The Weightless Economy: What Is It?

The exchange of abstract or intangible goods and services, such as professional services, software, and consultancy, is called the “weightless economy.” The weightless economy is a marketplace for concepts, knowledge, skills, and services. Some other names that are also used to characterize these intangible goods include post-industrial economy and new economy.

With the advent of information technology and its many byproducts at the turn of the twenty-first century, the idea of the weightless economy underwent significant evolution.

Knowing Your Weightless Economy

Of course, weightless goods have existed throughout human history. One example is music. However, lightweight goods did not dominate economies until computers’ widespread use and the Internet’s growth.

Large volumes of goods and services may now be delivered across long distances and to a wide range of consumers without needing physical labor and machinery for production, shipping, or storage. Certain items, such as software or music, only need to be made once before being made available to as many customers as possible for a low cost.

Creating Music in the Economy Without Weight

A musician could, for instance, record a song once. A record business used to have to physically produce vinyl records or CDs that replicated the music, package them, transport them from factories to warehouses, and then distribute them to retail locations so consumers could buy them. Each of these phases has financial and workforce expenses.

These days, the same musician and record company may release their music digitally via online retailers like the iTunes Store and streaming services like Spotify. Regardless of how often a song is sold—to one consumer or a million—the time required to compose it remains constant. Still, its delivery is almost effortless and immediate.

The Weightless Economy’s Economics

In this case, an economist would estimate that the musician’s marginal cost of production is almost zero. As a result, the marginal benefit from selling more songs is over 100%. It costs you practically nothing to sell each extra unit after you’ve recorded the song and put it up for sale online.

This is the underlying cause of certain technological businesses’ ability to profit significantly quickly in a very short period of time. If a product or service becomes in high demand, almost nothing can stop a business from gaining a large client base in the weightless economy.

In a weightless economy, a firm producing a product or service may experience almost infinite growth and profitability if it becomes the market leader. The Android operating system, the Windows operating system from Microsoft, the social network and advertising platform on Facebook, and the search engine Google are a few examples.

Significant recurring expenses are associated with managing, promoting, and improving each item. Yet they have meager manufacturing costs.

In contrast, conventional businesses like manufacturing facilities and physical stores have more challenges to expansion and financial success because of the increased expenses and logistical challenges they must confront to generate sales.

A Practical Illustration of the Weightless Economy

Intellectual property rights enable a weightless economy defined by information technology. If copyright rules do not safeguard artists’ music rights, they cannot profit from selling songs online.

The weightless economy allows new business owners to reach a broad prospective client base with relatively low barriers to entry by offering goods and services.

If you know how to code, you could make a smartphone app and market it in the Apple and Android app stores. While there are undoubtedly expenses associated with this, they are insignificant compared to opening a factory, for instance.

Garrett Gee, a Brigham Young University student, developed the barcode scanning program Scan in 2011. He received $54 million in 2014 when he sold the program to Snapchat. Even though Gee is an exception for having attained this degree of success, his tale exemplifies the sort of achievement that the weightless economy makes possible.

Conclusion

• The goods and services that make up the weightless economy are immaterial.
• The weightless economy is now more critical than conventional economic sectors like manufacturing and distribution because of the development of information technology.
• The weightless economy has allowed entrepreneurs to transform an early-stage concept into a successful company quickly.