The Connected Company

Chapter 2. The service economy

In today’s world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward. Manufactured goods often can be evaluated before the completion of a transaction. Service providers, on the other hand, usually can offer only their reputations.

—Alan Greenspan

Industrialization is a phase, and in developed nations that phase is ending. Growth in developed economies will increasingly come from services.

The Great Reset

In The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity, Richard Florida points to a shift from an economy based on making things to one that is increasingly powered by knowledge, creativity, and ideas:

Great Resets are broad and fundamental transformations of the economic and social order and involve much more than strictly economic or financial events. A true Reset transforms not simply the way we innovate and produce but also ushers in a whole new economic landscape.

Jeffrey Immelt, CEO of General Electric, agrees:

This economic crisis doesn’t represent a cycle. It represents a reset. It’s an emotional, raw social, economic reset. People who understand that will prosper. Those who don’t will be left behind.

The good news is that although resets are initiated by failures—sometimes catastrophic failures, ...