page_title: Transformation in economics
section_title: Self-service, disintermediation and customization
hierarchical_section_title: Transformation in economics / Self-service, disintermediation and customization
caption_attribution_description: English: Transformation in economics-- Self-service, disintermediation and customization
context_page_description: Transformation in economics refers to a long-term change in dominant economic activity in terms of prevailing relative engagement or employment of able individuals.
  Human economic systems undergo a number of deviations and departures from the "normal" state, trend or development. Among them are Disturbance, Perturbation, Deformation, Transformation and Renewal.
  Transformation is a unidirectional and irreversible change in dominant human economic activity. Such change is driven by slower or faster continuous improvement in sector productivity growth rate. Productivity growth itself is fueled by advances in technology, inflow of useful innovations, accumulated practical knowledge and experience, levels of education, viability of institutions, quality of decision making and organized human effort. Individual sector transformations are the outcomes of human socio-economic evolution.
  Human economic activity has so far undergone at least two fundamental transformations, as the leading sector has changed:
  From nomadic hunting and gathering to agriculture
  From agriculture to industry (I)
  Beyond industry there is no clear pattern now.
context_section_description: The new transformational paradigm could be defined by the ongoing self-organization of the market economy itself: its rates of self-service, disintermediation and mass customization are increasing and becoming most effective on local and regional levels. Because there is no new productive sector to emerge, the economy seeks to reinstate its new balance through these new modes of doing business. Producers and providers are outsourcing their production and services to customers and to technology. Outsourcing to customers is a natural and necessary self-organizing process, including disintermediation, customer integration and mass customization, all driven by the global productivity at the cusp of transformation.
  Due to its productivity growth rates, each sector must emerge, grow, persist, stagnate, decline and dissipate in terms of its employment generating capacity. The high-productivity growth sectors are emerging and dissipating first, the low-productivity growth sectors (like services) are completing their life cycles only now. Different productivity growth rates in different sectors are accompanied by virtually uniform growth rates in wages and salaries across all sectors, as required by free market forces.
  As a consequence, the goods of high productivity growth sectors (food, manufactured goods) are getting cheaper and the products of low productivity growth sectors (health care, education, insurance) are getting more expensive. In many developing nations this may still be the other way around (due to the prevailing stage of sector evolution): food and manufactured goods more expensive, while services still relatively cheap, as captured in the Figure 5:
  Rational economics agents tend towards substituting relatively cheaper and capital intensive manufactured goods for relatively more expensive and labor-intensive services. Consumers will use goods instead of services wherever economical and possible. By observing the emergence of automated teller machines instead of bank tellers, self-service gas stations instead of full-service stations, self-driving instead of chauffeurs, do-it-yourself pregnancy kits rather than hospital testing services, self-handled optical scanners rather than cashiers, and cloud computing instead of central mainframes, mature economies are entering the era of self-service, disintermediation and mass customization.
  Modern production is primarily based on the processing of information, not on the hauling of goods, humans and machinery over large distances.  One can more effectively “haul the information,” to produce goods and provide services locally. Information and knowledge travel effortlessly through electronic superhighways, through telecommunications and social networks over the internet.
caption: Fig. 5. Uniform wage growth vs. differential productivity rates
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