This book is in three - quite different - parts:
- The first section introduces how the rules of the economy are changing. It describes what factors and trends are driving the transition, and it attempts to sketch out the basic framework, that will characterize the new economy.
- The second section looks at the social consequences for businesses and for individuals. It shows how the new economic logic changes the balance of power and the distribution of gains, and it discusses business models and personal strategies for thriving.
- In the third section we examine a series of possible policies that could help ensure that the next economy will be a positive scenario for most of us.
Here’s a brief overview of the main points in the book:
Part 1: Your are now leaving the industrial economy
The three trends driving a new economy
We are moving from industrial society to a new economy, characterized by the possibilities that digital networks provide. The change is driven by three main trends: Connectivity, Co-creation and Coordination.
The product of the future is a solution
Products and services will still be essential in future. But like agricultural products, their importance in the economy will shrink. The new growth will come from linking things together in networks, and by coordinating resources and many different participants. This makes it possible to create solutions - “instances” - that ideally fit a specific user in a particular context.
Virtually all objects become “smart"; connected and interacting with the Internet of Things. Products will be provided with a new layer of functionality; a "superstructure", in the form of digital services and experiences that expand the experience and value for the user.
From broadcast to interaction
In the industrial culture, there is a clear separation between producer and consumer, and between amateurs and professionals. In the future, users and communities of users will be more like participants and co-creators of the solutions they use.
It’s a different mindset. Both the companies, which previously delivered finished products to passive consumers, and the consumers, employees and citizens who simply accepted - or not - what they were offered, need to get used to a closer interaction with each other around the co-creation of solutions. The maker movement is leading the way.
Platforms are the new giants
The coordination of resources and participants are a central feature of the economy - and this makes digital platforms the new giants. The platforms will organize the interaction of countless "smart" appliances, connect skills and needs, and devise solutions for specific contexts based on increasingly detailed information.
Because it is easier and cheaper to access and assemble resources for the occasion it becomes less necessary to own things - or to have permanent employees and own production facilities. It is more flexible and productive only to pull in resources when you need them.
A longer tail of products and resources
The economy will draw on a greater variety of resources. Increasingly, value will come from the “long tail” as more people are empowered to create useful contributions - and as platforms evolve to identify and coordinate much smaller units of value. The sharing economy is in indication of this: Amateurs and part-time workers can offer small services - “peanuts” - that in some cases start to replace professional services and products.
One platform to rule them all
The platform economy has a strong tendency towards monopoly. The more resources and users a platform coordinates, the greater the value for all who use it. Once the platform is designed and established, the marginal costs to grow are very low. Platforms can scale globally in a short time, because the platform does not even need to build and own a production plant.
Also, for those offering something through platforms, there is a very strong polarization of income. Ever-larger parts of the economy - first and foremost anything in digital form - can be provided with no regard to geographical distances. Customers can easily select the best, no matter from where. It creates a "winner take all" effect, where a few players gain the most by far.
Part 2: Social impact
Liquid life
Many of the basic structures that society was organized around are dissolving. Life is becoming liquid. Solutions are assembled to fit a particular context, a moment later it may be a different solution, created by a different set of contributors. We want services that are personal and flexible, but in turn we must be prepared to deliver to others when needed - rather than working only from 9-5. Change is accelerating. It’s exhilarating, but not everyone feels comfortable with it.
Beyond the industrial style standard job
Automation is changing our jobs. Advanced and increasingly intelligent machines can replace humans, whether its for driving lorries or molding dental crowns. As productivity goes up, we can produce what we need with a lot fewer employees.
At the same time, global platforms are making it easier to find “peanuts”, little, often informal bits of value that can be brought in for the occasion. A new market for labor is emerging; the gig-economy, consisting of a mix of freelancers, hobbyists, professionals and part-time workers.
This changes the relations between employers and employees. For an increasing number of people, the social contract, which defined rights and obligations in the industrial economy, is cancelled.
Sharing - or extracting the gains
More productivity, more accurate solutions to needs, cheaper and better products, greater user involvement, automation of tedious jobs ... In principle, the development should be extremely positive. The problem is that the gains are not evenly distributed. On the contrary, a few ultra-rich are extracting very big gains from the system - at the expense of a large number of people who lose security and position.
Often, the companies that gain the most feel no need to give anything back. The world’s leading corporations are evading taxation, rather than contributing fairly to maintain the societies, which makes their business possible in the first place. If extraction and in-equality continues to grow, eventually progress for everyone will be undermined. For an economy based on co-creation and coordination to thrive, it needs to be a plus-sum game; growing by making the pie bigger for everybody. A WE-economy.
Part 3: Suggestions for solutions
Fair sharing
The big issue is how we can ensure that the WE-economy is a positive scenario in which the benefits are distributed fairly. There are several levers to pull, the most important is taxation. Shifting the burden from labor to capital gains, financial transaction and natural resources would both even out some of the in-equality and create incentives towards a more human centered and sustainable economy.
Future needs and future skills
There is lots of important work that machines are not likely to take over. The care, teaching and communication we need and enjoy as human can only truly be delivered by other humans. As we become more wealthy and machines can deliver material goods to us cheaply, humans could focus on values that we have tended to think of as soft and in-efficient: Empathy, attention, beauty, humor, play, ethics and aesthetics. In fact, these essentially human values, may be the core skills that we can contribute to the future economy. Our job will be to provide meaning.
Beyond working for money
A lot of our efforts and work creates great value and pleasure, but they are not worth much in terms of money. Artisans, tinkerers and community volunteers make society better, but the economy is not geared to rewarding them. At the same time, it seems likely that a large part of the conventional money-making tasks will be automated to the point that there will simply not be jobs for everyone in a few decades. If indeed that happens, we will need other ways of securing a decent income for all. Some sort of universal basic income could redistribute the gains, while at the same time supporting lots of valuable and necessary non-monetary work.
Getting by on peanuts
It all adds up to a very different way of creating value. Imagine a scenario where a lot more people work part time, in shifting constellations and roles. Many will work not because they need to earn money, but driven instead by a personal interest, a sense of meaning and because they enjoy being of use to their community. The universal basic income would be quite modest, but life would require a lot less money, because much of what we use will cost very little.
A new coop movement?
In the industrial economy, labor unions and cooperatives were the main vehicles for securing workers’ rights and an inclusive economy. The need to organize and unite to find a shared voice in negotiations is as important in this transition as it was at the beginning of industrialism. But the structure of such organizations must reflect the changing, complex and global conditions of the 21st. century. Maker labs and co-working spaces suggest new models for cooperation. Exotic solutions like the blockchain could be a way to give back to each of us the power over our personal data and reputation.
Ultimately, it is a question of ideology
Many of fault lines from the ideological fights of the industrial age remain. Should the individual have the greatest possible freedom to create growth for themselves - or would it be better to ensure that the entire community thrives? Do we place the most emphasis on money and materialism - or are there other important values that we should protect and prioritize?
There’s a window of opportunity open to us. We have the surplus and the technology to create an economy that is inclusive, fair and focused on the values that truly matter to us as humans. But it will only work if we get everybody on board. The more connected we become, the more we need to realize that our own well-being cannot be separated from the community we increasingly depend on. We are going from a ME to a WE context in every way.
You can read the introductory chapter here