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How leapfrogging keeps you on your toes

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Growing up in South Africa in the 80’s was an exciting time for political change but behind the global media frenzy was a technological revolution that allowed South Africa to leapfrog ahead of many western nations, including the US. Because SA never had an analog cell phone network or cable TV infrastructure we were able to leapfrog developed countries that had invested billions into analog cell phone and cable networks. As a SA consumer that meant that by 1998 we were already doing secure 2G cell phone banking while US consumers were still dropping calls.

Now the NYT reports the same is happening in the auto industry in China. Having never really been a player in the international auto market they can leapfrog the rest of the world and become the leaders in electric and hybrid car production. This will be a game changing experience for all car makers around the world and could have a dramatic effect on the pollutants produced by gas-driven cars.

Leapfrogging is a powerful market force that affects highly capitalized industries. If you are an investor or entrepreneur in a highly capitalized industry make sure you build a long term plan of new tech cannibalization into your strategy, or someone might do it for you.

Note: Be cautious not to buy into the power plant argument that this article presents. The article suggests that the reduction in car emissions will do little to offset the increase in coal power plant emissions but fails to mention that China intends to spend $50 billion to build 32 nuclear plants by 2020. Some analysts say the country will build 300 more by the middle of the century. That’s not much less than the generating power of all the nuclear plants in the world today.

Author Richard Banfield

As CEO, Richard leads Fresh Tilled Soil’s strategic vision. He’s a mentor at TechStars and BluePrintHealth, an advisor and lecturer at the Boston Startup School, and serves on the executive committees of TEDxBoston, the AdClub’s Edge Conference, and Boston Regional Entrepreneurship Week.

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