In one of my standard presentations I make the point that the value proposition in the 19th century was agriculture when nearly 80% of the working population was involved in some form of agriculture. Now the figure is less than 3%. In the 20th century the value proposition shifted to manufacturing and material goods with a high in 1950 of 35% of the working population involved in industry, now that figure is 15% and declining. Another shift is taking place in the 21st century as the value proposition shifts to experiential. Now nearly 80% of the population is involved in the service sector which includes everything from flipping burgers to investment banking to professional sports. The highest paid in our economy are those that create the greatest experiences for the largest number of people. Tiger Woods creates an experience, Oprah creates an experience, Facebook creates an experience, Google creates an experience, these are the folks that get the big bucks. The bugger flipper only makes one person at a time happy.
This siesmic shift in value added has significant implications that are not yet realized nor well understood. Food and material goods are physical products with physical limitations involved in their production, distribution and use. A physical apple is grown in one place, transported to market and eaten by one person.
Experiences have no such limitations. The performance of a professional sports player can be seen by several million people with very little added cost to add several more million viewers. Also the performance can be replayed time and again for years. So for the first time in human history the major value proposition of the century is one that is infinitely scalable and whose delivery cost decreases every year as broadband increases and computers/mobile devices/HDTV becomes cheaper with ever more features. An Apple iTunes U podcast of an MIT course in linear algebra is available for free forever to anyone in the world.
Where we enjoyed a relatively smooth transition from farming to factories might we be in for a more difficult transition from factories to services / experiences. If this might be the case then we face the potential for many of our previously employed workers to be permanently structurally unemployed.
An enjoyable read on how things might work in a post capitalist world is “Down and Out in the Magic Kingdom”. The book is a free download and introduces a concept called Whuffie which is a reputation based currency. We are seeing the beginnings of Whuffie with things like the number of followers a person has on twitter or friends on Facebook.
All of our economic systems are based on the concept of scarcity. However in an information / experiential economy it is possible to eliminate scarcity. If that happens then what do we value?
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