Gregory Ferenstein – In just ten years, Facebook built a global empire that surpassed General Electric in market value—and did it with just 4 percent of the Old Economy giant’s workforce: 12,000, compared with 300,000. Whatsapp, a recent Facebook acquisition, managed an even more impressive wealth-to-labor ratio, with a $19 billion value and just 55 employees. Combined, both companies reach roughly one-sixth of humanity. Facebook’s entertainment colleague just to the south, Netflix, crushed Blockbuster’s mammoth national network of 9,000 stores and 60,000 employees with its more nimble workforce of just 3,700 employees. It’s easy to see why: for just $10 a month, Netflix consumers could enjoy an unlimited video library larger than any of Blockbuster’s retail shops, without ever having to find their car keys. Blockbuster filed for bankruptcy protection in 2010.

Blockbuster’s fate has been duplicated many times. The Silicon Valley economy has caused massive disruption of traditional business and business models—in the process, making a relatively small cadre of brilliant engineers staggeringly wealthy. Until now, these dislocations, while profound, have been reasonably manageable. But in the years ahead, a vast new range of technological innovation—from self-driving cars to robots—may make the disruptions we have seen so far look tame. In this coming world, driven by innovation and powered by individual brilliance, what role will “normal” employees and small-business owners have? Continue reading →