5 Ways to Leverage Proximity to Shape Tomorrow's Business, Society, and Careers

Welcome to the latest issue of the Product Management Learning Series - a series of live streaming events and newsletter articles to help you level up your product career! 🚀

In our 58th episode, our speaker was Robert C. Wolcott, cofounder and chair of The World Innovation Network (TWIN Global), adjunct professor of innovation at the Booth School of Business, University of Chicago, and adjunct professor of executive education at the Kellogg School of Management, Northwestern University. His books include Proximity: How Coming Breakthroughs in Just-in-Time Transform Business, Society, and Daily Life and Grow from Within: Mastering Corporate Entrepreneurship and Innovation. Wolcott is an active venture investor in more than thirty companies, many of which are leading the Proximity revolution.

If you missed the event, you can watch the full event recording here. 

Below are a few takeaways from my conversation with Professor Robert Wolcott:

Proximity is predictive of the direction of every industry due to digital capabilities. Digital technologies push value creation ever closer to the moment of demand, transforming business models.

Professor Robert Wolcott defines "Proximity” as the ability of digital technologies to push the creation of value closer to the actual moment of demand. Traditionally, proximity refers to physical closeness, but in this context, it encompasses the digital compression and distribution of capabilities, whether physical or virtual, across the economy. Technologies enabling this shift include AI, mobile apps, 3D printing, rooftop solar power, and large and small language models. These innovations allow businesses to meet customer needs more precisely and efficiently, revolutionizing production models and business strategies by enabling just-in-time creation and delivery of products, services and experiences.

Digital technologies revolutionize work and production by enabling instant value creation, enabling companies to balance efficiency with innovative, proximity-driven strategies.

During the interview, Professor Robert Wolcott explained how digital technologies are revolutionizing various aspects of life, particularly in work, creation, and production. For example, 3D printing allows for on-demand manufacturing, while generative AI, like ChatGPT, transforms content creation by quickly generating drafts that users can refine. This shift exemplifies the concept of proximity, where value is created almost instantaneously at the point of demand. Wolcott emphasized that proximity impacts diverse realms including healthcare, defense, and energy, highlighting how these technologies compress capabilities into smaller, more efficient forms distributed widely across industries.

Companies should adapt by balancing efficient current operations with innovative, future-oriented strategies. For instance, 3D printing allows firms to mitigate supply chain risks and enhance production flexibility. Innovations like L'Oreal's use of startup Interstellar Lab’s pods (optimized growing environments) allow the French luxury giant to produce essential plant-derived ingredients onsite in their manufacturing facilities. For L’Oreal, proximity resolves critical supply chain risks and dependencies. Netflix is another example, revolutionizing video content accessibility anywhere, anytime–quintessential proximity. In healthcare, he highlighted how always-on health monitoring and AI could shift the focus from curing diseases to preventing them, using real-time data to detect health issues well before they become problems. This paradigm shift requires a new way of envisioning business models, where proximity integrates deeply into all aspects of strategy and operations, driving both incremental improvements and transformative innovations.

The shift towards proximity in technology brings both opportunities and risks, necessitating balanced regulation and strategic policies to protect consumers, promote innovation, and enhance resilience and sustainability in various sectors.

Professor Robert Wolcott discussed the challenges and risks of proximity, particularly in marketing and human behavior. He warned that proximity could increase desire for harmful products, driven by sophisticated marketing. He also highlighted the dangers of constant healthcare monitoring and genetic modification, which could be misused. Citing dystopian literature like Orwell's "1984" and Huxley's "Brave New World," Wolcott illustrated the risks of excessive control and fleeting pleasures enabled by technology. He emphasized concerns about privacy, decision-making in abundance, and potential narcissism, urging a balance that maximizes benefits while mitigating risks.

Wolcott also addressed policy implications for a proximity-based economy, advocating for balanced regulation that protects consumers without stifling innovation. He noted that regulation often lags behind technology and suggested learning from global practices. Wolcott highlighted Europe’s strong consumer protections but lack of leading tech companies compared to the U.S. and China. He proposed that the U.S. study other countries' successes and failures to inform its policies.

Proximity offers enhanced resilience and sustainability through decentralized power generation, like rooftop solar and small-scale wind, making nations more adaptable in crises. Wolcott compared this to the Internet's origins, designed to provide resilient communications systems even through nuclear attacks, and modern distributed energy systems that could better withstand conflicts like those in Ukraine. He advocates for policies that encourage innovation while ensuring robust protections and adaptability.

Advancements in proximity through space exploration and virtual reality will revolutionize experiences, making them more efficient, sustainable, and immersive, while also addressing issues like resource scarcity and health.

Looking ahead, Professor Robert Wolcott envisions a future where proximity transforms our lives through advancements in space exploration and virtual reality. In space, proximity will be crucial for survival, as resources must be maximized on long missions like a journey to Mars. In virtual reality, the development of brain-machine interfaces will create experiences indistinguishable from real life, ushering in a "post-virtual" world. This future will allow people to have any experience anywhere, anytime, significantly impacting supply chains and sustainability.

Wolcott explained that this shift could make concerns like poverty and obesity obsolete, as technologies to enhance physical fitness and well-being will become widespread. He referenced the movie "Wall-E," suggesting that while it depicted a future of widespread obesity due to technology, actual advancements like GLP medications from Lilly and Novo Nordisk are already addressing such issues. Ultimately, proximity-driven innovations promise to enhance human experiences while promoting more efficient and sustainable use of resources.

Entrepreneurs should focus on innovative, hard-to-replicate solutions that anticipate future capabilities, while corporate professionals should balance short-term gains with long-term visionary projects to drive cost savings and future readiness.

When it comes to advice for entrepreneurs, Professor Robert Wolcott emphasized the unprecedented opportunities available now for them leveraging proximity. He advised starting with a clear understanding of customer needs, envisioning a scenario where they can have anything, anywhere, anytime. Entrepreneurs should then explore how to achieve this vision using current and future technologies, much like how Netflix anticipated the rise of streaming. Wolcott also recommended seeking ventures that drive proximity in innovative ways, making it hard for incumbents to replicate. He cited examples like Interstellar Lab, which used NASA-funded technology for Earth applications, and Unqork, which pioneered no-code software development, gaining significant market traction and investment.

For professionals aiming to leverage proximity within established companies, Wolcott advised first identifying whether they want to rise within their current organization or venture into entrepreneurship. For those choosing to stay, he recommended focusing on projects that can significantly reduce costs or risks in the short term using proximity technologies. Success in these areas can build credibility and support for more ambitious, transformative projects. Wolcott stressed the importance of balancing immediate, impactful initiatives with long-term, visionary goals to ensure both short-term gains and future readiness.

👉Grab your copy of Proximity: How Coming Breakthroughs in Just-in-Time Transform Business, Society, and Daily Life here. 

🍿 Next up: Join me and Nicholas Thompson , CEO of The Atlantic and co-founder of SpeakEasy AI, for an enlightening discussion as we delve into the transformative impact of generative AI on journalism. 

We will explore how AI is reshaping the ways stories are discovered, crafted, and shared, while also examining the balance between AI's potential and the essential human touch in storytelling. Through Nick's insights, we'll uncover the evolving roles of journalists, the ethical landscape of AI in media, and innovative strategies for media sustainability in this new era. Discover the future of media employment, the importance of editorial integrity, and Nick's vision for a media world enhanced by AI. 

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