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My Christmas tree lights and the success of globalisation

On Sunday, my family and I will unwrap our Christmas presents under a glossy Nordmann fir tree that was brought to the door of our London home last week. It is festooned with decorations and a string of lights.

A Christmas tree is surrounded by travellers at Austin-Bergstrom International Airport in Austin, Texas, on Thursday, Dec 22, 2016. Photo: AP

A Christmas tree is surrounded by travellers at Austin-Bergstrom International Airport in Austin, Texas, on Thursday, Dec 22, 2016. Photo: AP

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On Sunday, my family and I will unwrap our Christmas presents under a glossy Nordmann fir tree that was brought to the door of our London home last week. It is festooned with decorations and a string of lights.

There is nothing unusual in that: The same or similar no doubt goes for many readers. But our Christmas tree and its decorations are symbols of more than the festive season. They also epitomise the way in which technological innovation occurs steadily and stealthily as companies compete globally.

This thought occurred to me the other day as I was admiring our tree and realised that its appearance would have been impossible not long ago. It is covered with light-emitting diodes instead of incandescent bulbs, and they glow in a warm white that is cosier than the harsh blue-white of older LEDs.

The lights are better in other ways, too. They were cheaper — £23 (S$41) for a 30m string of 300 lights — and more reliable than the Christmas tree lights of my youth, which were wired in series so a whole line would go dark if a bulb burst or loosened. They are also energy efficient: LED bulbs do not get hot and can be safely touched. It encouraged me to find out more about our Christmas lights, and this is what I discovered.

We bought them on Amazon, influenced by the price and the number of stars in the customer reviews. They came from a small UK company called Ansio, a Finnish word for “merit” or “worth”, which its founders chose because it sounded good, started with A, and was not taken.

Ansio was founded in London in 2014 by three Indian-born immigrant entrepreneurs — two from Chennai and one from Hyderabad — to import and sell household products directly to consumers. They started with electric fans and have diversified into lighting, particularly decorative LEDs.

The partners chose the manufacturers for their lights by visiting the Canton fair, the largest trade fair in China, which is held twice a year in Guangzhou. It is a vast emporium for foreign buyers seeking to strike deals with Chinese suppliers in many industries. Having selected three (since reduced to two) LED manufacturers in Ningbo, an industrial city near Shanghai, they visited the factories to ensure the quality of the products. There was plenty of choice: Ningbo is full of LED makers and China competes with Japanese and South Korean companies so fiercely that prices have fallen.

Our Christmas tree lights were shipped from Ningbo across the world and through customs to a British warehouse, then delivered to us by an Amazon courier. Many of Ansio’s customer service and back-office tasks are carried out over the Internet by remote workers in India. Although tiny, the company has a global supply chain.

Globalisation is only half the story of the lights; the other is technology. American Christmas trees followed the German tradition of being lit with candles until Edward Johnson, a vice-president of the Edison Electric Light Company, fixed electric lights to the tree in his New York house in 1882 to show off the invention to passers-by. By 1903, its successor, General Electric, was selling “festoons” of 24 tree lamps for US$12.

The visible LED was invented by Nick Holonyak, a GE research scientist, in 1962, but it glowed red and early LEDs were confined to devices such as clocks and calculators. It became possible to light offices and homes with them a decade ago when companies such as Philips started making blue LEDs treated with phosphor to glow white. The technology has improved rapidly. Today’s diodes emit four times as much light in lumens per watt of power as they did eight years ago, and the cost per lumen has fallen one hundred fold, according to Philips.

As technology has advanced, economies of scale have grown. China’s push into LEDs has caused a leap in global capacity: There is a reason my lights were cheap.

New technology tends to be expensive but prices often fall to a fraction of their original level once second, third, fourth and later generations appear, and it gradually becomes a commodity. To buy 300 of the tree lamps sold by GE in 1903 would have cost US$3,870 at today’s prices. A display such as ours would have been a great luxury.

The quality of LED lights has also improved. Not only are our lights safer than crudely wired incandescents, but modern LEDs are capable of glowing in a range of colours and of changing during the day. As I press a button on the plug, made in Changzhou in the eastern province of Jiangsu, our lights display seven patterns, in turn flashing, glowing and twinkling. We chose white but could have picked other shades.

If there is a parable in our Christmas lights — sold by a British-Indian company through a US e-commerce platform, made in China and given a Finnish name — it is this. Globalisation and technological innovation have grown unpopular this year, blamed for the loss of some jobs and fracturing of communities in developed economies, but they also bring material benefits.

Many things we buy easily are not only cheaper, but much better than they used to be. If we allow it, they will carry on improving. Merry Christmas. FINANCIAL TIMES

 

ABOUT THE AUTHOR:

John Gapper is business columnist and associate editor of the Financial Times.

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