I believe (and hope) that the war as we know it is fundamentally an outdated concept. Jurisdictions (like Miami) will compete to attract talent, but that is not good news for unskilled labor, like gig workers.
- When we were fighters, we were fighting over herds of game and their territory,
- Then, the agricultural revolution came. The most important asset became fertile land, and the wars were fought over that.
- After the Scientific Revolution, we learned to process raw resources like metals, coal, and later oil.
- We are now experiencing the digital revolution. The new resource is going to be talent and talent is not easily captured in traditional warfare.
| Value | After Revolution | What are wars fought over | Countries that benefit |
|---|---|---|---|
| Fertile land | Agricultural revolution | Land & peasants You want to conquer easily arable land | Fertile Crescent, Mediterranean |
| Mined Resources (Metals, Oil) | Scientific Revolution | Resource-rich land | Colonial powers, plus resource-rich countries like Germany and the USA |
| Talent | Digital revolution | No wars, but hostile takeovers of talent | Anybody who started educating in STEM like crazy 10 years ago |
Two classes of employees.
Remote Work transition is certainly accelerating, but not everybody is benefitting from this situation. It has also lead to a new sort of class divide:
- “Talent” – highly skilled, and specialized experts that are constantly honing their craft and navigating the changing demands of the job market. During lockdowns, these people are known as the “Zoom Class” (because they can ride out the pandemic while working over zoom).
- “Gig workers“, who we treat as a utility, and depend on to provide us with the endless stream of Amazon purchases and Uber Eats orders. Also known as the “Heroes“
Nick Rimedio, who serves on the West Hollywood Chamber of Commerce, said the lockdowns had widened a class divide. While quarantine has been almost relaxing for what he called the wealthy “Zoom class,” it has been a nightmare for the poor and middle class who have storefronts or work service jobs in businesses in the area, he said.
New York Times
Talent is the new Oil
Automation is coming after our jobs, and I have written before how to protect yourself against that. But in the meantime, workers take time to train. With technological progress, complexity in many industries is unfathomable and requires highly trained labor. Which takes time, and can be rushed only to a point.
Training somebody to do basic programming tasks can be done in 6 months, but the way of thinking about the world needed to succeed in the information economy takes years to acquire.
We are post-scarcity on almost everything else, and I believe the talent will be the new frontier.
On the commodity metaphor
While drafting this newsletter, I wanted to compare “Gig Workers” to commodity and “Talent” to differentiable products. But I don’t think that’s entirely correct. There is a huge pool of the talent group that has commodity-like properties.
The majority of tech workers are uniform and replaceable enough. I’m sure that’s the case in many other specialized fields – creme de la creme will be irreplaceable, but the others will eventually be automated away.
The promised talent wars
War is a bit of a clickbait, but various initiatives around the world are trying to capitalize on the location independence of the “Talent” group.
- When you bring together talented people who like to create things, Startups & new industries will take care of themselves. We have seen this in Florence, Venice, Paris, and later New York and Silicon Valley
- These people tend to be compensated well (an argument can be made that unfairly so), which means higher tax revenue
- They also have more discretionary income, some of which they will spend locally,
- Children of educated&motivated people tend to turn out the same way. This is a flywheel for the community.
Miami
For a while now, Silicon Valley is downright hostile to the tech industry, behaving like an abusive partner that took your passport. Lockdowns took away any benefit of staying in San Francisco (meetups, conferences, and chance encounters), and multiple tech giants have adopted Remote Work (latest big news is Spotify pointing out that “Work isn’t something our people come to the office for, it’s something they do”).
Francis Suarez, the mayor of Miami jumped on the chance of turning the city into a tech hub and his efforts are inspiring. He is personally helping tech influencers move to his constituency, and now he’s reaching out to SV employees by the means of a billboard. In San Francisco.
“Thinking about moving to Miami? DM me”.
I’m not able to put together a coherent sentence about how transformative can it be to have supportive, effective, and accessible local legislation. Books will be written about the emergence of the Miami tech hub.
It’s not only about talent. It’s a fight for taxes
Municipalities seeking tax revenue is of course nothing new. But traditionally, the way to do that was to create jobs, which would both provide income to residents and attract talent.
Remote Work is changing that. Having a job in one place, and living in another is now possible, and something I myself practice. But in this new world, how do cities fight for taxes? Are they even entitled? The problem is already here.
Japan’s home tax
Every country with a “superstar” city has this problem: smaller towns are investing in family-friendly infrastructure and education, only to see its citizens move to the one superstar city and continue paying taxes there.
Japan has an interesting solution, called ふるさと納税 (Furusato Nouzei or, roughly, the Hometown Tax System). In an interesting quirk, a taxpayer can select a town at her discretion, and the towns started to compete on “gifts” they would send to incentivize choosing their municipality for the ‘donation.’ From Patrick Mckenzie:
The three farming communities we’re using all had a monthly subscription option for things produced locally, and they sound like e.g. “A rotating box of seasonal fruits produced in our town. Here’s the schedule: January, 500g of… February, a box of… The aesthetics of that are brilliant; fruit on our table will have come *from a place.* The economics are brilliant; probably half of the fruits are things we, like a typical Japanese family, wouldn’t generally choose to eat in a year.
For a while, cities even offered a “kickback” in the form of travel vouchers and other cach equivalents. Government had to put a stop to it in 2019. Read more in this essay and Tweetstorm for an incentive-exploration filled ride.
Specialized cities
Just as Japan’s towns are specializing in Wagyu-beef-for-tax-donation schemes, other cities are seeking to attract Nomads and professionals:
What will happen next?
Each of the revolutions outlined at the beginning of this post has shifted economic opportunities from incumbents to new countries:
- The agrarian revolution has brought prosperity to those with fertile land and water access
- The industrial revolution brought demand for steel, potassium, and eventually, oil, which meant prosperity for Germany and the USA
- The Digital revolution will shift the production centers to places abundant in highly educated and motivated workers,
Two countries in particular are well positioned to benefit from this new world order:
- China, which has a head start because the industry has already shifted here,
- India, which I’m especially optimistic about, because of their proficiency in English. Programming languages are all modeled after English grammar and English is already lingua franca. For better or worse.
Since I like having skin in the game, I’m investing in the Indian stock exchange. I started this thread on Reddit, and people shared great pointers. One thing I took away from GameStop is that Reddit has sold financial advice.
While the world order will be reshuffled, cities will specialize in attracting a certain kind of worker, with unique preferences. The concentration of artists and professionals in cities like Florence has led to Renaissance, and I hope it will lead to something good this time as well.
And I also hope we’ll find a way to trickle down these benefits to gig workers too. Wars may be over, but revolutions can turn out bloody too.