The Abundant Economy

“Knowledge was their treasure.” Indiana Jones

Gary Mintchell
Gary Mintchell
Following the by-now classic Indiana Jones story line, the famed archaeologist is searching for one thing and finds something much different. In the latest movie in the series, “The Kingdom of the Crystal Skull,” Jones thought that he was about to find the fabled “Lost City of Gold.” He instead discovers the home of the ancient space travelers who brought civilization to humans. I guess you would had to have read the exotic theories of Erich von Daniken to get the story. But the punch line fits with the theme of several conferences I’ve attended lately.

Futurist Alvin Toffler spoke at the RSTechEd event sponsored by Rockwell Automation’s Software division. He outlined the three waves of economic sources of wealth for societies that he and his wife wrote about in “The Third Wave.” The first source of wealth for humans as they became civilized was agriculture. This lasted until the mid-seventeenth century when manufacturing began to be developed. Manufacturing was the dominant source of wealth until about now. Just as agriculture existed beside manufacturing, albeit in a reduced role in the economy, so manufacturing will still exist in the new economy, but with reduced employment and impact on the economy.

The source of wealth

Knowledge is the new source of wealth in the developing third wave of economic organization, according to Toffler. And just who are knowledge workers? Toffler looked over his audience and congratulated its members for being at the forefront of the development of the knowledge economy. Automation World readers are in the same category. The knowledge economy is not something a prophet will envision in its wholeness and just plop down in the midst of society. It’s something that we all help build as we move the bulk of work—and the important work—to knowledge work and away from physical work.

The first week of June found me in Orlando at the Rockwell event. I traveled to Phoenix for the Honeywell Users Group Symposium during the third week of June. “We’re not just another DCS company,” proclaimed Honeywell Process Systems President Jack Bolick in his keynote address. Actually more than a third of revenues generated by HPS are from service and project management work—that is, knowledge work. And Honeywell is not alone in this phenomenon. There are companies that sell hardware as the primary source of wealth, and there always will be hardware suppliers. But the systems companies are moving more and more to knowledge work as the primary source of income for growth. They will do this or wither away.

Making money from knowledge work will also be a new paradigm. You see, the essence of the knowledge economy is abundance, not scarcity. Economics in the age of land or factories as the source of wealth was the study of the allocation of scarce resources. Knowledge is abundant. This fact turns the classic theories of economics on their heads. In some ways, knowledge is free.

The Editor in Chief of Wired Magazine and author of “The Long Tail,” Chris Anderson, is working on a new book titled “Free.” If knowledge and the publication of knowledge are abundant, it tends to become free. Anderson asks where this seeming paradox is taking us, if this knowledge economy is to be the source of wealth? The trick is using your knowledge. In the recent past, you made money by selling a book or a recording. These things are tending toward free. Artists will make money performing, writers by giving speeches or consulting.

Engineers are knowledge workers and will continue to make money applying their knowledge—maybe just in new ways.
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