Possession is not as important as it once was. Accessing is more important than ever.
Pretend you live inside the world’s largest rental store. Why would you own anything? You can borrow whatever you need within arm’s reach. Instant borrowing gives you most of the benefits of owning and few of its disadvantages. You have no responsibility to clean, to repair, to store, to sort, to insure, to upgrade, to maintain. What if this rental store were a magical cupboard, a kind of Mary Poppins carpetbag, where an endless selection of gear was crammed into a bottomless container? All you have to do is knock on the outside and summon an item, and abracadabra—there it is.
Advanced technology has enabled this magical rental store. It’s the internet/web/phone world. Its virtual cupboards are infinite. In this maximal rental store the most ordinary citizen can get hold of a good or service as fast as if they possessed it. In some cases, getting hold of it may be faster than finding it in your own “basement.” The quality of goods is equal to what you can own. Access is so superior to ownership in many ways that it is driving the frontiers of the economy.
Five deep technological trends accelerate this long-term move toward accessing and away from ownership.
Dematerialization
The trend in the past 30 years has been to make better stuff using fewer materials. A classic example is the beer can, whose basic shape, size, and function have been unchanged for 80 years. In 1950 a beer can was made of tin-coated steel and it weighed 73 grams. In 1972 lighter, thinner, cleverly shaped aluminum reduced the weight to 21 grams. Further ingenious folds and curves introduced yet more reductions in the raw materials such that today the can weighs only 13 grams, or one fifth of its original weight. And the new cans don’t need a beer can opener. More benefits for just 20 percent of the material. That’s called dematerialization.
On average most modern products have undergone dematerialization. Since the 1970s, the weight of the average automobile has fallen by 25 percent. Appliances tend to weigh less per function. Of course, communication technology shows the clearest dematerialization. Huge PC monitors shrunk to thin flat screens (but the width of our TVs expanded!), while clunky phones on the table become pocketable. Sometimes our products gain many new benefits without losing mass, but the general trend is toward products that use fewer atoms. We might not notice this because, while individual items use less material, we use more items as the economy expands and we thus accumulate more stuff in total. However, the total amount of material we use per GDP dollar is going down, which means we use less material for greater value. The ratio of mass needed to generate a unit of GDP has been falling for 150 years, declining even faster in the last two decades. In 1870 it took 4 kilograms of stuff to generate one unit of the U.S.’s GDP. In 1930 it took only one kilogram. Recently the value of GDP per kilogram of inputs rose from $1.64 in 1977 to $3.58 in 2000—a doubling of dematerialization in 23 years.
Digital technology accelerates dematerialization by hastening the migration from products to services. The liquid nature of services means they don’t have to be bound to materials. But dematerialization is not just about digital goods. The reason even solid physical goods—like a soda can—can deliver more benefits while inhabiting less material is because their heavy atoms are substituted by weightless bits. The tangible is replaced by intangibles—intangibles like better design, innovative processes, smart chips, and eventually online connectivity—that do the work that more aluminum atoms used to do. Soft things, like intelligence, are thus embedded into hard things, like aluminum, that make hard things behave more like software. Material goods infused with bits increasingly act as if they were intangible services. Nouns morph to verbs. Hardware behaves like software. In Silicon Valley they say it like this: “Software eats everything.”
The decreasing mass of steel in an automobile has already given way to lightweight silicon. An automobile today is really a computer on wheels. Smart silicon enhances a car’s engine performance, braking, safety—and all the more true for electric cars. This rolling computer is about to be connected and become an internet car. It will sport wireless connection for driverless navigation, for maintenance and safety, and for the latest, greatest HD 3-D video entertainment. The connected car will also become the new office. If you are not driving in your private space, you will either work or play in it. I predict that by 2025 the bandwidth to a high-end driverless car will exceed the bandwidth into your home.
As cars become more digital, they will tend to be swapped and shared and used in the same social way we swap digital media. The more we embed intelligence and smarts into the objects in our households and offices, the more we’ll treat these articles as social property. We’ll share aspects of them (perhaps what they are made of, where they are, what they see), which means that we’ll think of ourselves as sharing them.
When Amazon founder Jeff Bezos first introduced the Kindle ebook reader in 2007, he claimed it was not a product. He said it was a service selling access to reading material. That shift became more visible seven years later when Amazon introduced an all-you-can-read subscription library of almost a million ebooks. Book fans no longer had to purchase individual books, but could buy access to most books currently published with the purchase of one Kindle. (The price of the basic entry Kindle has been dropping steadily and is headed to be almost free soon.) Products encourage ownership, but services discourage ownership because the kind of exclusivity, control, and responsibility that comes with ownership privileges are missing from services.
The switch from “ownership that you purchase” to “access that you subscribe to” overturns many conventions. Ownership is casual, fickle. If something better comes along, grab it. A subscription, on the other hand, gushes a never-ending stream of updates, issues, and versions that force a constant interaction between the producer and the consumer. It is not a onetime event; it’s an ongoing relationship. To access a service, a customer is often committing to it in a far stronger way than when he or she purchases an item. You often get locked into a subscription (think of your mobile phone carrier or cable provider) that is difficult to switch out of. The longer you are with the service, the better it gets to know you; and the better it knows you, the harder it is to leave and start over again. It’s almost like being married. Naturally, the producer cherishes this kind of loyalty, but the customer gets (or should get) many advantages for continuing as welclass="underline" uninterrupted quality, continuous improvements, attentive personalization—assuming it’s a good service.
Access mode brings consumers closer to the producer, and in fact the consumer often acts as the producer, or what futurist Alvin Toffler called in 1980 the “prosumer.” If instead of owning software, you access software, then you can share in its improvement. But it also means you have been recruited. You, the new prosumer, are encouraged to identify bugs and report them (replacing a company’s expensive QA department), to seek technical help from other customers in forums (reducing a company’s expensive help desk), and to develop your own add-ons and improvements (replacing a company’s expensive development team). Access amplifies the interactions we have with all parts of a service.
The first stand-alone product to be “servicized” was software. Today, selling software as service (SaS) instead of product has become the default mode for almost all software. As an example of SaS, Adobe no longer sells its venerable Photoshop and design tools as discrete products with dated versions, 7.0 or whatever. Instead you subscribe to Photoshop, InDesign, Premiere, etc., or the entire suite of services, and its stream of updates. You sign up and your computer will operate the latest best versions as long as you pay the monthly subscription. This new model entails reorientation by customers comfortable owning something forever.