Listening to Swedish economist Kjell Nordstrom at the lifestyle travel conference LE Miami was a bit like trying to drink from a firehose. I found myself still sorting through the implications of one insight as he shared the next.
Among his observations:
• Despite antitrust laws, the key to success in capitalism is creating a monopoly. A new and creative approach will, for a period, have no meaningful competition. He cited Ikea as a retailing monopoly.
But, he noted, all monopolies are temporary. Returning to his home country for an example of a monopoly that lapsed, he pointed out that Volvo sales gained tremendous momentum for decades on the perception that it was the world's safest car. But that monopoly ended around 1994 when many cars became perceived as safe.
"Create and defend, for as long as you can, a monopoly," he advised.
• Each generation is measurably more intelligent than the one before, but the amount of information available increases so quickly that, in a sense, every morning we wake up a little stupider. We know less, as a percentage of what's knowable, than yesterday.
As a result of the daily leaps in accessible knowledge, forecasting has become more difficult, not less. The huge growth of knowledge has resulted in analytic chaos. Our efforts at prediction are increasingly analogous to a rain dance: You can become good at dancing, but it doesn't affect the likelihood of precipitation. Planning, strategy and budgeting have become less practical than trial and error, and it's highly unlikely that anyone will get things right on a first attempt.
• The financial value of a university degree is free-falling and approaching zero. Schools have lost their knowledge monopoly. M.I.T. cannot teach you anything that isn't available online.
But that only applies to "articulate" knowledge, i.e., that which can be found in lectures and books. Tacit, or silent, knowledge, which becomes manifest in art, poetry and music, can't be easily formulated and explained in words alone. It typically requires proximity to a master teacher. Going forward, tacit knowledge will increase in value; recruiters will hire for creativity and attitude, and train for skill.
• Society has been hierarchical for centuries, with knowledge and goods distributed from central points. But today, the periphery has become the center. Everyone contributes to our knowledge base, and anyone can access it, so reducing the friction and cost of transactions will define success, regardless of what's being distributed.
Uber, where a passenger and driver appear to connect and transact without an intermediary who takes a reservation, is a prime example of sidestepping a central system, and Nordstrom believes "this is only the beginning."
• Upon hearing Yale professor Harold Bloom's lecture that all literature essentially repeats what is expressed in 27 seminal books, Nordstrom recognized this was not limited to literature. Businesses, too, simply mimic other businesses, a phenomenon he dubs the "karaoke-fication" of the world.
"We in business will have to reclaim originality," he said. "You can only reach mediocrity by looking at others. ... Creation of something truly original gives birth to a temporary monopoly."
Interestingly, the speaker who followed him seemed, on one hand, to pick up where Nordstrom left off, but in unintentional ways seemed to validate the economist's observations about rain dances and karaoke.
Steve Pedigo, director of research for the Creative Class Group (CCG), studies, defines and tracks creative people. It advises communities, cities and even the U.N., but also has a commercial practice that enables companies to hunt creatives down, create messages that they hope will resonate, then market to them successfully.
But the creative class is not monolithic. Going back to Nordstrom's definitions, it could be seen as being bifurcated between articulate creatives and tacit creatives. Articulate creatives would drift toward advertising/marketing, commercial design, production and business professions. Tacit creatives become artists across many media.
I'm not sure tacits would embrace the commercially focused aspect of CCG. It lives in a world of data and analytics, employing the type of articulate knowledge that Nordstrom characterizes as ubiquitous and declining in value, to trace people possessing tacit knowledge, down to the ZIP codes where they congregate.
CCG's demographic approach is in tune with marketing today, but I wondered if such a constructed approach to analyzing creativity could truly employ tacit creativity to its commercial ends. Emblematic of the disconnect between the authentic audience it tracks and the companies it serves was Pedigo's statement that campaigns to reach the creative class must be "targeted and authentic."
Although I think it's possible to express authenticity commercially, I'm not sure that a marketing group can tell a large corporation how to do anything other than mimic authenticity. Like karaoke.
In fact, one of my takeaways from LE Miami is that the authentic, tacit influences of the creative class, which gave early lifestyle hotels their temporary monopoly, may have drifted elsewhere. Ian Schrager said as early as 2011 that the boutique hotel segment he pioneered had been "watered down." That doesn't mean he (and others) aren't still focused on design-driven hotels, which can be exciting to even noncreative types, but that some authenticity has been replaced by commercial mimicry.
Perhaps the heart of my somewhat negative reaction to Pedigo's presentation is a blurring in the definition of the authentic, tacit creatives and the stylish, articulate people who may aspire to be identified as members of the tacit creative class. Authenticity matters to the tacit class; marketed authenticity and karaoke will satisfy the aspiration-driven creative mass.