Social Media Marketing and Optimization

I remember Dale Carnegie in his book, “How to Win Friends and Influence People”, he speaks of recruiting others to form your knowledge base and lever their knowledge by organizing it. Through some incentive provided on your behalf, you can coax others to allow you to coordinate and utilize their knowledge in a mutually beneficial fashion.

A basic facet of economics is the division of labour. Adam Smith declared that as economies grow, people must begin to specialize in certain tasks in order for them to be salable in the market at a rate where the market clears and everyone can access the product (within reason). Given the diversity in today’s workforce, to specialize in every essential profession or industry, it’d take modern man centuries. Clearly this is inefficient and for most folks, impossible.

The productivity boom of 90’s, or the Clinton Administration depending on who you ask, was triggered by a productivity explosion which was fueled by an explosion of fixed asset investment overseas, assisted by technology and low cost/scalable real time communication which has allowed, and is allowing us to utilize the ready pool of both skilled and unskilled labour that exists in nations such as China and India.

So labour initially divides locally and domestically, and then further divides beyond existing borders with the support of fixed asset investment. Multinationals have set up operations overseas to capitalize on the abundance of low cost labor and generous government incentives. Here, both parties win, the company reduces cost and continues to optimize ROI for its shareholders, while the nation gets an economic boost and builds their commercial reputation and the value of their labor force.

Recalling the book, “The Lexus and the Olive Tree”, the democratization of information via email and high speed internet has freed economic activity from domestic borders with the aid of free trade agreements. The new phenomena of mass collaboration is now among us in the form of blogs, social networks, and open source CMS systems such as Joomla.

Where we once could use the web to communicate in real time, we can now utilize it to publish, review and manage complex projects in teams for free in real time. So first capital was freed up with the liberalization of data, and now knowledge is flowing freely with the widespread adoption of online mass collaboration tools such as Wikis, blogs and social networks.

The world is undergoing an economic revolution. The USA is running a large (6%+) current account deficit with developing nations being responsible for the trade imbalance. We consume - they produce - we leverage consumption - we offshore - their economies are bolstered - the investor class in the US prospers yet we’re faced with a large external deficit. Is this good or bad? Although the monetary value of our exports against our imports nets us a large deficit - is the knowledge value, if we could quantify it more precisely eliminating this imbalance? Are we still producing more value in this country? Either way you look at the trade deficit, the parties running a surplus (China for example) in their need to change dollars to RMB and keep their exchange rate fixed, must buy something back from us. It just so happens that we’re in great need of foreign inflows to cover our current national expenditures now. Here’s a great article which is highly accessible as well regarding myths surrounding the trade deficit.

That’s a hotly debated issue and I’ve not done it justice here. But I will venture to say, that as the adoption of mass collaboration tools grows, the value of “knowledge” will become more fluid and no nation will have a monopoly on it. Value today will become commoditized tomorrow are we begin this uncertain march into a new era. What were once salable will soon be a click away and the most important network you belong to may consist of people whom you’ve never met in person or spoken with directly. How will you influence them and where will you begin? This is a profound question…

This post was triggered by some commentary on the rule of 150 as it applies to control during the collaborative process, found on Buzz Marketing for Technology.

current account deficit

global trade

Laws of Wikinomics

online collaboration

Social Networks

web 2.0 tools

Wikinomics