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Fashion: A Remix Economy

Listening to Russ Roberts of EconTalk discuss his wardrobe and his relative cluelessness with regard to fashion, my thoughts turned to software engineers. I wondered if both economists and software engineers believe that there’s some kind of optimization algorithm for selecting clothing.

In an episode of EconTalk, Johanna Blakely talks with Roberts about how the lack of copyright protection in the fashion industry turns it into an economy of continuous innovation. There are some interesting lessons here regarding the relationship between originals and copies, remixing and the circulation of design motifs.

Download EconTalk: Johanna Blakely on Fashion and IP

Somehow it seems unlikely that the technology/media business will look to fashion as an inspiration for viable business models. But it’s clear they could learn a thing or two. As you look across the landscape of technology companies, only Apple (despite the fact that Jony Ive never changes his T-shirt), has managed to create a release cycle that in many ways mirrors the major fashion houses. They release new designs annually and then watch the knock-off shops go to work trying to replicate their products. And like the top fashion houses, Apple is driven to be creative, to set the next trend that puts them one step ahead.

The fashion world still honors and rewards the creators of fresh and original looks. Since there’s no regulatory friction hindering fast followers with good-enough copies, the market is filled with cheap knock-offs. Both seem to survive in the ecosystem. One reason for this is that the copies are not digital— they aren’t exact atom-for-atom copies of the originals. Generally, to lower the price of the knock-off, the materials have to be cheaper. In the world of bits, exact replication is just a matter of a few key strokes. There’s no such thing as cheaper or more expensive bits. One of the more interesting trends in fashion is the designer who copies herself. Rather than cede the low-end knock-off market, the designer executes low-end copies of her signature styles for mass distribution through the fast-fashion retailers.

You can learn a lot about the economics of the technology business by simply viewing each of the major vendors as a fashion house.

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