Will We All Be Our Own Boss in the Weightless Economy?

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THE FUTURIAN # 6

Photo by Brooke Lark on Unsplash

We are often told that the age of technology has arrived. Be that medical consultations held over Zoom, deliveries arriving via drones or driverless cars. But with the dawn of technology is also the dawn of the intangible economy. To operate, a company no longer needs the staple assets of staff, premises, or even equipment.

Take the top companies listed on the S&P 500, that is Apple, Microsoft, Amazon and Alphabet (Google). Compare this to the top companies listed on the S&P 500 in 1970 of General Motors, Exxon Mobil, Ford Motor and General Electric and the technological shift becomes much more transparent. This shift has not been exclusively within the US. In the UK, services accounted for 56% of output in the 1970s while today it is above 80%.

So, what is it that the successful companies of today all have in common? Intangible assets. An intangible asset is a resource that benefits the holder but lacks a physical substance. These include patents, intellectual property, brand recognition, as well as software. Today we have the weightless company: a company based on services and not on stuff.

Recognition of these intangible assets has become so familiar that new phrases have been coined. Terms such as “google it” or “stored on the cloud” allows the listener an instant understanding of not only the action taken but also the supplier providing the service. The 21st century has brought consumers great advances but what effect has it had upon employees? If technology can provide goods quicker and cheaper for consumers, then why bother with employees? Yet, how can the consumer cycle be sustained if consumers are not also employees?

For a company to succeed within an economy, there must be a cyclical approach to consumerism. That is, for a company to have customers those customers need a source of income. But this cycle is eroding. With the decline of people making up a company, we now feel removed from the businesses integrated in our lives. This also gives companies undue power to create monopolistic structures.

From 1985, dual share voting was introduced for listed companies. The result of which enabled certain owners, usually the founders, to issue themselves a “super vote” over other investors. This means that the super vote can nullify the votes cast by other shareholders. The likes of Meta (Facebook), Google and Spotify all hold these structures with many more companies holding this structure too. With the largest companies in the world owned by many but controlled by few, where does self-regulation and review arise? Who is it that speaks for the stakeholders of businesses outside of the Board Members?

One option is to vote with your feet. Rather than be an employee, one can be self-employed. Self-employment, that is an individual starting their own business and working for themselves, in the past 20 years has risen considerably within the UK. For males, there has been a 31% increase while women have seen a 76% increase. Today, almost 40% of working individuals within the UK are self-employed.

With the rise of the weightless company, so too has individual job insecurity. Large companies are controlled by the whims of an individual rather than a vote of a Board. Take Tesla as an example, in June 2022 the owner Elon Musk cut 10% of his workforce based on -as he described — a bad feeling. Employees can no longer work for one company for their whole career and retire with a guarantee of their retirement income. Whether they are able to meet their financial liabilities is now far less certain.

The weightless company of today does not have traditional assets to fall back on when times are tough. Where short sharp slowdown occurs, for example, the closure of a business as a result of pandemic lockdowns, selling assets cannot happen in the traditional sense. Few would pay to own part of the Coca Cola brand name without access to sell the recipe.

But what opportunities arise through a weightless company? Some key features include high levels of development, in researching and creating new applications or software. Once developed however, businesses can experience unlimited distribution. Services can be delivered globally as long as a strong internet connection is available. And finally, low production costs. Once a service has been perfected, the weightless company need only to find customers.

This provides an opportunity for individuals to take back job security. They can control how a business operates and grows by creating the business themselves. Where services are the product, the barriers to entry are lowered. It is no coincidence that the growth of self-employment has been greatest for female staff — the glass ceiling can be abolished!

But how can this opportunity be protected? A level of government regulation is required. To provide a level playing field for service development, established companies must not enjoy a monopolistic position. Progress was seen within the UK in June 2022 where the UK’s Intellectual Property Office determined that artificial-intelligence systems cannot patent inventions. It was established that only humans are in the position to exert rights on patents. This view is replicated in US law also. However, not all jurisdictions agree, as seen in Australia and South Africa.

Another area of regulation required for a thriving weightless economy is for government to ensure that all have equal access to fast reliable internet connections. Between 2021 to 2022, roughly 11 million households in the UK suffered broadband blackouts for more than three hours as a result of loss of service, power cuts and maintenance. The average outage time for homes across the UK was 19 hours. For the fifth largest economy in the world, this cannot be representative of the future. Fast paced broadband must be viewed on par with all other utilities to ensure working from home is not only possible but reliable to meet customer demands.

The future of how the weightless economy develops is also dependent on retrofitting homes. Homeowners must be able to install home offices for their business premise without the risk of homeowner association or neighbourhood intervention. Further, as 2022 has seen, reliance on power sources are vulnerable to global changes. Instead, self sufficiency on power sources such as solar panels or wind turbines must be enshrined as part of new home policies. Progress on this has been seen within the European Union where it is planned to introduce in to law that all new homes built must have solar panels by the end of the 2020s. The benefits of which would be to ensure that working from home businesses do not suffer such lengths of power cuts as has been seen in 2021 to 2022. Other countries must take note.

With the age of technology, individuals can no longer be complacent with their roles in an intangible economy. The weightless company and our individual futures rest around information and knowledge to then produce a created service. It is where value to the economy and security to the individual will co-exist. The future for individuals is to work smarter and not harder.

© Charlotte Aguilar-Millan 2022