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The Support Economy

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The Support Economy – Why corporations are failing individuals and the next episode of capitalism, by Shoshana Zuboff & James Maxmin (2002)

According to Zuboff and Maxmin we are on the verge of what is called a ‘Support Economy’. Where in the ‘old’ economy corporations have put themselves in the middle of the solar system with customers at the complete end of it; now the individual, who sometimes takes the role of customer, has to be put back in the center. Corporations have to become more modest in their role of facilitator, in supporting the individual in living his or her life. This shift towards a Support Economy is very complex since it involves a change of logic. The standard enterprise logic of corporations, based on managerial capitalism has to change towards a logic of distributed capitalism to avoid the Transaction Crisis. This crisis concerns the chasm that has arisen between individuals and corporations. Individuals have changed while the logic of corporations has not adapted. Many corporations are still organized around transaction value, while they destroy the possibly much greater relationship value through what Zuboff and Maxmin call starvation, inflation, tyranny and mimicry. A praiseworthy book for those who want to understand the consequences of the change of logic in the market.

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4 Comments »

Comment by mark Subscribed to comments via email
2006-01-24 09:33:23

I read the book last month and I think their analysis is excellent but it is less clear how this new enterprise logic of distributed capitalism will work out. How will the federation create an equilibrium in which every company gets its fair share of the pie? It seems that the company in the federation that is closest to the individual is in a power position because he knows most about the individual. Such positions can fall back into the old habits of maximizing profit on the short-term. If this would only occur in one federation, suppliers could move to a federation that treats them better, but what happens if this occurs in every federation? Power can easily seduce people (and organizations) to take advantage of others, creating relations not based on mutual trust but on power.

 
Comment by Anna
2006-01-24 09:49:51

Interesting point Mark, cause this is exactly what Zuboff and Maxmin warn against: power, old habits of maximizing profits on the short term, moving to federations that treat them better are all characteristics of the standard enterprise logic, not of the support economy. It’s a major culture shift to go from this standard logic to the new logic of support so it’s not going to happen overnight, and as long as people in organizations won’t get it, things will stay as they are. The problem then becomes one of taking into account the selfdirected initiatives of individuals who now have the technology to express their new individuation as Zuboff and Maxmin calls it, causing a need for the change of logic again (wouldn’t be the first time that an initially individual initiative without objctives like profit maximization etc, causes huge problems for standard industries…)

 
Comment by mark Subscribed to comments via email
2006-01-24 11:40:02

I fully agree with you, Anna. The thing is, are companies (people) ethically doing the right thing if they are in a powerful position? Will they leave the wallet on the street if somebody has left it there? The support economy requires that we (companies/individuals) care about others as much as we care about ourselves to build relationships of trust. I want to believe in this, because I believe in Christian way of life, but it is extremely difficult to act in this way.

 
Comment by Arjan Subscribed to comments via email
2006-01-26 18:54:30

Do we need trust if there was no power?! Convergence is increasing decentralisation and transparancy and thereby empowering individuals. Consumers have limited power since they are extremely fragmented. Only if inidviduals start organizing themselves more effectively (strategic and/or ad-hoc) the powershift will become more like an equilibrium.

Individuals will only collaborate if the gain of community exceeds the limitation of personal freedom. Who still realizes actively that his/ her experience of freedom is lying in the social-paradigm, not in the individual one. The fact that we agreed not to kill eachother makes ou feel saver on the straat each day. But due to this adaptaton most people see freedom as a personal matter.

So how do we get people to organize again in an age of extreme-individualism? Participatory community need a common-objective. Either defined positively (we want to achieve ….) or negative (we want to prevent ….). So far we see more collaboration when under pressure (eg fear), and therefor more collaboration which is negatively defined. A positive definition of freedom demands more long-term perspective, vision on where to go, including debate, and an attitude that is not trying to maximize personal interests on the short-term.

So to conclude, I totally agree with Zuboff that the momentum of a great disruption is growing, but structural change only occurs when crisis meets opportunity. The potential energy of the upcoming monumental change is huge, but what might that crisis be? What might that opportunity be?

 
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