22 September 2018

From Gates to Bezos - What the Change in World's Richest Man Tells us About a Shift From an Information to Entrepreneurial Economy

On America’s west coast there are examples of what the popularization of entrepreneurship could look like at the regional and company-level.

Silicon Valley continues to attract more venture capital and to create more wealth than any country in the world. The folks in the Bay Area have created an entrepreneurial economy.

Further north in Seattle, Jeff Bezos has created an entrepreneurial company.

Jeff Bezos recently emerged as the world’s richest man and is the world’s only triple-digit billionaire. Bezos is an entrepreneur. He has also created a platform that has popularized entrepreneurship. Not only does Amazon have more than 500,000 employees, it has "2 million sellers, hundreds of thousands of authors, [and] millions of Amazon Web Services developers.”  And, Bezos reports, "In 2017, for the first time in history, more than half of units sold on Amazon worldwide were from third-party sellers."[1] 

Bezos isn’t doing all the entrepreneurial lifting at Amazon; he’s got millions of co-entrepreneurs and the result is that as they struggle to become rich they inevitably increase his net worth. People who create, make or ship products hope to get rich by selling through Amazon. Jeff Bezos is just one of the millions of entrepreneurs who use the platform that his team has built.

Knowledge workers turn raw data into knowledge in the same way that factories turn raw materials into products. A computer makes knowledge work far easier and during the 1980s and 1990s, the personal computer became ubiquitous as knowledge work evolved and became more common. Microsoft provided the PC’s operating system and software like Word, Outlook, and Excel and for Microsoft it was like having a patent on forks and spoons when people stopped eating with their hands.

In 1995, Bill Gates became the world’s richest man by creating tools that enabled knowledge workers to do their work. In 2018, Jeff Bezos became the world’s richest man by creating tools that enabled entrepreneurs to do their work. From the last couple of decades in the 20th century to the first couple of the 21st century, the source of new wealth was shifting from making knowledge work easier to making entrepreneurship easier.

Sometimes what is most obvious deserves the closest scrutiny. A region that has created record amounts of wealth. The world’s richest men? Those might just hold clues as to how the economy is changing. Successful economic policies in this century will popularize entrepreneurship.

Three categories of successful 21st century economic policies will be “follow the lead of Silicon Valley,” create an entrepreneurial track in education, and make it easier for employees to act - and be rewarded - like entrepreneurs

[1] https://www.sec.gov/Archives/edgar/data/1018724/000119312518121161/d456916dex991.htm


Jason Brunson said...

Great article. Shared on Facebook (a fantastic ad platform being used by entrepreneurs).

I think I should get some credit though as my comment on your more pessimistic article, back at the end of August, sounds a lot like this article. ;-D

Ron Davison said...

Thanks for this great comment Jason. I have a confession. I had forgotten that I had my comments on moderation and just found a backlog of them, including this very thoughtful one.
I think that we're aligned on what is going on in the private sector. Corporations are evolving into platforms that enable people to succeed.
I do think that Trump is one of those steps backwards that riddles the progress of history. His anti-trade and immigration talk goes against the steady spread of the scope of an economy (from tribal to city to nation-state to regional to global). And his anti-first amendment impulses are very primitive. You are so right that we need a catalyst for questioning things but not things like first amendment rights that have already been proven.
And as to my Keynesian talk seeming inconsistent, that's a really intriguing point. I think I know what you're saying there. Let me try this explanation: these institutions (church, state, bank and corporation) are really important but as tools for the masses, not for the elites. Keynesian policies are one of the ways to ensure that banks pursue policies that benefit the entire economy and not just banks.
Thanks as always for your thoughtful comments. One of the things that I think will persist into the fourth economy is that there will always be judgement calls about what is and isn't important. These things are complex and really healthy debates can persist within the domain of religion or politics or business that - regardless of how they fall out - will still mean that things are alright. The differences of opinion that we have about this new economy mostly feel to me like debates I'd have 25 years ago on politics or religion. The differences of opinion that I have with Trump and his supporters feels like something very different: as I try to say in the piece, I just don't see how you move forward by blowing up the past stages that we should instead be building on.
Thanks for conversation.