It was 1930, at the start of the Great Depression, when famed economist John Maynard Keynes wrote the following words, in the same prescient essay where he coined the term “technological unemployment”:
“We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth century is over; that the rapid improvement in the standard of life is now going to slow down; that a decline in prosperity is more likely than an improvement in the decade which lies ahead of us. I believe that this is a wildly mistaken interpretation of what is happening to us. We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another….”
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Keynes was right, and he was wrong. Sure enough, after a punishing depression and a great World War, the economy entered a period of unparalleled prosperity. But in recent decades, despite all the remarkable progress of business and technology, that prosperity has been unevenly distributed.
Around the world, the average standard of living has increased enormously, but in modern developed economies, the middle class has stagnated, and for the first time in generations, our children may be worse off than we are. Once again, we face what Keynes called “the enormous anomaly of unemployment in a world full of wants,” with consequent political instability and uncertain business prospects.
It doesn’t have to be that way.
Last year, I launched a new event called The Next:Economy Summit, which aims to help businesses, policy makers, and technologists understand where the economy went wrong and to chart a course from the WTF economy we experience today, full of wonders and horrors in equal measure, to a Next Economy that brings greater prosperity to all.
I’m now planning the second annual Next:Economy Summit, which this year I’ll be co-hosting with LinkedIn co-founder and executive chairman Reid Hoffman. Here are some things I’ve been thinking about and will be exploring further at the Summit this year:
In the Next Economy, entrepreneurs tackle the world’s hardest problems – before they tackle us! There are those who worry that as more and more jobs are done by machines, there will be nothing left for humans to do. Yet in the 21st century, we face enormous challenges: climate change, refugees displaced by war and economic inequality, aging populations supported by fewer young workers, new infectious diseases, crumbling 20th century infrastructure, and more. In the past, machinery augmented human labor, making things that were once impossible the stuff of everyday life. We tunneled through mountains and under the sea, brought electricity, plumbing, and instantaneous communications even to remote locations. We have to stop worrying about “jobs” and start focusing on how to use the current generation of technology to enable people to do things that were unthinkable in the 20th century.As Nick Hanauer has said, “Technology is the accumulation of solutions to human problems. We won’t run out of jobs till we run out of problems.” I want to showcase entrepreneurs who are making a difference, not just making a dollar.
In the Next Economy, creativity—not just efficiency—is the key to competitive advantage. Even in a world where machines do many tasks that humans do today, the Next Economy will pay for what is uniquely human. We all crave the human touch, and caring and creativity will be keys to success. People at all levels of society pay a premium over the base cost of goods as a way of expressing and experiencing beauty, status, belonging, and identity. And in our most vibrant cities, a privileged class experiences a taste of a future that could be the future for everyone. Restaurants compete on the basis of creativity and service, “everyone’s private driver” whisks people around in comfort from experience to experience, and one-of-a-kind boutiques provide unique consumer goods.
In the Next Economy, companies use technology not to replace workers but to augment them, so that they can do things that were previously impossible. Uber and Lyft drivers can find passengers on demand at any point in the crowded city because they have been “upskilled” by the sensors in their phones and modern smartphone mapping technology. Surgeons partnered with robots routinely perform surgeries that were previously difficult or even impossible. Software robots can sift through mountains of documents no human could read to find the nugget of knowledge that makes all the difference.
In the Next Economy, companies create great experiences not just for their customers but also for their workers. What’s more, businesses recognize that if workers aren’t well paid, they can’t afford to be customers, and that it’s simple self-interest to have a fairer distribution of the fruits of productivity. Even with all the controversies about the labor practices of Uber, Amazon, and the “gig-economy” as a whole, I believe that we are still in the early stages of the game, and that over time, creating great places to work will be a locus of competitive advantage.
In the Next Economy, AI and robots take over more and more repetitive tasks, and people work at jobs that our grandfathers and grandmothers would not recognize as work. When Hal Varian, Google’s chief economist, made that remark, he was thinking about his own job. But how about some other jobs that didn’t exist even a few years ago? Data scientist, user experience designer, site reliability engineer, social media entertainer, AI trainer… Humans will be working alongside bots, partnering with them, managing them – and sometimes, being managed by them.
In the Next Economy, new kinds of technology platforms become the infrastructure of prosperity in much the same way that roads, electricity, and telephony did in the 20th century, enabling entrepreneurs at all levels of society. I’m not just talking about universal fiber, but about on-demand logistics, real time skill-matching platforms, online education, peer-to-peer media platforms (aka social media), real-time translation, new mechanisms for financial exchange, assistive AI, self-driving cars, drones, and other forms of universal robotics.
In the Next Economy, there are new ways of paying and being paid. And I’m not just talking about Bitcoin! For so long, we’ve taken advertising for granted as the primary currency of online media, but there are intriguing new models emerging, from patronage through implicit “reputation currencies.”
In the Next Economy, individuals cooperate across the boundaries of companies and countries. I’m asking myself how new networking technologies change the fundamental nature of management and corporate structure.
In the Next Economy, policy makers don’t just stick to old recipes for managing the economy and providing a social safety net, but try bold new experiments informed by data and reflecting the reality of how people live today. Universal Basic Income. How might that work? Portable benefits? Makes sense in a world of “continuous partial employment.” Drones? We’d better rethink our use of airspace! How do we regulate on demand transportation, homes turned into occasional hotels, and a future of self-driving cars? We are looking to convene a robust conversation about the legitimate public policy objectives of technology regulation, as well as how to make regulation more data driven and responsive to fast changing conditions.
In the Next Economy, companies recognize that “we all do better when we ALL do better.” “Public benefit” is not a special class of company but the common sense of how to do business. We’ve realized that our financial markets increasingly reward short-term thinking and that the idea that the only obligation of a corporation is to enrich its shareholders has made some of us very rich, but has made our society as a whole more fragile and our economy less productive.
Technology can make everyone richer. And it is only when everyone is richer, not just a few, that an economy truly thrives. It is our opportunity – not just our responsibility – to make the economy enjoyed by the rich into the economy for everyone – the Next Economy!
We’re assembling a remarkable cast of leaders—entrepreneurs, business and labor leaders, thinkers and policy makers, and hands-on workers—to help us think through the challenges and opportunities of the Next Economy.
If your startup is about augmenting humans so that they can do the impossible, creating amazing experiences for people, solving the world’s hardest problems, enriching not just yourself but everyone around you, you are part of the Next Economy. I want to hear from you.