Friday, August 14, 2009

Productivity comes to marketing

Addressing a meeting of the Public Relations Consultant's Association this morning, Peter Cochrane ducked the question of how the internet changes economics as we know it.

I thought it might be time to re-visit this difficult area of of forward thinking.

Of course, I am not pretending to be able to out-think Yochai Benkler or a host of other experts, authors and thinkers.

I just want to pause for a second to consider productivity.

The concepts of productivity espoused by Hansen & Prescott suggesting that automation is the prefer ed or dominant method for enhanced productivity is misleading. Automation and the deployment of technologies does tend to presage changes in employment and in wealth creation and distribution for a larger majority.

While no one would recommend the slums of London in the time of Dickens, the population was expanding and, horrid though these places were, they had an appeal for the rural population who migrated to them. How hard life must have been in the countryside!

I am not completely in the camp that suggests that mankind is successful because of recent evolution. Evidence suggesting that evolutionary processes in the composition of existing genetic traits may be rather rapid and the time between the Neolithic Revolution and the Industrial Revolution that lasted some 10,000 years is sufficient for significant evolutionary changes. True, changes occurred such as lactose tolerance in Europe and the Near East; genetic immunity to to malaria provided by the sickle cell trait among descendants of agrarian African tribes and so forth but I think that the productivity spark goes back a lot further.

Today's news of evidence that early modern humans living on the coast of the far southern tip of Africa 72,000 years ago employed pyrotechnology – the controlled use of fire – to increase the quality and efficiency of their stone tool manufacturing process tells us a lot more about our species.

Here we see examples of intellectual capital being deployed in the transformation of stone to tool.

This is manufacturing.

It also is an example of knowledge associated with technology in making mankind more efficient.

We are, as Philip and I made clear in 'Online Public Relations' (Kogan Page) extending the capability of our physiology.

Today we can travel much faster than our legs will carry us and instead of a super memory we have Google and Wikipedia. We have used our intellect to create super-humans in the basically primitive human of 70,000 years ago.

More recently, we have added to these capabilities by offering people opportunities to contribute time, creativity and attention to goods and services.

This may only be the adding of photograph to Facebook or an erudite Blog post or even an SMS vote to Big Brother (if it still exists). It might be the development of new process shared with like minds online but its not passively watching television.

This shift from consumer to producer is big and it has a major significance for economics. A huge jump in the productivity of huge population is happening now.

This productivity is lost to most organisations.

Some gain because the productivity is part of a production process or, in marketing it is brand building and its big.

I shall return to this though in a day or so.