In his talk at SXSW 2018, Tim O'Reilly argues that technology can enhance human capabilities rather than replace them, enabling society to tackle pressing global issues such as climate change, poverty, and education. He emphasizes that companies must evolve their business models and prioritize social purpose alongside profit to adapt to changing economic landscapes, while also warning against the potential dangers of unchecked AI. Ultimately, O'Reilly stresses the importance of collaboration between humans and technology to create a prosperous future for all.

1. Do More.
Do Things That Were Previously Impossible!
Tim O’Reilly
@timoreilly
oreilly.com
wtfeconomy.com
SxSW
March 9, 2018

2. Will there really be nothing left for people to do?
Is there really
nothing left for
humans to do?

4. Dealing with climate change
Rebuilding our infrastructure
Feeding the world
Ending disease
Resettling refugees
Caring for each other
Educating the next generation
Enjoying the fruits of shared prosperity

5. What is keeping us from
working on stuff that matters?

6. WTF?
Amazement or Dismay?
wtfeconomy.com

7. Our maps of the world are steering us wrong
In 1625, we thought
California was an island

8. In 2005, we thought the connected taxicab looked like this

10. This was science fiction, until it wasn’t

11. And you thought drones would deliver pizza

12. 1. In 2018, we believe that it is technology
that will put people out of work

13. What happened when Amazon added 45,000 robots

14. Jeff Bezos calls this “the flywheel”

15. Amazon ran this same play
in cloud computing
Radically lower prices
Create demand for something that didn’t really exist yet
Open up Amazon’s platform so others provide more services
Create more demand

16. Give people new superpowers

17. Michael Mandel on ecommerce vs retail
 Since 2007, hours worked by production and nonsupervisory employees in the digital
sector have risen by 8.5 percent compared to a 3.4 percent increase in the physical
sector.
 The ecommerce sector is adding jobs much faster than the general retail sector is losing
them.
 The ecommerce sector added 355,000 jobs from 2007 to 2016—more than enough to
compensate for the 51,000 jobs lost in the general retail sector.
 Wage and salary payments to ecommerce workers have increased by almost $18 billion
since 2007, in 2016 dollars. By comparison, real wage and salary payments to workers in
general retail have risen by less than $1 billion over the same period.
http://www.progressivepolicy.org/wp-content/uploads/2017/03/Tech-middle-class-3-9-17b.pdf

18. “Frontier Firms” are more productive,
and eventually pay everyone more

19. 100 years
Lister’s Mill, Bradford

20. Why Innovation Takes Time to Show Up in Productivity
James Bessen

21. It is not just technology innovation, but the diffusion
of knowledge through society about how to use new
technology that makes a difference in making us all
richer.

22. Eventually, there were dozens of specialized
machines, and complicated workflows.
But that wasn’t all. In addition to inventing new
machines, people had to learn to use them, fix
them, improve them.
Systems were needed for distributing and selling
the wealth of new products.
An educated, prepared workforce is an
ecosystem.

23. We sent children to school instead of the fields and factories

24. On Demand Learning

25. A platform for people to teach each other

26. “In order to fully reap the benefits of a changing economy—
and sustain growth over the long-term—businesses will need
to increase the earnings potential of the workers who drive
returns, helping the employee who once operated a machine
learn to program it. They must improve their capacity for
internal training and education to compete for talent in
today’s economy and fulfill their responsibilities to their
employees.”
Larry Fink,
CEO, Blackrock

27. Values Alert: Structural Changes In the Economy
“In the 35 years between
their jobs as janitors,
corporations across
America have flocked to a
new management theory:
Focus on core competence
and outsource the rest.”

28. It is machines that help us
to feed 7 billion

29. Our digital systems enhance our capabilities with software
and data the way our physical systems use heavy equipment
 Users post 7 billion pieces of content
to Facebook a day.
 Expecting human fact checkers to
catch fake news is like asking workers
to build a modern city with only picks
and shovels.
 At internet scale, we now rely
increasingly on algorithmic systems to
manage what we see and believe.

30. “I’ve just invested in an AI startup that will put 30% of call
center workers out of a job.”
(A VC who shall remain nameless)

31. Don’t replace people. Augment them!

32. This is what technology wants
“Prosperity in human societies is best
understood as the accumulation of
solutions to human problems. We won’t
run out of work until we run out of
problems.”
Nick Hanauer

33. The March of Progress

34. Technology is our superpower

35. Inequality is our kryptonite

36. 2. In 2018, we still believe that it’s acceptable for
companies to maximize their profits, regardless
of the social, environmental and human
consequences

37. We’ve heard from the economists and financial writers

38. What the great technology platforms
teach us about the economy and the
future of work
wtfeconomy.com

39. Fitness Landscapes
The way in which genes contribute
to the survival of an organism can
be viewed as a landscape of peaks
and valleys.
Through a series of experiments,
organisms evolve towards fitness
peaks, adapted to a particular
environment, or they die out.
Image source: http://evolution.berkeley.edu/evolibrary/article/side_0_0/complexnovelties_02

40. Fitness landscapes are dynamic
When conditions are stable, a
population chooses one fitness
peak and stays there.
But when conditions change,
populations must migrate to a
new fitness peak.

41. Local Maxima
Once you are on a peak, it’s
hard to get to another one,
even if it’s higher. You have
to go back down. It may be
easier to get to the top if you
are already starting from a
valley floor.

42. Technology also has a fitness landscape
In my career, I’ve watched a
number of migrations to new
peaks, and I’d like to share with
you some observations about
what happened, and why. And
then we’ll talk about some
lessons for companies like
Google, but also for the overall
economy.
Personal
Computer
Big Data
and
AI
Smartphones
Apple

43. Big Data
and
AI
Tim Berners-Lee, 1990
The World Wide Web
Linus Torvalds, 1991
Linux

44. This happens in politics as well
Voters are moving away from
the fitness peak of the
neoliberal consensus. We don’t
know yet where that new
fitness peak will be, but the
migration is telling us loud and
clear that the economy needs
some fresh thinking.

46. Yes, things are changing.
But one thing doesn’t
change.
A successful ecosystem
creates opportunity for
everyone, not just a few.

47. “Society is demanding that companies, both
public and private, serve a social purpose. To
prosper over time, every company must not
only deliver financial performance, but also
show how it makes a positive contribution to
society. Companies must benefit all of their
stakeholders, including shareholders,
employees, customers, and the communities
in which they operate.”
Larry Fink,
CEO of Blackrock

48. BCG’s Sustainable Economic Development Assessment

49. Total Societal Impact as Business Advantage

50. Climate change has
been a classic driver
for the change in
fitness landscapes,
for organisms and for
civilizations.

51. 3. In 2018, too many people still believe
that technology is a magic bullet
fired from the same old gun

52. Death Star Thinking
“What’s the lesson too many people take from that first and
most influential episode in the franchise back in 1977? One
incredibly well-placed shot into the thermal exhaust port and
the entire apparatus of our oppression explodes spectacularly.
All we really needed were the plans to the Death Star and a
very talented fighter pilot guided by the truth (“the Force”.)
Never mind that there are countless Death Stars ahead of us
as the Imperial war (and the franchise) continues. That one
glorious victory and the release it provided became the implicit
theory of change.”
Jennifer Pahlka,
Death Star Thinking and Government Reform
Jennifer Pahlka

53. Why simply adding an app doesn’t change the game for taxis

54. “A business model is the way that
all of the parts of a business work
together to create competitive
advantage and customer value.”
- Dan and Meredith Beam

55. A Business Model Map of Southwest Airlines
Low ticket prices
Short-haul,
point to point routes
No seat assignments
No baggage forwarding
Lean gate and ground crews
Highly paid employees
Flexible union contracts
High level of employee
stock ownership

56. A Business Model Map of Uber
 A magical app that lets drivers
and passengers find each other
in real time
 A networked marketplace of
drivers and passengers
 Augmented workers able to join
the market as and when they
wish
 Managed by algorithm

57. The Augmented Worker
Neo: “Can you fly that thing?”
Trinity: “Not yet.”

59. Gradually, then suddenly
1. We are creating new kinds of
partnerships between machines
and humans
2. Artificial Intelligence and
algorithmic systems are
everywhere
3. The world is becoming infused
with the digital

60. We see the same thing with Uber and Lyft
Oxford Internet Institute study:
 50% more total hours worked
 Higher wages per hour
https://www.oxfordmartin.ox.ac.uk/downloads/academic/Uber_Drivers_of_Disruption.pdf

61. But…

62. Platforms are marketplaces. They have
to work for all of their participants.
wtfeconomy.com

63. Creating a “thick marketplace”
Markets are outcomes. A better designed
marketplace can have better outcomes.

64. The great opportunity of the 21st century is to use our
newfound cognitive tools to build better marketplaces

65. 4. In 2018, we believe that human-hostile AI
is a future risk

66. We are all living and working inside a machine

67. The coming robots are not autonomous

68. Symbiogenesis and the origin of eukaryotic cells:
“species form new composite entities by fusion and merger”
“Nearly all extranuclear genes are derived from
bacteria or other sorts of microbes. In the search for
what genes outside the nucleus really are, I became
more and more aware that they're cohabiting entities,
live beings. Live small cells reside inside the larger
cells…. different bacteria form consortia that, under
ecological pressures, associate and undergo
metabolic and genetic change such that their tightly
integrated communities result in individuality at a more
complex level of organization. The case in point is the
origin of nucleated (protoctist, animal, fungal, and
plant) cells from bacteria…. species form new
composite entities by fusion and merger.”
Lynn Margulis

69. Biological symbiosis doesn’t stop there
“All zoology is really ecology. We cannot fully
understand the lives of animals without understanding
our microbes and our symbiosis with them…. When we
look at beetles and elephants, sea urchins and
earthworms, parents and friends, we see individuals,
working their way through life as a bunch of cells in a
single body, driven by a single brain, and operating with
a single genome. This is a pleasant fiction. In fact, we
are legion, each and every one of us. Always a ‘we’
and never a ‘me’.... Heed Walt Whitman: “I am large, I
contain multitudes.”
Ed Yong

70. From genes to memes
“Language doesn’t emerge de novo in each person; it is passed, with little
modification, from generation to generation. We speak the language of our
parents, they spoke the language of their parents, and so on, further and
further back in the past.”
– John Skoyles

71. And you can think of the Internet as the next evolutionary step

72. AI is “the most serious
threat to the survival of
the human race”
Elon Musk

73. The runaway objective function
“Even robots with a seemingly benign
task could indifferently harm us. ‘Let’s
say you create a self-improving A.I. to
pick strawberries,’ Musk said, ‘and it
gets better and better at picking
strawberries and picks more and more
and it is self-improving, so all it really
wants to do is pick strawberries. So
then it would have all the world be
strawberry fields. Strawberry fields
forever.’ No room for human beings.”
Elon Musk, quoted in Vanity Fair
https://www.vanityfair.com/news/2017/03/elon-musk-
billion-dollar-crusade-to-stop-ai-space-x

76. Algorithmic systems have an “objective function”
Uber and Lyft: Passenger pick up time
Google: Relevance
Facebook: Engagement
What is the objective function of our
financial markets?

77. The Equinix NY4 data center,
where trillions of dollars change hands

78. We didn’t mean to increase inequality and gut our economy
“The Social Responsibility of Business Is to
Increase Its Profits”
Milton Friedman, 1970

79. Zeynep Tufekci
Author of Twitter and Teargas

80. “The art of debugging is
figuring out what you really told
your program to do rather than
what you thought you told it to
do.”
Andrew Singer
Andrew Singer

81. 5. In 2018, we are still trying to revive the old
economy, rather than inventing the future that is
possible now

82. “Economic Possibilities for Our Grandchildren”
The world of his grandchildren—the
world of those of us living today—
would, “for the first time . . . be faced
with [mankind’s] real, his permanent
problem—how to use his freedom
from pressing economic cares, how
to occupy the leisure, which science
and compound interest will have won
for him, to live wisely and agreeably
and well.”
John Maynard Keynes
John Maynard Keynes

83. Divergence of productivity
and real median family income in the US

84. There’s plenty to go around.
It’s just not going around!

85. “If total US household income of $8.495
trillion were shared by America’s 116
million households, each would earn
$73,000, enough for a decent middle-
class life.”
Brian Arthur

86. The fundamental economic question
is no longer how to incentivize production
but how to incentivize fair distribution
of the fruits of increased productivity
Brian Arthur

87. So what are we going to do about this?

88. It is the job of the entrepreneur to redraw the map

89. We Need the “Human Colossus” to Work on Stuff that Matters

90. What’s the Future?
It’s Up To us
wtfeconomy.com

91. Tim O’Reilly
 Founder & CEO, O’Reilly Media
 Partner, O’Reilly AlphaTech Ventures
 Board member, Code for America
 Co-founder, Maker Media
@timoreilly
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