The Urgent Importance of Attention Economics

As more information than imaginable battles for our scarce attention, attention economics offers up some simple lessons for modern life.
Attention Economics

Spend enough time studying economics, and it doesn’t take too long to see that economists make an excellent job of complicating the obvious. Drawn-out academic papers fill pages with inaccessible formulaic models. The sophistication gives an impression of exactitude, but it’s anything but.

Economics can’t be an exact science. Perhaps it’s a stretch to call it a science at all – and that’s coming from an economics graduate. Instead, we should see economics for what it is. That is, the study of how scarce resources are allocated.

Scarcity. That’s the key word. Scarcity drives up value, and demand for something scarce drives up value even further. It’s a principle that can be widely applied to grow our understanding of the economic value of almost anything.

As the world has changed over the last few decades, it’s become clear that this extends to the question of attention. Our attention spans are shortening, the scale of available information is widening and our ability to filter isn’t keeping pace.

This age of ‘infobesity’ is dangerous, but economic principles also tell us it’s a golden opportunity – to create economic value, to capitalise on the age of information, and to increase our scarcity power.

What Is Attention Economics?

Attention economics is the study of how we manage information in order to optimise the use of our attention. Perhaps first articulated by Herbert A. Simon, the field considers attention as a scarce commodity.

In other words, attention economics recognises that as the availability of information grows, our attention can only selectively consume information. Attention, then, becomes the limiting factor in the consumption of information.

But what does this mean in practice?

With the advent of the internet and wide-ranging technological advancement, we have more information than we could ever consume at our fingertips – and of highly mixed quality.  The result? We now live in an attention economy. Getting people to focus their scarce attention on you or your product, among this abundance of information, can drive considerable value.

But by extension, information abundance has changed the parameters of attention economics somewhat. No longer is it just relevant how we win scarce attention to create economic value, but it is imperative that we focus more on how we allocate our own.

Global Trends in Attention Economics

Let me explain why personal attention management is so important right now.

Bottom line: things have changed. The modern world is eating up attention and pummeling us with information. Meanwhile, the forces that compete for our attention have mastered how to keep our brains compelled by this information.

It’s worth touching on these changes and their implications in a little more detail.

#1: ‘Infobesity’ and decision inertia

The recent growth in available information is hard to fathom. According to recent research, by 2025 our world will create 463 exabytes of data per day (that’s 463,000,000,000,000,000,000 bytes). We already send 294 billion emails, search 5 billion things, send 65 billion WhatsApp messages, tweet 500 million tweets – all in a single day.

It’s easy to see how this information abundance can become overwhelming. When we experience a state of ‘infobesity’ (or information overload) abundant information begins to impact our decision making. As emails flood our inbox or the buzz of notifications redirects our attention, we undermine our clarity of thought.

Put another way, as we’re presented with more and more information, that information becomes less and less useful. The inputs begin to exceed the system’s processing capacity.

This state of infobesity can lead to decision inertia. Excess information leaves us unable to take the decisions we were more than capable of taking in the face of less information. The abundance of information, which should better inform and support decisions, begins to undermine them. We see a similar type of decision fatigue when we encounter an excess of decisions themselves.

#2: Declining attention spans

Our attention is also not as simple as we’d thought. It seems attention spans may evolve according to external context. That means as we face different types and qualities of information, our attention adjusts.

Research by Microsoft found that since the turn of the millennium (incidentally when the era of mobile phones started to take hold) the average attention span has dropped from 12 seconds to 8 seconds.

To an extent, the science already provides potential explanations for this change. When we confront more information and tasks, we tend to ‘task switch’. And while we have a ravenous appetite for information, the truth is that we’re not particularly good at absorbing or filtering it.

Random distractions (cat memes being the case in point!) also provide a potential explanation. In parallel with the rise of the smartphone, the scale of distractions from emails and notifications has gone up a notch. I won’t revisit the dangers of smartphones for productivity here, but the implications for our attention should be clear for all to see.

You can quickly see why we’d overestimate our capacity to absorb information and try to make our attention more efficient. Unfortunately, the result is very different from the intention. And in the end the quality of our attention suffers.

#3: Changing forces competing for scarce attention

Then, of course, there is the small issue of the internet. The internet has irrevocably changed the way companies compete for our attention. If all you’ve known is the internet, imagine a world before it – one where companies accessed your attention through what we might now consider ‘traditional’ means: newspapers, televisions, billboards. Today’s world maintains these traditional tools, but the internet provides a whole new dimension.

We exchange our attention and our information online. This provides companies with the intelligence to customise their approach to winning your attention. Competition turbocharges the levels of sophistication, but as our attention spans decrease, an excess supply of information and an undersupply of attention leaves an inevitable ‘attention gap’.

#4: Habit loops and addiction

Those that successfully win our attention tend to be adept in psychological engineering. Of course, there is nothing unusual in businesses trying to use human psychology to make more money. (A walk through a supermarket is a clear example of the extent to which companies use psychological tools to get us to spend more.) But the internet provides new tools which go way beyond what we’ve considered conventional.

It’s no secret that social media providers and many mobile applications, for example, use psychological tricks to reinforce habit loops. It’s no surprise either. Why wouldn’t they want us to come back often? The more we see and click customised adverts, the more money they make. The more we engage and use their platforms, the deeper the personal profile they can cultivate and target.

That’s why applications are addictive by design. Sites reflect decades of research on linguistics, sound and design to keep us coming back for more. Notifications, messages, likes, retweets – they all give us a hit of dopamine that sustains the habit loop.

There is a wealth of useful information available in the palm of our hand. But if we’re not careful, that can become a sideshow to servicing habit loops that the digital industry actively works to reinforce.

How to Optimise Your Attention

How we consume information has undergone unprecedented change over the last two decades. That has inevitably impacted our personal attention.

But it’s not all bad. Attention economics tells us one thing unequivocally: your attention is scarce, and it can therefore generate considerable economic value.

But attention isn’t homogenous. The quality of attention varies from person to person and situation to situation. What maximises our personal economic value, then, is scarcity power. If we have a uniquely high quality and length of attention, we offer a differentiating skill in today’s environment.

So how can we harness our attention to maximise our scarcity power?

#1: Designate time for deep work and deep play

Deep work is where the magic happens. It’s a period of undisrupted focus on complex tasks and it sees your productivity and creativity at the peak of its powers. But intense periods of focused work thrive best when complimented by ‘deep play’: hobbies that stimulate but recuperate our cognitive powers for further deep work.

The benefits of deep work, especially when combined with deep play, can help foster higher quality attention. Designate time to both and you’ll see your focus soar.

#2: Apply a filter

We must learn how to cultivate and limit our information streams. The internet offers a wealth of quickly accessible, quality information, but we must know where to go and how to avoid the psychological traps. If we fail to apply a filter, we risk getting dumbed down in irrelevance.

Know the sources of information that apply your attention wisely and limit the sources of information that don’t. Switch off your mobile when you don’t need it. Follow websites that bring you useful information. Discard the ones that don’t.

#3: Don’t try to multitask

We can’t multitask on complex tasks, so there’s no point in trying. Focus instead on completing tasks, free from distraction. Research has shown that just the mere sound of a notification can increase subsequent error rates and break our flow of concentration for many minutes afterwards.

So stay disciplined when you are working on a project. Switch off your mobile and other notifications. Focus on the single task at hand.

#4: Make time for solitude

If you’re a cynic, like I was, you should consider the growing body of evidence on meditation. A wide range of studies have suggested various neurological benefits. Not least, meditation has been shown to reduce the occurrence of distracting thoughts, both in self-reflection studies and in studies looking at the default mode network of the brain (that’s the area associated with mind wandering and self-referential thoughts).

If meditation still isn’t your cup of tea, there are plenty of other reliable ways to experience the attention benefits of solitude. Simply spending some time outdoors to think, free from the relentless digital distractions is a good starting point. Couple that with walking, and the research shows you might also see a benefit for your creativity.

Attention Is a Crucial Asset

This blog focuses a great deal of content on assets as we conventionally see them: property, stocks, money in the bank. But the more I research the idea of attention, the more I’m convinced that well-managed attention is more important than any other asset class.

It’s my contention that if you already manage your financial assets with diligence and care, you should manage your attention with even more. If you don’t manage either, you should urgently get to grips with both.

Attention is a precious scarce commodity, and it must be nurtured and cultivated. As most of the world sees their attention erode, actively managing your attention now, before it’s too late, can be the difference between destroying and creating economic value.

On the current technological and social trajectory, quality attention will soon bring serious scarcity power. You don’t need to be an economist to work out what that can do for your value.

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