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December 6, 2006

Valuation of Knowledge

There was a day where the valuation of knowledge was based upon the scarcity of it. IN fact, we built hierarchal structures within organization to ensure command and control of knowledge where those that know are located at the top and those that do are located at the bottom. Even today, the Coca-Cola secret formlaue is only known by a few people located at the very top of the organization.

But something changed in the past 20 plus years where the value of knowledge was flipped on its head and thus based upon the number of people who shared the information. Towering command and control organizations were humbled by their flat and knowledgeable competition. The Internet opened the door where knowledge is not only shared it is free and free to everyone with a connection. Companies are sharing their intellectual property, their insight and trade secrets (see GoldCorp, Staples, P&G).

Now, the Web 2.0 environment opens some new doors and flips the model once again. Today, the knowledge does not create value from sharing but becomes the product itself. The barriers between producer and consumer have eroded and the friction removed. Hence, the consumer now becomes the product and generates value for the producer. Think about Amazon and Netflix; with you as the consumer generating millions of reviews and ratings have fundamentally altered the business model. Your as the knowledge consumer have become the knowledge producer and created value.

Posted by Todd at December 6, 2006 1:26 PM