This article was originally published in The Independent Review.
Written by J. Walker Smith, Executive Chairman, Kantar Futures
The poster child for the economy of the future is Uber, the much ballyhooed (and much booed) on-demand mobile service for transportation. It’s more than transportation, though. Every nook and cranny of the consumer economy is being “Uberized” by a business model that twins personal services with technology. Not only does this business model fit the competitive opportunities of today’s marketplace, but it also dovetails seamlessly with the larger dynamics shaping tomorrow’s marketplace. What’s ahead is a shift in the dominant business model, one in which all consumer goods will be available as a service and all consumer services will be available on demand. This is the Uber-All Economy of the future.
Anticipating the future in this way is a bottom-up view of change. The usual line-up of macrolevel shifts in productivity-enhancing technologies and labor-force demographics will be critical, of course, but the most important dynamic is happening at the level of the firm. Companies will make money in different ways, and this will cascade through the economy. Changes in technology and in the labor force are setting the stage for this transformation not by enabling companies to do something old in new ways but by forcing companies to do something entirely new.
The success of Uber and of companies with an Uber-like business model is particularly noteworthy in the context of a global economy struggling with slow growth. Technology is unlocking these opportunities. In particular, mobile applications are enabling start-ups to aggregate sufficient demand to support this new business model, often by capturing unrealized value from assets these start-ups do not own. But even when new infrastructure is required, needed investments are lower, which reduces start-up costs and time to market.
Equally important, technology is closing the gap between decisions made by consumers and the satisfaction of those choices. Speed has always been important, but immediacy will be the ante going forward. Machines are better at immediacy than people, not to mention more productive for both routine and abstract tasks. The displacement of people by machines will put the labor force under increasing pressure, with a shrinkage of jobs in many sectors and a growth of jobs assured only in personal services and technology, a duality of future employment that matches the twin elements central to the Uber-All business model.