News & Trends
Where New Value Is Created
When products become less expensive, business does not disappear. It moves. The only question is where.
Consider the light bulb. For a long time, it was a valuable product. Today, it costs almost nothing. The companies generating value from lighting are now those that manage energy flows.
This pattern is not new. Since gaining access to millions of songs for only a few Swiss francs per month, the CD has lost its value. Streaming platforms now generate the revenue. The telecommunications business has shifted as well. No one buys a smartphone solely to make calls. The valuable elements are the services and networks that connect people around the world.
Technological progress makes products less expensive and knowledge more accessible. Those who benefit are often not the companies manufacturing the product. Value accrues to those who provide access.
The value-creation seesaw illustrates what is happening. On one side, the marginal costs of energy, knowledge, and diagnostics are approaching zero. On the other, the value of infrastructure, guidance, and trust is increasing.
Tomorrow’s Scarce Resources
In a world of abundance, value shifts toward what cannot be reproduced at will. This is the foundation of the new economy.
The decisive question in the age of abundance is not:
What will become less expensive?
It is: What will remain irreplaceable?
Discover the entire issue
Read more articles from our current issue: ‘When Almost Everything Costs Next to Nothing’.
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