When Push comes to Pull

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When Push comes to Pull. David Bollier. Aspen Institute, 2006.

The Report, entitled When Push comes to Pull, is downloadable at http://www.aspeninstitute.org/site/c.huLWJeMRKpH/b.612049/k.612F/Communications_and_Society_Program.htm

This is a report on the widely discussed meme of the 'Pull Economy', i.e. the contrast between the old industrial model of push economies, vs. the new pull economies.


From the Cooperation Commons at http://www.cooperationcommons.com/node/416


  • We are living in an epochal period of transition bridging two very different types of economies and cultures. We are transitioning from a "push" economy: that tries to anticipate consumer demand, and then creates a standardized product, and "pushes the product into the market and culture, using standardized distribution channels and marketing. We are transitioning to a "pull" economy: open and flexible production platforms that use network technologies to coordinate many different entities from disparate regions.. "Pull" economies produce customized products and services that serve localized needs (demand-driven), usually in a rapid manner.
  • "Pull" networks tend to build the capabilities of their networked partners, by providing performance feedback and sharing best practices among the network participants. "Pull" platforms therefore tend to better employ the enthusiasm of all of the participants.
  • The "pull" phenomenon is not confined to business/online commerce. The spread of common use of internet technologies is finding "pull" techniques being applied in entertainment, social life, politics, education, and government.
  • "Pull" models are going to change the way that governments create policy as more companies gravitate toward them.

This paper is a summary of an Aspen Institute sponsored in-depth roundtable session, written from the perspective of one informed conference observer (Bollier). The participants are leading thinkers in the many complex areas this paper covers (economics, systems theory, human behavior, human futures, information technology evolution, etc) and are listed on page 57. A selection of their key insights shared in the paper are listed below:

A "push" economy is geared towards mass production, anticipating consumer demand, and routing resources to the right place at the right time, to create standardized and mass produced products. By contrast, a "pull" economy is based on open, flexible production platforms that are used to orchestrate a broad range of resources. Instead of producing standardized products, "pull" model companies are demand-driven, and assemble products in customized ways that serve specialized or local needs, usually using "rapid" or "on the fly" processes.

Several global corporations are moving towards "pull" methods, and away from "push" models; ie., Toyota, Dell, Cisco, Li & Fung. These companies employ different variations of Value Network models, that share information about overall network performance and best practices for serving specialized needs, among hundreds or even thousands of partner companies that make up the network. This creates an intra-network knowledge commons. Some companies also work closely with Open Source Software projects, thereby expanding their "pull" network, and expanding their knowledge commons into a broader Open Commons via Open Source Software project contributions. Thus, "pull" business models also tend to be Network Value-Increasing, and Commons-based business models as well.

"Pull" models can also be platforms for creating "increasing returns dynamics." This is due to "pull" models being based around loose and flexible networks that are already configured to scale as growth occurs. So, growth does not incur the huge overhead costs in administration that "push" models must contend with. Pull platform key characteristics include modular and loosely-coupled networks, open channels that better harness the passion and commitment of innovation communities. "Pull" platforms also will tend to influence public policy with regards to education and innovation, as more companies tend to gravitate towards the "pull" models.

The areas where "push" models tend to succeed in business are in areas where people do not know what they want, and prefer to shop from pre-made selections (Ikea, Home Depot). However, there are even "pull" models to found here, in the form of user-driven innovation, such as mountain biking, extreme skiing, hot rodding, etc. In these pro-amateur niches, customers don't necessarily know what they want, but do want to be a participant in the "pull" network that creates the product.

How do you tax a product that is made in 23 different countries? "Pull" models are going to change the way that governments create policy as more companies gravitate toward them. This will influence laws about intellectual property, education, taxation and more.

"Pull" economies are not just centered around finding creative ways to "outsource/offshore jobs" away from one place and to the places where "labor" is "cheaper". Successful "pull" models have encouraged and aided "insourcing", where more jobs are created, for instance in the United States by "foreign sources (a total of 7 million cited by this paper), than are out sourced (a total of 600,000+ cited by this paper). This is because pull models seek out, not just the "cheapest" labor, but the best ways to add value to the production networks. So, they can scale to many participants around the world, regardless of local labor costs, to find the best participants needed for specific specialized productions.

The social dynamics of "pull" models are highly centered around creating relationships of trust, sharing knowledge, and close cooperation among network participants. In "pull" models, non-market value creation (tacit knowledge, intangible value) is generally steered towards a commons-based model. A commons is used as a "collective governance regime for managing shared resources sustainably and equitably." Many of these commons are made possible by networked information technologies (the internet).

Bollier suggests that "if online commons are going to be useful to business, companies will need to do more work to develop protocols for identity and reputation management". This is because the use of the commons is based around trust. It also due to the need for ways to measure qualitative value in intangible assets beyond money, like knowledge, individual performance and value multiplication, and network wide performance/value multiplication.

Roundtable participants also noted that "pull" models will pose challenges to current education regimes that are centered around training people to participate in "push" economies. One of the participants mentions that " Computers, software tools, and Internet resources make possible some radically new styles of learning. By using pull-based systems, students can function much like businesses in the pull environment: They can access resources they don't control and put themselves into flows of activity, rather than just building inventories of static, objectified "knowledge." (http://www.cooperationcommons.com/node/416)


Here an excerpt from David Bollier, who co-authored a report on it, for the Aspen Institute. URL = http://onthecommons.org/node/824

"Briefly put, a “push economy" – the familiar industry model of mass production – is based on anticipating consumer demand and then making sure that needed resources are brought together at the right place, at the right time, for the right people. A company in the “push" model forecasts demand, specifies in advance the necessary inputs, regiments production procedures, and then pushes the final product into the marketplace and the culture, using standardized distribution channels and marketing.

By contrast, a “pull economy" – the kind that appears to be materializing in online environments – is based on open, flexible production platforms that use networking technologies to orchestrate a broad range of resources. Instead of producing standardized products for mass markets, companies use pull techniques to assemble products in customized ways to serve local or specialized needs, usually in a rapid or on-the-fly process.

Instead of companies pushing their products at us (in pursuit of their own strategic or competitive advantages), the networked environment radically empowers individuals, and communities of like-minded individuals, to pull the products and services that they want, on their own terms and time requirements. For example, small groups of people with unusual niche interests – say, extreme skateboarders or opera buffs – can now aggregate their consumer demand and successfully induce businesses to serve their specialized interests. In the process, many corporations are having to radically re-organize themselves in order to serve the emerging “pull" market demand.

What’s really interesting to those of us interested in the commons is how the Internet now enables small groups of people to easily constitute themselves as an online commons. In so doing, they can often get what they want through social sharing and collaboration, without even using the market! This is because a community based on norms of trust and reciprocity can be tremendously more efficient than markets, which tend to have huge fixed overhead costs (bureaucracies, advertising, distribution systems, lawyers to fight piracy, etc.). As John Seely Brown, the former director of Xerox PARC, put it, “The collaborative peer production achieved through pull platforms can be radically more efficient than classically structured corporations."

A handful of companies have established themselves as “pull platforms" – think eBay, Yahoo, Google and Amazon. But there are also manufacturing enterprises such as Cisco, the tech company, and Li & Fung, an apparel manufacturer, that are also using "pull" techniques to compete more successfully. "Pull" companies are structured to draw upon a vast global network of suppliers who can meet customized needs rapidly. This works because pull platforms are modular and loosely coupled." (http://onthecommons.org/node/824)

David Bollier then quotes from the Aspen report:

"A company can substitute any specialized function with another, more appropriate module with relative ease, as needed. Instead of having the entire corporation build around a rigid, standardized protocol, the interfaces among modules and the protocols for connecting them are standardized. “This means that anybody who wants access to these resources can figure out what they are and how to connect them," said John Hagel, a noted management consultant and co-author of The Only Sustainable Edge.

With modularity and loose coupling of functions, it therefore becomes easier to have frequent and rapid enhancements of the production platform. “The idea is that these platforms are not defined in advance," said Hagel. “They are emerging over time as a result of the actions of the participants, in rapid and frequent enhancements."

This points to another design premise of pull platforms: that more and more participants will join the process over time, adding greater value in the process. This enables companies to easily incorporate new supply and distribution participants, and to rapidly scale in size as market conditions or customer demand changes.

Pull platforms have a subtle but powerful advantage over push systems in their ability to leverage people’s enthusiasm and motivation. As Hagel and Brown have written, “Pull platforms harness the passion, commitment and desire to learn of their participants, thereby enabling the formation and functioning of distributed communities that can rapidly improvise and innovate." Pull platforms tend to be able to mobilize and deploy social energies more effectively than bureaucratic, standardized push platforms." (http://www.aspeninstitute.org/site/c.huLWJeMRKpH/b.612049/k.612F/Communications_and_Society_Program.htm)