Skip to content

What happens when scarcity is scarce?

February 19, 2012

Look familiar?

Commerce on the Internet, especially for services and information exchanges like forums and social networks, could be characterized by what scholars call “commons production,” which borrows from old-school law and production economic theory. Within this theory, a common resource operates on the premise of non-property between a society or community: a shared space that nobody “owns” or has autonomous authority.

Classically, utilizing such a scheme would equate to suicide for the community, as the resource would either be used up disproportionately as economic rationality assumes that each member of the community acts on their own self-interest (say, a common meadow for farmers, whose cattle might consume too much grain and deplete that resource for other farmers). It is more efficient, and therefore, more advantageous, for one to centralize their efforts in their own individual space.

We can contrast this rapidly from other movements, such as the GNU operating system or Creative Commons licensing for intellectual property, wherein commonality is the crux of production, and decentralization and codependence becomes the “secret weapon” for its passionate users.

In digital space, the assumptions made by the tragedy of the commons fly out of the window. In digital space, the model crumbles because the producers in this space, even if acting in their own self interest, are…

Not independent. Users that take part in these movements do not act in accordance to their individual self interests, but on the merit of the collective good of the movement in which they participate. This isn’t to say that they have a vested self interest in the movement; it’s simply that the cohesiveness of the benefits for the group at large must also be kept in tact, whether it be posting some modifications to code for an app in Linux or allowing others access to your music samplings on YouTube for further enhancement.

Rational (in the long-term). Logic dictates actions in any economic forum, and this holds true in common “markets.” However, it may not simply be the same kind of actions taken for short term profit, but measures taken for the betterment of the market in the long haul, so the entirety of the industry can build off of your innovations, prompting faster movements and shorter cycle times between improvements to the existing status quo of the market. The messy area here is between this and individual intellectual property, where one can profit off their own idea for a designated amount of time before considered “common.” Where does that line exist? For a hypothetical, imagine the longevity of the Mickey Mouse idea had the “intellectual property” of the characteristic face been released to the commons, and how much Mickey Mouse could have expanded and be the product of innovation. But then again, imagine how tarnished, from a branding, authenticity, and cohesiveness perspective had Disney lost the sole rights to act on their beloved character. Again, it’s a messy ground, but the crux of the argument is that, long term, the entire market (including you) will be better off with commons production than you simply hoarding the idea for short-term profit, restraining vehicles for innovation.

Working with inexhaustible resources. The majority of the mediums with which Internet-age workers work are services and/or published goods (for example, consulting services, websites, or cultural products like music), which are more akin to books than groceries. What does this mean? When one consumes a good like a book, it has no impact on another user’s ability to consume it: they can still read it. Not quite the same with a head of lettuce. Since most digital products are of the book variety, and not consumable in the traditional sense, the theoretical meadow of grain of the commons example can’t quite hold, as the resource itself would take a great deal of effort to “deplete”, if at all.

Working from their own passion. The specific breed of digital commons workers interact in these brand new environments, which enable an entirely new means of discourse, where people act and improve either for the sake of improving or because interests necessitates improvement of the product, not because their boss tells them to (Benkler 62). Then, the standard worker isn’t at play here. Users work because they want to, because they want to contribute. They’re produsers. The commons is a powerful mechanism for the produsage type to optimize their environment, and operate with the productivity needed to offset the inherent decentralization and efficiencies of such a movement. These users champion effectiveness in the face of efficiency, and they’re poised to help each other, and their movement, achieve.

What’s the point, then?

The point, plan and simple, is that the scarcity is well, scarce. What does this mean? Well, the foundation of economics is the presence of the principle of scarcity: the coexistence of limited resources and unlimited desires. In essence, because of the replicability, accessibility, and ease of production in the digital age, people can get more of what they want when they need it at faster speeds. Scarcity is on the fringe. People don’t “need” in the classical sense as they did a while ago; they can simply find a suitable alternative, either from a competitor or a commons. The margin at which businesses operate to fill scarcity is at its lowest ever, and rapidly decreasing. The only way to fill that need is to innovate. Let’s say this again: businesses today must strive to innovate to even be competitive, much less dominate the industry, a principle that might not have existed ten years ago (Criswell and Martin 6). Businesses will need to up the ante to meet these more specialized needs.

What can businesses learn?

So, it’s not that businesses can interact and participate in the open source movement or other forms of peer-based production; it’s that they have to harness the spirit of that movement, acknowledge the additions in production from having interested workers, and subject themselves to the licensure and regulations that govern the peer-based commons production network. Businesses should never attempt to cheat the system, as any bank’s Facebook page could tell you, because it’s even harder to harness the power of a movement against you than any neutral-level movement.

The respective tools of the population — blogs, mashups, social network presences, wikis — are a definite step forward for businesses looking to contribute to the movement. Information comes at a premium, especially behind closed doors, and it’s a definite positive to see businesses giving the world at least a peek into their thinking. If anything it’s a compromise, or even a first step forward into businesses beginning to adopt a more open environment for knowledge creation and innovation, even if heavily regulated.

This leads to one of my favorite marketing tactics: content marketing.

A recent blog post from Entrepreneur illustrated that content marketing, or “the creation and publication of original content… for the purpose of generating leads, enhancing a brand’s visibility, and putting the company’s subject matter expertise on display,” is now a more used tool for B2B marketing than any other medium, including the print and television advertising of yore (Belicove n.p.). Essentially, little blurbs from inside the walls of corporate are finding their way out; a secret here, a trick of the trade there, all for the purpose of attracting attention to ways that businesses are contributing to the easily accessible knowledge base of the Internet.

Here is an example of some content (a whitepaper and some video) from Pricewaterhouse Cooper. Here‘s another from Nielsen, another whitepaper. As you can see, the topics can vary widely, but the reports can range from the utmost in professional discourse to simply a YouTube video or an infographic. A variety of audiences are served, and a variety of knowledge is added to the general body of the industry.

The advantages from the business’ perspective may be quite different than the societal or industry-level benefits (including cost-effectiveness, centralizing digital strategy, and generating leads), which shows one clear trend: a faster track to innovation. And with innovation comes improvement, and with improvement comes progress and better solutions to our problems due to the accessibility of digital technology.

But what businesses learn is that it’s possible to sacrifice some “super secret” in-house knowledge for the betterment of society, and hey, maybe pick up a couple of clients in the process. Sharing helps in a variety of ways, after all.

Playing games with your own scarcity can be a tricky web to navigate. Seeing new businesses contribute just one more white paper or infographic of internal data, one more blog post of recent findings, and long-term, everyone, especially the consumer, benefits, and the commons is filled with just a little more resources than before.

Not bad for big bad business.

Works Cited

Belicove, Mikal. “Why Content Marketing Is King.” Web log post. Entrepreneur.com. Entrepreneur Media, Inc., 20 Oct. 2011. Web. 17 Feb. 2012. <http://www.entrepreneur.com/blog/220587>.

Benkler, Yochai. “Peer Production and Sharing.” The Wealth of Networks: How Social Production Transforms Markets and Freedom. New Haven [Conn.: Yale UP, 2006. 59-90. Print.

Criswell, Corey, and Andre Martin. 10 Trends. Rep. Center for Creative Leadership. Print.

One Comment leave one →
  1. February 20, 2012 8:27 pm

    Hi Jeff – your post is full of really interesting points! The Entrepreneur blog post was pretty insightful too. How do companies give away just enough information to inform an audience yet also entice potential customers to use their services/product? Are they giving free market research and ideas away to competitors?

    The blog notes that content curation is up 17% over just six months, but marketers run into problems with finding time and resources to grow these marketing programs. I wonder how sales are being tied to these marketing tactics right now? If they can be shown to drive sales, then I wonder how these stats will change in the near future.

    The blog and the Neilsen whitepaper just gave me some interesting ideas for a marketing plan I am working on now. Thanks!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: