Experiences are the highest form of economic progress, and service-based businesses seeking competitive advantage need to transcend their already-customized offerings through advanced personalization. That, at least, is the theory developed by scholars B. Joseph Pine II and James H. Gilmore in their 1998 Harvard Business Review article “Welcome to the Experience Economy” and in their bestselling book The Experience Economy.
The experience economy resulted from historical economic progressions stemming from value-addition in the marketplace: the agrarian economy that followed hunting and gathering was itself followed by the industrial economy and, in turn, by the service economy. Today, the service economy (based on the delivery of custom and intangible benefits to clients) precipitates the experience economy, which derives its value from the mass-personalized and staged experiences that produce temporal emotional responses (“sensations”) and memories for guests.
Enjoy this classic TED Talk from Prof. Joseph Pine as he shares his insight into this popular paradigm shift that underscores the importance of the experience-based enterprises.