For three decades we’ve been living through a paradigm shift. Our world is moving from the fading Fordist age to the ever-strengthening digital age. This shift is as unstoppable as the one that once brought us from railroads and steel mills to Fordist factories. And its impact on our lives is just as radical.
In this context, the lessons from history are clear: Providing economic security for the many generates prosperity for all. But this can only be done with the right safety net supporting both households and businesses against the risks brought about by the digital age.
There are those who long to re-establish the standards and regulations that marked the post-war boom. Others, especially in tech, realize that the institutions we know are anachronistic and no longer fit for today’s challenges.
Alas, neither group is considering the real solution: A complete redesign of our safety net that will let it do its critically important job without getting in the way of progress. Moving toward that new design is what Hedge is all about.
“Brilliant, timely and urgent! This digital native takes my theory of technological revolutions and runs with it, applying the lessons of history to the complexities of the present day. An eye-opening primer to the technological present, this book speaks to innovators and entrepreneurs, proposing bold and imaginative solutions towards the creation of a ‘Safety Net 2.0’ and a better future for all.”
— Carlota Perez, author of Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
“Nicolas has written a sharp and historically grounded analysis of how technology and the political economy of the West have evolved in tandem, and how we might lay groundwork for a society that has both a strong social safety net and supports entrepreneurialism and innovation going forward.”
— Kim-Mai Cutler, Partner, Initialized
“I have known Nicolas since the inception of his firm The Family, back in 2013. I’ve seen their capacity to transform the European startup ecosystem from the inside. As a former civil servant in the upper levels of the French government, Nicolas knows very well that politicians aren’t willing or able to take the lead when it comes to technology. To save the tech industry from itself, he urges entrepreneurs of the world to build a “Greater Safety Net 2.0" that can provide economic security and prosperity for all. I’ve always praised Silicon Valley’s unique ability to encourage contrarian thinking. Hedge should become part of its playbook, because we urgently need to come together and find ways to uplift humanity in these times of radical change.”
— Vivek Wadhwa, Distinguished Fellow at Harvard Law School and Carnegie Mellon University
“Nicolas Colin is a path-breaking French entrepreneur who emerged from the world’s most elite civil service to become a direct participant in and compelling analyst of the Digital Revolution. In Hedge, he brings together a deep reading of the history of economic development through transformational technology with his own direct experience as co-founder of a unique Paris-London-and Berlin based firm, The Family, dedicated to galvanizing a start-up culture first in France and now more broadly across Europe. Colin’s understanding that economic disruption, especially of the labor market, must be balanced and buffered by relevant innovations in social policy makes Hedge must reading for everyone – on both sides of the Atlantic and around the world – wakening to the impact of the Digital Revolution.”
— William H. Janeway, Senior Advisor, Warburg Pincus, author of Doing Capitalism in the Innovation Economy
“This is an important book which poses profound questions about the social and political effects of technological change. Rather than adding to the growing backlash against tech, Colin puts forward specific and forward looking ideas about how we can strike a new balance between technological change and wider social stability and solidarity. In essence, Colin envisages nothing less than a reinvention of the welfare state to suit the modern entrepreneurial age.”
— Sir Nick Clegg, former UK Deputy Prime Minister
“Nicolas Colin has brilliantly interpreted a fundamental shift in the nature of the worker and the political economy, a shift to the Entrepreneurial Age. This must be met, he argues, by delivering a new Great Safety Net. Carefully documented yet contemporary, Hedge makes for compulsive and thought-provoking reading, which will hopefully stir you into action.”
— Azeem Azhar, Founder, Exponential View
I’m busy working in the startup world. Why should I read Hedge?
Every entrepreneur is now exposed to the “Tech Backlash”. Today, many people feel left behind or have started to have doubts about whether technology is really making their lives better. And so now we’re in an environment that is making things much more difficult for entrepreneurs and tech companies, especially in the Western world.
In Hedge, I argue that some of the reasons for this backlash are unfounded while others are very real. What is clear is that entrepreneurs and venture capitalists need to join the global conversation on imagining a new Safety Net for the Entrepreneurial Age. They need to contribute but also to listen and better understand the unprecedented risks to which today’s individuals are exposed.
The safety net is a government thing. Why should entrepreneurs be involved?
We’ve all been taught that there is a strict divide between government and business, between the public sector and the private sector. But that wasn’t always the case. In the 19th century, when the modern Safety Net first began to be imagined, individuals took things into their own hands and built new mechanisms that were only later taken up by governments.
Today we need to embrace that bottom-up approach once again. Everything needs to be upgraded—from social insurance to collective bargaining to consumer finance to lifelong training to occupational licensing to the tax system. Government has its role to play, but the push toward a ‘Great Safety Net 2.0’ also needs to be underpinned by an engaged and vibrant ecosystem of innovators.
Automation is coming, jobs are being destroyed. Isn't basic income the best solution?
No. Basic income is a seemingly simple solution to a complicated set of problems. But believe me: when it comes to public policy, several problems are never solved with a single solution. We know that good entrepreneurs focus on a single problem that their users have, and policymakers should do the same.
So while it sounds good, basic income cannot solve problems as diverse as unaffordable housing, poor quality jobs, and the banking system’s inability to respond to people’s needs in a world where steady jobs are scarcer and scarcer—to name just three of many. Part 4 of Hedge presents some specific ideas on how to take aim at these and other problems.
Every nation is so different. What can really be said about the safety net that applies to everyone?
Despite specific differences, the Western world created a Safety Net that was underpinned by a shared set of liberal democratic values. A Great Safety Net 2.0 that boosts economic growth and security would still likely hold to those fundamental principles. And I believe that we’d really prefer it that way.
Meanwhile, China is actively building their version of a Safety Net for the Entrepreneurial Age. If they invent their own social institutions before we do, that example will likely be lacking in many of the core values at the heart of Western societies. And just like the US set global precedent following the Great Depression, China could very well provide an un-Western framework for the coming century.
For years, all we've seen are problems coming from technology. Why should we be looking to tech to make things better?
What sets the digital economy apart is that it obeys different laws—laws that derive from the potential and limitations of a new set of technologies. New risks come with the rise of ubiquitous computing and networks, but there are also new opportunities. There are many problems that used to be without a solution, and now technology makes it possible to tackle them and improve the lives of the many.
The problem is that the gap between the world of entrepreneurs and that of policymakers—in terms of truly understanding each others' perspectives—is widening. Hedge is an attempt to reverse this trend. Its goal is that entrepreneurs enter the world of public policy and that policymakers realize that the Entrepreneurial Age calls for a more entrepreneurial approach to solving problems.
Things are different this time, though...
The Entrepreneurial Age is very different from the previous Fordist Age because ubiquitous computing and networks bring about a radically different way of creating value. However, today bears a striking resemblance to what happened in the early 20th century, notably with widening inequalities and the creation of jobs that nobody wants because they’re too lousy.
What was done back then should serve as a precedent. Following the Great Depression, the US government and progressive corporate executives decided that enough was enough and went ahead with a radical agenda: they built effective institutions that provided economic security for the many and then generated prosperity for all. This is the same challenge we have to tackle today.
What role do entrepreneurs and their startups play in this Greater Safety Net?
Entrepreneurs are a vanguard: they’re the ones exploring the new world made possible by technology. Hence they know better than others how value is created in the Entrepreneurial Age. Working as an entrepreneur and with entrepreneurs has helped me a great deal in understanding what kind of risks affect both households and businesses in this radically different world.
Beyond knowledge, entrepreneurs can also contribute real means for action. The idea of a ‘Greater Safety Net’ is that we must combine a complex set of institutions and activities to hedge individuals against new critical risks, such as the ever-growing pressure on wages and the widespread instability of an economy driven by increasing returns to scale. And part of that hedge could be deployed by startups.
Is this book just about redistribution?
A Greater Safety Net is about much more than redistribution. Its main focus are the risks to which households and businesses are exposed in the current Entrepreneurial Age. If you hedge people against such risks, you strengthen their resilience and increase their ability to rebound throughout the booms and busts of a more unstable economy. Thus it can generate more prosperity for all.
This is precisely where Hedge differs from most other works focused on social policy in a more digital economy. I don’t believe in magic bullets like universal basic income or a more progressive tax system. For me, economic security depends on individuals being covered against traditional risks such as old age and illness, while also relying on their harnessing the power of technology to take better care of themselves and collectively defend their interests.