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There’s a very interesting discussion on AVC this week that fits squarely into a few topics I’ve been thinking about rather intensively this summer. To that end, I’m borrowing Fred’s title for this post. The background reading is this piece by Bloomberg’s Justin Fox and the money quote:

“In general, developing countries are making the switch from goods to services much earlier in their development than the U.S. and Europe did.”

This is a tectonic shift. We are used to measuring success and status via material goods accumulated but the switch to valuing services across more levels of the socio-economic spectrum aims to disrupt that. What if people in the developing world can skip the car ownership step altogether in favor of, say, on-demand drivereless cars, the way they’re skipping telephone land lines and desktops in favor of smartphones? How will that change their overall consumption patterns?

While the crystal ball is a great tool to have whenever considering the future, there are 3 large change agents to how we do things today that are visible and already underway:

  1. How we innovate: today innovation is globally largely still synonymous with Silicon Valley. I think (and am betting on) the defining characteristic of the next 50 years of innovation will be the emergence of diverse local hubs. The initial start will likely be mimicking successful companies (like what Rocket Internet is doing at scale) but within a decade we should start seeing local successes especially in the larger markets first (e.g. Turkey w/ 75MM people and mobile penetration rates in the high %60s).
  2. How we learn: with many localized variations, we generally subscribe to the concept of elementary, vocation, and higher education. It’s interesting to observe how much variation there is between countries on what should be covered in elementary school.* With the availability of excellent learning materials for free or negligible fees via MOOCs perhaps that basic curriculum can be toned down to a more general set of skills (logic, reading comprehension, foreign languages, mathematics, statistics, and other principles of analysis) augmented with very deep dives into more specific topics of interest. Tech aptitude is rapidly becoming the new literacy and the sooner our formal education systems are able to reflect that the better off our kids will be.
  3. How we make things: advancements in 3D printing are really intriguing to monitor. While we may still be a few years out from true market adoption, for the first time in recent memory we can contemplate what producing goods locally will look like. There’s an entire new economy hidden here: for example, how do you monetize and incentivize product designers**, what does the cost structure for more complex products look like, are there premium printer options/materials to consider, etc.

Most of our assumptions about the developing world are based on how the now-developed world has grown. Technology gives the developed world the opportunity to skip a few steps on that ladder and as a result come up with stronger, localized markets. We’re looking at a very interesting decade that will potentially warrant a tome of itself in the history books*** of the future.


*In Serbia, by the end of elementary education we were expected to command basics of calculus (math was mandatory), advanced physics (4 years of study), chemistry (3 years of study), 1 or 2 years of Latin among a variety of other subjects that my American colleagues didn’t cover until university or in some cases very advanced AP classes in high school. It made for an interesting transition from one educational system to another and back. 

**Most today seem to fall flat in the hobbyist category which is great given that most people interested in computers in recent memory were considered hobbyists until the first dot com boom/bust and the beginning of consumerization of computers. 

***Assuming we still have the concept of books in the future. And that we haven’t accidentally blown said future up.