Sitting among colleagues of mine, I heard the topic of conversation change from regular work chatter to matters of the economy. The question arose, “Are we in a ‘Depression’?”

This question got me thinking last week, and even more this weekend as yet another newspaper went down for the count and talk of a “global new deal” emerged from British PM, Gordon Brown. What I started wondering was, “What is really going on?” Is this a recession, a depression, or is something more profound taking place here?

On my radio show yesterday, I concluded that what we are witnessing was an event driven more by technology than we realize, and by institutions and policies that are based or structured on the models of the industrial age and not the digital age.

Digital age strategies are based on individualization – meeting the specific needs of a person, as opposed to one cookie-cutter solution designed for everyone. They also are based on demassification as opposed to massification. In other words, the digital age ethos is that smaller, more agile entities will thrive, while larger and more bureaucratic ones will wither and eventually fade away.

So, what does this mean in context with the current economic crisis?

For starters, command and control economies are passe. However, we seemingly have not learned the lessons the failures communism and European-styled socialism brought to light. Namely, we still rely on large scale institutions to hold almost monopolistic like control, both in the public sector and the private sector, over our economic welfare. Then we act surprised when a bubble pops and the small number of large organizations the government encouraged and at times directed to make bad decisions go under. Everyone is stuck in the same pot, a collapse ensues and then everyone is scrambling around trying to do the same thing: save the system that caused the very problems in the first place.

If the digital age has shown us anything, its that going backwards to the future just will not work. The kind of “New Deal” era set of policies on a national scale (and especially on an international scale) will simply not do the job. What we need to face is that a reorder of power needs to take place. We need get smaller, more personalized and more technologically driven in our approach to solving the problems government has created today and the problems we will face going forward.

What New Technology Has Done

We all marvel at how the post-industrial, new technology age continues to bring us all closer together, both virtually and in reality. New technology enhances our productivity, improves different aspects of our daily communication, and bridges the information divide. The ripple effect spreads out and across all elements of society and touches everything we do.

As these waves, which emanate from technological advancement, spread outwards, we can see the new models rising from the old. Our traditional methods of thinking, though not abandoned instantaneously, are gradually beginning to wither away. New methods and new ideologies are surfacing. And as a result, our behaviors and responses to things are starting to change.

The Internet is a component of this change – as it itself has migrated from a large, centrally governed and limited entity (by limited I mean that the Internet was initially limited in its number of participants as well as the amount of information and types/format of information available) into a demassified network – decentralized and unlimited.

Increasingly, we are all demanding more personalization of information, services and products, while at the same time, realizing that our concept of what is “personal” or “private” is also changing.

I remember in the retail world, not more than 7 or 8 years ago, a debate raged among many of the discounters or mass merchants over how to best handle online promotions, emails and distributing offers and content to customers – “opt in” vs “opt out”. The retail industry preferred “opt-out” for obvious reasons, including customer convenience and reduced burden on the retailer.

However, what was an initial convenience to the customer soon became a hassle due to two simple words: information overload. To be more precise, it was not just information overload, but an overload of irrelevant information. What was once a valuable service soon became a flood of impersonal content that was uninspiring and created a backlash within the customer. The customer was starting to step away.

In a simple explanation, this change forced retailers to adapt to the “opt-in” methodology. But that was not enough. The customer’s desire for the information, while important, was not as critical as identifying the needs of the customer and then meeting those needs.

On the surface, this appears to be marketing at its most basic. However, it was not all that long ago where salesmen went door-to-door selling vacuum cleaners whether or not you needed one or not. Cars were mass-produced with limited options or customer feedback. To be politically risky for a moment I’ll suggest that we still mass-produce things through our educational system – namely our kids. Students are sent to schools that resemble factories, each with uniform and mandated curriculums, and little flexibility for personalization.

Personalization Is Key

So, how does this all connect to what your company or organization is doing today?

It is easy to say that personalization is the key, but what does it really mean and what is it the key to?

The first step to understanding this dynamic rests in the model outlined above at the start of this column: that waves of change emanate from advancements in technology.

Let’s take the growth of social networking. The growth of social networks has been enabled through new technology platforms (the most successful of which were developed and later opened for developers) and applications that connect your virtual world with your real world. People are now building bridges between themselves and other people that are truly global.

My wife has over 500 friends on Facebook. Three years ago – her life revolved around her Palm Pilot. Now her life revolves around Facebook (sorry honey, but it’s true).

Why?

Because she updates Facebook through her mobile device, online from her laptop, and elsewhere (this may or may not be interpreted to include the office). Technology has advanced in such a way to allow for this level of connection.

The second step to understanding personalization rests in a subset or result of technology – namely, Facebook is easy to use, integrated, and encourages people like my wife to stay involved because the Facebook applications she selects enhance her connection with her friends, family and business colleagues in a way that a phone call cannot or in a way that buying a $700 roundtrip ticket to Colombia cannot.

So, offering a personalized environment is a key provided that it offers: ease of use, integration to other devices / environments, and encourages use through relevant tools or applications.

But what does this personalization deliver?

Well, in my wife’s case, it means she is on Facebook and not MySpace, hi5, Bebo and other networks.

This leads us into the next phases of our discussion – competition and later… technology and information filters.

MORE THOUGHTS TO FOLLOW ON THIS SUBJECT… Stay tuned…