It's been a bit over a year since we launched M4Edge, and we've had the opportunity to speak with many startup CEOs and CTOs and VCs. We've also had the opportunity to reflect on what we've learned, and we've come up with a theory for how technology is changing and shaping the economy. We are calling the new economy the RAPID economy.
R is for Remote
A for Automation
P is for Productivity and Pervasive
I is for Individualized and Individuated, but may also stand for Inequality
D is for Digitized, but also Decarbonized and potentially Dehumanizing
We'd love to know what you think of this framing - send us a note! (AND write us a review? Please??)
Wishing you a great and peaceful holiday season and happy 2020,
Marco and Michael
It's been a bit over a year since we launched M4Edge, and we've had the opportunity to speak with many startup CEOs and CTOs and VCs. We've also had the opportunity to reflect on what we've learned, and we've come up with a theory for how technology is changing and shaping the economy. We are calling the new economy the RAPID economy.
R is for Remote
A for Automation
P is for Productivity and Pervasive
I is for Individualized and Individuated, but may also stand for Inequality
D is for Digitized, but also Decarbonized and potentially Dehumanizing
We'd love to know what you think of this framing - send us a note! (AND write us a review? Please??)
Wishing you a great and peaceful holiday season and happy 2020,
Marco and Michael
Michael: 0:02
Hi there. And welcome to Macro Micro, You forgetting our
Marco: 0:11
Padres? And I'm hesitating Maybe so long, Sometimes I lose track of it.
Michael: 0:18
I've had that trouble myself. Where are we after Macaron Micro, It's Michael
Marco: 0:23
and then Marku
Michael: 0:24
and startups at the Edge, otherwise known as mmm for EJ. And we've been doing this now, Marco, for a little bit over a year. And we've had the privilege of speaking to lots of great start ups, some great veces cos kind of from all over the world, all over the spectrum of types of great tech startups of cool tech start ups. And we've begun to formulate a serie of what this all means and what is happening to the economy.
Marco: 0:58
Indeed, because the byline off our podcasts is technologies that change the way the economy works. And so I think we're starting to get a much more concrete sense of what the new economy is going to look like.
Michael: 1:12
And so, for this podcast, you lucky listeners, instead of hearing s interview a startup CEO or CDO, you're gonna hear me and Marco discuss what we think is happening to the economy. How we think it's changing because of all these startups, and we've come up with a theory, um, that recalling the rapid economy Um, trap
Marco: 1:34
it is an actual it out Elliot out. Like all acronyms, that can be a bit obscure.
Michael: 1:40
So R is for remotes, and we'll walk through these, but here we mean you no remote working remote control. Monitoring of drones from the production be a different kinds of advanced manufacturing techniques,
Marco: 1:55
and the day is predictable. It's for automation, which is a key feature of the revolution and the key source off advantages, but also fears
Michael: 2:07
P stands for also perhaps predictable. It stands for productivity. And if you've been following any of the debate around productivity, you know that there's a little bit of, ah, mystery that's at play, and we'll talk a little bit more about what's happening. So r a p
Marco: 2:23
the eyes someone less predictable, though it stands for individualized the individuated. So the individual tailoring off solutions and products, but also for something potentially darker, which is inequality, which risks getting exacerbated by some of the innovations with you at work, you
Michael: 2:44
know, going going through our acronym, I realized that we forgot one of the important peas that we will talk about, which is not just productivity but also pervasive. We think that a lot of guests technologies are not just hitting one part of the economy really many or all. So after I comes D at the end of Rapid and here again D could stand for a few different things. Obviously it stands for a digitization. Ah, but it could also stand for de carbonized, as we hope that many of these technologies will lead to a cleaner future. But they're a couple more than he could stand for. Maybe it's rapid did
Marco: 3:23
there. It's definitely de carbonized, hopefully, but also potentially dehumanizing because off a number off adverse consequences that some of these technologies are bringing,
Michael: 3:37
I hope you saw what I did there. I made you say dehumanized, and you also did any quality for I. So your asses the dark one
Marco: 3:46
here. I know this. I don't think I didn't notice. I'll get you back in our discussion, but it's worth pointing out also, that they're the rapid acronym is nice also because it's that he mind that off the speed at which these innovations taking please, it's reminder the transformation off the Connery is taking place of the faster, faster pace.
Michael: 4:08
Yeah, so that's actually for me, a good place to start the discussion because one of the questions that comes up in discussions around technology now around literature is why aren't we seeing it happen? We'll talk a little bit about this when we get to productivity. But a lot of the buzz around the technology quickly around the eye is that we're entering a phase of hyper growth. We're entering the past, the knee of the curve of exponential growth. Um, and then you look and you say the skeptics will say, Well, where? Where is it? How come we're not growing at 56% everywhere? Why are there slowdowns and productivity? Why they're slowdowns and GDP and some of the traditionally fast growing economies take on that. It's simply that we're conflating the possibility and the potential, or maybe the promise of, um, rapid and dramatic growth over the long term. You know whether or not it's ah, sort of contrite long wave with the manic obsession with quarter by quarter GDP numbers that we're talking about two very different things we're not talking about the kind of effect that is seen in the newspapers were talking about the kind of effect that scene and economics texts,
Marco: 5:33
and that's exactly right. And I think the other thing wishes that play here, Michael, is that we tend to get ahead of ourselves. We tend to get very, very excited. And I am reminded here off one statement that we heard in one of our parkas in the podcast within the on the future of mobility. We had a discussion with Mike Grand off investment manager, focused on mobility, partner, off money, mobility, ventures. And he said something which I really struck a chord with me. We're talking about the issue off autonomous vehicles and he said Yes, we all got very excited because we go to 90% of the way to fully self driving cars very quickly and we didn't realize that the last 10% was going to be a lot harder. And I think there is something that it's a reminder that we tend to get very excited. We focus on the end point, then the end point remains that out of reach for a while longer, and we act disappointed obviously well if it's moving so fast. The wearer of the flying cars where the self driving cars and we tend to downplay all the improvements which are taking please at the grassroots during this part of the perception problem.
Michael: 6:49
Yeah, I think that's right. I mean, it's a narrative that people I want to hear right. The startups want to convey that the possibility of you know magic happening quickly. The venture capitalists are happy to hear it. The newspapers like to write about it. The media likes to write about it, I should say, And so it's in. It's a phenomenon that we're all sort of guilty of perpetrating, right? It's something that we want to hear expectation, bias or whatever you want. You want to call it, Um, I think the other side of that coin and you sort of alluded to it at the end is there are all of these little bits of technology that we don't see his magic anymore, and so we just assume it's it's no longer a I. It's just regular old computing, you know, The fact that our cars can tell us when we're drifting out of the lane is an aye aye based technology. The fact that our phones, you know, recommend to us and the next thing to do or bi or whatever it is That's a I based technologies, but we sort of shrugged them off. And so we don't think that the magic has happened yet, so it's going to wrap it
Marco: 8:00
exactly that you have more to say this, but I want I don't want to preempt our discussion on the productivity part of the peace. So let's start at the beginning. Let's start with the R
Michael: 8:11
R is for remote, and here again, we mean a few different things could be remote working through business. Adoption of virtual reality is one example, and we spoke to the CEO of De six V are in one of our recent episodes, Andy Maggio. Um, and it's a very niche kind of application of V. R. You know, it's for, um, data analysis. Um, so it doesn't seem perhaps as sexy as you know V. R. That'll take you to the moon riding a dragon that's seated on a roller coaster. I don't know where I got that one from, um, but on the other hand, it's ah, it's much more really right. It's a note no pun intended on the V R. But it's much more useful for how business is done. Obviously, Um, and I think roll, You know, I expect that's the beginning of a trend. I know that people have been saying this about B R for a while, but Andy was quite clear in how far the technology has advanced in just the last few years. The goggles getting lighter, the tech getting much, much better. And everything will combined actually getting much deeper, much more accessible,
Marco: 9:26
absolutely. And we've seen also another powerful example off remote collaboration in the area off freely printing. One of the companies we talked to, Mark Forged has invested heavily on the softer side and cloud solutions. And they have developed the cloud based solution that allows products in parts to be designed in one location and then immediately produced the thousands of miles away. So that different manufacturer facility, two different manufacturing facilities belonging to the same company, can access the same blueprint at the same time. Even if a prototype is being changed, that's a very powerful example. Off remote collaboration generating efficiency.
Michael: 10:11
Yeah, that's right, I mean, it's It's very similar to what Zammit Tree and three D hubs are doing. They're both manufacturing as a service platforms, you know, heavily on the originally heavy on the three D printing side now with a much wider array of manufacturing technologies but their business models basically our to utilize as much of the existing manufacturing supply chain as possible, regardless of where geographically, there's manufacturing. Change those lines, I should say set. So another example of the increasing remoteness of, um, productive work
Marco: 10:50
that's exactly right. And it also strikes me. The is another meaning off remote. It's almost more literal. Remember when we had the discussion with that Mel? The manufacturing And they have developed three D printing technology that allows the machines to operate in the field so they don't need to operate under control the conditions, which means that they can operate in remote locations. You can operate in Army forward operating fields on oil rigs in mining locations, which are hard to access so that that's an another aspect, not a remote control. But it's in Agra aspect off technology that allows us to operate efficiently in remote areas. Indications which would be otherwise harder to reach.
Michael: 11:43
That's right. And so what we might see over time is a shifting of geographic concentrations of wealth. If the's trends combine. If they continue in the direction we think they're going, then with the needs to concentrate, production in one area grows weaker. So this it's a little bit different from offshoring. It's more, more of a sort of diffusion of where production, where productive work can happen.
Marco: 12:17
Exactly. That's exactly right. And it also dovetails with another discussion we had on with the rise off the Rest Revolution Investment Fund. The urge points to the the importance off innovation is an engine off back, her distributed growth so leading us towards a new economy where the opportunities for growth for jobs will be better distributed, hopefully moving away from the current situation where the little so much concentrated in a few big cities that the phenomenon has really contributed to the increasing inequality.
Michael: 12:55
Right? Right. So should we move on to a for automation? We should absolutely So you know, obviously, when people think about automation, the obvious image is of some robot, some you know, machinery that's doing labor. That was once done by human. Or maybe that could not have been done by human. And that, you know, automation has been happening since the dawn of the Industrial Revolution in one way or another. But we're now beginning to see actual robots in place. Um, we interviewed a robotics company, I think, a couple episodes ago, Um, Anson Kung of and K Robotics,
Marco: 13:38
Indeed. And that's a much more friendly and less frightening kind of rubble. It's Robert goes around cleaning the floors of hospitals or shuttling people around the airport corridors to take them to the right terminal to the right gate. So it's for the year, the helpful face off troubles. I've also seen a different company with Simba Robotics, which produces a Robert that goes around a big department store and takes images and then with artificial intelligence. And the visual recognition is able to, ah, Eve you Ariel time inventory off what you have in the store and where it's interesting. L is also designed to be a very cute Rob Otis, so it's interesting to see how these robots are being designed to be friendly and known, threatening looking right hand eye. And here is where you're this token, you should kick in.
Michael: 14:34
Yeah, well, right. Right. Are they really and non threatening? Looking to the workers were being displaced, I guess is that is the queue yer you're giving me? I you know, we had this conversation with with Anson, who was saying that in fact, the, um, the labor unions at the in the places where the and K robots have been installed have been happy because it helps them, Um, you know, manage there, there, workflow. You know, it helps them manage six sick leave. It helps them manage time off a little bit more. And I think it's still sort of an open question. Is that management of the labor force? Something that in fact, labor unions are happy with? Or is it something that the managers are happy with? His? You know, woodworkers with non unionized workers be as happy with, um, co bots or robots supplementing even if it's supplementing it replacing but somehow working alongside them, there's another Got
Marco: 15:34
him. I agreed eventually. Remember, I brought these up in their discussion with Anson because I had this cynical reaction saying, Well, of course, a trade union might be favorably disposed to these robots if they're in a situation where they can already guarantee job security to the workers. And so they're not too worried about the displacement impact because I tend to be Maura positive, less worried about the massive job losses, the troubles might calls. But I am skeptical off even some off our guests, who immediately feel that they have to say, Oh, no, R. Roberts will not replace the humans that you have made the point at least once, that there is always an opportunity cost. So the Robert you see might not taking away in existing job. But if it brings more efficiency, it eliminates the need to hire somebody else. So it carried this place a potential job that wasn't there but might have been created,
Michael: 16:41
right? That's right. There's also, you know, there's this phenomenon of of co bots. Robots working alongside humans are helping humans in some way. I think sometimes the the phrase is stretched a bit. So, uh, you're ready? I read a pretty fascinating article recently about the use of some of these Mark Mark forged three D printers that were being operated by so called co bots manufactured by the Universal Robots Company, who I'd like to have on the show in 2020 site for listening. This is an invitation. But those co bots that set up was specifically to make it a, um a human lis environment for, you know, for 24 7 operation or at least 24 hours in a real operation of his 21st step in someone's gotta gotta do something. But, you know, they're called co bots. But the idea was to get human out of the loop essentially tohave nonstop three d printing production. So it was really remarkable. And the combination of these technologies there was also, of course, WiFi and good old email involved. But I'm name was, you know, to enable robot production. But it happens. You know, this automation happens in less obvious places, too. It's not always machines doing stuff.
Marco: 17:54
No, indeed, we've seen a lot off automation, advancement in mobility and not just in self driving cars trying to talkto her cos like flip autonomy like wake attack. And it seems we've seen how they can use multiple data streams, too. Auto may the traffic management to automate the dispatching off security vehicles ambulances. Fire trucks, please. So we're seeing if you really the the hidden face off automation, zits, automation that doesn't really show up by any meeting workers where you could more easily come in contact with them. It's automation that on burdens humans off, not hard manual labor. But Maur conceptual intellectual labors off this computational. Some of it is hard, but this is the machine's artificial intelligence, competing with us on a different level. So competing with us on the calculation cognitive abilities in normal manual labor,
Michael: 19:04
right? Not a competition I personally would like to enter in many arenas. Honestly, Um, but I think one of the more interesting ones in this regard is what's Arciero is doing with institutional knowledge? And, um, you know, workplace instructions on various tasks. So they have a natural language processing an LP platform where they're basically collecting the, um, the wisdom of experts in different companies and then making it available widely to people in the company who don't have that wisdom. And so I think you know, deep on Rita would argue that they're not replacing the experts. They're just sort of amplifying them. Um, when I don't know, I mean, on the one hand, a agree, I think that argument is valid. They're taking the knowledge that exist that was produced by human and making more accessible to other humans. But on the other hand, you could also see, you know, once that knowledge is once that experts wisdom is captured, his own or her own value is actually diminished for it.
Marco: 20:12
It's a it's a It's a very good point, and I still believe that and I'm an optimist. But I'm skeptical of the arguments that say No, these automation, this innovation is not displacing human work. I think in most cases it is whether or not we want with me, it is displacing human work, and the key question is, can you help us create more and better work somewhere else? But this leads us especially to the question off whether these 12 months off podcasting has been has given you any a better insight on one of my favorite topics. And the paradoxes which is productivity because we've just been are going on on the automation we have just bean regaining our listeners with example after example off Roberts and algorithms taking the place of humans and you would expect that if this is happening, it should show up in greater productivity.
Michael: 21:11
So, yeah, the productivity puzzle, the peon rapid. We have heard that all these technologies are goingto improve the economy in unimaginable ways. And the evidence is clear at a really micro level that these technologies have lots of potential, and on a macro level, it seems to be invisible. So what's going on? It's
Marco: 21:36
pointing in exactly the wrong direction of the macro level. So let me just give a quick overview of the micro level productivity trend for our listeners. This is given that this is one of those rare occasions were having an economist on the podcast is actually useful. Basic listeners may want
Michael: 21:56
to mark this minute second share widely on social.
Marco: 22:01
Definitely a quotable moment. Yes, I will stand by, but that the productivity in the U. S. And elsewhere was running pretty fast until the mid late seventies. Then it slump and was in the doldrums for a while until 1996 in the mid nineties in the U. S. Productivity accelerated to 3% career imperfectly,
Michael: 22:30
let me interrupt for one second just just to give our non economists or non Nikon wonk audience a little background here. Productivity. It's measured how score
Marco: 22:43
points of productivity in a very simplistic way, is measured by the output, goods and service is that are produced, divided by the number off people who are producing them. I think that's for our purposes. That is the most intuitive and simplest way to measure productivity. So for a given workforce, how much can you produce? A more productive workforce will churn out more output. And the theory of courses and the evidence over history has bean that for the same number off workers to be able to produce more. What it takes is either better skills or more in batter, physical capital and technology to work with. So workers operating with more efficient machines will produce more stuff. And that connects with discussion on automation. We were having earlier because in theory, if automation allows us to produce the same amount of goods and service is with fewer workers productive, it issued, the automatically go up. It's essentially just an accounting identity. But as we were saying, this is not what's been happening, so productivity in the U. S was growing at about Fay percent barrier between 96 2005. Then we had the mess off the global financial crisis, and after that, productivity has been growing barely at 1%. So it's been a dramatic cap. Often, product committee growth at the same time is innovation has accepted it in the same is true. By the way, the same trend has been sort of in most advanced the conference,
Michael: 24:22
in fact, in some quarters and maybe even on average for one or two years. It wasn't that it was growing. It under 1% was actually negative court. Is that correct?
Marco: 24:30
That's got that. That's corrected, though I prefer to look at the average is because of the only quarterly Busan shortened bases. You can have all the fluctuations in productivity growth. So, for example, productivity growth spike the right at the beginning off the great recession in 2009. Because of the massive layoffs, sir is more meaningful to look at the longer averages. But now we've had about 10 years in which productivity gives no sign of life,
Michael: 25:00
right, right, And in case it wasn't, it wasn't totally obvious from the way Marco laid it out if the denominator of your productivity measure is workforce, either total employment or number of hours worked. If you have a more productive economy, it means that you need fewer people or you need fewer hours of work to produce the same amount of goods. Same amount of, ah, goods and service
Marco: 25:31
is it's an excellent point. Let me just have the one more thing at the general level, which is, why should we care about productivity wise? Higher productivity? Good thing. Well, essentially because it's only higher productivity that can allow workers toe, have higher wages and can allow us to have a higher standard of living because we say that it corresponds to more output, more stuff being produced per worker per hour. Work that it also means that corresponds to a higher income per person. Higher income per capita,
Michael: 26:06
right, so some of it is tied to the distribution of wealth after production. If that distribution goes to only a small portion of the population than productivity, gains don't necessarily create broad wealth. No, I
Marco: 26:22
have Absolutely. But I would say the anyway useful way to think about it for me is that productivity growth is the necessary but not sufficient condition for improving living standards for everybody. If productivity doesn't grow, we're not creating enough wealth. And so we're not gonna be. It's impossible for all of us to be better off. If productivity grows faster than we are creating more wealth. We can be better off. Then there is an issue off. What can we do to make sure that the games are distributed in a way which is fair and economically efficient?
Michael: 27:00
Right, Right. So we have, you know, from various guests we've had over the year, we have a few hints that this might be turning around soon. So actually, very first interview with Greg Mojo on the 1st 1 we did. He mentioned something about how there hasn't really been a change until recently until the advent of a I used for materials discovery. There hasn't really been a change in the way research has been done in the way new products of designed and developed, um, in decades and decades, um, that it's long slogging research through university labs through corporate are the arms a lot of trial and error and it just takes, you know, years, two decades before something gets done and that that hasn't changed. And so one of our early have posses, in fact, was, Well, maybe this is part of the key to productivity slowdown. The way we build the most fundamental things we we use, every product of your material we use hasn't changed in decades. And so maybe maybe this new era of aye aye based accelerated materials production will result in a increased productivity, increased wealth creation. This, of course, ties back to one of the early points I made about how quickly this all permeates through the economy. It's not as if now that citrine and dramatics exists, it switch is flipped and suddenly there's a new, you know, productivity lever that drives the entire economy. It takes a while.
Marco: 28:38
It's absolutely right. And something that has become more and more clear to us during our podcasts is how hard it is for companies, especially for manufacturing companies, to adopt the put in, place the new technologies and to use them effectively. Think off Freddie Printing. We have Greg Mark, the founder off Mark Forge, who pointed out that the key advantage off Freddie Cream finger additive manufacturing that it's also called is that companies can then bring products to market a lot faster than ever before. Because we're three D printing, you can accelerate the process off building a prototype, testing it and then modifying it because you modify it simply by modifying the digital blueprint that feeds into the machine. And then you create a new product. So it's a massive acceleration, the speed off product development and production that takes place. Thanks off really printing. However, we've also heard from the values of three D printing experts on our podcast. They put a lot off effort in trying to make their machines user friendly because a key barrier to adoption is. If you're a new manufacturing company, how do you bring the three D printer in? How do you make sure your workers are trained enough to use it? How do you make sure it's seamlessly integrating the rest of your production process?
Michael: 30:07
Great. I want I want to know it out a little bit because, you know, we talked about one kind of productivity, but we didn't really talk about the time stream, um, multi factor productivity and simple GP over labor productivity. And can you tell us a little bit about, um, first of all what it means, but also whether or not you think that's gonna show results more quickly than labor productivity, or will it may maybe going a different direction.
Marco: 30:38
So the a good good point in the sense that when you measure simple labor productivity, the numerator is always the same. How much stuff we produce goods and services which are being produced when you take labor productivity. You account your attribute, all the effort of the production to the worker. And so that productivity number you get with measure the impact off, how many machines you have and whether these machines that knew where are older, more efficient, less efficient, whether they embody new technology or not. When you talk about multi factor productivity, what you're doing is you're saying Okay, hold on a second. The what matters is not just the workers, but also the capital, the machinery that they work with. So the two factors of production normally are gonna be the labor on the one side and the physical capital on the other. So you know how much companies are invested and you get this multi factor productivity, which instead captures Maur directly the impact off the technology. So anyway, when you when you look at that, it's a I'm concerned we may. I don't want us to get lost in tow the technical differences between one number and the other. But I would say we should see the improvement in both measures that both in multi factor productivity and in labor productivity. In theory, we should almost to see a faster improvement in labor productivity. If your fears are justified, that is not just your fears, but also some of what we have to be fair, some of what we've seen in the attitudes off companies all over the place as they put in place new technology. They are looking for it clearly identifiable return on investment. And unfortunately, often the idea of being able to lay off workers is a very easy payoff to identify that. Have you been inside? You had any? That's one reason to expect that some of the first rounds of technology will be replacements off machines for workers, and so they will boost the label for the activity, probably ahead of multiplying.
Michael: 33:04
So that's interesting. I was actually I was I was trying to set you up to make a different point. I knew I wouldn't be able to describe Total factor multi factor productivity well, but I was trying to get to a different point or hypothesis, which is that going back to our remote are are in rapid. I was thinking that in fact, if goods are produced in more geographically diffuse way than they have been in the past for, I mean, I know that you know, when you buy a car, for example, it's no longer produced in one place. It's it's drawing from 100 different, different places. But if we're right that things become even more remote than perhaps that total factor, productivity begins to move a little bit more quickly than the immediate labor productivity. In other words, if you're drawing on, the resource is of some other countries cheaper, you know, think about the comparative advantage portrayed right. So if you're drawing on a different countries, resource is that might be optimized for one particular part of one particular good. Then maybe this is a stretch. Perhaps you tell me the TFB total factor productivity begins to go little faster than labor productivity.
Marco: 34:13
Maybe, maybe, but this is becoming too esoteric. I would imagine it's that there was a discussion of the other aspect off our P. The pervasive aspect off the wave of innovation. Yeah. So this is
Michael: 34:30
actually the part that I find most interesting when reflecting on that span of of technologies in the scope of cos we've interviewed and we've spoken to. So, you know, innovation is reshaped being all sectors of the economy. So we have spoken to companies like the tree in who we mentioned before, you know, we were changing how we design materials. We talked a lot about three d printing additive manufacturing. Already we spoke to Mark foraged and essentially, um, and meld and impossible objects. They are changing how you manufactured goods, not just the materials they better use, though That's linked to it, in fact, so how they're designed, how they're made. We spoke to Zombie Tree and three hubs. So how the supply chain functions How? Um, we we purchase and supply goods that are manufactured. But we also spoke to companies that are changing how we educate students in the work force like Legends of Learning and Sim Coach games. And you know, we mentioned source already changing how we learn at work, how we communicate knowledge at work. Um, we've talked to companies that will change how goods and people move around the whole mobility revolution for autonomy. Wake Aerotek Mosque Global Know every point of the chain is undergoing some kind of revolution. You know, Maybe the most. Um, I don't know. Interesting, I guess, is what is one adjective is evil. I v a with David Yang and changing how human resource departments figure out who's gonna stick around and who's gonna resign. So to me, thinking about all of these things together in their totality is sort of remarkable, really. Is an end to end revolution in how goods and service is are going to be produced. How we're gonna work
Marco: 36:26
It is. And it is. And it also makes me think off another other quick point on the show for productivity because, as we said, free one last son off. The productivity puzzle that we have learned clearing our podcasts is that it's gonna take a bit more time because the devil is in the detail of the adoption of these technologies. The execution in companies need to reorganize operations, change management practices. But the other thing which is important that it has a bearing on the pervasive aspect of the innovation is that all these innovations having impact the interact, they influence each other. And so I think some of the productivity benefits with only become a parent as these technologies this changes in technology across sectors have had time to Gellar and toe kick in with the right synergies.
Michael: 37:21
Right now, that's a great point. I mean, I guess hour I could have also been for institutional inertia. Um, that's maybe that's another another episode or something, but instead we chose individualized and individuated, um, along with inequality. So let's start with with individualized What do we mean by that?
Marco: 37:42
Oh, you mean that the greater access to data and information allows us to build products and to develop service's, which are tailored to individual characteristics off in the company's in the little people, and we're seeing it again across the range of sectors. Perhaps the most obvious is a medicine where the 80 off individualized, personalized medicine holds a lot off promise to try to identify the right therapies for individual patients. We've also We're also seeing it on education and training. And the companies you mentioned earlier we've spoken toe source. Aargh. We've spoken to Simcoe, which games? But we've also talked with other company presenter, which offers aye, aye driven support for workers to improve their presentation interaction skills. And it does it in a way that is interactive. So it responds to your presentations. Thanks in the weaknesses. So we're seeing it really across a range off the main entrance of and something I found interesting is we're seeing it applied the even to machines with a concept off the digital twin, which is the software double. Often individual piece off industrial equipment there can help you perform monitoring and maintenance based on the conditions off that specific gas turbine that specific as engine the jet engine as opposed to a A machine. An average machine of that kind,
Michael: 39:16
Right? Right. So the other eye we adhere, individualizing individuated. And, you know, this is a little bit more, um, theoretical, I think. But one of the things we we think we will see is sort of individualized, unique career paths and unique education paths. So with all of the individualized education, um, and training availability like you mentioned with some coach and legends of learning, et cetera. You could hypothesize that combined with a massive open online courses, the MOOCs and all of the new kinds of knowledge you can get, um, with a few a few clicks online, you could envision over a future in which people's education is much less, um, cookie cutter. Then it has been, um, you know, where a major in economics or a major in bioengineering no longer really means the exact same thing to any to any two people. It could be that there are such specific kinds of skills that we teach ourselves. So that's, I think, exciting it all. So you could imagine it being, um, a little lonely in some way. I mean, you know, that's that is the thing with charting your course of you alone. Are you lonely? Right. So that's Ah, that's part of the darker side of how this how this might be, which leads to the other eye, which is for potential inequality,
Marco: 40:46
inequality. And let me take that head on, since I'm supposed to be the optimist. But I have a realistic note, which is we should be worried about inequality, because when we talk about the impact off automation, my view is that the concerns about the automation creating mass unemployment are misplaced. This is not what we should worry about. There will always be new jobs, more jobs. And by the way, we're seeing it in the numbers. If you look at the the US today, we have never had as many jobs as we have today. The unemployment rate is the lowest it has been in 50 years, 50 so there's no evidence that innovation is destroying jobs. But the problem, I think, is the quality off jobs. So can we identify as machines as Robinson artificial intelligence become able to perform more and more of the tasks that we have been performing? Can we identify what it is that we as humans can do, which is high value ended and the machines cannot do so that as many people as possible can move on to better and higher pay jobs? It's not a trivial challenge because the alternative is the scenario where most off us end up in low level service jobs because we can interact with other people patterns. We can be personal trainers, dog walkers, waiters, all occupations, which are fantastic and can be very rewarding. But in today's world that do not commend very high ridges,
Michael: 42:27
you know, I think there's a as you know, I think there's a darker alternative, which is that even those service jobs could theoretically eventually go to automation or two robots of some sort. You know, you've all Harari calls this bleeder future the advent of the useless class where, you know, humans just sort of out competed both in broad and brain. Um, I think that's probably a farther and distant future, but I wouldn't discount that entirely. I think you know, either way, you know, either you're more optimistic or my more more pessimistic view. I think the lesson is we can't as a society simply let automation happened without also thinking about all of its consequences. If we don't plan for a transition where there's something to do and some, um, uh, you know, way to exist other than existing, um, then we're ah, you know, we're in for a a a bleak future. Um, you know, we you and I had a little back and forth recently on something we agree on, which is universal, universal basic income. You just wrote about it in your Forbes dot com block. Um, it's to me. It's it's peculiar or maddening that so many people think you b i is the obvious answer to this question. Um, and you know, I think I told you. Paul Krugman even agrees with you, which I know is a sore spot. It's incredible said. But even he said, Lucky. If you do the math at all, if you really want to provide an adequate level of income for a universal population, it's a It's an amount of money that no one would possibly be willing to spend.
Marco: 44:16
You're in for 30 seconds of universal basic income. We think that they're two concerns. When is my immediate concern is thinking about universal? Basic income is a waste of time because in a situation where today the robots don't produce that much, we don't have the money to finance universal basic income and promising it in electoral campaigns is reckless. But then there is the more intelligent, anything thoughtful concern, which is what you expressed earlier, which is if we really move to a world of abundance where artificial intelligence and roubles produce everything, and therefore we do have the money to finance universal basic income. What do we do? So what is going to give meaning to humans existence? And how do we organize a society where there is no longer a need to work? That is a much more profound question that we should think about because giving universal basic income once the robots are doing well. The job. It's just, you know, dividing the amount of the stuff they produced by the number of people. It's not difficult policy problems are solved,
Michael: 45:30
right? So, you know, I think for me, the big point here is that this is a really vexing question. What sort of you know, one of the hard problems that isn't easily solvable. U u B I just really is the wrong answer here. That doesn't mean that there aren't answers and doesn't mean that inequality looming inequality needs to be shrugged off means we need to a society think in new and creative ways about you know, how we avoid this trap. We're we're potentially setting for ourselves. I think that unfortunately, um, you know corporations are not incentivized to come up with. The answer, I think that governments know is evidence by what just happened at the climate cop in Madrid. Governments are poor at planning for long term problems. Um and so my own hope is that philanthropists start funding major initiatives on exactly this issue. You know, what's what's next? Cuts, um, get some new thinking out there, pay for pay for some people to think deeply about this problem in ways that we haven't yet.
Marco: 46:38
Let's stay on that dark wavelength as we move to the last letter of the actually to the D, which we know it's for digitization. This is a digital revolution that's easily disposed off. It also includes decentralized control, which again echoes the remote aspect with discussed third there. But then we're left with one very positive aspect of the D and one very negative one. So stop the stuff with the positive
Michael: 47:07
on the positive one. So de fer de carbonized, one of the companies we interviewed was switched. That's with a Y and you know their. Their main aim is to incentivize clean and renewable power generation by use of a combination of things including some Blockchain for, um, you know, monitoring or ensuring that the generation is actually clean. Um, you know, combining it with us, a suite of models to get the best insights around. So it was a cool, if complicated, technology. But we've also, of course, been speaking regularly with Ricky Butch, Um, in our Siri's Ricky's reports from the edge of Ricky started. Reality is we're now calling it Who's got a decentralized back to D. Uh, renewable energy. Um, platform that he's Ah, he's beginning to build. So that's, you know, yet another example of some of the stuff. I think there are a lot of technologies out there that could help, um, de carbonized beyond the beyond the obvious ones. So I'm not talking about, you know, sold one specifically but more along the lines of the company's we've been talking to. So, for example, materials development for me as huge potential for a D carbon ization, if we can begin to figure out either how to produce things like that, have the qualities of plastics, but without the petroleum underlying them, or if we could figure out how to use captured carbon or Seo to in other products were beginning to do that with cement. Already those sorts of advances, I think, are really promising. They're not, You know, they're not tomorrow. But they might be, you know, in in a decade or something like that. If we're if we really push same thing with artificial intelligence, you know, there are all sorts of ways, um, in which renewable energy is great. One of the difficulties it presents is that grid management becomes a little bit more complicated because of the, um, temporal inconsistencies with of wind and obviously the general pattern of solar power. So managing the grid becomes more complicated. Having a I behind all of those power plants behind all of the grid is certainly a promising way to help incorporate renewables more easily, um, and decentralized energy more easily into a functioning, reliable grid. So I think there's lots of potential out there. Um, I'd liketo and hoping that it will become evident in the next few years because the clock is ticking.
Marco: 49:48
Touched you the positive aspect of it. It's hard to be type B positive about that man, and you can be hopeful Theater characterization we have for the is that the humanizing aspect off innovation we talked a lot of off. We have already spoken off a lot of these aspects, whether it's automation, the atomization off work into different tasks. For those, as you were pointing out, if we get into a situation where work is more and more than remotely and therefore in isolated fashion, if career paths and education path become Maur individualized, do they become more isolating as well? And there is another aspect, another form off manifestation of the the rich who worries me a lot, which is a just bag it. There's a distraction. What are we talking about again? Hey, the fact that if you don't stop glancing at your smartphone, your not be able to follow the complex train by profound conversation. But seriously, we know that there is research now. It shows that our device inside Constand, the source off distraction, were constantly tempted to track. Is there a new email? Is there in your Facebook update? We also know that the business model off companies like Facebook, Twitter, google your name. It relies on their ability to capture our attention and bring us back to the screens. Bring suspect the feet over and over and over again so that they can sell clicks and advertisements and that there is overwhelming and growing evidence that the these is doing significant heart or cognitive abilities, our capacity to concentrate, to think, to take long term decisions. So in a situation where, as we were discussing earlier, we're trying to figure out how do we keep an edge over the machines If at the same time the same technology is eroding, what should be our strongest ability, we are really in trouble. So this is one aspect off this technological revolution that really, really worries me.
Michael: 52:06
I feel like now that we've gotten to the end of rapid and explaining what it is, we've perhaps left our listeners with a more, um, bleak and dark outlooks. And even I intended So Let's end on a positive note, and I'll say that although there are a lot of things here that I think are troubling, I think that the the possibility of really transformative positive change for many of these technologies exists, you know, and it's up to us a society to not waste that opportunity and not not let the the sort of darker possibilities in the worst possibilities of these of these different technologies play out. But I think we just have to sort of be on guard and be creative. But what we do with this stuff
Marco: 52:58
absolutely own these positive. What I would say that for me, the positive message I've really gotten from the 2019 division of the M Forage podcasters confirmation that these technologies have enormous potential. So we're seeing it that the micro I will step by step there, creating efficiency. They're improving project activity. So I am confident we will see more evidence in 2020 that the productivity revolution we'll get going and we'll create more wealth, more income. The other positive aspect, which is something that they think will continue to see in the 2020 podcast, is how these innovation these technologies can be leveraged buy investors by entrepreneurs to create more jobs, and we've seen it with disgust. The platforms like zombie tree so manufacturing is a service problems which allow manufacturers across the US across Europe to make better use of the productive capacity to have more reliable flow for others and therefore to produce more toe whether the economic cycle. Better to keep people employed to create jobs. Plus, the company's we've seen, like, so Syrians in coach games, which are focused on trying to improve the learning, the human abilities, that off in the middle workers. So I'm I'm pause it your own violence. I enjoy going good. Enjoy following you down that stuck in a rabbit hole that I always end up feeling Maur more positive thinking. Though these technologies well give us a lot off good potential to exploit. And the thing I fear most is always not. The technology itself is humans. I think humans, human stupidity and not artificial intelligence is the biggest concern
Michael: 54:52
we have. We have nothing to fear except stupid humans themselves. Exactly. Exactly. So. You know, I'm optimistic about one other thing, Marco. I'm optimistic that our listeners will, in fact, this time go to Apple casts its review. I hope you have similar cause for after
Marco: 55:19
nicely that you've baited the at least of this almost as well as you bait me
Michael: 55:26
with that. Uh, thanks for being curious way Hope you enjoy this on uh asked this on anyone else you think I enjoy? Thanks.
Marco: 55:38
Everyone in the great 2022 everyone everyone off our listeners. Hi