How an Industrial Age Mindset is Crippling Innovative Technology Companies

by | Feb 22, 2017 | Interactive Marketing, Marketing Technology

The 1900s may be over, but the Industrial Age mindset of companies in those days lingers still, especially in the third world, which is currently industrializing. Even multinational innovative technology companies are subjected to Industrial Age thinking especially when working with professional service providers like marketing agencies.

So what’s the big deal? What’s so bad about the age of industry? If you’re driving innovative technology, aren’t you by definition beyond the Industrial Age mindset?

Before we dive into the problems with Industrial Age thinking, it’s important that we know these three economic definitions:

Information, Knowledge and Work-Based Economies

Tech entrepreneur Marc Uri Porat wrote a pivotal 9 volume dissertation on the upcoming replacement for the industrial economy. He referred to this replacement as the “Information Economy“.

He defined it as an economy in which information-related work exceeds work related to other sectors. According to Porats measurements of the different sectors, this transition occurred in the US in 1967, when 53% of the US workforce was doing information related work.

Innovative technology

In an information-based economy, raw data is used to generate value (profit).

For example, consumer data is being used by retailers, communications metadata is being used by intelligence agencies, etc.

We see nothing wrong with raw data being used in ethical ways, but manipulating that data in order to generate fake or false value is where we draw the line.

Unfortunately, this can happen if the raw data being created is not shared with the masses. If the raw data is being controlled and manipulated instead of shared as-is with the masses, then you have an information based economy that’s propped up by the manipulation of raw data.

There can be two outcomes from an information based economy depending on how the distribution of data is handled in the society:

  1. A free and open information based economy will naturally transition into a knowledge-based economy.
  2. A closed and manipulated information based economy will hinder progress towards a knowledge-based economy.

At least 25 percent of the world is fully industrialized and is already in the information economy stage. Fully industrialized countries are progressing towards the knowledge economy stage. The rest of the world is still industrializing and is in the work-based economy stage.

What is a Knowledge-Based Economy?

The Organization for Economic Co-operation and Development (OECD) adopted Porat’s definition for the information economy. The OECD has defined Knowledge Economy as “an economy which is directly based on the production, distribution, and use of knowledge and information”.

Innovative technology

In a knowledge-based economy, specific experience, knowledge, wisdom and skills are needed—it’s not a matter of quantity of bodies—but more of having the right knowledge to do the job.

A well functioning information economy will naturally transition into this. And this should be the goal. A knowledgeable and skilled society can better further human creativity and human goals.

What is a Work-Based Economy?

In a Work-Based Economy, it’s all about quantity over quality. Simply throw more bodies at a problem to create the solution.

If a country has a work-based economy, then that can mean a couple of things:

  1. Raw data isn’t being used by the masses due to a lack of awareness/industrial age thinking, processes, and stage of development.
  2. Raw data/information is being controlled, suppressed or manipulated.

A work-based economy is the polar opposite of a knowledge-based economy, because if an economy has a higher skilled workforce, then an excessive number of low paid workers aren’t necessary.

Innovative technology

So what has this got to do with tech companies?

Well, put it this way – if you have a work-based (industrial) economy approach to things, an intern, or a warehouse of low-paid resources can do a service for you. You won’t know that they aren’t doing it right, but it’ll “get done”. This is very much an industrial/manufacturing/1900s mentality.

It also gives credence to the harmful belief that anyone can provide marketing services.

And this mentality still plays out in many different countries and innovative technology companies around the world.

Stepping Outside the Box

If you’ve traveled outside of the neat and tidy box that is your own country and visited any developing countries, you’ll have noticed something odd. Walk into almost any shopping mall or large company store and you’ll notice an over abundance of employees just standing around.

Seeing so many employees standing by and ready to help can be a reassuring sight for the customer. After all, more employees must mean a better experience right?

Not always.

As a customer, try getting the help you need on the first try. Often times you will not get the help you need on the first try. This scenario may not play out as often in a department store, but in an innovative technology company store, customer needs and specifications are more complex, and thus the problem becomes more apparent.

An employee may look to the other employees to help assist you, and in the worst case scenario, nobody can properly assist you (or it will take much longer than it should).

In that worst case scenario:

  • The customer has a frustrating experience
  • The employees have a frustrating experience
  • The company has wasted resources hiring more employees for no tangible benefit
  • The company has potentially lost a sale/customer
  • Everybody loses

Innovative technology

So what is the root cause of the problem?

The employees aren’t up to par.

And why is that?

The reason is two-fold. Certainly, there can be a cultural element to it. International tech companies hiring local employees to assist customers’ need to train employees to converse well in English, the universal language in business.

The second element of the problem (and the most fundamental part) is perspective or rather, the mindset of quantity over quality when it comes to human resources. This mindset is from the Industrial Age, and it will absolutely cripple your business efforts overseas.

This phenomenon is explained by American author Douglas Bullis in his book Preparing for Electronic Commerce in Asia, page 36.

“Southeast Asian companies have long shown the typical symptoms of cheap productivity: too many employees late in and early out, too many people administering instead of producing, too many people job-hopping and too many people hiring without thinking to offer employees longevity-based stock options.”

Why Tech Companies Need to get out of 1900s Industrial Age Mentality

Many countries (particularly in the third world) are going through a phase similar to the 1900s Industrial Age in the US when the number of bodies was viewed as more important than the quality of employees.

Why would a company want to waste human resources like this in the 21st century? Well, they would prefer to hire more employees and pay them all less than they deserve, rather than hire fewer employees and pay them what they deserve. This helps politicians look better by lowering unemployment numbers, but this also creates wages that are too low.

It’s not just about wages either, worker exploitation through loopholes is another factor.

In the Philippines, for example, there is a little-known hiring practice at SM shopping malls called ‘5-5-5’, where employees are hired and contracted for 5 months, then fired, then hired again. After 6 months, worker protections take effect according to Philippine labor law.

This short-term hiring of employees helps explain why they aren’t trained well to begin with. Third world companies actively choose not to invest in their employees.

This also creates a confusion of power between large companies and corrupt governments. The companies make the government look better (because on the surface more people are employed) while the government rewards the companies for their quantity-over-quality hiring methods. This confusion of power helps maintain the status quo.


Anyway, back to you and your business. Your company doesn’t need to take any part in this. If you’re an innovative technology company trying to grow your business, you can’t afford to fall into this trap.

Wages that are too low means less motivated employees. Less motivated employees mean a worse customer experience, as well as less employee productivity. In reality, many jobs (including marketing) require a highly skilled workforce.

If you want your new customers to view your company as favorably as the customers in your home country, then you must continue giving them a good experience.

In order to do that, you absolutely cannot take a work-based (industrial) economy approach to your company when developing and delivering innovative technology. Instead, spend more resources on high-quality individuals so your company can provide higher quality services.

Interested in learning how your international, innovative technology company can tap into smarter thinking? Contact us today!

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