KAMPALA — Almost 90 years ago, Lionel Robbins proposed a highly influential definition of the subject matter of economics: the allocation of scarce means that have alternative ends.
Economics is the science that studies human behaviour as a relationship between ends and scarce means which have alternative uses.
He confined his definition to human behavior, and he strove to separate economics from the natural sciences in general and from psychology in particular.
Nonetheless, I extend his definition to the relationship between the cost of adaptation and the shift from the economics of scarcity.
It is in this stark contest of my career that I had to choose between discussions of scarcity or creating abundance through digitization, well allow me to endow you on the constraint by which many merchants have exploited small markets to achieve monopoly.
We are realizing the lowest cost of adaptation in all-time history which I can define as a time where data is available in practically infinite supply and can be consumed at zero cost or trade-off of other goods.
There has been a long debate on the impact of digital channels on key economic constructs just because of the growth of the digital technology phenomenon.
To many analysts, they claim that prices are set by demand not the constraints of supply therefore no need to discuss digital technology here.
I agree with the fact that digitization has not repealed the rules of economics only if we ignore the exponential rise of costs of value creation. There is also a scarcity of talent and ideas which has made a shift in terms of where value is created in the supply chain.
It is at this point that we must engage on what is the role of value and what is the vantage point to which value must be maximized so as to appreciate and look at ‘cost’ properly in the new world.
More to that, in this new world, two things have met, the economics of scarcity and economics of abundance, which has made the internet, which is the key driver of infinite choice drastically increased ease of access and raised scarcity of consumer’s limited time of choice in the abundance of alternatives.
In old markets, there was no Youtube to find music which means Musicians like in Africa that did not adjust their products to be sold online waiting for concerts left the industry in total shambles. Letting go of YouTube, there is more music, more information than you can ever process, more opportunities for fulfilling experiences in the limited time you have available.
This, therefore, has led to a new term called Abundance Thinking, the realization that you have plenty and that you can easily meet whatever needs you might have.
Since scarcity has met with abundance, two discussions will rise,
(i) What is the cost of adaptation of each enterprise?
(ii) the variables to harness as an opportunity to profit by designing and creating production systems that make use of the abundance created by the internet.
I, therefore, invite you to the webinar series where you will learn how your business can navigate the shift from scarcity to abundance.