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 two days, you can read the continuation of the transcript of our conversation. Parts 1 and 2 were sent on Thursday, 9 July and Friday, 10 July, respectively. Anyone invested in the stock market should read this.
Callum: There’s a group, I’m sure you’re aware of them called ARK Invest. And Cathie Wood is the Chief Investment Officer. She’s very focused on a similar thing to you.
It’s about disruption and it’s about the industries that benefit from that. Her big five are a little bit…well similar, but different, energy storage, artificial intelligence, blockchain, robotics, genome sequencing.
Tony Seba: Yes.
Callum: From your perspective, are those topics within your framework too, just slightly phrased differently? And would you add or take away either or any of those?
Tony Seba: Yeah, so, here’s the difference. I look at technologies as technologies, right? I mean, not as disruptive technologies, what enables the major disruptions?
I mean, all the disruptions that I’m talking about, is not any one technology, it’s a convergence of technologies that happen at different times for different industries. Does that make sense?
So battery storage is a technology. And then when you analyse the convergence switch in context of transportation, then that’s one disruption. When you analyse it in the context of energy, that’s another disruption.
And it may happen in a different context for different reasons and so on and so forth. AI, yes. AI is going to underlie everything right.
Biology. Yes. I mean, biology, what I call precision biology, which is an umbrella term for genetic engineering and synthetic biology and so on and so forth, that is going to disrupt all the food, food, materials, like I said, cosmetics and so on.
So what I do is look at those technologies in terms of context, within a specific industry. Is blockchain disruptive? Absolutely. In and of itself, there’s got to be a context, you know what I mean? Within what context and basically we can talk about how that disruption is going to unfold. Does that make sense?
Callum: Yeah. And just in the book, you often talk about how say like an electricity grid is like a hundred years old tech, like Thomas Edison would walk out the door and recognise it.
Tony Seba: Yes.
Callum: When you look at the stock market itself, I mean, do you think blockchain and tokens are coming to disrupt the traditional stock market and projects because, in the book you emphasise that this kind of broad national concept is going to shrink and it’s going to be local economies. Do you think that that kind of centralised stock market itself is ripe to get blown apart?
Tony Seba: Yes, yes, absolutely. And, how and when and who and all of that, I would need to spend more time analysing, but what we see is that the asset classes that we’ve had for a hundred years are not necessarily the asset classes that we’re going to have in the next generation or two or three.
And are we going to have…so what asset classes are we going to have? And so on, all of that’s going to change. And that’s another report altogether.
Callum: That’s another book.
Tony Seba: Yes. That’s another one altogether. And my partner Jamie has been working on that for a little bit. And, but yeah, the answer is that it’s going to happen in a lot of ways, but to answer your question, yes, it’s incredibly disruptive and yeah.
Callum: And so when you talk…you mention in the book too, that…I mean, we’ve been talking about industries getting blown apart, traditional jobs, just…I just went and got my car serviced strangely enough today, my traditional car.
Tony Seba: Yeah.
Callum: And I was just walking along where the mechanic is, and there’s just car yards everywhere, and you’re talking about…OK, that’s 10 years now, that’s gone. It’s either apartments, that land and it’s rejuvenated.
Guys like mechanics, all those traditional jobs get blown apart. There’s this fear in the market. There’s always been a fear in the market that once the tech comes through, everybody loses their job and you’ve got mass unemployment.
Tony Seba: Yeah.
Callum: Is it your view that the jobs get replaced with new industries or that the drop in cost, living cost is so great that people work less? Is it a positive or a negative, I guess, or it…depends what industry you’re in?
Tony Seba: Yeah. So traditionally, I mean, in disruption, we’ve seen that…so one of the patterns is what I mentioned, is the idea that basically the big hit happens early and job losses and financial losses and so on.
And the new industry may take a little bit of time to emerge. So when we went from horses to cars and when we went from Blockbuster to Netflix and so on and so forth.
Eventually we’ve created more than enough jobs to compensate, even though the new services and products and so on are cheaper and faster and better, and so on and so forth.
So we have created larger industries than in the past. Having said that, so, in this case, this specific case of energy and transport and food and so on which we have analysed and the number of jobs in food specifically, yeah, we’re going to create almost as many jobs in the new food system as in the existing one.
But the existing ones are going to be wiped out early, and the new ones are going to take 10 years to emerge. Same thing is going to happen with transport then and so on and so forth.
But the thing about what makes…so from that perspective, essentially what we want to do from a societal perspective is accelerate the new, so that all the new jobs are going to be created sooner, kind of thing.
Let the old essentially go, not subsidise the old, and more than anything protect people. Not industries, not companies, people. And, that’s the most important thing, that idea of protecting people is basically misused by industry lobbyists to say, ‘Give me subsidies because we need to protect people’.
In fact, those subsidies are not for people, right? So we need to directly protect people basically subsidising them financially and basically education so that they can retrain for the new industries.
And if they’re near retirement, they need to…we should help them retire with dignity and so on and so forth. But do not subsidise the old industry, actually let it go and accelerate the new.
And we see the millions and millions of jobs being generated in building the new infrastructure in these five sectors, energy, transport, and so on and so forth.
And in fact, when you look at it most of the jobs, at least here, are being created in those industries, whether it’s Amazon, whether it’s Tesla, whether it’s Apple and so on and so forth.
Callum: Well, it’s interesting that you mentioned those companies because here in Australia, our bog standard stock market, what we call the ASX 200 is still below its all time highs from 2007. US markets have blasted long ago into new highs.
Do you still see America as the centre of tech and disruption? I mean, is that where…or do you see other countries, or is it purely the ideas get diffused around the world and then you can take advantage of it in a local context?
Tony Seba: Yeah. So a lot of those technologies are being developed here and, but China has emerged. China has been…when you talk about electric vehicles, China is going to eat that market.
I mean, China has been investing in EVs for longer. They’ve been investing in batteries for much longer. And if not for Tesla, America would have nothing. You know what I mean?
Callum: I do, yes.
Tony Seba: So China is leading in solar. They’re leading in batteries; they’re leading in wind, in manufacturing. They’re also leading in electric vehicles. They’re catching up to the US in information technology, not in AI just yet, but in a lot of these technologies.
So, I mean, technologies now are global and no country is more than a few years ahead of basically other countries that have invested, you know what I mean? Technologies are global.
There’s a lot of stuff that you can download about anything, a lot of open source everything and so on and so forth.
So, from a purely technology perspective, that’s the good news, that essentially any country, any region, any city that wants to emerge as a new leader can do it without having to reinvent anything.
But, here’s the big but: it’s not just about technologies. So when we looked at the emergence of these new orders in history, technology was necessary, but not sufficient. So the civilisations that actually led, that emerged as the new leaders, essentially created new, what I call organising systems, meaning governance systems, belief systems, mythologies, rules and regulations, and so on, new ways of organising everything.
And it is that adaptation of those organising systems and the emerging technologies that when they are put together, essentially create this, what we call the societal capabilities that allow new societies to become leaders.
So it’s both. It’s both the organising system and the production system, which means technology that allow basically a society to emerge and everyone else can be pretty trampled. I mean you never know what’s going to happen to everybody else.
That’s the end of part three of our discussion. Stay tuned for Monday!
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