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.