I have written several pieces under The Future series title:
- The Future - Genetic Engineering?
- The Future - Destructive Technology Trends
- The Future - End Of Capitalism
- The Future - The Problem With Longevity
- The Future - Technology Without Philosophy
- The Future - The Most Important Entrepreneurial Challenge Of Our Time
- The Future - Age Of Idiocracy
Now, if you agree with my prognosis that both blue collar and white collar jobs are going to disappear at a massive scale due to automation, then you must ask yourself, what is a constructive direction forward?
I have two answers to this question.
The first is a look at the next 30 years. The second is a longer term, beyond 30-year view.
Inequality, Fortune at the Tip of the Pyramid: Today's Entrepreneurial Capitalism is driven by venture capital, which has an inherent tendency to create very large fortunes, but very few of them. How many Googles have you heard of? How many Facebooks? And thus, fortune accumulates in the hands of a few, very few people. In 2014, the top 1% of America's wealthy owned 40% of the nation's wealth. Fortune has been steadily accumulating at the tip of the economic pyramid.
Fortune in the Middle of the Pyramid: My observation, however, is that in Silicon Valley, we have learned a LOT about how to build successful businesses following the principles of Capitalism. If this knowledge can be broadly disseminated, and a much larger number of entrepreneurs start building successful businesses - doesn't have to be billion dollar businesses - can be million dollar businesses - that would drive fortune in the middle of the economic pyramid. And that is both possible today, and necessary today, given everything else that is going wrong in the global economic system.
Democratic, Distributed Capitalism: My vision for Capitalism in its next phase is a distributed, democratic capitalism whereby millions and millions of entrepreneurs build small and medium businesses that are profitable and sustainable in the long term. In other words, we need to create fortune in the middle of the pyramid.
Entrepreneurship Education, Incubation, Acceleration: So how is this possible to accomplish? The answer to this question is not finance. It is education. In fact, again, the entrepreneurship ecosystem is misreading the challenge and running after financing as the solution. I don't believe that. I believe entrepreneurship education is of paramount importance. And that is what will drive broad adoption of a Capitalistic system of value creation as well as wealth creation, although, more modest than the billionaire fortunes. No, we will not create a million billionaires and that kind of excess is not necessary.
Brexit: Greece Example: Just to give you an example, the morning after the Brexit vote, as Europe watched in horror, I spoke with a Greek entrepreneur who runs a $5M company called MarineTraffic. People are leaving Europe in droves right now. Europe is a fine example of the kind of disaster that Socialism creates. And yet, here, Demitris Memos had created a successful business from Athens that speaks to my vision: democratic, distributed capitalism. As of July 2016, youth unemployment rate in Greece stands at 50.3%. Spain is at 43.9%. Italy is at 39.2%. France is at 24.4%. It's a dreadful, tragic story of several lost generations. If Europe could mint a million entrepreneurs like Demitris, the continent could be saved.
1M/1M Vision: This is my work today. In 2010, I founded One Million by One Million - 1M/1M for short - the first global virtual accelerator in the world. Our mission is to help a million entrepreneurs reach a million dollars and beyond in annual revenue, build a trillion dollars in global GDP and 10 million jobs. We run this out of Silicon Valley but work with entrepreneurs all over the world.
What we do: The program is first and foremost an online educational program where you get to learn the nuances of technology entrepreneurship from over 700 successful entrepreneurs. We also do active mentoring, and make introductions to potential customers, channel partners, investors, media, analysts, etc.
Freshdesk example: One of the companies from the program, Freshdesk, has raised almost $150 million in venture capital and has some 40,000 customers around the world. The company was born in Chennai, but has moved headquarters to San Francisco recently. I am very proud of Freshdesk.
Siliguri example: I am, however, equally proud of a different type of entrepreneur that I have encountered through our work. You see, we do these free online mentoring sessions every week. One day, a first year college student from Siliguri, a small town in India in the foothills of the Himalayas, came to the mentoring roundtable and pitched an idea that he was working on. He wanted to use Uber-style GPS-enabled technology to power a small business delivery network in his regional market. I found it fascinating that this boy had come up with a decent concept, found 1M/1M, and was pitching this to me, half a world away. And this happens every week. We work with entrepreneurs from all corners of the world - not just India, but Africa, Asia, Latin America. And of course, US and Europe continue to be big markets for our work.
Optimistic in the next couple of decades: I do believe entrepreneurship and entrepreneurial capitalism can be democratized, and wealth can be created in the middle of the pyramid using capitalistic principles. In the next 2-3 decades, the potential for distributed capitalism is very high and the outcome should be extremely positive around the world.
Bootstrapping with a Paycheck: Now, the job loss due to automation has already started, as we speak. So, for those in large corporations, I have a simple word of wisdom: start a small side business while you still have a job. Bootstrap your startup with your paycheck. This way, if the axe falls, you have a fallback position.
Older Engineers: Layoffs, please note, tend to skew older. The white-collar job loss that is coming will impact older engineers (and older workers in general) much more severely. Start preparing now, while you still have a job, and line up your ducks. You will need to build a micro business of your own.
Beyond 30 years: In the 30-50 year timeframe and beyond, technology and automation will create tremendous disruption. 60-80% of ALL jobs will, likely, get automated. At that point, Capitalism fails, and the only solution would be Universal Basic Income.
Photo credit: Markus Spiske/Flickr.com.