How do you figure out what to invest in today that will be a big company tomorrow? It’s a question a lot of people ask. You can’t take out a crystal ball and have some soothsayer tell you what’s going to happen, what’s going to work.
However, digging into macrotrends and macrodata, sometimes you can extract some things that are so strong there is nothing that will change them.
The way we work, and interact with work in the world is one of those phenomena.
It’s become highly expensive to hire workers. It goes without saying that labor costs are the single largest input into production. Companies have an economic incentive to create machines to replace humans. When they do, they decrease randomness in production and drop their costs.
In the last ten years, we have begun to see that change in jobs that previously seemed to be unassailed by the technological march. Walter Russell Meade wrote a nice piece linked here.
Promoting new ways for people to make a living in this still young century isn’t as simple as getting macroeconomic policy right. And it isn’t about figuring out how to re-industrialize the economy: how to bring the smokestacks back to Buffalo. That door is shut. That day is done.
Solving America’s jobs problem and its consequences—slack demand for workers at many skill levels and the rising consequences for wages, working conditions and inequality—is going to require both policy and cultural shifts. In the 19th century most Americans spent their time working with animals and plants outdoors in the country. In the 20th century most Americans spent their time pushing paper in offices or bashing widgets in factories. In the 21st century most of us are going to work with people, providing services that enhance each others’ lives.
Politicians will characterize this as a jobs crisis. But even if they removed all the artificial costs of hiring workers, this macro trend isn’t changing. If they went the other way and subsidized workers to try and ease the transitory forces in our economy, it won’t change the macro trend either.
Over the next ten years, we will see the “podding of workers”. Just like factories drove division of labor in the late 18th century, we will see similar things in the knowledge economy. Adam Smith wasn’t wrong back then and the same economic forces shape humankind today.
It’s why I invested in Desktime. They help people manage this change. Co-working is something that will happen in our lifetime. It will become the prevalent way people work.
By being aware, digging into data, talking to people, and listening, you can figure out a lot. Sometimes the trends you identify are wrong. Sometimes people think that you are crazy. But, sometimes those crazy ideas are the ones that change the world, or make the changing world easier to live in.