The end of scarcity and the economics of everything (including knowledge)

Posted on May 2, 2011

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Earlier today I read an interesting piece by James L. McQuivey on Mashable.com titled Why the End of Scarcity Will Change the Economics of Everything [OPINION]. In it, he asks:

what happens if the economics of scarcity are exchanged for the economics of plenty? For those industries that provide information or experience as a primary good, scarcity is rapidly evaporating. The media business is undergoing a similar change with the rise of citizen journalists, bloggers, and YouTube performers — all of which circumvent the traditional systems that once dictated production norms and processes. Most of these companies have sought to restore order by reinstating scarcity rather than celebrating its passing. It’s not a good sign of things to come.

McQuivey argues that companies like Facebook, Google and Twitter have staked their territories online precisely because they have given their product away. By creating unlimited potential for people to become invested in the product, these companies are renegotiating the rules on the economics of plenty. As he writes, “In their world, the costs to exploit scale revert to zero. The best ideas, no matter how small or underfunded, have the largest potential impact, and a company that gives its value away may stand to gain more value in return.”

Following on from this, McQuivey delivers a fairly bleak outlook for those industries like education that deal primarily in information in the context of an economy of plenty (emphasis added):

Education reformers have long predicted a world where top professors spread their knowledge across the globe through electronic tools. But the knowledge students need is not only located in those few professors’ minds. Once we digitize not just the distribution of knowledge but the production of it, the existing university system loses its raison d’etre. Why would people come to a single physical location at higher and higher costs when the knowledge it houses is no longer scarce?

Now, whether McQuivey’s predictions on the growing economy of plenty come to pass in the way he is imagining or not, it’s still something we should be considering as online museums in the twenty first century. Why would someone visit the Louvre’s website to find out about the Mona Lisa, when they could just click on the first link to pop up in Google? Even assuming they knew that the Mona Lisa was at the Louvre, what would compel them to invest time in learning how an unfamiliar site works, instead of just visiting Wikipedia?

Legona Lisa

In other words, what are we offering to our digital visitors that they can’t get elsewhere on the web? Is it expertise (or access to expertise)? Is it the curation of culture? In an economy that relies on scarcity, museums in their current format make a lot of sense. But what about one that doesn’t?

Examining the Rosetta Stone

As I was writing this post, Jasper Visser from the Dutch Museum of National History sent me a copy of the museum’s vision. The opening page simply states: THE NATIONAL HISTORY MUSEUM STIRS THE HISTORICAL IMAGINATION. Now that’s a pretty awesome goal, and might be just the sort of thinking that can translate to compelling digital content and context in the online museum. Maybe the goal of the digital museum in a content of plenty is not simply to provide content and information – which can indeed be gathered from almost everywhere – but to stir the historical (or scientific or artistic) imagination. Maybe rather than relying on the scarcity of their product, museums online can find a way to do what arguably they have always done extraordinarily well and get people to ask questions, instead of seeking simply to provide answers.

Addendum: I was thinking about this on the cycle home, and I started wondering about whether any museums do include information about what is still unknown about their collections, as well as providing known information. What I mean is, surely there are works of art or objects in the museum that still raise questions. And if so, would providing those questions in context with the work and the associated text give people a compelling reason to invest in museum collection websites? I am guessing that one reason Wikipedia became so popular is that it asked of investment of people’s knowledge, and gave them opportunity to contribute to the collected intelligence of the world. Maybe museums need to do a bit more of the same. Rather than simply allowing people to tag works of art etc, we should actively seek new expertise by opening up about the gaps in our collections, and in our knowledge. Solving puzzles is a pretty addictive thing to do. No doubt that’s why Google have just started their A Google A Day page… The difference is the puzzles on their pages have known answers. Maybe one of the sweet things about museums is that the answers to our puzzles have not yet been found. Just a thought…

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