Tim Harford is an award-winning journalist, economist, and broadcaster. He’s the author of the bestselling The Undercover Economist, The Undercover Economist Strikes Back, Messy, Fifty Inventions That Shaped the Modern Economy, Adapt, and The Logic of Life. Harford is currently a senior columnist at the Financial Times and host of the BBC Radio 4 program More or Less.
Fifty Inventions That Shaped the Modern Economy showcases the technological change in our society over the years by reviewing the tools, people, and ideas that affected our population. Bestselling author and Financial Times columnist Tim Harford explores the origin and impact of key inventions, from the plough to artificial intelligence, Gillette’s disposable razor to IKEA’s Billy bookcase, and much more.
Below is an excerpted chapter from Fifty Inventions That Shaped the Modern Economy, titled ‘Billy Bookcase.’ It explores the significance of IKEA’s Billy bookcase, and how it has changed the world of furniture.
Denver Thornton hates the Billy bookcase.
He runs a company called unflatpack.com. If you buy flat- pack furniture from a company such as IKEA but you’re terrified by dowels and Allen keys and cryptic instruction leaflets featuring happy cartoon men, you can get someone like Thornton to come to your house to build it for you.
And the Billy bookcase? It’s the archetypal IKEA product. It was dreamed up in 1978 by an IKEA designer named Gillis Lundgren. He sketched it on the back of a napkin, worried that he’d forget it. Now there are sixty-odd million in the world, nearly one for every hundred people. Not bad for a humble bookcase. In fact, so ubiquitous are they, Bloomberg News uses them to compare purchasing power around the world. According to the Bloomberg Billy Bookcase Index – yes, that’s a thing – the bookcase costs the most in Egypt, just over $100; in Slovakia you can get one for less than $40.
Every three seconds, another Billy bookcase rolls off the production line of the Gyllensvaans Mobler factory in Kattilstorp, a tiny village in southern Sweden. The factory’s couple hundred employees never actually touch a bookshelf – their job is to tend to the machines, imported from Germany and Japan, that work ceaselessly, day and night, to cut and glue and drill and pack the various component parts of the Billy bookcase. In goes particleboard by the truckload, six hundred tons a day; out come ready-boxed products, stacked six by three on pallets and ready for the trucks.
In reception at the Gyllensvaans Mobler factory, in a frame on the wall, is a typewritten letter – the company’s very first furniture-making order from IKEA. The date of the letter: 1952.
IKEA was not, back then, the global behemoth it is today, with stores in dozens of countries and revenues in the tens of billions. The company’s founder, Ingvar Kamprad, was just seventeen when he started the business with a small gift of cash from his dad, a reward for trying hard at school despite dyslexia. By 1952, at age twenty-six, young Ingvar already had a hundred-page furniture catalogue, but hadn’t yet hit on the idea of flat packing. That came a few years later, as he and his company’s fourth employee – one Gillis Lundgren – were packing a car with furniture for a catalogue photoshoot. “This table takes up too much darn space,” Gillis said. “We should unscrew the legs.”
It was a lightbulb moment. Kamprad was already obsessed with cutting prices – so obsessed, some manufacturers had started refusing to work with him. And one way to keep prices low is to sell furniture in pieces rather than paying laborers to assemble it. In that sense, it may seem perverse to get in a Denver Thornton to construct your Billy bookcase – like buying ingredients at a supermarket and hiring a private chef to cook your dinner.
That might be true if outsourcing the labor to the customer were the only consideration that made flat packs cheaper. But even bigger savings come from precisely the problem that inspired Gillis Lundgren: transport. In 2010, for instance, IKEA rethought the design of its Ektorp sofa. It made the armrests detachable. That helped halve the size of the packaging, which halved the number of trucks you need to get the sofas from factory to warehouse and warehouse to store. And that lopped a seventh off the price – more than enough to cover Denver Thornton’s labor for screwing on the armrests.
It’s not just furniture for which constantly questioning product design can reap dividends. Consider another IKEA icon: The Bang mug. You’ve probably had a drink from one – with yearly sales reaching 25 million, there are plenty of them knocking around. Its design is distinctive – wide at the top, tapering downward; a small handle, right by the rim – and it’s not motivated purely by aesthetics. IKEA changed the height of the mug when designers realized doing so would make slightly better use of the space in their supplier’s kiln in Romania. And by tweaking the handle design, they made the mugs stack more compactly – more than doubling the number you could fit on a pallet, and more than halving the cost of getting them from the kiln in Romania to the shelves in stores around the world.
It’s been a similar story with the Billy bookcase. It doesn’t look as if it’s changed much since 1978, but it does cost 30 percent less. That’s partly due to constant, tiny tweaks in both product and production method.16 But it’s also thanks to sheer economies of scale— the more of something you can commit to making, the cheaper you can get it made. Look at Gyllensvaans Mobler: compared with the 1980s, it’s making 37 times as many bookcases, yet its number of employees has only doubled. Of course, that’s thanks to all those German and Japanese robots. Yet a business needs confidence to sink so much money into machinery, especially when it has no other client: pretty much all Gyllensvaans Mobler does is make bookcases for IKEA.
Or consider, again, the Bang mug. Initially, IKEA asked a supplier to price up a million units in the first year. Then they said: What if we commit to five million a year for three years? That cut the cost by a tenth. Not much, perhaps, but every penny counts. Just ask the famously penny-pinching Ingvar Kamprad: In a rare interview to mark his ninetieth birthday, Kamprad claimed to be wearing clothes he’d bought at a flea market. He is said to fly economy and drive an old Volvo. This frugality may help explain why he’s the world’s eighth-richest man – although the four decades he spent living in Switzerland to avoid Swedish taxes may also have something to do with it.
Still, penny-pinching isn’t all it takes to succeed. Anyone can make shoddy, ugly goods by cutting corners. And anyone can make elegant, sturdy products by throwing money at them. To get as rich as Kamprad has, you have to make stuff that is both cheap and acceptably good. And that’s what seems to explain the enduring popularity of the Billy bookcase. “Simple, practical and timeless” is how Gillis Lundgren once described the designs he hoped to create; and the Billy is surprisingly well accepted by the type of people you might expect to be sniffy about mass-produced MDF. Sophie Donelson edits the interiors magazine House Beautiful. She told AdWeek the Billy is “unfussy” and “unfettered,” and “modern without trying too hard.”
Furniture designer Matthew Hilton praises an interesting quality of the Billy: anonymity. Interior design expert Mat Sanders agrees, declaring that IKEA is “a great place for basic you can really dress up to make feel high- end.” The Billy’s a bare-bones, functional bookshelf if that’s all you want from it, or it’s a blank canvas for creativity: on ikeahackers.net you’ll see it repurposed as everything from a wine rack to a room divider to a baby-changing station.
But business and supply-chain nerds don’t admire the Billy bookcase for its modernity or flexibility. They admire it – and IKEA in general – for relentlessly finding ways to cut costs and prices without reducing the quality of its products. That is why the Billy is a symbol of how innovation in the modern economy isn’t just about snazzy new technologies, but also boringly efficient systems. The Billy bookcase isn’t innovative in the way that the iPhone is innovative. The innovations are about working within the limits of production and logistics, finding tiny ways to shave more off the cost, all while producing something that looks inoffensive and does the job.
And that annoys handyman Denver Thornton. “It’s just so easy and monotonous,” he says. “I prefer a challenge.”
Discover the surprising stories behind the inventions that helped shape our everyday lives in Tim Harford’s new book, Fifty Inventions That Shaped The Modern Economy, on sale now.