WTF?: What's the Future and Why It's Up to Us

by Tim O'Reilly

Meanwhile, in hopes that “the market” will deliver jobs, central banks have pushed ever more money into the system, hoping that somehow this will unlock business investment. But instead, corporate profits have reached highs not seen since the 1920s, corporate investment has shrunk, and more than $30 trillion of cash is sitting on the sidelines. The magic of the market is not working.

De markt is niet de oplossing.

To have a chance at making a better future for ourselves and our children, we must grasp not only how the nature of these algorithms is changing, but also why the algorithms we have most to fear may not be those of artificial intelligence but the unexamined algorithms that rule our economy.

If you want a human-centered future, support companies that demonstrate human-centered values.

creating a thick marketplace is the first requirement of any platform.

Citing and linking to sources makes it much easier to validate whether an assertion is an opinion or interpretation, and who is making it. This should be the gold standard for all reporting. If media reliably linked to sources, any story without sources would automatically become suspect.

Social capital is as important as financial capital in the wealth of nations.

Stock prices are a map that should ideally describe the underlying prospects of companies; attempts to distort that map should be recognized for what they are. We need to add “fake growth” to “fake news” in our vocabulary to describe what is going on. Real growth improves people’s lives.

It isn’t Wall Street per se that is becoming hostile to humanity. It is the master algorithm of shareholder capitalism, whose fitness function both motivates and coerces companies to pursue short-term profit above all else. What are humans in that system but a cost to be eliminated?

but I’m tired of hearing that people like me create jobs. There’s only one thing that creates jobs, and that’s customers.

Peter F. Drucker in his 1955 book, The Practice of Management: “There is only one valid definition of business purpose: to create a customer. . . . It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. . . . The customer is the foundation of a business and keeps it in existence.”

In this view, business exists to serve human needs. Corporations and profits are a means to that end, not an end in themselves. Free trade, outsourcing, and technology are tools not for reducing costs and improving share price, but for increasing the wealth of the world.

It is this hybrid artificial intelligence of today, not some fabled future artificial superintelligence, that we must bring under control.

the laws of welfare economics assert that when some people are made better off as the result of an economic policy change, the winners must compensate the losers. But as Bill Janeway put it to me in a pungent email, “Unfortunately, the winners rarely do so except as the result of political coercion.”

In the worst case, companies are formed not to serve real customers, but to be financed. Strategic “pivots” are made not to advance the actual business but to convince investors to place another bet even though the original business idea didn’t pan out.

valuing a company based on positive cash flow is the secret to successful investing.

If they are to break free from the mistakes of the failed philosophy of current financial markets, which too often hollow out the real economy and increase inequality, these platform companies must commit themselves to the health and sustainability of their partner ecosystems. This is not just a matter of idealism. It is a matter of self-interest. When platforms take too much of the value for themselves, they lose their way.

Company financial statements routinely measure and report on the value captured by the company for its owners. Little is routinely done to measure the value that is created for others. That needs to change.

Thomas Piketty agrees that increased productivity and better diffusion of knowledge create more wealth for society and are among the forces that reduce income inequality.

It would be great to see standardized financial measures of the ratio between the value created for the owners and investors in a company and the value created for other stakeholders. This ratio is particularly important in the winner-takes-all world of online platforms. The value created for the ecosystem should be a paramount concern.

Sharing rather than hoarding knowledge can also be a powerful lever for competitive advantage. Companies too often assume that the best way to increase their share of the gains from innovation is to keep it proprietary.

Understanding where value is created versus where it is captured is equally important when considering the future of work.

we face what Keynes called “the enormous anomaly of unemployment in a world full of wants,” with consequent political instability and uncertain business prospects.

We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another”

Nick Hanauer once said to me, “Prosperity in human societies is best understood as the accumulation of solutions to human problems. We won’t run out of work until we run out of problems.”

Part of the problem is that “the job” is an artificial construct, in which work is managed and parceled out by corporations and other institutions, to which individuals must apply to participate in doing the work. Financial markets are supposed to reward people and corporations for accomplishing work that needs doing.

The drawbacks of these platforms in providing consistent income and a social safety net shouldn’t blind us to what does work about them. We need to improve these platforms so that they truly serve the people who find work through them, not try to turn back the clock to the guaranteed employment structure of jobs in the 1950s.

good jobs, not just profits, or even great products, are one of the key outputs of a great company. Executives can’t just complain about not being able to hire the right people. They have to take responsibility for training the people they need for the jobs of the future.

“There may need to be two kinds of money: machine money, and human money. Machine money is what you use to buy things that are produced by machines. These things are always getting cheaper. Human money is what you use to buy things that only humans can produce.”

Perhaps “human money” should be further subdivided into “caring money” and “creativity money.” Caring is a necessity of life, just as is food and shelter, and should not be denied to anyone in a just society. In an ideal world, caring is a natural outgrowth of family and community, as we care for those we love.

quality of life now involves more time and less stuff.” They want to spend their money on experiences, not things.

Work gives a sense of purpose, and it’s also worth considering how many things people work at that are currently unpaid, or low paid, that are actually far more valuable to them than things we have been mistakenly trained to pay for.

We know what the good life looks like. We have the resources to provide it to everyone. Why have we constructed an economy that makes it so difficult to achieve?

The status quo isn’t worth protecting. It’s so easy to be in reaction, on the defensive, fighting for the world we had yesterday. Fight for something better, something we haven’t seen yet, something we have to invent.

We need new mechanisms to support education and retraining throughout life, not just in its early stages. This is already true for professionals in every field, whether athletes or doctors, computer programmers or skilled manufacturing workers. For them, ongoing learning is an essential part of the job; access to training and educational resources is one of the most prized perks, used to attract top employees. And as “the job” is deconstructed, the need for education doesn’t go away. If anything, it is increased. But the nature of that education also needs to change. In a connected world where knowledge is available on demand, we need to rethink what people need to know and how they come to know it.

It was language that was our greatest invention, the ability to pass fire from mind to mind. In periods where knowledge is embraced and widely shared, society advances and becomes richer. When knowledge is hoarded or disregarded, society becomes poorer.

The three-part process of creating new knowledge, sharing it, and then embedding it into tools so that it can be used by less skilled workers is illustrated neatly by the rise of big data technologies.

AI is not some kind of radical discontinuity. AI is not the machine from the future that is hostile to human values and will put us all out of work. AI is the next step in the spread and usefulness of knowledge, which is the true source of the wealth of nations. We should not fear it. We should put it to work, intentionally and thoughtfully, in ways that create more value for society than they disrupt. It is already being used to enhance, not replace, human intelligence.

Searching out the frontier for enhancing human value is the great challenge for the next generation of entrepreneurs, and for all of society.

People need a base—knowing enough to ask the right questions and to take in new knowledge. People learn from each other. People learn best by doing, solving real problems and pulling in the knowledge they need on demand. People learn best when what they are doing is so compelling that they want to do it on their own time, not just because the job asks them to do it.

There’s no joy in our current education system. It is full of canned solutions to be memorized when it needs to be a vast collection of problems to be solved. When you start with what you want to accomplish, knowledge becomes a tool. You seek it out, and when you get it, it is truly yours.

science is not the collection of what we know. It is the practice of investigating what we don’t know. Ignorance, not knowledge, drives science.

We have far too little fun in most formal learning, and people are hungry for it. If you can’t inspire curiosity, chances are you are on the wrong path.

This combination of learning by doing, social sharing, and on-demand expertise is central to how people—especially young people—learn today.

“Economists’ common practice of defining ‘skilled workers’ as those with four years of college is particularly misleading,” he writes. “The skill needed to work with a new technology often has little to do with the knowledge acquired in college.”

It is not just knowledge that we have to teach, it is the ability to learn. To learn constantly.

A lot of companies complain that they can’t hire enough people with the skills they need. This is lazy thinking.

At the speed with which technology changes today, we can expect the traditional education establishment to provide a foundation, but it will be the job of every company that wants to succeed to invest in the unique and ever-changing skills of its workforce.

1. WORK ON SOMETHING THAT MATTERS TO YOU MORE THAN MONEY.

Money is like gas in the car—you need to pay attention or you’ll end up on the side of the road—but a successful business or a well-lived life is not a tour of gas stations.

Whatever you do, think about what you really value. If you’re an entrepreneur, the time you spend thinking about your values will help you build a better company. If you’re going to work for someone else, the time you spend understanding your values will help you find the right kind of company or institution to work for, and when you find it, to do a better job.