Excellent article from McKinsey that details the 4 main trends that will affect the world in coming years. My only disagreement is the order; I would place technological disruption first, with urbanization second.
A great article from the Harvard Business Review. I love analysis that focuses on incentive structures as the primary drivers of macro-shifts over time.
The income gap between creativity-intensive talent and routine-intensive labor is bad for social cohesion. The move from building value to trading value is bad for economic growth and performance. The increased stock market volatility is bad for retirement accounts and pension funds. So although it’s great that the proportion of creativity-intensive jobs is now nearly three times what it was a century ago, and terrific that the economy is so richly endowed with talent, that talent is being channeled into unproductive activities and egregious behaviors.
How will society respond to a world that richly rewards educated innovators while ignoring increased income inequality? The simple truth is that the growth of disruptive technologies isn’t likely to ensure many well-paying jobs. High-tech skills will be at a premium, empowering some, but many high-skill jobs will be increasingly done by automation.
Sigh. Central governments have no business dictating and coercing individuals’ financial affairs. Yet that’s what we’re starting to see as governments turn to increasingly stringent ways to control and direct the flow of value in society to favor more risk.
Like chemotherapy, negative interest rates are a harsh medicine. It’s disorienting when people are paid to borrow and charged to save. “Over time, market disequilibria are dangerous,” G+ Economics Chief Economist Lena Komileva wrote to clients on April 21. Which side of the debate you fall on probably comes down to how much you trust government. On one side, there’s an argument to be made that cash has become what John Maynard Keynes once called gold: a barbarous relic. It thwarts monetary policy and makes life easy for criminals and tax evaders: Seventy-eight percent of the value of American currency is in $100 bills. On the other side, if you’re afraid that central banks are in a war against savers, or that the government will try to control your financial affairs, cash is your best defense. Taking it away “is a prescription for revolution,” Cecchetti says. The longer rates break on through to the other side, the more pressing these questions become.
Yet another example of the macro-trend of hierarchies to networks. Decentralization is more efficient, and as long as markets continue to chase efficiency (as they always have), more decentralization is inevitable over time.
What that means, in practice, could be big. An internet focused on the what, not the where, could be a more flexible internet, less likely to get clogged up as a steady stream of new devices join the party. An internet that no longer relies on the aging architecture known as TCP/IP could also be an internet with fewer of the middlemen that currently throttle speeds, gather our data, or control what can and can’t be seen.
Could it be that solar power, potentially combined with large-scale batteries, will be the “grid” in developing markets, perhaps at least in the near future? I think so. At the very least, solar will prove enormously useful and beneficial and require effectively zero-dollar investments in infrastructure to dramatically improve lives. Solar combined with small-scale appliances, starting with mobile phones, provides an enormous increase in standard of living.
Sam Altman writes some great stuff. I especially appreciate his concise, efficient, and honest writing style.
I also frequently reading the comment threads on Hacker News for articles like this one. You can find find the thread for this article here.
I think Thomas Friedman really did hit the nail on the head when he described the 21st century world as “flat”, but we’re definitely starting to see evidence of a slowdown in globalization. The Washington Post provides a relatively comprehensive analysis that points to protectionism, rising costs in developing countries, and shifting demographic trends as the main culprits. A few quotes that stand out:
“In the past year, as many as 30 multinationals were placed under investigation — some were penalized and others raided — by Chinese government authorities for any number of dubious infractions. Among those in the crosshairs: drugmaker GlaxoSmithKline (corruption), Apple (inadequate warranties), Microsoft (monopolistic practices), and Audi, BMW and Daimler-Benz (price gouging). No surprise, then, that more than half of multinationals responding to a survey by the American Chamber of Commerce in China said that Chinese regulators “targeted” foreign firms and that laws and regulations favored domestic companies.”
“Multinationals are very nervous now, and they should be,” said Mark Leonard, co-founder of the European Council on Foreign Relations. In the past, only some sectors — mining, oil and gas, commodity companies — had to worry about geopolitics. Now companies that make fizzy drinks or handbags or chocolate are finding their supply chains, their markets, their operations completely blown apart by geopolitical risks and unfavorable treatment.”
“Well over half of all companies in China, Russia, Indonesia, Malaysia and Vietnam, to name a few, count their governments as stakeholders. These enterprises — in mining, telecom, banking, construction, manufacturing and even retail — receive preferential treatment in lending rates, government investment and subsidies with little accountability for their results. Armed with cheap money, undisturbed by impatient investors and inured from the threat of failure if they underperform, SOEs are often guilty of “overcapacity, inefficient cost control and slow industrial upgrading,” said analyst Li Jin of the China Enterprise Research Institute.”
Taking X and adding AI will fundamentally disrupt a whole bunch of different industries — there are an awful lot of Xs out there. Computers will begin to perform all kinds of communication and visual inspection tasks faster, more cheaply and more accurately than their human forebears. All the examples I’ve given in this post are either happening right now, or will exist in the next 5 years.
I frequently enjoy reading David Brooks’ work, and was fortunate enough to have met him when he came to speak at Davidson during the fall of my freshman year.
But if you live for external achievement, years pass and the deepest parts of you go unexplored and unstructured. You lack a moral vocabulary. It is easy to slip into a self-satisfied moral mediocrity. You grade yourself on a forgiving curve. You figure as long as you are not obviously hurting anybody and people seem to like you, you must be O.K. But you live with an unconscious boredom, separated from the deepest meaning of life and the highest moral joys. Gradually, a humiliating gap opens between your actual self and your desired self, between you and those incandescent souls you sometimes meet.
Commencement speakers are always telling young people to follow their passions. Be true to yourself. This is a vision of life that begins with self and ends with self. But people on the road to inner light do not find their vocations by asking, what do I want from life? They ask, what is life asking of me? How can I match my intrinsic talent with one of the world’s deep needs?