I'm in Singapore today where I just spoke at the Global Forum on Intellectual Property, a conference about the future of intellectual property. I had the honor of speaking immediately after Will Hutton, the brilliant Guardian economics journalist and current CEO of The Work Foundation. Huttons's presentation was spellbinding. He introduced the idea of the world economy moving from a production centric model to what he called an "experiental" model in which consumers "actualize themselves" rather than simply buying factory built product. To make his point, Hutton used the example of Mercedes who are now flying customers to their factory in Germany so that they can personalize production of their cars. Hutton's notion of the shift from production to experiential capitalism is prescient.
So what, exactly, does the word "experiental mean"?
Ex*pe`ri*en"tial\, a. Derived from, or pertaining to, experience. --Coleridge.It is called empirical or experiential . . . because it is divan to us by experience or observation, and not obtained as the result of inference or reasoning. --Sir. W. Hamiltion. --
, adv. --DR. H. More.
A more fashionable word for this focus on the personal and the observable is "interactive". But I prefer experiental because it captures the cultural revolution that is now fundamentally reshaping capitalism and the challenge of wealth creation. Value will be increasingly located in things to which we can lend our own experience or observation. And thus, in this economy, products/industries (the music labels or Detroit car manufacturers) which can't incorporate experiental business models will have no long-term value.
Hutton, author of the 2007 The Writing on the Wall: China and the West in the 21st Century, was particularly interesting on comparing the American and Chinese economies. In contrast to received wisdom, Hutton is extremely bullish on America and quite pessimistic about China. The reason? Experientalism, of course. American individualistic and innovative business culture is intrinsically experiental; Chinese business culture, on the other hand, remains stuck in the industrial, productive age.
As Hutton suggested, it's time to invest in Wall Street again. Fortune favors the brave. And the experiental.