Tuesday, February 26, 2008

The taxonomy of free...cor blimey gov

Sounds very fancy doesn't it...and the Asian link is a bit of a stretch, but here goes. You're going to be seeing a lot about this.

Wired magazine's Chris Anderson codified the Amazon world of dotcom 1.0 with his concept of the long tail. Today, he uses the magazine to preview his next book, "Free" which captures pretty neatly the dotcom v1.5 (not really 2.0) world of Alibaba, Taobao (see....the Asian connection) and Google. If you're not up to reading 6,000 words, my basic take is: we'll give you something and pay for it by selling something to someone else. This is fuelled by marginal costs being at or close to zero and, thus, Yahoo!'s recent fight-back against Gmail by offering infinite storage to all users.

Other Asia links in the piece:

Forty years ago, charity was dominated by clothing drives for the poor. Now you can get a T-shirt for less than the price of a cup of coffee, thanks to China and global sourcing. So too for toys, gadgets, and commodities of every sort.
How much longer the China connection can be quoted as the key driver is increasingly open to question. This AP piece in the UK's Guardian newspaper echoes many others which are now appearing. It reports on "a new challenge for China" and suggest that "its huge economy, which has long offered some of the world's lowest manufacturing costs, is losing its claim on cheapness as factories get squeezed by rising prices for energy, materials and labor".

This isn't particularly "new" actually and I remain sceptical about the capacity of some of the mooted alternatives to take over from China very quickly. Watch for Pearl River Delta neighbours Guangxi, Hunan and Jiangxi rather than Bangladesh and India really taking over the manufacturing mantle. Indonesia and Vietnam are, though, clearly on the rise.

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