The No Collar Economy November 2017 PDF

The
No Collar
Economy
Exponential Change
and the Digital Revolution
The
No Collar
Economy
Exponential Change
Authored by Samuel George & Felipe Buitrago

About the Authors
Samuel Felipe
George Buitrago
is the Global Markets and Digital is director of TicTac,
Advisor for the Bertelsmann a Colombia-based
Foundation North America. think tank.
His portfolio features the He leads research and

documentary film series The policy-design initiatives to
Crossroads investigating foster development based on
critical hot spots in harnessing the opportunities
economics, politics and of digital technology in
digital transitions around finance, investment, and
the globe. He is the author national transformation.
of The Pacific Pumas: An He is the co-author of The
Emerging Model for Emerging Orange Economy: An Infinite
Markets, a keystone text that Opportunity, the most
identifies the advancements downloaded publication in the
and opportunities of Chile, history of the Inter-American
Colombia, Mexico and Peru. Development Bank.
Additional input from: Jeffrey Brown, Christian Bluth and Nanya Sudhir.
Cartoons by Paul George. Design by Mateo L. Zúñiga.
Cover photo by SpaceX on Unsplash.

Foreword
The Foreword
No Collar
Economy
This is our aim

with The No Collar
Economy – to
spark an inclusive
conversation.
Our world is constantly And yet this book begins with a machines and their skill sets an inclusive conversation. Once
changing—a simple truism simple premise: This time is dif-

ferent. The exponential change
inadequate to compete for a
shrinking pool of high-quality,
we understand how the rules are
changing, we can devise winning
that is not unique for caused by digital innovations

has changed the way we work,
contract-based positions. strategies, not just for New York or
London, but for society as a whole.
any given generation or the way we play, the way we

buy, and the way we bank – all
We believe this alienation,
perhaps still in an incipient In this case, digital can work for
era. And yet the very fact in the span of a couple decades.
And as a digitizing society, we
phase, in part sparked the
populist backlash witnessed
us, and not the inverse. At least
until the next disruption.
that our dynamics shift are just getting warmed up. If it

hasn’t been disrupted yet, it will
on both sides of the Atlantic
over recent years. The visceral
continues to surprise us. be soon. From the labor market

to the dating market, digital tools
complaints may have been levied
against globalization, elites and
are rapidly redefining the rules foreigners, but at the heart of all
of the game. three is the lingering angst that
the world is changing and people
We routinely observe that we Instead we are prone to hyperbole, Analyzing the impact of these are being left behind.
live in turbulent times without to view the constant shifts as changes cannot simply be the
pausing to consider that times existential threats to our way of life. purview of inscrutable academic The conversation on the digital
are always turbulent. When
was the last time a major
We believe “this time is different.”
In fact, be it the inventions of the
papers and think-tank debates
in Washington and Brussels. If
economy must be inclusive. It
must consider the opportunities,
Irene
policy speech began “Times are
pretty normal. Everything is
cotton mill or the internet, humans
have shown a remarkable ability to
the digital transition occurs in an
unbalanced fashion, many could
the threats, the challenges and
the inevitability of the digital
Braam
Executive Director
as expected. Let’s just put this adapt. Our way of life changes but end up on the outside looking transition. This is our aim with Bertelsmann Foundation
4 planet on auto-pilot for a while”? life continues. in, their jobs made obsolete by The No Collar Economy – to spark North America 5
Photo by Samuel Zeller on Unsplash.

Chapters
Exponential Bank The Future Crowdpitalism Digitalization Smart Cities e-Mocracy The End
Change to the Future of Work and Global Trade of Geography
page 9 page 27 page 47 page 67 page 85 page 99 page 115 page 135
The
No Collar
Economy
Chapter
“We can only see
Exponential
a short distance
ahead, but we
can see plenty
there that needs
to be done.”
Change
— Alan Turing
The father of modern
computer science
Photo by unknown author on Wikimedia Commons.

The 1
No Collar Exponential
Economy Change
So, let’s talk about

how wrong we are.
Many of us believe So you think you know

exponentiality?
we understand
exponentiality.
Most of us don’t.
Even people who are familiar with
the math behind the concept tend to
misinterpret it regularly.
We do this because in the short term,

the exponential feels linear, and linear
is how our key survival skill of pattern
recognition works.
10 11
Photo by Gage Skidmore on Wikimedia Commons.

The 1
Economy Change
“Believe me,
exponen tiality
huge.
is
It’s so huge,
it’s unbeli evable.”

12 13
Photo by TextureX.com
Digital
The 1
Economy By 1974 Change
10,000 This prediction is
Exponentiality
transistors known as Moore’s
Law, and it has
held true to today.
In 1975, Gordon Moore, who co-founded

Intel with Noyce, predicted
that the number of transistors
packed in a microchip would
Let’s see.
On May 23, 1960, a team led by Robert Noyce,

co-founder of Fairchild Semiconductor and
Intel, produced the first integrated circuit,
double
or microchip, based on silicon. every two years.
It contained six transistors.
A transistor
is like a fork
in the road for
By 1971
2,300
computer processors;
it is the smallest
unit of decision-
transistors
making ability. The
more transistors in So, how many transistors do
a microchip, the you think are crammed into a
more the computer microchip in your smartphone?
can do at one time.
Take a wild guess,

and write it down, so you don’t cheat ;-)
By 1964
Millions, right?
120 Exponential
growth
By 1960 transistors
microchips had
6
transistors
14 15
The 1
Economy Change
That’s more transistors

in one microchip than
people on Earth, and
more transistors in your
smartphone than the
total number of humans
who have ever lived.
If you think the number And it is the

of transistors in a
DNA
single microchip expanded
rapidly, consider that
the power of the microchip
grows even faster as
the possible number of
transistor combinations
increases. This is of the
exponential growth on top
16 of exponential growth. No Collar Economy. 17
The Number of transistors In other words, as the number of transistors The Rules of the Game Have Changed 1
1.67
No Collar grew in 57 years by a factor of Exponential
Economy and possible combinations Change
6 transistors
=
720 combinations
100 transistors billion,

= a microchip’s computing power
415
increased roughly
4,950 combinations
1 million transistors
=
500
thousand times
billion combinations
10 billion transistors
more in the same period.
500 quadrillion combinations

It’s more complicated than simply combinations. Microchips are optimized for
Because the
world is oh-so
desperate to
different purposes: video, sound, memory, and time-keeping, to name a few. hear them ¬¬
That last one is a 5 followed by 17 zeros. This means no single one is fully able to access 100 percent of its possible
combinations. Just as in urban street design where one-way roads optimize That is why you can simultaneously handle a
500.000.000.000.000.000 mobility, microchips follow several efficiency paths.
dozen conversations on WhatsApp, check your three Bell’s
e-mail accounts, request an Uber while securing a parents then
got a line,
reservation at the restaurant you are eyeballing on and he began
working on
Yelp!, share your political insights on Twitter, and
Now, what does that mean to us?

the answering
post photos of that fancy dinner on Instagram. machine.
Well, think again about your smartphone: And that’s just with some- almost useless in 1876, the system, the device became
For one thing, its current computing power far exceeds NASA’s thing that fits in the palm of when Alexander Graham Bell more useful. Soon enough
needs in 1969 to launch a crew of three into space, land Neil your hand. On a wider scale, patented it. we reached a point where a
Armstrong and Buzz Aldrin on the Moon, and return them to Earth our combined processing The phone was a great quarter of the US population
safely in the Apollo 11 mission.1 power is also growing. There idea, but Bell was at first able was interconnected. 
is historical precedent for to call only his assistant. When By 1910 this was a
18 this: The telephone was a couple friends connected to communications revolution. 19
Finally, there is another
The
No Collar Economists describe this as a
Latency. 1
Exponential
Economy The time delay between Change
layer of complexity:
an action and its
effective transmission
“network speed
through the system.
effect” and latency.

and it’s what’s happening with
transistors in a microchip.
A new transistor connected
to the network creates more
options for transistors
previously connected.
 On December 15, 1991, President George Introducing 5G. 
H.W. Bush launched operation Desert Storm
to liberate Kuwait from Iraqi occupation. A fifth generation of mobile data
The operation’s precision and coordination communications is around the corner. The first
surprised Saddam Hussein’s forces, and full-fledged 5G network is set to be activated
captivated the world with what was described for the Winter Olympics in February 2018 in
as the first war to be transmitted live on TV. Tokyo. What makes this development special
 This was possible only because the is the speed of data transfer 5G devices will
US military managed to dedicate the provide: between 100 megabytes and 1 gigabyte
equivalent of 100 megabytes per second2 per second, or between 1 and 10 times the
to the coordination and exchange of data-transferring capabilities that the entire US
information among satellites, AWACS (a military committed to Desert Storm. 
special kind of radar mounted on top of a
plane), commanders on the ground, and
 And the 5G device will
intelligence experts halfway around the
20 world. It was unprecedented. fit in your pocket! 21
Photo by Jingyi Wang on Unsplash.

The 1
No Collar There are already <html> Exponential
billion
Economy Change
more than <title>
devices3 Lose the

connected to 4G networks. And at the Mobile World Congress in March 2017, the ICT
industry advocated for an accelerated adoption of the 5G network, with a target of
connecting 1.1 billion devices by the end of 2019. Tie, Find
the Hotspot
From desktops to laptops to tablets to TV sets to surveillance cameras to parking
meters to windows to doors to lamps to vehicles to just about everything you can
imagine. Altogether, by 2020, there could be
</title>
billion Paul’s apartment is a mess.

Pizza boxes, soda cans and an
assortment of video games are
California, ferried by private
carrier to the headquarters of Al-
phabet, Inc. Born at the right time
encyclopedia, the sports page,
the store, even cash: In the span
of about two decades the things
devices spread out across the floor like

a Sevillan fan. In the evenings
and with the right skill set, Paul is
scouting the uncharted areas of
that we once held in our hands or
visited on foot will have moved to
he pairs beer with beer, and in a vast new frontier. You see, Paul the new frontier. Our newfound
connected to the internet. 4
the mornings he rolls out of bed knows how to work a computer. cloud-based environs will upend
and is off to work in a pair of Or, better yet, Paul knows how the global economics, just as the
Massive disruption is not coming soon… Levi’s and a t-shirt. In short, Paul computer works. discovery of “new worlds” did in
is not altogether different from But there’s more to it than the 15th-century. 
It is already happening. the generations of Americans that because the really important In our rapidly transforming
that have preceded him. He is things—the seismic shifts in our 21st-century economy, Paul is
a young man fumbling through economy—are not occurring on an ace, a ringer, a guy who can
his 20s, one box of easy mac and the computer, but rather between help create an empire with a
So what are we gonna cheese at a time. 

 He is not off to wait tables,
however, and he is not studying
computers. Paul understands
our digital transformation, the
imprecise transition of nearly all
laptop and some La Croix. He is a
computer engineer, contributing
code to Google’s search engine,
22 do about it? for the GRE. Paul—t-shirt, jeans

and all—is off to Mountain View,
that we once knew as physical
to a new, online universe. The
the company’s golden goose. The
veritable foundation of a US$600 23
The
No Collar How billion behemoth. He buttresses hours, the frisbee fields—are Meanwhile, some digital giants <h1>
1
Exponential
This is the
Economy Change
important a code that instantaneously sifts geared to entice him to stay are selling stuff – a whole lot of
through the internet’s unfathom- and ward off the daily pings it. In 2016, online commerce
is Google? able amount of information to from headhunters, poachers accounted for eight percent of
find the answer to your obscure and starry-eyed start-ups. And retail sales,8 a figure that jumps
No Collar
Let me google
that for you: question, often before you even Paul doesn’t wear a white collar. to 11.7 percent if car and fuel
finish typing it. He doesn’t wear a blue collar. sales are excluded.9 Amazon, for
Google's search The value to Google of being And he certainly doesn’t own example, has expanded from
index contains the best at this is somewhere anything in pinstripes. primarily an online bookstore to a
Economy
over 100 million
between US$600 billion and incal- The most coveted employees one-stop shop for more than 300
gigabytes of data;
culable. As long as Google remains of our new economy wear no million products,10 from Fender
1.2 trillion searches the industry standard-bearer, it collar at all. guitars to baby formula. 
per year worldwide;
will continue to build upon the And they work for companies Such services revolutionize the
Around 20 percent current average of 40,000 search that are often not selling way we shop – not just because
</h1>
of daily queries queries per second, 3.5 billion anything, at least not in the they obviate the need to leave
have never been
searches per day, and 1.2 trillion traditional sense. Search, home. In addition, an increasing The digital revolution has
asked before;

Bill Gates
searches per year.6 Gmail, Google Maps, YouTube number of products sold are transformed the global economy
A single Google query But it’s more than just —the Google ecosystem’s key themselves digital in nature. faster than any other develop- posits that
uses 1,000 computers
in 0.2 seconds.
eyeballs. We tell Google exactly components are usually free to Services such as Amazon Prime, ment in recent history. Given by 2030,
what we are looking for, and in use. Even the things that are for Kindle Unlimited and Music Unlim- the exponential nature of this
When Google went
offline for five
minutes in 2013, global
real time. 
 The combination of traffic
sale—the Google Chrome laptop,
for example—are intentionally
ited underscore a trend towards
subscription-based consumption.
innovation, we may be only at the
threshold of an era of profound “two
and information is unbeatable underpriced because the real Amazon’s soaring profits stem change. Brick and mortar stores
internet traffic
dropped by 40 percent. for business, which poured value for the company is getting from these digital products. The – cornerstones of real economics billion
upwards of US$80 billion in as many people as possible on company’s operating income from for centuries, if not millennia – are
The competition
is still searching
advertisements into Google their platforms. In these early web-based services, which more becoming obsolete, while soft- people
for an answer. coffers in 2016.7 Google Search stages of the new digital world, than doubled from 2015 to 2016, ware companies that sell nothing,
who don’t have a bank
is the backbone of a digital enticing people into the system actually outpaced profits from its but connect people to people and
account today will
empire that seeks expansion can be more important than retail services. things, command billion-dollar be storing money and
into everything from your making sales. Increasingly, people are valuations on Wall Street. making payments with
Other their phones.”12
pocket, via Android phone, to Google is not unique. Many not shopping for objects but The long-term effects of these
your earbuds, via Google Play. leaders of the digital economy for access. Digital downloads trends are difficult to quantify. On
The Spanish Empire suffered a do not own or sell anything at and subscription-based music one hand, the digital economy re-
mortal wound when Napoleon all. Uber does not rely on its services surpassed CDs in terms spects no borders, be they social,
Bonaparte took Madrid early own cars (to this point at least), of revenue generation in 2015.11 geographical or political. Families
Google in the 19th-century. Should Airbnb doesn’t rent its own And there is no dress code in a in rural Africa, for example, enjoy
Search falter, Google’s sprawling property, and Facebook’s value digital store. Our grandparents unprecedented levels of financial
81%
ecosystem could slump. is entirely user-generated. The may have dressed up to go food integration via mobile banking.
This figure is shocking
 The competition for eyeballs biggest winners aren’t focused shopping, but millennials are In India, a government-run digital considering that web-
and information is cutthroat, and simply on gaining capital, but subscribing to organic grocery biometric scheme has registered based services account
for about 15 percent of
Paul’s entire work environment— rather gathering data and delivery services from their beds, more than one billion citizens, the revenue generated
Global Desktop Search Engine
24 Market Share, July 2017.5 the cheese plates, the flexible sharing it more efficiently. snug in their pajamas. connecting many families to their from retail services.13 25
The The point is not
No Collar The
Products are based on imagination, While nearly all Americans
No Collar
Economy
that these jobs are
easy, but that innovation and ingenuity. Rather under the age of 45 have used
Economy
than the hammer and wrench, the digitally shared and on-demand
talented
fundamental tools of the 21st-cen- services, 44 percent of Americans
people from tury are “apps”, and people create over 50 have not.17 
remote areas Chapter
the apps. This is post-industrial What of the millions of poor
can now do them.
employment, and it is an exponen- families worldwide who have no
tially increasing segment of the access to digital apps? Wealthy
Airbnb is now active in global economy. Americans already use digital
191 countries. That’s
 With access to the right sharing and on-demand services
65,000 cities software, anyone can become a at three times the clip of poorer
film editor, a financial guru, or Americans.18 In India, urban
with over
Bank to
a journalist – and they can be centers are rapidly adopting
2.3 million instantly connected to potential new digital tools, but many rural
the
properties clients worldwide. Advances in pockets lack the internet cover-
available for the “sharing economy” allow us to age to access services. 
rent. maximize our capital stock, from In democracies, what happens
Estimates hold
spare bikes to vacation homes, when voters realize that ma-
that hotels lose and they reduce entry barriers for chines, not foreigners, are taking
approximately would-be workers. their jobs? 
 At the same time, “disrup- The digital revolution is
US$450 tions” create winners and losers. exciting and intimidating, and the
million Developed-world manufacturing

jobs have already become
conversation about its economic
consequences must not be
in direct revenues per
Future
year to Airbnb.14 increasingly rare. What happens limited to academics debating
to the taxi driver, the hotel inscrutable research papers.
manager, the TV salesman when With The No Collar Economy, we
From US$1.3 million in Uber, Airbnb and Amazon take aim to highlight the importance
2014 to US$250,000 in over? What happens to the Uber of the revolutionary and expo-
late 2016 according to
driver when the driverless car nential change heralded by the
Business Insider.15
hits the streets? The value of digital economy’s expansion. 
a New York taxi medallion is
government for the first time. already down 80 percent since
Leaders of India’s digital push are 2014, and the White House
convinced that a cashless econo-
my will promote inclusive growth,
estimates that over three million
driving-based workers will lose
Let’s get

down to
curtail corruption, and help the their jobs to automation in the
country skip various steps on its coming years.16 
path to development. What happens when a
business. Why FinTech Changes


 Instead of manufacturing, generation that should be at its


21st-century value-creation is professional prime can’t keep up
26 increasingly “mind-facturing”. with digital developments? </html> How (and Whom) We Finance
The 2
No Collar Just as many of today’s bankers believe their Will FinTech break through the FinTech carries awesome potential for creative Bank to the
Economy Future
jobs are unassailable, some 800 years ago the Street’s formidable barriers, and disruption, and the financial industry—the very
Jin Dynasty was confident that no ragtag band of rearrange the financial sector as we creators of money—must manage this global
nomads would breach the impenetrable string of know it? Will the Morgan Stanleys dash towards both disintermediation and
fortresses now known as the Great Wall of China. and the Western Unions of today demonetization. Increasingly, people worldwide
But leading those outsiders was one Genghis become fallen dynasties? Or will are using new technologies and tools to cut out
Khan, and in less than a decade after he came the traditional players harness expensive and inefficient intermediaries in the
to power the Mongols would establish their own advancements, using technology financial sector, while mobile wallets and digital
dynasty in the Middle Kingdom. They proceeded to forge a renaissance for their transactions force society to confront the value of
to rule China for over two centuries. beleaguered sector? physical cash.
Fast forward to the

Only time will tell.
present day, and For example, the
US$12.2 billion
we have financial
Historically a highly regulated industry dominated
by traditional entities, the banking and financial invested in 2014
technology
sector faces increasing competition. dwarfed the 2013 figure
of roughly
(FinTech) start-ups US$4 billion.2

Since 2011 alone, venture capitalists
have poured nearly
US$23 billion
lurking around
the edges of Wall
Street—prodding But one thing is certain.
for a soft spot and

If the current
plotting an incursion.
financial industry is
to remain relevant,
into FinTech start-ups1, and
it must brace for a the rate of investment could
FinTech-tonic shift
of unprecedented
increase exponentially
28 proportions. in the coming years. 29
Photo by Irving Underhill on Wikimedia Commons.

The
The potential spoils have attracted 2
No Collar Bank
Economy an expanding group of players. to the
Future
These players
range from the
usual suspects
placing bets
on digital
platforms
—see Morgan Stanley’s
US$100 million
buy-in to Affirm Inc., a start-
up that provides alternative
online financing3—
to
India
Many start-ups and concepts will fail. But some You can bet your bottom dollar
will succeed, and these apps, mobile wallets and on that - except, if current
trends persist, many of us soon
platforms will radically transform the way
newcomers
won’t be carrying dollars.
we save, invest, Bank?
The No Collar Economy

spend, sell, lend
Could Go
such as India’s wildly popular Paytm millennials
mobile wallet, which attracted
200 million and borrow, We know that one in three
Cashless.
millennials does not expect to
need a bank within five years,5
users following New Delhi’s unexpected from the previously forgotten pockets and India, the world’s second-
retirement of 500- and 1000-rupee of the developing world to the globe’s most populous country, is rapidly
30 notes in late 2016. 4
most advanced metropolises. pursuing a cashless economy. 31
Photo by Igor Ovsyannykov on Unsplash. Icons by The Noun Project.

How will
Imagine that as a prospective buyer tours
The 2
No Collar her dream brownstone in Washington, DC Bank to the
Economy Future
she uses her phone to verify in real time
FinTech
the property’s ownership and history,
the neighborhood’s safety
and transportation accessibility.
Imagine then an app that verifies her identity and
change our
financial history
by simply
touching, looking, and

talking to the phone.
lives?
Then in a matter of seconds it offers
Let’s consider the purchase of a first home, a a series of financing options.
milestone moment for many young families. It’s
an intimidating process, with long-term financial Some of these options come from traditional banks.
implications, and one fraught with seemingly endless
obstacles: inspections, certificates, co-signers, The majority might well come from peer-to-peer
lawyers’ fees. A transaction can take months and lenders (P2P) via new digital platforms that
leave all sides feeling short-changed. “connect borrowers to investors
faster than any bank.”6
Outfits such as SoFi and Reality Mogul focus on P2P

mortgages, cutting out the traditional intermediary
(the bank) and thereby reducing costs and time. She picks one of the offers.
Meanwhile, the property’s owner can review her

offer while the perspective buyer dreams about the
wallpaper in her soon-to-be-acquired living room. He accepts her offer
This is precisely the kind of red tape by touching, looking,

that digital innovation has proved adept and talking to his phone…
32
at shredding. from Los Angeles. 33
Photo by Luca Iaconelli on Unsplash. Icons by The Noun Project.

The
Blockchain. An inherently 2
No Collar All the procedures and payments, the commissions secure way to safeguard data As the Information Technology & Innovation Foundation states, Bank to the
Economy Future
and taxes are executed in a matter of minutes from modifications, as every
new set of records (a block)
“the financial-services
without printing a single sheet of paper.
is encrypted, timestamped
and linked with the latest
Quotation and data
set in the string of records courtesy of Alan
(the chain). McQuinn, Weining Guo,
industry has a long

Which is why, five years from now… and Daniel Castro.
Policy Principles for
Fintech. Information
2018 2019 2020 2021 2022
77%
Technology &
history of using
Innovation Foundation,
October 2016.
of the incumbents in the

financial system expect to adopt
blockchain as part of an
IT for innovation”.
in-production system or process.
82%
Stock exchanges replace manual floor-

trading with electronic stock trading
Banks begin using computers to allow

Diner’s Club and American Express
expect to partner
with FinTech start-ups.7
customers to make transactions
Advent of internet banking
Arrival of mobile banking

Such technology will challenge the way people
create first credit card

interact with the financial system, offering the
Banks introduce ATMs

potential of a safer, convenient, agile and simplified
Ana Botin, president of Banco Santander, one banking experience. These innovations can
of the largest European financial organizations, eliminate the information asymmetries endemic
has announced yearly investments of to the financial-services industry while addressing
age-old barriers to accessibility. The emergence of
€1.9
disruptive forms of financing, savings, spending,
and investment is already happening.
Institutions that fail to

reinvent themselves will suffer
billion the fate

1950s 1960s 1970s 1980s 1990s 2000s
34 in FinTech development.8 of the dinosaurs. 35
Image by Internet Archive Book Images on Wikimedia Commons. Icons by The Noun Project.
Keep
The
In April 2015, 2
No Collar Bank to the
Economy Future
about 800 companies

pursued FinTech initiatives.
the Change
That number spiked to between
2,000 and 16,000 ventures

by the end of the first half of 2016.9
Collaborative Versus Competitive Fintech
Investments (US$ Millions)
FinTech’s pervasiveness could upend regulatory and geographical barriers

$92 $2,897 $1,118 $11,387 $43 $3,781
869
Collaborative
erected over 500 years of financial evolution. Global FinTech
7%
14% 16%
Financing Activity
Productivity $22,265
Type Potential
38% 40%
e-Commerce Payments Incremental
702
Mobile Transactions Incremental 666
60%
Digital Currencies Significant
Payments & Transfers
Peer-to-Peer Transactions Incremental Deal volume
Faster Transaction Processing Significant
Cross-Border Transactions Significant 500

$12,688
Robo-Advisors Significant 93%
86%
Personal Finance Mobile Trading Incremental 84%
391
Personal Financial Management Incremental
Investments
(US$ Millions)
Crowdfunding Significant 62% 60%
Alternative Financing Alternative Lending Significant 269
Invoice & Supply Chain Finance Incremental

$4,590 40%
Insurance Automation, Mobile, & Peer-to-Peer Model Incremental
Competitive
$3,175
$2,357
$1,761
Source: ITIF
Today’s banking is being fundamentally transformed 2010 2011 2012 2013 2014 2015 2010 2015 2010 2015 2010 2015
Source: Accenture, 2016. Source: Accenture, 2016.
by digital technologies as…

we transit the road to a cash-free world with unlimited access to capital in the cloud, disintermediated and at a minimized risk in a wholly automated system.
Cash Capital Loans Transactions

36 (emissions) (accumulation) (intermediation) (logistics) 37
Alternative
The 2
No Collar <html> Bank to the
Economy Future
<title>
Financing Mobile Mobile Banking.
Banking
The ability to conduct
financial and banking
transactions via SMS and
Digital tools have rearranged personal financing: smartphone applications. In
more developed countries,
the technology eases
access to accounts, as the
ZOPA, a FinTech P2P lending platform, Daviplata is a Colombian </title>

programs are accessible 24
hours a day. In rural parts
has helped more than 233,000 people buy new bank-owned platform that allows one to send of developing countries,
cars, improve their homes and take control of and receive money from a mobile device, mobile access can mean the
difference between having
their finances. Since 2005, it has provided loans receive international money orders, receive and not having access to
totaling US$2.8 billion to British consumers.10 cash payments at Davivienda offices, pay public formal financial systems.
services, recharge cellular phone credit and/ FinTech has already made convenience than disruption.
Venmo grew 103% over the or withdraw up to the equivalent of US$800 at major inroads into the banking The technology has certainly
year to Q2 2017, reaching $8 billion in Davivienda network ATMs for a US$1-2 fee. sector, a trend that appears to had repercussions—more than Insiders suggest that
quarterly P2P payments processed.11 correlate with the expanded 1,600 US bank branches closed in regulations, along
with technology, are
use of smartphones. The US 201515. But perhaps the biggest
SMEs and individuals have saved 2500 responsible for some of
Federal Reserve finds more than impact has been allowing tech- the closures.
roughly US$3.7 trillion in international transfers half of American smartphone savvy individuals to access their
thanks to TransferWise, a FinTech startup owners used mobile banking in traditional banks without having
2100 The Digital Banking
focused on money transfers, which offers 2016, most typically to perform to skip out early from work to Report estimates that
transfer fees of around 0.5 percent instead quotidian tasks such as “checking catch a teller before 5:00pm. The visits to brick-and-
mortar bank branches
of the five percent rates typically offered. balances or recent transactions, client-bank relationship remains, can be reduced by a
1600 transferring money between an but has moved online. third if more people
Kickstarter, a individual’s own accounts, and to As JPMorgan Chase CEO Jamie
deposit checks via
mobile applications.
crowdfunding FinTech platform founded in receive alerts.”13 The same survey Dimon noted in 2015, “Silicon
1300
2008, has raised about US$3 billion for creative notes that mobile-banking usage Valley is coming” and start-ups
endeavors, financing more than 123,000 projects. spikes to nearly 70 percent when are already competing aggres-
About 13 million people have contributed to these 906
considering millennials only, sively in mobile payment and loan
projects, which have created 300,000 jobs.12 suggesting a forthcoming demo- alternatives. A start-up’s challenge already being met without mobile
700 graphic boom in terms of mobile is convincing consumers of the payments… and that they did not
Venmo Payment Volume banking (the study found only 18 value of such services. Only 28 see a clear benefit from using
(US$ Millions) 468 percent of people over the age of percent of American smartphone such a service.”16 Even Americans
314 60 bank online). 14
 owners report having used who do complete mobile transac-
194 Thus far, in Europe and the mobile payments in the last year, tions are often comfortable using
141
81 105 US, the trend towards mobile with many survey respondents traditional banks and credit cards.
38 banking has been more about claiming “their needs were Major US financial institutions 39
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
The 2
No Collar feel the heat, but the relatively “Emerging markets often have The World Bank estimates that Bank to the
Economy Future
advanced banking system has a high percentage of unbanked two billion adults cannot avail
an opportunity to survive if it can population, relatively weak themselves of formal financial
incorporate digital innovation. consumer banks, and a high services.19 These people, who
 Traditional banks have penetration of mobile phones. are concentrated in poorer, rural
significant advantages in more Hence, they are ripe for FinTech areas, are unable to save, invest,
advanced economies. While they disruption.”17 In other words, a insure, borrow, or send and
may grouse about regulations, farmer in rural Rajasthan may not receive money beyond the most
the thick legal code also creates even have a bank account. For basic cash transactions. They
barriers to entry, especially for him, a mobile wallet program such are subsequently cut off from
smaller start-ups. Generally as Paytm, which permits storing broader growth patterns and
speaking, FinTech companies can- and transferring of funds via particularly vulnerable to unex-
not offer traditional services such mobile transaction without a bank pected shocks. Global institutions
as debit or checking accounts. account, does offer a clear benefit. such as the World Bank and
One might use Venmo, a digital And market players are well aware United Nations have made clear
wallet, to complete an electronic of that. From Peru to Kenya to that inclusive growth requires
payment, but the Venmo account China, emerging markets are at inclusive financing. 
must be connected to an account the cutting edge of FinTech and A primary cause of financial
at a traditional bank to execute the programs and platforms are exclusion in the developing world
the transaction. incorporating millions of families is distance: Traditional banks have
 The story in the developing into formal financial ecosystems not established brick-and-mortar
world is different. As a CitiBank for the first time. branches in poorer, remote
study succinctly concludes, regions. The slim profit margins
<h1> or limited liquidity opportunities rural Rajasthan may not be able app’s marketplace, where users Remittances
FinTech and
are transfers of money
in these areas have curtailed the to reach a bank branch, but there can browse clothing, electronics, via mail or online
interest of traditional institutions. is a reasonably good chance home goods and more. often across borders.
Financial
According to a 2016 This supply-side bottleneck is that he has access to a mobile FinTech has already had a
Citi investigation,
matched on the demand side. device: India boasts more than major impact on the sending and
Inclusion
“to remain
Given the “leakages” in many one billion mobile subscribers20 receiving of remittances, whose
competitive, banks As India’s digital
need to get innovation emerging-market financial and 220 million smartphone total global value spiked from economy expands, Paytm
before the FinTech </h1> systems, many people—especially users.21 Via phone, individuals US$68 billion in 1990 to US$586 has become ever more
important. The firm:
companies get scale.” those lacking financial literacy— create accounts—with traditional billion in 2015. Just in the US
 Lack of access to the distrust systems that have banks and start-ups—that allow the value of remittances leaving Eclipsed 200 million
registered users in 2017.
formal economy represents byzantine or inaccessible paper them to manage, save, receive the country dwarfs the foreign
Processed over one billion
The ILO estimates that a critical bottleneck in global trails. In short, traditional financial and transfer money. Sticking aid budget. Thus, efficiency transactions in 2016.
“more than half of the development. Such exclusion can institutions do not expressly with the example of India, Paytm, improvements in this critical
Expanded to over 850,000
global labor force
manifest itself in different forms. serve excluded communities, the Indian company offering economic sector are of particular brick-and-mortar
and more than merchants that now
Off-the-books labor, with limited which also do not trust (or remain mobile-wallet services, facilitates value to emerging markets. accept Paytm payments,
90 percent advancement opportunities, acts unaware of) such institutions. roughly seven million transac- Remittances to El Salvador, for example in grocery
stores and pharmacies.
of micro and small as a drag on growth. A lack of Digital tools address these tions daily. These range from for example, account for more
Forged partnerships with
enterprises” are in the access to financial markets and supply and demand constraints. recharging phone tariffs to paying than 16 percent of the country’s
Uber and other apps to act
40 shadow economy.18 toolkits also takes a toll. On the supply side, the farmer in utility bills to shopping on the annual GDP.23 as payment mechanism.22 41
The
 A number of smaller emerging Albania 9.2%
2
No Collar Bank to the
Economy markets are particularly Future
Armenia 14.2%
reliant on personal
remittances. Here are some of Bangladesh 7.9%
the countries with the largest
Bosnia and Herzegovina 11.1%
percentage of remittances in
terms of overall 2015 GDP.24 El Salvador 16.6%
The Gambia 19.2%
Georgia 10.4%
Ghana 13.3%
Haiti 25%
Honduras 18%
Jamaica 16.6%
<h2>
Case Study:
Lebanon 15.9%
Liberia 31.2%
No-Collar Financing
Nepal 31.8%
Tajikistan 28.8% The fixed-cost fee

schedule can make
in Kenya
low-cost transfers
proportionally
more expensive.30
</h2>
 As anyone who has sent “The opportunity to ‘disrupt traditional banking system.27 The phone became a
bank, and suddenly
money via Western Union can remittances’ has become TransferWise uses a P2P sys- Financial exclusion is partic- Kenya in 2007, has scored a
financial access was
attest, traditional mechanisms of FinTech’s honey pot, luring tem to match people looking ularly prevalent in sub-Saharan major success for spreading available anywhere
international transfers can be cost- entrepreneurs of all kinds to to transfer the same currency Africa. In Kenya only 40 percent financial inclusion. Originally in Kenya that had
ly, with different banks charging join the party and see if they but in the opposite direction. of citizens had a traditional bank conceived as a mechanism for mobile access.
their own service fees as money is can offer better pricing, better Someone with rupees wanting account in 2011. Banks typically streamlining microfinance loans,
routed to its final destination. An service, better experience, to send dollars is thereby open branches only in towns, M-Pesa rapidly morphed into a
initial transfer of US$200 means, better everything.”26 matched with a dollar holder eschewing rural villages. Rural money-transfer service. 
after fees, roughly US$184 at the With this in mind, start-ups wanting to send rupees. The residents often face “substantial Individuals put funds into The exchanges can be conducted
end of the transaction.25 And there such as Xoom, Azimo and software eliminates the need to minimum balance requirements M-Pesa accounts via ubiquitous for highly competitive (if not
is little transparency about the WorldRemit have developed convert via a traditional bank, and withdraw fees” and fees to “airtime” agents: often streetside necessarily cheap) rates because
eight-percent loss. their own software that allows making the service significantly open an account.29 vendors who also sell cell-phone the mobile program requires little
 But this could be changing. them to execute transfers cheaper than that conducted Enter digital tools: M-Pesa, credits. Money can then be overhead or physical presence. All
As FinTech investors Paul Breloff digitally at real-time exchange by traditional methods.28 a mobile-phone-based money- transferred to others using a that’s needed to use the platform
42 and Jeff Bond write, rates, while bypassing the </html> transfer program launched in mobile-phone-based menu. is mobile access. 43
The <html> 2
No Collar The impact of digital curren- Bank to the
Economy <title> Future
Cryptocurrencies
cies, now firmly entrenched in the
public’s imagination, if not their
investment portfolios, remains to
Towards a New Gold

be seen. To proponents, digital
currencies are an unstoppable
Standard?
wave, destined to cut out middle-
men and banking interests that
<title> made conducting business secure
but costly. “The day you started
 The impact of FinTech has comparison to a digital asset such earning and spending money is
been generally uncontroversial as Bitcoin. Both have an intrinsic the day you began repeatedly
until now. The developed world value independent of any govern- handing over slices of that money
has enjoyed the convenience of ment’s monetary policy. There is a to these middlemen,” write Paul
mobile banking, while automated finite quantity of gold in the world, Vigna and Michael Casey of The
wealth-management tools (so-called and people expend considerable Wall Street Journal. “Cryptocur-
“robo advisors”) help middle-class efforts to obtain it. rency promises to stop that
families access financial guidance, Bitcoin is similar, though it is outflow and put the money back
and peer-to-peer lending programs found by mining numbers and in your pocket.”38 Of course, many
open avenues of lending for new not the Earth. Bitcoin miners use people remain unconvinced. They
start-ups, moneyed families, and high-powered computers to find include market drivers who have
everything in between. Meanwhile, specific numbers that solve a com- punished Bitcoin at various times
emerging markets enjoy unprec- plex riddle. Successful numbers in recent years (The Economist
edented options for financial can earn miners a unique Bitcoin; labeled it the world’s worst per-
inclusion that could allow fast they strike digital gold, so to forming currency in 201439). 
 Via M-Pesa, Kenyans have the previously un-banked. By M-Pesa has expanded beyond adaptors to leapfrog various steps speak. There are a finite number Just as Paytm or M-Pesa may
saved hours previously lost 2014, seven years after M-Pesa’s its initial roots to other African in financial development. of successful numbers, implying not dominate forever, the fate
on transportation to locations advent, 67 percent of Kenyans countries, central and southern But forthcoming innovations a finite number of Bitcoins that of Bitcoin itself is irrelevant. It’s
where rudimentary transactions partook of banking services.33 Asia, and the Balkans. could prove far more disruptive, can be found and traded, but not the technology behind Bitcoin,
can be made. Moreover, the By that same year, 72 percent of M-Pesa is not a silver bullet, challenging our very notion of be created or destroyed. Newly the proven ability to create a
simple digital interface inspires Kenyans living outside the capital and some question whether the money itself, and who controls minted Bitcoins can be registered secure digital ledger without
confidence in mobile transac- on less than US$1.25 per day positive press and hype outweigh it. Cryptocurrencies, the digital to a digital ledger, a “blockchain”, either a bank or a government,
tions, while years of violence and were using M-Pesa.34 the actual benefits.36 The company assets currently not endorsed or thus guaranteeing ownership. that cannot be ignored. FinTech
ethnic tension had bred distrust A number of start-ups have will either continue to innovate and recognized by any government or Holders enjoy the security of a may not be able to profoundly
of traditional banks.31 mimicked M-Pesa technology, improve or face stiff competition central bank, are at the center of bank without using one. or rapidly disrupt a concept as
 M-Pesa’s impact has been offering Kenya’s mobile bankers from others (Paytm, for example, this storm brewing on the horizon. Once reserved for settling fundamental as money, but it’s
stunning. The Economist reports different services and prices. The vies with M-Pesa in India). Either The technology behind digital cur- illicit transactions in the internet’s already clear that the financing
that 17 million Kenyans use M-Shawari program, a joint oper- way, digital wallets have already rencies is dizzying, but the appeal darkest depths, Bitcoin exploded of The No Collar Economy will
it, and roughly a quarter of ation between M-Pesa’s owners extended financial access beyond is relatively straightforward. onto international consciousness not solely be in the hands of
the country’s annual GDP and the Commercial Bank of white- and blue-collar clients to the The lure harkens back to the in late 2013 when the value of a Wall Street bankers in smart
passes through it.32 Critically, the Africa, offers loans and savings unbanked, allowing them to join days of the gold standard, and single unit spiked from US$125 to pinstripes or central bankers in
44 program has made inroads with programs to clients. Meanwhile,
35
the No Collar Economy. the yellow metal may be an apt US$979 in a matter of weeks. 37
 nondiscript suits. 45
Mexican
The
 See, Clara has lots of The
No Collar
Economy
 friends back in Mexico. No Collar
Well, actually, she has friends Economy
immigrants

all over Latin America. 
 She does not know them in
soon may love

person, but they have created
a Facebook group called: 
Chapter
Bitcoiners USA
the Donald.

 to LATAM 
 Every member of the group

has a Bitcoin account and has
been vetted by the group’s ad-
The Future
ministrator. Clara collects Carlos’
Remittances to money, keeps US$10, and trans-
of
 How so? Mexico have averaged fers US$490 in Bitcoins to an
account holder in Chiapas. 
US$27 billion over the
 Well, let’s say the Trump
administration decides to last five years. That account holder

establish a tax on remittances The IRS will have to

pays Carlos’ family
so that Mexico foots the bill impose a tax of 7.4 percent the equivalent in
for a new 1,600-mile wall along on all remittances to pesos of US$480,
reach the administration’s
the US-Mexican border. Here keeping US$10
revenue goal. 
is what might follow… for himself. 
 Carlos, an unassuming garden- This means that Carlos’
er from Chiapas, lives and works
in Marietta, Georgia. He helps
family will now receive US$38
less per month. 
In a couple of

his family back home, dutifully key strokes, the
Work
reporting to the Western Union Or will they? 
money has been
office the first Monday of every
month with US$500 in cash. 
 Because Carlos has just
made a new friend: a young
transferred,
His family receives

woman named Clara. Western Union
a variable number of
 She’s been trying to talk Carlos
into giving her a chance to send the
is out of the
picture and, all
pesos depending on the
exchange rate, but money to his family at a low fee of
invariably transaction
costs exceed US$55. 
US$20 per transaction, regardless
of the transfer amount. 
in all, Carlos
 Clara is a recent arrival, has not paid
 Now imagine that Trump
has a plan to collect the
so Carlos does not trust her.
However, the wall tax on
for the bricks
US$20 billion invested in the remittances has convinced in the wall. 
46 wall within 10 years. him to give her a shot. <html>
Photo by Jezar on Unsplash.

Great.
The 3
No Collar Future
Still with us?

Economy of Work
Now let’s get down

to work… and we mean it this time!
Because in an exponentially changing Say Cheese!
world, the jobs we do to make a living

are shifting right before our eyes.
Disruption can be mesmerizing to observe even when devastating in consequence:

Images of atomic-bomb test runs have captivated audiences since the 1940s.
In a similar vein, the technology in that elegant iPhone that so many of us put on a
Foreigners aren’t
pedestal has the power to put millions of people out of work.
Politically charged debates about international trade may soon become debates on automation.
From the cab driver to the bank teller to the sportswriter,
many jobs familiar today will be taking the jobs.

the work of computers tomorrow.
And that’s not crazy futurist talk –
it’s already happening.

Machines are.
48 And they are getting smarter, faster. 49
Photo by Ricardo Gomez Angel on Unsplash.

The 3
No Collar Consider the following three milestones Future
Economy of Work
in artificial intelligence:
1997 2011 2016
Your move
Deep Watson, Alpha

Blue, another IBM
supercomputer,
crushed Ken Jennings
Go,
an IBM supercomputer, a narrow AI program,
and Brad Rutter in a series
defeated chess grandmaster Garry of Jeopardy! matches. defeated Go champion Lee Sedol in
Kasparov in a six-game re-match a five-game match of the ancient,
complex
by 3½ to 2½. Sure, Jennings may hold the record for the longest
winning streak in the game’s history, while Rutter is
Many consider Kasparov to be the best chess its highest earner.
player of all time, but even he had to begrudgingly
admit that IBM hadn’t cheated. The machine beat
him fair and square. 1
But in February 2011, the real
Jeopardy! answer was “Who are
board game.
two dudes who were beaten
In May 1997, by the computer?” as Watson
humanity was bested in outperformed humans in a Lee Sedol vs. AlphaGo
Game 1
strategy. cognitive
Garry Kasparov
challenge.
vs. Deep Blue
Game 1 First 100 moves Moves 100-186 The astounding
advances have led
Kasparov was indeed After the game, Jennings wrote “Just as Despite its simple rules, Go is extremely
very angry about it, factory jobs were eliminated in the 20th- complex, even more so than chess. Its abstract
to four of the most
accusing IBM publicly century by new assembly-line robots, Brad
nature and board size make for more move feared and revered
of cheating. Later, IBM and I were the first knowledge-industry
published the logs, and workers put out of work by the new possibilities than the total number of atoms
50 End. Kasparov got over it. generation of ‘thinking’ machines.”2 in the visible universe.3 syllables in English… 51
Images by Wikimedia Commons. Icons by The Noun Project.

The 3
No Collar Future
Economy of Work
Automation has already caused

deep reductions in rich-country
manufacturing jobs, and the resulting
squeeze on middle classes has led to
increasingly exotic political choices.
In the coming years, as

machine learning takes
center stage, this vice
on the middle class
could tighten.
52 53
Image by Loew’s International on Wikimedia Commons.

The <html>
No Collar Welcome to the 3
Future
Economy <title> of Work
So what is the
Machine
The World Economic Forum (WEF)
estimates the risks of automation
of jobs for major economies:
future of
work?
</title>
 Futurists often foretell a world in trucking, retail, investing and

in which AI, big data, machine even pizza-making.4 More than 51%
learning and automation dictate Previous industrial or 49% to 51%
human life. Some argue that the agricultural “revolutions” 47% to 49%
technological disruption will lead to harnessed work to draw 45% to 47%
the elimination of work altogether, hundreds of millions – perhaps Less than 45%
or, if we are not careful, robot billions – out of poverty.
No data
domination. For others, this change But the automation and
gives rise to a newly empowered technology ushered in by the
professional class that derives its No Collar Economy will strike
prosperity from coding and the at our basic understanding
servicing of robots. of labor, productivity and
 While neither of these fulfilling employment. 
visions has yet come to fruition, As a result of cutting-edge
technology and automation advances in robotics, AI and
have already laid waste to machine learning, automation
jobs in manufacturing and are may replace up to 47 percent
increasingly threatening the of American jobs, 57 percent of
bread and butter of well-trained, jobs in OECD countries and 77 creation of tens or hundreds of and AI increasingly drive value platform-enabled work that
well-educated workers: jobs percent of jobs in China.5 of technology and automation millions of new jobs. creation.7 The subsequent slow, offers no fringe benefits. 
in the service sector. Hints of The result of this process is already causing monumental In the United States, the shift downward pressure on wages Without swift action to equip
coming labor-market disruption may be greater prosperity, but shifts in the way we work. in employment is characterized and full-time employment workers for future labor markets,
can already be seen in the the interim will almost certainly But, unlike previous labor by the rise of the “autonomous has already caused millions society may be forced to grapple
early-stage disruption of run- see painful disorientation and revolutions, there is no economy”, in which computers, of workers to transition with ever-spiraling unemployment
54 of-the-mill service-sector jobs disruption. The introduction
6
guarantee that it can spur the platforms, big data, robots to precarious no-contract, and inequality. 55
Map by freevectormaps.com
The 3
No Collar Future
Economy of Work
The Evolution
of Work
56 57
Is this time really
The
Industrial 3
No Collar Future
Economy revolutions of Work
different? 1.0
Steam
2.0
Electricity
3.0
Computers
4.0
Digital Age
Our new Digital Age also has

A very short history of four building blocks, but they are less
industrial revolutions visible. Bits and bytes form the
basis of an economic system in
which ideas take center stage,
To be fair, people have feared the impact of The brick and mortar of and access can be as important
automation and technology for centuries. Although The world witnessed illumination factories, shopping malls as possession. But the value of
it may not yet be time to throw our shoes at the as the night became part of the and modern cities attest to a goods and services produced
day. New means of collaboration transformation that allowed and consumed in this No Collar
computer, some believe this time really is different.
In the last two and a half and division of labor were people to accumulate an Economy is difficult to measure.
centuries, capital emerged as the established: After all, the inordinate amount of stuff
key to wealth creation. The ability production line would not be while consuming a myriad The value is obscured by
to transform raw materials into possible without electricity, and of services: The result of intangibles such as identity,
manufactured goods generated the internal combustion engine is globalized value chains enabled lifestyle, networks, and data
unprecedented economic growth. but a portable electricity plant. by the first age of computers. stored in “the cloud.”
Pre-Industrial
10000 BC 1750 1870 1960 2000
Cloud computing is an internet-

based technology that provides
shared computer processing
resources and data to computers
and other devices on demand.
First Second
Machine Age Machine Age
Such intangibles are not

manufactured, they are
‘mindfactured’. It may
While these revolutions sound silly, but petabytes
Brute strength and sweat served as made many jobs could soon be more important
redundant, they also than petrodollars. So far,
primary sources of wealth creation
tended to complement machines have made us
for most of human existence. We
human labor, creating stronger; the challenge ahead
didn’t make money; we hunted food. millions of new blue- is to learn how we can become
58 A good day was a day survived. and white-collar jobs. smarter with them. 59
Icons by The Noun Project.

The 100% <html> A 2013 study by Carl 3
No Collar Future
Economy <title> Benedikt Frey and Michael of Work
Agriculture
The Rise of
Osborne cautioned that
taxi and delivery drivers,
US employment
receptionists, cashiers,
percentage by sector accountants, and security
over time
the Bipolar
guards are most vulnerable
to automation.9
Manual Labor
80%
Just look how employment

Work Force
It’s not just Americans who
are losing manufacturing
has evolved since the jobs. From 1990 to 2014,

manufacturing jobs fell by
Industrial Revolution. </title>
25 percent in Germany,
33 percent in France,
33 percent in Sweden,
So this is not our first experience The major concern of the No allowed tellers to focus on higher 34 percent in Japan and
49 percent in the UK.
with fundamental disruption. And 60% Collar Economy is that it will create value “relationship banking”
In the same period in the
while previous revolutions made a limited number of exhilarating, involving complex interpersonal
US, jobs in the sector
many jobs redundant, they also highly paid jobs for lucky individuals tasks that, for the moment, dropped 31 percent.10
created hundreds of thousands of with access to skills training, higher cannot be easily automated. 
new jobs. The fundamental question education and elite networks. So, why does the current wave
for the future of work is will this new Meanwhile, most other work of technology and automation percent.11 But it has also created
digital revolution be any different? Services could be low paid and require little differ from previous waves? First, a bifurcated labor market, one
education. This could engender a the types of jobs affected differ characterized by a small number
bipolar work force, exacerbating the from those of yesteryear. In 1960, of high-wage jobs requiring
40%
inequality that already marks the one in four American workers advanced skills and many low-
21st century. was employed in manufacturing. wage jobs requiring little skill. The
 Such a bifurcation would be It’s one in ten today. But the disparity has contributed to wage
unique to the digital revolution. integration of technology created stagnation across the OECD.12 
Previous waves of technology and service-sector jobs because it More than half of new jobs
automation tended to comple- tended to complement human created in the US since 2010 have
ment human labor, resulting in labor. The exponential rise in been concentrated in lower-wage
higher output per worker while service-sector employment, which service-sector positions in, for
20%
generating fresh demand for now accounts for 80 percent of US example, food service and home
goods and services. The installa- jobs (as opposed to fewer than 50 healthcare. These pay less than
tion of 400,000 automated teller percent five decades ago), generat- the annual median household
machines (ATMs) in the US since ed opportunities for workers in the income of US$52,000.13 At the
the 1970s, for example, paradox- manufacturing sector displaced by same time, the number of jobs
Knowledge Based ically resulted in an increase in technology or globalization. requiring above-average edu-
Source: Catherine Madden the number of bank tellers. ATMs
8
 This economic transformation cation, training and experience
and R.J. Andrews, IADB.
lowered the cost of maintaining has resulted in an overall US increased more than 68 percent
60 0% individual bank branches, and unemployment rate of just 4.4 between 1980 and 2015.14 61
1800 1850 1900 1950 2000

The
No Collar In other words, the early company rolling, so to speak. But massive ecosystems that harness driverless cars are coming soon. developing countries will be able to
Gamification. 3
Future
Economy To apply game-design elements of Work
years of the No Collar Economy it depends on an army low-wage, the network effects and cost Longstanding norms regarding offer lower prices for their services and game principles to non-
game contexts, improving user’s
witnessed most job growth at the low-skilled driving positions (which efficiencies of millions of workers pay equity have been replaced on global platforms. engagement. The resulting ease
very top and the very bottom of themselves will exist only until competing to complete a task, sell with a culture of permanent Consider the company Fiverr, of use generally results in
higher productivity, better
the quality spectrum. self-driving cars take over). a product or provide a transpor- insecurity, with potential long-term whose idea is simple enough. learning experiences, activation
 There is an ever-growing gap The societal effects of this may tation service. implications on emotional well-be- Clients post requests for one-time of crowdsourcing, and the
generation of a lot of valuable
between high- and low-skilled already be appearing. A growing While the development of ing and life expectancy.18 jobs, such as designing a logo data for all sorts of purposes.
workers in this environment. So gap between those with skills, platform-enabled exchange is Millions of on-demand workers or configuring a catchy business
even without massive job losses, income, education and jobs and still in its infancy, recent trends may soon rely for their livelihoods card. Freelancers then bid for
automation and technology those without is being blamed for highlight the crucial role that on platforms that paradoxically the job for as little as US$5. It’s
may exert slow but continual declining rates of marriage, reduced platforms will play in the future of wield immense control over this a global market, but there’s no
downward wage pressure, leading happiness, opiate abuse and even work. As of 2015, 15.8 percent of dispersed – yet digitally connected global purchasing-power parity.
to a vicious cycle of further the election of Donald Trump. the US workforce was engaged in – labor force. Uber is already A five spot might buy dinner in
labor-market divergence. The 15
<h1> “alternative work arrangements” using so-called “gamification” Thailand, but it won’t even get you
A No
ride-sharing company Uber may as “temporary help agency strategies, which leverage big data a Guinness in Washington, DC. 
From 2011 to 2015, mobile
create worldwide a few thousand workers, on-call workers, contract to incentivize drivers to continue Given demographic expec- broadband penetration in
India skyrocketed from 1.9
high-end jobs that offer big money workers, and independent taking customers when they tations, emerging markets may
Contract
active subscriptions per
and cheese plates to the upper contractors or freelancers.” 16
 would rather take a break or end contribute up to 500 million more 100 inhabitants to 9.36.20
echelon of coders, advertisers Furthermore, the number of their working day.19 We could be workers to the global working-age
Economy
and lobbyists that can keep the participants in the digital market is approaching a future in which tens population by 2030, and they
expanding at an exponential rate, of millions of workers in the on-de- will be able to take advantage of Given these trends, we
Over the past 25 years, increasing 47-fold from October mand economy are managed not the platforms and advances in need to refocus the crux of our
employment growth has been
</h1> 2012 to September 2015. Tellingly, by companies or supervisors, but manufacturing technologies that policy debates. Developed-world
most rapid in education
and health services So what does the future of the marketplaces spawned by by big data and data scientists. will allow buyers and sellers to attention since the 2007 financial
work look like for folks lacking platforms have attracted the The proliferation of on-demand connect in new ways. Such plat- crisis has concentrated on the
% change in indutry employment,
1990 - 2015 elite networks and degrees? same demographic that has lost platforms in the industrialized forms can break down barriers to decline in manufacturing employ-
 Many workers displaced since the most from digital revolution: world raises a raft of questions entry that previously prohibited ment. But this only accounts for
Educational services 105%
Health care and social assistance 99% the 2007 financial crisis have yesterday’s factory worker is to- that policymakers must address: citizens of emerging markets 8.6 percent of American jobs. And
Professional and business services 81% sought opportunity in a booming day’s Amazon packager. Platform Can the platform economy from engaging with the global as much as the folks in Ohio or
on-demand economy facilitated workers tend to be young men connect buyers and sellers to economy. The introduction and Pennsylvania don’t want to hear
Leisure and hospitality 63%
Transportation and warehousing 39%
Other services 32% by online platforms, which act as with low incomes.17 maximize growth and jobs? Will scaling of new technologies may it, manufacturing jobs are highly
All 30% a digital means of exchange in the Such “contractors” are often platforms inevitably find ways to also allow emerging markets to unlikely to return (and it would be
No Collar Economy. By leveraging ineligible for social protections such monopolize their ecosystems for skip critical steps in the arduous machines doing the work if they
Financial activities 23%
Construction 22%
Government 20% cloud computing and algorithms, as unemployment insurance and maximum profit? process of industrialization, in did return). Attention must instead
Retail trade 19% these platforms facilitate the social security, and their bargaining Meanwhile, the no-contract effect allowing their workers to focus on the digital revolution
exchange of goods (think Etsy), power is being eroded by new economy could be a winner for the move onto an equal footing with and developments in automation
Wholesale trading 12%
Mining and logging 7%
Information 2% services (Airbnb) and even capital ways that digital platforms allow developing world. The economic their no-contract counterparts and technology. They, after all,
Utilities -25% (Kickstarter) among individuals buyers and sellers of goods and argument is familiar: Just as emerg- in the developed world. This ex- represent the threat to the low-
and groups. Companies such as services to connect. In other words, ing-market manufacturers were plains why leaders such as India’s and mid-level service-sector jobs of
Manufacturing -30%
Note: “All” dos not include farm employment. Amazon, Facebook, Salesforce, our Uber driver doesn’t have a lot able to work for less cost than their Narendra Modi take broadband tens of millions of Americans.
Source: Pew Research Center analysis
of US Bureau of Labor Statistics Uber, TaskRabbit and UpWork of leverage given that half his block Western counterparts, editors, penetration and digital platforms A wall along the Rio Grande is
Current Employment Statictics survey
62 WThe State of American Jobs”. vie to construct and optimize drives for the company, and that designers and graphic artists in so seriously. not going to block “the cloud”. 63
So—quite
The 3
No Collar <h2> Future
Economy of Work
of a bipolar economy and the
Case Study:

literally—what are
introduction of automation and
technology, how can policymak-
Automated Retail
ers and workers prepare for the
we going to do?
future of work? 
 As in previous industrial
</h2> revolutions, our current approach
places great emphasis on the
ability of education and training
to transition workers to the jobs
of the future. But is education
enough? While it has proven
effective at upgrading skills for
 A big part of preparing for the talents. Others have pointed higher-level jobs, relying too
No Collar Economy lies in educa- towards “service sectors of love”, heavily on training poses two
tion. Not just more education, but such as assisting older folks.26 main obstacles. First, training and
the right kind of education. But it’s difficult to fathom how education are slow in transi-
 We need to devise a radically these sectors can create mass tioning workers to other fields,
different approach to adapt to employment. and many older workers may
a radically different world. We Labor-market disruption be incapable of retraining and
 The retail sector is a pillar of ripe for widespread disruption – and how millions of low-wage must develop new skills, with wrought by the future of work reskilling for millennial-dominat-
the US economy. More than 16 even if policymakers are largely service-sector workers make lifelong learning at the core of is a first-order policy challenge. ed positions in coding and data
million Americans, 10 percent of unaware of it. a living. Amazon Go stores are the strategy. As policymakers and the scraping. Second, what happens
the country’s workforce, are em- Areas that until now have operated by an average of just After all, the one certainty public struggle to grasp how this if the future of work diminishes
ployed as cashiers, salespeople, been impervious to the changes six workers compared to an today is the uncertainty disruption will affect their lives, the amount of work available? We
stock clerks and customer service wrought by e-commerce will be average of 72 at an American of tomorrow. The modern the need for concrete solutions could be faced with a situation
representatives. An additional
21
affected. The threat is perhaps grocery store. The Amazon Go
24
workforce must be capable of is becoming apparent. Yet there in which we continue to churn
25 percent of all American jobs, most clearly seen in the grocery model is still being refined, but rapid adaptation and flexibility to is little consensus on how to go out educated and well-trained
in related sectors such as logistics sub-sector, which employed the company plans to roll out remain relevant. about designing them. A 2016 workers who can no longer
and marketing, are supported by 856,850 Americans in 2015. its automated establishments in Grandpa’s inability to use poll by the Pew Research Center access employment, further
the industry. Although the US
22
Just one percent of sales in this 2,000 or more US locations. 25
 Facebook may be funny today, found that 65 percent of Ameri- compounding the problem. 
Department of Labor predicts US$1.5 trillion sector have moved Workers displaced by this but it’s no joke if, in a few years, can workers believe that robots Perhaps employers need to
that retail-sector employment will online to date, sparing supermar- automation may secure similar 40-year-olds can’t keep up with and technology will “definitely” pick up some of the slack and
grow at a healthy seven percent kets from large-scale disruption.23 employment in the labyrinth of technological progress. or “probably” replace much of play a greater role in upgrading
between 2014 and 2024, those That may soon change. warehouses and logistics set up We could also see a greater their work within the next 50 and updating workers’ skills. The
jobs are highly susceptible to Amazon Go concept stores, by e-commerce retailers. But emphasis on jobs that machines years, while 80 percent also dominant employer-employee
automation and technological which eliminate cashiers and even here the potential for auto- still can’t do and probably won’t believe that their individual jobs relationship of the past is no
disruption due to the scale of checkout lines for real-time inven- mation could threaten these jobs, be able to do for some time. would “probably” or “definitely” longer relevant. Lifelong learning,
the market and early advances tory management, smart shelves thereby reinforcing the significant For example, in the Orange still exist. 27
 personalized skills counseling,
in automated retail technologies. and smartphones, threaten to and multiple disruptions the Economy: the intangibles With the value of human and the creation of frameworks
64 This highly competitive sector is transform how consumers shop retail-sector workforce faces. anchored in artistic and creative work being squeezed by the rise for employees to act with 65
Photo by Tom Sodoge on Unsplash.

The
No Collar The
greater autonomy and creativity Meanwhile, others are thinking the freedom to spend less time
Economy
represent the way forward.28 This outside the box. Tech luminaries on work and more time with No Collar
Economy
could be challenging in an era such as Mark Zuckerberg and family and community. UBI may
29
of platform-based employment, Elon Musk have channeled provide sustenance for all, and
where the app is essentially the Thomas Paine to revive interest it would also revolutionize our
employer. In some countries, in alternative income schemes perceptions of work, wealth, and
such as Germany, policy makers and “universal basic income” (UBI) a life well lived.30 
are atttempting to regulate that decouples wage earning All, some or none of the
platforms to ensure they feature from work. With UBI pilot projects aforementioned policy responses
opportunities such as lifelong already under way in Finland may eventually be adopted. A well-
learning. There is no similar and Oakland, California, some measured approach, however,
Chapter
movement in the US. believe workers will finally have remains an imperative. 
Crowd-
The World Economic Forum
can help us understand
new, needed skills: 21st-century Skills
Foundational Literacies Competencies Character Qualities

How students apply core How students approach How students approach
skills to everyday tasks complex challenges their changing environment
1. 7. 11.
Literacy Critical thinking / Curiosity
pitalism
problem-solving
2. 12.
Numeracy 8. Initiative
Creativity
3. 13.
Scientific literacy 9. Persistence / grit
Communication
4. 14.
ICT literacy 10. Adaptability
Collaboration
5. 15.
Financial literacy Leadership
Lifelong
6. Learning 16.
Cultural and civic literacy Social and cultural awareness
Source: WEF
At the very least, it


gives us something to
Big Dollars
66 work on. and Big Data
The 4
No Collar Crowdpitalism
Economy
Who wants to be Unlike contestants in the famous television game show of a similar name,
today’s billionaires are not all about the money.
a billionaire?
In the No Collar Economy, a billionaire might be
just as likely to set their sights on reaching a billion people:
Just as peta-bytes and not petrodollars

could be the building blocks of the future
“b”.
(see The Future of Work),
Yes, with a amassing data and expanding outreach

could be a vital aspect of wealth creation.
From setting up social networks to tackling climate change to providing potable water and medical
supplies in remote parts of the world, a new breed of entrepreneur has emerged.
The shifting notion of being a “billionaire”,

from collecting a billion dollars
to impacting a billion people,
comes from the very nature of
But not necessarily digital technology,

with Benjamins. and the trend has been evident for some time now.
68 69
Photo by Wikimedia Commons.

The 4
Remember Atari?
No
NoCollar
Collar
Crowdpitalism
Economy
Economy
(Google it, millennials)
Way before billions of people began streaming any

song under the sun on Spotify, before they could
share those college party, then wedding, and then
baby photos on Facebook, and before they could
get “together” to play in massive online worlds
like World of Warcraft, there was a world where an
engineer—a developer—was not a rockstar.
Ladies and Gentlemen,
welcome
to the era of
 When Atari, the company

that invented home interactive
entertainment, went bankrupt
after a series of flops in 1984, a
Big
Data.
whole new industry faced the brink
of extinction. Ladies and Gentlemen,
 Happily, the likes of Nintendo welcome to the era of Big Data. 
and Sega held the fort during Google and Facebook—just
the 1990s until peer-to-peer to name a couple of the largest—
networking came along at the turn advertise just as television and
of the century. radio did. But unlike traditional Spotify knows what we want
 The world changed for good. broadcast media, these internet at any given moment, because
Ever since, becoming a “digital giants have far more information it knows we just searched for
millionaire” in terms of subscribers about potential customers. “I Want It That Way” by the
could also make you a dollar They can identify the specific Backstreet Boys. 
millionaire as companies learned behavior and preferences of each
70 to monetize their outreach. one of us. It’s still a jam. 71
Photo by Ben Neale on Unsplash.

What is data?
2.3 4.2
The 4
Economy
Your digital footprint
billion billion
is marked by data.
Every Google search, every or downloads, they generate Data.

Facebook profile, every Amazon information. Whether for work, Perhaps one of the
oldest human obsessions.
order creates a record, a point entertainment, socializing, or… From Inca knot-counting
systems that recorded
of light in an enormous constel- ahem… “other”, all our digital demographic statistics
to the decrepit filing gigabytes of web traffic Google searches
lation of personal data we make interactions create strings of cabinets beneath the
8.8 207
available to the world. Anytime data that record our relations US Treasury, people
have turned to record-
anyone clicks, snaps, programs, with one another and with keeping in an effort
to impose order on
taps, swipes, uploads, saves, digital content. a chaotic world.
Here is a typical day in “the cloud”:1
billion billion
36 186 YouTube video views e-mails
million million
The Incas couldn’t track windowless, dull warehouses from finding your best route
this with their knot-
counting system.
often located in the middle of to work to picking the most
nowhere. Yet inside the sterilized prominent posts you see on
corridors, cool air refrigerates Facebook; from the new music
The ability to analyze big data tens of thousands of computers Pandora thinks you will like to
Amazon purchases Instagram photos
is particular to the No Collar that crunch, plug and extract the travel book for that vacation
152 803
Economy. The information flows of data in search of trends, Amazon realizes you need; even
available is not millions but insights and information. the romantic comedy that Netflix
billions of entries, often knows you want to watch (even
capturing trends in real time. In What they find if you won’t admit it to anyone
previous generations, so much is extremely else). All such decisions are
raw information would have valuable. guided by what models know
million million
been useless. We lacked the about you, and what the models
ability to analyze it. But massive Computers use these know about everyone else.4 The
data centers can now handle it. observations to separate more data available, the more
patterns from noise, and to likely the model is to offer exactly
These big-data facilities are create models capable of what you want, even if you didn’t
72 Skype calls Tweets hauntingly inconspicuous: providing client-specific services: realize you wanted it. 73
Photo by Barret Lyon on The Opte Project.

This was just an appetizer:
Has data
The 4
No Collar WhatsApp Crowdpitalism
Economy
users
In 2014,
Facebook acquired
become the coin

WhatsApp for
US$19 billion;
of the realm? US$30

for each of the messenger service’s
In 2012,
600
million
users
Facebook acquired Instagram for
US$1 billion,
paying roughly at the time.
US$30
for each of the photo-sharing app’s
33
Instagram In other words, your
personal data has
users
become a commodity.
And, on average,
access to your
digital self isn’t
worth much less than
a barrel of oil.2
million
74 users. 75

Crowd Creating
The 4
Economy
Value
pitalism In principle, modern factories
are not too far removed from
Meanwhile, “soft” activities
such as design, supply-
kraʊdˈpӏtəˌlɪz(ə)m those of the past. They receive chain management, and

raw materials and parts, and servicing add much more.3
they produce new stuff.
n.
However, the value-creating
An economic system where aspect of the manufacturing Value increasingly
crowd-generated-data process has shifted. depends on
knowledge added
is the critical commodity In the No Collar Economy,
from beyond the
assembly adds less value
for value creation. than it once did. factory floor.
The materials used

for making a 32
GB iPhone 7 cost
Design
US$225. Assembling
the phone in China Patents
costs a mere
Logistics
additional US$5.
Apple captures the Branding and
Packaging
bulk of its profit
from the device’s Operative
retail price of System
US$649 because The App Store
it controls the
intangibles that
76 make it valuable.4 77
Photo by Louis Lo on Unsplash.

Big Data
The The oil barons have been replaced by 4
No Collar Just look at how today’s
the whiz kids of Silicon Valley Crowdpitalism
Economy West Coast stacks up
with 1990s Motown:5
& The Crowd

Silicon
Detroit
Top 3 Valley
(1990)
(2014) General General
Exxon Exxon Apple
Electric Electric
Type of Car $137 $406 $446 $406 $582
IT
companies manufacturers
Market US$36 US$1.09

capitalization billion trillion General
Shell Microsoft Apple Alphabet
Electric
Revenues US$250 US$247 $128 $365 $383 $376 $556
billion billion
Employees 1,200,000 137,000 Data can seem to make money Now consider that the amount of
appear out of thin air. Facebook data exchanged online doubles
Coca-Cola Exxon TotalErg PetroChina Microsoft
is worth billions of dollars even every two years. That’s about the
$117 $272 $327 $277 $452
though the only thing it makes same rate of exponential change

 Why does market cap differ is “friends”. that the number of transistors
greatly despite similar revenues? in a microchip has undergone,
Nippon Citi Microsoft Shell Amazon
Sure, Silicon Valley’s bottom line

But are we as described at the beginning of
$114 $261 $293 $237 $364
is helped by having far fewer this book.

employees. But that can’t be the leaving meat
whole story. 
on the bone? Most of this data sits idly in
Exxon Walmart Citi ICBC Facebook
Let’s look under the hood. massive data centers. Like oil
$102 $260 $273 $228 $359

General Motors, Ford and Chrys- 1996 2001 2006 2011 2016 deposits underground, it waits to
ler (Detroit’s big three) may keep Data specialists figure that only be extracted, refined and used.
an inventory of raw materials, 0.5 percent of data generated
The World’s Largest Public Companies Tech
parts and vehicles. But this stash By Market Capitalization (US$ Billions) over the internet is mined to
Other
is relatively expensive to store, Source: visualcapitalit.com create value. Most “Internet
and the longer the inventory is of Things (IoT)” data is not
held, the less it is worth. crunched. Only one percent
 Silicon Valley’s tech giants, on of data collected from an oil More than
90%
the other hand, store data. This Facebook becomes more business model of three of rig with 30,000 sensors, for
is relatively inexpensive to keep. valuable as more people use them (Alphabet, Amazon and example, is examined. And that
And the more you store, the it and the company manages Facebook) is heavily reliant collection is used primarily for
more valuable it becomes - for more data. In other words, the on Big Data analysis and the anomaly detection and control.
companies and their clients. inventory appreciates. ability to engage a large and Optimization and prediction,
The economics of networks Big Data has flipped the defi- heterogeneous community which provide the greatest value, of mobile data traffic will come from
means that information on nition of value. Just 20 years ago, of millions or even billions of are overlooked.7
each additional person adds no IT company ranked among people. The models of the oth- smartphones
value to the experience and the world’s top five in terms of er two, Apple and Microsoft,
possibilities of those already in market capitalization. Now the are increasingly dependent in 2022.8
78 the networks. top five are all IT-based.6 The upon such analysis. 79
Yes, data is
The
By 2020, 4
Economy the number of devices connected
to the internet could surpass
50 billion.
THE commodity That’s seven devices
for every human.
of the No Collar Economy! And by 2050,
one trillion
And it is underexploited. devices could be connected
to the internet.
That’s one hundred devices for

The possibilities for wealth and welfare creation are limitless.
every human. 9
The vast majority of them will be

So, who is generating
so much valuable and underused data? “invisible”.
It is not that they won’t be able
the crowd.
You guessed it:
to be seen. Rather, they will be
ubiquitous, autonomous and
unnoticed. They’ll be:
Home appliances
Vehicles
Clothing
Windows
Furniture
Traffic signs
The crowd wears, carries and That’s some Light posts
eight billion
installs devices that passively
and actively record data on To take full advantage of the
everything happening around possibilities of a data-based
us. It’s our avid consumption for economy, we must challenge core
connected devices that pushes gadgets assisting our digital selves. beliefs of individuality,
the exponential growth in data. privacy, collaboration,
About half of them are work-life balance,
For every human connected to smartphones. The other half are and how we provide
the internet today, there are desktops, laptops, cameras, robots, and consume goods
80 roughly two connected devices. watches or sensors of some sort. and services. 81

Touring
The <html> 4
No Collar Biotechnologies. Crowdpitalism
Economy <title>
Innovations in genome editing,
the
gene therapies, and other
forms of genetic manipulation Getting
Your
and synthetic biology.
Data
Data’s
Energy capture,
Factories
storage and
transmission.
Generating, capturing, storing

Advanced batteries and fuel cells,
orbiting solar arrays, tidal energy
capture, smart grid systems, New computing
Worth
</title>
and analyzing data lies at the wireless energy transfer. technologies. For
heart of the digital economy. The example: quantum computing, At this point, it would
World Economic Forum identifies Blockchain and centralized cloud computing, be fair to ask: 
12 key emerging technologies distributed neural network processing,
as particularly disruptive:10 ledger. Cryptographic biological data storage “So, what’s
systems that manage,
verify and publically record
and optical computing.
in it for me?” 
3D printing. transaction data; the basis of Space After all, Facebook makes mon-
Synthesis of physical objects “cryptocurrencies” such as Bitcoin. technologies. ey off your data. Google, Spotify
using a widening range of Developments allowing and Twitter, too. So where’s your
materials; innovations include Geoengineering. for greater access to and piece of the action? 
3D bioprinting to create Technological intervention in exploration of space, including The answer remains to be
synthetic tissues and organs. planetary systems, typically to microsatellites, reusable rockets seen. But one truism will hold as
mitigate effects of climate change and integrated rocket-jet engines. we transition from the old econo-
Advanced materials by removing carbon dioxide my to the No Collar Economy: pitalism. One concept is to develop those who have our consent to
and nanomaterials. or managing solar radiation. Virtual and There is no free lunch. secure and unique digital identities access it.11 
Creation of new materials; augmented Some people still watch free- linked to all the data an individual As more firms battle to be dig-
breakthroughs include Ubiquitous linked realities. Sophisticated to-air television, but they pay for it generates online and offline. Such ital billionaires, the race to access
thermoelectric properties, sensors. Also known as the immersive environments, by viewing commercials. Access to a tool could help people manage our data will become increasingly
shape retention and new “Internet of Things”. The use of from holographic readouts to the free-of-charge social networks what, with whom, how, and at what competitive. But individuals will
mechanical functionality. networked sensors to remotely complete virtual interfaces. also involves an exchange. You pay price such data is accessible. remain only race spectators as
connect, track and manage by supplying your personal data Implementing such digital long as they continue to view
Artificial products, systems, grids, etc. instead of your dollars. identities won’t be easy, nor will online platforms as “free.” 
intelligence
In one way or another, But since this data has it be possible without further de-
and robotics. Neurotechnologies. these technologies value, it is reasonable for us to velopments in Distributed Data So until we
Development of machines that New methods such as smart reinforce the transition demand our cut. Ledgers (DDL), more commonly find better ways
can substitute for humans, drugs, neuroimaging, bioelectronic Here is where developing our known as blockchains. These are
from a commodities- 
to monetize our
increasingly in tasks associated interfaces that allow for reading, digital identities — no, not just keys to a digital environment
with thinking, multitasking, communicating and influencing based economy to a a LinkedIn profile — is key to where we can retain ownership own info… 
82 and fine motor skills. human brain activity. data-based economy. ensuring a more equitable Crowd- of our data and share it only with </html> 83
Photo by SpaceX on Unsplash.

The
No Collar The
Economy
No Collar
Economy
KEEP
CALM Chapter
AND
PROTECT Digitization
YOUR DATA
and Global
Trade
1 2 3
Take responsibility Don’t store all your passwords (Yes, plural! Double check before
for keeping a proper Do not use the same one for everything!), granting unfettered
backup of your digital biometrics and sensitive information in access to your social-
information. one place. Take advantage of the several media accounts to
cloud services now competing for your friends, partners or the
vacation photos. latest cool app.
Overall, treat your data like your life depends on it.
84 Because in the No Collar Economy it does.

The 5
No Collar Digitization
Economy and Global
Trade
Visualizing the
digitalization of
incluir pies de pagina
trade is not easy.

And many of us are amazed
at the sight of
After all,
massive or the football- or the US Navy
tankers field-sized and its 11
New Panamax carrier groups
90
that daily deliver more than
40 million ships, that protect the world’s

shipping lanes and their
barrels of each carrying up to 15,500 eight choke points:
oil; containers, enough
capacity to move Panama,
four and a Suez,
percent half years’ Gibraltar,

global supply Malacca,
of goods traded
of iPhones; Denmark,
across borders travel,
Hormuz,
in part, by sea.1
Bab-el-Mandeb,
86 Bosporus. 87
Photo by Zoltan Tasi on Unsplash.

In our minds,
The
In 2017, the world saw 5
No Collar Digitization
US$7.8 billion
Economy and Global
Trade
international trade in digital music sales2
arrives and departs US$18.3 billion

on ships, in revenue for business intelligence and analytics software markets3
not online. US$77 billion

in revenue for mobile-app downloads4
So, to help dematerialize our

trade mindset, let’s take it slowly. Wait, we’re US$247 billion
in public cloud services5
getting off
Or, as Justin Bieber, Luis Fonsi
US$2.3 trillion
and Daddy Yankee sing…
topic…
“savor every moment
slowly, slowly…” in global e-retail6
and
“pasito a pasito,
suave suavecito...” When someone in Spain streams
… or are we?
“muy despacito… “Despacito”, a song performed by Canadian,
despacito” American and Puerto Rican artists for a California-
based record label, this is a services export, and a
The song Despacito has become the most border is crossed.
This
five-billion
streamed tune of all time, the first song to break the
A lot of these transactions occur

within a country’s borders.
But what
borders does is trade.
the internet
threshold for combined global In fact, the numbers above reflect expanding
platforms such as Spotify, Google global online value chains. Just as nine countries
Play and YouTube. are involved in the production of a new Boeing 787
88
And Despacito is just the tip
of the iceberg. have? Dreamliner,7 Google’s product creation and delivery
involve people working in 50 countries.8 89
Photo by João Silas on Unsplash.

The <html> 5
No Collar <title>
Digital
Digitization
Economy and Global
Trade
Trade
101
</title>
 The patterns of global trade

<h1> <h1>
depend on the availability and price <h1>
of production factors. Since auto-

<h1> 2. 4. 5.
mation and digitization are already
changing the costs of production 1. Resource Intellectual Private Data
factors, it is only natural that we
Proximity Availability <h1> Property (IP) Protection
see a corresponding change in
global trade dynamics. 
</h1> </h1> 3. Rights Policies
</h1> </h1>
 Automation is capital intensive Newton’s equation for gravity The buying and selling of raw Comparative
and reduces labor costs, while dig- remains relevant to trade. The materials comprises a share of Such rights are already an Data privacy and security are
itization lowers information and force of attraction depends on global trade. They are transported
Advantage important issue in global trade, thorny issues for governments,
</h1>
communication costs, and makes the mass of two bodies and the from countries in which they are but they become critical in a which must formulate policy for
capital and labor production more distance between them.9 If we abundant to countries in which This concept hasn’t changed digitalized economy. And they data collection, access, usage and
efficient. According to traditional substitute mass with market they are scarce. In many cases, since your freshman year in go beyond patents or copyrights. consent, especially for data gener-
economic theory, increased size, and we continue to use developed countries import raw college. A country enjoys a compar- Holding IP rights is as important ated in public spaces. Restrictive
efficiency should translate into physical distance (controlling for materials from emerging markets. ative advantage in the production as employing them optimally. The policies and the threat of hackers
increased returns, in this case for a few additional factors such as Similarly, high-tech goods and of a certain good if that country balance between protection and (domestic and international) may
labor and capital. shared histories and languages), services might be abundant is relatively more efficient than use is critical, as evidenced by the render data flows valueless, as
 How will these fundamental we can obtain a surprisingly in developed countries and in another in producing that good. potential gains of Open Innova- data collection and sharing are
changes impact global trade? Five accurate prediction of the trade demand in developing countries. By focusing on areas in which they tion and Open Source versus the key to realizing the full economic
key factors of international trade flows (or attraction) between two This creates trade flows in the are relatively more efficient, both risks of brand counterfeiting and value of Big-Data analytics and
90 help us forecast the outcome: geographical entities. other direction. 10
 countries are better off. 11
 copyright piracy. 12
 the Internet of Things.13 91
Photo by chuttersnap on Unsplash.

90.2 TBPS 19.5 TBPS 10 TBPS 166.6 TBPS 27.1 TBPS 15.2 TBPS
Trade &
The 5
No Collar In the second half of the 20th- Digitization
Economy and Global
century, important developments Trade
changed the geography of trade

flows. Lower transport costs and
the dismantling of many trade
restrictions through the General
Data Flows North America
Europe
Agreement on Tariffs and Trade

(GATT) and, later, the World Asia
Trade Organization (WTO) led to

smoother international trade. Atlantic
Ocean
This included easier movement of
Africa
technology and capital, both key
production factors. 
105.5 TBPS
 As a result, developed 7.9 TBPS
countries increasingly outsourced

Oceania
Pacific 15.1 TBPS
Ocean
industrial production. Low
transport costs, the transferability South America
Potential capacity is
of technology and capital, and

what submarine cables are
capable of, while lit
the availability of cheap labor in

capacity is what current
equipment allows.
Indian
emerging markets made produc- Ocean
ing goods in the developing world

more attractive. The result was
Trade Data Flows
deindustrialization in countries
such as the US, and a decline in Shipping Lanes
Total potential capacity
well-paid blue-collar jobs. Source: Statistics

Line weight indicates Used capacity
value of content, not
 Conventional wisdom around from various volume of traffic
Current Capacity (Lit)
sources15
the turn of the millennium
held that developed countries
needed to specialize in services
or high-skilled elements of the
Cross-border trade US$7 billion invested in 40 new • 6 bottles of whisky
manufacturing supply chain since Submarine cables make submarine cables in 2017-18 – US$0.90
these countries could not compete US$26 trillion the internet global. • 1 Barrel of oil - US$0.80
• Growth in knowledge-intensive US$450 billion added to • 1 Full print of Wikipedia
with the low wages commonly total annually goods trade is currently Their layout follows the same global GDP each year by (in 18,750 volumes weighing
1.3 times faster than in pattern as the major shipping submarine-cable flow 28 tons) - US$1,900
paid to industrial workers in the Digital Trade, 2005-2013 labor-intensive goods lanes for global trade in goods.
For every day that a country
developing world. But the No Collar To stream (globally)
• E-commerce in goods Goods They are capable of transmitting loses internet connection, its
Economy calls into question this trade: from 3 to 12 211,000 gigabits per second over economy loses US$2.36 per person • 10 tracks on iTunes
division of labor. Some experts percent of total trade • 2.7 percent growth in 880.000 kilometers of cables - $0.001
• International calls using volume (2015-16) The cost of trade • 1 gigabite of data - $0.03
now forecast that industrial Skype: from 3 to 39 percent • 14 percent decrease in value +52.9 percent cross-border • Netflix HD movie – $0.09
production is likely to return to (2015-16) to US$16 trillion dataflow growth (average International averages • All Wikipedia’s +45 million
Services • 90 percent of commercial per year 2005-14); 45-fold to reach US articles in +270 languages
developed countries.14 sellers on eBay export to increase in just a decade! with all associated media
• US exports of digital other countries, compared • TV set – US$10
products represent 70 percent to less than 25 percent of US$46.3 billion invested in 347 • 100 pounds of coffee - US$6.80 • Compressed - $3
92 Why might this be? of its services trade surplus traditional small businesses submarine cables (1998-2016) • DVD player – US$1.50 • Uncompressed - $690 93
Map by University of Texas Libraries.

The
No Collar mation. Labor costs are, therefore,
And what about <h2> Still, as automation becomes
5
Digitization
Economy and Global
drones?
Of Smart
no longer a major consideration cheaper, developing countries Trade
for determining the location of may eventually replace antiquat-
and Dumb
production. Instead, other factors ed technology with their own
have become more important. automated factories. But this
Production
Time-to-market is probably the would not stem a trend toward
most important, as consumers are decreasing trade flows and
growing ever more accustomed to </h2> eliminating the historic opportu-
getting what they want, when they We could be on the nities for economic development
want it. A consumer with 20 options Domino’s Pizza is precipice of a growing friction that the relocation of industrial
on Amazon will not wait weeks for already delivering between specialized, high-tech production has provided. 
pizza with drones in
production and they may even pay production and unspecialized,
New Zealand,17
more for quicker delivery. traditional mass production. <h2>
Easier Retail
 Another critical development while 7-Eleven The latter is unlikely to
is digital customization, which performs drops in disappear since some goods
Strategies
enables more specialized or Reno, Nevada,18 require no specialization, and
personalized production. German some markets do not demand
and Chipotle flies
sportswear producer Adidas, for immediate delivery. </h2>
burritos to hungry
example, offers customized run- The emerging dichotomy Online retail platforms such
students in Virginia.19
ning shoes, which are produced between “smart” and “dumb” as Amazon and Alibaba can have
in an automated “speed factory” production, however, has import- an important effect on trade.
in Germany to avoid weeks of ant economic implications. Past Currently, only a tiny fraction
shipping from the production site relocation of high-tech goods of companies participates in
to the retail market. Intermediate
16
production moved technical international trade. In 2014,
industrial products are also know-how from the developed 304,000 out of the roughly
increasingly customized and to the developing world. But this seven million firms in the US
produced to meet end users’ The potential impact source of technology transfer exported goods.21 The ratio in
of drones goes beyond
needs. But this kind of flexibility becomes unavailable if such other countries is similar. 
high-in-the-sky
requires high-quality physical production returns to rich Few firms engage in interna-
access to munchies,
<h2> and digital infrastructure, both of and it could quickly countries. Adidas, for example, tional trade because it requires
The Future
which are more easily available in expand to delivering may be less inclined to automate considerable effort to deal with
the developed world. emergency food, its factories in Cambodia if it is authorities in export markets,
of Trade
 Should the re-industrialization medicine and supplies doing so at home. to conform to regulations and
to disaster zones
hypothesis bear fruit, industrial Automated machines could, to build a retail network, among
and isolated areas
in Goods
production will again increase of course, also produce basic other obstacles. The emergence
worldwide.
in the developed world. Emerg- products. But the process is of online retail platforms allevi-
</h2> ing-market production will receive costly and requires skilled ates some of these hurdles and
It’s a
 The “re-industrialization” some boost from increased local personnel for supervision and eliminates the need to hire local
hypothesis holds that industrial consumption, but the developing
brave new maintenance. Production of staff. Instead, creating an online
production is returning to the world would be unlikely to remain frontier for such goods is consequently likely account and trading through that
developed world because most a center of production for person- humanitarian to remain labor-intensive and platform is sufficient for conduct-
94 goods can be produced by auto- alized goods. relief.20 rooted in the developing world. ing international business. 95
Photo by Mike Kononov on Unsplash. Icons by The Noun Project.

3D
The 5
No Collar The relative ease with which <h2> Digitization
Economy and Global
The Future
an online presence can be In 2014, Trade
established is likely to lead to US sales of industrial-grade 3D printers reached
printing a third of Trade in

increased business-to-consumer
trade via online platforms and,
Services
therefore, trade flows in general.
This may well attract more firms of the volume of total
to trade internationally, which is gaining momentum industrial automation and robotic sales. </h2>
will offer consumers expanded
350
choices. The increased compe- Many services are global-
tition and transparency will also In 2008 there were ization-proof simply because
generate lower prices, further models of 3D printers. the location where they are
benefitting consumers. By 2020 provided is fixed, limiting
that figure will rise to arbitrage opportunities. A haircut
42
<h2> in Kingston, Jamaica is likely
Do it
cheaper than one in Manhattan,
yet few New Yorkers are flying to
Yourself percent. the Caribbean to get natty.

 We also wouldn’t trust a 3D

printer with the clippers. But

The Impact Today there are more than digitization has allowed some
23,000
of 3D Printing Source: Metropolitan Corporate Counsel.
services to be performed far from
where they are commissioned
</h2>
or consumed. More than a
 The most disruptive effect From replicated organs to The technology will play a huge decade ago, US- and UK-based
on international trade, however, gourmet food, doctors, chefs, and role in producing goods in smaller financial firms began outsourcing
Source: Metropolitan Corporate Counsel.
could come from the widespread anyone in between will be able to numbers or goods requiring a accounting activities to Indian
use of 3D printing. 3D printing, make it at home with an appropri- high degree of customization. subcontractors. The success of
or additive manufacturing ate 3D printer and materials. But despite all the potential Indian call centers was further
(AM), refers to processes used It is already possible to benefits, there could be a proof that business services can
to create three-dimensional produce equipment with moving downside. 3D printing may be globalized due to improved
objects, layer by layer, from The versatility of this rainforest, the International parts; in ten years we may be have a negative effect on communications and information-
a digital model such as an technology goes beyond Space Station, anywhere! able to print a smartphone. the volume of trade flows if sharing via the internet. 
Additive Manufacturing File producing rich geometrical Essential items, whether We are still years away from consumers engage in home So there are differences
(AMF) or a Computer-Aided and intricate pieces. It’s for repairing a pacemaker printing our own flat-screen TVs. manufacturing. How large between digitally tradable
Design (CAD). This process was also flexible enough to use or a tea cup, can now Due to the economics of scale, the impact on trade may be services, which include most
developed in the 1980s and everywhere you can imagine: be printed on site within 3D printers will remain less and when it will materialize, business services, and non-digi-
has evolved rapidly in the last your home, a refugee camp, an hours, potentially saving cost-efficient than automated however, remain unknown. tally tradable services. Not much
decade. 3D printers can now oil rig off the coast of Angola, a days or weeks of lengthy mass production for the fore- To maintain exports, coun- will change for the latter, unless
work with multiple materials medical center in the Amazon procurement processes. seeable future. tries will need to substitute any these services lend themselves
including plastic, concrete and That is not to say there is no decreased trade in goods with to automation (again, our
96 even metal. short-term utility for 3D printing. increased trade in data. robo-barber). 97
Icon by The Noun Project.

The
No Collar The
 But digitally tradable services, <h2> vices, will become more global
Economy
No Collar
Bring IT on!
such as accounting, research and and more competitive. Relaxing
Economy
development, and legal services, non-tariff barriers to services
will see increasing competition </h2> will emerge as an important
as they can be outsourced to These trends are already theme in international trade
low-cost countries. This can be appearing, and they will likely negotiations. Rich and develop-
an important source of economic gain momentum in the next ing economies can use services
growth for developing and emerg- decade. What could trade look trade to compensate for the
ing economies, provided they have like in 2030? losses in high-tech production,
the requisite digital infrastructure Here are a couple guesses: provided they have sufficiently
and human capital. well-developed human capital
1.

 Even here, though, there are and a digital infrastructure. 
exceptions. Regulations that

 
prohibit outsourcing and automa- What does this mean for inter-
tion prevent the globalization of Developed Countries will national trade flows? Trade in raw
some services, particularly in the Re-industrialize: Production of materials will likely increase while
legal arena. These services could high-tech and highly customized trade in manufactured goods will
be automated or outsourced, but goods will return to the developed likely decline. Trade in services
Smart
Chapter
political and social considerations world to facilitate faster delivery, will also increase, as will emerging
offer protection. but factories are likely to be almost economies’ share of this market.
 So, which way will digital completely automated. Of course, the amount of ex-
services flow? It will most likely be changed data will rise with trade
2.
from the developing to the devel- in services. And if 3-D printing
oped world. White-collar workers becomes a widely used produc-
 
in rich countries may have largely tion technology, all these trends
been spared the redundancies More Access to Bigger will be amplified. 
that hit blue-collar workers in the Markets: Through online trading

recent waves of globalization, platforms, more firms will be able
but they may not be as lucky in to participate in international
the No Collar Economy. Despite trade of manufactured goods and
Cities
gaining advantages from access to sell their products to a larger mar- On the bright

larger global markets, those in the ket. Consumers will have access to
service sector may learn the hard more products that are subject to side, losing the
lesson that their counterparts
in manufacturing have learned:
greater price competition. And if
you play your cards right, a drone
remote will no
High-quality products, whether just might bring you a burrito. longer be a crisis.
You’ll just have
goods or services, can be made
3.
and sold from many locations. 
 to print a new

one at home.
What? You didn’t think
the lawyers would take You Just Got Served: Trade in 
98 care of themselves? services, especially business ser- </html>

Cities
The 6
No Collar Today, urban areas house about 90 percent of the increase will Smart
Economy Cities
3.8 billion
come from internal migration
in Africa and Asia - rural folks
in the Niger Delta moving to
are
residents, totaling 54 percent of Lagos, for example.
the world’s population. 3
By 2050, that number could

increase by another 2.5 billion.
awesome.
Cities will need to provide up to 6.3
billion people with opportunities to
live, work and play.
As hubs of economic activity,

they are responsible for more
In 2007, for the first This migration will place
than 80 percent of the globe’s
US$78 trillion annual GDP.1
time, more humans unprecedented pressure on
urban infrastructure, services, and
lived in cities than in housing, which is already strained in
rural areas.
Put another way, with a many of the world’s cities.
geographic footprint of just over
0.2 percent of the world’s surface, To survive, let alone flourish, cities
cities generate the equivalent of will need to manage resources
four times the entire output of with great efficiency. They will
the US economy. 2
need to become smarter to do this.
And from their population to
A lot smarter.
their economic output to their
very surface size, they’re growing
at an exponential rate.
100 101
Photo by Alex Knight on Unsplash.

The 6
No Collar Perhaps oddly, given the mobile People living in informal housing Smart
Economy Cities
nature of digital technology, often find work in the informal
cities have emerged as major economy. They may also If you have used the
hubs for people searching for power their houses with illegal Waze app to navigate
economic opportunity in an electricity and wash their dishes through rush-hour traffic,
increasingly interconnected with water from informal water
global economy. supplies. Their entire existence is
off the books.
But the world deserves mixed
marks to date for its ability Meanwhile, the demand to live in
to handle mass urbanization. cities has pushed the cost of living if you have pinged
Housing is one area in which cities through the roof. This has created a local official
have not performed well. Waves of a situation in which people find
on Twitter
newcomers to larger urban areas themselves in urban areas that
must often make do with informal offer jobs but are affordable
accommodation, sometimes only for the rich. It’s a recipe for
building their own makeshift proliferating inequality.
dwellings. Such housing, in the
aggregate, creates large informal or if you have paid your
communities such as the favelas
gas bill
that are perched over the beaches
of Rio de Janeiro.
online,
To address these you know the answer is a resounding

challenges, innovative policy
initiatives are needed at the
municipal level.
Can the tools
of the No Collar
102 Economy help? 103
Image by unknown author on Wikimedia Commons. Icon by The Noun Project.

The 6
No Collar Our increasing ability to leverage Smart
Economy Cities
Big Data is helping us make sense
of our cities. The most successful of
them have municipal governments
that work hand-in-hand with the
private sector, academia and
residents to apply new tools to
solve old problems. Waze, for
example, helps users deal with the
curse of congestion by mapping
traffic patterns from mobile-phone
data, adapting open-source user
platforms to reduce the stress of
daily life in the city.
Inefficient trash collection is If applied correctly, these tools

a major problem in Mozambique’s
can help sprawling cities realize
capital city Maputo. The MOPA
program attempts to address this breakthroughs in organization
problem using digital technology and management. Nairobi’s
and crowd participation. When
citizens see problems, they
residents have managed to
can text and even send photos map out their obscure and
to MOPA headquarters, where
informally run public-transport
problem areas are monitored in
real time. Next, the MOPA team system. The local government in
hits the road to investigate the Maputo, Mozambique has used
problem. The team reviews the
situation, and attempts to
citizen-generated data to address
plan a solution. waste-management problems.
See? Life The No Collar Economy levels

access for all players by eroding
or even digital) may seem onerous
or expensive at first, the gains from
in the city
traditional business and class integrating the digital economy
hierarchies and top-down into urban planning initiatives can
government service provision. But actually be achieved quickly and
a local authority’s ability to harness cheaply once digital platforms
doesn’t have
digitization depends on its flexibility are in place. The smartest of
and willingness to adapt to the smart cities coordinate with all
emerging technology, collaborate sectors of society (citizens, private
to stink.
with partners, and learn from sector, academia) to ensure that
pilot programs and experiments. establishing a digital economy has
While any initial infrastructural ripple effects that are far greater
104 investment (physical, institutional than past urban initiatives. 105
Image by NASA/GSFC/METI/ERSDAC/JAROS and U.S./Japan ASTER Science Team.

A Tale of Two
The 6
No Collar The two approaches are co-de- Smart
Economy Cities
pendent. In other words, the high
cost and often lofty ambitions
associated with solutions in smart
Smart Cities
cities can be successful only if
citizens see that those solutions
improve their lives. 
 To enable the resident engage-

ment necessary to make a city truly
smart, urban centers must create
pathways for those residents to
co-create smart solutions. Seoul,
Leipzig and Detroit are among the
cities that increasingly leverage
the power of their residents by
partnering them with the private
sector. This collaboration can
 Smart technologies and leaving residents to deposit their then use reams of open data to
solutions are rapidly emerging garbage next to the overflowing design technological solutions to
as responses to the litany of cans. This is not just an eyesore.
5
local problems. More than 150
challenges facing cities. These It leads to the proliferation Detroiters, for example, joined
technologies offer policymakers of rats and hazards that have forces with Loveland Technology
and citizens a new toolbox of The first health- and sanitary-related to combat urban blight by partic-
problem-solving mechanisms to and, by far, more well-known consequences for residents. ipating in “Motor City Mapping”,
deal with demographic change, approach focuses government Enter physical infrastructure an effort to crowdsource data
workforce development and and private-sector investment on as a smart solution. Athens is on every municipal property.
transportation demands. A infrastructure such as: making a significant push towards This information, in addition to By digitizing such information,
smart city uses interconnected installing rubbish bins capable of digital platforms that enable residents hoped to make informed
information and communication broadband, collecting real-time data on the residents to co-create smart city decisions about zoning and
technology networks to improve smart streetlights, amount of trash throughout the solutions, helps policymakers planning, and open new channels
the lives of its residents, most smart water & city. This information would then decide how to adjust public of communication with city hall.6 In
often by delivering services more electricity meters, be fed into a central operations The second services to meet citizen demands. other cities, such as Amsterdam,
efficiently, and spurring innovation traffic-light sensors, center that determines the most major approach to smarten up a Collecting and using data from in- hackathons produce program
and competitiveness. 4
 e-governance portals, efficient and cost-effective pick- city uses data that already exists formational networks to provide code that can be applied to a host
and up route for garbage collectors. or can be accessed with minimal insights into residents’ activities of urban challenges. Social media
smart trash cans. Garbage trucks consequently effort to empower residents. This and demands is the source of enables international replication
There are two
 spend less time roaming the can be as simple as capturing real power for cities in a digital of this strategy. In other words,
The Greek capital of Athens streets, workers use their time GPS data on location, activity and economy. Data is most effective the NextBus app built to provide
approaches that

has long suffered from chronic more efficiently, residents actually public sentiment from residents’ when combined, analyzed and passengers real-time bus tracking
cities use to deficiencies in waste collection. have their rubbish picked up, and mobile phones or social media, or humanized to construct a more in the San Francisco Bay Area easily
Bins often fill up before city mayors can claim bragging rights analyzing open public data from holistic image of the city as a fits Washington, DC’s Metro and
106 smarten up. workers can empty them, when they run for re-election. government data repositories. living organism. public bus system.7 107
What Infrastructure
The 6
No Collar Smart
Economy Cities
Fifth Generation (5G) Investment action Internet of things (IoT)
networks bring forth the offers the ultimate management
potential of real-time and optimization tool while
Makes
everything to improve generating an enormous amount of
the quality of life for crunchable data for the creation
everybody, everywhere: of value and opportunities of
Sewage today’s Crowdpitalism:
Best of class availability
a City
Digital Identity Grids
Cybersecurity Roads
Affordability Parks
Electricity Networks
Smart? Wearables
Pedestrian
Traffic Water
Freight
The key is an integrated & symbiotic
Source: Own elaboration.
Public Lighting action on all these functionalities, since,
Telemedicine
as a whole, they make for a smarter city
than the sum of their parts.
Adoption
Personal choices
Mass Transit Garbage Clean Energy
Telework
There’s no easy answer, as Shared Mobility
there are no practical limits

to how digital technology and mapped each
can improve urban life. functionality according to Security
its dependence on three
After investigating several domains of action: Environment
Public Connectivity
approaches, and by mixing and FinTech
Big-Data Analysis and
matching the best of them, 1. Adoption Artificial Intelligence (AI)
we have come up with a list of 2. Infrastructure lower the public-sector share
of GDP and make the state
core functionalities that show 3. Governance more effective, frugal and
promise of success and sorted Education & Culture efficient, while allowing
for a more dynamic and
them in three main categories: Each domain is driven by less intrusive process of
a specific technology legislation and enforcement:
Social Service
and a set of enablers
Governance
Utilities that can be activated to Regulatory Minimalism
Pro Investment
unleash the full potential
Digital First
108
Transport8
of “smart” functionality. Political leadership Open Data 109
Icon by The Noun Project.

Cities worldwide have
The 6
No Collar Smart
Economy Cities
used data to make

Amsterdam, Stockholm, Sweden
Photo-realistic 3D models
Netherlands
with touch screens show
A sustainable shopping
what Stockholm will look
services more useful

street in Amsterdam features
like in the future
smart meters to measure
energy use and smart plugs
Seattle, United
to regulate lighting
States
and efficient.
E-Park system gives Toronto, Canada
drivers real-time Real-time traffic, public
Friedrichshafen,
parking availability transit, local weather,
energy and water consumption
Germany
Manchester, UK Pilot project allows
available via mobile apps
3D district models control via mobile
provide real-time device of energy use and Beijing, China
household appliances Sensors help prepare for
energy-consumption
storms by monitoring
New York City, information for buildings
drainage systems
United States
Monitoring equipment
detects gunshots and
Tel Aviv, Israel
contacts NYPD
Home of Silicon Wadi,
San Jose, United arguably the most successful
States Silicon Valley spin-off Source: Own elaboration.
Paris,
Smart meters automatically Havana, Cuba New Delhi, India
France
alert authorities to Residents are using mobile- The world’s only 100%
17,000-strong
abnormal water use phone cameras, GoPros, green metro system
bike-sharing
and the Mapillary and program
OpenStreetMap apps to create
a 3D map of Old Havana Barcelona, Spain Hong Kong, China
Mexico City, Mexico A “city OS” provides Vehicle-to-everything
a single platform
Dubai, UAE (“V2X”) technology
A city-wide network of sensors
Happiness Meter app lets warns drivers
communicates real-time pollution- to manage the
Here are some related alerts via an app
Sao Paulo, Brazil
Detecta, a crime-monitoring
city’s many apps
citizens and visitors
provide feedback on their
before collisions
examples: Panama City, Panama

system, collects data from
phone calls, video cameras
experiences in Dubai
Installed free wi-fi access and police patrols

points at bus stops Melbourne, Australia
Pune, India Sensors around Melbourne measure
Realigning public pedestrian activity via the 24-hour
1. Bogota, Colombia
Aggregates geospatial
information of the city’s more
Lagos, Nigeria
Building free wi-fi
transportation based
on congestion data
Singapore,
pedestrian counting system
connectivity spots in Singapore

Inspired by baseball, Boston than three million properties public parks and gardens City-wide sensors
into a single online map
collect information
calculates a “city score” for Nairobi, Kenya
2.
on traffic movements
Micro-clinic technologies and crowd behavior
complaints fielded by local-gov- provide remote health
consultations
ernment departments by using Santiago, Chile
live data from its non-emergency Seoul’s “Government 3.0” Chilean energy company
Chilectra uses the city
Cape Town,
app and hotline, BOS:311. Stats framework pushes for increased as its testing grounds for
South Africa
3.
projects like an electronic
Free wifi in the
on complaints registered and city-wide connectivity, citizen vehicle car-sharing
program and smart grids
public bus system
resolved are displayed on a engagement and data analysis

dashboard so that the mayor to make local services more Buenos Aires, In Amsterdam, the “het nieuwe find each other. The workspace
Argentina Palmerston North,
can review them and take any efficient. Initiatives such as Converted 91,000 public werken” (new way of working) features open, light-filled central New Zealand
street lights to LED bulbs
necessary action, much as a base- cheap broadband and public concept uses smart tools to spaces with games and smart
Palmerston North is mapping
with sensors that communicate
sites of illegal dumping with
power outages, broken
ball manager might analyze an wi-fi hotspots ensure blazing fast generate flexible working hours coffee machines to encourage
live statistics, directing work
lights and vandalism
crews and collecting evidence
ongoing game. The mayor can’t internet access to 98 percent and happier, more productive interaction and collaboration.
go back in time and pull Pedro of the population. Meanwhile,
10
transparency in South Korea’s employees. The Deloitte Sections of the building can be
Martinez from Game 7 vs. the cashless payments through push towards a cashless econo- building, designed around this closed off on days when fewer
Yankees, but he can locate and TMoney (a rechargeable smart my. Smart water and electricity concept, has 1,000 desks for employees are expected, saving
repair 50 percent more damaged payment card) and Upass (a meters are also monitored to 2,500 employees, with digital electricity, heating or cooling,
110 sidewalks, as he did in 2014. 9
transportation service) enable make paying utility bills easier. sign-ins to help teammates and cleaning resources.11 111
Map by freevectormaps.com
<html>
The <title> 6
No Collar <h1>
It’s a Family
Smart
Economy Cities
Building Smart
Digital Smart Cities in the Yinchuan,
Affair
Economy City
Developing World
<h2>
</h1>
China </h2>
 The IT company ZTE and the

 “Going smart” sounds sexy no Chinese government have collabo-
Government
Local Synergies matter where in the world you are.
But gaps in wealth and infrastruc-
rated to build urban districts from
scratch and outfit them with the
Provides services
Creates the
Make Smarter ture exist in every city, complicating
any effort to even begin imple-
latest smart-cities technology. This
has included “smart mailboxes”
Cities menting smart strategies. While that can change temperature if,
environment for
innovation
Sets and enforces
3.5 billion people, or 47 percent Dar es
<h2>
for example, the tenant receives
of the world’s population, have a delivery of cold food from the
regulations in
an ever-changing
</title>
Amsterdam,
<h2>
access to the internet, 3.9 billion
Salaam, grocery delivery app. In addition,
environment
Netherlands, </h2>
(53 percent) do not. For every ten Tanzania </h2> solar-powered trash cans compact
Private Sector mobile phones active worldwide, contents and send signals to
Collects user
for example, shows the promise fewer than five are connected to 70 percent of the population collectors when they are full.
information of such synergies since it fosters the internet. Lack of digital access
13
lives in heavily populated, infor- Monitoring technology (sensors,
Develops innovative
the environment and offers stymies smart solutions. In fact, mal housing settlements.14 More drones, cameras) continuously
and efficient
solutions incentives for smart initiatives. such solutions are useless if people will undoubtedly join them in gathers data on everything from
Helps roll out Local government is not alone The city held a competition remain offline. the world’s ninth fastest-growing waste disposal to traffic, providing
innovations
in making cities smart. Pri- in 2012 for a sustainable and The challenges arise in city. Such crowded neighbor-
15
feedback that can help authorities
Citizens vate-sector innovations such as innovative re-use concept for countries with low internet pene- hoods are already plagued by increase efficiency of services.17 
Google Maps and crowdsourced the derelict De Ceuvel shipyard. tration, and they are often in the deadly and destructive floods
Provide information
on needs and citizen-led initiatives such as The winning group of architects global south. Unfortunately, it is that hit twice annually. To combat Some countries are developing
preference OpenStreetMap, GoFundMe and designed a circular office park also this region as a whole that is this, the city council teamed up smart strategies nationwide.
Act as in-vivo
testing ground for
Paytm also help. But government featuring energy and waste experiencing increased urban- in 2013 with the World Bank, Indian Prime Minister Narendra
innovations involvement can be crucial to self-sufficiency. The site even ization and population growth, the Red Cross, and the Open Modi has pioneered since 2014 a
Use range of
disseminating new platforms to a uses soil-cleaning plants to which will accelerate demand Geospatial Consortium to build Smart Cities Mission that deploys
skills to directly
participate in wider audience, thereby making restore the earth. Amsterdam for energy, food and water. But roads, streams and flood plains smart technologies to nearly
innovation and the platforms more effective. also leases state-owned land how can cities in the global south in densely populated areas. The 100 cities in his country. These
development process
Create a market
 Smart cities work best when free of charge to private-sector develop smart solutions when partners used the OpenStreet- municipalities compete for federal
for private-sector citizens (who use services), partners at its “Park 2020”, which pockets of the population lack Map (OSM) app, a collaborative and state funding under the Smart
advancements
private-sector innovators (who is built entirely on cradle-to-cra- even basic connectivity? mapping program, to determine Cities Challenge, which is admin-
collect data and build solutions) dle principles. That means any This chicken-and-egg problem where such construction was istered by the Indian government
Academia
and academics (who identify gaps component of the park’s infra- presents significant challenges needed. More recently, drones and Bloomberg Philanthropies.
Study trends
Identify gaps
and carry out training) collaborate structure, including construction but also exciting opportunities. have been used to identify The goal is to prod Indian cities
112 Carry out training with city government. 12
 material, can be re-used. For example, in… problem areas. 16
 to meet priorities familiar to the 113
Maps by Rob, Martin23230 and Ssolbergj on Wikimedia Commons.

The
No Collar The
developing world, such as those waste, and electricity systems in the data transparency to enable open
Economy
related to sanitation, water, Town Centre district. In addition to access and organize workshops No Collar
Economy
electricity and transportation infra- constructing physical infrastructure, to teach users how to best man-
structure, all while implementing Bhubaneswar is implementing age new hardware and software,
digital platforms. an Intelligent City Operations and thereby removing capacity-build-
Management Centre to digitize ing barriers to innovation. Chapter
municipal cash transactions such as It doesn’t have to
those for parking, public transporta- be expensive! 
tion and utilities. If your city is like ours, it’s
 Despite the top-down nature probably broke. But making cities
of the central government’s smarter doesn’t have to break the
Smart Cities Mission, programs bank. Maputo’s waste-manage-
Bhubaneswar,
<h2>
in Bhubaneswar are powered by ment system, which uses simple
e-
its residents, approximately one- text message-based menus to
India </h2>
third of whom have participated gather data and encourage civic
 Is home to some of the most via opinion polls, planning inputs engagement, shows that smart-
ambitious Smart Cities Mission and idea-submission platforms city interventions can be low-cost,
projects. The city of one million in the design and construction of low-tech and of big benefit. 
crammed into 42 square miles the Town Centre. Innovations can also be easy to
− that’s like 115 percent of San scale and share. A program that
Francisco’s population with only 90 <h1> solves a specific problem in one
Mocracy
What can
percent of its area − suffers from city can be re-tooled for a problem
overcrowding, traffic congestion in another. OpenStreetMap (OSM)
city govern-
and a lack of waste-processing was invented to map London but
facilities. It also has a large, slum- has since spread worldwide.18
ments do?
housed population on the hunt Hackathons or contests that use
for steady employment. When the open data to build publicly available
Bhubaneswar Smart City Plan is </h1> apps are simple and inexpensive
completed, residents will have an As the folks in Boston to organize, and the prize is often
option to overcome the transport might say, “Play Ball!” Cities fame rather than cash. 
challenge. They’ll be able to use need to actively engage with These ideas represent
a bike-sharing system based on digital technology, creating open just a few ways to encourage
London’s Santander Cycles and ride environments that promote residents to become involved
to the Bhubaneswar Town Centre innovation. They need to be in their communities. Cities are
Governance in an
district on Amsterdam-inspired cy- living labs and idea incubators in increasingly realizing many more
cle tracks. There, they can increase which public-private partnerships options are ripe for development
their employability by taking a class and citizen input contribute and worth pursuing. 
at the “commerce, business, and to experimentation. Cities can
Era of Change
education hub”, or avail themselves promote diffusion, inclusion and
of long-distance transportation. competitiveness through public They would

The city is even building low-cost forums, contests, hackathons be stupid not to. 
114 housing outfitted with water, and sharing. They can encourage </html>
Map by Ssolbergj on Wikimedia Commons.

The
Don’t believe everything you 7
No Collar e-Mocracy
Economy
In this era of exhilarating change, read on the internet just
it can almost seem a buzzkill to decelerate from the hyperspeed Gof innovation because there’s a picture with
ra
ss
to consider the more mundane pace of governance. Li
ne
OUTFIELD
(grass, size can vary
a quote next to it.
from 290-400 ft to fence)
The tedious nature of bureaucracy feels like a relic of the past—

INFIELD (dirt) –Abraham Lincoln
something that belongs in a museum to remind us of how we lived before life was on-demand.
With the US Congress polling at about 20 percent approval in 2017,1

many Americans would likely support the automation of the legislative process.
2nd base
But the No Collar Economy is about far more
Are our
than reconfiguring how we crunch data or earn a living,
95 ft (28.88 m)
and we cannot ignore the role of policymakers.
If the very nature of value is changing, then so too is the

governments
m)
nature of power.
36
7.
(2
et
prepared to
fe
90
line The No Collar Economy is a whole new ballgame,

pitcher's plate
and the new game requires new rules;

foul line
referee this
data privacy, new game?
3rd base
pitcher's mound 1st base

diameter 18 ft (5.47 m)
rules that ensure
the safety of our online valuables, Governments struggle to keep

up with the digital revolution.
and taxed? Should digital markets
run wild? Emerging-market
x
c
o
o
b
a
c
new online world,

s
h
In Washington, US Treasury governments seek to leapfrog

'
'
h
s
c
a
60 ft 6 in (18.39 m)
b
access to the
o
o
digital detectives try to track No

x
development steps through
labor rights
Collar criminals with outdated digital tools even though many
computers running Windows citizens lack consistent access to
in platform employment,
home plate
XP. European governments the latest requisite infrastructure.
pirates and protection from digital

struggle with the economic
and social disruption posed by
Authorities can’t seem to master
the revolutionary technological
and rogue governments. online platforms such as Uber.

Should platform employment
changes sweeping the globe.
be prohibited to protect existing
catcher's box
jobs? Should they be regulated
116 117
on-deck circle
Photo by Alexander Gardner on Wikimedia Commons.
batter's boxes
The 7
No Collar Meanwhile, cynical players as Breitbart News can attest. in the digital age. If data is the fake story about Barack Obama’s democracy. Led by Prime Minister India, however, the country has e-Mocracy
Economy
find ample opportunity to illicitly The website recorded more coin of the realm in the No birth certificate can mean big Narendra Modi, the government had a bottom-up approach that
exploit the exponential tech- than two billion views in 2016, Collar Economy, governments bucks for the man who poured in New Delhi has bet heavily on has put citizens at the forefront
nological growth that outpaces traffic that it monetizes by must ensure its safekeeping. metal inside an ant nest. digital technology to help jump- of digital advancements. This
the development of democratic cramming its online presence Their ability to handle these The challenges are great, start economic development. His appears to be opening a window
institutions. The success of a with advertisements and paid challenges has significant impact but so are the opportunities. top-down push to make India to political dialogue. 
Russian-government-supported links to male-enhancement on the global economy. Governments may be slow on “cashless” could help root out the Finally, we move to the
interest’s hacking the private drugs, medical panaceas, and Billions of dollars moved in the uptake, but around the informality and corruption in the Baltics to review Estonia, which
emails of leading figures in Hillary “After This Man Poured Metal different directions owing to the world they are developing tools Indian economy. has capitalized on a small
Clinton’s 2016 US presidential Inside An Ant Nest, What He surprise outcome of the 2016 US to expand citizens’ access to the Second, we look at Cuba. On population, strong internet
campaign shows the extent of Dug Up Was Magical.”3 election. Across the Atlantic, how digital economy. the surface, the island nation literacy and a deep level of trust
the vulnerability. Although these Governments, especially the European Union chooses to We consider in this chapter seems an odd choice for a between citizenry and govern-
Clinton insiders represented democracies subject to popular regulate digital start-ups will affect three case studies of such chapter on e-Mocracy, as Cuba ment to create a highly efficient
the upper echelon of seasoned, will and demands for transpar- the region’s embrace of the No expanding access. First, we check is neither a democracy nor a bea- e-identification system with
American political operatives, ency, face daunting challenges Collar Economy. And a titillating in on India, the world’s largest con of connectivity. In contrast to major economic benefits. 
their decades of experience did
not adequately prepare them for
even a simple digital ruse. 
 The hackers “fished” Clinton’s
team by posing as Google
employees emailing a request for
passwords. Her advisors obliged,
and soon highly sensitive docu-
ments were public fodder. 
 Few elected officials truly
understand the cutting edge
of digital innovation. Until they
do, they will be fished, punked,
hacked and duped. Just months
after the Clinton debacle, Russia
appeared to be behind a new
digital caper intended to sway
French elections.2 
 Part of the Kremlin plot
involves the alleged placement
of “fake news”. The internet has
proved to be a petri dish for
these false or half-true stories
that chip away at public faith
in democratic institutions.
Peddling of fake news has
118 become remarkably profitable, 119
New Delhi would
The 7
No Collar <html> e-Mocracy
Economy
<title>
not be asleep for
India
this ride. It would be
steering the bus. 
A Top-Down
Embrace of the
No Collar Economy
</title>
 “India grows at night.” The end of explosive emerging-market last ten years4, right through
argument, popularized by writer growth in the second half of the the thick of the global economic
Gurcharan Das, holds that true ex- 20th-century. recession. 
pansion in the country’s economy But an interesting trend Critically, as digital India
occurs while the bureaucrats in emerged in the 1990s as new expanded, the government moved
New Delhi sleep. technologies seeped into the away from the overregulation of
 In the decades following subcontinent. Entrepreneurs the license raj. In conjunction with
India’s 1947 independence, found a refreshing degree of op- broader reforms to cut red tape—
the country’s economy was erational freedom in the digital efforts which began in earnest in
beholden to the “license raj”, a realm. The government at first 1991—New Delhi chose to embrace
byzantine system of rules and did not understand the tech- digital technology by viewing it as
regulations that made operating nological transition, so it could a tool to modernize its workforce,
a private business a punishing hardly regulate it. And while the to boost economic programs in the
bureaucratic exercise. bureaucrats slept, India’s No outer reaches of a deeply underde-
 The system also deeply em- Collar Economy took root. The veloped country, and to help rein in
bedded corruption. As economist country’s digital rise may not economic corruption. 
Jagdish Bhagwati told us, often the have been intuitive—India is a In a nation in which more
only way a fork manufacturer could decidedly labor-intensive coun- than 30 percent of the rural
get the permit to make a spoon try developing a specialization in population is considered illiterate
was to fork over some rupees as a capital-intensive sector—but and hundreds of millions lack an
a bribe to government officials. In it has been effective, helping it internet connection, the govern-
this stifling environment, India’s average more than seven-per- ment bet heavily on the value of
120 economy could only catch the tail cent growth annually over the digital technology. 121
<h1> <h1>
The 7
Aadhaar Demonetization
No Collar e-Mocracy
Economy
A Digital Identity Going Cashless

in the No Collar Economy
</h1>
</h1>
 Implementing any new New Delhi was spending be made instantaneously and
program with a nationwide impact billions of dollars on government directly, cutting out months of An informal economy is On November 8, 2016, Modi
on 1.3 billion people represents schemes, but much of it was bureaucratic hurdles, and ensuring defined as “activities and incomes made a stunning announcement.
a monumental undertaking. not reaching the intended that middlemen don’t take a cut in that are partially or fully outside Effective midnight the next day,
“Government schemes” try beneficiaries. In the mid-2000s,
5
the process. of government regulation, tax- he proclaimed, India’s 500- and
to provide basic food access, the Indian government believed it The sheer logistical difficulty of ation and observation.”10 India’s 1000-rupee bills—banknotes
employment opportunity and had pinpointed one key source of collecting the data and implement- has reached staggering propor- that together accounted for 86
education for all citizens. But who the problem: As much as half of ing the program was no mean feat. tions, with some estimating that percent of all Indian rupees in
is eligible for what? And how can India’s population lacked a “root But so far Indians have responded 75 percent of rural employment circulation—would no longer be
the government plug the many document”—a birth certificate that positively to the effort. As of early and 69 percent of urban employ- legal tender. 
cash leakages that spring up as it provided proof of identity. 6
 2017, more than 99 percent of ment is off the books. 11
 Indians and the international
attempts to disperse benefits from The government launched an Indians over 18—some one billion The informally employed lack press referred to the policy as
Mumbai’s overcrowded slums to effort with a simple goal but an people—have enrolled in the access to capital and training, “demonetization,” which was
the red-earth villages along the extremely complicated path to suc- digital-identification program.8 and they do not receive health something of a misnomer as the
Kabini river? cess. It aimed to create a biometric Aadhaar is by no means a per- or pension benefits. Workers retired banknotes were (eventual-
digital database of its immense fect system. The government has are heavily exposed to the ly) replaced and redesigned with
population. The project-team began tied the public distribution of basic winds of economic change. notes of 500- and 2000-Rupees.
assigning a 12-digit number to food stuffs to Aadhaar accounts, On a macro level, tax revenue But the new notes were unavail-
each Indian, “backed by biometrics which can pose problems in rural suffers, which hampers funding able in the immediate aftermath
including fingerprint and iris scans India. Citizens in those regions of much-needed development of the announcement. 
stored in a central database.” 7
 may have an Aadhaar account, and infrastructure programs. The In this cashless environment,
 Once established, the but poor internet connectivity may informal economy also functions however, Indians began to
database—known as Aadhaar, prevent them from confirming in cash, creating a fertile environ- move toward online payment
India is a cash-based
or “foundation” in Hindi—would their identity or eligibility for ment for corruption. mechanisms. Businesses began economy but that may be
India’s biometric afford all Indians the ability to government-distributed rations. Addressing such informality in to use digital services to pay changing.
identification system can
prove their identity, a require- This has led to infamous situations a country as big as India is no easy employees. And Indians who
give a face to the faceless.
ment for participating in the and viral photos of rural woman task. In 2013, The Economist esti- had previously never banked
formal economy, whether gaining climbing trees in a desperate mated that “[a]t the present rate, online had to use such services
employment or receiving a bank search for an internet connection it will take half a century before to access their money. More
loan. The system also allowed the so that they can receive rice.9 India’s economy is fully formal.”12 e-banking and e-paying means
government to disburse benefits These are challenges the Indian But Prime Minister Modi did not more paper trails and more tax
directly into a bank account or government must address. Still, feel like waiting 50 years. He saw revenue. In the meantime, the
a mobile wallet affiliated with Aadhaar’s creation paves the way an immediate opportunity to use world continues to monitor the
a given identification number. for even the poorest Indian citizens digital technology to put more of effort to make the No Collar
122 Such disbursements could then to join the No Collar Economy. India’s economy on the books. Economy cashless. 123
The 7
No Collar <h2> e-Mocracy
Economy
Can India
Keep Pace?
</h2>
Few emerging-market

governments have pushed

to adapt a No Collar
Economy to the extent that
New Delhi has in India. 
 In fact, India’s digital

transition may be happening
India’s
too fast. If Aadhaar requires
internet, and if many regions
remain without online
access, the program could be
leadership
counterproductive in the short
term. Similarly, demonetization
may be a fine idea, but its hasty
implementation created real
complications in an economy
is convinced that the

used to dealing in cash. 
 India’s leadership nevertheless
appears convinced that the No
Collar Economy is an unstoppable
wave. The government is hoping
No Collar Economy is an
unstoppable wave.
its aggressive push will put India in
a position to ride that wave. 
124 </html> 125
The <html>
Cuba
7
No Collar <title> e-Mocracy
Economy
A Citizen-led
Approach
</title>
 Some may balk at considering ed, top-down effort to build the
Cuba for a chapter on e-Mocracy. infrastructure for the No Collar
After all, the Caribbean island can- Economy, Cuba’s digital transi-
not fairly be called a democracy. In tion has largely been bottom-up.
addition, between strict limits on The citizenry’s curiosity and
speech and a punishing US trade ingenuity have pushed Havana
embargo, Cuba continues to be toward permitting greater online
one of the world’s least connected access. And as Cubans connect,
countries. Public wi-fi did not exist they increasingly find economic <h1>
The Cuban
until recently, and a household opportunities and venues to
broadband connection remains a share political dialogue, the
Hacker
far-fetched dream.13 latter of which is still difficult to
 But dual transitions are under do in person. The connectivity
Spirit
way. Cuba is slowly opening its also provides more exposure Havana’s “old timers”, the transformation. Many Cubans
economy, and a new crop of to international pop culture 1950s and 60s automobiles that were vaguely aware of the
younger political leaders, poten- and markets, which Cubans </h1> still cruise the Malecon, have internet in the first decade of
tially more open to democratic find appealing. This, in turn, The US has enforced since 1962 become a tourist attraction, but the 21st-century, but few could
norms, waits in the wings. A third increases pressure for political a trade embargo on Cuba that their existence attests to the access it. Universities were the
transition, the rise of digital access, normalization. not only prevents many American Cuban response to the trade first and only access points for Take the story of Luilver
is also in an incipient stage. But it The old guard’s success in entities from trading with the is- embargo. Few new cars have many millennials. Unable to con- Garcés Briñas. Frustrated by
has arguably the most momentum containing reform momentum land, but also bars American trade been imported, so come hielo nect beyond discrete locations at his inability to access Gmail
and could significantly accelerate owed much to personal with non-US entities that engage in or high water, the old ones specific times, Cubans began to outside his university, he built a
the first two transitions. allegiance and veneration. Their commercial relations with Cuba. In must keep running. “reverse engineer” the internet. program that converted emails
 In contrast to India, where the successors will not stand a this environment, scarcity in Cuba This Cuban spirit is playing a They recreated online functions to text messages, which are
126 government is making a concert- chance against Beyoncé. became a way of life. critical role in the island’s digital in an offline setting. widely available in Cuba. Once 127
The Havana’s wi-fi 7
No Collar A he began receiving his emails by 2001 other young Cubans began Hotspots B e-Mocracy
Economy
text, his buddies quickly wanted working to create an island-wide
in. But not everyone had Gmail, intranet now called SNET. They
and Luilver tinkered with the could not connect with the outside
C
code so it could also text Yahoo! world, but they could link comput-
D
emails. He then went further, ers at home. A network originally A
writing new code that could of only a few computers in Havana
send updates of almost any kind expanded to include municipalities
to Cuban mobile phones. BBC throughout the country. Users
political news, Yankees scores, built knock-off versions of many
celebrity gossip—all this and globally popular programs such as
B more could be scanned from the Facebook, chat rooms and online
internet and texted. gaming, which would at least
 A market for such services connect Cuban communities. 
rapidly emerged. As the Cuban Then came El Paquete, “The

government began to permit pri- Package”. Lacking cable TV, Net-
vate endeavors, in 2013 Luilver flix, HBO and YouTube, Cubans
opened his own business named have been cut off from the wild
Knales (a play on the Spanish wonders of modern flat-screen
word for channels). The platform entertainment, from cat videos
allowed customers to sign up for to Sean Spicer to “Keeping up
the updates they wanted. with the Kardashians”. 
C
 But how to pay for the Enter the Cuban hacker <h1>
Cuba
services? After all, Cuba has spirit to fill the void. El Paquete Using smart devices—not online entrepreneurship. From
no credit-card or e-commerce “dealers” offer a huge inventory ubiquitous in Cuba, but not un- restaurant-review apps such as
Online
infrastructure. To overcome this of up-to-date digital content, common either—people can now AlaMesa to Revolico, the Cuban
challenge, Knales helped pioneer from the latest episodes of Game connect to the worldwide web. Craigslist, Cubans prepare
digital trade in cell-phone minutes. of Thrones to yesterday’s Real </h1> The prices remain steep: An hour content offline and then visit a
Mobile phone access in Cuba is Madrid-FC Barcelona football of internet time costs US$1.50 in wi-fi spot to upload it. 
paid for by the minute at a stan- match. All are available for upload As Cubans continued to a country in which many people
dard price, allowing the minutes on hard drives. jigger access to internet con- officially earn between US$20
to become proxies for pesos, a Cubans may not be able tent, Havana’s intransigence to and US$30 a month. But that
D fungible commodity that can be
traded electronically. By exploiting
to stream content, but they
can usually procure a flash
connectivity became untenable.
In 2015, as then-US President
cost is dropping. In 2015 an hour
online cost roughly US$5. Still,
They are

this, Knales became a nationwide drive. With this drive, they Obama spearheaded a policy the sub-par connectivity means participating in
provider of information and visit the Paquete distributor and of rapprochement, the Cuban an hour can be chewed up just
demonstrated the Cuban hacker download a tailor-made packet government began opening “wi-fi trying to upload a photo or two the 21st-century
sprit by reverse engineering online
banking—in cell-phone minutes
of digital content as current as
anything airing in the US. In es-
parks” throughout the island.
These public parks offer wi-fi
to Facebook.15


For many Cubans, the gov-

digital economy.
rather than hard currency.14 sence, Cubans engineered access connections that can be pur- ernment’s wi-fi parks represent No collar is
 Luilver was not alone in his to digital entertainment without chased by the minute (just as an introduction to the No Collar
128 endeavors. Starting as far back as connecting to the internet. with cell-phone usage). Economy that has spawned required. 129
Image by Google Earth.

<title>
Estonia
The 7
No Collar resources to enrich themselves?” e-Mocracy
Economy
asks another. 16

 A semblance of a virtuous

cycle may be emerging. Cubans’
bottom-up ingenuity and curiosity
have forced the government to
The economic impact

relax digital restrictions. The
increased access is being used to
demand more transparency and
of e-Mocracy done right

even more connectivity. In the
end, however, economic pressures
may force the government to
acquiesce to such demands. 
 Cuba’s post-revolutionary </title>
economy has been consistently

propped up by a series of
“sugar daddies”. But Soviet
support collapsed with the Berlin
Wall, and Venezuela, Cuba’s Odds are that you are not Estonia is an excellent
Estonia
most recent benefactor, has reading this in Estonia. So, quick laboratory for digital governance
literally run out of sugar.17 Digital question: How long does it take programs. It’s small and relatively
commerce could create valuable you to file taxes, buy a car and rich,20 with deep digital pene-
employment opportunities for vote? tration. More than 95 percent According to a World
Cubans and a vital revenue of Estonians have accessed the Bank report,
stream for the government (via If you are in Estonia,
 internet, besting the 85 percent
“selling a car in
taxable income and the direct pan-European Union figure.21
sale of internet minutes). 
the answer is less These factors created an

Estonia can be done
remotely in less than
 A more connected Cuba than 25 minutes—to environment in which the
will almost certainly lead to e-identity system could flourish, 15 minutes,
a more democratic Cuba—as
do all three.18 
but a government that led the
filing an online tax
long as the US does not again This efficiency is thanks to effort also helped. In 2001, declaration takes
<h1> has been all but non-existent in restrict US corporate activity. If country’s electronic identification Estonia developed Look@World, an average person
Getting
recent decades. While couched in it does, American firms such as system, with compulsory partici- a public-private partnership no more than
socialist terms, Joven Cuba prods Sprint and Google may need to pation for every Estonian starting designed to promote internet five minutes,
Political
the government to increase ac- discontinue projects to improve with a state-issued digital identity literacy among the adult popu-
cess and open new avenues of di- the island’s connectivity. And assigned at birth. The system is lation.22 At the same time, the and participating in
elections by internet
</h1> alogue. “How much has Cuba lost Cuban hardliners would have an based on an ID card about the size country’s banks, some of which
voting takes
 The wi-fi parks have also due to political corruption and excuse to re-consolidate power. of a chip-enabled driver’s license were part of the Look@World
90
helped a cottage industry of polit- poor resource management?” Curiously, US President Donald that requires one, sometimes two, consortium, began pushing for
ical bloggers. Sites such as Harold questions one post on Joven Cuba. Trump has indicated that he will secure codes to use. Ninety-eight a more reliable identification
Cardenas’ Joven Cuba (Young “Who impedes the press from pursue precisely this counter- percent of Estonia’s 1.32 million method and threw their support
seconds
130 Cuba) push a political debate that reporting on those using public productive strategy. citizens have an e-identity.19 behind a digital-ID concept.23 on average.” 131
The 7
No Collar These efforts resulted in the <h1> The X-Road platform and would further secure transactions omy helped it rebound quickly e-Mocracy
Economy
Identifying
growth of digital democracy the personal data that flows occurring through X-Road. following the financial crisis of
alongside an expansion of internet through it are governed by Still, external threats remain 2008 and motor through the sub-
the
literacy. The e-identity’s capabili- a series of regulations that a concern. In 2007, Russia-based sequent Eurozone malaise.33 
ties developed gradually, allowing provide the legal basis for IP addresses were the sources Via its e-Residency program,
Economic
Estonians time to adjust to the digitized transactions. By the of a series of cyber-attacks on Estonia has also opened its No
growing collection of authorized time the state rolled out the Estonian banks, newspapers Collar Economy to international
Impact
services and interactions available digital ID system in 2002, this and telecom networks. 29
players. Digital ID cards have
through the digital ID cards. The institutional infrastructure had Estonia responded by seeking been issued to non-residents
transparency, security, efficiency </h1> already been established. 26
 to enhance its IT and cyber-se- since 2014, and 20,000 people
and convenience this system pro- Just as India faces secu- curity capabilities. The country from more than 130 countries
vides have helped cement a high Besides voting online, Esto- rity concerns regarding its continues, undeterred, with its have since applied for e-Resi-
level of social trust that empowers nians can use their digital ID cards Aadhaar database, Estonia e-identification program.30 dency. 34 This status confers the
the government to continue to for a host of economic activities must also protect the wealth ability to open a company based
digitize services.24 such as: of information it holds on its <h1> in Estonia and take advantage
Successes
citizens. The country maintains of a streamlined, transparent
Submitting job
a constant effort to ensure the bureaucracy and a free, secure
applications
of e-Stonia
security of its digital ID system, internet. It takes only 18 minutes
Signing contracts working to identify threats and to register a business with an Es-
preempt security breaches. A </h1> tonian e-identity.35 The program
Conducting financial
card can be easily cancelled is already making the small Baltic
transactions
if it is lost or stolen. Estonians’ frequent use of country a convenient hub for
Filing taxes A double authentication their e-identities confirms their new companies. Just three years
process also complicates theft view that the system’s benefits after the e-Residency program’s
Accessing healthcare
and fraud. Depending on the outweigh the security threats. inception, Estonia boasts the
Paying energy bills transaction, the ID-card holder Estonians use e-identities to third highest number of start-ups
must confirm one or two distinct file 95 percent of income-tax per capita in Europe.36 
Buying public-
PIN codes to authenticate and declarations, and one in every Just as Facebook, Amazon
transportation tickets
authorize. In addition to securing three citizens uses an e-iden- and Google augment their
Traveling within the EU the identity behind multiple pass- tity to vote electronically.31 worth by drawing in more users,
codes, the Estonian government The ease of interacting with Estonia is working to spread
 The government and authorized is working to bring blockchain the government through an its model to other countries. In
private-sector entities, such as energy technology to all levels of X-Road e-identity has even strength- addition to targeting individuals
providers, telecom companies and digital infrastructure, ensuring ened civic participation. Voter with its e-Residency program,
banks that are allowed access to this transparency and preventing fraud turnout for local and national Estonia wants to overhaul the
personal data, share the information through internal security process- elections has increased since EU data market and establish
on a platform known as the X-Road.25 es.27 Blockchain, best known as the introduction of e-voting a free flow of data throughout
This networked system ensures that the distributed ledger technology in the mid-2000s. 32
 the bloc. An “e-Europe”,37 the
digital-identity holders must provide that secures Bitcoin’s value, allows Estonia’s digital economy country argues, would raise GDP,
personal information only once. They data to be added to a system is also booming thanks to the facilitate travel and business, and
are not asked for it again once their and shared but not altered.28 system. The country’s aggressive streamline healthcare.38 
132 data is in the system. Introducing blockchain technology push into the global digital econ- </html> 133
Photo by Markus Spiske on Unsplash.

biggest BRICS
The
No Collar The Chapter
Economy
No Collar
From the Economy
to the smallest pieces
of the old Soviet bloc,

governments to keep apace of the digital revolution.
are scrambling
hack it,
For those that can
e-mocracy The
End of
offers tangible benefits:
weeding out corruption,

streamlining services,
Geography
increasing efficiency,
shredding red tape.
Meanwhile, governments that fall behind the

constantly-evolving digital economy may find themselves
disconnected from their citizens
134
and the greater global economy.
A Call to Action
WTF?!
The 8
No Collar By now you should be asking yourself a most consequential question: The End of
Economy Geography
This book is about sharing our interpretation

of the challenges that exponential change presents to the global economy:
our jobs, What’s. The. Future?!
our bank accounts, We don’t pretend to have the answer.

As the Danish say, “It’s difficult to make predictions, especially about the future.”
our politics, However, we do have a call to action.
It is not meant to be a definitive guide to navigate the digital age.
our cities.
Instead, we offer some
And this is just the beginning: We don’t

even discuss health, education, and many
common-sense,
other important areas.
digitally-adapted,
action-based
We have aimed to turn that interpretation
principles
into useful concepts and stories, which, to kick-start - in case you haven’t already -
your digital transformation and embrace the opportunities
combined with statistical bites
and the occasional pop-culture reference, of a brave new world with no collars,
are meant to focus on your development, borders or natural barriers.
raising your awareness about making the most of the opportunities
and meeting the challenges of the No Collar Economy.
136 137
Photo by Slava Bowman on Unsplash.

The 8
No Collar The End of
Economy Geography
Involve the youngsters

Take them seriously. They are digital natives.
Few know the landscape better
even if their judgement is occasionally flawed.
Incorporate the veterans

Yes, the up-and-comers may be on the cutting edge of technology,
but they have much to learn about developing a life, a business or a country.
Not all value in the No Collar Economy is measured in lines of code per minute.
All but they fail to recognize

that the future is not an
Aboard extension of the recent

past and that the old
playbook does not guarantee
We are not living future victories.
in an age of change;
we are The specifics are unique, but

the dynamic is not. When electricity
experiencing
replaced steam as the main source
a change of factory power, few managers took
of age. advantage of the opportunities of the
radical new technology. 
Most political, Factories were often transformed
social and only when old directors were replaced
industry leaders by a younger generation. 
 This transformation sometimes
pay lip service to the occurred decades after electricity was
138 digital jargon, introduced on the factory floor. 139
Photo by Anna Dziubinska on Unsplash.

The 8
Economy Geography
Be mindful
Search. Filter. Discover.
Track. Question. Mix.
Interact. Give back. Repeat.
The wealth of digital information available

is only as valuable as the consciousness
with which you use it.
Stay Human tool for real human interaction

as evidenced by online dating
As the code governing our platforms (tell your folks you
digital world challenges met at the supermarket). But
our tried-and-true methods it can also act as an opiate, an
of economic, political avenue for escapism that leads
and social interaction, to detachment. 
it is natural that we feel The No Collar Economy can be
hostage to the perils of the No Color Economy, breaking
barriers of geography, class and
hackers
race. After all, who knows the
automation
ethnicity of the developer of that
digital fads
app that lets you beat rush-hour
electronic surveillance
traffic? But it can also be an echo
cyberterrorism
chamber of ignorance, a veil of
technological collapse
anonymity for deplorable views. 
“alternative facts”
 If we are not careful, the
 In this chaotic period, the economic transformation could
allure and paranoia of digital leave many behind, disenchanted,
connection will be potent. and ever more susceptible to
140 Technology can be a valuable online extremist outlets. 141
Photo by h heyerlein on Unsplash.

The 8
Economy Geography
Let it flow
And stay engaged.
To keep up with an ever-changing No Collar Economy,
you must become an active part of a smarter environment
that benefits a world larger than yourself
and that is beyond your control.
You’ll improve your life and stay relevant if you do.
Control is accelerating the speed

at which interactions happen
Freaks Need among people, products and

machines, in all their possible
Not Apply combinations. This is challenging

and fundamentally changing how
value creation occurs. 
 But here’s the catch: To make
the most of it, we must be willing
to dive into digital and deal with
Everything is
much more uncertainty than
getting smarter.
most of us like. 
From our production
 The development of a smart
plants to our
environment is equal parts
refrigerators to
engineering and art. And they
our trashcans.
are not necessarily balanced. Nor
The powerful combination of are they ever predictable. 
the Internet of Things,
Big-Data analysis, What works in Silicon
artificial intelligence Valley may not work in
142 and 5G networks Rio de Janeiro. 143
Photo by Ravi Pinisetti on Unsplash.

The 8
Economy Geography
Stop and
look around
The business environment is always changing.
Now, though, it is changing much faster

than we are used to, so try to keep up.
When in doubt, check out what the Luddites are up to…
then do the opposite.
If you are not If you have a good idea,
run with it.

disrupting Because someone else is
your business, already working to make it
someone
Better, Smaller,
Faster, Cheaper.
else will. Competition is fierce, but it

spurs a rare opportunity to stop
and ask ourselves: Why do we do
things in a certain way? Is there a
This is the age of the way we could do them better? 
service industry. Businesses traditionally
And as the Internet of underscore, in theory, the importance
Everything expands from of taking risks, but how many balk
the richest cities to the when push comes to shove? 
poorest rural outposts, In the No Collar Economy,
no talent or resource will business as usual is not a
144 be too small to monetize. viable strategy. 145
Image by Urfan Hasanov on Unsplash.

The 8
Economy Geography
Sharing (mindfully)
is all you need
As William Gibson says, the future is already here.
It is just unevenly distributed.
If you are among the lucky ones making the No Collar Economy roll,
make sure to keep it accessible to newcomers
and to give back to those left behind.
Sharing
is Caring
 Machines are getting better
at being machines. They are
As repeated throughout taking our jobs, facilitating our
this book, financial transactions, coordinating
ubiquitous interconnectedness super complex long-distance
is a game changer. logistics and anticipating our
every material need. 
 People need to become better,
Your work? Changed! much better, at being people. 
What you buy? Changed! We can fear automation and
How you meet people? Changed! resist it. Or we can embrace
Whom you associate with? Changed! the freedom unleashed by
National security? Changed! artificially intelligent e-serfs. 
Political participation? Changed! Your soft skills hold the key to
Skills and education? Changed! open infinite possibilities. 
Share them!
: Changed!
146 147
Photo by Jamie Taylor on Unsplash.

The 8
Economy Geography
Overall,
This is not the end.
keep learning, keep learning, keep learning.
It’s only the beginning.
Don’t be too proud

to learn to learn again.
Do
And like the Little Prince:
Always look beyond

your
the hat-like shape
of a digital challenge
and picture
the elephant-sized opportunities

bit
that lie ahead.
148 149
Photo by Efe Kurnaz on Unsplash.

The 6. “Google Search Statistics.” 13. Board of Governors of the Billion Transactions & 147 Million Notes
No Collar
Economy
Notes 1 Internetlivestats.Com. http://
www.internetlivestats.com/
google-search-statistics/
2 Federal Reserve System. “Con-
sumers and Mobile Financial
Services.” March, 2016. https://
Wallet Users In 2016; Records 80
Million Active Users In December
2016.” Track India, January 2, 2017.
Exponential 7. “Google: Ad Revenue 2001-2016.”

2017. Statista. https://www.
statista.com/statistics/266249/
Bank to www.federalreserve.gov/econres-
data/consumers-and-mobile-finan-
cial-services-report-201603.pdf
23. World Bank Data: Personal
remittances, received (% of
GDP), http://data.worldbank.org/
Change advertisingrevenue-of-google/.
8. “Quarterly retail e-commerce
sales. 2nd quarter 2017.” US
the Future 14. Tom Groenfeldt. “Mobile
Banking Trends Will Lead Change
in Banking in 2016.” Insights,
indicator/BX.TRF.PWKR.DT.GD.ZS
24. Data courtesy of the World Bank
25. McQuinn, Guo and Castro.
All the links were checked 1. Cliff Saran. “Apollo 11: Department of Commerce. U.S 1. Miklos Dietz et al., “Cut- April 15, 2016. https://in- “Policy Principles for Fin-
& valiated for the last The computers that Put Man on Census Bureau News. https:// ting through the noise around sights.samsung.com/2016/04/15/ tech.” ITIF 2016 https://itif.
time on October 9 2017. the Moon.” Computer Weekly, www.census.gov/retail/mrts/ financial technology,” McKinsey mobile-banking-trends-will-lead- org/publications/2016/10/18/
2009. http://www.computerweekly. www/data/pdf/ec_current.pdf & Company, February 2016. change-in-banking-in-2016/ policy-principles-fintech
com/feature/Apollo-11-The-com- 9. Zaroban, Stefany. 2017. “US 2. Ibid. 15. Allissa Kline. “Report: 26. Paul Breloff and Jeff Bond.
puters-that-put-man-on-the-moon E-Commerce Sales Grow 15.6% In 3. Telis Demos. “Morgan Stan- More than 1,600 bank branch “Picking Winners in the Great
2. “Satellite Bandwidth”. 2016”. Digital Commerce 360. ley Makes $100-Million Move on closures in the U.S. last Remittance Disruption.” CGAP,
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statistics-global/ lege_of_business_ws.pdf Paytm founder Vijay Shekhar 17. Ronit Ghose, et al., “Digital telegraph.co.uk/money/transferwise/
4. There have been many different 11. James Vincent. “Digital music Sharma on Chinese ownership.” Disruption: How Fintech is Forcing how-does-it-work-and-is-it-safe/
estimates over the years, ranging revenue overtakes CD sales for The Economic Times, November Banking to a Tipping Point” 29. Pascaline Dupas, Sarah Green,
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a recent list of some of them: Verge, April 15, 2015. http://www. indiatimes.com/small-biz/ disruptivefinance.co.uk/2016/04/01/ son. “Challenges in Banking the Poor
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org/community/thessaloniki/ digital-physical-music- ti-paytm-founder-vijayshek- to-a-tipping-point-citi-report/ Poverty Action Lab, 2011. https://
post/50-billion-iot-devices- sales-overtake-globally. har-sharma-on-chinese-ownership/ 18. “Informal Economy” http:// www.povertyactionlab.org/evaluation/
will-be-connected-by-2020 12. Ben Popper. “Can Mobile articleshow/55647880.cms www.ilo.org/employment/units/ challenges-banking-poor-rural-kenya.
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13. Nick Wingfield. “Amazon’s P2P Lending Platforms For of-adults-worldwide-without-ac- clusion.” Slate, February 27, 2012.
Profits Grow More Than 800 Percent, Investors In 2017 – Detailed cess-to-formal-financial-services http://www.slate.com/blogs/future_
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com.co/about/about-us & http:// the-4-best-p2p-lending-plat- Just Beginning.” Forbes, January in mobile money?” The Econo-
expandedramblings.com/index. forms-for-investors-in-2017-de- 6, 2016. https://www.forbes.com/ mist, March 2, 2015. http://www.
php/airbnb-statistics/ tailed-analysis/#652433ca52ab sites/saritharai/2016/01/06/india- economist.com/blogs/economist-ex-
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org/files/2016/05/PI_2016.05.19_ 2017. https://www.pwc.com/jg/ scribers-milestone-and-the-excite- 32. Ibid.
Sharing-Economy_FINAL.pdf en/publications/pwc-global-fin- ments-just-beginning/#2f54873e7db0 33. Claudia McKay and Rafe Ma-
16. Dave Greshgorn. “The White tech-report-17.3.17-final.pdf 21. “With 220mn users, India zer. “10 Myths About M-PESA.”
House predicts nearly all truck, 8. Vega, Guillermo. “Fintech: La is now world’s second-biggest CGAP, October 1, 2014. http://
taxi, and delivery driver jobs will digitalización bancaria acecha smartphone market.” The Hindu, www.cgap.org/blog/10-myths-
be automated.” Quartz, December a la tarjeta de crédito.” El February 3, 2016. http://www. about-m-pesa-2014-update
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lyall-truck-taxi-and-delivery- cias/1491844813_119366.html is-now-worlds-secondbiggest-smart- The Economist, March 30,2013.
driver-jobs-will-be-automated/ 9. McKinsey. “Fintechnicolor: The phone-market/article8186543.ece https://www.economist.com/news/
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ican Groceries.” Bloomberg, May
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3
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of Work
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advantage was first forwarded by
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sitions, http://tromp. 16. Autor. artificial-intelligence-econom- technology/iphone-7-materi- 3. Susan Moore. “Gartner Says Peter Bisson, Jonathan Woetzel,
github.io/go/legal.html 17. Lawrence Katz and Alan ic-inequality.html?smprod=nyt- als-costs-higher-previous-ver- Worldwide Business Intelligence Richard Dobbs, Jacques Bughin
4. “This Might Be the Best Krueger, “The Rise and Nature of core-ipad&smid=nytcore-ipad-share. sions-ihs-markit-teardown-revea and Analytics Market to Reach and Dan Aharon. “Unlocking the
Pizza in America.” Bloomberg, Alternative Work Arrangements in 27. Pew Research Center, “Pub- 5. James Manyika and Michael $18.3 Billion in 2017.” Gartner, potential of the Internet of
March 14, 2017, https://www. the United States, 1995-2015.” lic Predictions for the Future Chui. “Digital Era Brings Hyper- February 17, 2017. http://www. Things.” McKinsey Global Insti-
facebook.com/bloombergbusiness/ Princeton. Working Paper #603, of Workforce Automation,” scale Challenges.” The Financial gartner.com/newsroom/id/3612617 tute, June, 2015. https://www.
videos/10155097576961880/ http://dataspace.princeton. March 10, 2016, http://www. Times, 13 August 2014. https:// 4. Rob van der Meulen and Ja- mckinsey.com/business-functions/
5. Frey, Carl Benedikt. “The edu/jspui/bitstream/88435/ pewinternet.org/2016/03/10/ www.ft.com/content/f30051b2- nessa Rivera. “Gartner Says by digital-mckinsey/our-insights/
Future of Jobs and Growth: Making dsp01zs25xb933/3/603.pdf. public-predictions-for-the-fu- 1e36-11e4-bb68-00144feabdc0 2017, Mobile Users Will Provide the-internet-of-things-the-value-
the Digital Revolution Work for 18. Allison J. Pugh, “What ture-of-workforce-automation/. 6. “Global Top 100 Companies Personalized Data Streams to of-digitizing-the-physical-world
the Many.” G20 Insights, March 18, Happens at Home When People 28. Anna Brown, “Key findings 2017.” PWC, March, 2017. http:// More Than 100 Apps and Services 14. Willy Shih. “The Re-Industri-
2017, http://www.g20-insights. Can’t Depend on Stable Work,” about the American workforce www.pwc.com/gx/en/services/ Every Day.” Gartner, January alization of the United States?”
org/wp-content/uploads/2017/03/ Harvard Business Review, April and the changing job market” audit-assurance/publications/ 22, 2014. http://www.gartner. Wirtschaftspolitische Blätter, 2013:
The-Future-of-Jobs-and-Growth.pdf 4,2017, https://hbr.org/2017/04/ Pew Research Center, October 6, global-top-100-companies-2017.html com/newsroom/id/2654115 pp. 297-312. http://www.hbs.edu/
6. Andrew McAfee and Erik Bryn- what-happens-at-home-when-people- 2016, http://www.pewresearch.org/ 7. Antonio Regalado. “The Data 5. Louis Columbus. “Roundup faculty/Pages/item.aspx?num=46105
jolfsson. The Second Machine Age: cant-depend-on-stable-work. fact-tank/2016/10/06/key-findings- Made Me Do It.” MIT Technology of Cloud Computing Forecasts, 15. Own elaboration based
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a Time of Brilliant Technologies. Tricks to Push Its Drivers’ But- and-the-changing-job-market/ technologyreview.com/s/514346/ https://www.forbes.com/sites/
New York: W.W. Norton, 2014. tons,” The New York Times, April 29. Ivana Kottasova, “Finland the-data-made-me-do-it/ louiscolumbus/2017/04/29/ • Deloitte 2016 https://
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Why Doesn’t it Feel that Way?” technology/uber-drivers-psy- January 3, 2017, http://money. Com, 2017. https://www.erics- 6. “Worldwide Retail Ecommerce ic-Impact-of-Disruptions-to-In-
Harvard Business Review, April 3, chological-tricks.html?_r=0. cnn.com/2017/01/02/news/economy/ son.com/en/mobility-report/ Sales Will Reach $1.915 Trillion ternet-Connectivity-Deloitte.pdf
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automation-makes-things-cheaper- Not a Bird: Bringing the Internet 30. David Brancaccio. “What 9. McKinsey Global Institute. “The 22 2016. https://www.emarketer. Maritime Shipping Routes.”
so-why-doesnt-it-feel-that-way to Rural India.” The New York universal basic income could Internet Of Things: Mapping The com/Article/Worldwide-Retail- Hofstra University. https://
Times, May 21, 2017, https://www. mean for the future of work.” Value Beyond The Hype.” McKinsey people.hofstra.edu/geotrans/
152 153
The eng/ch3en/conc3en/main_mar- ble-w-2016-rates-spoti- 6. See: Motor City Mapping The New York Times, May 8, net-access-to-battle-coun- News, April 27, 2017. http:// Notes
No Collar itime_shipping_routes.html fy-apple-music-youtube-tid- https://www.motorcitymapping. 2016. https://www.nytimes. trys-dire-lack-of-connectivity www.bbc.com/news/39655415
Economy • Live Science. “Humans al-amazon-pandora-etc/ org/#t=overview&s=detroit&f=all com/2017/05/08/world/europe/ 14. Luilver Garcés Briña. Inter- 31. Vassil, “Estonian e-Gov-
Have Produced a Whopping 9 • World Shipping. http:// 7. “History.” Nextbus, https:// macron-hacking-attack-france.html view with author, May 2, 2017. ernment Ecosystem.”
Billion Tons of Plastic.” www.worldshipping.org/ nextbus.cubic.com/About/History 3. Examples reflect actual ad- 15. Cuban singer Africa Reina 32. Ibid.
• https://www.livescience. about-the-industry/glob- 8. Of course transport can vertisements or paid links on shared this frustration with the 33. Juhan Parts. “Estonia and the
com/59862-humans-have-produced- al-trade/trade-statistics be viewed as a utility, but breitbart.com on July 11, 2017. author in 2017. While a photo European Debt Crisis.” Cato Jour-
9-billion-tons-of-plastic.html” • World Trade Organization, given the importance of this 4. Source: IMF Data might take an hour, a video or au- nal, Vol. 33, No. 2 (Spring/Summer
• McKinsey Global Insti- 2016. https://www.wto.org/ sector for many cities, we 5. Shankar Maruwada. Interview dio recording of her performances 2013). https://object.cato.org/
tute 2014. “Global flows english/res_e/statis_e/ break it out on its own. with author, March 13, 2017. was still unthinkable, she sighed. sites/cato.org/files/serials/files/
in a digital age.” wts2016_e/wts2016_e.pdf 9. See: Daniel Koh’s TEDx 6. Pramod Varma. Interview with 16. Gabriel Torres Rodriguez. “La cato-journal/2013/5/cj33n2-8.pdf
• https://www.mckinsey. Cambridge talk. https://www. author, March 13, 2017. According culpa, ¿será nuestra?” Joven Cuba, 34. “Freedom on the Net 2016
com/business-functions/ 16. RTR, “Produktion stückweise youtube.com/watch?v=bGlcpo09WUA to a 2012 Times of India article, April 25, 2017. Available online at Table of Country Scores.”
strategy-and-corporate-fi- wieder ‘Made in Germany’.” 10. “Smart City, Smart Res- 25 percent of children born in https://jovencuba.com/2017/04/25/ Freedom House. https://
nance/our-insights/global- WirtschaftsWoche, 24 May 2016. idents: Seoul’s ‘Smart’ 2007 went unregistered. See: la-culpa-sera-nuestra/ freedomhouse.org/report/ta-
flows-in-a-digital-age 17. Steven Musil. “Domino’s Transformation Accelerates http://timesofindia.indiatimes.com/ 17. “Sugar shortage cuts Coca-Cola ble-country-scores-fotn-2016
• McKinsey Global Institute, delivers – by drone.” Cnet, Under Mayor Park.” Centre india/25-of-Indian-births-not-reg- production in Venezuela.” BBC 35. Richard Newton. “Tallinn, Esto-
2016. http://www.mckinsey. November 16, 2016. https://www. for Liveable Cities, 2017. istered/articleshow/12104158.cms News, May 26, 2016. http://www. nia: Baltic city’s global digital
com/spContent/slideshows/ cnet.com/news/dominos-deliv- 11. Tom Randall. “The Smart- 7. Jeanette Rodrigues. “India bbc.com/news/business-36365336 ambitions.” Financial Times, 11 Au-
GlobalFlows-v4/index.html# ers-by-drone-pizza-new-zealand/ est Building in the World.” ID Program Wins World Bank 18. Kristjan Vassil. “Estonian gust, 2015. https://www.ft.com/con-
McKinsey Global Institute 2016 18. Carrie Mihalcik. “7-Eleven Bloomberg. Sept. 23, 2015. Praise Despite Big Brother e-Government Ecosystem: Founda- tent/89fb1dd2-3799-11e5-bdbb-35e55c-
http://www.mckinsey.com/busi- completes 77 drone deliveries 12. Arnkil et al, “Exploring Qua- Fears.” Bloomberg, March 15, tion, Applications, Outcomes.” bae175?mhq5j=e2
ness-functions/digital-mckinsey/ in the US.” Cnet, December 20, druple Helix Outlining user-ori- 2017. https://www.bloomberg. World Bank World Develop- 36. “Estonia ranks third in Europe
our-insights/digital-globaliza- 2016. https://www.cnet.com/ ented innovation models,” 2010. com/news/articles/2017-03-15/ ment Report 2016, June 2015. regarding the highest number of
tion-the-new-era-of-global-flows news/7-eleven-flirtey-77-drone-de- 13. While 7.2 billion mobile india-id-program-wins-world-bank- http://pubdocs.worldbank.org/ startups per capita.” e-estonia,
• McKinsey Global Institute. liveries-amazon-google/ phone connections were registered praise-amid-big-brother-fears en/165711456838073531/WDR16-BP-Es- June 2017. https://e-estonia.
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the new era of global flows.” burrito deliveries on its drone connections were active/using Indians over 18 now have Aadhar 19. “e-identity.” e-estonia, in-europe-regarding-the-highest-
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com/business-functions/dig- 2016. https://www.cnet.com/news/ Telecommunication Union (ITU). January 28, 2017. http://timesof- tions/e-identity/e-residency/ 37. Estonia’s EU presidency:
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digital-globalization-the- ies-on-its-drone-launch-pad/ Africa’s next megacity?” indians-over-18-now-have-aadhaar/ ita is about US$31,000, movement of data.” e-estonia,
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www.mylotrade.com/barri- drone delivery,” Cnet, May 20, “Where is the fastest grow- internet to buy PDS rations? World Stats, last updated 8 ital-europe-and-the-free-move-
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nuPK:584866~pagePK:148956~piP-
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• Telegeography, 2017. “Cities in numbers: how patterns 12. “India’s informal econo- cure-1m-patient-2102628.htm
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154 155
Acknowledgements
Sam and Felipe want to thank
Many people were very gracious

with their time and insights
during the course of this
project. In particular, the
text benefited from the direct
input of Jeffrey Brown, Nanya
Sudhir, and Christian Bluth.
From pitching big ideas to

catching nettlesome grammatical
errors, we are thankful for the
support of our research assistants
Alexandra Ryan and Samuel
Denney (Bertelsmann Foundation)
and Nathalia Gamboa (TicTac).
Special thanks to Carlos Romero
(TicTac) and Alberto Yohai
(CCIT) for helping us develop
our vision for this project, and
www.puntoaparte.com.co
to Andrew Cohen for sharpening
that vision as our editor.
The project enjoyed significant

support from the Bertelsmann
Foundation team in Washington DC,
in particular Irene Braam, Faith
Gray, Anthony Silberfeld, Megan
Long, Samia Yakub, Stephan Strothe,
Michael McKeon and Emily Hruban.
Special thanks to Mateo L. Zúñiga,

Art Director and designer from
.Puntoaparte Bookvertising, and
cartoon illustrator Paul George.
Thanks for reading
The
No Collar
Economy
Exponential Change
Our world is constantly

changing—a simple truism
that is not unique for any given
generation or era. And yet the
very fact that our dynamics shift
continues to surprise us.

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The

Authored by Samuel George & Felipe Buitrago

His portfolio features the He leads research and

Cover photo by SpaceX on Unsplash.

This is our aim

changing—a simple truism simple premise: This time is dif-

that is not unique for caused by digital innovations

any given generation or the way we play, the way we

that our dynamics shift are just getting warmed up. If it

continues to surprise us. be soon. From the labor market

Photo by Samuel Zeller on Unsplash.

“We can only see

Photo by unknown author on Wikimedia Commons.

So, let’s talk about

Many of us believe So you think you know

We do this because in the short term,

Photo by Gage Skidmore on Wikimedia Commons.

it’s unbeli evable.”

10,000 This prediction is

In 1975, Gordon Moore, who co-founded

On May 23, 1960, a team led by Robert Noyce,

Take a wild guess,

That’s more transistors

If you think the number And it is the

100 transistors billion,

500 quadrillion combinations

Now, what does that mean to us?

effect” and latency.

Photo by Jingyi Wang on Unsplash.

devices3 Lose the

billion <p> Paul’s apartment is a mess.

devices spread out across the floor like

So what are we gonna cheese at a time. </p>

22 do about it? for the GRE. Paul—t-shirt, jeans

million Developed-world manufacturing

business. Why FinTech Changes

<p> Instead of manufacturing, generation that should be at its

Fast forward to the

present day, and For example, the

(FinTech) start-ups US$4 billion.2

for a soft spot and

Photo by Irving Underhill on Wikimedia Commons.

we save, invest, Bank?

The No Collar Economy

200 million and borrow, We know that one in three

Photo by Igor Ovsyannykov on Unsplash. Icons by The Noun Project.

she uses her phone to verify in real time

Imagine then an app that verifies her identity and

touching, looking, and

Outfits such as SoFi and Reality Mogul focus on P2P

Meanwhile, the property’s owner can review her

This is precisely the kind of red tape by touching, looking,

Photo by Luca Iaconelli on Unsplash. Icons by The Noun Project.

industry has a long

of the incumbents in the

Stock exchanges replace manual floor-

Banks begin using computers to allow

customers to make transactions

Advent of internet banking

Arrival of mobile banking

create first credit card

Banks introduce ATMs

Institutions that fail to