I keep using terms like the New Economy and the Knowledge Economy and contrasting them to the Industrial Economy and people keep asking me what I’m talking about. I’ve been asked this so many times I decided to sit down and actually figure out what I am talking about. Let me tell you, it isn’t easy. I can’t in fact find a definition that I actually like.
Instead of a definition, I think it is best to look at how money is made.
In agriculture, mining and oil and gas, you have an asset which is land and you turn it into revenue by producing raw materials that you then sell. This is the Resource Economy.
Companies take those resources and raw material and using plant and equipment, turn them into products. This is the Industrial Economy.
Other companies take those finished products and provide distribution, location, selection and service. This is the Service Economy.
Then there are a bunch of us that take knowledge and turn that into a service or a product. We don’t need land, machinery, stores, inventory or anything else that the other economies need. This is the Knowledge Economy. I make the mistake of calling it the New Economy but it isn’t entirely New so I should stop this.
Why is this important? Well, as a relatively new venture, there are all sorts of things that need to be figured out in order to run a knowledge economy business. How to turn knowledge into a product, how to monetize it, how to make a profitable business model, and how to manage and lead are all issues that need to be figured out in the knowledge economy.
While many people are trying to figure out the business side of the Knowledge Economy relatively few are trying to figure out how to lead in this economy and yet it is even more important than how to lead in the other economies.