Perhaps we should have seen this acceleration coming. In the 1930s an American aeronautical engineer named T. P Wright carefully observed aeroplane factories at work. He published research demonstrating that the more often a particular type of aeroplane was assembled, the quicker and cheaper the next unit became. Workers would gain experience, specialised tools would be developed, and ways to save time and material would be discovered. Wright reckoned that every time accumulated production doubled, unit costs would fall by 15 per cent. He called this phenomenon ‘the learning curve’.
Three decades later, management consultants at Boston Consulting Group, or BCG, rediscovered Wright’s rule of thumb in the case of semiconductors, and then other products too. Recently, a group of economists and mathematicians at Oxford University found convincing evidence of learning curve effects across more than 50 different products from transistors to beer – including photovoltaic cells. Sometimes the learning curve is shallow and sometimes steep, but it always seems to be there.
The learning curve may be a dependable fact about technology, but paradoxically, it creates a feedback loop that makes it harder to predict technological change. Popular products become cheap; cheaper products become popular.
John Kay, an economist at Oxford University, argues that advertising doesn’t work because of explicit messages. He suggests that one context is particularly important that of waste. By waste he means spending more on adverts than is necessary to functionally communicate the explicit message. That could be a 90-second ad, acres of white space on double-page spread or extravagant production values.
Advertising known to be expensive signals the volume of the resources available to the advertiser. As Kay says in his landmark paper:
The advertiser has either persuaded lots or people to buy his product already, a good sign, or has persuaded someone to lend him lots of money to finance the campaign.
Advertising works, not despite its perceived wastage, but because of it.
Recent research indicates that suggestion not only influences what we smell, but also how we react to smells. In 2005 researchers at Oxford University asked subjects to sniff two odors, one labeled cheddar cheese and the other body odor. Predictably, the subjects rated the body odor as significantly more unpleasant. However, the two smells were identical. Only the labels differed. Consider that the next time you’re enjoying some especially pungent cheese at a cocktail party.