Two of the more successful new business startups in our small corner of the world have been coffee shops. Both sell expensive espressos, lattes, chai teas, and fancy baked goods. Sure, the products are good, but what sets these businesses apart from your average Tim’s is the experience.
The staff at these boutique shops take their time.
They put a little extra effort into your coffee, making sure there’s enough cream on the top of your shot of espresso, enough steam in your steamed milk to create just the right amount of foam in your latte. It’s the attention to detail – the theatre of preparation – that adds a valuable intangible to the coffee experience.
Your local banker might not have predicted success for these two companies. Neither town is particularly bustling. Both towns have very busy Tim Hortons stores.
But banking isn’t what’s driving the experience economy. It’s an economic paradigm shift.
The experience economy is not exactly a new idea. Joseph Pine and James Gilmour wrote about it in the Harvard Business Review back in 1998. They wrote, “From now on, leading-edge companies – whether they sell to consumers or businesses – will find that the next competitive battleground lies in staging experiences.”
The reason they cite is the service economy, like the production economy before it, has become “commoditized”. And when anything becomes a bulk commodity like, say, general accounting, it loses its distinctiveness, and decreases in value. Adding a unique experience to the service adds that value back.
But I think there’s more to this paradigm shift than shifting a marketing tactic.
All over the world, universities and colleges are facing declining enrolment and increasing competition for students. At the same time, more and more workers are facing the reality of being replaced by artificial intelligence (AI), including accountants, lawyers and other high-cost professionals.
Add to that the fact that older workers remain in the workforce, young people are finding it more difficult to find jobs, let alone afford to get married and raise families. Young people are waiting longer to get married, if they marry at all, as recent statistics show.
Not only has the production economy slowed as most of our homes are now overloaded with stuff we’ve purchased, but we’re oversaturated with services we don’t actually want or need.
And if we do, we can easily buy them online.
In other words, the general economy is stagnating. That’s not to say we’re not consuming. As the global population continues to expand, we’re increasing our consumption exponentially. But individually, most of us are beginning to feel that we’ve been at this banquet table too long. We’re full.
Corporations and governments know this. The ranks of mid-management have swollen to the extent that large organizations can no longer afford to add more bloat to the payroll.
Graduating students, unless they’re from the best, big brand schools, can no longer find jobs.
Meanwhile, the environment is suffering from too much corporate extraction. GMO crops threaten our health, and pesticides and industrial processes threaten the environment. Within this century we’ll be running out of oil, fresh water, rare earth minerals and arable land.
We all know, either consciously or unconsciously, that lowering consumption is the only logical answer.
And that brings us back to employment. If we’re not producing and consuming as much, including services, how will we survive?
Where will the new jobs come from?
That is exactly what the experience economy delivers. Our future success depends on creating creative jobs – not corporate jobs. Our colleges and universities will be slow to change course, tied as they are to the corporate job-feeder and funding mechanisms.
Yes, corporate jobs will continue to exist. But the next economy will require entrepreneurial skills not currently taught in post-secondary institutions or in the corporate-bureaucratic world. As AI wipes out corporate jobs, more young people will turn to creating experiences to support themselves. This will include performance, theatre, music, relaxation therapies, recreational and sports training, soul work, mediation, natural healing, game design, outdoor guiding, and much more.
And these are the very non-tangible subjects schools have been dropping from their curricula for decades. Given how dry and unsatisfying the education experience has been for most of us – and the commoditization of post-secondary education itself – change won’t be a bad thing at all.