Average Is Over

1. The rise of intelligent machines is transforming work and wages

Average is over is the catchphrase of our age, and it is likely to apply all the more to our future.

Technological revolution. The increasing productivity of intelligent machines, economic globalization, and the split of modern economies into stagnant and dynamic sectors are driving fundamental changes in the job market. These forces are creating a divide between workers who can effectively collaborate with machines and those who cannot. The result is a polarization of the workforce, with high-skilled workers seeing wage increases while others experience stagnation or decline.

Impact on various sectors. This transformation is affecting a wide range of industries:

• Manufacturing: Increased use of robots and automation
• Service sector: AI-powered customer service and data analysis
• Healthcare: Machine learning for diagnosis and treatment planning
• Finance: Algorithmic trading and risk assessment
• Transportation: Development of self-driving vehicles

2. High earners will increasingly work with machines, while others face stagnation

Human–computer teams are the best teams.

Freestyle model. The future of high-earning work will resemble the "Freestyle" chess model, where humans and machines collaborate to achieve superior results. This approach combines the strengths of human intuition and creativity with the processing power and data analysis capabilities of machines. Key characteristics of successful human-machine teams include:

• Deep understanding of machine capabilities
• Ability to interpret and apply machine-generated insights
• Skills in managing and directing machine resources

Wage polarization. As the demand for workers who can effectively collaborate with machines increases, wage inequality is likely to grow. This trend is already evident in various sectors:

• Technology: High salaries for software engineers and data scientists
• Finance: Premium pay for quants and algorithmic traders
• Healthcare: Increased compensation for specialists using advanced diagnostic tools
• Education: Growing divide between tech-savvy educators and traditional teachers

3. Education and skill development must adapt to the new technological landscape

Machine intelligence is the friend of the educational parvenu, albeit the disciplined, gutsy parvenu with high IQ.

Revolutionizing learning. The education system must evolve to prepare students for the new world of work. Key changes include:

• Integration of online and digital learning tools
• Focus on developing skills that complement machine capabilities
• Emphasis on lifelong learning and adaptability

Emerging educational models:

• MOOCs (Massive Open Online Courses)
• Gamification of learning
• AI-powered personalized learning paths
• Hybrid models combining online and in-person instruction

The role of human teachers will shift towards motivation, mentorship, and fostering critical thinking skills that machines cannot replicate.

4. Freelancing and self-employment will become more prevalent in the job market

Many of society's lower earners will reshape their tastes—will have to reshape their tastes—toward cheaper desires.

Gig economy growth. The traditional employment model is giving way to a more flexible, project-based approach. Factors driving this shift include:

• Technological platforms enabling easy connection between workers and clients
• Companies seeking to reduce fixed labor costs
• Workers desiring greater autonomy and work-life balance

Adapting to new realities. As stable, high-paying jobs become scarcer for many, individuals will need to:

• Develop multiple skills to remain competitive
• Build personal brands and networks
• Learn to manage irregular income streams
• Adjust lifestyle expectations and consumption patterns

This shift will require a reevaluation of social safety nets and benefits traditionally tied to full-time employment.

5. Geographic location will play a crucial role in economic opportunities

We will move from a society based on the pretense that everyone is given an okay standard of living to a society in which people are expected to fend for themselves much more than they do now.

Economic clustering. High-earning jobs and opportunities will increasingly concentrate in specific geographic areas, leading to:

• Growth of "superstar" cities with high costs of living
• Decline of traditional industrial centers
• Emergence of new tech hubs and innovation districts

Adaptation strategies:

• Relocation to areas with better job prospects
• Remote work to access opportunities in high-cost areas
• Development of local economies to create new opportunities
• Investment in infrastructure to attract businesses and talent

This trend will have significant implications for housing markets, urban planning, and regional economic development policies.

6. Scientific research and understanding will evolve with machine intelligence

We will increasingly become doers and participants rather than comprehending observers.

Transformation of scientific inquiry. Machine intelligence will revolutionize how scientific research is conducted and understood:

• Analysis of vast datasets beyond human comprehension
• Generation of hypotheses and experimental designs by AI systems
• Acceleration of discovery in fields like drug development and materials science

Challenges and opportunities:

• Need for new skills to interpret machine-generated results
• Potential for breakthrough discoveries in complex systems
• Risk of reduced human understanding of underlying scientific principles
• Emergence of new ethical considerations in research

This shift will require a reevaluation of scientific education, peer review processes, and the communication of scientific findings to the public.

7. A new social contract will emerge, reshaping politics and society

We'll pay for as much of a welfare state as we can afford to, and then no more.

Fiscal realities. The combination of demographic changes, rising healthcare costs, and technological disruption will force a reconsideration of the social safety net:

• Pressure on traditional entitlement programs
• Exploration of new models like universal basic income
• Shift towards more individual responsibility for financial security

Political implications:

• Growing influence of high-earning tech workers and entrepreneurs
• Potential for increased social tension due to inequality
• Emergence of new political coalitions based on economic interests
• Need for policies addressing technological unemployment and retraining

This evolving social contract will require careful balancing of economic growth, social stability, and individual opportunity in an increasingly automated world.

Last updated: September 24, 2024