Interview, Podcast
a16z Podcast | Connectivity and the Internet as Supply Chain
- Global connectivity is projected as the defining force of the century, shifting the world organization from nation-states to a flow-based system where infrastructure and supply chains supersede borders.
- Physical digital infrastructure investment by technology companies is estimated at $4 trillion between the present and 2020 to support the transition from national economies to global flows.
- Economic activity is increasingly distributed globally, with Fortune 500 companies earning more revenue abroad than domestically and major firms like Cisco seeking universal locations to access cloud coding talent and emerging markets.
- The workforce is predicted to shift toward self-employment, with an estimated 30 to 40 million participants in the sharing economy as part-time workers, freelancers, or digital workforce members.
- Migration trends show a tripling of the expatriate population to over 300 million, driven by a demographic shift where loyalty moves from countries to employers, particularly among Millennials, Generation Y, and Generation Z.
- Social connectivity is expanding with international social media friendships comprising 15 to 16 percent of an average person's network, while the potential for accessing global ideas remains vast despite risks of filter bubbles.
- Future economic growth targets the next three to five billion people for connection, utilizing blockchain and cloud technologies to lower transaction costs and increase transparency and security.
- Lower-cost platforms will enable broader participation in global supply chains, supported by portable insurance schemes and worker rights initiatives emerging from organizations like the Freelancers Union.
- Urban infrastructure plans involve establishing incubators, low-cost co-working spaces, and vocational schools to equip Millennials with skills for a digital global economy.
- Special economic zones have proliferated to 4,000 globally, compared to a handful in the 1960s, with Central American countries deriving 50 percent of their GDP and China 25 percent of theirs from exports generated within these zones.
- These special economic zones are expected to facilitate rapid ascension up the value chain for participating countries while creating spillover effects that raise wages and improve workers' living standards.