Issue #

Looking after Number One

We need early adopters to ‘Think of Number One’ and start building the Bigger Pie.

“We are living in tumultuous times and you need to actively take control of your own destiny.”

I’m finding it hard to think of a time during my life when everything feels so very much .... up in the air.

Yet I don’t think, en masse, we are taking it nearly as seriously as we should. Indeed we are in a strange world where those who are working on advanced technology are telling us one thing whereas politicians and the commentariat something else altogether.

The AI Revolution: Divergent Narratives and High Stakes

For example, at the recent AI Action Summit, in Paris, US Vice President JD Vance, in a hyper ‘go, go, go AI’ speech said:

“Finally, this administration wants to be very clear about one last point. We will always center American workers in our AI policy. We refuse to view AI as a purely disruptive technology that will inevitably automate away our labor force. We believe and we will fight for policies that ensure that AI is going to make our workers more productive, and we expect that they will reap the rewards with higher wages, better benefits, and safer and more prosperous communities."

I.e workers have nothing at all to fear from AI.

Meanwhile Marc Andreessen, CEO of Tech VC a16z, and one of theadministrations key advisors on AI, is actively investing tens of billions of dollars in AI companies building ‘Agentic’ systems whose primary purpose is substituting AI for human labour. He has also recently predicted that by 2034, the traditional 9-to-5 job will become obsolete, and that AI will inevitably lead to a collapse in human wages (a thousand-fold reduction in the cost of high-value professional services such as legal advice, medical diagnostics, and management consulting).

At the same Paris Summit, Dario Amodei, CEO of AI research lab Anthropic (who produce Claude) said, in a written statement:

“Time is short, and we must accelerate our actions to match accelerating Al progress. Possibly by 2026 or 2027 (and almost certainly no later than 2030), the capabilities of Al systems will be best thought of as akin to an entirely new state populated by highly intelligent people appearing on the global stage—a "country of geniuses in a datacenter" —with the profound economic, societal, and security implications that would bring. There are potentially greater economic, scientific, and humanitarian opportunities than for any previous technology in human history-but also serious risks to be managed.”

So Vice President JD Vance is publicly arguing the opposite of what those ‘in the know’ know. Now Marc Andreessen also argues that jobs obsolescence and collapsing wages is actually a good thing and will lead to huge economic growth because we’ll be living in a world of abundance where everything will cost next to nothing. So Vice President JD Vance might be riffing off that techno-optimism. But Amodei is more in line with how the AI industry generally speak about what is occurring - yes there are huge upsides but there absolutely are ‘serious risks to be managed’. Sam Altman of OpenAI, and Demis Hassabis of Google DeepMind have said the same.

One can criticise tech industry leaders for many things but one cannot accuse them of not being upfront about how fast they believe AI is progressing, or that they expect it to be deeply societally disruptive.

My belief is that one should be heavily discounting populist Politicians with bases to pander to, or CEOs following the ‘our people are our greatest asset’ scripts.

When those at the coalface of developing e ‘General Purpose Technology’ are telling you that they’ll soon have tools that can act autonomously, in multi step problem solving, it makes sense to believe them, rather than those massively incentivised to say ‘nothing to see here’.

Hence, ‘Looking after Number One’. (See *** below for exactly what I mean by this)

Historical Lessons

Two economic phenomena are worth bearing in mind.

The Jevons Paradox: Efficiency Gains and Resource Consumption

First, the Jevons Paradox posits that technological advancements which increase the efficiency of resource use can lead to increased consumption of that resource, rather than decreased use as might be expected. Essentially as things get cheaper we don’t spend less,we use more. This supports, in many ways, Andreessen’s techno-optimist approach; as the cost of intelligence (and energy) tends towards zero it will likely impact unit costs dramatically but will also enable us to have more... of everything.

The Engels Pause: Technological Upheaval and Wage Stagnation

But secondly, there is the ‘Engels Pause’. This refers to the period from 1790 to 1840 when British working-class wages stagnated while per-capita GDP expanded rapidly during a technological upheaval. This period was characterised by stagnant wages, rapid economic growth, increasing income inequality and major technological advancements. Think of the works of Charles Dickens, especially ‘Hard Times’ - they effectively captured the social and economic conditions of the period that coincided with this phenomenon.

So, whilst historically it IS true that we adjust to new technologies and they DO improve the lot of mankind, the period of transition can last a long time and be very brutal.

All things
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Shaping AI's Impact: The Role of Policy and Incentives

And as famed US Economist Daron Acemoglu wrote about, at length last year in his book ‘Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity’ it DOES NOT JUST HAPPEN. Society, and governments, have to be redesigned to make the most of new technologies. We have to set the incentives that drive the outcomes we desire. He uses, as an example, the fact that, from a cost point of view, the tax system in western economies highly favours investing in technology over labour. With very obvious consequences. Similarly the tax treatment of debt over equity.

The Imperative for Self-Investment

So ..... contrary to what many are telling you:

“We are living in tumultuous times and you need to actively take control of your own destiny”

Over time policies will change, economies will adjust, and (with mybiased hat on) eventually people will be suitably trained in how to leverage and make the most of AI. But in the meantime three things are going to be occurring:

Most companies will not be providing adequate training in AI.
Most people won’t bother to train themselves.
Many companies WILL be swept along by the stock markets love of layoffs (see all tech co’s performance for emphatic evidence of this).

All of which are very bad and/or short term wins at the expense of longer term paybacks.

Opportunities Ahead

They do however mean that a HUGE opportunity is arising. For those that do ‘look after number one’ first (I know it is not a robustlong term strategy) there is enormous opportunity to put clear blue water between oneself and one’s peers/competitors. Those people that understand how to marry human + machine, and how doing so will enable entirely new workflows, business models, and value propositions, have, I think, at least 12-24 months to maximise personal competitive advantage.

First by ensuring that, as an AI literate person, you’re not going to be on the chopping board, and secondly because such skills are and will remain, for a while, rare. Currently only circa 10% of people use AI on a daily basis. Even fewer have woven it into how they work and operate.

The AI Productivity Dividend: Achieving 3X Gains and Beyond

And the evidence is mounting about how much more productive they are. In a paper released last week from Stanford University (“The Labor Market Effects of Generative Artificial Intelligence”) they write:

“On average, workers that use generative AI to complete their task, they spend about 30 minutes working with a generative AI tool... Without the use of generative AI, workers estimate that it would take them about 90 minutes on average to complete the same task”

3X productivity is not to be sniffed at.

Reimagining Work: How AI Will Transform Business Models and Workflows

Personally I think 3X is just the start of things. I see people building agent type AI automations today that eliminate 80-90% of a workflow, but that are still in some ways automating the past. As one thinks through workflows it becomes increasingly obvious that the future trick is going to be doing things in entirely different ways. Just take meetings: we now have really good AI meeting assistants helping us transcribe, summarise and set up ‘to-dos’, but I often look at these and wonder why the meeting is happening at all. Most of what goes on could be automated, optimised and enhanced by AI systems working in the background. Once people really start focussing on ‘killing the irritant’ (and for most people endless meetings are irritants), we’ll see true change.

Conclusion

In my last newsletter I talked about the need to ‘Build a Bigger Pie’- the notion that AI will certainly lead to fewer people being neededto output a given quantum of work, and therefore without ‘a BiggerPie’ a lot of people are going to have nothing to do. With this newsletter I hope the message is clear - we need early adopters to ‘Think of Number One’ and start building the Bigger Pie. For their own short term security, but also because WE really do need to shorten, as much as possible, the adjustment period between now and the ‘end of work’.