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 ...