In the eighteenth century, the concept of luxury focused on its moral and social implications. The image of the polyamorous profligate surrounded by luxurious silks, in a smoky opium den comes to mind. Luxury often meant decadence and social ruin, which often drew upon both the Christian and Classic traditions. In our contemporary world, luxury has adopted a cultural-political aspect that is closely associated with capitalism in an era of abundance.
Victorian Era opium den in which the upper classes indulged in drugs and polyamorous pursuits.
Luxury now represents something “comfortable” which the middle classes can enjoy in an era that moved away from the utilitarianism and tyranny of communism, when individuality had been oppressed in lieu of likeness and conformity. Luxury condos, luxury cars, and the luxury market all target the general population with the psychology of luxury to indicate the comfort of living in an era in which the individual is free to express themselves in an array of styles and colours.
At the highest contextual level, luxury is also which something people “collect” which accrues value over time, and considered the same as an investment; whether art, jewellery, archaeological artefacts, sculpture or classic cars, it’s a way to move capital around. In this way, luxury is also paradoxical to the concept of planned obsolescence; it correlates with high art, and meant to withstand the test of time.
The original Apple iPhone, launched in 2007. As with most electronics and mobile devices, they weren't built to last more than a couple of years. Planned obsolescence, or built-in obsolescence, in industrial design and economics is a policy of planning or designing a product with an artificially limited useful life, so it will become obsolete (that is, unfashionable or no longer functional) after a certain period of time.
In a throw-away culture where people buy fast-food, fast-fashion, disposable objects such as mobile phones and electronics that are only intended to last a couple of years, luxury has come to be recognised as a sign of lasting refinement, a symbol of American and European innovation. Interestingly, as the sales of luxury brands steadily declined in the US over the past decade, luxury has become a large market for nations such as China. China alone represents 32% of all global luxury car sales and 32% of all luxury products and its luxury sales grew 20% to $22.07 bln in 2017 from the year before.
China: A Global Consumer of Luxury Products
Although, China has become the number one global consumer of luxury brands, it is also ironically, the place where the production of replica luxury brands is also centered. This kind of philosophy permeates through the population, where luxury is a concept that can only be imported, but not produced domestically. To a degree, the Chinese government and such popular online eCommerce companies, such as Alibaba have been attempting to curtail the distribution of replica luxury brands whilst many other companies have been attempting to copy the tested traditions of other innovators.
Youxia, the copycat Tesla car, produced in China is not popular amongst Chinese luxury consumers
For China to become a global producer of its own luxury brands, it is necessary to change the philosophy of its people. Although, China has given birth to iconic philosopher-entrepreneurs such as Jack Ma and Zhang Xin, both of whom have shaped China’s landscape into a place of entrepreneurship embedded in a landscape of modernist architecture, China must lose the global perception of its nation being the headquarters for sweatshop labour and human rights abuses.
Chinese factory workers, lining up to go to work. Known for their subjugation of workers, Chinese people often work 12-14 hours a day for just pennies a day, which has been criticised by international humanitarian agencies as inhumane and akin to human slavery.
Embracing humanitarian issues and creating an atmosphere of freedom and liberty is a necessary climate in which to nurture luxury brands. The “backbreaking work” of factory workers as they live in dormitories embedded within the barbed wire fences of factories and work 12-14 hours per day creates the impression of a nation still trapped in the era of the indentured servant and the oppressive climate of communism, in which luxury cannot exist because of the operational mentality that is at odds with liberty.
A Tale of Two Brands: Burberry and Volkswagen
When Burberry moved production to China, the luxury brand started to suffer; now Burberry is unofficially known on the street as a “fast-fashion” brand with a “Made in China” label and not quite a luxury brand made in the UK due to the short-sighted management team that decided to move a significant part of its production to China in 2006. Although, they initially had made some short-term financial gains when they moved their production base to China, the Burberry brand is struggling now to become relevant in the luxury market.
When we examine the luxury market today, automobiles that are at the forefront of the luxury market, German cars have prevailed. BMW and Mercedes lead in production and revenue around the world and Porsche has steadily remained an iconic brand. The parent company of Porsche also did something extraordinary by also creating a car for a secondary market, Volkswagen in 1937, in order to address the growing discontent amongst the population in which there existed great social and financial inequality. In German, “Volkswagen” means, “The People’s Car”; yet very few people might realise that Porsche and Volkswagen parts are interchangeable. In effect, Volkswagen was able to dominate a market that Porsche could not reach and vice versa, without the loss of quality, and without the loss of the stature of each brand.
Volkswagen, "The People's Car". Volkswagen is the top selling brand in China and Europe.
In China, 5 of the top 10 best selling cars are Volkswagens. Volkswagen and Porsche, which are owned by the same parent company, and possess interchangeable parts, are marketed towards two different sectors of the population, although Volkswagen is primarily produced abroad in Brazil, China, Mexico, Nigeria whilst Porsche remains firmly rooted in Germany with some parts made in Finland.
US automobiles, such as Buick, also suffered when they moved production bases to China, similar to the Burberry brand when it lost its luxury image when it moved production to China. Instead, the US market chose Japanese brands made in the USA (eg, Toyota, Honda) as the staple of modern American living.
San Francisco Venture Capitalist Stewart Alsop II was denied a Tesla Model X when he wrote an inflammatory critique of a Tesla event. He later wrote subsequent humourous blog posts lamenting why he was denied a Tesla vehicle and had to "settle" for a BMW when he was ejected from the wait list after speaking to CEO Elon Musk.
One of the most appealing aspects of the Tesla brand is that it is a distinctly US produced car, in which there has been an ever steadily growing demand. Venture capitalists have been on the waiting list for different models of the car for a year or longer. In fact, amongst luxury cars, Tesla is one of the most desired brands in the United States. Because Tesla is uniquely American, just as Porsche is uniquely German and Aston Martin is uniquely British, it has created an entirely new luxury status of American elitism. Although, in the current economic climate in which people are outraged by highly paid executives living in the lap of luxury, at the same time, social inequality has fuelled the luxury market further, and Tesla has become the brand that represents a technocratic society; the socially enlightened elite that champions against global warming and sexism. Due to this cult of personality, the Tesla copycat made in China is neither popular nor desirable in China because of the psychological perception that true luxury is not a replica product.
Richemont, the Swiss watchmaker that owns Cartier and Mont Blanc destroyed $539 mln of its luxury watches to prevent them from entering secondary, discounted markets in order to preserve its luxury brand image.
From replica Chanel bags, to “fake meat”, Asians and other luxury target demographics have the distinct mindset that anything fake is not worth collecting nor consuming and that one must pay for quality and authenticity. In the current mindset of the Chinese demographic, luxury is something that can only be imported into their country, and not domestically produced.
The Adoption of Secondary Brands
Elon Musk, the CEO of Tesla, has said sometime ago that he had wanted to start a news website called, “Pravda” which means, “True” in response to the negative press he has been recently receiving from the media. However, this could present a great opportunity to promote the ideals of truth and freedom in a nation, such as China, to distribute a secondary brand of car that targets the Chinese/ East Asian demographic.
Many luxury brands have protected its primary brand through the creation of secondary market brands that are targeted for different population demographics. In the 1950s, the luxury European watchmaker Jaegar LeCoultre known for its 14K gold watches created a secondary brand, LeCoultre, made of gold fill and gold plate for the US market; Porsche and Volkswagen are owned by the same parent company, and whilst Porsche is still popular amongst its luxury demographic, Volkswagen or “The People’s Car” has dominated sales on many different continents from China to Europe, and due to the interchangeable parts of both Porsche and Volkswagen, they are essentially similar cars with different branding, although Porsche has retained its luxury status by keeping its production bases firmly inside Germany.
In a similar way, a Tesla + China partnership could give birth to a new secondary brand (真理? 自由?) with a production base in China that targets the needs of the East Asian demographic, whilst Tesla itself remains firmly rooted in production in the US.
In the US - one of the biggest imports are cars at 4.2%. This could grow exponentially over the next 10 years to 6% if US car and motorcycle producers keep its “Made in the USA” philosophy to protect their luxury brand. Although, short-term financial gains may appear tempting in order to satisfy investors and look good on quarterly financial statements, a 10-year-plan has to be considered which affects long-term growth and profitability of a brand. Whilst many brands, such as Burberry, Buick and many others have suffered in short-sightedness as they lost their brand appeal, Tesla could incorporate a strategy similar to what Porsche had undertaken when it had launched the Volkswagen, “The People’s Car”, which would then become the number one most popular vehicle brand in nearly all the major continents of the world 80 years later.
By Sierra Choi
This article originally appeared in www.globalfounders.london
Recently, I was reading in the news about a South Korean couple who was visiting San Francisco with their toddler son, and after visiting the Zuckerberg San Francisco Hospital for a slight bump on the head, in which the boy ended up received a bottle of formula, they received a bill of $18,836. $15,666 had been for triggering “trauma activation” and $3170 was apparently charged for the toddler’s examination by doctors and the baby formula he received whilst taking a nap in his mother’s arms at the hospital for a few hours.
I think this case highlights the extraordinary increasing costs of emergency care under a for-profit system in which healthcare is treated as a commodity. Critics of this system have not only been patients, but it has mainly been doctors who have been the most vocal about their discontents. Under this system of management, doctors have made complaints that their performance review was based on how many hospital beds they fill, how many drugs they prescribed and how many surgeries they performed in a quarterly period. Doctors who do not meet this quota in the for-profit model of healthcare are often under threat of losing their jobs. Due to the incentives and organisational controls that adversely affect the physician-patient relationship, this creates a conflict of interest that ultimately diminish the quality of care and erodes the patient’s trust in their physician and the public’s trust in the medical profession.
In addition, due to the increasing workload that is placed on doctors under this system, they do not have enough time to update their education and focus a portion of their time on research, which is what is necessary in a fast-paced sector such as medicine and healthcare, where many innovative technologies and treatments are primarily being developed at universities but not implemented in a clinical setting.
Retail minute clinics could replace primary care at hospitals for management of chronic diseases such as diabetes, hypertension, seasonal flus and minor injuries.
However, hospitals are also undergoing another revolution; due to the increasing costs of primary care and the rise of insurance premiums, more and more Americans are turning to retail minute clinics for their primary care needs. This creates a shift in dynamic in which hospitals are evolving to become emergency care centers and specialised services for research in idiopathic diseases, whereas the minute clinic serves the needs of the widespread public for management of their chronic diseases.
For-Profit Model of Healthcare or Socialised Medicine?
In the UK, the National Health Service (NHS) was formed in 1948 after WWII, when members of Parliament voted to launch socialised medicine and universal health care for all. During WWII, when many different social classes had been united to fight a common enemy, a sentiment of equality for all began to take shape and the concept of universal health care had been borne. Today, the NHS is under threat, and many UK politicians have suggested following a for-profit model, such as the United States without going so far as to say they will abolish the NHS. Prime Minister Theresa May has said that she would like greater involvement for US corporations in British healthcare during trade negotiations, in which she has been criticised for mimicking a US for-profit model of healthcare that incentivises corporations and shareholders.
However, although socialised medicine initially appears to have many benefits, I also think that under socialised healthcare, a lack of choice may be present under a system in which the govt primarily controls what kind of healthcare patients may receive. In the United States, despite numerous flaws in the healthcare system, people have the freedom of choice to pursue many different options in their healthcare; whereas, in nations that have implemented socialised healthcare such as the UK, France and Canada, people may be forced by law to undergo treatment or prevented from having the freedom to pursue other options in their healthcare.
If we take the recent examples of Baby Charlie Gard and Isaiah Haastrup in the UK, parents were forced to allow their children to die by hospital administrators and did not have the choice to pursue further treatment elsewhere, even when one of the parents had raised enough funds to pursue treatment in the US, the UK courts had stopped the parents from doing so.
President Trump weighed in his opinion and tweeted in support of helping baby Charlie Gard, contradicting the UK courts that demanded that Charlie Gard be taken off life support.
Similarly, in Canada, parents of a child who had a type of cancer were forced to undergo chemotherapy treatments for their child even when both the child and parents rejected the treatment.
In addition, nations such as France have recently passed a mandatory vaccination schedule for children, in which 11 vaccinations have become compulsory and parents are legally obligated to vaccinate their children. Vaccinations have been an area of controversy for decades, however, with the advent of personalised medicine, and epigenetics, it has been discovered by researchers that certain people have genetic predispositions that may make them adversely affected by vaccinations. Due to the fact that children with weakened immune systems also react adversely to vaccinations, it would be dangerous to mandate vaccinations for all babies and children as a “one-size fits all” rule. Mandating vaccinations without first genetically screening babies and children would be putting their lives at risk and increase the likelihood of adverse effects.
Acute cerebellar ataxia following meningococcal group C conjugate vaccination. There have been many reports of delayed or stunted development of the cerebellum in the developing brains of young children after vaccination. This anomaly could be explained by the genetic predisposition of certain children who are at risk or who have weakened immune systems in which they suffer adverse effects of vaccination. This situation could be remedied if pharmaceutical corporations were to genetically profile and monitor each child before vaccination, so that at risk children are exempted from vaccinations.
Although, socialised medicine has been idealised in the media, due to increasing costs of care in the US, and popularised by the films of Michael Moore, upon closer examination, the lack of choice present in patients under a socialised healthcare system may endanger civil liberties. People should have the choice to pursue which type of healthcare may be best for them, and for governments to interfere and force patients into a specific type of treatment against their will is moving towards an authoritarian society that impinges upon freedom of choice and self agency, in addition to becoming a threat to global capitalism.
The Information Age and Rise of Personalised Medicine
Just as Google revolutionised access to information, it is becoming clear that personalised medicine, and not a “one size fits all” treatment model of healthcare will become the norm in the future.
Click to play: https://youtu.be/kNV2pDJJBUA
In 1993, when Former First Lady Hillary Clinton set out to reform healthcare and testified in a Congressional hearing, she said that there was no difference in the quality of care that patients receive despite the large differences in payment under the American healthcare system. This could be explained partially by the lack of personalised healthcare at the time in which patients were treated the same for various illnesses without assessing their genetic profile. A drug and dosage that works for one patient may not be effective in another patient, just as vaccinations can have adverse effects on children with a particular genetic makeup whilst not affecting others. However, since the age of antibiotics, global healthcare has mainly revolved around a platform in which patients are given similar dosages of similar drugs in a “one size fits all” model.
However, now as medical treatment is moving towards immunology and personalised healthcare, pharmaceutical corporations and academic institutions have been involved in research that moves beyond the drug industry into areas such as optogenetics, enzyme replacement therapy, in situ vaccinations, development of human organs in laboratories and ultrasound surgery, a type of non-invasive surgery.
For the last 200 years, invasive surgeries in which cutting a patient open to operate has been the norm. However, now, doctors are able to use MRI guided ultrasound surgery to be able to perform surgeries without cutting open a patient.
Medical innovations such as these are developed from partnerships with universities and hospitals, and it is clear that as hospitals become centres for research with less focus on primary care, that the gap in the market will be provided by retail minute clinic outlets to serve the public’s needs.
It has been widely documented that overworked doctors at hospitals make mistakes, which can often lead to catastrophic results and leads to the deaths of patients in which medical errors have been said to be the 3rd leading cause of death in the United States. The NHS in the UK is facing a similar crisis as doctors are forced to work extra hours due to a lack of funding.
However, with the rise of retail minute clinic outlets, this separation of emergency care vs. primary care allows doctors with specialisations to focus on treatment of idiopathic diseases and research into innovative treatment methodologies at the hospital setting, whilst nurse practitioners at minute clinics can address the management of chronic diseases with a focus on preventative medicine.
By utilising a combination of both for-profit medicine and government funded research, hospitals can serve as non-profit entities, similar to research universities whilst retail minute clinics can fill the gap of primary care. This allows innovation at the highest level, and allows a wider dissemination of primary care that is available to a greater portion of the public, making healthcare affordable for patients, whilst at the same time satisfying shareholders and investors of pharmaceutical corporations.
Under this system of capitalism, giving the patient the power of a consumer; and utilising a combination of both for-profit and nonprofit healthcare whilst separating the institutions that provide emergency care (nonprofit) vs. primary care (for-profit), patients would have a choice in the type of care they want to receive and not be forced to undergo treatment against their will, as what has been occuring in nations with socialised medicine such as the UK, Canada and France, in which the government has the power to dictate what type of treatment a person can have.
How Pharmaceutical Corporations and Insurance Companies Can Pivot In the Era of Preventative Medicine
When President Trump was elected, he had a platform to “come down hard” on pharmaceutical corporations. He had a plan to take on the “tangled web of special interests” that drive up drug prices, noting the high amount that pharma companies spend on lobbyists to “protect the status quo” and “keep drug prices high.” He also cited supply chain middlemen for getting “very rich” under the current system and promised regulatory and legislative changes to address the status quo. Under the leadership of Secretary Alex Azar, a former pharmaceutical executive, President Trump’s policies “stopped short of giving the government authority to negotiate Medicare drug prices or liberalizing curbs on drug imports, policies strongly opposed by pharma".
However, although focusing on limiting drug prices may be a noble effort, I think instead by focusing on the patient, and allowing patients direct and immediate access to information in their medical history across multiple institutions and databases, including access to all the doctor’s notes in their file would be giving the patient a higher amount of control in which services they would want to choose for their primary care. Patients should have direct and immediate access to their entire medical history so that they can be informed about a wide variety of treatment options in order to choose the type of treatment that they want. By being informed about their own medical history and by having access to doctor’s notes, patients can have the choice to make their own decision about what’s best for them.
Brazil's Yoshiyuki Shimizu (R), France's Michel Claverie (C) and Germany's Wolfgang Reuter (L) compete in the men's 100m final for athletes between 85 and 89 years old, during the World Masters Athletics Championships (From the Telegraph). The reason for longevity in certain populations have been overwhelmingly due to a physically active lifestyle. By shifting Medicare to focus on sports and active lifestyles rather than on drug coverage could radically alter the quality of life in the elderly population.
In addition, currently Medicare only covers a limited portion of physical and occupational therapy. However, Medicare would be more cost effective in the elderly if it was integrated alongside physical rehabilitation services with a focus on sports and active lifestyles, instead of what is occurring at the present time in which the elderly are often bedridden at hospitals on multiple drip medications, waiting to die. Instead, Medicare would be more cost effective if it were utilised across different occupational services, so that it could be easily integrated with physical therapists and retail gym outlets to encourage the elderly to become active members of our societies instead of primarily focusing on Medicare to cover drug costs. If Medicare covered group athletic activities, specialised one-on-one gym training sessions, and increased in coverage as the elderly becomes more active in local volunteer organisations, this could radically change the quality of life for many elderly people, who are often isolated, only to spend their last days bedridden in the hospital.
This also provides an opportunity for health and medical insurance companies to cater their services towards seniors, so that part of the insurance coverage can offer services such as local gym memberships, lifelong physical therapy services and preventative medicine education. In this way, insurance companies can move the focus from covering short-term medical treatment primarily based in the hospital setting, and move towards long-term care that targets the elderly’s entire lifestyle, creating more value for shareholders and investors, in addition to improving the quality of life for seniors.
The global wellness economy was $3.7 trillion in 2015 and grew 3 times larger than pharmaceutical industries and projected to double over the next decade. This presents an opportunity for insurance companies to cater to specific lifestyle needs of the elderly and for pharmaceutical corporations to move from a “sick care” model of healthcare to a preventative model of healthcare that focuses on personalised medicine with more frequent preventative screenings.
In every part of the world that has documented the longevity of its people, it has been noted that they all lead physically active lifestyles. Much of my insights about elderly care comes from my direct experience with the passing away of my father last year. What my father didn’t need were more drugs nor to be immobilised on a hospital bed. What my father needed was physical therapy and have a community of other elderly people to be physically active. What my father needed was more frequent preventative medical screenings and not merely a short annual checkup. I still have so many regrets about the way in which my father passed away. I hope one day, we can all come together; insurance companies, pharmaceutical companies, and politicians to shape government policies, in order to improve the quality of life for our senior citizens, because the longer the lifespan of a patient who is active in society, you have a customer for life.
By Sierra Choi
This article was first published in www.globalfounders.london