What is the Relationship Economy?

The Consumer (Mass-Market) Economy peaked in the 1970s and 80s, when a small number of companies and media channels controlled the narrative of the “good life” by sending streams of messages to consumers – messages the senders didn’t expect many replies to.

Retail goods weren’t the only things that got consumerized. Every sector of human activity did, worldwide: Politicians, sports teams, hospitals, pharmaceuticals and even academic degrees and religions are marketed to us with the same methods used to sell us Rice Krispies and Tide.

As the Consumer Economy cusped, increases in material goods owned strangely coincided with an increased sense of social disconnection and a drop in personal responsibility. Capitalism had its hiccups, too.

Two-Way-Traffic-SignThankfully, we’re not in the 80s anymore. The old one-way media highway is now two-way, and crowded. Barriers are falling everywhere, including those that used to make it hard to publish to the world, sharing information. People are collaborating. Ideas are having sex.

The Consumer Economy is in its death throes. It’s making way for the Relationship Economy, which has different “physics.”

Markets have fragmented. The media has exploded into countless channels that are two-way, not just one-way. People are buying less. They’re also making and sharing more, driven not only because of recent dips in the economy, but also by a desire to reconnect, to find again that sense of community.

Smart companies are building authentic relationships with their customers, no longer treating them as consumers. Smart governments are figuring out how to trust their citizens by opening their data and their budgeting processes, among other ways.

Less enlightened incumbent companies, trying to keep their hold on markets and consumers, are using the old methods with greater force and accuracy. They’re exploiting the world of big data to surveil and manipulate. The problem is that such behavior isn’t trustworthy. In the Relationship Economy trust is paramount.

The new physics can be confusing to incumbents. For example, the surge in openness and connectivity has created a world of abundance. Want to learn a bit about logistics? Use the free Wikipedia; Britannica or Encarta won’t even come to mind. Need to find a specialist in logistics? Most of their resumes are on LinkedIn. Nobody had to cajole them to enter their info, either.

Generalizing from the Wikipedia example, many things that we thought required corporations to build are now being created collectively, at very low cost. The world is awash in open lecture series, instructions for bootstrapping a village, cute cat videos, not-so-cute videos, fan-created movies, digital maps (used for rescues), people offering to teach, software and more.

Abundance changes the basic assumptions of business, violating that old conventional wisdom that scarcity equals value. Abundance makes hoarding and secrecy much less interesting than generosity and transparency. SA in Schools snapIt also makes finding the right thread in the tangle much more valuable.

We’re so deep into this assumption of scarcity that we don’t even notice how much it has changed our world. (Here’s an example in education.)

In this new world, whom you trust and who trusts you are primary assets. You’ll choose the product (or vote for the candidate) that people you trust recommend, from among the abundant choices.

Welcome to the Relationship Economy.

Scarcity and abundance are just the beginning of this journey. The Relationship Economy is a broad umbrella, under which many other concepts fit comfortably, from Theory U/Presencing to the Sharing Economy, True Wealth, Open Source, Open Source Ecology, Open Everything, Occupy Wall Street, Creating Shared Value, Creative Commons and many more.

Here are nine different perspectives on what the Relationship Economy is and what it means.

Relationship Economy Tasting Menu

Thriving in the Relationship Economy
Prezi
What If We Trusted You?
TEDxCopenhagen
Video
Old Conventional Wisdoms Being Proven False
Prezi
That Troubling Word, Consumer
Video
Jerry's BrainPersistence: An Appreciation
Video
Lessons from Wikipedia
Video
Why Do I Do What I Do?
Video
Seeing Abundantly: Education
Screencast

If you’d like to dive deeper, please take a look at the REX Commons, or consider applying to join the private REX Cohort.

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