Prepare for the revolution. We share the evolution of new features for the future. 

Recent advances of in technology have created an increasingly unified global marketplace for labor and capital. Machines and technology are substituting for more types of human labor than ever before. 

Technology has sped globalization forward, dramatically lowering communication and transaction cost and moving the world much closer to a single mass global market for labor, capital and other inputs.

But it is not only software that is being transformed. Digitization and networks are becoming more pervasive to every industry and function across the economy, from retail to financial services. To manufacturing and marketing. 

Fortune will instead favors a third group of new investors, the one who can innovate, create new products, services and business models. Today is is possible to take many goods, services and processes and cordify them. Once cordified, they can be digitized, and can be replicated. This digital copies can be made at virtually zero cost and transmitted anywhere in the world almost instantaneously.

Rather than reharsh the usual failed economics, there  are some powerful ideas that resonate strongly that we can explore and work on.

1. Digital economies, networking, networking software, networking robotic are reducing the need for human labor and the leverage of traditional capital like land, fixed assets and cash in this globalization era.

2. Premiums flows to whatever imput are scarce. Labor and traditional capital are no longer scarce. What's scarce is innovative, practical ideas. Ideas for new innovation, products, services, processes and etc. These are the third form of capital that will accrue most of the rewards.

3. The distribution of premiums and rewards following a powerful law, where the vital few with the third type of capital and great ideas reap most of the rewards. 

This is of course a generalized simplification and there are plenty of parts of the economy that still depend on labor and conventional capital. But the point here is that thanks the globalization and over capacity, most inputs are no longer scarce, so the premium of high wages and/ or profit margin that the owners or labor and capital can change is trending down in every tradable sector.

One systematically of rising inequality is crony capitalism and socialism. The vast array of insider deals, collusion, winners being picked by the state, too big to fail banks bailout by taxpayers money and etc. People are increasingly aware of the status quo is rigged. And the playing field is titled to favor the few insider in the crony capitalist castle.

The leverage of of digital technologies rewards the most talented to the extreme degree. In an economy where the premium of labor and ordinary capital is failing. The yield on ordinary capital is almost zero. And the wages are declining in real terms. Those who can leverage ideas digitally can reap the premium benefits reserved for what's scarce. 

This may means that the real winners of the future will not be the labor providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation and technology innovation. Fortune may indeed favor this third option group. Those who can innovate and create new services and products as their business model. 

This distribution of income for this creative class typically takes a form of power of law, with a small number of winners, capturing most of the rewards and a long tail consisting of the rest of the participants. 

So in the future, ideas will be real scarce in the world, scarcer than most labor and capital in the world. And the few who provides good ideas will reap the rewards. Huge reward. Should the digital technologies continue to be as powerful in the future, as it has been in the recent years, the structure of the modern economy and the role of work itself may need to be rethought.

For individuals/ societies this means able to solve problems and create value in ways that can't be automated. This way is to leverage ones idea is to network, network, network and acquire multiple skills that can be applied in innovative and offer practical way to solve a wide spectrum of problems. 

As a society/or investor, we have to deal with the reality that the nature of work is fundamentally changing and wages are no longer adequate means of distributing the surplus of an economy. 

Which sector will beneficial to the challenge of the technology innovation?

Are there any successful corporations with this third option ideology available in Malaysia?

Which sector will be the old traditional labor and capital dependent will have to follow this evolution?

Would you believe this is the fastest growing segment in the future? 

Which will be your choice for your future investment strategy? 

Creating sustainable, equitable and inclusive growth requires more than business as usual. The place to start is with proper understanding of just how fast and how far things are evolving. 
 

Till then.