by: Sigurd Rinde

This is entirely about i n f o r m a t i o n.

Take our consumption, business, what we do and use and re-think 'what is information':

  • Advertising is information. It informs me about a product. Duh
  • Retail is information. It enables me to inform myself of the 'real product' by touching it and trying it on. And sure, pick it up, but the actual physical distribution could be by FedEx, or some twist to that. (You know what it costs to have your stuff shipped within a day or two from Amazon, Brooks Brothers or whoever - in percents, almost nothing!)
  • Thus distributors, agents and warehousing costs are 'information costs' as well. All geared towards making a product available for my touchy-feely-choice.
  • Then look into corporate OH - what about the whole marketing departments? Some or most of the time spent in organisational hierarchies? Etc.

An author, a musician, a game developer ends up with a royalty of 5-10-15%, rest is 'information costs'. A shirt, a skirt, a pair of shoes leaves about half of your payment in the shop, and some more for advertising, warehousing, agents...

A big & bulky item like a car car must be different, or what? But getting it entails distributors, showrooms, advertising, PR stunts... may I suggest at least 40% 'information costs'?

What does this mean?
It means that about half of the world's resource-use is wasted on 'information costs'. It means that we easily could make the world twice as 'rich'.

How about that.

Admittedly, my assumptions are... well pretty assumptive and not very scientific. But make a better founded calculation and tell me if I'm wrong - I'll bet I'm pretty close!

Original Post: http://thingamy.typepad.com/sigs_blog/2005/01/my_oh_my_how_we.html

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