A new economic order: Where opportunities will arise
A macro framework to see what's coming.
Get ready, changes ahead!
Our social, political, economic, and technological landscapes are shifting.
Changes have never come as fast or as dramatically as what we are witnessing right now.
Staying ahead of the transformations and adapting with equal speed will be critical to come out on top. This article will give you a framework to do just that. I summarize the influences that will sway the economic landscape in the years ahead.
But before we get into it, there’s something you should know.
A lesson on predicting the future
I have learned an important lesson in my fifteen years of building businesses and making investments.
What’s more important (and challenging) than predicting the future is timing it.
Projecting the horizon for a trend to reach its full potential requires deep analysis and constant monitoring of the markets.
Many factors hinder or accelerate the adoption of a new idea; your projection of when the time will come for a trend to achieve mainstream adoption will determine your success levels.
Every innovation has its unique adoption and growth curve. Every market has its nuances. Taking the time to understand these intricacies is the diligence required to be a successful investor.
DYOR - “do your own research” - will always be the mantra.
With that said, let’s get into it.
Here are some trends I’ve forecasted in the past.
10+ years of reading the markets
I’ve put either my time or money into the following high-level market theses:
Consumers will demand eco-friendly and socially responsible fashion that delivers equally high standards of design and quality (2010)
Brick-and-mortar retail will rapidly collapse and make way for online commerce (2012)
Electric vehicles that equal or surpass the performance of mainstream gas-powered ones will dominate the automobile sector (2013)
3-D printing will revolutionize industry (2013)
Policy and cultural acceptance of cannabis will spawn a multi-billion dollar sector (2015)
Digital technologies that solve fundamental human challenges will thrive in developing regions with the fastest-growing populations, such as in Africa (2016)
Bitcoin and Ethereum will be the fundamental building blocks of a new world economy (2016)
Some of these have turned out accurate, while others are still maturing and are yet to achieve critical levels of adoption. Here’s an update on them -
My business in the eco-fashion space faltered, primarily due to operational and strategic reasons rather than a misdiagnosis of the future market. The dialog around transparency in apparel supply chains has reached mainstream levels.
Going all in with my time on a software startup that helped bring retailers online saw exponential growth in revenue and demand.
My early investment in Tesla (~$180/share) and the overall sector of automobile electrification has outperformed my projections
The 3-D printing sector has grown but hasn’t reached the heights I expected 10 years ago. My bets on this sector's most significant public companies (such as SSYS and DDD) took a while to turn profitable, and I could have allocated that capital elsewhere.
Cannabis as a viable growth sector took 5 years longer than I expected it to hit mainstream adoption and continues to lag behind other innovations. Again, my capital would have performed better in other sectors.
Startups in East Africa, primarily using tech solutions to solve logistics challenges of essential goods, have had a mixed performance. I was fortunate with the portfolio of companies I invested in and remain bullish on their prospects while expecting a longer time horizon to see returns.
The adoption of Bitcoin and decentralized finance requires a high amount of regulatory scrutiny and has taken longer than expected to hit mainstream adoption; however, this sector has delivered more profits than any other asset class and I consider this to be amongst the best calls I’ve made.
Going forward, the world will be way more complex than we have today or can envision.
Instead of a simplistic list of theses or predictions, we need a framework through which we see the world.
A new economic order
In the future, when we look back at the world we live in today, the homogeneity and uniformity of the current system will stand out. We will gradually transition into a bipolar (or ‘multipolar’) world with a more distributed balance of (economic) power, adoption and integration of diverse lifestyles, and hyper-digitization at unforeseeable levels.
The splintering of the global system will lead to the adoption of emerging currencies, migration, and spawn industries catering to alternative lifestyles.
A world economy and geopolitical landscape led by a Western-led coalition and backed by the US Dollar will be balanced by a bloc of emerging economies (BRICS) that trade using alternative currencies.
Social and demographical shifts will spawn multiple special-interest communities based on diverse lifestyle choices, impacting how people are educated, where they work and live, and their consumption choices.
Artificial Intelligence (AI) will spearhead the future.
AI and robotics will alleviate some pains from labor shortages arising from aging populations in developed countries.
Today and in the past, acquiring technical skills was the route to ensuring gainful employment and a secure future. AI will soon render degrees in STEM subjects (science, technology, engineering, and mathematics) useless while unleashing a renaissance in arts and creativity.
The rise of the “solopreneur” is here. With AI taking on the function of expensive technical talent, people can now direct and curate their visions, democratizing entrepreneurship and shaking up the traditional startup model.
Services facilitating interactions with other humans will gain traction as more people seek a more authentic, “non-artificial” experience.
Key technological trends will accelerate social and political forces at work while leading the next wave of hyper-digitization.
The current economy, based on transacting goods and services in the “physical” space, will make way for a parallel virtual economy, creating the next wave of hyper-growth and wealth creation.
The current breed of tech corporations with highly centralized power structures and data ownership will be tested by consumers who demand a more democratic distribution of benefits from the networks they help build.
A second and parallel web will be built on the fundamentals of censorship resistance and distributed network ownership.
Ballooning national debt, tightening monetary policy, and governments willing to exercise draconian laws aided by new technologies will make privacy and self-custody of monetary value essential.
These are not predictions on specific industries or technologies. Instead, consider this a narrative of where the world is today and where it can go in the future.
Some trends will take longer to mature, while others may take an unpredictable turn.
Choose the wave you want to ride and share your journey with me. Did I miss anything? See you in the comments!
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