Value Proposition in the New Economy

Before 1970, information was a scarce resource and the underlying potential of facilitating decision making with information was a distant dream to the managers. The fact that information can be captured and distributed across the organization for generation of competitive advantage was evident only during mid-seventies. Information Age lasted approximately for twenty years. Information was not a scarce commodity after that; but the movement of taking the information to knowledge level started around 90s and it still continues to be.

The knowledge economy is also a network economy treating knowledge as a commodity and suggesting that professionals need to work with ideas, information and creativity and new knowledge play the parts of raw materials. Value in this economy does not mean something that the company adds to its shareholders but something that is done in favor of the customer. The performance dimension addresses the degree to which professionals collaborate with others to realize benefits. In this economy, orgnanization combine the main factor of production, human asset in an innovative way to make a profit and the central planners decide how assets are used to provide for maximum benefit to all.

Everyone has to understand value in the new perspective of knowledge economy. Value helps customers produce gain benefit. The right value proposition eliminates price as an objection; it helps in curtailing competition. It is the responsibility of the knowledge professionals to understand and develop his value from the perspective of his customer. Customer actually takes this value to customers' customers to gain profit from open and competitive market. Any activity towards the development of professionals in any organization has to be based on this philosophy. If customers don't get value that is useful to his customers, then the value the professional is now offering to his customers is not valuable to the market in future. Without properly spelling out the value, a price war has to be fought by all.