Notes from Sarah Busse's paper Strategies of Daly Life

Life in a transition economy is uncertain and unpredictable. In this environment life is less a process of goal attainment that a perpetual process of solving unexpected problems that inevitably arise. The focus of life as a series of problem solving be applied to the life of an information worker. Pattern responses to distinctive sets of problems called "tool kits" or "frameworks" evolve over time to create some of the features that distinguish one network community from another.

Individuals in these networks share their "tool kits" with others, they learn strategies for solving problems through their own experience and then transmit these strategies overtly or by example to their families, friends or others observers in the society.

Problem solving strategies consist of mobilizing resources which people have themselves or at their disposal through friends or family in order to resolve problems. Resources are everywhere unevenly distributed, with patterns of inequality varying across network clusters. The strategy selected depends upon both the problem and the resources available. Strategies also differ across social classes within a given society. The variety of strategies depends not only on the total sum of resources but also on the specific combination of types of resources. Resources are enabling to those who possess them and limiting to those who do not: relative distribution of resources are essential for understanding the different strategies employed by people in different socio-economic groups.

How often have I heard knowledge workers say if I had the budget I could solve this problem. Lacking financial resources the problem still remains unsolved. Workers at the edge must rely on their contacts in the informal economy and may choose a strategy that given control of resources would not likely be chosen. This increases risk and in the end cost more to the enterprise.

Because social and material resources can be mobilized to solve problems, they are often described as capital, or means of storing universal value that can be transferred to other settings. Four forms of capital come to mind at this time

Financial capital, the most liquid form, includes money in cash or access to budget including other interments such as stocks and investments.

Physical capital includes all possessions that enable people to solve problems, that would either bring money if sold or that would cost money to replace like your computer and network access. Physical capital is the most visible of all forms of capital and plays an important role in communicating ones place in society.

Human capital is the skills and the knowledge acquired by an individual including education, training and work experience. Human capital is often communicated in credentials like college degrees or professional certifications. These credentials help others rapidly evaluate the stock of human capital in strangers but are not always an accurate assessment. Some categories under humane capital are intellectual capital, skills capital, and local knowledge or “street smarts”.

Social capital describes the connections between people that allow other resources to flow among people. Unlike the other forms of capital mentioned above, social capital is not characteristic of one individual but rather is embodied in the relationship among people. Network structure determines a person’s access to other resources, including goods, assistance, and information.

In a market economy, financial capital becomes the universal medium for problem solving strategies. With enough money, there are few problems that cannot be solved. When financial capital becomes scarce, obtaining goods and services requires mobilizing far more social capital than finical capital. Out here at the edge of the information economy there is very little access to financial capital. In problem-solving strategies one form of capital must often be combined with another form to transform it to a third. Access to available options is fundamental for maximizing an individual’s household utility. At times the information economy approaches the model of the true market, the more it is dependent on social ties for its effective functioning. The information economy plays a role in the every day lives of individuals in all social classes and any industrial society, and social capital plays a role in many uses of the information economy. The challenge at the edge is for information sellers to transform their time, skills, and local knowledge of the market into the extra capital resources they need in order to solve tomorrow’s problems.

Conclusion

Understanding the information economy, and the social capital which makes it possible, is truly central to understanding the broader economic situation. The informal economy of information workers is prevalent in part because of low barriers to entry, enabling cash poor workers at the edge to solve their problems without high outlays of finical capital. Transactions at the edge are conversations and exchanges of information ideas all taking up the limited time of each person. At the edge there is an abundance of access to information and social exchanges and a shortage of access to financial capital and a shortage of time that each person needs to maintain the health of their social network.

The way to take advantage of this asymmetric condition is not to push financial capital to the edge but rather increase the amount of social capital available to information workers at the edge. Give them tools to communicate faster with each other, like instant messenger applications. Provide them with information consumption tools like news aggregators that reduce the cost of information consumption. Provide them with information production and transition tools like web logs that greatly increase ones ability to maintain important week social ties. In this shortage economy people will find new ways to combine their social capital with their human capital located at the edge. These changes will lead to the creation of more finical capital for the corporations that do so first.