A year ago, at the close of the decade, I made a set of predictions about 2030. Three months later, on March 9, with the U.S.’s daily count of new Covid-19 cases at 200, I added an early projection about how Covid would change the future of tech.
With a year of distance from my 2030 predictions, and nine months of living with Covid as a daily reality, I took some time to examine the long-term implications of the virus—and our response to it—for society and technology. What seems clear to me is that the events of 2020 will turn out to be less game-changing in the long term than they might seem right now.
I still stand behind most, though not all, of my long-term predictions. Covid certainly dramatically accelerated some trends already in play. It also changed some details about how big-picture themes will play out.
But while acknowledging the individual tragedies people face, Covid, with a few exceptions, hasn’t changed the direction in which we were already headed.
The big challenges we face as a society have intensified but not changed
I started my 2030 predictions last year with a focus on the dramatically increasing challenges I expected we would face around inequality and identity politics in the coming years.
Covid clearly speeded up the emergence of this reality, though it isn’t clear that it shifted the narrative as much as it simply brought us a few years forward into the future.
On the inequality front, the story is clear: We already had problems—but I can’t think of a historical period where a crisis so spectacularly decoupled the relative fortunes of different socioeconomic groups.
Wealthy knowledge workers may have had their struggles, but broadly their jobs remained intact. They were able to shift rapidly to working from home, and if anything their assets appreciated while their spending declined.
Service workers, meanwhile, faced massive job losses, risks on the front line, lack of childcare, dwindling savings without the ability to retrench spending, and in many cases food insecurity.
It is even more unfortunate, that the crude tools we had for infusing cash into the economy likely only further exacerbated inequality.
Direct cash transfers from the federal government might have been the right idea, but the dominant impact of all that extra money floating in the system seems to have been to ease investor fears and help drive up the stock market, which, in combination with low interest rates, benefited the wealthy.
So I await the massive shock to the Gini coefficient I expect pundits will be studying in the future.
On the topic of identity politics, the narrative is equally clear.
Many explanations will be offered in the future about why this was a particularly intense year. Part of that intensity was expected because of the highly polarized presidential election, but part of it wasn’t, and the knock-on effects of stay-at-home orders changed people’s focus and time. But it is undeniable that the past year has been an acceleration of the trend toward division.
In the coming years some of these conflicts will seem to be cooling off. It is possible—even likely—that the new administration will bring more nuanced approaches to these big problems that will keep them under control or even start to address root issues. However, both issues fundamentally remain unsolved, and I still expect that by 2030 the tenor around both will have intensified.
The macro economy took a serious hit, but with extreme government intervention has so far proved surprisingly resilient
In my 2030 predictions, I unequivocally—and no doubt controversially—predicted that we wouldn’t see a recession in the next decade.
My theory was that the government had demonstrated such a willingness and ability to intervene in the economy to prop it up that even if a crisis hit, it wouldn’t have deep economic consequences.
Covid-19 proved me wrong about that with almost comic speed. We most certainly are in a recession, and job loss, food insecurity and the closure of small businesses are the devastating results.
That said, I have to say that compared with the terror that marked the early days of Covid, when banks were running out of cash and people were hoarding food and toilet paper, the economy and certainly the equities markets, supported by massive government cash infusions, have proven shockingly resilient.
In that regard, I stand behind the idea of my prediction.
Gone are the days where the government lets the economy work independently. We are in a period where the economy and government are so intimately linked and co-managed that in my mind we are unlikely in the next decade to suffer serious recessions.
None of this is to say that there aren’t challenges on the horizon.
You simply can’t print money at the scale we have without creating negative consequences down the road, whether that is moving away faster from being the reserve currency of the world or inflation—though that trend, because of inequality, might be limited to things like asset prices as opposed to the price of bread and basic consumer goods.
But, in keeping with my year-ago prediction, I still believe that the economy as we measure it today will do well over the next decade, if the propellant (also as I predicted) switches from tech innovation to government spending, driving up tech valuations.
The narrative around tech regulation ultimately hasn’t changed, though Covid-19 did add several new pressures to the equation
It has been clear for a long time that the 2020s would be a period of deep tension between the government and technology.
Everyone knew a year ago, as is clear now, that government was going to go after the power of big tech and that the internet faced increased scrutiny globally and was under threat of being carved up and regionalized by regulators.
The events of 2020 have not changed this, but Covid did alter a few variables that might have an impact on the details of regulation.
First, Covid provided a brief but powerful reminder to people of just how incredibly amazing, magical and valuable our major tech platforms are. There was a moment when Facebook was loved again for connecting us to friends and family stuck at home. Facebook’s Portal, once a device that no one wanted in their homes, was sold out, and even virtual reality had its moment to shine. Zoom became a beloved household name. People at home starkly confronted how incredibly painful (even impossible for many) life would have been in this crisis without services like Amazon and DoorDash. This moment of consumer appreciation may have been fleeting, but I believe it will make it at least marginally harder for the government to popularize anti-tech narratives.
Another wrench that Covid has thrown into the big tech regulatory game was that it opened consumers to new tech experiences in markets that may have previously seemed less accessible to them.
Take social media, for instance. While services like TikTok, Zoom and OnlyFans were all well positioned before, Covid was rocket fuel for their growth. It is hard to make monopoly-style claims about the big social media channels when alternatives grow so quickly.
On the flip side, the stark decoupling of tech valuations from the rest of the economy has clearly strengthened an anti-tech narrative. Watching the stock prices of Amazon, Zoom and others explode as the world burned fueled anger and envy. The same went for names like Airbnb, which, while momentarily disrupted, now has a multiple in the public market far higher than ever before, or for on-demand services like DoorDash and Instacart, who have seen their pre-pandemic business and regulatory struggles utterly reversed. It isn’t that these valuations aren’t explainable—they are. But winning while everyone else loses isn’t a good look to have when the government comes knocking.
Overall, the pandemic didn’t change my view of where regulation is going. The suits are still coming for big tech, but they won’t succeed in breaking up the industry giants. Instead, the pandemic might modify in marginal ways how tech companies will reach compromises and settlements with regulators.
The expansion of the startup and venture financing ecosystem, as well as the growth of tech valuations, have accelerated throughout 2020
In the early days of Covid, I, like many others, expected venture capital to pull back, private company valuations to drop and the activity around the venture world to slow down. I also predicted that people would be less willing to leave great, high-paying jobs to start companies.
I was right about that last part—people are less willing to leave great jobs in the middle of a pandemic—but otherwise I was dead wrong.
If anything, what we have seen is acceleration of tech focus and valuation.
Venture capitalists have never been busier, valuations are skyrocketing, and the public markets, including SPACs, seem open and are even valuing companies more richly than private investors for the first time in a while.
This mostly relates to the fact that with government money flowing, massive business disruption, and time and attention up for grabs, this period ended up looking like an important moment for tech breakout rather than a broad pullback across the economy.
This is also a function of people simply not wanting to hold cash in a world where everyone now fears inflation. If you aren’t going to buy other currencies, investing in equities, especially those that can grow, and in bitcoin seems like the solution.
The upshot is that while most people expected tech to continue to accelerate in the coming years, this pandemic proved again that in a world where people are afraid of investing in everything else—dollars, for example, or companies with physical assets that are hard to value in times of uncertainty—tech only accelerates faster.
Tech has lots of free money with nowhere to put it, as well as companies and assets that seem poised to survive and grow in dynamic environments. Put this in opposition to legacy competitors that must deal with fixed assets and hard pivots, and the combination leads to a decoupled world.
Back to the point on inequality: This clear decoupling, where tech operates in an ecosystem independent from the rest of the economy, is—if rational—a scary schism to face in terms of social stability.
It is clear today, as it was a year ago, that in 2030 technology companies and the tech ecosystem will drive the economy.
The shift to on-demand and asset-light economic models, though disrupted seems to be continuing at pace
I have always maintained that on a long-term basis we are on a path toward asset-light or asset-less on-demand models.
This is no longer a novel thesis, but it was when I started beating the drum in 2009 about how in the future “only poor people who can’t afford to rent things will own them.”
I fell for the deception early in the pandemic that there would be a momentary pausing of this narrative, that people would look for security and stability through ownership and that on-demand models would face a momentary pullback.
This seemed like a reasonable position to take when people were worried about surface transmission, particularly throwing into question how willing people would be to share Airbnbs, Ubers and other spaces. However, as surface transmission fears subsided and the reality of airborne transmission set in, this turned out to be wrong.
If anything, with local businesses holding long-term leases getting crushed and a massive reshuffling of the physical world’s economic deck, the move away from asset ownership and toward marketplaces and on-demand models for consumption and work has only picked up steam through this period.
Even marketplaces such as on-demand delivery that were threatened before the pandemic have come back stronger than ever before.
We now see a future where on-demand access to employment is even more important than it has been historically. (It is quite plausible that California’s Prop. 22, which exempted gig economy companies from treating workers as employees, might have fared differently without Covid as a catalyst). The future of restaurants seems even more clearly to lie in ghost kitchens, as the pandemic has put many restaurants with physical footprints into economic distress. Small businesses are going to shy away from long-term leases and embrace more-flexible models as the value of real estate comes into question. The list goes on.
It is going to be a long time before people want to own fixed physical assets again, which only creates more downward pressure on interest rates.
The exodus from New York and San Francisco has accelerated faster than expected and the patterns of migration are changing the landscape
No thinking person believes that New York and San Francisco will be as dominant in 2030 as they were in 2020. My prediction at the end of last year was that we would see a slow flattening out and exodus from these cities as more companies chose a remote work model and the cost of living continued to spiral out of control. I also predicted that we would see some new technology cities born from scratch in different locations.
Personally, I suspect that by 2030, New York and San Francisco will have recovered and will look much as they would have if the pandemic had not occurred. Cities have a way of surviving and young people still want to congregate physically with their peers. If anything, the hope would be that whatever hit the cities are taking now, the flexibility that chaos opens—where all bets are off—should allow them to fix some of their deepest problems.
That said, the suddenness of the shift to remote work, accelerated by technology companies rapidly embracing change and legacy companies proving surprisingly nimble in their reorganization, is having a notable impact on the fortunes of a couple of cities in particular.
For example, the migration is a major boon to cities like Austin and Miami, which are aggressively courting inflows of people, especially tech workers.
In a slower move away from the major tech cities, would these two have been prime destinations? It’s uncertain. But when people are making fast and relatively sight-unseen decisions about where to move, they go for the shovel-ready, most obvious answers. So it is possible that Covid will concentrate the tech megalopolis exit on a few places instead of on many.
This trend is almost certainly going to cause real estate asset bubbles in a few places, like Jackson Hole, Wyo., where tech workers are willing to go—and to buy homes—sight unseen, rather than a more gradual shift away from major hubs.
I also question whether the dream of many billionaires to build new tech cities from scratch will come to fruition. My sense is that with the pressure valve released on San Francisco and New York, and meaningful outflows of people to cities specifically seeking to entice tech talent, the drive to found new cities may abate.
The upshot is that New York and San Francisco were going to experience outflows and downward pressure in the 2020s regardless. The apparent rise of Austin and Miami, however, is tied to the Covid situation.
The long-term future of work hasn’t changed but the timeline has dramatically accelerated
Without a crisis, the march toward remote work, hand in hand with the outflows from San Francisco and New York, would have been slow and methodical. Instead, what we saw was a sudden transformation that forced tech workers, and then workers in many other industries, to go remote very, very quickly.
The amazing part is just how well this transition actually worked in so many fields.
Even in industries such as medicine where working remotely was verboten pre-pandemic, people and businesses adapted at lightning speed, proving what was possible and opening up new business opportunities.
After the pandemic, will many people go back to physical offices? Of course they will. But the world will be forever changed in meaningful ways.
Enough workers will keep working from home so that downtown areas, along with their supporting economic and real estate ecosystems, will face major challenges.
Enough business will start sourcing talent globally to create downward pressure on white-collar wages and jobs.
Enough companies will retain flexible time so that the five-day workweek will no longer be so standard.
Again, this was all coming anyway. But sometimes a sudden jolt forward can have unintended consequences if ecosystems don’t have sufficient time to respond, and that is my sense of what we will face.
Our biggest human challenges, including depression, flight from reality and crisis of identity and purpose, remain and have even intensified
Technology is so deeply changing our lives that we face certain challenges at the core of who we are as individuals and as a species.
The discussion of mental health is part of this story. In my 2030 predictions, I asserted that the crisis of depression we face would be more intense than ever but that the narrative would widen in scope—focusing less on blaming social networks and the internet and more on the broader socioeconomic realities of modernity. Covid clearly confirms this. We are discussing depression and loneliness more openly than ever before, but we have evolved from thinking about them as the fault of the internet.
Flight from reality is another part of this narrative. In a digital world, fantasy is more accessible and compelling than ever before. People stuck at home looking for entertainment and a sense of identity have found their way to TikTok, OnlyFans and other platforms and have participated in increasingly extreme and hermetic subcommunities.
In my 2030 predictions I suggested that this retreat away from reality was going to be a big issue. Now I think it is going to be big way faster—in 2021, when it turns out that after a year alone at home, some people won’t crave a return to the physical world.
And then there is the deep question of human purpose and meaning in the technological future.
One of the big themes in 2020 was a sense of helplessness in the context of overwhelmingly large problems. People felt helpless as their friends got sick, helpless as their jobs and savings disappeared, and helpless to do much individually to fight the virus.
For most people, it was a year of waiting on the federal government’s actions on stimulus, and then waiting on a vaccine. Unlike most earlier crises, where a strong local response could meet the challenge, the scale of the problem and the solutions left most people sitting on the sidelines, feeling like there was little they could do.
This is probably the biggest problem of our technological future, played out in a single intense year.
By bringing the whole world together, technology creates incredible leverage, scale and power, but it also obliterates for most people a sense of purpose and place, as well as the ability to have meaningful impact through their own day-to-day efforts. Covid gave us an intense and compressed dose of this situation we will face for decades to come as we try to figure out how to give people a sense of individual purpose when their individual labors are no longer as meaningful to their communities as they once were.
Where do the flows of money, time, attention and intellect go in 2021?
One can make a strong argument that the pandemic is a prime reason we will have a new president in 2021. Given how pivotal and fragile a moment we live in, that impact alone may change the future more than anything else.
That said, when I think about the fundamental flows of money, time, attention and intellect, it doesn’t feel like 2021 will likely change the theme much for the decade ahead.
Money will flow to tech almost as fast as it is printed, feeding growing inequality. With zero-percent interest rates and highly mobile people creating interesting tax problems, value, money and human effort will become increasingly and perilously disconnected.
Time and attention will flow away from the physical world and into digital realms with ever more flexibility. This will create great diversity of thought and experience, but it will also be alienating and disconnect people from the real world.
We will spend the decade wrestling with our national and human values, and learning how to work together against the backdrop of our new technological superpowers.
I remain an optimist. Humans are infinitely creative and inventive, and I think fundamentally good. That said, as the saying goes, “Never let a crisis go to waste.” But we have done exactly that with Covid: With a few exceptions, the way we handled the pandemic as a society has only doubled down and accelerated the problems we already faced.