My latest piece is posted at Public Square Today, my blog at Washington Times Communities:

The Emerging Market In Virtual Goods: Public Leaders Take Note

If you listen to the people who are at the cutting edge of online popular culture, the future of the Web is being written in tiny micropayments, some amounting to fractions of a cent.

This is the world of “virtual goods,” items that are purchased and used in online social games, such as Zynga’s Farmville on the Facebook social platform. Indeed, Zynga’s CEO and founder, Mark Pincus, recently said, “with the popularity of virtual goods today, we are in the early stages of a new economy that could grow and shape the future of the Web.”

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Public leaders should take note for two reasons.

First, this is a tangible demonstration of the fact that, more and more, the borders between physical life and online life are crumbling. People spend real money to improve online-only experiences. They see their interactions in this space as just as real as their interactions face-to-face. Yet, public institutions and community benefit organizations too often discount what happens online as ephemeral. At a recent speech about innovating online that I gave to a national gathering of city officials, one big theme running through the comments was a skepticism that online sites were good for anything beyond message-delivery. Public leaders simply must get over this attitude.

Second, the power of the virtual goods market shows the potency of the shift our society has undergone. We live in a citizen-centric world in which the ability to customize is taken for granted. It is so fundamental to people’s expectations, that whole markets emerge and thrive based on the idea.

The public leaders and community benefit organizations who can harness these forces will survive and thrive. Look, for example at the Hair Fair, which takes place in the online virtual world Second Life. It’s like an online festival where users can purchase and compare new hairstyles. The most recent one earned its organizers over $8,000, and included a “bandana day” where all users removed their hair and instead wore bandanas in support of the charity Locks of Love.

As more charities and public leaders begin to understand this new space, we will see more of these kinds of partnerships. It may feel cutting edge, but it is already here.

Public life needs to catch up.

Go here to read the whole article, with more detail.

Photo: moggs oceanlane (Flickr)