Disruption is both the cloud and silver lining

Water SplashSometimes you read something that is so provocative that you go sleep thinking about and even wake with it in your head. For me, it was Jon Evans, writing in Tech Crunch, making the statement America Has Hit “Peak Jobs”Evans believes the gulf between the haves and have nots will increase and that the middle-income of society is a relic of the past thanks to automation.

This was exactly the kind of keep-you-up-thinking story I’m talking about. After a night of working through it, I can understand his logic but decided his conclusions are wrong.

Yes, the Middle Class is being hallowed out, but this is happening mostly because the ‘jobs for all’ benefit the U.S. and other developed nations have enjoyed for half a century was really the product of a multi-decade labor shortage. Developed countries and their factories that supplied the world competed for human resources and drove up the value of simply being an ‘everyday’ worker. Labor unions accelerated the pace, but it was a fundamental supply and demand issue.

Globalization changes everything

Then globalization completely change the value of basic work. Jobs flowed for the past couple of decades to low-cost labor markets. Outsourcing became a dirty word and a political football.

But there’s a change taking place that will accelerate in the years to come. What brought growth and new wealth to the developing world thanks mostly to cheap labor will just as quickly disappear when automation and innovation become more important than labor cost. This trend will make transportation cost the long pole in the economic tent and change how and where manufacturing is performed.

And all of this is happening because of the Internet, and more recently because of cloud computing.

Misery and opportunity

Many disruptive things create misery in the short term and opportunity in the longer term. If we were automating and globalizing without a corresponding change in technology, the situation would be bleak for the developed world. Instead, the disruptive ubiquity of the Web that allows one merchant to serve millions also allows one entrepreneur to bring their idea to just as many. Just like domestication of animals, the printing press, industrial farming and other tectonic shifts in human history, the Internet and cloud computing bring both misery and opportunity at the same time. And as much as the Internet allowed some to dominate, adding cloud computing to the mix allows just as many others to disrupt.

Not about more merchants

While many more have a chance to create and sell in a globalized, connected world, this shift isn’t necessarily about creating more merchants. If we look at pre-Internet history, the number of merchants needed to serve a given population was a reasonably predictable number. But now a connected world means fewer merchants, not more. The new world brings disruption to what good and services are desired and how they’re sold. The future is about constant disruption of the merchant class by smarter, smaller entrepreneurs.

The path to wealth has become less about those lucky to escape the middle class through hard work, promotion and investment and more about the ability to disrupt.

Cheap disruption

Cloud computing and the Internet are the great equalizer and disruptor. Anyone who can cover monthly costs for computing power that used to be a major investment can now take on an entrenched business with better ideas and at lower cost. But beware, the entrepreneur can just as easily be disrupted by the next great idea brought with even greater efficiency.

We’ve entered an era of living in a cycle of disruption. Disruption is a double-edged sword of loss and opportunity…it is both cloud and silver lining.

Resources:

‘Big data’ and cloud computing empower smart machines to do human work, take human jobs, Ray Kurzweil, Kurzweilia

American has hit ‘peak jobs’, Jon Evans, TechCrunch

10 reasons why 2013 will be the year you quit your job, James Altucher, TechCrunch

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Categories: Disruption, Future of work

Author:Chris Taylor

Reimagining the way work is done through big data, analytics, and event processing. There's no end to what we can change and improve. I wear myself out...

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2 Comments on “Disruption is both the cloud and silver lining”

  1. Sean Smith
    February 12, 2013 at 11:08 am #

    I love this line:
    “The path to wealth has become less about those lucky to escape the middle class through hard work, promotion and investment and more about the ability to disrupt.”

    Rule-breakers unite! Seriously, disruption is totally key. Every major change allowing human evolution starts with disruption- Boston Tea Party, Carterphone, School vouchers, mass communications (internet, cellphones, Steve Job’s smartphone revolution), the list goes on and on starting from the beginning of man’s history.

    Even our own stupidity creates disruption- the master controllers sold bunk about hemp being so evil (thanks cotton industry) but because we spent and over compensated public employees with lavish pensions (and a dozen other factors), the need for tax revenue is finally felling many old stigmas (gambling, pot, jail time for minor offenses).

    A recent meetup hosted by NetSquared in Seattle had speaker Joe Mirabella (http://www.joemirabella.com) talking about progressing past the petition to affect change. The NGO folks there were thirsting for techniques to achieve change. Much of the types of changes required for a better world involve disruption – disrupting graft, middlemen, pirates, terrorists, bad funding mechanisms, disrupting our apathetic tendencies (flattening the commitment curve).

  2. February 12, 2013 at 12:27 pm #

    Peak jobs has nothing to do with automation, the Internet or the cloud. The issue is wealth distribution and the fact that more and more of the worlds resources are held by fewer and fewer people.

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