Saturday, 27 October 2012

Intent casting shifts balance of power (and Facebook dips a toe)

Back in 1980, Prof. Allan Schnaiberg wrote about a theory he'd developed called "The Treadmill of Production" which was in part used to explain the drastic changes in US production quantities and/or qualities after the second World War.  It suggested how advances in technology, driven mainly by producers seeking increased profits allowed them to invest in new technologies which further increased production which was necessarily then matched by an increase in consumption.  This created an ever growing cycle as more efficient production required further economic growth to offset unemployment created by the previous mechanisation.

At a simple level it suggested that it is not demand from the consumer that drives supply but rather supply that creates the desire for demand.  In the paper "Interrogating the treadmill of Production" it went on to discuss  the focus of the theory on the production side rather than consumption side and the fact that consumers can only consume what is produced saying:-

"Consumers may opt not to consume specific produced items.  But they are not empowered by market processes to determine how such items will and will not be produced."

Ignoring the environmental aspects of this (as the ToP theory was focused on how this impacted the environment), it's interesting how this power play between producers and consumers may be changing in the sense that consumers are increasingly being given control of production.

Traditionally there was no way to access consumer needs in any formal way and so producers would create mass-market products based on limited market research studies.  However, technology is changing that allows consumers to provide feedback on products that don't yet exist, create demand for new product ideas and even to create their own products.

The concept of "Intent Casting" is one way this is manifesting itselt, with consumers able to create and issue their own personal RFP for a product or service they want and for producers/suppliers to be able to respond to this.  The website AskForIt for example allows consumers to ask for anything and through social sharing, to gain support for this from others.  Another website called OffersByMe allows you to indicate what activity/service you want and how much you're prepared to pay for it - offers are then shown/sourced based on this request.

It is probably home services which is the biggest growth area for intent casting however with services like Thumbtack allowing the consumer to indicate the service they want (plumber / electrician / etc.) and to then receive quotes from local tradesmen for the request.

Facebook has recently extended into the area of intent casting by extending it's "Like It" button to include a "Want It" button.  This allows consumers to indicate products they want which are then added to collections.  They, or more importantly friends can then reviews these and click through to actually buy then.  While at the moment this is more of a wish list function, I suspect it won't be long before Facebook are mining these "wants" (or essentially consumer intents) to provide relevant offers from other service providers.

Intent casting for existing products and services is just the start of it though.

Crowdfunding website Kickstarter is opening up to UK projects at the end of this month, allowing anyone with an idea to sell it to consumers before they've even produced it.  In this model, intent casting actually starts to drive production as users on Kickstarter essentially help to bring the product to the market through demand (and donations).

Consumers can also now take a step back even further and become producers in their own right.

CreateSpace by Amazon is one of a number of companies that allows consumers to create their own books and to have these professionally printed on demand.  Website Ponoko takes this even further, allowing consumers to become producers with physical materials.  The user submits 2D and 3D designs and can then have these custom manufactured in over 80 different materials.  These products can then be listed and sold via the Ponoko website and custom manufactured on demand based on each individual order.

Brands such as Nike have also experimented in this area, allowing consumers to design their own trainers and have these uniquely produced.

Finally, new technologies are letting the consumers actually manufacture their own uniques goods on demand, in their home.

3D printers are now becoming commercialised to the extent that early adopter consumers can now purchase them, with brands like MakerBot and Cubify leading the charge.  The BBC recently reported how Disney Research is looking into how toys can be designed that can only be produced with a 3D printer due to their unique characteristics and controversial file-sharing website Pirate Bay is starting to host what it terms "Physibiles", or 3D printable designs.

It doesn't take much to see how all of these trends may ultimately come together, allowing the consumer to find products that don't yet exist and express a preference for them to direct what ultimately gets produced or is simply produced on-demand, whether by a 3rd party or at home.

This won't slow down the treadmill of production (and it's environmental impact), but it may change the economics and dynamics of it.  Given that "a key dimension of power is the ability to influence, if not dictate, the choices of those less powerful.", giving consumers more direct choice and the ability to state their intent is certainly a step forward.

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trutherator said...

Allan Schnaiberg's theory (The Treadmill of Production) has a major flaw in its basic premise. "[Consumers are not empowered by market processes to determine how such items will or will not be produced."

He cannot when he is shopping of course,he can pick and choose from what is available at the time of purchase.

Fact is, though, consumer is king in the market, because the CONSUMER PICKS AND CHOOSE. The market is not a static process. A product that does not sell well, causes a decrease in its production. A producer that sees it's goods fly off the shelves will make more of them. Production always adjusts to demand in a truly free market.

That is how "the free market" finds the price point "sweet spot" where consumer expenditure and production costs find each other. That's why central planning and central banks do not help at all. They only centralize the market's blowback effect. Government-managed medicine forvexample, has multiplied costs to both consumers and body politic. The topmost scum of our decision facto national rulers know this, that is why they offloaded the worst effects to ten years out, but of course it started just two years on.

Now comes the Internet and the Information Explosion, with its side effect phenomena like communicationsome technology leaps, predicted thousands of years ago (Daniel 2:3-4,KJV Bible). Consumers are getting even more empowered to accelerate those market processes, and even made-to-order individualized production commences.

If only we could keep Keyesian economists at bay. A good understanding of economics begins and ends with "Austrian-school" economics.

Thank you for listening
Www.trutherator.wordpress.come

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