Fast Company

Creating a Post-Crisis Economy: Learning to Measure Participation

When I consider bidding for something on e-Bay, the first thing I do is check the reliability rating of the seller. When I want to meet a hard-to-reach executive, I try to establish a link through my network. When I consider which conference I will pay to attend, I choose TED because I know it will give me the most new ideas to feed off for the year.

Each of these qualities--reputation, access, and ideas--has real and tangible value to me and to the individual or institution that holds them. I am more likely to shop with an e-Bay vendor with a stellar rating. I am more likely to meet that executive if I have a large and well-maintained network. I am more likely to pay (a very large sum of money) to go to the conference with the most useful ideas. So why don't we measure some of these things and have them constitute the picture we have of our personal, corporate or national wealth?

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Some would argue that these are intangible and therefore hard to exchange, unlike cash or physical assets. I would argue that this is much less true in an information society where essentially everything is intangible. How can anything be less tangible than credit default swaps, and yet somehow we managed to exchange those, with admittedly disastrous consequences? With the information systems at our disposal, we can create measures of many of the things that facilitate modern society. Here is my list of things that I think might make up a networked, participation based economy.

Network value would describe the access that an individual or organization has to new ideas and opportunities. Brand value would describe reputation. Social value would measure influence. Knowledge would be measured through the number and quality of ideas and, finally, meaning measured through engagement. I suspect that we may have a hard time letting go of the measuring of cash, so I assume monetary value remains one of the dimensions of a participation economy. Personally, I think it would be an interesting thought experiment to imagine the first five replacing money rather than augmenting it.

Each type of value has to have some kind of measurable currency and the units of that currency presumably have to be exchangeable in some form. So in this framework monetary value has a measurable currency in the form of cash and has units such as dollars, euros or yuan. The measurable units of currency for networks might be connections, such the number of Linked-in connections I might have. For brand, reputation would be measured through ratings, just like e-Bay ratings, or the ranking of corporations that Interbrand publishes each year. The influence generated through social value might be measured by tracking conversations, much as the number of hits in a Google search is an indication of influence or importance. Identifying a universal measure for meaning might well be the most difficult, but corporations manage to measure employee engagement and media companies measure audience engagement. Somehow the stickiness of our experiences ought to be measurable and be an indication of how important to us any given experience might be. The more meaningful those experiences, the wealthier we should feel, and be.

Measuring and tracking all six of these may make for a complex economy, but unlike much of what we measure today, these are all relevant at an individual, organizational, or national scale. It seems to me we are more likely to want to participate in their nurturing and growth rather than leaving it to a few smart mathematicians on Wall Street.

Are these the right things to measure in an economy based on participation--and could their measurement result in some kind of sustainable system of growth and wealth creation?

Related: Creating a Post-Crisis Economy: Why We Need Economic Dashboards

Related: Creating a Post-Crisis Economy: Moving Beyond Consumption
Related: Welcoming Guest Blogger Tim Brown: Can We Design a Post-Crisis Economy?

Editor's note: Tim Brown is the CEO and president of IDEO, and a thought leader on the subject of design thinking. He's also an industrial designer himself, and has exhibited at the Museum of Modern Art in New York, and the Design Museum in London. He's particularly interested in the convergence of technology and the arts, and how design can have a social impact, particularly in emerging economies.

His talk on "Serious Play" can be seen on TED.com and his article on design thinking for The Harvard Business Review is available here. Brown's new book, Change By Design, on how design thinking transforms organizations, will be released by HarperBusiness in September 2009.

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4 Comments

  • Tomson Phillips

    I totally agree with you. Networking is something that we need in every face of our lives.

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  • David Capece

    This article is spot on. Just participated in an expert roundtable where we discussed the importance of building reputation and influence, which is earned through participation in a community where you can gain respect. Measuring only sales can be short-sited and lead you to focus on the wrong activities. We must build sustainable businesses for the long-run and that means building relationships, building a brand, building human capital. Money still matters, but maybe a little bit less.

  • Peter Thomson

    By contrasting the participation economy with the consumption economy, there is a risk that we might miss the underlying operating system of both: the transaction economy.

    Metrics on participation such as connections, reputation, social impact, meaning and environmental impact are indeed important but maybe as a layer of information to add to the transaction economy rather than replacing it.

    The ebay example is perfect: I’ve chosen to pay $10 for a second-hand book from a seller with good feedback instead of the same book for $5 from a seller with poor feedback. The ebay feedback is an important part of the transaction but it doesn’t actually replace money as the means of exchange. In fact, using money allows an economist, and in turn other participants, to know that, on transactions of around $10, reputation is worth at least $5 to me.

    Kickstart and Acumen make the perfect counterpoints. There’s a risk of being condescending when thinking that because a person in an Indian slum isn’t using twitter to determine someone’s social value before doing business, that slums don’t have both a transaction economy and a layer of information about almost all the factors of “participation”. According to reports from many developing cultures, they absolutely do have both.

    In New Zealand we have Pacific Island cultures that do indeed place much more importance on the information economy (trust and relationships) than the consumption economy. When working with them to unwind finance agreements and loans from loan sharks I often did wish that there was a transparent, human centred, appropriate tech, way of rating those loan providers to discourage abuse of power asymmetry, but that system would not have replaced the need for the underlying monetary transactions.

    Empowering those without access to the consumption economy with access to a participation economy will be vitally important. But maybe it comes second, after empowering them with genuine access to the transaction economy.