E2 Tradability profile

Topic

Information and knowledge possess a very high tradability profile, with virtually zero friction when crossing borders: software, data, and digital content are distributed globally at the marginal cost of a single copy—the same near-zero marginal reproduction cost that already accounts for the tech bubble, extreme platform monopolies, sudden disruptive obsolescence, and the saturation of low-quality content.

This profile goes even further than the high tradability profile characteristic of the production sector: in production, high tradability means that while the origin and destination of a physical good can shift, transporting it still incurs a cost; in the realm of information and knowledge, by contrast, there is no physical good to transport, so the friction of crossing borders virtually vanishes. It is also the exact opposite of the low tradability profile found in services—where provider and client cannot be separated in time and space—and in the resources and extraction sector, where the commodity travels but the resulting rents and jobs remain tied to the extraction site. In the information and knowledge sector, there is no extraction point or local provider anchoring activity to a specific territory, because the traded asset—whether knowledge, a platform, or data—can be reproduced wherever needed at that same near-zero cost.

This combination of near-zero friction and near-zero marginal cost allows digital market concentration and the speed of technological adoption to operate on a global scale, largely bypassing the buffer that a national scale provides in other sectors: extreme platform monopolies or sudden disruptive obsolescence are not contained within a single economy but instead spread just as easily as any additional copy of the digital asset itself.

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