Investing in what will become our scarcest resource: us

Today’s digital revolution is being built on an industrial infrastructure.

The first industrial revolution unlocked economic growth and better lives by augmenting our muscles with machines. Now, machines are augmenting our minds, so we must prepare people for a world that focuses on what makes us human. As artificial intelligence, automation, machines, and robotics become more common, humans will become the scare resource, so we must invest in people.

Humans create, learn, trust, connect, make, dream, and love. These are the attributes of successful entrepreneurs today, but they will be the necessary attributes for everyone to achieve economic independence in an interconnected, digital world.

By preparing people for a world where their economic independence is connected with their ability to work under ambiguity, we can reverse the decline in business dynamism. Simply put, we must change education and training to empower everyone to be entrepreneurs even if they never start a business.

A new American Dream

Technological progress has fundamentally changed work. This includes tasks, arrangements, firm boundaries, meaning of job, transactions costs, etc. We should re-imagine the American Dream as empowering everyone to take ownership of their economic independence.

It starts with education. We must change the way we instruct students and train workers as we transition from a hierarchical and structured workforce into one in which self-motivation (entrepreneurialism) determines success. Not everyone will need to incorporate a business, but everyone must have entrepreneurial skills to navigate the new economy.

The workplace will require advanced degrees and a specific set of skills. By 2020, 65 percent of jobs will require a post-secondary credential. Innovation across the education system is essential to prepare not just a fortunate few, but all students for the jobs they will take and create to meet the needs of a job market that has already changed, and will be almost unrecognizable in the next 20 years.

Dream Jobs

Yes, technology will destroy jobs, but it will also create new jobs. In fact, there is strong reason to suspect that this will be a net gain of new jobs, albeit very different jobs. Jobs we haven’t dreamed of yet. Jobs that will require us to leverage our humanity as technology continues to drive this changing workforce.

There are multiple estimates (McKinsey, OECD) that the majority of jobs will see 30-70 percent of their jobs automated by technology. Furthermore, research indicates (OECD) that job growth has taken place only for low-skill and high-skill workers, while middle-skill jobs have declined. Wages are stagnant or declining for low- and middle-skill workers while rising for high-skill workers. Plus, workers who are most likely to have their jobs (or large parts of their job) automated are also the least likely to receive training.

So, let’s not think of the future of work as firms and jobs, but as people and work. This will force us to let go of the notion of traditional full-time jobs and the inflexible infrastructure of health care, retirement and status tied with it. This approach presents a model where technology can replace us, but also empower us by augmenting human activity.

Dream of a future created equal

“The future is already here – it’s just not evenly distributed.” –William Gibson

Despite macroeconomic indicators reporting positive, albeit lackluster growth for the nation, the digitalization of the economy across a very wide spectrum is polarizing. Rural America, for example, isn’t necessarily feeling the glow of a rising Dow. Nor are those who face systemic barriers to economic success such as minorities, women and other under-represented groups.

Certain firms and industries are digitizing at much faster rates than others. Adoption rates vary substantially, which further complicates predicting how technology will change work and entrepreneurship.

Traditional economic measures are no longer adequate indicators. The local economy (metro ecosystem) is a more relevant unit of analysis to understand declining dynamism and identify the specific barriers to job creators. This is why it is ever-more important to understand the implications for entrepreneurship in this future economy. More specifically, the new nature of entrepreneurship.

Technology has made the activity of starting and scaling a business inherently different than it used to be. Fewer jobs are created as companies are able to reach massive scale in terms of revenue without having to scale employment in the same fashion. On the other hand, new industries open and entrepreneurial opportunities become more widely accessible through platforms that lower barriers to entry. The new nature of entrepreneurship relies on more people willing to make jobs.

Our future economy depends on removing barriers to welcome and support more diverse job creators. Additionally, low-wage and low-skill workers must be part of the conversation in developing functional local entrepreneurial ecosystems.

The fate of a new American Dream resides squarely at the intersection of entrepreneurship and education, and the future of work is exactly that. Today’s economy is creating a tremendous amount of wealth, but it is increasingly shared unequally. We must empower the thinkers, dreamers, and doers to pursue economic independence to build stronger communities and design a future for humans in a digital world.