The article ends by quoting me:

Futurist Ross Dawson says the average weekly wage increased in line with labour productivity up until the early 1970s.

“Since 1973, wages and productivity have diverged,” he says. “Wages have essentially plateaued, even while the productivity of labour has risen.”

At the same time, corporate profitability has consistently increased. “Companies are taking a larger proportion of the value created, using technology, new organisational structures and taking out middle management,” Dawson says.

“More value has been created per unit of work, but this has not flowed through to wage increases.”

My quote referred to the US economy, where the divergence between productivity and wages has been particularly pronounced for the last decades, with just a 9% increase in real compensation over four decades while productivity rose 72%, as illustrated in the chart below.

Source: Economic Policy Institute

However the same trend has been long evident across most developed nations, as shown in this OECD data.

Source: OECD

While the data shown in the data is not very recent, the same trends have continued. In a handful of developed countries such as France, Finland, and UK, productivity and wages have not significantly decoupled, pointing to a larger divergence in other countries.

Another absolutely critical aspect of this chart is that average wages are increasing considerably faster than median wages, a point I made to the journalist interviewing me, though this didn’t make it into the article.

Essentially this means that there is increasing disparity between high earners and low earners, a worrying trend that has been in place for some time.

Part of this is being driven by automation displacing jobs and the growth of low-paid service jobs, driving an increasing polarization of income.

This helps frame the concept of ‘post-capitalism‘, in seeking to create a system and society in which those creating value are adequately rewarded, rather than the increasing divergence we are currently experiencing across nations.

The divergence of labor productivity (read: value creation) and wages, overlaid with increasing polarization of income, are already leading to social fragmentation.

Especially as technological disruption impacts work and industries, organizations, governments, and all of us need to work to mitigate these trends that, if extended indefinitely, will tear society apart.

Regarding Bitcoin:
When I was in financial markets I learned about the very plausible “perverse market theory” – the market acts to hurt the most people the most – draws the suckers in, then wipes them out, gives them hope, then tramples on them.

Many are going to get hurt.

— Ross Dawson (@rossdawson) December 8, 2017

I was later asked for more information about perverse market theory, and after digging around I have drawn a blank. The term “perverse market” is usually used to refer to unintended or unanticipated market responses, but that is a different meaning from the one I referred to here.

Perhaps my memory fails me on the concept’s name (let me know if you can instruct me on this!), but the idea really struck me when I heard about it in my early career working in financial markets.

Do markets want to hurt people?

The idea of perverse market theory essentially anthropomorphizes the markets, attributing it intent, not dissimilarly to how Kevin Kelly describes directional behaviors in the development of technology in his book What Technology Wants.

Of course a financial market does not have intentions. However its movements often do effectively hurt market participants, drawing increasing numbers of unsophisticated investors into speculative asset bubbles, giving people hope and getting them to buy more when prices bounce on the subsequent fall, and generally suckering people into extreme market mis-timing.

The manifestation of greed and fear

This makes sense in that a market is in fact an aggregation of human behavior, and specifically an aggregation of the primal emotions of greed and fear. As such its fluctuations are an expression of human emotion.

Greed pushes up prices which attracts increasing degrees of greed, meaning most purchases are made when prices are too high. When things go awry the fear is compounded, pushing down prices so that sales are made below true value, with bounces along the way allowing human fallibility and cognitive bias to weak the most damage.

It is an valid point that algorithms are increasingly driving markets, however these are all overlaid on the underlying human behaviors that drive markets, only adding variations, not fundamental dynamics.

Crypto-currencies have become almost purely speculative assets

Which bring us to Bitcoin and crypto-currencies. A number of people responded to my tweet saying that Bitcoin is entirely unlike traditional financial assets.

It is true that crypto-currencies come from a completely different intent to existing financial assets, and are substantially different kinds of assets.

However once people start to treat an asset as a speculative investment, its behavior will be exactly the same as any other asset, be it shares, property, or tulips.

Only a tiny minority of people today are buying Bitcoin for transactions. In fact it is now being used less for financial transactions – which is what it was created for – due to its volatility and increased transaction costs, with one major online sales channel Steam stopping accepting Bitcoin earlier this month.

As such Bitcoin today has become almost purely a speculative asset – a complete perversion of its original intent.

The true value of crypto

Vitalik Buterin, the founder of Ethereum, last night tweeted a thread beginning:

So total cryptocoin market cap just hit $0.5T today. But have we *earned* it?

— Vitalik Buterin (@VitalikButerin) December 13, 2017

(Click on the link to see the full thread)

His conclusion was that crypto-currencies have created real social value, but nothing like the financial asset value attributed to them.

As Bitcoin creator Satoshi Nakamoto, Buterin designed his crypto-currency to create “real” value, not financial value. The two have become fundamentally misaligned through speculation.

The future value of Bitcoin

Financial analysts refer to Bitcoin going through a “price discovery” process, fluctuating as we find what its “true” value is.

When I was faculty on a Singularity University program a few years ago, Bitcoin Foundation President Brock Pierce was asked what he expected the value of Bitcoin to be in five years (it was around $400 at the time). His answer was “either zero or $50,000”.

Thinking in terms of scenarios from today, it is certainly possible that the long-term value of Bitcoin will substantially exceed $100,000. This could happen if it eventually becomes a widely used currency, or if it is perceived as a store of value.

It is also possible that the long-term value of Bitcoin is significantly less than it is today, with the recent spike proving to be a classic asset bubble that will go down in history.

It is impossible to know today. I am not fundamentally pessimistic about the long-term value of Bitcoin. However its extreme volatility today is making that less likely.

People will get hurt

Which comes back to today’s bubble. It is frightening to see highly unsophisticated people pulled into buying Bitcoin with absolutely no idea what they are doing. Some of them have done well, and some of them may continue to do well.

But markets often hurt people, particularly those driven by greed, which is the only way to describe the motivation of the latecomers to the Bitcoin party.

Whatever happens, many will get hurt.

And the really sad part is that all this is taking away from the dream and the potential of Bitcoin and crypto-currencies.

These themes were explored by leading futurist Ross Dawson in his keynote at the 2016 Ericsson Services Forum in Mumbai. Dawson’s talk related to the event theme of “Turning Wants into Wows” by discussing how organizations can create value in a connected world through harnessing the power of networks, consumer expectations, integrated systems, and unique branding. The full keynote is shown in the video below.

Here are four key insights drawn from Dawson’s keynote at the forum.

1. Networks are driving change and transforming the structure of the economy

Today, all layers of our lives are becoming intricately networked, changing the ways in which value is created. As Dawson told the forum, we have shifted to a society in which “the unit of value creation in the economy is now the individual, as they are connected, as they are able to share and create value”. Consequently, he asserted,

“The network is the birth of the global brain: we are collectively becoming something beyond ourselves.”

What does this mean for organizations? Firstly, that there is an explosion of possibility and opportunity as more and more of the things around us become connected. From the cloud to crowdsourcing to the Internet of Things, a social trend towards openness is shaping technology, which is in turn reshaping social attitudes. This cycle is fuelling a networked economy in which scale-free networks are growing, creating winners and losers.

Winners such as Uber and Airbnb exemplify the power of crowd sharing and how “social change is as vast as technological change”, like Dawson said at the forum. As a result of social change, organizations are grappling with rapidly changing consumer expectations, affecting how they understand and approach innovation, business structures and strategy.

2. Consumers expect more on every front

Fuelled by the vast possibilities of technology, “Our expectations for everything are going forwards, not backwards,” said Dawson. “We expect more on every front.” Here are some of the points he raised about consumer expectations:

We expect immediacy. In 1998, with dial-up Internet, you could download a webpage in approximately one minute. In 2017, ten seconds is too slow for most of us to wait.

We expect to participate. The pervasiveness of social media has put consumers “inside” and behind information as sharers and co-creators, critics and influencers, empowered in a networked economy.

We expect choice. We subject our demands for features such as speed, functionality, price and efficiency to intense comparisons both before and after purchasing.

We expect beauty. Even enterprise technology is now commonly scrutinized for the beauty of its user interfaces.

We expect world-class products and services. Our standards for quality are on the rise, driven by our knowledge of the competition, what other people are receiving, and our desire to have the best experience possible.

3. Aligning internal and external systems can drive value for customers

In order for organizations to fulfil and exceed consumer expectations, Dawson emphasizes:

“The way in which you interface with your customers, or the world at large, needs to absolutely mirror and be integrated with the way you work internally.”

This is vital because the dividing line between the outside and inside of an organization is blurring, partly due to open data and public expectations around transparency. Consequently, organizations should aim to be “extraordinarily well networked”, Dawson said, with their culture, connections and idea flow integrated in networks that drive value for external customers. This process can also promote efficiency and innovation, as well as clarify brand values and messaging.

4. Organizations must be unique to succeed

In a fast-paced world of widespread disruption, the least performing and best performing organizations are growing in divergence. Building on the ideas of Andrew McAfee and Erik Brynjolfsson in Race Against the Machine, Dawson declared:

“All organizations are becoming more and more different…Now we are seeing the potential for the merging of the technology and culture and history of an organization to create something that is absolutely unique. And that is not just an opportunity, it is an imperative.”

A unique organization, in Dawson’s view, “cannot be copied by others however much they look at it, because they are not able to embody what it is”. In order to achieve this, leaders must help their organizations to transcend the boundaries and become as flexible as their environment. Otherwise, according to the Law of Requisite Variety, organizations and their employees will simply be buffeted by the winds of change, unable to take a lead and shape the world around them.

Therefore, in order to create a unique vision and vibrant future for their organizations, leaders should understand how networks impact the flow of innovation and value creation. As Dawson wrote in his book Living Networks, we have shifted to a society where, ultimately, “value is created by the network, not by the organization”. Those organizations that create value across systems and communities will be best equipped to benefit from—and contribute to—our connected world and its future.

Images: Adapted from Polychorosket and Khalid Albaih

The Global Economic Policy Uncertainty Index is currently the highest it has been since the beginning of the period analyzed starting at the end of 1996.

Not surprisingly the US, EU and UK were at all time highs at the most recent index point on October 31, 2016, just before the US elections and with no clear direction post the Brexit vote, but Chinese economic policy is also highly uncertain.

Uncertainty should be a critical input into decision-making, yet there have been no good measures of uncertainty available. Stockmarket volatility is a proxy for economic uncertainty, but is often driven by market factors more than macro-economic outlook.

The Global Economic Policy Uncertainty Index only covers a portion of business and even economic uncertainty, but when economic policy is highly uncertain, that uncertainty flows through to the broader economic outlook.

Analysts at French bank Société Generale have pointed out that while sovereign credit spreads have usually closely tracked the index, they have decoupled to an exceptional degree over the last months, leading to SG’s (often bearish) global strategist Albert Edwards describing this as “one of the scariest charts I have seen for a very long time”.

As remarkable are the increases in US and some other stockmarkets in the face of extremely high uncertainty on not just economic policy, but also trade and geopolitics.

Global uncertainty seems unlikely to abate in the near-term, though it is feasible that the Trump administration will move to a degree of predictability over the next half-year, and we will see more clarity on not just Brexit, but the broader implications for the EU.

One of the values of the index is simply allowing decision-makers to frame economic uncertainty as a factor in their strategies and decisions, and to support the use of scenario planning and other foresight tools to make effective decisions in uncertain times.

It was a very broad-ranging interview, however one of the topics I touched on was the concluding point of my keynote that afternoon, on governments as platforms.

I have written before about issues such as the role of crowdsourcing in government, how crowdfunding could shift the shape of taxation and government, how we can envisage the future of government as a solution enabler, and the value of a framework for the Transformation of Government.

As I have recently spent increasing time and attention on platform strategy, it has struck me that “government as platform” provides a clear and compelling vision for the future role of government.

The current view of government is of a set of institutions that take money from citizens in the form of taxes, and spend it to create social value. One of the most fundamental problems with this model is that governments are indubitably highly ineffective and inefficient at achieving the desired outcomes with the resources they have.

Governments should not be doing work that they do very poorly. They should be facilitators, enablers, catalysts, and orchestrators of value-creating interactions between citizens.

The starting point needs to be agreeing and understanding the social and economic outcomes we want, which can still happen through a political process that may not be dissimilar to current structures (though the shift to true participatory democracy is another important topic, to return to another day).

When we know what outcomes we want, we can design platforms that bring together participants to create those outcomes in the most efficient manner possible.

As a small example, HireUp enabling people with disability to find and work with their own support workers. The platform is able to enable the desired outcomes at substantially lower cost than any government body has been able to do. Moreover, since it enables people to find each other, it is far more likely to bring together people who will get on well with each other, rather than be randomly matched.

The idea of government of platform is by no means new. Tim O’Reilly has written and spoken about the idea at length, including an excellent book chapter on the topic. The UK government is currently discussing the topic, though largely from a narrower technological perspective.

Now that platforms models such as Uber, AirBnB, PayPal, Upwork, Tripadvisor, Lending Club and many others have not only helped people understand what platforms are, but also for us to develop far better principles for effective platform strategy, we are in a far better position to build not just the metaphor, but the reality, of government as platform.

The potential is exceptional.

I spent some time giving the partners current perspectives on both disruption and innovation in professional services, with the rest of the time spent facilitating the group in generating and prioritizing initiatives to drive the members firms’ future.

I ran through the domains in which they can enhance their business models and performance. However in professional services probably the most important domain is service delivery, in which extraordinary possibilities for innovation have opened up in the network economy.

I have just recalled that eight years ago I co-authored a white paper for SAP titled Service Delivery Innovation: Creating Client Value and Enhancing Profitability. While it is not recent, the issues I covered are still completely relevant today, so I thought I’d share a section from the white paper here:

Characteristics of Successful Service Delivery Innovation

Professional services firms that excel at service delivery innovation demonstrate six key characteristics:
• A networked organization
• Flexible workflows
• Global sourcing
• Client and supplier collaboration
• Continuous innovation
• Enabling technology

A Networked Organization

Professional services organizations are ultimately collections of people: deeply specialized professionals who bring together their expertise to create value for clients. As such, the relationships and networks that link individual professionals are at the heart of the organization. Siloed professional organizations are ineffective. Successful organizational networks rely on human capital policies and technologies that quickly and effectively locate expertise, support project teams, and encourage collaboration throughout the organization.

Flexible Workflows

Streamlined and effective workflows are a vital component of service delivery innovation within a professional services firm. However, this workflow is markedly different from the workflow required by a routine operation, such as processing an invoice for payment. Workflows within innovative professional services firms need to be readily reconfigured to adapt to different projects, situations, and emerging market needs. Workflows need to support the firm’s efforts to identify talent, create marketplaces, establish pricing mechanisms, enhance client relationships, and integrate quality assurance processes into workflows. The systems and processes in place should support the introduction of new services and products across the organization.

Global Sourcing

Both internal and external sourcing strategies are critical to the success of a global professional services firm, and work and resources need to flow across boundaries. To succeed at global sourcing, professional services firms must undertake several initiatives. First, they must consistently implement highly effective processes for identifying and applying internal talent. Secondly, firms must establish an approach for drawing on external talent as soon as required. Professional services firms must master this complex activity in order to compete in a global market influenced by low-cost labor and emerging pools of expertise. Firms need integrated workflow technologies, available collaboration spaces, appropriate organizational design, and a professional culture that supports work across borders. Firms must also adapt and mesh the work and social attitudes of its home country with the very different cultures of colleagues and clients on other continents.

Client and Supplier Collaboration

If a firm provides “black box” services – characteristic of no collaboration with clients – it will rapidly become a commoditized service provider. Professional services firms need to effectively and continuously collaborate with their clients to build greater value and lock in clients for the long term. Firms must also achieve outstanding collaboration with their talent suppliers. In a modularized economy, receiving the greatest value from external talent requires bringing them into the firm’s processes rather than contracting for work piecemeal. To enable external collaboration, professional services firms can use technology that allows remote professionals to view and participate in key business processes.

Continuous Innovation

Service delivery innovation is an ongoing process; it must be embedded into the way a professional services firm functions and develops new products and services. Some initiatives – such as implementing global processes, developing client collaboration, or creating a more networked organization – are ongoing as well. There is always room for improvement. Other strategies, such as productizing services, may evolve in stages, building on existing capabilities and firm maturity. Most importantly, everyone in the company, from the executive team on down, must continually seek better ways to deliver services.

Enabling Technology

Technology is a key enabler of service delivery innovation – as shown by the overwhelming response of 93% of the professional services firms surveyed. Each of the characteristics of service delivery innovation discussed so far requires a technology platform that is modular, flexible, and reconfigurable. In addition, this platform must integrate easily with external systems and processes to support client and supplier collaboration and to draw on global best-of-breed resources.

You can read the full white paper here.

Below is a video excerpt of the opening minutes of my keynote.

You can see a video of the complete keynote here, and the static presentation slides here (though much of my visual presentation was video).

A post in INMA’s Keynote blog, Creator of “Newspaper Extinction Timeline” lays out industry’s optimistic future, described the messages I brought to the audience.

The entire news media industry was buzzing in August of 2010 after Ross Dawson released his predictions for when newspapers worldwide would cease to exist.
…
“This is one of the only predictions that I’ve made,” Dawson said at the INMA World Congress in New York City last month. “As a futurist, I believe predictions are often not worthwile because nobody knows the future. The future is unpredictable. Yet the reason why I did make these predictions was to provoke, to be able to wake people.”

If he provoked people to consider why they disagreed with the timeline, then “I’ve served my purpose.” His intention was never to necessarily be right — although he might be closer than you’d like to think.

“This is about news on paper. I think the dynamics of that are not bright. But the point is about the news overall, the future is extraordinarily bright.”

Dawson will revise his predictions at the five-year mark later this year.

We are working not just on the revised newspaper timeline, but also on developing research, content, analysis, and frameworks on the far more important topic: the future of news. Keep posted for a lot more on how we can create an extraordinarily successful future for the news industry.

Government was designed to be institutional, providing stability to nations. Yet that design and structure means that governmental institutions are generally very poorly prepared to change as required in the face of extraordinary shifts in society and business.

I have been drawn more into the future of government over the last few years, among other activities creating and sharing my Transformation of Government framework with a variety of groups of senior policymakers.

William Eggers and his team at Deloitte have distilled some excellent analysis and insights into the future of government at their Government 2020 site, which includes an overview of drivers and trends shaping government, and views on the implications across domains of government.

The following slides and video provide nice high-level overviews of the work.

The other resources on the website are well worth a look, including the Drivers and Trends sections.

At the time we did want to translate it into Arabic, however this proved difficult as it requires the Middle East version of Illustrator; most versions of Adobe CS do not support Arabic text. Fortunately we were recently approached with an offer to do a translation into Arabic, supported by the NGO Internews.

When I recently did the keynote at Arab Media World in Dubai on Creating the Future of Arab Media I noted that one of the defining aspects of Arab media is the exceptional uptake of social media in a number of Arab countries, by some measures the highest in the world.

As such the social media familiarity gap between users on the one hand and companies and governments on the other is extremely high. Hopefully this framework will prove useful. As always feel free to pass on the framework to those who might find it useful.

Click on the framework image to see the full pdf.

Pew Internet has just launched a very interesting report AI, Robotics, and the Future of Jobs which delves into this topic by drawing on almost 2,000 experts who responded to the question:

The economic impact of robotic advances and AI — Self-driving cars, intelligent digital agents that can act for you, and robots are advancing rapidly. Will networked, automated, artificial intelligence (AI) applications and robotic devices have displaced more jobs than they have created by 2025?

They distilled the responses into positive and negative perspectives as well as points of agreement:

The view from those who expect AI and robotics to have a positive or neutral impact on jobs by 2025

JP Rangaswami, chief scientist for Salesforce.com, offered a number of reasons for his belief that automation will not be a net displacer of jobs in the next decade: “The effects will be different in different economies (which themselves may look different from today’s political boundaries). Driven by revolutions in education and in technology, the very nature of work will have changed radically—but only in economies that have chosen to invest in education, technology, and related infrastructure. Some classes of jobs will be handed over to the ‘immigrants’ of AI and Robotics, but more will have been generated in creative and curating activities as demand for their services grows exponentially while barriers to entry continue to fall. For many classes of jobs, robots will continue to be poor labor substitutes.”

The main arguments given by those supporting a positive outlook were:

Argument #1: Throughout history, technology has been a job creator—not a job destroyer

Argument #2: Advances in technology create new jobs and industries even as they displace some of the older ones

Argument #3: There are certain jobs that only humans have the capacity to do

Argument #4: The technology will not advance enough in the next decade to substantially impact the job market

Argument #5: Our social, legal, and regulatory structures will minimize the impact on employment

The view from those who expect AI and robotics to displace more jobs than they create by 2025

An equally large group of experts takes a diametrically opposed view of technology’s impact on employment. In their reading of history, job displacement as a result of technological advancement is clearly in evidence today, and can only be expected to get worse as automation comes to the white-collar world.

The negative view was based on two major points:

Argument #1: Displacement of workers from automation is already happening—and about to get much worse

Argument #2: The consequences for income inequality will be profound

Points of agreement

There were however a number of points of broad agreement:

Point: The educational system is doing a poor job of preparing the next generation of workers

Point: The concept of “work” may change significantly in the coming decade

– Possibility #1: We will experience less drudgery and more leisure time

– Possibility #2: It will free us from the industrial age notion of what a “job” is

– Possibility #3: We will see a return to uniquely “human” forms of production

Point: Technology is not destiny … we control the future we will inhabit

I have addressed almost all of these points in my writing and speaking, including on expanding and replacing human work, the humanization of work, the replacement of jobs, broader views of the future of work, and many of the issues in our future of work framework (now available as a video).

One of the greatest dangers, as important as the potential for dramatic rises in unemployment, are the powerful forces of polarization in work. The risk of an increasing social divide between the haves and have-nots of rewarding work are immense.

Yet the final point made is the most important: we can shape the future, and make the choices that are more likely to lead to a world in which work is human, rewarding, and taps the true potential of many more people than it does today.

It is absolutely critical that all of us, and certainly all business and government leaders, understand the scope of the issues at stake. That understanding must help us act to shape better futures for all us in a dramatically changing world of work.