Social media. It's an oxymoron. The only thing that distinguishes today's media from the past, and therefore deeming it 'social', is that we can respond immediately. Letters posted in the 19th century (and earlier) were also social media. As were the cave drawings in Europe from 32,000 years ago.
I believe that today's social media has allowed us to bypass the knowledge economy and move directly into a more transparent reputation economy. It is not what you know, it is who you know. The promise of an economy growing according to [knowledge generated] patents does not get very far without the money to build, test, market and improve said patented item. And where does the money come from? According to the Occupy Wall Street movement, the money belongs to only 1% of the population. So if you've got a great idea you are going to have to gain access to some of that wealth in order to generate wealth with that idea. And that, my friends, is where reputation is key.
I spent many years pursuing a doctoral degree. The brick wall I came up against while researching my topic (Investment Decision Making in New Technologies) was the fact that time and time again the venture capitalists and the angel investors were not modelling anything when making these decisions. It was the handshake and the reputation that sealed the deals. To be sure, a thorough examination of the knowledge aspects were part of the due diligence process. But the final decision came down to the handshake and the reputation of the development team. This reality, as well as the chaos of my personal life, forced the ending of this academic route since handshakes are not only difficult to measure but a dissertation on the 'soft' aspects of investment decision making was not likely to be easily defended in an engineering faculty.
I learned a lot about communication networks in this field of study. I've even published on the matter. The idea of lead users is quite compelling and feeds nicely into the foundation of a reputation economy. With social media you no longer have to rely on face to face connections or peruse trade magazines and conferences. If you have an idea, you can actively search online for people looking for solutions that fit your idea. Or conversely, if you have a problem you can look for ideas that solve it.
And how does the 'wheat get separated from the chaff'? Reputation. And this is greatly eased by the immediacy of social media. Letters of introduction are no longer needed (my father brought a few with him when he emigrated to Canada from Ireland in 1967). Answers to questions like: How many twitter followers does the person have?; LinkedIn connections?; Blog traffic?; Youtube videos?; Conference presentations?; TED talks?; will allow a potential investor to ascertain quickly whether there is enough 'klout' to warrant further investigation or a seed investment.
The sad thing about bypassing the knowledge economy is that there might be some truly great ideas out there that will go nowhere in the reputation economy. The world transformed itself in the space of a mere decade, leaving knowledge junkies like myself hankering a bit for a bygone era and resigned to blogging for a better world. A 3.0 world where reputation is based on quality rather than merely quantity.