This year Exponent has become my primary must-listen-to podcast. (I am still hugely appreciative of The Critical Path podcast, but it has gradually drifted away from a weekly schedule.) What makes the Exponent format unique, amongst the podcasts I listen to regularly, is that the hosts Ben Thompson and James Allworth usually tackle a topic by taking two different analysis and having a robust debate to dig into the topic and uncover new insights. There is a lot to learn from their full and frank exchanges. I find their probing dialogues to be successful because, in general, they are dissecting the ideas – not the person proposing the ideas. I always strive to live up to the maxim of ‘Strong Opinions, Weakly Held’. So I think it is always educational to see how someone well-invested in one thoughtful analysis can revise their position in a debate that brings new insights to the surface.
Recently I have been doing some investigations around the topic of ‘The Future Of Work’. The twelfth episode of Exponent ‘The Internet Rainforest’ delved into aspects of that topic. To appropriate one of Allworth’s preferred superlatives this particular topic is ‘super-interesting’. There are many significant changes already underway in the way that labour markets are going to operate. With no guarantees of positive developments for the majority.
The aspects they discuss reflects Thompson’s career where he has established a viable niche as an analyst/blogger/pundit/podcaster by cultivating an audience of paying subscribers. They discuss whether the majority of viable careers will have to take similar forms in the future, and how many people shall be capable of operating at the required levels. They develop an intriguing metaphor of an ‘Internet Rainforest’ to represent the extremes within future labour markets: with colossal omni-national corporations above in the canopy and nimble techno-artisans below on the forest floor.
As I have already transcribed selected excerpts from episode twelve for my own notes, I hope that, by sharing them here, others may find them useful as well. I have attributed each quote to BT (Ben Thompson) or JA (James Allworth) and given an approximate time stamp. One disclaimer: I have lightly-edited portions of these transcriptions for clarity, mostly by omitting conversational repetitions.
One of the absolute outcomes of the Internet may be the end of super-large companies. (BT ~19.50)
If you start a company on the Internet your addressable market is in the billions. So even if your niche is only point-one percent of four billion, it is still a very big number. (BT ~20.30)
It is like you can longer have super-large companies now because they cannot be large enough any more. (BT ~22.20)
My thesis is that there is going to be a massive bifurcation between very, very large and very, very small and everyone in the middle will go away. (BT ~23.40)
I am imagining this Rain Forest with these massive trees, but this interesting canopy down underneath that is growing and harbouring all of this interesting life. But there is literally nothing in between the two. That is the economy that the Internet is creating. (BT ~28.00)
I am reaching an infinitesimal sliver of the Internet, but the Internet is so huge that it is a meaningful amount. On the flip side: huge sites get more huge. They are reaping the benefits just as well. Meanwhile everyone in the middle, who has neither the focus nor the huge scale, is going out of business. (BT ~28.30)
What is the future of jobs going to look like? It is going to look messy; just as the Industrial Revolution was messy. However, whenever we do reach that future, it is going to be a more individual, artisanal society. Where people do something super-specific that they are really freaking good at. And they are able to reach a sustainable audience through the Internet. (BT ~30.30)
[The questions are] how technology is changing the ways people work and where the gains will accrue. They will increasingly flow to a few people who will become really big winners. Folks that are concerned about how the Internet is going to change employment and contribute to inequality are not Luddites. They have identified that something has changed fundamentally in the way that the labour market operates. (JA ~39.20)
Technology increases efficiency. Those efficiency gains accrue to the owners of capital and not to labour. The people who actually do the work, not only do they not make more money, but they are not even needed. That is all basic Marxist theory: but what Marx got wrong was that machines in the time of the Industrial Revolution were dumb and did not take that many jobs. Now machines are smart and just because people were wrong to say machines would take over human jobs previously, does not mean that it is not going to happen this time. Also, it is not like it was super-great the last time. The Industrial Revolution took decades and two world wars to work its way through the system. (BT ~40.20)
In the Industrial Revolution, the number of new jobs and their value outweighed the number of old jobs that they replaced. So the question is: will that be true again here? (JA ~43.10)
How fast can we come up with these new types of jobs? And can we come up with them at a rate faster than we are losing jobs to automation? (BT ~44.00)
What is encouraging is that this is a clear call-to-action for how we can meaningfully create the future and overcome those problems. (BT ~44.20)
The longer-term question is: are there potentials for everyone not working inside [a large multinational at top of the Internet Rainforest] to be doing the kind of thing you are doing? (JA ~45.20)
If you start breaking the seven(?) billion people on the planet into these little niches: are there enough niches to support the vast majority of the world’s population doing these kind of jobs? The skills required have evolved from the Agrarian Age to the Industrial Age onto the Information Age. It sounds like creativity is going to be something that allows people to flourish on the forest floor. Are there enough creative people out there to do that? And if you are not creative what happens to you? (JA ~45.40)
Another way to frame your question is: will the number of niches outpace the gains to the power curve? (BT ~46.30)
In any particular niche there are going to be just a couple of big winners. And so when I talk about the long tail: it is not that there is a long tail within a niche, it is that there are an infinite number of niches. Because, in a particular niche, the whole reason the niche is now possible is that you can reach everyone on the planet. There is going to be the single best person who does X, and if you are the fifth or sixth best person who does X… Well that is where the tension comes in. (BT ~47.00)
My hypothesis would be that there are going to be plenty of fifths and sixths; and the world we moving towards does not behave too kindly towards them. (JA ~47.30)
Even after the Industrial Revolution the vast majority of people do jobs that they don’t like. This is not a utopian future. (BT ~48.00)
We started with 98% working on farms. We ended with 2% working on farms. The problem was that industrial jobs increased more slowly than jobs on the farms disappeared. That meant we went through a wrenching change over decades that manifested in all kinds of ways, through economic upheaval and wars. (BT ~49.30)
When you have a system where things don’t line up temporaly, then you have the chance for all kinds of ruptures and fissures in society. To me that is a clarion call to us in Tech. (BT ~50.40)
Everything is accelerating. We don’t want to overly pattern-match, So why assume? Just because it took a few hundred years before; it does not necessarily have to take a few hundred years this time. (BT ~51.30)If you find the ideas in those excerpted transcriptions engaging, then I urge you to listen to the complete episode here. The other episodes are worth delving into as well (there have been nineteen to date).