Economics For Entrepreneurs
David Nordfors on the People-Centered Economy
Tags The EntrepreneurEntrepreneurship
David Nordfors is CEO and co-founder of IIIJ and the co-chair of the i4j — Innovation For Jobs — Summit together with Vint Cerf. He was previously co-founder and Executive Director of the Center for Innovation and Communication at Stanford University. He has served on World Economic forum Global Agenda Councils and was one of the WEF Innovation 100 in 2009.
Will technological innovation kill or create jobs? It’s the wrong question. The right question is whether technology being used enough to innovate new ways of earning a living, to open new sources of income. The value proposition should be focused on the individual earner.
David predicts there is a huge opportunity for entrepreneurs to make people more valuable to each other. He calls this idea The People Centered Economy. It’s a research project, a book, a Summit and discussion group, and an innovation idea. Or, rather, an idea for a solution. The problem to be addressed is the fear that technological automation will destroy jobs. David wants to make sure technological innovation makes people more valuable to each other. We’ve illustrated David’s People Centered Economy in an infographic for you to download and share.
In his view, this is a disruption of the conventional economic approach — which he calls the Task-Centered Economy. In the Task-Centered Economy, producers pay workers to do tasks with little concern for making those people more valuable. If they can eliminate them through automation, they will. But on the other side of the economy, the consumption side, they want those people to buy the goods and services that are produced. Corporations are working hard to help people consume, but less hard to help them earn.
In the People-Centered Economy, entrepreneurs will work hard to make individuals more valuable to each other. Entrepreneurs are creative people who identify an unmet need felt by customers, and devise novel and profitable ways to meet that need. David says that the need among earners that is largely unmet is to “work with people you like, be valued by people you don’t know, in order to provide for people you love”. That’s a pretty good description of the collaborative entrepreneurial economy. Making people more valuable will be a new market for opportunity-seeking entrepreneurs. It may be one where entrepreneurs will be highly successful, because the difficulty for large corporations — who control much of the relevant technology — in switching to a PCE (people-centered economy) mode from a TCE (task-centered economy mode) is daunting for them.
David has developed a concept for the execution of PCE: Jobly.com. In his book, David describes a conceptual platform called Jobly.com. On one side of the platform are earners. Jobly applies A.I. to assess everything about the individual that’s available to know – probably more than they know about themselves – to profile them and assess their talents. Those talents may be latent or hidden. As an example, he uses people with synesthesia. They combine senses in an unusual way, for example, seeing colors when hearing music or a person’s voice. There may be no obvious way this talent can be applied in the job market to earn money.
But what if Jobly could also use A.I. to ascertain what unmet job needs can be met by this unusual talent. For example, HR can be viewed as an industry with 95% failure rate — only 5% of people say they have a job that both fits them and is engaging. What if a synesthetic could identify people who are in the “wrong” jobs — hear a marketer who’s “green”, and would be better placed in a technology job — and thereby improve the performance of an HR department with their hidden skills?
Jobly would match hidden talents to unrealized job needs so that both the earner and the employer become more valuable. Jobly could find a person with talents they don’t know about, and introduce them to an organization to solve a problem the organization didn’t know it had, creating the perfect job for both the individual and the organization.
David’s imagination of the future is that a good economy will be defined as people finding valuable things for each other to do. If people don’t find valuable things for each other to do, ultimately no-one does valuable things. Then we don’t have a very good economy. The customer is the earner. It’s the difference between EBay and Uber. EBay makes its sellers — earners — the most important people; they’re more important than buyers. Uber takes the opposite approach, making riders more important than drivers — and now drivers are dissatisfied because of eroding earning power. Uber may have to think about how to make its Drivers more valuable.
We’ve prepared a graphic to illustrate the evolution of the People-Centered Economy (Mises.org/E4E_16_PDF). We’d welcome any ideas you have regarding entrepreneurial initiatives to make people more valuable.