The Progress Economy

For leaders solving innovation, sales, or growth problems, stop asking “What product should we build?” and start asking “What capabilities do our customers lack that is reducing their progress, and how can we supplement those, packaged into the resource types Seekers are looking for?”

What are resources?

In the Progress Economy, resources are the raw materials of progress. Whether it’s a call centre agent resolving an issue, AI generating content, sunlight powering a solar panel, a hammer driving a nail, or the R&D department discovering new solutions – progress happens when we purposefully, and successfully, integrate the right resources to move from one state to our more desired one.

Sometimes integration is simple. Sometimes it’s complex. But the goal is always the same: making progress.

As Vargo et al (2010) note, human ingenuity continuously creates “countless resources” that reshape markets and societies. Just as a Seeker’s progress origin and progress sought evolve, new resources are sought, emerge, or are borrowed across industries and markets to meet them. Or spark new possibilities altogether.

De Gregori, in “Resources are not; they become: an institutional theory” makes a critical point: resources aren’t fixed. We redefine them based on how we learn to apply them. This evolutionary view of resources is central to economic and societal progress.

Importantly, for our discussion, resources carry capabilities. It is those capabilities which we apply through resource integration. And those capabilities could be carried by different resources – meaning we could exchange one resource fir another if they carry the same capability.

In short: without resources to integrate, no progress can be made.

Let’s explore how the Progress Economy redefines resources. Not as static assets, but as dynamic enablers of progress. We’ll begin with the traditional view: tangible and intangible resources. Then we’ll introduce how the progress economy sees two different essential resource types: operant and operand. In separate articles we’ll deep dive into those, looking at them through each actor’s lens and how they are acquired/developed.

The traditional view: tangible vs intangible

In traditional strategy, we split resources into two categories: tangible or intangible. Hunt’s Resource-Advantage Theory defines resources as:

the tangible and intangible entities available to an actor

Hunt, S. (1997) “Competing Through Relationships: Grounding Relationship Marketing in Resource-Advantage Theory”

In this framing, resources include goods and infrastructure as well as intangibles like expertise, brand equity, and relationships.

But this framing often skews toward goods. It invites us to evaluate resources based on what they are, rather than what they do. That tempts us into an unhelpful goods versus services (plural) debates which obscure the real question: how does this resource help make progress?

The progress economy view: carriers of capability

n the Progress Economy, we flip the lens. Instead of asking what is this resource – tangible or intangible – we ask how does it enable progress? Essentially, what capabilities does the resource carry? What truly matters is not the asset itself, but the role it plays in shaping progress.

Peters et al. (2014) capture it perfectly:

…no tangible or intangible item represents a resource in its own right; rather a resource is a “property of things…”. In this sense, a resource is a carrier of capabilities

Peters L.D., Löbler, H., Brodie R. and Briedbach, C. (2014) “Theorizing about resource integration though S-D Logic”

The capabilities that resources carry come in many forms, some common ones are:

• competencies, e.g skills and knowledge
• physical attributes like strength
• organisational traits such as culture
• abstract entities like availability

For example, a Seeker may carry relevant knowledge and physical strength; wind carries power; time carries availability.

There is an exciting impact when we think this way. We can often swap out one resource for another that carries the same capabilities. A goods might be replaced by a service (servitisation); a human employee might be replaced, or augmented, by a system (e.g. AI, for example); old paper-based customer tracking systems might be replaced by shiny new cloud CRM. This is a key characteristic that enables innovation; something we’ll discuss more when looking at the progress resource mix.

Common resources in the Progress Economy include Seekers, Helpers propositions, goods, and locations. Others, like time and weather, lie outside human control—but still play a role in shaping outcomes (as noted in “Advancing service science with service-dominant logic” by Vargo, Lusch & Akaka).

Here’s the Progress Economy’s definition:

resource: a carrier of capability that can be integrated in one or more progress-making activities.

There is a little issue, though…

The resource-capability confusion

In both academic and business circles, “resource” and “capability” often get used interchangeably. That creates confusion. Some common mix-ups are:

• Skills: these are capabilities, but we often call them resources. In reality, people carry skills; systems codify them; goods may embed them
• Strength: is a capability, but we often attribute it to people, robots, or machines as if it were the resource.
• Wind: is dubbed a “natural resource,” yet it’s the power it carries that is involve in progress
• Resource integration: actually we are integrating capabilities carried by resources, but resource integration is the common way of saying this

These linguistic short-cuts are here to say and are something we need to live with; but always be aware of them!

The bottom line is: Capabilities enable progress. Resources carry capabilities. Integration of capabilities carried by resources leads to progress (value).

How resources help make progress

Progress doesn’t just happen. It depends the right mix of capabilities (carried by resources) being available, used in the right way, and at the right time.

Resource integration: how progress is made

When two or more resources are integrated, that is, combining their capabilities with intent, progress is made. Often we’ll bow to linguistic de facto and call this resource integration.

In fact, we define our basic progress step – a progress-making activity – as the integration of two or more resources. And a progress attempt is simply a sequence of these.

Seen this way, the foundation of any failure to make progress is usually straightforward: a lack of or misaligned resource. That missing piece could be a tool, for example, but also knowledge of the progress-making activities, or skills to perform them.

This is where progress propositions offered by a Helper come in. We define them as bundles of supplementary resources: a proposed series of progress-making activities, supported by a specific resource mix designed to be integrated with the Seeker’s own. These resources might include employees, systems, data, tools, physical environments, or locations. Who performs the majority of the integrations positions whether your proposition leans toward the enabling or relieving end of the proposition continuum.

Here’s the interesting part: for integration to happen, at least one resource must act on the others. Without action, there’s no integration—no movement. This distinction leads us to a shift in how we categorise resource in the progress economy.

Operant and Operand resources: different ways to progress

Forget the traditional distinction between tangible and intangible resources. That just tells us what something is, and leads to unproductive debates – products vs. services (plural) – when what really matters is how a resource works.

In the Progress Economy, we classify resources by their role in progress-making:

These definitions build on the foundational work of Constantin and Lusch (1994) in “Understanding Resource : How to Deploy Your People, Products and Processes for Maximum Productivity“, but are adapted here to focus on how progress is made.

Let’s ground this with a simple example. In the progress attempt “John drives the car to get to the office”:

• John carries the knowledge and skill of how to drive. He applies those capabilities on the car. He’s the operant resource.
• The car has the capability of movement, but it requires John to activate it. It’s an operand resource.

However, a resource’s classification isn’t fixed. It can depend on the capability in question. Consider the natural resource of water:

• used to drive a turbine, water is an operand resource – its movement acts upon the turbine to create energy
• used to quench thirst, water is an operant resource – it must be consumed (acted upon)

Similarly a Seeker is often an operant resource, acting on other resources to make progress. But they can be an operand resource in cases of progress on their body, such as medical or being tattooed.

One thing is for sure. Without at least one operant resource, nothing integrates; no progress is made; no value emerges. Two cars parked side by side don’t move themselves.

Both Seekers and Helpers may have operand and operant resources. And they acquire them through various strategies, which I’ll expand on in these following articles.

Allocative control: who decides when a resource is used?

A dimension of resources is allocative control: the authority and freedom to decide when and how a resource is put to work.

Allocative control (of a resource): the ability to determine when a resource is used.

This distinction becomes important when resources are shared or temporarily transferred. Allocative control doesn’t require transferring ownership, only control over when and how the resource is deployed.

Why does this matter?

It frames how we think about goods and data within a Helper’s proposition. For example, a resource seen as a goods implies permanent transfer of ownership when acquired. Whereas a physical resources implies temporary transfer of allocative control. You can do what you want with a hire care when you are hiring it, but once the hire ends you no longer have any allocative control. With digital goods we often observe Helpers treating them as physical resources rather than goods. Take your playlist on Spotify, you don’t own those songs, you are just have allocative control until Spotify decide to remove them.

Strategic Benefit: why better resources mean better business

To a Seeker, one resource is “better” than another if it helps them make progress better, and/or better progress.

For Progress Helpers, offering better resources is a path to strategic advantage. Superior resources drive more, and likely larger, service exchanges. As Hunt’s Resource-Advantage Theory explains, firms win by deploying better resources. Weaker players must improve by managing existing resources better, acquiring new ones, or innovating around how they’re used. (Hunt, S. (1997) “Competing Through Relationships: Grounding Relationship Marketing in Resource-Advantage Theory”).

Where Hunt speaks of advantage, Service-Dominant Logic (Vargo & Lusch) instead frames this as strategic benefit. This is a more fitting term for the Progress Economy. From our Seeker-centric perspective, they look for propositions that can help them progress better than they can themselves. Helpers should focus on helping the Seeker with that.

But what does “better progress” actually mean? It comes in two forms:

• Progress, better – Helping the Seeker achieve the same goal in a more effective way
• Better progress – Helping the Seeker reach a goal they couldn’t previously attain

Both are measured, by the Seeker, through the three aspects of progress:

• Functional – Does the resource help get the job done?
• Non-functional – Does it do so in a way that is preferred, efficient, or emotionally resonant?
• Contextual – Is it fit for the Seeker’s specific situation, constraints, and preferences?

“Better” can emerge from any one of these dimensions, or by reducing one or more of the 6 progress hurdles.

Let’s anchor this in a simple scenario: traveling 100 km from A to B.

Functionally, many resources could do the job: walking shoes, a bicycle, a private or hired car, a train, a plane, or even a Zoom call. But layer in non-functional or contextual elements, like a desire for exercise, the need to work en route, or a preference for scenic views, and the strategic benefit of each option changes.

Want achievement? Take the bike. Need to prepare for a board meeting? Book a train or taxi. Prefer flexibility and control? Use a car.

Service-Dominant Logic (Vargo & Lusch) positions operant resources – those that act on others – as the true source of strategic benefit. Unlike passive goods, operant resources adapt, respond, and interact. A handyman offers advice and judgement; a power drill does not.

However, whilst this is true for a Seeker searching for a relieving proposition, there are seekers looking for enabling propositions, and they typically offer operand resources. Additionally there is the dynamic that relieving propositions often push up the inequitable exchange progress hurdle (lazily: costs).

So, you should aim for leveraging operant resources, unless your target market is looking for enabling propositions, in which case operand resources are king for you.

This is the art of creating propositions. First fully understand the progress journey of the Seeker (origin and progress sought). Identify the capabilities they are missing or that are carried by resources not beneficial to the Seeker. From there, create, adapt, borrow resources from other industries or markets; ensuring you are minimising all the 6 progress hurdles.

Relation to value

Resources have no value. There, I said it.

They only have potential to help progress, and when used they enable progress (from which value emerges). Both potential and emerged values are comparisons of progress, predominantly made by a Seeker.

Resources have only the potential to help make progress; which is realised during resource integrations…

Seekers evaluate the potential value of resources by comparing how much progress towards their progress sought they feel they can make when integrating with it along with comparing the progress hurdles related to them using it. Emerged value comes from comparing progress reached with expectations.

As resources only contribute to progress when being used, this raises a question about resource efficiency. Which in turn leads to the sharing economy – how can we increase the usage rate of resources. That takes us onto the relation to innovation.

Relation to innovation

Editing below here

We can capture this more generically. A resource is a strategic benefit if it does one or more of the following:

• help make current progress potential in a better way
• help make better progress towards individual seeker’s progress sought
• reduce one or more of the 6 progress hurdles

And that just happens to be part of the progress economy’s definition of innovation.

Offering better progress

We primarily innovate resources to improve progress that can be made through resource integrations.

The overall goal of a seeker’s progress attempt is to reach their progress sought. They may attempt to use their existing resources in innovative ways, including in novel combinations.

Alternatively a seeker looks to a progress helper for supplementary resources. The helper may innovate their resources in order to:

• get their progress offered to closer match individual seeker’s progress sought
• better reach their current progress offered
• reduce one or more of the six progress hurdles

The helper offers some of their resources to the seeker to integrate with in the form of the progress resource mix.

A progress proposition includes proposed progress-making steps. These are also ripe for innovation to meet the same goals as above.

Leveraging skills from other markets/industries

Seekers are constantly attempting to progress with many things. This means they experience many markets and industries that are different than yours. They are learning new skills and gaining new knowledge there.

Innovators should be aware of what seekers are learning elsewhere and identify what can be “carried” into the helpers resource integration proposals. Think of the pervasive multi-uses of QR codes, as an example.

Educating seekers

We saw above (Alves, Ferreira, and Fernandes (2016)) that educating/training seekers increases co-value creation. How can you educate your seekers to improve resource integrations in your proposal? Where we should think of education in its broadest sense (one-one, group, physical, virtual, trial usage, AI instructors/tools and so on)

Increasing resource usage efficiency

We saw that resources are only creating value when used in acts of integration. Think of it this way: a screwdriver or an employee are not contributing to any progress (creating no value) when they are not used.

There’s even an academic debate on whether they can be called resources when not in action. Rather than jump down that rabbit hole, let’s summarise this as saying innovation should look at how to maximise use of resources. Which hints to subscription or sharing models – as long as allocation does not become a problem…

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