolutionizing film production with Pixar Animation Studios.

In this write-up though, I want to focus on Apple, the organization, rather than Steve Jobs, the business genius. As western economies are struggling to deal with huge deficits and high unemployment, we can learn a lot from Apple as a model for economic revitalization. Let's see some of Apple's characteristics.

Apple has achieved sustainable and often explosive growth through innovation, which propelled it and kept it far ahead of its competitors. In a globalized and highly interconnected world, this is the only way western economies can stay ahead of the emerging economies, which recently have become strong competitors.

Another Apple trademark is its proprietary software/hardware and secrecy culture. While this may sound selfish and undemocratic, close control of Intellectual Property (IP) is an essential element for success. Look what is happening in renewable energy technologies. Venture capital in Silicon Valley is having second thoughts about investing in new technologies after witnessing their inventions fly so quickly to China and other countries.

However, Apple leaders are pragmatists too. The company realizes that you can not compete with low-cost manufacturing countries. So, if you look at the components of the iPhone, you see that Apple’s contribution is the product design, proprietary software, integration of the innovations of others and marketing. Other components are manufactured through an extensive network of suppliers; examples: the screen is mostly from Japan, the flash memory from South Korea, and the final product is assembled in China. So, one could protect certain strategic elements of the product, but needs to accept that we live in a globalized world and we need to have a global strategy.

Above all though, Apple has empowered the individual and put in his/her hands an amazing amount of power, access to information, ability to communicate with others easily and inexpensively, ability to establish and operate businesses with minimal costs, and in general encourage the individual to innovate. Countries need to unleash the creativity of their citizens, too. Empowered individuals will revitalize the lagging economies and create a sustainable growth with opportunities for all.