A remarkable global institution-at least in developed countries-is a place known as Ikea. This is yet another international business based in relatively tiny Sweden, a country that defies the tenets of fundamentalist capitalism with great success. Mixed economies work, otherwise we wouldn't have Ikea, Volvo, Saab and so on. But that's another argument, another column.
Ikea pretends to be a furniture shop, but it's really a giant, identikit lifestyle store. And I mean giant. There are three Ikea stores in my hometown, Toronto, part of a worldwide network of hundreds of sprawling warrens of consumer choice. Everything is meticulously planned-Swedish-style-down to the cheap cup of fragrant coffee-again Swedish-style-that happy customers clutch in their fists as they dash between aisles, picking up boxes that may contain beds or bathroom cabinets, kitchen fittings or toys. In Toronto, Ikea is the first stop of the city's newly arrived immigrants, or students leaving home in need of cheap furniture. Like almost everything else from Sweden, Ikea is socially useful as well as profitable.
Ikea began life as an outgrowth of Sweden's powerful forest products industry but it soon became a way of marketing all things Swedish, primarily the austere, tasteful design that the country is now known for. A huge range of products for the home-all with absurd names like "Bille", "Lande" or my favourite "Ekesvog"-are on display. Prices are cheap, the shop attendants are friendly and helpful. No wonder that on any given day, all Ikea stores are mobbed with customers. Each outlet does millions of dollars in business every week.
The real secret of Ikea's success is an idea that's catching on in other walks of life, and it's a worrisome one. Ikea's furniture, you see, might look diverse and unique. It may call out to you "take me home and put me in your bedroom", but it's all mass-produced from a narrow range of patterns that use interchangeable parts to maximum efficiency. In other words, a few basic building blocks appear in almost every item on sale and this reduces costs to the company hugely. It's good marketing and even better cost control. But once the idea gets into other sectors, it's time to worry.
These days, what line of work doesn't involve standardisation of some sort? As we're finding out, the international accounting industry used universal and abysmally low standards to evaluate corporate clients' balance sheets. That's one reason why the global economy is sinking. Policy makers in all countries are encouraged to follow identical paths if they're to get any money from multilateral institutions-never mind that the paths encouraged by International Monetary Fund and World Bank planners are increasingly discredited in rich countries. And even soft development assistance follows an Ikea-like approach, fitting together bits developed in meeting rooms back home, to produce aid policy in myriad situations around the world.
To put it simply, what works for Ikea won't work for aid, public policy or economics. That's becoming increasingly plain. Countries, societies, places, each has different approaches, local conditions and special needs. Applying the theories of thinkers from home rarely helps with any of those unique challenges. At best, imported approaches provide comfort only to the official who's paid by his government to run the program. If it goes well, then that's down home know-how at work. If it fails, the locals stole the money or didn't understand the concept. But as for the beneficiaries, they can wait until we find the right combination of ideas, funding and so on. Perhaps there'll be some in the warehouse, next to the mattresses and alongside the kitchen sinks. If we just get a few more of them down, maybe it'll fit together next time...