the village economy
TRANSCRIPT
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The Village Economy!!
!!!
Terrence Rohan!@tmrohan!
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!!!!!
Uncommon times:!!
Post-war culture & economics! are ending.!
!
+!!
3rd industrial revolution !is beginning. !
!! !!!
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!!!
Post-war culture and economics !are ending.!
!!!
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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. !
!
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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. !!
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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 !
!
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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.!!!
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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!
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. !!!
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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!
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Services!
“Sacred” public institutions are being challenged.!
!!
• Education!• Public Transport!• Urban Development!• Science!• Healthcare!• Space!!
Private companies are providing “public” goods: !
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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.!!
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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. !
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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.!
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!!!
Post-war life is ending.! !!!
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!!!!
Urban Villages are rising.!!
Modern cities with the communal values, practices & preferences of villages !
! !!!
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!! !!!
Village Values!
Urban Economy!
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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!
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!!!!
Why? !! !!!
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! 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. !!
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! 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.!
!!
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!!!!!
Uncommon times:!!
Post-war culture & economics! are ending.!
!
+!!
3rd industrial revolution !is beginning. !
!! !!!
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!!!
3rd Industrial revolution !is now beginning.!
!!!
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!!!
Engine driven!
economy!
1850’s! !!!
!!!
Electricity!driven!
economy!
1880’s! !!!
!!!
Digital driven!
economy!
1990’s! !!!
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!!
2005 !!!
!!
2013 !!!
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!!
2005 !!!
!!
2013 !!!
!!
Tipping point in the digital revolution !!!
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!!!!
Two consequences !! !!!
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!!
1. Social !!!
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!!
Villages defined !and constrained
by location!!!
!!
Villages span geographies and
identities !!!
!!
200,000BC - 2005 !!!
!!
2005 - !!!
!!
150 !!!
!!
150 !!!
!!
150 !!!
!!
150 !!!
!!
150 !!!
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!!
2. Economic !!!
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!!
1960 - 2005 !!!
!!
2005 - !!!
Tectonic shift!
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1960-2005!!
Technology !is Niche!
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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!
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1960-2005!!!
Less than 3% GDP globally!
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2005 –!!
Technology is Unbounded!
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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!
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2005 --!!!
Unlimited impact !on global GDP!
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!!!!!!
Urban Villages !!
+!!
3rd Industrial revolution!!
=!!! !!!
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!!!!!
Radical opportunity! !! !!!
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!!
Urban!density !
= ! Higher
economic!output !!!!!
Village !values !
= !New
economic!behaviors!
!!
Urban!Economies!
!!
Village Values !!!
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!!
Digital Ubiquity !!!
!!
Industries Disrupted !
!!
Third Industrial!
Revolution!
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Urban !+!
Digital!Revolutions!
!!
Village Values !!!
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Modern !Village !
Economies!
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Marketplace! !
Crowd!!
Social SaaS!
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!!
Village Values !!!
Marketplaces!Exchanges of goods and
services.!!!
Why now?!!
SMBs & Makers!Gig Economy!
Mobile & Web penetration!Sharing Economy!
Urbanization!
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Crowd!Sourcing money or
information via the crowd.!!!
Why now?!!
Mobile & Web penetration!SMBs & Makers!
Financial inefficiencies!Global Markets !
!!
Village Values !!!
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Social SaaS!Community driven, !
low friction !Software as a Service.!
!
!Why now?!
!Cloud!
Open Source!Mobile & Web penetration!
API!Machine Learning!
!!!
Village Values !!!
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!!!!!
Three principles for !!
Marketplaces!Crowd!
Social SaaS!!
In our new era !!
!! !!!
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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. !!!!
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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. !
!!!
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Global Orientation!
!!
The world is now !wired and flat.!
!Customers and
competition will come from every !
corner of the globe. !!!!!
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The Village Economy!!
!!!
Terrence Rohan!@tmrohan!
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!!!!! !!!
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!
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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/!