Entrepreneur Elon Musk has a handy way of thinking about challenges, whether interplanetary exploration or building batteries and cars. In a 2012 interview, Musk said: “It is important to reason from first principles rather than by analogy. The normal way we conduct our lives is we reason by analogy. We are doing this because it is like something else that was done or it is like what other people are doing – slight iterations on a theme. First principles is kind of a physics way of looking at the world. You boil things down to the most fundamental truths and say: ‘What are we sure is true?’, and then reason up from there.”
For people, a first-principles approach could be looking at the way they dealt with the initial challenges of dealing with famine, plague and war, and are now starting to grapple with second-order priorities of immortality, happiness and gaining the god-like powers to achieve them, according to Yuval Harari in his books, Sapiens and Homo Deus.
As Demis Hassabis, founder of UK-based machine learning platform DeepMind, acquired by search engine provider Google, has said: “We really believe that if you solved intelligence in a very general way, like we are trying to do at DeepMind, then step two [using intelligence to solve everything else] would naturally follow on.”
As with Harari, Prof Max Tegmark, founder of the Future of Life Institute and author Life 3.0: Being Human in an Age of Artificial Intelligence, is trying to ask people to project forward from the implications of humans becoming gods and then help influence and decide how we get there.
As Tegmark said, if life 1.0 primarily consisted of bacteria working towards replication and survival, and life 2.0 consisted of animals pursuing goals beyond survival by manipulating their environment rather than modifing themselves, then life 3.0 is the “master of its own destiny”. But the organising principles while these modifications are under way are at an interesting point.
Gerald Davis, professor of management and organisations at University of Michigan, in his book – The Vanishing American Corporation: Navigating the Hazards of a New Economy – said: “We are past the point where [corporations] are the most sensible way to organise the economy.”
To Davis, signs of the corporation’s challenges began in the 1980s and 1990s, as the rise of financialisation – in which financial services account for a higher share of national income than other sectors – transformed the US economy and “they learned it does not pay to be big, but it pays to be small”. Or it pays at least to work in a distributed way with smaller companies and rely less on financialisation, with Davis pointing to Canada (see innovative region report) as an example for the US.
Whether through the potential break-up of storied corporations, such as industrials group GE (see sector focus), or distributed conglomerates owning partial or majority stakes in a wide range of assets, including Google’s parent Alphabet, or equivalents, such as South Africa’s Naspers, China’s Tencent and Alibaba and US stalwart Berkshire Hathaway, the creative disruption and relationships offer as much potential as cause for concern.
This re-evaluation of structures and purpose is encompassing almost all areas. Politicians and government officials are looking at how technology changes how they represent people, robots and entities. Universities are also looking more closely at how they engage with where their students will work in future, and the results, or impact on society and the economy, of their research and teaching.
This is also pushing academic institutions towards encouraging or incubating startups and spinouts (see University Corner). Threats might emerge in new ways as university power has as much emanated from the network effects of its students and faculty as from the power to accredit or hold stores of knowledge in a location. Different models developed by venture capital and their portfolio companies could pose threats in this light.
As artificial intelligence comes increasingly to the fore, people are asking what change do we want to see, as well as where will we first see signs of its emergence? The media is one of Tegmark’s hypotheses, that it will first be used to gain both money and influence in the world. This will form the starting point for an invitation-only roundtable on the sector’s future at our GCV Symposium in May 22-23.
Form, however, follows function. Sir Ronald Cohen, serial entrepreneur and investor (see comment), talks about the 21st century being about risk, return and impact.
And if the goal of business moves beyond profit or loss considerations then longer-term impact analysis will be important. The GCV Symposium’s theme is “going beyond capital” because while the focus will be on how startups and entrepreneurs can benefit from being lifted by their corporate investors and those corporates benefit from increased exposure to emerging technologies, the ability to create new ecosystems and to connect their startups to other parts of their own corporations for commercial arrangements and other collaborations, the provision of money is only one factor.
For entrepreneurs and incumbent corporations to change the world, regardless of principles held, the same building blocks are required – capital, customers, product development, hiring and, eventually, an exit.