Introducing Viral Economics

Ebola virus particle
Ebola virus particle. Photo Credit Wikimedia Commons

Darwin is very used to justify how some people should be considered better than other one. The concept of the survival of the fittest is very used to established differences between successful people in the field of the business and politics.

Evolution of species is a process that requires a lot of generations and thousands of years. Our current species (Homo Spiens Spiens) is exactly the same as the man of Cro-magnon thousand years later. However, some people, taking the whole for a part, confuse survival of individuals with evolution of species. The evolution process can be driven by the survival of the fittest, but this is a concept on the long term under the laws of probability. If a healthy individual is exposed to a deadly virus while a delicate one is not exposed, the survival of the delicate individual does not imply that he fitted better the environment but his environment was less harmful. Evolution imply that on the long term both a great group of individuals with certain genetic material and another great group with different genetic material have lived in a similar environments and a group has got a higher survival rate that has been transmitted to the following generations.

Another thing we can hear often is that the individuals that adapt better are not the more intelligent necessarily, as a way to justify why a company should not contract the more intelligent people. However, intelligence is the ability to analyze our environment and to establish some kind of strategy to take advantage of it. Intelligence means ability to fit the environment. Of course, under certain environments intelligence may not be an advantage, but this does not imply that an intelligent individual has not capability to fit better an unexpected situation. Following the biological example of the virus, if an intelligent man is not vaccinated against a deadly virus and a stupid one is, the stupid one will survive but it is not related to any kind of adaptability. The conclusion should not be that companies must not contract intelligent people but they should spend more money in vaccines.

Intelligence is a more scarce resource that most people admit, and the reason why companies do not contract the most intelligent individuals can be more related to the cost a scarce resource than a lack of adaptability. In a well-managed company, any human and material resource is acquired under an analysis of cost-benefit. If adaptability has a higher cost than the expected benefit that adaptability can provide, the more adaptable individual would be discarded.

A virus is a living being with a simple genetic code compared to the genetic code of a more complex organism as a human, and it has the capability to replicate fast. The concept of a viral economy would be an economy based on simpler products that can replicate fast and extend widely. Old economy is filled with simpler products that can be extended widely among a lot of markets; however, a virus is an organism that requires the support of a host to replicate itself, affecting the behavior of the cells of the host.

A viral economy should require the support of additional agents to extend modifying the behavior of these agents in order that they reproduce the viral product.

An example of this viral economy is the on-line press and its business model. Traditional press requires high investment in printing equipment and a great distribution network that was financed through subscriptions and advertisements. On-line press uses internet and every piece of news can be replicated in any computer on the Earth that are property of the clients instead of the business. The business model is based on advertisements that are reproduced equally.

As the required investment in equipment and the distribution network is much lower, the highest cost of the business moves from equipment towards the staff of writers pressing their salaries downwards. This is common in the new viral economy. We can say the same about on-line distribution of music and films. The creative effort is depreciated due to a free transmission and reproduction through networks out of the business. As in a fight between viruses and humans, intelligence or adaptability is not providing any advantage, only those journalists that can get the vaccine of television and popularity can preserve high incomes whether they are the most intelligent or not. The advantage for the business is provided by the fast reproduction using resources out of the business instead of the creativity of the staff, and popularity instead of intelligence contributes to it.

You could argue that creativity continues being required, however, an on-line business of music distribution can work with a huge database of old records, and an on-line newspaper can reproduce the pieces of news from global agencies and reputable newspapers with minimum changes. The business can run with lower quality because quality is not providing the competitive advantage in front the traditional business models but the lower cost of using a free external network to substitute the process of distribution and/or commercialization.

What is usually named currently collaborative economy is related to this concept of viral economy too. Modern collaborative economy is supported by telecommunication networks. It cannot exist without internet, and many of the products that provides are a modification of preexistent ones with lower quality requirements and controls, however they have a great competitive advantage due to the externalization of the cost. This is the last throw of the dice related to outsourcing, you are not outsourcing the activity but the full cost, and even you get reduce other costs pressing them downwards because quality is not the most important competitive advantage yet.


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