The Village Economy

transcript

The Village Economy!!

Terrence Rohan!@tmrohan!

Uncommon times:!!

Post-war culture & economics! are ending.!

3rd industrial revolution !is beginning. !

!! !!!

Post-war culture and economics !are ending.!

http://www.theatlanticcities.com/jobs-and-economy/2012/06/why-cities-are-growing-faster-suburbs/2420/!http://www.mckinsey.com/insights/urbanization/us_cities_in_the_global_economy!

Living!

For the first time in 100 years, suburbs are dying,

and cities are growing.! ! !!

Urban life, culture and businesses are thriving.!

!Poised for global growth, cities

already account for 80% of !global GDP. !

Transport!

Car culture is dying. !!!

For the first time in 50 years, we’ve seen a steady 2.5% decline in miles

driven / yr over the past 8 years. !!

Public transport, biking, ride sharing are at the highest ridership

in 60 years. !!

Retail!

How we shop is radically changing. !

Offline, malls are dying at 10% a year; and urban experiential!

retail is booming.!!

Online, e-commerce is already at 4% of GDP of the G20 !

Money!

Monetary systems are being re-written.!

Like Naspter to music, digital currencies will upend!

international systems. !!

Peer-to-peer provides real alternatives to lending and

investing. !!

Cash is no longer king.!!!

http://www.forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normal-for-millennials-three-ways-to-prevent-a-human-resource-nightmare/!

http://www.nytimes.com/2013/11/10/jobs/embracing-the-millennials-mind-set-at-work.html?_r=0!

Work is viewed, valued and practiced differently. !

Meaning and a sense of purpose, not monetary upside, !

are the primary drivers for Gen Y in the workplace.!

!There are 42m freelancers!

in the US, up from 10m in 2005. !!!

Ownership!

Concept of ownership is being re-defined.!

Driven by Gen Y sensibilities, the sharing economy already

generates $5b+ a yr. !!

Home ownership is at 20 yr lows and renting is at all time highs. !

http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy!

Services!

“Sacred” public institutions are being challenged.!

•  Education!•  Public Transport!•  Urban Development!•  Science!•  Healthcare!•  Space!!

Private companies are providing “public” goods: !

Companies!

Economic power is shifting towards start-ups, makers & SMBs.!

Technology and startups represent largest job and GDP

growth. !!

SMBs account for over 50% of both GDP and jobs. !

!Makers, including craft &

hardware, are a $50b market.!!

Goods!

Consumer preferences are radically changing. !

Big box brands are losing favor to the trends of personalization, craft, local, artisan, and so on.!

!One category alone, local and

organic food, is a combined $40b market. !

Entertainment!

Media has completely changed.!

Media production & consumption has been turned on its head: !

!Music, News, Movies, TV industries have all

contracted in the past 20 years. !!

Yet there has never been more Music, News, Movies and TV available to everyone.!

Post-war life is ending.! !!!

Urban Villages are rising.!!

Modern cities with the communal values, practices & preferences of villages !

!! !!!

Village Values!

Urban Economy!

Denser, community

living !

Walking, Biking, Public

Transport !

Urban shopping

experiences !

Wired !citizens and businesses !

Craft, Local Products !

Meaningful work !

Sharing, Lower

consumerism !Makers, Small

business !

Urban Village!

Why? !! !!!

! 1. Economic advantage !

Whenever a city doubles in size, every measure of economic activity increases by 15% per capita. !

Cities make us more productive, and life, often better. !!

! 2. Social instinct !

The “suburban era” only represents .001% of our time on earth.!!

Humans grew up in villages, and we are instinctually drawn to !communal life, practices & values.!

Uncommon times:!!

Post-war culture & economics! are ending.!

3rd industrial revolution !is beginning. !

!! !!!

3rd Industrial revolution !is now beginning.!

Engine driven!

economy!

1850’s! !!!

Electricity!driven!

economy!

1880’s! !!!

Digital driven!

economy!

1990’s! !!!

2005 !!!

2013 !!!

2005 !!!

2013 !!!

Tipping point in the digital revolution !!!

Two consequences !! !!!

1. Social !!!

Villages defined !and constrained

by location!!!

Villages span geographies and

identities !!!

200,000BC - 2005 !!!

2005 - !!!

150 !!!

2. Economic !!!

1960 - 2005 !!!

2005 - !!!

Tectonic shift!

1960-2005!!

Technology !is Niche!

1960-2005!!

Technology !is Niche!

Innovation hubs:!Silicon Valley!

Sources of capital:!Sand Hill Road!

Industries:!IT primary!

Tools of production:!Software, servers!

Cost/time of production:!Long & costly!

Output:! Client side, Hardware !

Method of distribution:!Retail, Web!

Mobile:!> 2B, 2G!

1960-2005!!!

Less than 3% GDP globally!

2005 –!!

Technology is Unbounded!

2005 –!!

Technology is Unbounded!

Sources of capital:!Sand Hill, Angels, P2P!

Industries:!All!

Tools of production:!API, Cloud, Open Source!

Cost/time of production:!Short & Cheap!

Output:! Software, Apps, Hardware !

Mobile:!6B, 3/4G!

Innovation hubs:!Global Cities!

Method of distribution:!Web, Mobile, Social!

2005 --!!!

Unlimited impact !on global GDP!

!!!!!!

Urban Villages !!

3rd Industrial revolution!!

=!!! !!!

Radical opportunity! !! !!!

Urban!density !

= ! Higher

economic!output !!!!!

Village !values !

= !New

economic!behaviors!

Urban!Economies!

Village Values !!!

Digital Ubiquity !!!

Industries Disrupted !

Third Industrial!

Revolution!

Urban !+!

Digital!Revolutions!

Village Values !!!

Modern !Village !

Economies!

Marketplace! !

Crowd!!

Social SaaS!

Village Values !!!

Marketplaces!Exchanges of goods and

services.!!!

Why now?!!

SMBs & Makers!Gig Economy!

Mobile & Web penetration!Sharing Economy!

Urbanization!

Crowd!Sourcing money or

information via the crowd.!!!

Why now?!!

Mobile & Web penetration!SMBs & Makers!

Financial inefficiencies!Global Markets !

Village Values !!!

Social SaaS!Community driven, !

low friction !Software as a Service.!

!Why now?!

!Cloud!

Open Source!Mobile & Web penetration!

API!Machine Learning!

Village Values !!!

Three principles for !!

Marketplaces!Crowd!

Social SaaS!!

In our new era !!

!! !!!

Mission!!

Humans seek purpose and meaning. !

!Employees want to build towards mission and are

best motivated intrinsically. !

!Customers are most loyal when they have a sense a

of belonging. !!!!

Proprietary Supply !

There is near infinite demand on the web for

unique & valuable product, services or

information.!!

If your good can be found elsewhere, the web is

hyper efficient at surfacing alternatives. !

Global Orientation!

The world is now !wired and flat.!

!Customers and

competition will come from every !

corner of the globe. !!!!!

The Village Economy!!

Terrence Rohan!@tmrohan!

!!!!! !!!

References!•  http://www.theatlanticcities.com/jobs-and-economy/2012/06/why-cities-are-growing-faster-suburbs/2420/!•  http://blogs.wsj.com/economics/2013/05/23/u-s-cities-growing-faster-than-suburbs/!•  http://www.mckinsey.com/insights/urbanization/urban_world_cities_and_the_rise_of_the_consuming_class!•  http://www.nytimes.com/2010/12/19/magazine/19Urban_West-t.html?pagewanted=all&_r=1&!•  http://usa.streetsblog.org/2013/02/27/for-eighth-year-in-a-row-the-average-american-drove-fewer-miles-in-2012/!•  http://www.nytimes.com/2014/03/10/us/use-of-public-transit-in-us-reaches-highest-level-since-1956-advocates-

report.html!•  http://www.businessinsider.com/shopping-malls-are-going-extinct-2014-1!•  http://www.theguardian.com/social-enterprise-network/2014/feb/19/generation-y-millennials-job-seekers-money-

financial-security-fulfilment!•  http://www.forbes.com/sites/groupthink/2013/07/03/forget-the-jobs-report-focus-on-the-freelance-economy/!•  https://www.bcgperspectives.com/content/articles/

media_entertainment_strategic_planning_4_2_trillion_opportunity_internet_economy_g20/#chapter1!•  http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy!•  http://www.zerohedge.com/news/2013-11-05/us-rents-rise-new-all-time-high-homeownership-rate-stuck-18-year-

low!•  http://www.apta.com/mediacenter/pressreleases/2013/Pages/130311_Ridership.aspx!•  http://online.wsj.com/news/articles/SB124294047987244803!•  http://www.oracle.com/oms/retail/wp-evolution-experience-retailing-1896570.pdf!•  http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/a#uniquesubscribers!•  http://en.wikipedia.org/wiki/Industrial_Revolution!•  http://en.wikipedia.org/wiki/Second_Industrial_Revolution!

!!!!! !!!

References!•  http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights%20and%20pubs/MGI/Research/Technology%20and

%20Innovation/The%20great%20transformer/MGI_Impact_of_Internet_on_economic_growth.ashx!•  http://money.cnn.com/2010/02/02/news/companies/napster_music_industry/!