2020 has brought permanent change to the working world and the way that economic incentives are pointed. Let’s walk through how the effects we’re starting to see today will reward those who can position themselves well. A vaccine is starting to be deployed as of the time of writing and we can imagine how a post COVID world will play out. Having worked with data for some time, I can confidently say that forecasting is generally wrong for most things - but forecasts that anticipate how incentives will affect behaviour are usually right.
Everyday people have never had so much individual freedom and autonomy. The immense but quiet transition happening is the world moving away from geography-based local economies to a single global cyber-based economy. Profound implications result from this tectonic shift.
An increase in human mobility across borders will mean that skilled individuals will move to wherever suits them best at that point in time. Personal quality of life considerations will weigh heavily into this, favouring lower cost of living locales with good weather, culture, and social opportunities. Countries with high taxation will see brain drain and capital flight in increasing amounts. When money can be earned anywhere, you won’t be obligated to subjugate yourself to high taxes. Rather than being tied to the work opportunities in your local city, you can live in one country and be employed in another, using financial arbitrage to your advantage. Of course, this only works for those who can work online - any career relating to physical goods or services will remain local. The flipside of this is that you now compete globally for work! Companies that don’t offer remote work will lose the talent war and won’t be able to draw the “A Players” they seek. The age of the sovereign individual is here. In an extreme example, it is possible to declare tax non-residency from your home country, instead choosing to be taxed in a nation state with minimal or no tax requirements - potentially avoiding paying taxes altogether. Governments that charge too much will drive away their best customers. The digital nomad movement is a prime example of this. The nation-state will not endure these changes in its present form.
For greater future flexibility and options, you should do everything that you can to make your career remote. It will give you much more career capital and let you work with the most successful people.
One change that has been accelerated is the trend of rapidly changing jobs rather than having a long career in one company. The incentives are increasingly against those who stay in their jobs for more than a few years. Performance evaluations, corporate politics, wage structures all advantage those who jump between opportunities more often. The corporate ladder is now more diagonal for those with the highest aspirations. Nothing here is a revolutionary prediction but here is what is: eventually the idea of having a job will go away altogether. The late game of this trend is that employees will become companies of one - independent contractors for contracted services. Your financial success will be completely dependent on your ability to provide goods or services that actually provide value. “What are you working on right now?” will be a more relevant question than “what do you do?”. The days of irrelevant paper-pushing jobs are numbered - eventually automation and technology will trim most of the fat from all but the biggest companies.
To get an advantage, start looking at yourself as a company of one today. Start thinking about exactly why a business would pay you, not in terms of the skills you possess but because of the revenue you bring in or the costs you cut.
A lot of these changes are going to be acutely painful for unskilled workers. I’m sure you’ve noticed that the middle class is disappearing quickly. At some point, this could reach a boil and prompt strong negative reactions from those who are underemployed due to automation. There could be a widespread push back against those leveraging technology. We are already seeing the beginnings of this today but the momentum is continuing in this direction. Main Street businesses have been decimated by COVID and have concentrated power even more in the tech giants’ hands. It’s hard to predict how this ends when so much of the global power is concentrated in the hands of so few. The economy runs fine when there is a relatively wealthy middle class who keep it moving but we are entering the age of exclusively haves and have-nots. We could see large political movements rise up to tackle the issue with regulation. We could also see a larger subset of people opting out of the default working arrangements.
If you want to avoid being on the wrong side of this widening chasm, it is time to double down on a skill that is in demand today. Ignore most other things. Programming, effective business writing, digital distribution, and video making are all very in demand skill sets as a starting point.
Information is power. Those who have it will win, those who don’t will lose. In parallel, technology is getting faster and more capable. If your business is not online, it does not exist. This is going to make it harder for governments to track business activity, again undermining their strength. Cryptocurrencies feed directly into this. As more money moves online, governments won’t be able to track or control it anymore. They’ll lose their power over commerce and won’t be able to treat their citizens as revenue sources. They also have the ability to erode savings held in fiat currencies through inflation and money printing. Part of the appeal of digital currencies is the hedge against inflation, though there are still many barriers to their widespread use for transactions. Digital businesses having a country of origin will largely lose meaning.
In the future, wealth will be measured by your ability to structure your affairs to complete individual autonomy and independence.
For some, there will be unprecedented financial independence in the new economy based on information. There is no doubt that the cyber economy is the greatest economic phenomenon in history so far. It enables infinite leverage. As access to technology grows and becomes more accessible, we can multiply our abilities as individuals by getting computers to complete tasks for us.
For you to place yourself in a good spot, you need to focus on finding a point of leverage somewhere. Leverage means reaching more customers with less work. Tools that give you leverage include code (servers work for you), money (can be invested to earn compound returns), and media (create once, distribute forever). Would-be millionaires need to identify and capitalize on their specific points of leverage.
If you can teach yourself to solve problems, you have a bright career ahead. No matter where you live, you will find problems galore in need of solving. Those who would benefit from solutions to their problems, will pay you handsomely to solve them.