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Technology’s Relationship with Wealth



There is a question so important to the modern economy that it often hides in plain view. I’m talking about the role that technology plays in the distribution of wealth. This connection between our distribution of societal resources and our rapidly evolving technology centers on two fundamental phenomena:

  1. The way technology displaces labor
  2. The way technology concentrates profits

Technology and Jobs

The primary way that technology displaces labor centers on productivity, which amongst most economists today is usually framed as “labor productivity,” or the amount of goods and services produced in one hour of human labor.

Labor productivity gains happen by:

a) Holding the amount of labor steady and increasing the flow of goods and services;
b) Holding the flow of goods and service steady and decreasing the amount of labor; or
c) Some combination of the two

Economists focus on “labor productivity” because, historically speaking, human labor has accounted for the largest portion of the total cost of production. As corporations have concentrated on maximizing profits over the last several decades through downsizing, restructuring and the like, it’s usually been with a heavy reliance on option “b” – i.e. replacing humans, first with hardware, and now increasingly, with software.

When a business makes a fixed investment in a new manufacturing robot or in automation software for taking airline reservations, its ongoing variable costs of operation typically decrease. With smart investments, over time these new automated processes make the firm more efficient and more productive than when these processes were done with human labor. That leads to increased profits. But more on that later.

The question that concerns us first, though, is what happens to the earnings power of those people who’ve been displaced by these investments in automation. The answer, of course, is that the job loss leads to an immediate inability to earn income, which if uncorrected, eventually erodes any wealth these employees may have once built up over the course of their working life.

I should note two things here. First, technology isn’t the only cause of job eliminations, but it is the only way of eliminating jobs without cutting into the firm’s ability to deliver economic value over time.

Second, there are questions about what happens to these employees over time; specifically with regard to their re-employability, and how easily they learn new skills that haven’t yet been addressed by automation. This is the the race against the machine,” and history has shown that we humans are pretty good at it finding hitherto unimagined, new sources of employment. Buggy whip assemblers get re-trained and go on to build Model T’s.

This argument is hard to counter, of course, because history has demonstrated it time again and again. And yet, looking at our current stage of economic development, there is something quite different from where we were even just a few short decades ago. It’s the pace and interconnectedness of technology’s evolution. You don’t have to necessarily believe in the Singularity to understand how the accelerating pace of technology won’t just eat into more and more jobs that have traditionally been done by humans, but that it will also make it harder and harder for humans to keep up with machines in learning the new jobs that the technology itself makes possible.

Just twenty years ago, most of us would have been puzzled at the idea that technology might lead to out-of-work bookshop and movie rental store employees, just as today it seems hard to believe that New York City taxi drivers will be looking for new work in not too many years. As human jobs are displaced at a faster and faster pace, ever larger portions of our population will lose their ability to generate wealth, as income disparity accelerates from the bottom up.

Technology and Profits

This is only half of the story, however, and it may not even be the most important way that technology accelerates the concentration of wealth. To understand the rest of the story, we need to look back at what happens to the increased profits that resulted from those investments in labor-saving technologies, and to do that, we need to take an accountant’s perspective.

When a company buys equipment to automate its processes, the cost of that purchase isn’t treated as an expense. Instead it’s treated as a “capital expenditure” which increases the assets on the firm’s balance sheet. As an investor, we no longer allow you to own the people who make a profit for you, but you can own the machines that displace those people. And, as the firm makes more labor saving investments in technology, its operating costs go down and its productivity – and profits – go up.

Where do the increased profits from these technology-driven productivity increases go? They go to the owners of the firm, naturally. And so, as long as the technology investments don’t somehow harm the firm’s revenue streams and as long as they result in lower operating costs – which are both pretty good bets – then, the owners of the firm generate greater earnings, either in the form of more dividends or capital gains.

That investors are entitled to a return on their investments isn’t really a point of contention – at least for me. What is is allowing investor returns to transcend all other factors as the driver of modern day capitalism. This “shareholder primacy” perspective elevates maximizing returns for shareholders as the primary purpose of the firm.

Here’s the interesting part as it relates to technology though. Within today’s ascendent shareholder primacy perspective, the main reason to make technology investments is to increase productivity and profits, and the main reason for doing that is to pass those profits on to shareholders. If those shareholders aren’t the employees or other long-term stakeholders of the firm, then technology investments essentially act as a powerful force for extracting profits from businesses and concentrating them in the hands of outside investors who are part of a rapidly shrinking percentage of the population.

As investors generate more returns, they invest in more firms, perpetuating the process in one industry after another and skewing the wealth-generating capacity of more and more sectors of our economy. As this happens, wealth is concentrated into ever fewer hands. Seemingly oxymoronic phrases like a “jobless recovery” also start to make sense as sector after sector begins generating healthy returns for investors without necessarily adding new jobs. Remember, in the United States, 88% of investment assets (excluding residential homes) are owned by just 10% of the population and more than 50% of assets are owned by just the top one percent.

As the primary source of the productivity gains and the profits these investment assets create, technology is the catalyst for most of this growing concentration of wealth.

What Do We Do?

In short, technology plays a critical role in the distribution of wealth. It erodes income generation in lower income families while concentrating profits into the hands of those with the greatest financial assets.

One of the solutions to this dilemma is to design technologies so that humans are better able to race with machines rather of just against them. Remember, labor productivity can increase by either cutting labor costs or by increasing the value of the goods and services that that labor creates. That means thinking a lot harder about how to build our technologies to better augment our human capacities rather than eliminate them.

There are clearly limits here, however. As the race with our technological progeny accelerates, there will only be so much racing with that we will be able to do. The machines will eventually outpace our ability to learn the new jobs and may one day even run our firms.

It’s my view that the real answer to this dilemma is less about technology and jobs and more about how we handle the second question – the question of technology and profits. And here, we get down to some tough questions about ownership and equity. For if ownership of the machines and their earnings potential were more broadly held, then so too would their ability to generate and maintain wealth across a broader base of humanity.

Equity is the central question that now confronts us. Do we really want a world where all of our engines of wealth generation are closely held by a minuscule segment of our citizens? The accelerating pace of technological development lends a certain urgency to this question. How far will it go?

This all raises a fundamental question about the operating instructions for the entities that now create most of our technology: our assumptions about the purpose of businesses. If it truly is shareholder primacy and simply maximizing returns for external shareholders, then we are hard-coding the next evolution of intelligence on the planet for one goal: concentrating wealth.

Surely, there must be some more noble aspiration for the Promethean fire we now hold in our hands.


About the Author

This article was written by Gideon Rosenblatt of The Vital Edge. Gideon ran an innovative social enterprise called Groundwire for nine years. He worked at Microsoft for ten years in marketing and product development, and created CarPoint, one of the world’s first large-scale e-commerce websites in 1996. The Vital Edge explores the human experience in an era of machine intelligence.


Is International Women’s Day just another Tokenism?



Yearly on 8th March around the world, we celebrate a day for women. This year that was 2 weeks ago, before this article was published.

A Question for You:

Did we change for the better after that day? or

Did we just all go back just to Business as Usual?

And if so, why?

As a psychologist and conscious leadership coach, I work to change mindsets to do more good in the world. We all know bad habits are hard to change. Ignoring Women talent and needs is a bad habit. Calling attention to it once in a while is simply not just not enough, it also assuages leadership guilt. The guilt alone does not lead to sustainable efforts to transformation.

We all know one International Women’s Day yearly is simply not enough.

One women’s group in your company is not enough.

One women’s breakfast in the technology conference is not enough.

One Women’s March is not enough.

But it is the start.

It’s the start. We need to join forces.

Join forces with leaders who read #MeToo and ask themselves what we must do today to reduce and end such harassment. Tech Leaders who are aware of the power of money and resources lying in the hands of a few heightens potential bullying and unwanted sexual advances. Leaders who actively act to counter or stop abuses and want to create new workplace cultures. Leaders who promote women on merit, but who also look to sponsor, mentor, and support more women to the senior leadership tracks.

We need a critical mass to tip Gender Parity to become the new norm. We need to dialogue and language new ways of being and leading in the world. We need daily, weekly, monthly habits to make gender parity the daily actionable. What is your daily actionable to not just gender parity, but inclusion and diversity in all aspects of our work and life? Let’s build the momentum by increasing connections across companies, countries, and communities. This article brings insight to what we can do next and communities you can support.

On March 8th, at 1880 , a private club where one of the focuses in women’s leadership, the Salon discussion was on “Undressing Feminism”. Participants spoke frankly about unwanted sexual advances and what both men and women can do to stop work and national or religious cultures where such actions are deemed normal. One husband joked about how he told his wife he was attending the event and she told him to shut up and listen carefully. We were all listening carefully and we spoke as a group with a transparency that is rarely found in conservative Asian culture and even in rather Westernized Singapore.

Who we heard from:

Matthew Spacie at Magic Bus

He spoke of his work in the non-profit and called out the terrifying statistics that should not be hidden or ignored.

This is an average Indian girl’s gender based obstacles throughout her lifetime

There are about 600 million women in India. They have the highest rate of infanticide of girls. Women are 56 times more likely to die before the age of 5 years as compared to boys.  If a girl does get to go to school; up to 53 percent drop out and only 1 percent graduate. 40 % of the women are married off as children.  If she gets to have a job, 40% are in unregulated work which means they can be bullied, paid less, and anything else without any external regulatory bodies to assist.

Aware’s Executive Director, Corinna Lim:

If the vision is – a society where there is true gender equality – where women and men are valued as individuals free to make informed and responsible choices about their lives. Then we look towards Aware, Singapore  as a resource – for their mission is to remove all gender-based barriers so as to allow individuals in Singapore to develop their potential to the fullest and realise their personal visions and hopes.

In fact, after the #MeToo movement came out, there were 80% more calls to sexual harassment center in Singapore. And Corrina shared how one in ten women in Singapore has been physically abused by a man. Do know that AWARE’s Sexual Assault Care Centre, the only centre that supports victims of sexual assault and harassment  can be reached at  6779 0282.

Survivor of War, Human Trafficking, and Sexual Assault, Lurata Lyon:

Forgiveness is what is needed to heal and also to take the lessons and give ourselves strength. She shared how she was molested in Singapore by a British expat and she immediately grabbed his phone to keep him there while she called the police. Her two children were with her and thankfully a local pregnant woman came and stood by her as the man tried to force her hand to let go of his phone. She reminded the audience that this could not have been the first time this man acted in this unacceptable manner, yet how many others had let his behavior slip through our silence.

Asian Feminist Role Model, Activist, and Burlesque Artist, Sukki Singapora:

“Someone has got to be brave. If it is not you, it’ll have to be someone else. So make it you.”

Sukki braved her family’s strict culture and Singapore’s public indecency laws to fully express herself in her choice of art and profession, burlesque. She left us wondering why should sensuality be repressed? What is the world so afraid of? Her choice of expression was initially considered a crime in the public decency act of Singapore. Now she is a champion and face of freedom of expression for women in socially restrictive countries.

These conversations can evoke small changes in public consensus which will bring about swift changes in the societal consensus, that’s why we have political debates during the elections.  We are part of that dialogue, debate, and actionable steps and accountability. It’s our call to not let International Women’s Day fall on deaf ears. Let’s not just have one token discussion on one day set aside, but make such discussions a daily act.

Thanking Matthew, Corinna, Lurata, Sukki, and Marc Nicholson panel moderator and co-founder, 1880 for allowing their stories to inspire and confront us all again with the unknowing discrimination and bullying we may be supporting under our own roofs.

Like this piece?

See my article on International Women’s Day

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Women on Top in Tech – Vidya Vellala, Founder and CEO of Faasthelp



(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Vidya Vellala is the Founder and CEO of Faasthelp, a 24/7 (round the clock) customer support on any business application through Artificial intelligence powered products. It analyzes what the customer is asking using natural language processing, machine learning and processes that to give the accurate responses to the customers instantly. Vidya is an Entrepreneur with a passion for innovation and latest technologies, having 17 years of Technology Experience. She won the India’s Best Startup CTO by Dell EMC.

What makes you do what you do?
I believe technology can solve any problem. Innovations in technology can improve the quality of life and the quality of work people does.
I am grown with a mindset which says self-sympathy is the enemy of self and hard work consistently without expecting a result will open bigger pathways. What I am doing is the combination of all.
Being an entrepreneur is an eternal learning which I love and I enjoy playing with technology and challenges that is the reason why I am doing what I am doing today.

How did you rise in the industry you are in?
Updating myself with the latest technologies is a must. Having said that, that alone is not sufficient. Always thinking positively, fighting against the fears, perseverance, and working hard helps.
I am lucky to have a big support from my family. My sisters who are also into technology field, make my life more beautiful and meaningful, to share not only the personal but also technical matters with them.

Why did you take on this role/start this startup especially since this is perhaps a stretch or challenge for you (or viewed as one since you are not the usual leadership demographics)?
With the bigger goal of supporting the future generations, this is the beginning. It had to start somewhere. In the very long journey this is the first step that I took.
My current startup is Faasthelp. We build artificial intelligence products.

Do you have a mentor that you look up to in your industries or did you look for one or how did that work?How did you make a match if you did, and how did you end up being mentored by him?
There have been many mentors at all stages of my startup. A startup eco system has brought me too many friends and mentors who have been very helpful at every stage of my startup and I am thankful to all of them.
My primary mentors in my life are my parents. The spirit of entrepreneurship was ignited when I was a kid and my mother was managing her small industry. The strong value system, sense of service, and responsibility towards the society is instilled in me by my dad. The strong urge to do something by myself was driven by my parents. They are the role models and driving factors.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I take personal interest in grooming and nurturing talent. I have established processes that identify the potential talent and to groom. I play to the best of their strengths and encourage them to take risks. My business needs also drive me to develop new skills and grow them. I value emotional intelligence and so is the strength of my team.

Do you consciously or subconsciously support diversity and why?
I consciously and subconsciously support diversity, this again I can say got from my parents, my dad always wanted all women to be empowered and my mother had more women in her work force.
I have mentored women entrepreneurs, especially in their technical initiatives as I come with a vast technical expertise. I have extended my entrepreneurial connections to other women entrepreneurs. Our organization has more women representation.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
To be a great leader, you have to be a good leader, for that you must be a good human being, driven by high values, honesty, and ethics with great empathy for the people around.
Motivating the team, being a good listener with persistent hard work is a general thumb rule. Now there might be several ways to implement these and depending on the industry the implementation might differ but the ground principles remain same.
Entrepreneurship is continuous learning and I encourage others to do the same. Aim high and work towards the set goals is a way to go. I believe mindset to do service is also a way to become a good leader.

Advice for others?
Always be positive and create a positive impact on everyone. Have your values defined and do not compromise on them at any cost. Each small step taken towards the big thing is important, value them and go ahead, you will succeed surely. Success is something which we define our self and it can be achieved from any field and anywhere, on the way keep helping others.
The present focus is to develop the startup which I have taken up and my next idea is to continue to innovate and create technology products which will improvise human life.

If you’d like to get in touch with Vidya Vellala, please feel free to reach out to her on LinkedIn:

To learn more about Faasthelp, please click here.

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