CEO, InvestorPlace and Co-Founder, The Freeport Society
After the director yelled “cut” for the last time and ordered the cameras turned off, the final bill was enormous.
$120 billion.
That’s how much the entertainment business spent on creating content in 2019.
We’ve all noticed how there are a million shows on the likes of Apple TV+, Amazon Prime, Netflix, and Disney+. Those shows employ armies of writers, actors, crew members, and managers and they cost a fortune to produce. The annual cost to keep us entertained is now more than the annual GDP of many countries.
The final season of Succession alone cost $90 million! Star Wars: The Force Awakens cost $447 million!
How did so much money become available to the film and movie industries? How did so many people get employed in the pursuit of entertainment?
The answers are interesting. And they go a long way toward answering one of the biggest questions on the planet right now…
What does the rise of artificial intelligence and robotics mean for jobs and society as a whole?
If you or anyone else you know is worried about AI and its effect on jobs, read on. This is what you want to know. This will make you the smartest person about AI in the room.
The “Long Life of Leisure” Society
An incredible new technology poised to automate and eliminate millions of good jobs.
It has everyone terrified… and thinking we need to regulate it ASAP to prevent things from getting out of hand.
After all, it has the power to wreck society.
Of course, I’m talking about artificial intelligence. But I’m also talking about every revolutionary technology in history.
Steam engines.
Cars.
Airplanes.
Trains.
Electricity.
The internet.
You see it again and again throughout history. Every time a revolutionary new technology is rolled out to the masses, the masses freak out.
People worried the speed of train travel would rip the human body apart. They worried radio waves would cause cancer. They believed mechanized weaving looms would cause mass unemployment.
And while AI may seem massively different from the innovations of the past, it’s not. It just feels different to most people because it’s here now and they’re not familiar with history.
When it comes to jobs and how we spend our days, AI is going to follow a predictable path and reinforce a powerful centuries-old trend. I call it the Long Life of Leisure trend.
Here’s how it works…
You can think of your career or business as falling into one of two big categories…
There’s the category we can call “The Necessities.” This category is made up of trades that grow or extract basic natural resources such as food, energy, and building materials and work them into end products.
We’re talking farming, livestock production, textile production, mining, oil and gas, petroleum refining, forestry, steelmaking, and homebuilding.
The second category is everything that doesn’t fit into the first category. It’s made up mostly of healthcare and “non-necessities” such as entertainment and leisure.
In addition to healthcare, this category contains all the jobs related to movies, TV shows, concerts, magazines, pets, resorts, museums, theme parks, professional sports, books, journalism, music, and consumer electronics.
These are all “nice to have” things, rather than “must have” things. They provide us with enjoyable leisure time. They provide us with increased health and lifespans.
Let’s call this category “ELH” (entertainment, leisure, healthcare).
Back in the 1700s, the ELH segment of the economy was very small.
Sure, there were singers, musicians, doctors, artists, playwrights, and authors back then, but the bulk of a country’s population worked to provide The Necessities for society.
They worked on farms producing food… in forests cutting down trees… in quarries extracting stone… in foundries producing steel for weapons… and in textile mills producing clothing.
In many cases, this kind of work was dirty, difficult, and dangerous. But that’s just how life was back then.
Producing The Necessities in the 1700s was so laborious that there wasn’t much time or people left over to do jobs in the ELH category.
But then, technological progress started to change the equation.
Innovations such as the steam engine, railroads, tractors, harvesting machines, and sewing machines made it easier to produce and transport The Necessities.
Farmers went from using oxen to using giant tractors. Loggers went from using axes to using chainsaws. Miners went from using picks and shovels to using drills and excavators. We went from transporting The Necessities with wagons pulled by horses to transporting them with trains and steam-powered boats.
These innovations meant the world needed fewer people to produce The Necessities. This freed up more people to work in the ELH category.
Thanks to machines, people who stayed working in The Necessities industries could produce more in less time. This meant they had more free time to enjoy or benefit from the ELH category.
As a whole, society got more leisure time… and less “dirty, difficult, dangerous work” time.
Since then, dozens of time- and labor-saving innovations have continued this megatrend… a smaller and smaller percentage of the population needed to produce food, energy, shelter, and raw materials… freeing up a greater and greater percentage of the population to work in entertainment, leisure, and healthcare.
These days, one person with a tractor can do the work of 2,000 farm laborers from the 1700s. One person operating a mining excavator can do the work of 2,000 miners from the 1700s. A team of 10 people working with a crane can unload a ship faster than 300 laborers from the 1700s can.
You see this “do more with fewer people thanks to machines” phenomenon in every industry.
This means we have a lot more time for ELH.
More and more people can live a “Long Life of Leisure.”
Fewer people are employed as farmers, loggers, miners, bakers, and factory workers… while more and more people are employed as screenwriters, athletes, podcasters, influencers, doctors, hair stylists, authors, nutritionists, nurses, journalists, financial managers, yoga instructors, and web developers.
You want a society so ridiculously affluent that “dog surfing instructor” and “nail polish namer” are real jobs? Thank technology.
If not for innovation, people in those professions would be shoveling s**t out of horse stables. (And perhaps your essayist as well.)
And all that money I mentioned earlier spent on producing entertainment? All those people working in film and television?
The reason so many people can work on location for things like Tiger King, Succession, Queen’s Gambit, and Game of Thrones is because they were not needed on location in a mine or on a farm.
The Thinking Technology
Many people currently writing and speaking about AI and its effect on jobs take a doom and gloom approach.
They say AI is different than revolutionary technologies of the past… because it’s a “thinking technology.”
This means it will eliminate lots of white-collar jobs where people use their brains instead of their backs – lawyers, business managers, bankers, software coders, journalists. Due to AI, they say, we’ll have whole swathes of the population with nothing to do and no meaning in their lives.
To this, I ask: “Were you even paying attention to the past 30 years?”
Over the past 30 years, another “thinking technology” – computer software – has revolutionized every area of our lives. It has made the collection, analysis, and storage of data much easier and much cheaper. It already has “eliminated” millions of white-collar jobs.
An accountant running an Excel spreadsheet can do the work of 1,000 accountants from 1950.
But did financial software make it so we don’t need accountants or financial analysts?
No. It just made accountants more efficient.
And if there were any accountants that were “phased out” by technology, they had a huge new universe of careers and businesses to enter in the Long Life of Leisure society.
Get laid off from your accounting job in 2019?
Go write a Netflix show or become a yoga influencer. Get people healthier or entertain them… and get rich.
This is no different than the guy or gal who was “phased out” of farm work back in 1950 by a tractor. Go work as a journalist or a marketing copywriter or a million other “Long Life of Leisure” jobs that were made possible because producing The Necessities requires fewer people than it did 50 years ago.
Yes, AI will phase out lots of jobs.
But so did the steam engine. So did refrigerators. So did computers. So did mechanized farming and mining.
But people retrained and got other jobs. They didn’t sit around unemployed for the rest of their lives. The unemployment rate didn’t soar to 50%. You don’t see tons of out-of-work milkmen, telegraph operators, and horse carriage makers lined up at the unemployment office.
No, we just moved more people out of producing The Necessities and more people into ELH. We went full bore on entertainment, leisure, and health.
That’s what AI will do… move more and more of us into the Long Life of Leisure industries.
I can say that with 100% confidence, because that’s what technology has done with uninterrupted success for 400 years.
So yes, someday, AI will probably phase out your job or your business – or at least parts of it. Yes, your current livelihood is at risk.
But this cycle has been repeating over and over for centuries. People have been adapting and retraining for centuries.
The big question you need to ask yourself is what you’re going to do next in the ELH category.
So… get yourself to Hollywood. Or create a podcast or a newsletter or a video game or a dermatology clinic. Americans are about to have a lot more free time on their hands. Americans want to be entertained. Americans want to live longer, healthier lives.
Ideally, incorporate AI into your work. Being able to harness and deploy AI to make yourself or your business more efficient is a superpower – and it will continue to be a superpower for the rest of your life.
Just read a few articles about how Netflix destroyed Blockbuster or how Amazon destroyed hundreds of brick-and-mortar retailers if you want a reminder of how important it is to have technological innovation working for you, rather than against you.
It’s Not Rosy for Everyone…
You might call this a rosy outlook on AI. I believe it is.
The massive proliferation of smart computers and smart robots is injecting huge new amounts of “productive units” in developed economies. In the past, an economy’s “productive units” were people. But increasingly, the productive units are AI programs and smart robots.
This trend will hugely increase our economic productivity.
In thousands of businesses, machine labor is much cheaper than human labor. After all, AI programs and robots will work 24 hours a day, 7 days a week, 365 days a year. They don’t call in sick or go on strike or take vacations.
The AI/Robotics trend will make many of the things we buy go way down in price. Costly human labor will be increasingly replaced by cheaper AI and robots.
Incredible abundance will be unleashed.
Some industries will boom as a result.
Some groups of people will make fortunes as a result.
However, there is one group of people getting dealt a very tough hand here.
If you’re over 55 with little savings and you need to work for 15 more years and you’ve spent your career doing repetitive jobs that AI and robotics will soon automate, you’re in a pickle.
There’s not a lot of time to retrain and start a great new career.
But if you’re in this group, I recommend giving it your best try.
Everyone has something to teach or contribute to the Long Life of Leisure society.
Brian Hunt