Thursday, January 18, 1996

The power and value of information

We are now operating in an information economy. What does that mean? Does it mean that material things are no longer important? No. Material things are still vital.

What we mean by an information economy is that we define and create value based on information content, rather than on physical properties. In an information economy, the information content is what gives value to most products and services.

The most extreme example is probably the silicon computer chip. The chip itself is very small. The materials contained in it are of very little value. The incremental cost to manufacture it is small. The thing that gives a computer chip its value is information. The information that went into designing and producing the chip, and the information processing ability of the chip itself.

But it is not just in the high tech world that information plays a key role. I heard an ad the other day on the radio for a car leasing company. The company was making money by arranging leases on cars. However, the value of their product came in the information content. They advertised that they would find the lowest price on the car you wanted and provide you with all the reports, ratings and magazine articles available on the models that you were interested in. They may be in the car leasing business, but their product -- and the way they distinguish themselves from the competition -- is pure information.

Every business, no matter how high tech or low tech, can benefit from the strategic use of information. To be competitive in today’s marketplace, you must know how to find, process and utilize the right information. It is the new form of leverage. Look for ways to improve what you do through the strategic use of information.

— Ralph Marston

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