Deflationary technologies of the digital revolution will not naturally narrow the prosperity gap. Instead, they serve as a wedge to widen it.
Here at Ikigai, we have the privilege of deploying capital on behalf of our investors into a new technology and asset class that we believe will fundamentally change the world. Through this, we have the opportunity and privilege to serve as shepherds, leaders, and teachers - to help the world better understand the powerful potential of distributed ledger technology (DLT) and crypto assets. However, this begs the question: as an asset management firm, is social responsibility needed, and why should Ikigai as an asset manager play a role? In short, deflationary technologies of the digital revolution will not naturally narrow the prosperity gap. Instead, they serve as a wedge to widen it.
Despite serving as a wedge, this doesn't mean that the potential for prosperity creation through the digital revolution is low — quite the opposite. Emerging technologies like crypto can create a host of economic opportunities and bring billions of new market participants globally into a modern financial system. The stage is set, and people are ready for the next wave of globalization.
Access to and quantity of equity of economic opportunity will transformationally increase over the coming years and generations. By equity of economic opportunity, I mean fairness and inclusion. Fairness comes through a consistent removal of an individual's conditions affecting their potential for economic success. Inclusion comes through consistent standards. Ponder, for example, how many people on the planet have underutilized talent mainly as a function of where they were born geographically. Far too many have comparable potential and IQ but are getting paid a mere fraction of their peers because of where they live.
The digital revolution is in full motion toward solving problems like this. The coming years will bring prosperity and inclusion to billions. As investors, we are honored and privileged to support and vote through our investment decisions in technologies we believe will have a net positive benefit on humanity. We also recognize the need to be abundantly clear-eyed about the potential for the gap between the "haves" and "have-nots" to grow as a result of deflationary digital technologies.
Most technological revolutions are inherently deflationary. They create a sudden increase in supply by allowing for more intensive use of resources leading to higher production. All else being equal, prices decrease. While certainly an oversimplification, "all else being equal" is a common assumption economists like to make. Yet, through the agrarian, industrial, and - thus far - digital revolutions, this net deflationary nature has been well-evidenced long-term. We'll unpack this in more detail in our next periodical.
A foundational difference with the current state of our digital revolution is the superlinear and viral nature of technology growth, adoption, and acceleration of computing power and iteration of guided and unguided learning methods. Capabilities across DLT, AI, VR, AR, robotics and more will continue trending toward commoditization as increasingly more sophisticated functions become open source. As this acceleration progresses and automation increases, fewer and fewer people will ultimately be needed to keep the economy and society as we know it today functioning. Digital technology will naturally be better at filling the role, not to mention retrainability at the individual level is low.
In prior revolutions, individuals retrained out of leveraging hand tools into leveraging machines and ultimately into filling service positions. The retrainability of today's labor force into a tech-enabled role is low. In other words, it is a high hurdle to train a person to leverage and develop technology in a way that creates a net positive of value relative to technology or a machine alone. To be clear, low retrainability is not anyone's fault. It is merely how we are wired as humans. As we age, the neuroplasticity of our brains naturally reinforces what we do most often and deprecates what we don't. This is why learning a new language later in life is difficult. Learning to write code is no different.
Now, this isn't to say that everyone will need to learn how to code. Although, innovative education mechanisms like Lambda School are indeed starting to tackle that current need. Human-readable programming languages will continue trending toward a lower barrier to entry, and AI will get better at understanding and taking instructions by voice or text or even thought. However, creating new value in an augmented intelligence age – an age where machines and humans work together – will ultimately favor those best at leveraging and understanding technology.
For example, consider the difference between a chess grandmaster or Go champion playing alongside a computer and combining strengths (e.g., tactics and strategy) relative to a chess or Go amateur doing the same thing. How many moves that the computer suggests is the amateur going to override correctly?
That high hurdle is a driving force in deflationary technologies of the digital revolution not naturally narrowing the prosperity gap. Instead, they serve as a wedge to widen it. DLT, AI, VR, AR, robotics, and more are the deflationary technologies filling that wedge.
Therein lies the reason why we at Ikigai are compelled to evaluate our role in social responsibility. Our investment decisions serve to cast a vote of support in technologies we wholeheartedly believe will have a net positive benefit on humanity. We are also clear-eyed that while higher overall prosperity is likely, a wider prosperity gap is more likely. Unintended consequences, displacement, a lack of inclusion, and fairness must all be actively managed and thought through ahead of time, not in real-time and especially not reactively. Technology moves too quickly for humanity not to suffer if we fail to plan and execute. Failing to plan really is planning to fail in this instance.
Look no further than the entirely new discipline of technology ethics to demonstrate this. Think about the dilemmas presented in iRobot. Alternatively, who will the automated car choose, the driver or the pedestrian? CRISPR, designer babies, AI, and more all create a wealth of even more complex ethical dilemmas needing proactive thought and planning, effective governance, and consequently taught to technology, not left to a laissez-faire approach. We've seen how that worked for the internet in its current state, given the weaponization of social media, privacy concerns, and the attention economy.
Over a year ago, our mission was borne out of the confluence of many of these considerations and more. Specifically, Ikigai's mission is to empower humanity to leverage technology, not the other way around. The other way around is technology leveraging humanity to create data silos, to prey on our attention through psychological clickbait, and sacrifice our security and identities along the way.
In support of this mission, we recently announced that a portion of Ikigai's general partnership profit is being set aside for impact efforts. Our goal is to give back and help mitigate potential negative unintended consequences from deflationary technologies in the wedge. We do not presently have a specific initiative that we are committed to positively impacting. We have ideas. We're actively thinking through how we can best help. We are sharing this to bring the community into the fold, state that we are looking for potential opportunities, and empower those more knowledgeable than us to sharpen the pencil. Long-term, we'd like to actively direct our efforts and capital where we can uniquely generate meaningful impact. Themes complementary to skillsets developed through our core business at Ikigai are reliable options. Financial inclusion is a reasonable example.
Knowing this, we are open to suggestions and introductions to get the ball rolling. Please reach out via HQ@ikigai.fund.