OwnerOperator

Quora Answer : There is significant emerging evidence that large segments of the middle class in the developed world will basically become unemployable soon, leading to growing income inequality. What tools and services could turn this class into entrepreneurs?

Aug 28, 2011

I recently wrote in a discussion forum that I could foresee two possible outcomes of the current automation revolution. One in which incredibly powerful fabrication machines all belonged to the wealthy, most people were unemployable, and those who were in work were receiving a minimal salary for tending the machines.

An alternative would be a world of "owner-operator" small businesses. In this world, "economies of scale" would be trumped by "economies of flexibility" from local and ecologically sustainable on-demand manufacture. Your local main-street / high-street would be revitalised. When you shopped for a pair of shoes, you'd visit a family owned shop, getting personalised service - the shopkeeper, who was also the owner, would help customise the shoe design for your feet and taste and would then go into the back of the store and fabricate the shoe on the printer. These owner-operators would be responsible for maintenance of the machines (at least calling the guy who fixes them); for understanding enough to download and install software upgrades, etc; and even collecting old shoes to recycle material back into the feed for the next round of fabrication.

Now, how could we get to this second scenario? I don't believe that naive techno-determinism gets us there. Technologies get invented to solve the problems people WANT to solve. It won't just come from the existence of the 3D sintering machines. I also don't believe that saying "leave it to the market" or the "leave it to the entrepreneurs" sorts it out. Ambitious entrepreneurs are always going to want to build huge companies that make a lot of money. VCs will be prejudiced in that direction too. But this vision is of a "mittelstand" of small and medium sized businesses that employ a lot of people but don't make big, short-term returns for investors.

So we have to WANT this future. And deliberately try to create it. Here are some areas where I think we should act

Education

I don't buy the story that entrepreneurship can't be taught. It's part of the myth of the entrepreneur as some kind of superman. To me, it's shocking that Western capitalist countries idealise business and entrepreneurship so much but do so LITTLE to teach it in our educational institutions.

So, here's the start. By age 8, every school would have scheduled lesson-time where pupils played "play-money" games like Monopoly and similar. They'd also have gambling card games like poker (played with real casino chips) and strategy games like chess and Go. On the curriculum! In lesson time. Not as some special after-school club that only nerds go to.

Then, by age 10, there'd be classes that were about setting up the proverbial "lemonade stall". Three times a year, all schools would run markets whose stalls were operated by the pupils, selling whatever they managed to make and figured there was a demand for. Pupils would keep the money they made.

From 10, children would also have a specific "political economy" class, teaching basic economic principles, how banks work, how the insurance industry works, how stock markets work. And the history of economic ideas.

By age 14, pupils should start leaving the ghetto of school to engage with the adult world. So by 14, the school week should drop to 4 days of taught lessons, with Fridays being reserved for self-directed projects with supervision from teachers. A self-directed project may be academic - a pupil may still choose to study maths; may arrange with the physics teacher to use the school's facilities to do their own experiment; or may choose to write a mini-dissertation on a period of history they are particularly interested by. On the other hand, the school may arrange that the day is spent on an apprenticeship with a local business. Those who seem sufficiently motivated and competent may spend the day working on their own startup.

From age 15, school attendance should be voluntary and pupils free to choose the courses that interest them. Schools should offer courses at night. And short, applied courses (in computer literacy, fabrication technology, accountancy etc.) Classes should be open for adults in the community to attend.

Finally, schools should be given money to act as investment funds in their pupils' enterprises. Not a large amount, but schools should be able to make small grants to help their pupils set up their enterprises.

Zoning

Many in the middle-classes have an incredible, unused resource in the form of their homes and gardens, but are often prevented from exploiting it commercially by zoning regulations or by private contracts with their neighbourhoods.

Apart from the case where outflow byproducts are genuinely harmful, local laws that prevent people from growing vegetables in their gardens, turning their residential home into a cafe, or running a commercial laser-cutter in their garage, should be scrapped.

Eminent domain should be used to break similar restrictions due to private contracts.
The separation between residential and commercial needs to be broken down to bring jobs and work closer to where people live in the suburbs and to turn that land and architecture from mere consumption good back into productive capital.