Post 9: What If We Have Been Classifying the Economy Wrong?

Most business information begins with labels.

Retailer.

Manufacturer.

Hotel.

Hospital.

Warehouse.

Airline.

Restaurant.

Data center.

Those labels are useful for humans, but they may also prevent us from seeing opportunities.

A grocery store, for example, is not merely a grocery store.

It is a bundle of capabilities:

– climate-controlled space,  refrigeration & freezer capacity, electrical service, water and sewer, roof area, parking, loading access, security, internet connectivity, employees, storage, customer traffic, delivery routes, waste, heat, commercial zoning, known location –

None of those capabilities intrinsically requires the building to sell groceries.

“Grocery store” is simply the economic configuration currently sitting on top of them.

Factories have the same problem

Imagine a factory that makes drills.

Calling it a “drill factory” tells us what comes out the front door.

It may tell us very little about what the factory is capable of doing.

The facility may possess:

precision machining injection molding, motor assembly, battery assembly, electronics testing, powder coatin,g packaging, quality-control, systems distribution access, skilled labor, certifications, electrical capacity

Perhaps another industry desperately needs some combination of those capabilities.

The opportunity becomes invisible when the database says:

Industry: Power Tools

Build a capability graph instead

What if companies were represented differently?

Instead of:

Company → Industry → Products

we build:

Company → Facilities → Equipment → Processes → Materials → Skills → Certifications → Inputs → Outputs → Excess Capacity → Distribution → Data

Now companies that appear unrelated may suddenly sit next to each other.

The system can search for functional similarities rather than industry similarities.

False scarcity

This could expose something I call false scarcity. An industry may say, “There is not enough capacity to make Component Q.” Maybe that is true if we search only factories already categorized as Component Q manufacturers. But perhaps 73 unrelated factories possess 80-90% of the necessary capabilities and could be converted economically.

The capacity existed.

It was classified incorrectly.

False abundance

The inverse is also possible.

There may be millions of roofs, warehouses, vehicles or parcels.

They appear abundant.

But perhaps only 20,000 possess a very specific combination of properties required by an emerging technology.

Once that combination matters, those 20,000 become scarce.

The opportunity is not the roof.

It is recognizing the hidden characteristic before the market does.

A different map of the economy

This project is increasingly becoming an attempt to construct a different representation of economic reality. Not what things are called. What they can do.

Not which industry owns them. What properties they possess.

Not what a company currently sells. What its accumulated infrastructure could enable.

If that representation is better than the conventional one, unusual opportunities should begin appearing naturally.