Hi, I’m Azeem Azhar. I’m exploring how our societies and political economy will change under the force of rapidly accelerating technologies and other trends. You are reading the free edition of Exponential View.
🎨 This edition has been supported by our partner Masterworks
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Dept of the near future
🔑 Jack Dorsey of Twitter announced a small team at the firm would be exploring how to “develop an open and decentralized standard for social media”. Ultimately, Twitter would use the standard. Twitter, from its inception, had the feel of a product built on an open standard. I built my last startup, PeerIndex, on top of that early Twitter. The social network was a haven of innovation, thousands of radical apps sprung upon it.
But in August 2012, Twitter changed the rules. Ultimately commercial concerns, the need to lock-down the audience experience for the advertising model, forced a more traditional closed platform service.
Clearly, the Internet itself was built on an open platform which is why we use it, rather than GEnie or AOL. EV reader, Fred Wilson, explains his excitement:
The idea of turning Twitter into a protocol and allowing an entire ecosystem of applications to flourish on top of it is breathtaking in its ambition and importance.
Fred, an investor and board member at Twitter, powerfully made the case for moving to a protocol three years ago. My take is that such an approach, coupled with data portability and interoperability could kick-off a ton of innovation, and potentially innovation away from the excesses of surveillance advertising. But tweeting about it is easier than making it happen.
🤓🇪🇺 Don’t laugh. The European Innovation Council wants to become ‘Europe’s unicorn factory’ and it has €10 billion to make it happen. Jean-Eric Paquet, EU director for research and innovation, says the EIC is ‘creating a deal flow in Europe’ for deep-tech innovation, and hopes that other funds will want to co-invest. I’m broadly supportive of this approach. The state is a good investor of first resort in risky ventures, and co-investment models have proved successful in some markets, such as Germany with its High-Tech Gründerfonds. And the European Investment Fund has backed many successful European VC firms which in turn back more than 40 per cent of venture investments in Europe in 2014.
European investor, Joe Schorge, makes the case for why Europe is an attractive market. (Separately, many leading US firms are increasingly investing in European startups. And some of the most storied are actively hiring partners here.)
💯 ‘The death of Economic Man will be a balm to the soul,’ according to a review of the latest book from Nicholas Christakis. Christakis argues that well-functioning societies develop not because of, but in spite of, those few individuals who operate solely as rational economic actors. ‘Instead, in well-functioning societies, humans construct and abide by a vast web of kindness and mutual obligations of which Economic Man would be incapable.’
🧭 The British election reinforced a narrative. The share of workers in low-skilled jobs was a bigger predictor of swing than either Brexit vote or graduates, says John Burns Murdoch for the Financial Times.
This divide also shows up as one between the city-dweller and the non-city dweller. See this telling chart. Higher skilled jobs are clustering in small numbers of cities. We’ve seen the pattern play out in the US, Turkey, Hungary and many other places. It is part of the ongoing resurgence of place in our political economies. One key driver is our shift to an intangible economy whose patterns and processes strongly favour local agglomeration into big cities. This is a major trend of the exponential age. (See the Dig Deeper section at the very bottom for our members-only discussion about intangible capital with Stian Westlake.)
For example, tech jobs and the wealth they generate are becomingly increasingly concentrated in the US. Since 2005, just five metro areas have accounted for 90 per cent of all US growth in innovation sector jobs. The tech industry is far more driven by network effects than other industries; where manufacturing requires being close to sources of raw materials, tech requires being close to people who are sources of ideas and expertise, incentivising large tech companies to cluster together and creating a ‘winner-takes-most’ dynamic.
🧠 Interesting interview with Jeff Dean of Google Brain on AI trends, including hardware, carbon footprints, breakthrough areas and everyday robots.
🧬 ‘We’re at a very special point in history, where all of our sciences converge into biology,’ says Sonia Contera, a pioneering scientist in the field of nanotechnology, in the latest conversation on my Exponential View podcast.
🌡️ Climate catastrophe: 411.52ppm 3,820 days
Each week, we’re going to remind you of the CO2 levels in the atmosphere and the number of days until reaching the 450ppm threshold.
The latest measurement (as of December 12): 411.52ppm; December, 2018: 408.44ppm; 25 years ago: 360ppm; 250 years ago, est: 250ppm. Share this reminder with your community by forwarding this email or tweeting this.
What’s ‘fair’ when it comes to carbon emissions? The average American and Australian generates nearly 3½ times the global average of carbon dioxide pollution.
The Prado Museum and the World Wildlife Fund re-imagined classical paintings in the context of climate change.
We have climate leaders, now we need followers, argues Dr David Victor in this terrific reflection on the UN climate conference in Madrid.
📈 Graph of the week
Incumbent banks are falling over themselves to use their balance sheets to buy a bit of the future. Banks have put nearly $4bn into startups this year alone, above more than 10-fold in five years. My take is that for many reasons to do with leadership, culture, talent, and technical debt, incumbent banks will have to heavily rely on acquiring their way into successful fintechs. (The technical debt is, in my view, largely a pink elephant—the real issues are talent and leadership.)
Short morsels to appear smart at dinner parties
📽️ Are video apps the future of e-commerce? 42 per cent of product pages on Taobao, China’s largest e-commerce platform, include short videos or live streaming.
Great read on social genomics: the opportunity and threat of linking human DNA to socio-economic circumstances.
🐰 Researchers have demonstrated the ‘DNA of things’ by 3D printing a bunny which carries the code to reproduce itself.
📦 Free shipping has complex socioeconomic (and gendered) impacts which favour big companies over small creators.
Almost 50 per cent of all workers reuse their old password when asked to update their logins. Don’titerateyourpasswords1. Don’titerateyourpasswords2. Don’titerateyourpasswords3.
💧 If you were on Mars with a shovel, you could find water ice, according to NASA.
😍 Killer whales are loving grandmothers who pass on knowledge, and tasty fish, to their grandchildren.
Europe, and particularly Germany, continues to be a driving force for greater regulation of social media platforms. The latest proposal aims to protect diversity and promote non-discrimination. Super interesting
For a few bucks, you can buy live access to Moscow’s facial recognition network.
🤯 Here’s a really interesting answer to a question which has probably never occurred to you: if the universe is 13.8 billion years old, how can we see 46 billion light years away?
I’ve made a bold early claim about the underlying drivers of the British election result. People more expert than yours truly will pore over the data to understand what drove such a clear outcome. But I’m particularly interested in the shifting allegiances, and where they might highlight a new cleavage in our societies.
We are dematerialising our economies, and separating sources of value from stuff you can touch to things we hold in our heads and in databases. In this world, the frequency of interconnection becomes the driver of momentum and value. Not the fruit of the earth or the size of the warehouse. And those interconnections occur in cities.
I do think the urban-rural split is an increasingly common pattern. (We witness it in the US as well.)
One of the most salient essays I read on this urban-rural cleavage was by EV reader, Philip Auerswald, back in Jul 2016, The Origin of Populist Surges. It still deserves a read!
If this relationship holds, it makes for very interesting politics as more of humanity moves into bigger cities, and cities remain lodestones of intrigue, interest and innovation. Yet little of our politics reflects this divide explicitly, even as some leaders have expediently taken advantage of it. Nor have I come across a clear visionary who deals with it. (Who is the Marx, Keynes or Friedman of the rural/urban divide?)
Have a great week!
P.S. Scroll all the way down for a deeper analysis of some of the issues we discuss in this week’s newsletter, and also to check in on your fellow EV readers.
This edition has been supported by our partner, Masterworks
You might not have $100M lying around to own a Picasso, but now you can own part of one. Masterworks is the only platform that allows anyone access to this ultra-exclusive asset class. You might not be able to hang it on your wall, but it can still make you a lot of money. Get started today.
What you are up to—notes from EV readers
Artists and entrepreneurs are two sides of the same coin. Curiosity, creativity and courage will be the key to entrepreneurial (and artistic) success in the post-industrial world, according to Esko Kilpi.
Jakob Fricke and his colleagues published a 60-page free-to-download report for VCs collecting best practices for delivering a great founder experience.
Emmanuel Omoruyi writes about understanding the relationship between credit and big debt crises.
Riccardo Volpato writes about the future of AI and decision-making.
To share your projects and news, email email@example.com. No PR, please.
Dig deeper—previously published by Exponential View
My discussion with Elif Shafak includes a discussion on the growth of the illiberal state when centrist parties lose their relevance.
Growth of the intangible capital and intangible economy, my discussion with Stian Westlake.
My conversation with the veteran VC investor and economist Bill Janeway covers the three-player game between the mission-driven state, innovation markets, and financial speculators.