We are approaching the fastest, deepest, most consequential technological disruption in history
Suppose we told you that solutions to the world’s most intractable problems are possible in the next decade. Poverty. Inequality. Climate change. You’d probably say impossible, preposterous, unthinkable. We’ve heard that about our predictions before. But we have been proven right.
Now, we are predicting the fastest, deepest, most consequential technological disruption in history and with it, a moment civilization has never encountered before. In the next 10 years, key technologies will converge to completely disrupt the five foundational sectors—information, energy, food, transportation, and materials—that underpin our global economy, and with them every major industry in the world today. Costs will fall by 10 times or more, while production processes become an order of magnitude (10x) more efficient, using 90% fewer natural resources and producing 10 times to 100 times less waste.
These technological disruptions are turning the prevailing extraction and exploitation, scarcity and central control model of production on its head, driving a new model of localized creation from limitless, ubiquitous building blocks—a world built not on coal, oil, steel, livestock, and concrete, but on photons, electrons, DNA, molecules and (q)bits.
We need no technological breakthroughs. Solar and wind are now the cheapest energy sources for the majority of the planet; Uber and Lyft made us rethink transportation as a service; Impossible Foods and others are disrupting conventional agriculture; Black Lives Matter and Me Too are examples of how decentralized information networks can mobilize society.
Humanity is now at a crossroads.
While we have the potential to capture the extraordinary societal benefits that these technologies unlock, our ability to do so depends on an unprecedented transformation of society. Our models of thought, belief systems; political, social and economic systems (together our organizing system) are industrial era relics, they co-evolved with and are optimized for the industries of (October 13, 2020). As these disruptions accelerate, leaders are increasingly unable to understand, manage, and organize our world. That’s why we’re witnessing social injustice and unrest, environmental destruction, and a global pandemic wreak havoc on society. And it’s just the start.
Our most recent book, Rethinking Humanity, provides a detailed action plan for investors, policymakers, and corporate leaders to embrace the new creation based production system and solve our most daunting global challenges. Here are a few steps for public and private sectors leaders to keep in mind.
The first step is to recognize the speed, magnitude, and nonlinear nature of the disruption ahead, and accelerate the rollout, infrastructure, and value chains of the new production system. We must resist the urge to protect incumbent, legacy industries, which will result in the lock-in of uncompetitive systems, stranded assets, and trillions of dollars of losses. Instead, we need to focus on protecting people and maintaining social stability while strategically winding down the old extraction model of production (i.e. fossil fuels and industrial agriculture). While we’re at it, governments should exit the energy business—they should not own electric power generation, transmission, pipelines, and mines.
Governments should focus on accelerating the rollout of new infrastructure and value chains in the five foundational sectors:
Information is at the center of each disruption: consumer data on energy use, transport, personalized nutrition, and healthcare, for example, have value.
Ensuring individual ownership and control of private data will provide economic benefits to consumers that are currently being extracted by third parties. We recommend treating user data like intellectual property (IP)—individuals would own all personal data and have the right to license it to anyone on their own terms. That is, “legal agreements,” whereby companies like Facebook, Google, and Amazon, compel users to give up rights to their data in exchange for access to apps, should be illegal.
The coming disruption has profound implications for investments and asset management as well.
Pensions and savings must be protected from stranded assets and should instead be used to build out the new system. We need to create new asset classes to allow individuals to invest directly in small cash-generating projects such as local community solar, battery power plants, transportation-as-a-service vehicles, and precision fermentation hubs. The fixed return profile of these investments will closely match the liability profile of pension schemes (much more than traditional pension portfolios) and are a good proxy for the ultimate needs for which pensions are designed to meet (such as food, housing, energy, and transportation).
Changing rules to help drive pension assets and savings toward these technologies and projects would provide the critical stepping stone to distributed, participatory ownership (or a new social contract based on a “right” to energy and other needs). As information networks take over an increasing share of economic activity, driven by powerful network effects, our ownership models will need to change to prevent inequality on an unprecedented scale.
Adapting metrics and taxation to fit the new system is critical. For example, move transportation taxes and fees to a cents-per-mile basis to replace gasoline tax and annual vehicle fees. Keep gasoline taxes for internal combustion engine vehicles as the industry winds down. Treat electrons as we do information: individuals should have the right to generate, store, and sell electricity. Do not tax solar self-generation or energy storage, only tax sales to the grid or third parties.
Aligned with this, adapt subsidies to fit the new system and stop subsidies and regulatory support to legacy sectors. For transportation, consider a zero-emission-miles (ZEM) not zero-emissions-vehicle (ZEV) incentive. Incentives for purchasing vehicles (ZEV) encourage inefficient use of more vehicles that impose up to 10x more costs on society through inefficient resource utilization and externalizing costs (e.g. materials, traffic, and parking space needs).
At the core of this decision making is protecting people, not businesses. Allow unviable incumbent businesses to go bankrupt, but protect people through policies to retrain, provide financial and healthcare support, and access to social capital through the transition.
This is a clarion call to leaders across society—public and private—to see what is really happening, to understand the implications, and to rethink the way we all do business, invest and organize society.
Tony Seba and James Arbib are co-founders of RethinkX and co-authors of the recently released book Rethinking Humanity.