The internet is successfully ravaging almost every industry from music to real estate. Technology has, throughout history, caused the end of many industries, removing millions of jobs from the economy. What looks scary in the short term ends up being a long-term boon, with technology often replacing those jobs with better jobs, larger markets, and more efficient allocation of resources.
This weekend, Thomas Friedman wrote about the “Do-It-Yourself” economy where, even in this Great Recession, companies with fewer dollars and less manpower are finding ways to do more. He highlights marketing firm Greer & Associates whose budget has been cut 20 percent. Using online collaborative tools, cheap stock photography, and crowd sourced voiceover work, they have been able to produce far more than they could with a full budget.
Greer paid far less for these services. Voice talent that once cost up to $500 was 10 percent its original cost. Thousands of dollars of stock photography could be had for a few dollars.
Friedman sadly doesn’t go far enough highlighting how amazing this ultra-efficiency is. While people will pay less for stock photography, more people can afford it now. It’s feasible for someone making a birthday card or personal website to spend a few dollars for really professional photography. The market is far larger – elastic pricing at work.
But what about the poor photographer you say? Focus only true scarce goods. Stock photography, especially in the age of cheap digital cameras and photo editing software, is a glutted market pushing the price down to zero. That’s competition and it’s a good thing. All this stock photography makes commissioned photography, long the bread and butter of any photographer, more valuable, especially when they can show samples of their work in active use.
With more efficiency and less costs, Greer can put more resources into creativity and making actual marketing products. It’s so cheap and easy to distribute music, musicians can save those resources to engage with fans and sell scarce goods (like time, concert tickets, etc.) to those fans. Greer’s clients and a musicians fans save money they once spent on high-priced voice-overs or CDs can put that money to other areas of the economy, creating other jobs.
Look at 15-20 years ago how many jobs didn’t exist before the internet and computers become ubiquitous. There are search engines, SEO specialists, social media sites, online gaming, life streaming, GPS, cell phone data plans, and more. All of these provide more jobs even if they replace others. It’s like the automobile industry replacing horses and buggies or phones replacing the telegraph. Agriculture is my favorite example, as the majority of the U.S.’s jobs used to be in agriculture, replaced by manufacturing because agriculture became so efficient. Now manufacturing is more efficient, those jobs are disappearing. They will be replaced by new jobs, whether online or in other areas not yet discovered.
Companies need to stop fearing the changing marketplace and embrace the new opportunities, even if it means radically changing your business model. The market makes the decisions and companies just come along for the ride.