The economy is evolving and changing. The ubiquitous proliferation of technology and social networks in all aspects of our global village is having a clear impact on the world’s economy. Money is changing hands in new ways. Some of which are proving entirely different to track and measure than before. The new economy has many characteristics which distinguish it from its old version: innovative, explorative, but one trait seems to be defying it, collaborative. A light in the end of the tunnel may be shinning for those of us who dream of a reality of an economy focused on long-term goals instead of the old relentless push for endless growth without an explicit objective.
“Growth at all cost” is still in some part presented as the twisted solution to all problems, when in reality it is the exact cause of many of them. It undoubtedly leads to ecological destruction and inequality in allocation of increment in income. Even worse than that, it lacks any moral principles and its only purpose is “More”.
The old economic model was centralised. Brands which succeeded were the once which build channel distributions and strive to grow outward exponentially.
The manner of doing business was in large part based on the so-called net mentality. Companies would cast as wide a net as possible and make it reach as far as possible with the hope that they would catch as much metaphorical fish as possible. And that undoubtedly worked. But it worked at a time when the channels for outreach to potential clients were much more limited compared to 2018’s reality. Also, the consumer’s choices in business offering services and products are far greater today. Another difference is the extreme targeting of very specific niches which has never existed before. There are TV channels dedicated specifically to children, golfers, foodies, fishermen and many more.
Compared to back in the day when there were a handful of channels on TV on which to run ads. What about YouTube? It is comprised of literally millions of channels which could be used to advertise any imaginable business.
There is a clear distinction between new and old economy. But what are the actual main characteristic, meaning, and importance of the “new economy”? Mainstream media has left a lot to be desired in providing an extensive answer to this question.
We could with confidence call the new economy a “collaboration economy”. The philosophy of the new economy can be, albeit admittedly rather simplistically, summed up in the equation “1+1=3”.
It is all about connections and partnerships. Less emphasis is placed on competition and more of cooperation. It is about learning that coexisting is not detrimental to business, on the contrary, it can be beneficial.
At the core of every successful collaboration, you will find shared goals and values but also skills which complement and supplement each other. The new economic model is open to using this to its full advantage.
The new economy is also distinctly decentralised with different people or networks of people handling different parts of a unit. Companies no longer feel obliged to run their own department for each aspect of their business. They can co-curate with another company which offers a specific service. Thus a network of specific services comes together as a living puzzle.
Today’s winning companies all share a common focus on building communities, culture, and platforms.
Why? Because it multiplies networks, gives valuable insights and brings down research and development time.
What stands out most about this new economy is perhaps the fact that big corporations have a realistic opportunity of becoming the catalyst for change. The new economy is strongly characterized by an increased emphasis on delivering better quality and having an impact on consumers. Those businesses which are thriving in the new economic environment are the once who understand that the client wants goods and services which raise their overall quality of life. Consumers are informed, connected and inquisitive, with a tendency to begin putting their core values above creature comfort. They want to know how their purchase will optimise and improve them long-term. That is part of the reason why some giant companies are utilizing corporate social responsibility as a marketing tool.
For example, Procter & Gamble launched the first shampoo bottle manufactured out of partially recycled plastic waste collected from beaches around the world. The average consumer today cares about climate change and feels let down by the government when it comes to taking action against it. The new economy looks accommodating to a mutually beneficial symbiosis between corporations and consumers, big sales resulting in more environmentally friendly decisions being made in the manufacturing industry. The end goal of Procter and Gamble’s Head Shoulders Beach Plastics Bottle project is to reduce new plastic used for shampoo bottles by 1/4 by the end of 2018.
Other juggernauts to launch products from recycled materials include Addidas, Nike, Patagonia, G-star Raw Jeans and many more. Corona beer has promised to protect 100 islands from pollution by the year 2020. Of course, we are nowhere near home and dry yet, but at least there is a promising trend emerging.
This model of doing collaborative business could create the desired profitable circular and sustainable economy for future generations.
Another pillar for cooperation between businesses is the assertion of blockchain technology. The future of information is decentralised. The new economy is favoring blockchain technology for its agility of use and safety mechanism against malicious alteration of information.
How does the “new economy” mentality compare to the old one?
It used to be that employees were more than happy to have a stable job and it was not uncommon to spend your entire professional life with one employer. Hopping from company to company was frowned upon. Working hours were clearly outlined as was the distinction between work life and personal life and people left their job at their desk, rarely bringing it home with them.
The new encourages the opposite professional behavior in many ways. Employees are more than happy to change things up by switching companies when a better opportunity presents itself. The work day is enhanced with a ping pong game in the break room or pizza-lunch-brainstorming. Working hours get moved all over the place around in the span of a 168 hours work week, do it on a Sunday morning if you have to as long as it gets done.
In the old economy it helped if you knew the right people but in the new economy, it would be impossible to succeed if you don’t know them.