Path dependency
A commercial & social nightmare
Ever notice that footpaths, especially in the rural areas and villages across South Africa, do not make sense.
They are winding, and at times non-efficient as a road to get you to where you need to go.
But everyone uses it. . .
This issue is not unique to rural villages or Africa as a whole. It is a present throughout the world, from paths made in the snow in Europe and the USA, to paths in the outback of Australia and Asia.
The same thing seems to be the case — winding roads that make no sense, yet everyone uses them.
This strange human issue exist outside the 'harmless' paths in veldts and in snow, and can be found in industry, business and society as a whole.
There is a name for this, economists call it Path Dependency
Path Dependence is largely looked at in the technology space, as a key determinant or predictive ability for market commentators on how brands and products get diffused within a particular market. As indicated this phenomenon, permeates all areas of human international an society.
It is present in areas such as recruitment — where the underlying sentiment is that talent for a particular industry looks and behaves a certain way. For example, the best skills for accounting come from a particular institution, dressed up in a package that looks a certain race and a particular gender.
This ideology creates significant barriers of entry for those individuals who do not possess the dominant profile characteristics, and thus, diversity in sectors and the larger national commercial environment is never achieved.
The same people that lead corporates, invariably, hire people who are similar to them, are comfortable with. Candidates who will exhibit the same character traits and background as they do. Think about how an alma mater plays the dominant role in determining the success of an individual.
In our work representing brands and products, great contact is made with corporate retail buyers. What is immediately noticeable is the glaring lack of diversity.
Similar in the banking industry, there is a dominant package that most need to adhere to, where diversity is limited.
One is able to notice the same character traits in most individuals in that industry, similar or overwhelming majority of a particular racial and gender. All factors that indicate a certain bias and lack of understanding of the different within this grouping.
We witness Path dependency in our sports codes, in our golf clubs and in corporate boardrooms. Individuals who are almost non-distinguishable from each other, pushing the same agenda that has been perpetuated for generations.
The limited perspective of these individuals and groupings, ensures that alternative voices are never heard.
Ideas, brands and products from the "unintrenched" struggle to find traction and in many cases, never make it to the consumer market.
The consumer base of South Africa ends up being served less than optimal, as people who look like them, understand their requirements, are barred from offering those products that they are keenly suited to be able to offer.
Lets take the case of condiments — new brands and products seldom surface, yet the consuming majority makes and consumes condiments that are not available to them in the retail value chain. All because the possible producers of these products have no clear route-to-market, in a path dependence filled commercial sector.
We need to change the narrative and allow for greater diversity of thought, diversity of production and diversity of off-set points.
Path dependency perpetuates racist sentiments, sexist doctrines and intolerance for others, deemed different.
Route-to-Market (RTM), this is the discipline of conceptualising the commercial strategy of taking a concept (can be a service or slogan to band around - essential to political parties), product or brand to the consuming market you wish to serve.
It needs to be kept in mind, no product, brand or service is suitable for all markets, it is imperative that you clearly define your desired market in order to effectively device a strategy to capture that market.
In the South African economy, based on archaic system of diffusion and business, we have an environment where access to most goods & services is via one of 1 to 6 major suppliers.
From Energy, which is received from a single state-owned entity to media, which is received from the oligopoly of 3 major groups and the example continues into banking sector, retail environment and many more.
We thus have little to no form of competition. Furthermore, the economy lacks real alternative routes to market for new products or services.
Our supply chains rely heavily on historical understandings that bias is placed on products and services that keep the status-quo. New brands that cater to a category that is underserviced, do not get effective traction.
New services that do not tie up to the established norm, find it hard to break into the market. The lever of the economy are thus in the hands of a few, claiming to be serving us all, without real service but keeping all benefit.
Networks matter, and some, matter more than others.
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