May 19, 2020

The knowledge economy after Covid-19 (RSA Blog)

If the entrepreneurship of the 2010s is dead, what will replace it in the 2020s?

The knowledge economy after Covid-19 (RSA Blog)

In the decade to 2020, entrepreneurship was on the rise worldwide. But that isn’t the whole story. Last year, more than half of adults across 35 countries started a business simply “to earn a living because jobs are scarce”. For many, becoming a sole trader or starting a business is an imperfect route to a basic level of opportunity. Far from entrepreneurs aspiring to unicorn status, these people seek something simpler: a little autonomy over their work and economic interests.

Post-pandemic, a global recession predicted to be worse than 2008 will create less incentive for people to become entrepreneurs, at least in the Silicon Valley mould of the past. Employees, offices and capital come with big risks, and during a downturn, fewer rewards. In an increasingly volatile world, standing at the helm of a large organisation has less appeal, even for talented and ambitious people. So what comes next?

Politics in the 21st century

As their economies slump and their governments stumble, locked-down populations are reassessing their relationship with work. The consequences of that intersection will define opportunities and career choices for generations. We are entering a new era of thought leaders; of influencers over particular domains. The shift is already underway. These new public figures will reshape the political and economic landscape.

Politics has always been an arena of influencers, but social media now gives ideas global reach. Influence that was once temporary and localised around infrequent elections now transcends borders and invigorates politicians, activists and movements elsewhere.

Look at the fast rise of Bernie Sanders in the US and his subsequent impact on Jeremy Corbyn in the UK. People all over the world know about congresswoman Alexandria Ocasio-Cortez; not because they follow US politics, but because videos of her speaking truth to power – channelling the frustrations of people globally – regularly go viral. She may be an American politician, but she’s a global thought leader.

President Donald Trump made it to the highest position in US politics by harnessing the power of social media, repeating his ideas louder and louder until they stuck. He used the controversial data company Cambridge Analytica to micro-target voters, profiling individuals based on their social media history. With this information, he designed highly emotive advertising on topics like immigration and gun control as a means of convincing people to vote for him. In the 2020 race, Trump’s re-election campaign has already been spending as much as $1 million per week on Facebook ads alone.

Politicians in the 21st century use influencer tactics and social media platforms to connect with people and build global tribes. That is the new normal, the new metric for success. The impact goes beyond an individual’s time in public office too: Barack Obama still enjoys a Twitter audience of 116 million three years after leaving the White House.

An era of thought leaders

The same thing is happening away from politics too. Subject-matter experts across industries are creating audiences, movements and ventures from their perspectives and insights. They sustain lucrative careers, spearhead activism, become household names and catalyse real-world change, all in their niche of choice.

Martin Lewis, founder of UK personal finance website Money Saving Expert (MSE), is one of these experts. He got started back in 2002 – well ahead of the curve – and sold his website in a deal worth £87 million a decade later. He stayed on as editor-in-chief and received an OBE in the Queen’s honours list. Today, MSE serves 16 million monthly users, equivalent to 24% of the British population.

Lewis has influenced policy through awareness-raising and lobbying campaigns, becoming a personal finance spokesperson for the whole nation at times. On matters of public interest, thought leaders can speak and negotiate on behalf of hundreds, thousands, sometimes millions of others. People love ideas; they love them even more when a human face is fighting for them.

Like the indie bloggers before them, thought leaders start off solo and develop versatile skill sets. They do everything they can to establish themselves and make things happen: journalism, activism, speaking, marketing, book writing, bookkeeping and whatever else comes up. When the load gets too much, they hire others to help. These days, MSE has more than 70 staff and works regularly with freelancers. Imagine replicating a fraction of Lewis’s success across 100 or 1,000 people. This new force is reshaping the global economy.

The future of careers

Last month, the American journalist Matt Taibbi left Rolling Stone to work full-time on his newsletter. When Anna Codrea-Rado faced redundancy at VICE in 2017, she began publishing a newsletter that now makes up a regular portion of her income.

And then there is also Bill Bishop, former media executive and author of a Chinese affairs newsletter called Sinocism. He has 80,000 subscribers and a minimum subscription fee of  $168 per year, suggesting annual revenues in excess of $1.2 million. His content, published four times a week, is read by investors, policymakers, executives, analysts, and diplomats across the globe.

Despite surging demand for content, the Covid-19 crisis has prompted a wave of layoffs in the media industry. Everybody wants more stuff to read, watch and listen to, but advertisers do not want slots next to that day’s death rates. This is not the first troubling contradiction for media business models in the 21st century. But it has been an enormous blow for the journalists losing their jobs and some have faced a second or third redundancy in just a few years. With those odds, why risk another staff role instead of striking out on your own?

Thought leaders adopt ideas and tactics from other fields to shape their non-traditional pathways. The internet fuels niche interests and activities, and it becomes easier to monetise them every year. This digital infrastructure makes it possible for thought leaders to create their choice of products and services: newsletters, podcasts, tweets, videos, t-shirts, events and anything else that their audience wants.

There are fewer companies and jobs around during a recession, which offers more incentive for people to go independent. These new freelancers will use their expertise to build audiences and revenue streams. The visibility and network they create will attract a flow of opportunities, bigger and better each time, even in a devastated wider economy. Specialist talent, at the individual level, is always in demand. For these workers, personal brand is the new career.

The knowledge economy is on the cusp of booming. When that happens, the future of work – and of everything else – will accelerate decades. But people outside the knowledge sector are in danger of being left behind. Governments have some tools at their disposal to smooth the shift to a new era of work, particularly in innovative policies like universal basic income. Whether or not they are bold enough to embrace them, however, remains to be seen.

This story was originally published on The RSA Blog.