Thursday, March 3, 2011

Some thoughts on the Knowledge Economy

In 1969 Peter Drucker popularized the phrase knowledge economy. The idea of a knowledge economy is that knowledge is viewed as a product versus knowledge as a tool. The knowledge economy is based on the economics of abundance. I touch on this in Open Source: The End of Scarcity Means More. Information and knowledge increase through the act of sharing. The more data/information shared, the more growth in knowledge results. Knowledge flows as water, it drips then becomes a steady stream or torrent where ever there is demand and few barriers. In the knowledge economy, wealth is based on ownership of knowledge and information.

Forty-two years later Drucker’s children are the knowledge workers – the Gen X and Yers, the Millennials and Digital Natives are established or entering the workplace. As suggested in my post, What If Work Were Fun?, the worker of the 21st century is becoming a knowledge worker. Schooled in new media, the brightest of them are capable of both convergent and divergent thinking, they can be collaborative, evaluate priorities, make connections, establish and nurture relationships, and be flexible enough to both create new paradigms as well as modify existing ones.

Social media has risen in importance and currently drives the knowledge economy because communication is a fundamental component to the stream of knowledge and information. Social media highlights the importance of relational capital – one based on interactions and relationships. The act of transforming information into knowledge is the creation of value.

Just a few years ago we did business differently. The rule was - I offered a product/commodity for sale, you bought it (or not), end of transaction. It was an even exchange, a closed system. But the knowledge economy has changed that. The open sourced, new way of doing business also values expertise and the concept of “know how”. Meshing social with business creates an emotional bond. It’s about more than just selling, these relationships foster an interactive and cooperative exchange.

The old way of doing business doesn’t work effectively anymore because more social effort needs to be invested to get people to listen. Business must engage and be present vis a vis their customers who now demand openness, flexibility and a willingness to embrace change.

I have an actor friend who used to believe that once he landed an agent, he could just sit back and the jobs would come rolling in. He believed that an agent would do the heavy lifting for him, bring him work so he wouldn’t have to hustle. This didn’t happen, so he fired the agent. But once my friend realized that he was his own best representative - his career started to take off because he was creating value for himself. He was giving to get. Now he’s got several agents chasing him.

“What you give is what you get.”

I used to talk about this concept a lot when I was a fundraising executive. We rallied our board members around the Give/Get principle because we expected them to create value for the institution.

It’s not really that different in business. By giving value for the people around you, you will get value in return. Value creates thought leadership, someone who people want to know and do business with. People want to give business to those who give them business. This is not a new idea, but it’s one worth being mindful of because emphasizes reciprocity, an exchange which creates a relationship.

I try to create value everyday because I appreciate the community I inhabit. For me, it makes for a full and fulfilled work life. Who doesn’t want that?

Photos from: Wikipedia, Teamsubmarine & Mr. Cheapstuff

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At the intersection of art and new media, a place where the convergence emerges.