Friday, February 24, 2006

Cultural Economy

  • We have moved from a hunter gatherer economy (about 60,000 years of it)
  • We have moved from an agrarian economy (about 6000 years of it)
  • We have moved from an industrial economy (about 200 years of it)
  • We have moved from an information economy (about 40 years of it)
  • We are in the networked economy (for about 7 years)
  • We are now moving towards a cultural economy.

This is not to say that all the old economies have gone away, They have not. What is important is that, as each economic era is superseded the new entrant offers increased wealth for the participants. It may seem that the horrid conditions of industrial workers in the 1850's was retrograde but, by the standards of the time, there were benefits for most people.

The newest of our economy's is at an early stage but is quite evident. Under the old regime of the information economy people were empowered to select a range of places and means by which they could achieve self actualisation. This meant that they could choose to but products in the high street or on-line. They could disintermendiate the supply chain. The retail part of the chain could be avoided. Enter Dell and Amazon. Customer experience became all the rage.

In the networked economy, people were able to find out much more about the things they believed would lead to self actailisation. They could ask questions and observe comments of people on-line to help seek alternatives and make decisions. They were able to choose between products and services pick 'n mix.

For example, they could choose to by a 'package holiday', a manufactured product, or could choose to buy or select elements that could make up a holiday and so they performed the role of the package holiday 'manufacturer'. What is important here is that the 'manufacturer may or may not be a 'co-producer' because it is the person who decides what, where, when and the price of the components.

Now we are seeing the cultural economy emerge. This economy drives the producer. It is where people are well informed and can contribute to knowledge and can make linkages between ideas and information.

Here we see people 'telling' producers what to make. In the UK there is a big row over cancer drugs.

In this case they are not licensed but consumers are insisting through the courts that they should be made available. What these people are doing is changing the marketing policies and plans of organisations. To succeed, these consumers deploy whole cultures including knowledge about product development, production, marketing, distribution, public opinion, the legal system and political structures to make products available.

As the key elements of the Internet make organisations more transparent and porous, the impact is cultural and organisations have to respond to cultural drivers to find the competitive edge,