In 1990, the top 3 automakers in Detroit had a combined:

  • market capitalization of 36 billion dollars
  • revenue of $250 billion
  • 1.2 million employees, out of which 5% worked in innovation

In 2014, the top 3 companies in Silicon Valley had a combined:

  • market capitalization 30 times bigger: more than 1,000 billion dollars!
  • same level of revenue: $247 billion
  • 10 times fewer employees: 137,000, with more than 80% of them working in innovation

In the Digital Age, ideas, and not material goods, become the main source of wealth. In today’s economy, far fewer workers are needed to generate the same income, and the value of the wealth generated multiplies.

In the world we are heading to, Innovation drives the creation of employment and wealth.

Companies based on technological innovation already top the rankings of the largest companies in the world by capitalization: Google (Alphabet), Apple, Microsoft, Amazon, Facebook, etc. The technological sector, or one with a strong technology component, is the main engine for the creation of new companies that seek to create cataclysms that reconfigure the industries they transform. Fintech, Insurtech, Edtech, HealthTech are just some of the buzzwords that push a good number of startups that intend to completely re-invent sectors such as finance, insurance, education or health through technology.

There are many areas of research where exponential advances are being made that are going to transform the world in which we live. These are 10 of them:

  • Artificial Intelligence
  • Internet of Things: connectivity, computing and ubiquitous sensors
  • Quantum technology
  • 3D printing
  • New Materials
  • Advanced robotics
  • Gene editing
  • Synthetic biology
  • Implantable technology
  • Neurotechnology

The possibilities and challenges that these technologies pose are such that the economic system must be capable of adapting to a new world so as not to leave anyone behind.

These developments are going to be transcendental to enable other innovation territories. There are two other areas that will be key in shaping the world to which we are headed and that will mean two sectors of growing activity with their own entity to add to Agriculture, Industrial and Services:

  • The Fourth Sector: Social Innovation. Social entrepreneurship, foundations and non-profits to solve social problems and challenges that emerge as a result of the changes

  • The Fifth Sector: Artistic Innovation. Culture, show-business and entertainment. Key to articulating thought, ideas, common values and developing critical thinking in a society in which the avalanche of information is a breeding ground for half-truths, polarization and extreme radicalization. More people than ever will be able to make a living out of artistic creation and entertainment.

We are facing the possibility of a New Renaissance in which science, humanities and arts will have unprecedented progress, generating a large part of the economic activity and employment.

Politicians must reform the system to create a framework that enables this Renaissance. Tax incentives for employment and innovation, and Universal Basic Income are two elements in this line.

The alternative is to let the system inherited from the industrial era accelerate rampant inequality that destroys the middle class and gives rise to the populism that we have seen grow in recent years. The system that took us so long to build risks collapsing before the elites realize it.

We have to decide what world we want for our children. It is in our power to make technological and economic progress work for everyone, without destroying the elements of the system that brought us here.