Blur, the Speed of Change in the Connected Economy

To many of us, the new economy may seem like an amorphous, incomprehensible concept. We may understand a few pieces of it, but developing a sense of the entire picture is difficult, and our inability to grasp it makes us uncomfortable. Stan Davis and Christopher Meyer shed some insight into why some people might feel like everything is a blur. In their book, Blur: The Speed of Change in the Connected Economy, they detail some of the concepts that make the economy so confusing, and they provide the reader with several rules to follow in order to better focus on the rapidly moving world. The authors credit three factors for the blurring of the economy and the discomfort we feel when trying to follow it: speed, connectivity, and intangibles - the trinity of the blur.

Today’s economy moves incredibly fast as information flows instantly from one person to another and throughout the web of network connections. Product life cycles have been shortened from years to months to days, and the firm that moves the fastest tends to be the most successful. The concept of being both big and small simultaneously touches on adaptability, and a firm’s ability to adapt quickly becomes the key to success. Understanding the next trend and getting there first becomes every company’s goal.

For a firm to adapt quickly, they must interact with customers, suppliers, and any other entity they rely on for business. Connectivity, in the form of network connections, partnerships, and even customer inputs, becomes a vital component for a firm to be able to anticipate needs and quickly adapt to them. In this economy, the difference between buyers and sellers is blurred and the transaction becomes one of two-way communication. Even the separation of product and service is blurred to the point where a service is connected to a product, and vice-versa. For example, Mercedes Benz doesn’t just sell you a car anymore but a system that instantly notifies Mercedes of any problems with your car. The next time you hear a knocking under the engine, you won’t need to rely on the knocking to occur again when you visit the shop. By the time you come into the shop, the service technician will already know what the problem is.

So what is the value of having this service? It is hard to say, and that leads to the third part of the trinity, intangibles. The value of intangibles is increasing much faster than the value of tangible goods. Information is now one of the most valued commodities that either the consumer or the firm can obtain. What is the price a consumer would pay for the problem detection system in the Mercedes Benz? The answer will probably be different for everyone, and having this type of information will enable firms to offer customized packages to consumers. The selling line won’t be a superior product anymore but rather a package that creates an emotional attachment to the brand.

The world is definitely moving much faster than it used to, but speed isn’t the only culprit for our discomfort. It is the interaction of speed, connectivity, and intangibles. Blur, although simplistic, helps to break down the new economy and provides a framework that can be used to identify the underlying themes.