MEREDITH Strategy + Design

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My emerging new rules for an emerging economy

dsc_0006Returning home empty-handed from a recent several-hours foray into the local manifestation of the global economy---Christmas shopping at the malls and local downtowns---I found myself yearning for something we have very little of around here: local stores selling the works of local producers. Wandering the malls with the realization that Somerset, and Michigan Avenue, and Fifth Avenue, and so many others sold the same stuff here as there and there and there, I felt the frustration of being unable to be imaginative and thoughtful, and the disappointment of being unable to express my appreciation for others in this season with something original, select, and authentic.

Later that day, I was cruising through my subscriptions. and hit KK*. Kevin Kelly is a Wired magazine founder, has been doing a reprise of his 1998 book, New Rules for the New Economy, on his website.

The key premise of this book is that the principles governing the world of the soft--the world of intangibles, of media, of software, and of services--will soon command the world of the hard--the world of reality, of atoms, of objects, of steel and oil, and the hard work done by the sweat of brows. Iron and lumber will obey the laws of software, automobiles will follow the rules of networks, smokestacks will comply with the decrees of knowledge. If you want to envision where the future of your industry will be, imagine it as a business built entirely around the soft, even if at this point you see it based in the hard.

Kelly argued that "plenitude drives value." He pointed to three key new rules for the new economy---"It is global. It favors intangible things--ideas, information and relationships. And it is intensely interlinked."

However, this is also a week that wraps up a rather incredible year. Bernie Madoff has made off with $50 billion of others' money in an extraordinary graft, the White house has stingily granted $14 billion to preserve auto manufacturing and jobs in the country, Hank Paulson is on his way to spending $700 billion to restore a global financial system that is doing nothing to restore an economy, and Barak Obama's ambitious program to create 3 million jobs now looks feeble as the fallout from the excesses of virtual plenitude is predicted to cost over 4 million jobs.

It is yet early in the new cycle to see what trend there is in reaction to this very dangerous and fragile economy we are now in. But this reaction, combined with the interest in sustainability, and the "practical" rather than :ideological" character of the new administration, might all be pointing to a rewrite of those "new rules."

My suggestions---

  • It is intensely local. The increasing separation from the means of production brought a world in which the virtual representation of the real masked the reality of its ephemera. Arguments about global  flows and their contribution to cost and value collapsed in the face of the power of local conservation. Interest in sustainability brought awareness of the impacts of distance and the increasing value and measure of carbon footprints. Collapsed communities now bring awareness of the importance and real value of supporting local production. Employment, home values, real money, and sustained communities may now be seen as the products of thinking and acting local.
  • It is about the tangible. The products I am interested in these days carry the substantial value of authenticity. Whether "local" from Detroit, or Nepal, or Peru, they are the products of a distinctive, individual and embedded culture and not the marks of global "brands." I touch them and can tell a story about them and the people who made them. They endure in my house and in my appreciation long after the stuff with a label has been tossed out, having lost emotional and well as appreciable value. Most are "natural" in the sense that their materiality has a recognizable, experienced source. I now have more value to show for small investments in local things than can be shown from the waste of the billions in the pursuit of virtual WMD's, or the billions lost by many in the greedy search for more from Madoff's "black box."
  • It is about trust. I certainly believe in and benefit from the network. Much of the value I bring to my clients is enriched by the learning I bring from others' experiences in other places and others' expertise from other places. The value I receive and deliver is first grounded in a relationship, however. I know and have met these people. We exchange stories, challenge assumptions, test concepts, measure results. And the value given to me by my clients is also based on trust--that I am interested in what matters to them and will deliver what I offer to their satisfaction. The year-end roundup of tales of extraordinary fraud, economic collapse and world respect are all explained by a loss of "confidence"---trust---where in so many cases those who were intensely interlinked were not appropriately interrelated.

Kelly subtitled his book, "Radical strategies for a connected world." It will be interesting to see how sustainable these strategies are. Does the loss of plentude cause value to collapse, or does it reveal true value in the local, the tangible, and the social.