WHAT is 'Weightless Economy'

Weightless economy refers to services and products that are intangible. Intellectual property, computer software and entertainment products, such as music and movies, are examples of products that are part of a weightless economy.

Businesses producing and trading intangible services or products are able to grow quickly and produce strong profits because of the unique nature of these products. Three features set these products apart.

First, the cost of development in a weightless economy is typically high. Consider the high up-front expense of music production or software productions, for example.

Second, reproduction costs in a weightless economy are low. Once the initial product exists, reproduction might be as simple as partnering with an online distributor so you can continue to sell it on demand.

Lastly, distribution in a weightless economy is limitless. Once a song exists, for instance, it can be purchased and delivered around the world in a matter of seconds.

BREAKING DOWN 'Weightless Economy'

The weightless economy includes information technology, biotechnologies, patents, electronic libraries of media and information, copyrights and trademarks, and more. This economy is often described as part of a knowledge economy, or the trading of intellectual capital. Research and databases are examples of products in a knowledge economy.

In 1999, Professor Danny Quah of the National University of Singapore coined the term weightless economy in reaction to a rapidly changing economy. During this time, manufacturing jobs were decreasing, while service jobs were increasing. Information technology and other intangible products were playing a larger role in increasing gross domestic production.

Economists have also called the intangible nature of the changing economy a digital economy or The New Economy.

Weightless economy examples

In a weightless economy, wealth building is possible without access to significant economic resources. Individuals who have a specific skill set or knowledge can creatively produce non-material goods and distribute them without excessive expense.

For example, if coding is part of your skill set, creating a smartphone app is one way to profit in a weightless economy. Of course, there are expenses associated with startup, including hiring developers and designers, launching it on the Apple and Android stores and marketing the finished product.

However, once production is complete, there is infinite potential for distribution, which means there is infinite potential for profit. For example, Scan, a barcode scanner, was created in 2011 by Garrett Gee, who was a student at Brigham Young University at the time. In 2014, he sold his app to Snapchat for $54 million.

  1. New Economy

    New economy is a buzzword describing new, high-growth industries ...
  2. Amortization Of Intangibles

    Amortization of intangibles is the process of expensing the cost ...
  3. Property

    Property is anything tangible or intangible over which a person ...
  4. Intangible Cost

    An intangible cost is an unquantifiable cost relating to an identifiable ...
  5. Economy

    An economy is the large set of interrelated economic production ...
  6. Intellectual Capital

    Intellectual capital is the value of a company or organization's ...
Related Articles
  1. Investing

    Which Countries Will Drive Global Growth in 2016?

    Given the volatility that has already shaken the global economy, the world's largest economies will be leaned on to stimulate growth in 2016
  2. Managing Wealth

    How to Calculate Your Tangible Net Worth

    Tangible net worth accounts for assets and liabilities but subtracts the assets that you cannot physically touch. Learn more.
  3. Small Business

    How To Protect Your Intellectual Property

    Intellectual property rights - patents, trademarks, trade secrets and copyrights - protect creators of everything from new products to new pop songs.
  4. Investing

    What's a Command Economy?

    A command economy is one where the government controls the economy, acting as the central planner, dictating production quotas and distribution levels, and setting prices. Such economies exist ...
  5. Personal Finance

    Market Economy

    In a market economy, economic decisions and prices are determined by market forces rather than by central planning.
  6. Insights

    Four Factors Supporting the Global Economy in 2016

    The global economy enters 2016 on a promising note, with the growth pace forecast to be the fastest since 2011, thanks to a combination of four potent factors.
  7. Managing Wealth

    Comparing Tangible and Intangible Assets

    Tangible assets are physical assets such as land, vehicles or equipment.
  8. Financial Advisor

    What's Behind the Decline in Productivity Numbers? 

    There are several theories and hypotheses about low productivity numbers in the American economy. This article examines some of them.
  9. Insights

    Exploring the Current Account in the Balance of Payments

    Learn how a country's current account balance reflects the country's economic health.
  1. How do intangible assets show on a balance sheet?

    Intangible assets are often intellectual assets, but their valuation and accounting can vary, depending on whether they're ... Read Answer >>
  2. How do tangible and intangible assets differ?

    Tangible assets are physical assets that are used in a company's operations. Intangible assets are nonphysical, long-term ... Read Answer >>
  3. How is an economy formed and why does it grow?

    Find out how an economy forms and why it grows, including the role that financial markets play and how productivity increases ... Read Answer >>
  4. Can a government intervene in a market economy?

    Find out at what point a market economy receives so much government intervention that it can no longer be considered a market ... Read Answer >>
  5. What are the differences between amortization and impairment?

    Learn the differences between amortization and impairment as they relate to intangible assets held on a company's balance ... Read Answer >>
  6. What are typical examples of capitalized costs within a company?

    Learn examples of company capitalized costs, including expenses incurred to put fixed assets, software development costs, ... Read Answer >>
Trading Center