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.

RELATED TERMS
  1. Intangible Drilling Costs - IDC

    Intangible drilling costs are costs to develop an oil or gas ...
  2. Property

    Property is anything tangible or intangible over which a person ...
  3. Calculated Intangible Value - CIV

    Calculated intangible value is a method of valuing a company's ...
  4. Amortization Of Intangibles

    A tax term relating to the practice of deducting the cost of ...
  5. Intellectual Capital

    Intellectual capital is the value of a company or organization's ...
  6. Advanced Economies

    Advanced economies, as described by the International Monetary ...
Related Articles
  1. Investing

    Intangible Assets Provide Real Value To Stocks

    Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value.
  2. Insights

    The World's Top 10 Economies

    The United States has been the world's largest economy since 1871, but China's growth may soon position it as the leader of the world's top 10 economies.
  3. Investing

    Understanding Production Efficiency

    Production efficiency is the point at which an economy cannot increase output of a good or service without lowering the production of another product.
  4. Managing Wealth

    Comparing Tangible and Intangible Assets

    Tangible assets are physical assets such as land, vehicles or equipment.
  5. 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 ...
  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. Investing

    Impact of the Chinese Economy on the U.S. Economy

    The economic growth of China has been decreasing since 2010. What impact does this have on the US and the world economy?
  8. Personal Finance

    Basic Economy: Pay the Same, Get Less?

    Basic economy is supposed to be cheaper, but are you just paying the previously regular economy fare and getting less for it?
  9. Insights

    Bezos Selling $1 Bn Amazon Stock Every Year to Fund Blue Origin

    Amazon founder Jeff Bezos bets big on his space venture, pledging to contribute $1 billion each year from his Amazon stake sale.
  10. Insights

    Exploring the Current Account in the Balance of Payments

    Learn how a country's current account balance reflects the country's economic health.
RELATED FAQS
  1. What kinds of events or circumstances will increase or decrease the proportion of ...

    Learn the variety of events and circumstances which can significantly increase or decrease the proportion of intangible assets ... 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. Can you realize capital gains on intangible property?

    Learn more about capital gains and losses and how they may apply to intangible assets. Find examples of intangible assets ... Read Answer >>
  4. What are some advantages of a market economy over other types of economies?

    Learn what a market economy is, the main assumption behind a market economy and some important advantages it has over other ... Read Answer >>
  5. What's the Difference Between a Market Economy and a Command Economy?

    Set by supply and demand, a market economy operates through a price system; in a command economy, governments control the ... Read Answer >>
  6. How is computer software classified as an asset?

    Although computer software is often thought of as an intangible asset, it can be classified as a tangible asset if it meets ... Read Answer >>
Hot Definitions
  1. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  2. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
Trading Center