Juan Francisco Retali
The proximity economy: Why human connection may become the most valuable asset of the 21st centur
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Juan Francisco Retali
The proximity economy: Why human connection may become the most valuable asset of the 21st centur
In a world where advances in technology, artificial intelligence, and automation are becoming increasingly constant, business leaders across the globe make almost the same mistake time and time again: believing that the future has already been written.
Every week, a new tool emerges. Every month, a new innovation appears, capable of making processes more efficient, automating tasks, or reducing time and costs. It would be absurd to suggest that organizations should not adapt to this new reality. No reasonable person could seriously argue otherwise.
Yet it is precisely at this point that one of the greatest opportunities of the coming years begins to emerge for our organizations.
For decades, consumer psychology has studied what is known as the “scarcity effect.” Numerous studies have shown that when a product, an experience, or an opportunity is perceived as limited, its perceived value automatically increases. In other words, we tend to place greater value on what we believe we might lose or what is difficult to obtain.
The question, then, is not whether technology will continue to advance. All evidence suggests that it will. The real question is a different one:
What will become scarce as technology continues to evolve?
Perhaps that is why it is not surprising to see a renewed interest in in-person experiences such as theater performances, festivals, concerts, and live events. A study conducted by Connect by Live Nation involving more than 4,600 members of Generation Z found that 90% consider authenticity and “realness” among the most important aspects of their lives, while 92.3% actively seek real-world experiences over digital interactions.
The trend appears to be gaining momentum. Eventbrite’s *Reset to Real* report found that 79% of young adults between the ages of 18 and 35 plan to attend more in-person events, 58% are looking for unique, once-in-a-lifetime experiences, and 49% say they would prefer events that are less produced and more authentic.
What seems to be growing is not simply the consumption of entertainment. What is growing is the search for spaces where presence regains its value—spaces where people can experience something that cannot be replicated by an algorithm, a screen, or artificial intelligence. And the data suggests that this phenomenon extends far beyond entertainment.
While technology continues to advance at an extraordinary pace, international organizations have increasingly warned about the sustained rise of loneliness and social isolation as one of the major challenges facing modern society. We live in an era of hyperconnectivity, yet that does not necessarily mean we are more connected to one another.
Paradoxically, the easier it becomes to communicate, the more difficult it seems to be to truly connect. Perhaps that is why we are beginning to place value on something we took for granted for decades: proximity.
Not proximity understood merely as physical closeness. Nor as friendliness or kindness. Rather, proximity as the ability to make another person feel recognized, understood, and valued.
For years, we have been studying this phenomenon through a concept we call the *Proximity Experience*. It is an approach built on a simple yet powerful idea: people do not remember organizations; they remember how organizations made them feel.
For a long time, companies competed through products. Then they competed on price. Later, they began competing through customer experience. Our hypothesis, however, is that the next great competitive arena will be proximity.
This is not because products no longer matter or because price has ceased to influence decisions. Nor is it because technology has become less relevant. Quite the opposite. These factors remain essential, but no longer as sources of differentiation. Instead, they have become what we call “customer entitlements”—the baseline expectations that customers simply assume will be met. In a sense, they have ceased to be the ceiling of the value proposition and have become merely the floor of the relationship.
We believe proximity is becoming increasingly valuable precisely because technology will become increasingly abundant. In a world where artificial intelligence is more accessible, processes are more efficient, and automation is more commonplace, differentiation will once again be found elsewhere—in what is scarce, in what is difficult to replicate: human relationships, trust, the ability to understand people within their unique contexts, and the capacity to build genuine, enduring connections over time.
As we continued to explore this phenomenon, we began to realize that it was not merely a management methodology or a new way of designing customer experiences. What was taking place seemed far more profound.
We came to call this phenomenon the *Proximity Economy*.
The Proximity Economy describes a landscape in which the ability to create meaningful relationships is becoming an economic asset as important as innovation, efficiency, or scale. It does not advocate replacing technology, processes, or traditional management models. On the contrary, it argues that in a context where these tools are becoming increasingly accessible and abundant, true competitive advantage will emerge from an organization’s ability to foster trust, belonging, and genuine human connections.
In other words, the more accessible technology becomes, the more valuable becomes that which technology cannot fully replicate: human connection.
This perspective has been shaped through years of research, fieldwork, and collaboration with organizations across a wide range of industries throughout Latin America. Many of these insights led to the publication of *The Power of Proximity: The Invisible Advantage Behind Business Growth in Latin America*, a book that explores why human relationships are becoming an increasingly important source of value creation for businesses, tourism destinations, institutions, and communities.
This represents a tremendous opportunity for organizations of every size, particularly for those that have historically remained close to their communities, customers, and local environments.
For decades, organizations competed to become larger, faster, and more efficient. They will continue to need those capabilities. Yet history shows that when everyone gains access to similar tools, true differentiation inevitably shifts elsewhere.
Artificial intelligence will continue to evolve. Processes will continue to improve. Automation will continue to advance. The real question is what organizations will choose to do with the time, resources, and efficiency that these technologies make possible.
The Proximity Economy offers one possible answer: to use that progress to strengthen what should never be lost—human relationships.
Because perhaps the great competitive advantage of the twenty-first century will not come from becoming more like a machine, but from becoming more deeply human.
And perhaps, in a world where artificial intelligence becomes increasingly abundant, proximity itself will emerge as the most valuable resource of all.
Author: Juan Francisco Retali
International Speaker
Consultant and Specialist in Proximity Experience
Author of *Stores That Inspire Loyalty* and *The Power of Proximity*
The authors are responsible for the choice and presentation of the facts contained in this document and for the opinions expressed therein, which are not necessarily those of Tourism and Society Think Tank and do not commit the Organization, and should not be attributed to TSTT or its members.
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