Houston, we have a problem.

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But you clearly don’t!

WE HAVE A PROBLEM. It is a major problem and we aren’t sure that it can be fixed.

A report was published recently proposing that of the 18 million sales people in the US, these will be gradually replaced by social media savvy, techno wizard sales people, plumbed into the internet ‘matrix’ style.

How many of these jobs will remain by 2020?

According to the report, only 3 million of them, which means a loss of 15 million jobs.

Now for many who read this they will be thinking “Good, I’m fed up of being sold to, I would rather just purchase stuff directly on the internet.”

So why do we have a problem?

Well, in the Western world this creates an issue, due to the way we have developed our economies. Remember that we are predominantly service based economies. The manufacturing is often done somewhere else. Translated in to simple terms, many of our businesses are actually sales and marketing operations or involved in servicing those operations.

Our companies purchase products or manufacture them, somewhere else and then they act as a middle man, finding and marketing to customers and then providing the product or service to them with a mark up. Our economy also has an armada of service companies providing these companies with advice, consultancy, training and installation.

Whether IT, Energy, Telecoms, Furniture, Office supplies, Insurance products, Retail, or hundreds of others, it’s basically the same.

Now this is a description of Western economies from a general perspective, so the loss of the middle men, could be major problem. Here in the UK, however, we have another much, much bigger problem.

You see filling the gap, connecting the supplier and customer, is a new kind of company. They are gradually eliminating the middle man – the service provider, from the equation.

Here are the some examples of the main players in the new game of ‘match the customer to the supplier’.

Google, Facebook, LinkedIn, Groupon, Salesforce.com, Microsoft, Apple, Amazon, Netflix, Twitter, eBay, Youtube.

There are also a tidal wave of additional new companies coming along to add to these. Some of them, maybe most will not make it.

What do you notice about the list?

Yes, you are correct, they are all US based companies. For us in the UK and possibly across the remainder of the Western economies, this is the elephant in the room. It may well go on to define how we ‘thrive or dive’ in the future.

Whereas in the past you wanted to find a joiner, plumber, roofer, you would have looked in a directory. This created a huge industry of data cleansing, telemarketing, sales, printing, copywriting and many other jobs, working in companies related to the directory industry. It created demand for cars, mobile phones, petrol, motorway services, sat nav and so on. Subsequently, all of the revenue generated passed through the people’s wallets and back in to the UK economy. In the future, much of it may well go into the Google Wallet.

If you needed IT support, Hardware, software, you got the local IT expert to come and help and you paid him, the money circulated. Although brilliant, the cloud will kill much of that.

If you wanted to buy a product a decade ago, you popped to the shops. Now you buy from Amazon.

If you buy from eBay, they too take a fee for matching supplier and customer.

Pretty soon , if we aren’t careful, the company doing the middle man job of matching all UK suppliers to UK customers, will be based in the US.

Think about it. I want to buy a new lawnmower from a UK company, so I approach a US based company to find me a relevant supplier and then purchase the product from that UK company. The UK company then pay the US based middle man a fee for connecting us. It sounds crazy, but guess what – that is how it already works, RIGHT NOW!

Funnily enough, the supplier is actually based on the next street to our house. It is genius and at the same time, frankly frightening.

So are there any exceptions?

Well, our team struggled to come up with any at all. We could think of one industry where we managed to create a dominant industry on the web – gambling. Once we got it established, the US recognised that it was taking money out of their economy and promptly shut it down! The question therefore is, should we be doing the same?

Now you are probably reading this and thinking ‘protectionism’ or ‘ US-phobic’, but you would be wrong.

We are not condemning or criticising the US approach at all. In fact, we applaud it!

The attitude taken by everyone in the US from the government down seems to be encouraging, patient and highly tolerant of failure. These businesses are funded, developed and then the money made, goes back into the next phase of development, growing some of these businesses to many billions of dollars of revenue, and hundreds of billions in market capitalisation- using the rest of the World’s money.

This has resulted in a near total ownership of a global industry – the internet. With it, US based companies will probably end up owning and controlling the majority of relationships between UK companies and UK customers. Imagine, we will effectively become a commercial annexe of the US.

I am still not sure why we have been so categorically bad at developing our own platforms.

I had a conversation with an entrepreneur about developing a fantastic idea we have, that has the potential to be exported to the US and give us a presence over the pond. Remember that there are few boundaries on the internet, so at least one company should have done it in a big way by now.

His advice was to move to the US, as it probably wasn’t possible in the UK, due to the attitude to risk, failure and the need to make a healthy profit before you start trading!

Is your experience different?

Can you think of a UK company who provides the middle man relationship between US suppliers and US customers?

If so, we are really keen to hear your feedback, so tell us in the comments and let’s start what might become a long conversation.


About the Author:

KnowledgeBank work with Companies to develop their data driven marketing solutions to generate profitable new customer relationships. We also deliver social media training, consultancy and strategy to hundreds of businesses across the UK. If you would like further information about how you can develop your own marketing activity or social media, please contact us on 01772 978 101.