Innovation and (Steve) Jobs

From the iPhone and iPod to a…thermostat?

At a Silicone Valley start-up, a former Apple design leader has switched his focus to diminishing carbon emissions, decreasing electric bills, and moderating energy usage. He has changed from iPhones and iPods to thermostats.

Described in the NY Times, his firm, Nest Labs, has developed a “cool” thermostat. It looks great, has motion sensors that track you, can self-program, and with a click or two, does what you want. Knowing that existing digital thermostats are complex and/or boring, he wants to transform the experience.

Our bottom line? Incentive. Yes, even when we care about the environment, it takes the appropriate incentives to modify our behavior.

The Economic Lesson

Noted during a 60 Minutes segment, for personal computers, animated movies, music, telephone, retail stores, tablet computing and digital publishing, Steve Jobs made the past obsolete.

Now, maybe, it’s the thermostat? Like his former employer, Nest Labs founder is hoping for some of Joseph Schumpeter’s (1883-1950) creative destruction.

An Economic Question: Explain the following equation: incentive + green technology + creative destruction =  Nest Labs’s thermostat