It's all about incentives

It's all about incentives.

That was the opening line of my presentation at Latitude59 in May of 2024.

Over the past few decades, our global society has structured itself in a way so that the number of goods and products, flowing through economy, can be maximized and spun around swiftly. Meanwhile, lifespans of these goods and products have been minimized.

The underlying reason for this structuring is that the "governing" core economic incentive, is to do so.

We're all driven by incentives.

As the global middle class is expected to rise from 4 billion people, to upwards of 7, over the coming decades - conducting a strategy to lower carbon emissions through efficiency innovations, is not the recipe for success. In my humble and personal opinion.

Instead, we need to change the core economic incentive toward a new model where the economic rationale is based on making as few physical goods and products as possible, with maximized lifespans.

When the spirit of human innovation is unleashed with the right incentives, we've seen countless of massive disruptions since the start of the industrial revolution.

This requires disruptive innovations.

I believe Artificial Intelligence is the disruptive innovation and key to unlock a change of incentives on a global scale.

Why?

AI enables any product to become a "robot", which in turn increases the likelihood of selling it as a service (instead of units), because a robot can take care of tasks by themselves. In turn, manufacturers will want their products to last as long as possible (more revenue).

AI could also lower the manufacturing cost for high-wage regions around our blue planet (through Humanoid robots, etc.), so that localized manufacturing is the best economic option.

AI could also crush the cost of logistics, and make a seamless peer-to-peer sharing economy possible - through autonomous vehicles. Cost-efficient and seamless product exchange could be a vital consumption-avoiding enabler.

And lastly, AI is a potential supercharger for discovering novel ways to come up with renewable materials. We already see this in the discovery of novel life-saving drugs. Materials are next in line.

Closing remarks:

1. It's all about incentives

2. We need to change the linear incentive, to unleash global change

3. AI could be a key to unlock a new circular incentive

Thoughts above are part of 'Regenerate the Economic Machine' (an exploratory research report). Link: https://webapp.sebgroup.com/mb/mblib.nsf/alldocsbyunid/2F019DDF02AF7080C1258A690031A22B/$FILE/Regenerate_the_Economic_Machine.pdf