Conceptual economy
Encyclopedia
Creativity
Creativity refers to the phenomenon whereby a person creates something new that has some kind of value. What counts as "new" may be in reference to the individual creator, or to the society or domain within which the novelty occurs...
, innovation
Innovation
Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...
, and design
Design
Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...
skills to economic competitiveness
Competitiveness
Competitiveness is a comparative concept of the ability and performance of a firm, sub-sector or country to sell and supply goods and/or services in a given market...
, especially in the global context
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
.
History and background
Alan GreenspanAlan Greenspan
Alan Greenspan is an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private advisor and provides consulting for firms through his company, Greenspan Associates LLC...
, former chairman of the Federal Reserve Board, recognized the role of conceptual output as early as 1997 in a speech at the University of Connecticut
University of Connecticut
The admission rate to the University of Connecticut is about 50% and has been steadily decreasing, with about 28,000 prospective students applying for admission to the freshman class in recent years. Approximately 40,000 prospective students tour the main campus in Storrs annually...
when he said "The growth of the conceptual component of output has brought with it accelerating demands for workers who are equipped not simply with technical know-how, but with the ability to create, analyze, and transform information and to interact effectively with others." By 2004, he had developed his views on the topic, referring to reductions in manufacturing in the United States, outsourcing to India and China, excess of supply and the global marketplace, all leading to the increasing conceptualization of economic output.
A Whole New Mind
A Whole New Mind: Why Right-brainers Will Rule the Future is a book by Daniel H. Pink, author of Free Agent Nation. A Whole New Mind posits that the future of global business belongs to the right-brainers.-Key concepts:...
, Daniel H. Pink
Daniel H. Pink
Daniel H. Pink is an American author and journalist. From 1995 to 1997, he worked for Vice President Al Gore in the capacity of chief speechwriter, and before that as an aide to Secretary of Labor Robert Reich.- Personal history :...
explains how the economy is now moving from the information age
Information Age
The Information Age, also commonly known as the Computer Age or Digital Age, is an idea that the current age will be characterized by the ability of individuals to transfer information freely, and to have instant access to knowledge that would have been difficult or impossible to find previously...
to the conceptual age. He describes how abundance (over-supply), Asia (outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
) and automation
Automation
Automation is the use of control systems and information technologies to reduce the need for human work in the production of goods and services. In the scope of industrialization, automation is a step beyond mechanization...
contribute to the need for business to concentrate on cognitive or creative assets such as design
Design
Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...
, storytelling
Storytelling
Storytelling is the conveying of events in words, images and sounds, often by improvisation or embellishment. Stories or narratives have been shared in every culture as a means of entertainment, education, cultural preservation and in order to instill moral values...
, teamwork
Teamwork
Teamwork is action performed by a team towards a common goal. A team consists of more than one person, each of whom typically has different responsibilities....
, empathy
Empathy
Empathy is the capacity to recognize and, to some extent, share feelings that are being experienced by another sapient or semi-sapient being. Someone may need to have a certain amount of empathy before they are able to feel compassion. The English word was coined in 1909 by E.B...
, play
Game
A game is structured playing, usually undertaken for enjoyment and sometimes used as an educational tool. Games are distinct from work, which is usually carried out for remuneration, and from art, which is more often an expression of aesthetic or ideological elements...
and meaning
Ontology
Ontology is the philosophical study of the nature of being, existence or reality as such, as well as the basic categories of being and their relations...
. He bases his approach on brain functions
Cerebral hemisphere
A cerebral hemisphere is one of the two regions of the eutherian brain that are delineated by the median plane, . The brain can thus be described as being divided into left and right cerebral hemispheres. Each of these hemispheres has an outer layer of grey matter called the cerebral cortex that is...
explaining how qualities dependent on the left hemisphere of the brain (logic, knowledge) now need to be complemented by those associated with right-brained processes (intuition and creative thinking).
Other contributors to our understanding of the conceptual economy include Tom Friedman
Thomas Friedman
Thomas Lauren Friedman is an American journalist, columnist and author. He writes a twice-weekly column for The New York Times. He has written extensively on foreign affairs including global trade, the Middle East, and environmental issues and has won the Pulitzer Prize three times.-Personal...
who describes the opportunities of globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
in his book The World is Flat
The World Is Flat
The World Is Flat: A Brief History of the Twenty-First Century is an international bestselling book by Thomas Friedman that analyzes globalization, primarily in the early 21st century. The title is a metaphor for viewing the world as a level playing field in terms of commerce, where all competitors...
. He emphasizes the importance of the internet and personal computers for communications and software sharing across the globe. This explains how American companies are able to outsource a substantial portion of their business to India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
with no disruptions for the customer.
Tom Kelley is also a key player in the field, both as general manager of IDEO
IDEO
IDEO is an international design and innovation consultancy founded in Palo Alto, California, United States with other locations in San Francisco, Chicago, New York, Boston, London, Munich, Shanghai, and Singapore, as well as Mumbai, Seoul, and Tokyo. The company helps design products, services,...
, a highly successful design and innovation company, and the author of two widely acclaimed books: The Art of Innovation, highlighting the importance of brainstorming and teamwork in product creation; and The Ten Faces of Innovation, explaining the role of assets such as empathy
Empathy
Empathy is the capacity to recognize and, to some extent, share feelings that are being experienced by another sapient or semi-sapient being. Someone may need to have a certain amount of empathy before they are able to feel compassion. The English word was coined in 1909 by E.B...
, storytelling
Storytelling
Storytelling is the conveying of events in words, images and sounds, often by improvisation or embellishment. Stories or narratives have been shared in every culture as a means of entertainment, education, cultural preservation and in order to instill moral values...
, individual experiences and stimulating work environments in fostering creative ideas.
The key steps behind the conceptual economy fall into the following categories:
The evolving state of the economy
Until quite recently, our understanding of the economy was based on the premise that the way forward would depend on traditional values and qualifications such as those for accountants, lawyers, engineers, mathematicians or computer programmers. With the new opportunities resulting from globalizationGlobalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
and the internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
, the accepted forms of success are losing ground to scenarios drawing on innovative ideas. Here there is an increasing need for artists, designers and creative authors to contribute not only to product design
Product design
-Introduction:Product design is the process of creating a new product to be sold by a business or enterprise to its customers. It is concerned with the efficient and effective generation and development of ideas through a process that leads to new products.Product designers conceptualize and...
but also to business management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
and strategic planning
Strategic planning
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues...
.
Areas deserving particular attention are related to three key developments:
Over-supply
For the past 15 or 20 years, the Western economies (Europe, North America) have experienced a situation of fully dependable supply of basic goods, including round-the-year abundance of agricultural produceProduce
Produce is a generalized term for a group of farm-produced goods and, not limited to fruits and vegetables . More specifically, the term "produce" often implies that the products are fresh and generally in the same state as where they were harvested. In supermarkets the term is also used to refer...
, with the result that a significant proportion of households have begun to look for more than just the basic necessities. Families now look for goods which extend beyond the basic norm such as organic foods or sophisticated digital television sets
Digital television
Digital television is the transmission of audio and video by digital signals, in contrast to the analog signals used by analog TV...
, mobile phones and cars with four-wheel drive
Four-wheel drive
Four-wheel drive, 4WD, or 4×4 is a four-wheeled vehicle with a drivetrain that allows all four wheels to receive torque from the engine simultaneously...
, cruise control
Cruise control
Cruise control is a system that automatically controls the speed of a motor vehicle. The system takes over the throttle of the car to maintain a steady speed as set by the driver.-History:...
or integrated navigation systems
Automotive navigation system
An automotive navigation system is a satellite navigation system designed for use in automobiles. It typically uses a GPS navigation device to acquire position data to locate the user on a road in the unit's map database. Using the road database, the unit can give directions to other locations...
.
Outsourcing
Given the low costs of labourManual labour
Manual labour , manual or manual work is physical work done by people, most especially in contrast to that done by machines, and also to that done by working animals...
in developing countries such as China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and the Philippines, American and European companies are now outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
or offshoring
Offshoring
Offshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Even state governments employ offshoring...
an ever increasing proportion of their production, manufacturing or service tasks to foreign countries. As a result, job opportunities in the West are slowly moving away from routine tasks such as accounting, telephone support services
Call centre
A call centre or call center is a centralised office used for the purpose of receiving and transmitting a large volume of requests by telephone. A call centre is operated by a company to administer incoming product support or information inquiries from consumers. Outgoing calls for telemarketing,...
, computer programming
Computer programming
Computer programming is the process of designing, writing, testing, debugging, and maintaining the source code of computer programs. This source code is written in one or more programming languages. The purpose of programming is to create a program that performs specific operations or exhibits a...
and electronic component
Electronic component
An electronic component is a basic electronic element and may be available in a discrete form having two or more electrical terminals . These are intended to be connected together, usually by soldering to a printed circuit board, in order to create an electronic circuit with a particular function...
manufacturing. The efficiency of outsourcing has also been improving as the internet continues to provide increasingly reliable and ever faster global communications links.
Automation
In industry too, the development of roboticsRobotics
Robotics is the branch of technology that deals with the design, construction, operation, structural disposition, manufacture and application of robots...
and automated manufacturing
Computer-aided manufacturing
Computer-aided manufacturing is the use of computer software to control machine tools and related machinery in the manufacturing of workpieces. This is not the only definition for CAM, but it is the most common; CAM may also refer to the use of a computer to assist in all operations of a...
facilities means that opportunities for traditional jobs in industries such as automobile manufacturing
Automaker
The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
and food processing
Food processing
Food processing is the set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for consumption by humans or animals either in the home or by the food processing industry...
are also diminishing. Ever higher levels of qualification are now required to contribute to operations that are largely computerized.
New areas of opportunity
Partly a result of the above factors, a wide range of new facilities and opportunities has begun to emerge. These include:- the development of appealing new internet-based facilitiesElectronic commerceElectronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
for sales and services, - transportation logisticsIntelligent transportation systemThe term intelligent transportation systems refers to information and communication technology that improve transport outcomes such as transport safety, transport productivity, travel reliability, informed travel choices, social equity, environmental performance and network operation...
for better coordination of component supply and product distribution, - customer-oriented interactive travel guidesTravel technologyTravel technology is a term used to describe applications of Information Technology , or Information and Communications Technology , in travel, tourism and hospitality industry...
for more efficient and often cheaper travel abroad, - value-added productsGadgetA gadget is a small technological object that has a particular function, but is often thought of as a novelty. Gadgets are invariably considered to be more unusually or cleverly designed than normal technological objects at the time of their invention...
combining a number of services, often into one small unit, - computerized courseware to enhance on-the-job training, and
- sophisticated design toolsComputer-aided designComputer-aided design , also known as computer-aided design and drafting , is the use of computer technology for the process of design and design-documentation. Computer Aided Drafting describes the process of drafting with a computer...
for greater production efficiency.
Virtually every area of industry can benefit from developments of this kind both to improve the products themselves and to offer better marketing opportunities and after-sales services. As a result, these factors are seen as major contributors to increased productivity
Productivity
Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average, expressing the total output divided by the total input...
and economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
.
Criteria for economic success
Drivers behind the conceptual economy, can be categorised into the following areas:Scholarship
Educational institutions need to place more emphasis on creativity and the arts rather than on traditional qualifications in the areas of engineering and management. In particular, more attention needs to devoted to basic literacyLiteracy
Literacy has traditionally been described as the ability to read for knowledge, write coherently and think critically about printed material.Literacy represents the lifelong, intellectual process of gaining meaning from print...
, analytical and critical thinking
Critical thinking
Critical thinking is the process or method of thinking that questions assumptions. It is a way of deciding whether a claim is true, false, or sometimes true and sometimes false, or partly true and partly false. The origins of critical thinking can be traced in Western thought to the Socratic...
, synthesis and quantitative skills:
Creativity and artistry
Until now, information technologyInformation technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
has had considerable impact on the economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
. Increasingly, success will depend on how to make use of the knowledge and information that has emerged. Here qualities such as intuition
Intuition (knowledge)
Intuition is the ability to acquire knowledge without inference or the use of reason. "The word 'intuition' comes from the Latin word 'intueri', which is often roughly translated as meaning 'to look inside'’ or 'to contemplate'." Intuition provides us with beliefs that we cannot necessarily justify...
, creativity
Creativity
Creativity refers to the phenomenon whereby a person creates something new that has some kind of value. What counts as "new" may be in reference to the individual creator, or to the society or domain within which the novelty occurs...
and game-based approaches
Game
A game is structured playing, usually undertaken for enjoyment and sometimes used as an educational tool. Games are distinct from work, which is usually carried out for remuneration, and from art, which is more often an expression of aesthetic or ideological elements...
will become ever more important.
Cultural and technical diversity
Prosperity and competitiveness in the 21st century will depend on an understanding of diverse national cultures and how to draw on their ideas in order to assist the innovation process. Here too, there will be a need for more extensive teamwork, creativity and leading-edge thinking, all in the context of the global economy.See also
- Computer-aided manufacturingComputer-aided manufacturingComputer-aided manufacturing is the use of computer software to control machine tools and related machinery in the manufacturing of workpieces. This is not the only definition for CAM, but it is the most common; CAM may also refer to the use of a computer to assist in all operations of a...
- Creative industriesCreative industriesThe creative industries refers to a range of economic activities which are concerned with the generation or exploitation of knowledge and information...
- Knowledge economyKnowledge economyThe knowledge economy is a term that refers either to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints, or to a knowledge-based economy. In the second meaning, more frequently used, it refers to the use of knowledge technologies to...
- New product developmentNew product developmentIn business and engineering, new product development is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible or intangible...
- GlobalizationGlobalizationGlobalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
- Cognitive roboticsCognitive roboticsa robot is a robot device that is built from inanimate matter. Its behavior in response to the environment is deterministic, based on how the robot was designed. Cognition is the process of acquiring and using knowledge about the world for goal-oriented purposes, such as survival...