Simple Innovations Can Have Huge Consequences

On this day in economic and business history ...

Several innovations reached critical milestones in their development on April 27. All three of those we'll examine today have affected the companies on the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , but the effect isn't always straightforward, nor is it always positive. In fact, the first development on our list never added much at all to its creator's bottom line -- but its influence on the computing industry (which has placed five companies on the Dow) is undeniable. Let's take a closer look at these three developments, to better understand how they've helped shape the business world as it exists today.

Point and click, day one
Xerox (NYSE: XRX  ) introduced the world's first commercially available computer mouse on April 27, 1981. The mouse had been invented way back in the 1960s by Douglas Englebart and his team of researchers at Stanford, but it would take many years for technologists to translate his innovations into commercially successful products. In fact, until the mouse was released as part of the Xerox Star workstation package, there had been no computers with graphical interfaces available for public purchase. Without graphical interfaces, there simply hadn't been a reason for anyone to use a mouse.

The Star's graphical interface and its mouse were both descendants of the legendary Xerox Alto, an experimental computer developed by Xerox's Palo Alto Research Center that is largely known now for its influence on young entrepreneurs Steve Jobs and Bill Gates. However, like the Alto, the Star was too far ahead of its time and wound up quickly eclipsed by a lower-cost but less-functional computer released later in 1981: the PC.

It was not until 1984, when Apple launched the Macintosh, that a computer purpose-built for mouse controls caught on with the public. By the time Dow component Microsoft's (NASDAQ: MSFT  ) Windows 1.0 hit the market in 1985, the mouse era had taken hold. The combination of a mouse with a graphical user interface could have propelled Xerox ahead of PC creator (and longtime Dow component) IBM, but Xerox's inability to capitalize on advanced technology is the stuff of corporate legend. IBM is no less to blame for its inability to maintain control of the standard it created. By allowing Microsoft to control the PC's operating software, IBM missed a golden chance to leverage its scale and technological expertise into a fully proprietary mouse-based computing experience.

How much longer will the mouse era last? The mouse may soon find itself relegated to technology's dustbin as touchscreen devices gain prominence with the public. That won't happen for some time, but it's interesting to think about what our next control scheme will be. Beyond touch, will we move things on the screen with our eyes? Will our brainwaves be the next control scheme? The answer may be just around the corner.

The 747's biggest threat
The world's largest passenger aircraft took off for the first time on April 27, 2005. The Airbus A380 was built as Europe's answer to Boeing's (NYSE: BA  ) long dominance of the large-body aircraft market -- the 747 had dominated large-scale long-haul flights for decades since its introduction in the late 1960s. Airbus didn't skimp on size, as the A380 boasted about 50% more floor space than the largest 747 model on the airline market. More than 850 people can cram into an all-economy A380 configuration, but it more typically carries about 525 people between the standard three-class configuration of first, business, and economy. The A380 is apparently so well designed that test pilot Jacques Rosay, who took the bigger-than-big bird on its April 27 first flight, told the press it was "like handling a bicycle."

There aren't that many of these super-jumbo jets in service yet, but Airbus is working hard at its backlog of over 250 A380s, which will join more than 100 already in service by the eighth anniversary of its first flight. That doesn't quite compare with the backlog of more than 800 787s Boeing has amassed since announcing its next-gen jet, which only flew for the first time in 2009. Of course, if mechanical problems continue to plague the 787, Airbus might see a few more orders roll in.

A child-rearing revolution
The worst part of child-rearing is undoubtedly the constant need to change diapers, a task made all the worse by the fact that, until quite recently, there was no such thing as a disposable diaper. That all changed in the 1960s, when longtime Dow component Procter & Gamble (NYSE: PG  ) sought new uses for a paper pulp plant that it had bought in 1956. The man in charge, Victor Mills, set about using the mill's absorbent paper to create the world's first fully disposable diaper. A patent was sought in 1961, and finally, on April 27, 1965, Pampers disposable diapers gained their patent, legitimizing (but not necessarily protecting) P&G's huge leap forward for diaper-weary young families everywhere.

Granted to several executives at P&G's Cincinnati headquarters, the patent laid out a few basic principles of disposable diapers that still hold true today. The design, an hourglass shape with a waterproof edge lining, is still used in the manufacture of disposable diapers today, which have grown to dominate more than 90% of the diaper market in the present day. Within a few years, Kimberly-Clark came out with its own disposable diaper under the Huggies brand. Since Huggies was never sued into oblivion and now controls nearly twice as much of the disposable-diaper market as Pampers, it's safe to assume that P&G's patent didn't give it any sort of competitive advantage.

Although disposable diapers have made life easier for millions of parents, there have been certain environmental drawbacks. In his book American Inventions, Stephen Dulken points out that "the average child will use about 5,000 diapers, and it takes some 800 pounds of fluff pulp and 280 pounds of plastic (including packaging) to supply one baby for a year." That's a lot of extra trash when added up over the course of millions of children across five decades of use.

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