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A Fourth Economy
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A Fourth Economy

A Fourth Economy

For some years now, we have been moving away from the three stage economy, towards a larger four stage model. It was not all that long ago that people spoke of the 'service economy', the new, third stage of economic processes in which the onus is not on harvesting / mining goods, nor on the creation of composite goods by combining, shaping and cutting (manufacturing). Rather, service economy was a new paradigm, a totally non-tangible economy, built upon the basis of offering services to people wherever there was a need.

In less than 20 years, the service economy is being replaced with a new model, the 'Experience Economy', a model in which, whilst there is still a place for services, they are not the main act of the economy. Instead, what is is the provision of experiences, memes, sensory indulgances, and a deeply personal and individual type of service.

Economic Offering Commodities Goods Services Experiences
Economy Agrarian Industrial Service Experience
Economic Offering Extract Make Deliver Stage
Nature of Offering Fungible Tangible Intangible Memorable
Key Attribute Natural Standardised Customised Personal
Method of Supply Stored in Bulk Inventoried after production Delivered on request Revealed over a duration
Seller Trader Manufacturer Provider Stager
Buyer Market User Client Guest
Factors of Demand Characteristics Features Benefits Sensations

When you think of an experience based business, it is necessary to think both of something tailored to fit the individual, and at the same time cheaply mass produced. Deeply intimate, and yet wholesale. The obvious candidates for what this would mean, are perhaps obvious: Virtual reality, augmented reality, and embodied AI robotics.

VR services fit the mold of the experience economy, only if they are sufficiently advanced. By this, meaning reaching the point where a VR can elicit a fundamental change in someone's experience of the world, usually for the better. When a virtual environment is freeing an individual from chains emposed on them by the physical world, whether through poverty, family or disability, then that virtual environment has gone beyond providing a service: it becomes an essential fundamental for that individual to enjoy the experience of life.

Augmented reality systems function similarly. A case in point might be an AR system whose function is to restore 'sight' to a blind or partially sighted individual, by taking advantyage of other sensory data such as heatmaps or radar. At that point, the individual is not being provided with a service, they are being provided with a fundamental for a better experience.

The recent anime Eve no Jikan is another, less extreme example. Rather than release on broadcast TV, networks are eliciting to offer direct downloads of their products at a rate the user prefers - pay per episode, and it is streamed as and when. This is more than a service, because once the product has downloaded, it is DRM free, and up to the individual what they do with it - it is theirs to keep, or share, or whatever.

Thus, experience economy services live for the moment. There is money to be made in providing experiences to individuals that capture a moment in time, make life better, just provide an on tap burst of sensory stimulation.

It is an economy type unlike anything that has come before, and, thanks predominently to VR, it is becvoming mainstream.

References

The Experience Economy

The term Experience Economy is first described in a book written in 1999 by B. Joseph Pine II and James H. Gilmore, titled "The Experience Economy". In it they describe the experience economy, as a next economy following the agrarian economy, the industrial economy and the most recent service economy.

EVE no Jikan (The Time of Eve)

Podcast: Better Life

A beautiful, short animation detailing the value of an experience in VR to an individual who would have no hope of experiencing life that way, outside of VR. Not a service, a way of living.

Staff Comments

 


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