Localize production. Virtualize everything else. JR.
This is kind of a lame post in that it doesn't break new ground. It's a simple backgrounder. I thought the concept needed to be aired (at least my spin on it) for those readers that hadn't seen it before.
Here's a conceptual building block (for building an economy as a software-enabled service, EaaS). It is the distinction between rivalrous goods/services and non-rival goods/services. Here are some examples:
Rival goods and services:
- physical goods such as food, consumer products, and raw materials
- personal services such as assembly line work, massage, or lawn care
- service flows such as energy, bandwidth, and water
Non-rival goods and services:
- digital goods such as product designs, music, movies, and books
- digital services (that cost nearly zero to provide on a per user basis) include most software enabled services (i.e. Web sites)
- digital information/sensor flows
As you can see, rival goods and services share a common trait. The original purchaser suffers a tangible loss when they are used by someone else. In contrast, non-rival goods and services can be copied endlessly without significant loss to the original purchaser (although, in some cases it can be argued that exclusive use of these goods and services offers the owner a competitive or status advantage).
Our current economy doesn't differentiate between rival and non-rival goods. Nearly everything is sold or traded as if it is a rivalrous good, even though the transactional volume of non-rival goods is starting to dwarf the trade in rival goods.
Something to think about.