27 Oct Knowledge in the most important production factor
Knowledge is the most discriminating production factor of the 21st century. Individuals and companies alike should therefore be focused on their knowledge-driven added value in the marketplace. This holds true, whatever your marketplace is.
In human history, at first we were hunter gatherers. We took what we could find, until we were satisfied or died of famine or disease. To overcome this whimsicality, people started to grow their own food in the agricultural society. Risk of famine was replaced by long and hard work, and the only thing needed was a patch of land. This hard work represents the second production factor, labor.
Then in the mid-1800’s the industrial revolution replaced ever more labor with production machines. To buy such machines, companies and entrepreneurs needed capital, which is the third historical production factor.
The most land intensive economical activity to this day is agriculture. Though even in agriculture land might become less important in the near future. Plantyfood (among others) is harvesting agricultural crops without daylight (http://www.certhon.com/en/greenhouse-solutions/innovations/plantyfood).
Real labor (hands) is becoming less necessary for economical activity. Whenever it still is necessary, labor is abundantly available in the global labor market.
The cost of capital has gone down to almost, and sometimes below, zero (https://www.bloomberg.com/quicktake/negative-interest-rates).
So land, labor and capital are widely available and relatively cheap, therefor knowledge is the only remaining production factor to set you, as a person or business, apart from your competition.
How do you develop, value, and market your knowledge? I will write about knowledge valuation in a future blogpost.