With the end of the Great Stagnation and the beginning of the Great Acceleration/roaring 20's, it's useful to consider relative status changes. My general framework is that we have moved from a world that prioritizes efficiency gains to one that prioritizes innovation gains.
Efficiency gains make small improvements in output and quality from the same (or similar) inputs. Think about how cars get slightly better every year. Innovation gains are about creating new production mechanisms and new products, think a flying car.
With the compounding impact of the internet, and new technologies like AI, biotech, aeronautics, and more, it's useful to think about relative changes in status of institutions and structures that define our life. This is my first stab at it.
In a world of efficiency gains, grinding to increase output of 2% annually is success. Institutions are built around those marginal increases. Labor is on some margin interchangeable. A world of innovation gains looks different. The world is, by definition, more uncertain. Institutions must be open and flexible, allowing for disruptive innovation to take place. Talent becomes paramount.
Increase
-Events
-Brexit
-Community
-Talent
Decrease
-Universities
-Government
-Consulting
Events are increasingly important as innovation requires creating new recipes and discovering new products. That is best done by bringing smart people with different backgrounds together and letting them work.
The events of the past were single industry snooze fests focusing on incremental gains. The events of the future are information dense, multidisciplinary, creative phenomena. Bringing people together generates compounding returns.
Brexit has risen in status. The EU is good because it has a large market for goods, services and labor. The EU is bad because it is a sclerotic, poorly governed, anti-innovation regulatory block.
Efficiency gains dominated the last decades making the EU important. Innovation gains will dominate the coming decades making the EU net negative. The UK responded to covid better and is doing better than the EU on AI.
Communities define ideologies and memes. In an era of efficiency gains, communities were flattened as there was one, semi-obvious, way to interpret the world. In a world of innovation gains, how to interpret important changes is up for grabs. Communities that build frameworks for understanding will have an outsized impact.
The giant sorting mechanism of the internet is already spilling over into the real world. The rationalists and EA’s have had large ideological impacts. Now Progress Studies VibeCamp, Zuzalu, e/acc, are emerging to define part of the narrative.
The nature of Talent has changed. Tech showed that talented young people could have tremendously outsized impact at a startup. Rather than working decades in the trenches of investment banking, consulting, or politics, startups allow talent to take executive positions early and capture huge amounts of wealth. The impact of talent will increase as well as the rewards from spotting talent.
Universities continue to find creative ways to embarrass themselves. Prestige spirals can start slow, then happen all at once. The Thiel Fellowship feels increasingly obvious, instead of prescient like it was at launch. I won't be surprised if the preferred educational platforms for our elite look substantially different in 20 years.
In 2003 the American government and a large portion of our population thought we could 'shape our own reality' and remake the Middle East in our image. We were of course wrong, but the optimism and confidence feels almost entirely alien.
Europe is a retirement community. China is facing a property meltdown that will make 2008 look like a cakewalk. America is in the strongest position and can't even get a handful of allies to keep the Red Sea shipping lanes open.
Context is scarce. Modern consulting, McKinsey, BCG, etc, is built on context which is increasingly out of date. Consulting, meaning hiring someone with domain specific expertise for contract work, won’t go away. However, it’s hard to imagine McKinsey and BCG continuing to occupy such a significant place in status hierarchies when they are unable to adapt to rapidly changing contexts.
