Long live the networked (& reputation) economy

They say "It’s not what you know, it’s who you know." I’ve always disliked that phrase, not necessarily because I disagree with it, but simply as it doesn’t seem fair or right. This response reflects my background which is originally academic where ideas are, in principle at least, the primary currency.  However I am increasingly of the view that relationships and networks are increasingly the currency upon which our economy and society is based.

With increased mobility of people, capital and information, it becomes more difficult to create value or competitive advantage through knowledge alone. All major economies trying to capture the higher value jobs/functions and create knowledge economies, however with information becoming increasing ubiquitous, any slender market advantage achieved through creating/developing/secretively hoarding exclusive information can be very quickly eroded.

I believe that we are moving from a knowledge economy, if indeed we ever were one, to being a networked economy, where organisations and individuals create value primarily through their relationships and networks. This is a world where reputation is increasingly crucial but also increasingly permanent. Of course people will try to influence perception but will be less able to control it. This networked reputation economy applies to multinational corporations as much as individuals. The best idea in the world will go nowhere if the originator is unpleasant or impossible to work with, as all innovation is fundamentally collaborative. And interestingly, our reputations are cumulative, so bad deeds done by an individual or organisation in the dim and distant past are less likely to ‘go away’ so the optimist in me hopes that this will lead to greater responsibility percolating through the networked economy.

So what do you think? Is this right? Is this a good thing? What are the impacts upon our economy and society? I’d be very interested for comments or thoughts.

Comments

  1. Roland – I agree that moving towards a more networked society will have profound implications on where and how individuals, companies and organisations create value. This could mean big changes for our civic institutions, as well as companies. On this front a group of us, with partners RSA and NCVO, will be looking at this through a re-inventing membership project. At its simplest, will people still pay their subs if they can network for free? More here http://tinyurl.com/2644wr. We’ll be running an open, collaborative and I hope innovative process to co-design the project with anyone interested. It’s one of the early spin-offs from the RSA Networks programme NESTA is supporting, so I guess we should thank you too!

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