Note from Callum: The other week I got on the phone with futurist Tony Seba. He just released a new book called Rethinking Humanity.
For the next four days you can read a transcript of our conversation. Anyone invested in the stock market should read this…
Callum: You’ve just launched Rethinking Humanity.
Tony Seba: Right.
Callum: You say the 2020s will be the most disruptive decade in the history of the world. Why is that?
Tony Seba: There are two things that are coming in the 2020s. One is the technology disruptions themselves.
We see that in what we call the five foundational sectors; information, energy, transport, food and materials, there are going to be 10X technology disruptions in the 2020s. 10X meaning that the costs will be 10 times cheaper than the incumbent and they’re going to use 10 times your resources and generate 10 times more waste, and so on and so forth.
Every time we’ve seen a 10X in those five foundational sectors we’ve seen a disruption, and all these things are going to happen in the 2020s. I mean, the big difference now is that it’s going to be 10 years for the five, whereas in the past it used to take hundreds. So, that’s one.
So the good news on that angle is that, for the first time in history…we can talk about this later…we can solve poverty and we can solve all of the intractable problems in equality, resource, environmental destruction; all of these things. But it’s going to be very unstable when all of these things happen. So, that’s one.
Two, separately and for the first time ever, we also see that the existing civilisation is reaching its limits in terms of what we call societal capabilities, and I’ll explain that. And every time this has happened, essentially there’s been a collapse. So we’re seeing two things at the same time. One is the possible emergence of a total new age, and, at the same time, the collapse of the existing order. In the past when we’ve had collapses; Rome, British Empire, Sumer, whatever, essentially the leading civilisation has collapsed, there’s been a dark age. And then later; much later, someone else; another civilisation from the edge, rises and they become the new leader.
But now it can happen both at the same time: both the collapse of the old and the emergence of the new. And that’s why; that combination, it’s because of both…either one could mean that it’s going to be a disruptive decade. Both together, it’s going to be super-disruptive, super-unstable.
Callum: You mention in the book that where we saw COVID-19 sort of collapse the market and scare everybody. It won’t necessarily be a virus next time but…you expect these big swings as existing industries collapse and all of the aftershocks come. When you think about this as an investor, is it basically that volatility is going to stay extreme?
Tony Seba: Yeah, insane. I mean, volatility, you said it; it’s going to be insane. Because of both. I mean, any one of these…the disruption of transportation means the disruption of oil, right; the world’s leading commodity. And the implications of that are going to be huge. Just that one thing.
The disruption of energy’s going to be…and that’s going to mean instability: joblessness, social unrest and so on. So, we’re going to five of those and each one of them has a feedback loop; they don’t happen independently, necessarily.
And at the same time we have all of these other things: pandemics, social unrest, financial leverage, currency debasement and natural disasters and so on, which are also…we’ve seen two so far this decade and it’s only six months old. You know what I mean? So put the two together and, yeah, volatility’s going to be huge. It’s going to be insane.
Tony Seba: We’re going to get a new system. Oil is going to collapse and not just oil but a lot of materials because the new system is going to use 10Xless in terms of resources, land, farm land. 25% of the United States is going to open up.
40% of the landmass of the US is used for livestock, and when that gets disrupted over the next 10 years, essentially we’re going to open up. What happens when 25% of the landmass of the United States opens up? What is stable?
In the cities, the disruption of transport is going to disrupt a lot of things, and one of them is properties. Yes, oil is going to be disrupted, but it’s not going to be a swap of one electric vehicle for one internal combustion engine vehicle, right? There’s going to be autonomous electric and on demand. We’re going to stop, basically, buying cars because they’re not going to make any sense, and so on.
So, if that happens or when that happens…like I said, 10X has always caused a disruption and that’s what makes me comfortable talking about it, ‘That will happen’, because 10X has always done that. So, essentially that means that we won’t own cars, there are going to be fewer cars on the road, and they’re going to be autonomous within 10 years. So a third of the landmass of a lot of cities; Sydney and Perth and Melbourne, basically gone. Parking is going to be obsolete. What happens to the price of real estate when a third of the landmass of cities essentially opens up?
It has to go down because most of the price…not cost; the price, of properties is land.
Tony Seba: Right. So a lot of things are going to be disrupted at the same time, which is why it is going to be so unstable because all of these things are going to happen at the same time.
Callum: When I was reading your book, it paints a fairly bleak picture for Australia in one way. I mean, all our exports are iron ore, gas, oil less so, coal, agriculture, meat livestock. When you’re asked to speak, what industries should companies, investors, countries, will you be focusing on?
Tony Seba: Yeah. I mean essentially there are going to be…every industry will be a major one disrupted, so what should we be investing in? Invest in the five fundamental sectors and those are the ones that…it doesn’t mean don’t invest in other stock. I mean, I didn’t talk about healthcare, for instance; industries that are essential. But when we analyse the 10,000 years of civilisation, basically it doesn’t come up as one of the fundamental sectors that makes…basically that enables new societies to emerge, you know what I mean? So what’s the opportunity? Well, we have the new food sector, food disruption, and that’s going to be what I call procession fermentation. So we’re not going to need cows. I mean, think Impossible Foods. The magic ingredient for Impossible Burgers is something called heme, which is only 2% of their product, and yet that’s the magic. But that 2% is going to keep growing and we’re going to make essentially all proteins from fermentation, and fermentation uses 10 to 25 fewer resources than livestock.
But think breweries. Everywhere there is civilisation, there is beer. Anywhere you have beer, you have the opportunity to make food for the 21st century. I mean, that’s one, and not just food, because just like the same…in chemical synthesis, for instance, they make ingredients for food and for healthcare and for cosmetics and for materials. So the same technologies that we use; biology, fermentation and so on, that we’re going to use to make food, we’re also going to use to make new materials and drugs and so on and so forth. That’s one. Transportation is basically three technologies. It’s going to be autonomous, electric and on demand. That is the disruption. And, of course, all the infrastructure that enables that new system of transportation; charging and so on and so forth, in energy; solar, wind, and batteries.
That’s the end of part one of our discussion. Stay tuned for tomorrow!
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