We’ve talked about the idea of a jobless recovery leading to a long-term lack of jobs, but how about something even stranger — a jobless boom. Our buddy Alvis Brigis lays it out in a piece that is somewhere between blog post and manifesto. The salient points, neatly summarized by Alvis:
- American job losses will continue due to a convergence of big forces including offshoring and automation driven by accelerating change. Service sector jobs will generally not return.
- Social web business models are flourishing and point the way to new jobs and efficiencies.
- A new class of Super Prosumer companies like Groupon are poised to explode and return more value to people, creating more jobs, but driving price points lower.
- We need to encourage the development of Super Prosumer companies on U.S. soil across various industries and become a Prosumer Nation.
Actually, “jobless” boom is not quite accurate. Alvis states that the very trends and technologies which are eliminating jobs are simultaneously fueling the growth of social networks and a whole new economy around them. Unfortunately, that economy is going to have to boom, boom, boom — which it may well do — to generate the kind of economic activity we’ll need to get all those who’ve lost jobs back on their feet.
Even then, I’m not clear on what a “booming” prosumer economy looks like. How do we make our money? Our new infrastructure has to enable the creation of new value, extrinsic value. I don’t see how we can all make a living playing Farmville or clipping coupons. Somehow, that feels like an economy based on taking in each other’s washing.
On the other hand…
Some portion of the economy and the workforce will have to continue to be devoted to the production of actual stuff (unless / until we can each produce our own stuff.) Another large segment of the workforce will be devoted to adding value to that process. But in a prosumer model, everybody adds value, all the way down the chain. So as long as automation and new efficiencies are creating lots of stuff, while human beings create new ideas, content, ways of interacting — all of which add value — maybe we CAN have an economy where a signficant portion of the “workforce” makes a living playing games or clipping coupons.
This sounds crazy, but when we discussed these transformations a few months ago, we narrowed it down to a few alternative scenarios:
- A huge welfare state wherein the government pays us all to keep consuming.
- A booming corporate economy in which the vast majority of us work completely made-up and meaningless jobs* which the companies all support just to keep consumer activity alive.
- A massive depression in which rampant automation kills the majority of jobs and destroys the economy in the process
- A ”lucky break” scenario where we hit some form of equilibrium, allowing large numbers of human beings to continue to make a meaningful contribution to the economy and be rewarded accordingly
Maybe the Prosumer Nation model is one way of getting a lucky break. I certainly like the idea of people playing Farmville or clipping coupons for a living better than those other three possibilities.
Alvis has some thoughts on the success of Groupon, recently valued at around $6 billion:
This is a MIND-BOGGLING figure, especially for a company that many scoffed at not too long ago and that initially set out to “organize collective action around social or charitable causes”. Never before has a company reached $2 billion in annual revenue in just 2 years time. Never before has a company been offered $6 billion just 2 years into its existence (other than spin-off companies).
Particularly interesting is the trendline of valuations. Going back just one decade we can see acceleration at work. Youtube was purchased by google for $1.65 billion after just 18 months of existence. Farmville creator Zynga is said to be worth $5.5 billion just 3 years into its life. Secondary market shares of Facebook are reported to be trading at a value of $50 billion after 6 years. And now Groupon has claimed the crown of fastest growing company in the history of planet Earth. The speed at which a company can be organized and scale is clearly accelerating.
How far can that go? It’s hard to say. Robin Hanson makes the case that in the not too distant future, the acceleration of economic growth will provide us an economy that doubles once a week – or maybe even more rapidly than that.
Combine that prediction with the idea of a Prosumer economy and there’s a jobless boom for you — a future in which no one cares about whether they get to be famous for 15 minutes, because we each (and I mean every single one of us) get to own our own multi-billion-dollar startup.
Works for me!
UPDATE: More thoughts on all this from Will Brown.
*Insert obvious snarky comment about your own job here.
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