Pippa Malmgren: Presidential Economic Advisor Tells What’s About To Happen – Virtually Speaking Ep. 22
Dr. Pippa Malmgren is a multiple bestselling author who is an expert in the Economy, Leadership, and Technology. She is a former economic advisor to the U.S. President, The British Prime Minister, and to the National Economic Council. A two-time World Economic Forum Global Leader for Tomorrow, Pippa is an internationally regarded financial authority and trend spotter who takes on economics through a unique holistic lens, showing companies and individuals how they can extract valuable insights and economic implications by tapping into subtle signals strewn throughout our daily lives. Also a successful technology entrepreneur who exited from her robotics company, she shares her techniques for not only forecasting trends, but finding opportunities and fully capitalizing on them. Dr. Malmgren is one of the few experts who accurately predicted the 2007-2008 Real Estate Bubble, BREXIT, and Donald Trump’s victory in the 2016 U.S. presidential election.
Pippa is the international bestselling author of “Signals: How Everyday Signs Can Help Us Navigate the World’s Turbulent Economy”, “The Leadership Lab” (which won the Independent Press Award 2020 – Leadership Category and was the Business Book of the Year 2019 in the UK Business Book Awards), and “Geopolitics for Investors”. In her timely and critically acclaimed 2020 book, “The Infinite Leader: Balancing the Demands of Modern Business Leadership”, Pippa and her co-author argue that the spectacular leadership failures that we have witnessed in recent history, stretching across business, community life and politics, can be explained by a lack of balance.
Forbes has called @DrPippaM a “Must Follow” on Twitter since 2015. In 2019 Computer Weekly named Dr. Malmgren as one of the Most Influential Women in Tech in the UK. In late 2018, she was named one of the Fifty Top Inspiring Women in the UK and one of the Top 100 Women in Technology by @WATC_WeAreTech. In 2018 she was listed as one of the Most Influential Economists in the World, one of the Most Influential in Geopolitics, Top 100 Women in Blockchain, 5th Most Powerful Women in Finance, and the 3rd most important Influencer on Robotics on Twitter (2017).
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Pippa Malmgren: Presidential Economic Advisor Tells What’s About To Happen – Virtually Speaking
Joining me is Dr. Pippa Malmgren, an international multiple bestselling author who’s an expert on the economy, leadership, and technology. A two-time World Economic Forum Global Leader for Tomorrow. She was an internationally regarded financial authority and trend spotter. She is a former advisor to US presidents, the British prime minister, and to the National Economic Council. She’s one of a few experts who accurately predicted the 2007-2008 Real Estate Bubble, BREXIT and Donald Trump’s victory in the 2016 election. Pippa’s bestsellers are Signals, The Leadership Lab, Geopolitics for Investors, and in 2020, she released her timely and critically acclaimed book, The Infinite Leader. In 2019, Computer Weekly named her one of the Most Influential Women in Tech in the UK, and she was named as one of the Top 100 Women in Tech by WeAreTech. She and Walter Isaacson together won the 2015 Intelligence Squared Debate on Robotics. Forbes has called her a must-follow on Twitter. In 2018, she was listed as one of the Most Influential Economists in the World, one of the Most Influential in Geopolitics, one of the Top 100 Women in Blockchain, and one of the Fifth Most Powerful Women in Finance. Please join me with the incredible Dr. Pippa Malmgren.
Pippa Malmgren, how are you doing? Thank you for joining me. What’s going on?
Thank you for having me. I’m so psyched about this.
Me too. You’re my first international guest. You’re sitting in London, England now.Economy and politics are intertwined. You can't really pull them apart. You have to have a comprehensive view. Click To Tweet
I am. I’m an American, but I’ve lived in London for a long time. I spent my career all over the world.
You grew up in Washington, DC.
My dad worked for four presidents, Kennedy, Johnson, Nixon, and Ford. It turned into a family business. I ended up working for a couple of presidents, a British prime minister, heads of government around the world.
What did you do for these people that you work for? You are an advisor on the economy, is that correct?
My thing is trying to help people see what’s coming on the horizon whether they’re in the world of politics or they’re running businesses, it’s been anticipating what the world economy is going to bring, and I find it possible to figure that out before it arrives. Most people find this hard but I don’t know, somehow, I was able to see the financial crisis coming. I saw Trump being elected. Predictions and preferences, not the same thing, but just to say, and lots of things that business people and political people call me in to help them understand how to horizon scan. How to see what’s coming because they’re so busy doing their day-to-day detail they don’t get a chance to look up. My job is to help them see what’s there and to comprehend it so they can get ready for it.
What was your title under George W. Bush?
I was on the National Economic Council as a special assistant to the president. The two big things I worked on then was we had 7 of the 9 largest bankruptcies in American history in my first year there. That was Enron, Tyco, WorldCom. I worked on Sarbanes-Oxley and all that stuff, and then the second big event of course is 9/11. I was the only person on the National Economic Council with a bit of background in National Security. They put me in charge of the issue of terrorism to the rest of the economy after 9/11. It’s an amazing period in my life.
That’s an amazing time to be advising, analyzing, thinking about protecting. You had a lot of background from what your own dad did, your own parents did, but also from your whole career of being an economist, working with governments on their economies. Also, being a technology influencer. You had your own robotics company I know that you exited from. The Computer Weekly in 2019 named you one of the Most Influential Women in Tech in the UK. One of the 50 Top Inspiring Women in the UK as well, that was in tech, and Top 100 in Tech by WeareTech. Technology, the economy, and politics, it’s a mishmash but you make sense of it. How do you do that?
They’re all intertwined, and you can’t pull them apart. You have to have a comprehensive view. I’ll give you an example, Geopolitics used to be about aircraft carriers and tanks. We would talk about war games and that’s what we meant. Now geopolitics and war games are about actual children’s games like TikTok, Fortnite, and Minecraft, and you’re like, “How do we go from aircraft carriers to computer games?” It’s because of data. The new battle zone that the superpowers are fighting over is who has the greatest command of data. That’s why all these governments in the US, Russia, China, they’re spending a fortune, record spending on computational power, supercomputers.
That’s important because the spinoffs from that are going to be as big or bigger than the spinoffs from NASA in the 1960s and ‘70s. The private sector ought to be ready and waiting for these extraordinary benefits that are going to come from this incredible spending on how to compute a huge amount of data because whoever has the best capacity for that can break a code for anything, whether that’s the genetic code, that’s a nuclear code, or it’s frankly, a Bitcoin password code.The new battle zone that the superpowers are fighting over who has the greatest command of is data. Click To Tweet
You’re going to talk about your latest book that came out, which is The Infinite Leader, which has a very compelling title. You’re also going to talk about which is so fun to be able to talk to you about the future, but the future of our society that we live in. I know in London there’s a parallel there with the government electing a guy like Trump, and BREXIT and all of that. You see what’s going on there because you lived there for many years, but also you know well what’s going on here. I know we talked a little bit before we started this about the future. You seem to think that 2021, as I tend to think and hope, and I’m an optimistic person, is going to be a positive outlook. You have a positive outlook and a very positive time for us. Isn’t it just anything that is going to be better than this? Anything’s up from where we are now anyway, or is it some things are happening that you’re excited about?
I think both. COVID is interesting because it reveals the underlying pre-existing conditions initially in a person, but over time in businesses, economies and societies. It reveals when the debt problem is too great. It reveals when a business doesn’t have the right cashflow or the right business model, it’s revealing the social stresses. For example, in American society about the African-American population and their feeling that they don’t have the position that they really ought to have by this day and age. I know I speak to audiences all over America and I look. I’m like, “Where are the people of color? Where’s everybody I went to college with?” This is important that the US is now addressing this. I know it’s a super controversial issue and people are on all sides on how to address it. It’s a good thing it’s being addressed.
COVID is bringing up all these things that were already there then add to that, that it’s unleashing a wave of entrepreneurial energy because as so many businesses collapse and disappear, business models die. It’s a question of faith. Do you believe that people just go home, roll over and become a ward of the state? Do you think they go, “I’ve got to do something. Let’s do something. Let’s build a business. Let’s find a friend who’s building a business. Let’s be imaginative.” I take the latter view of life. What I see is we are going to have a wave of entrepreneurs and entrepreneurial startups. That’s always a very good thing because entrepreneurial firms generate two-thirds of the net new jobs in the US economy. This is crucial.
It’s happening at a time when we have a record amount of money injected into the world economy by governments. This is not to be underestimated. This is way bigger than the financial crisis. If you add up that we’ve got record cash, looking for a home and record number of entrepreneurs who are trying to scramble to come up with something new that works, that alone you know they’re going to find each other at some point but I’ll add some more stuff. We’ve also had this extraordinary leap in digitization. What does that mean? What it means is the way I’m presenting to you now, it’s not my atoms of reality. It’s little packets of electronic data. I’m converted from atoms of reality into electric bits of information. This is happening across the board. Zoom is the most famous example of this, but it’s so much bigger than that. For example, I worked in the world of drones. Most people think drones are about, “What are they going to deliver to me?” “Are they going to bring a book to my house or a beer to me on the golf course?” That’s not what it’s about.
It’s about teleporting your perception to far distant places. It’s about taking your sensory perception and placing it on the other side of the state, the other side of the country, the other side of the world. You can look at an agribusiness in Brazil or a mining site in Africa with more precision and clarity than if you were standing there yourself with your own eyes. That digitization is revolutionizing how value can be captured. If now I add those three things together, this is an incredible foundation for growth. We’re going to find many years from now that the recovery happens so quickly that a lot of people weren’t able to keep up. What they’re preparing for now is a Great Depression mark two. Let me finish by saying something about the Great Depression in the 1920s, which is maybe the last period in history that’s parallel to what we’re experiencing now.
In the 1920s, we got two different things at once, and this is important because everybody says, “What’s the shape of the recovery. Is it a V shape? Is it an L shape?” The answer is it’s not linear, it’s quantum. What I mean by that is in the 1920s, when we were recovering from World War One and the Spanish flu, which by the way, was so much worse than this. You could be perfectly fine at 10:00 AM and dead by 10:00 PM. It’s a completely different level of virulence. People were so happy to survive those two huge things that they just went nuts spending. That is the novel, The Great Gatsby where they bought champagne and live the high life because they were just so happy to be alive at all.
At the same time in 1920, 60% of the American public rep poverty line and they formed a foundation for another novel, The Grapes of Wrath. It took a couple of generations for those people, the Okies, to get back on to the world economy and find their foothold again. Could we have both? My answer is that’s what we’re going to have. We’re going to have both. Don’t ask the question, “Is the recovery A or B?” The recovery is probably everything all at once. My point is you shouldn’t miss the Great Gatsby end of that spectrum because we are so fueled for that to happen. I believe it will happen first and fastest in the United States.
You said that you knew that Trump or you felt that Trump was going to win. Is that because you were in the UK and you were seeing what was going on there, or is it because you could just tell that America was hungry for change, and there were a lot of people struggling in poverty without a voice? They felt like there was a reason to vote for him. This is not my opinion. This is just me analyzing it along with a lot of other people like you. Is that why you knew he was going to win?
I wrote a book in 2016 called Signals. When we think about the economy, we tend to look at data and by definition, that means you’re looking backward. We know that what happened in the past usually doesn’t extrapolate in a neat line into the future. Unfortunately, it’s not that easy. My concept was there are all sorts of signals that tell you about what’s coming but they’re not yet in the data. Some of the signals I saw was the debt problem everywhere in the world. It’s like a weight that bears down on the social fabric and it breaks the promises that hold the society together. For example, the promise that you can retire at 65 but because of the debt burden, then the government goes, “The new retirement age is not 65. It’s like 93.”
You all know you’re going to have to retire so much later than you expected. That’s a break of a promise. If you break enough of those promises, you rip apart the social fabric. You’re going to get a lot of things. You’re going to get social protest. You’re going to get nationalism. You’re going to get people who start to be very inward-oriented. All of those things led me to believe that we would end up with that in many places, not just the US, but China, the UK. That resurgence of nationalism, social protest is a function of this concept of signals that I raised. It’s still in motion. People still feel they have to repair the social fabric. They’re coming up with a new social contract about what’s the right relationship between governments and citizens between companies and customers among citizens. This is all up for grabs, and while that’s unsettling, it’s also a super exciting time in history because I’m sure we’ll reach a conclusion.Whoever has the best capacity for data can break a code for anything. Click To Tweet
I like to talk to people about the fact that in my own experience and the experiences of many other people who I’ve been talking to throughout this period is that we’re having to look at ourselves in the mirror. As you said, it reveals all of the things that weren’t working. We have to now look at ourselves in the mirror and say, “What could I be doing better than that I wasn’t doing before? What is it that I can do now that I never got around to doing that now I need to do? My business is depending on it. My business needs these ways to streamline, ways to be more productive, ways to be more positive, healthier.” All of these things we’re focusing on because of COVID.
Our businesses are suffering and people around us are suffering. We don’t want to suffer. We want to pull ourselves out. We’ve got to improve on a lot of stuff. A lot of the things we learn and start doing differently during COVID are going to boost us into much more success, and we might turn around many years from now and go, “That was the turning point in my life because I changed some things. My business got better and my health got better.” Hopefully, that’s how most people are going to take a look at this time and react to it.
That was exactly the idea behind this latest book, The Infinite Leader. That was precisely the thought process my coauthor and I put into it. We didn’t anticipate the pandemic, but we’re seeing that people were so overwhelmed that they weren’t conducting their leadership very well. Let’s face it. We’ve had a crisis of leadership in every category, business, religious communities, politics. There isn’t a category where we haven’t seen catastrophic failure. In the past years, the single most common reason that CEOs are forced out are ethical lapses. You’re like, “What is that about?” We realized that there are two levels of it. One is how to manage organizations. That was the focus of the book, The Leadership Lab which came out in 2018, which I wrote with Chris Lewis, who’s the author of Too Fast to Think as well.
In this new book, we realized that it’s a very personal thing. Your personal dialogue with yourself is where it begins. Leadership isn’t always the president, that person over there, or someone else. It’s every one of us. We all have the power to make decisions and see the world in new ways if we choose to do so. This new book is very much about how to learn the skill of reframing, reforming, seeing reality in a completely new and different way. We took the idea that whenever you say to yourself, “It’s a zero. We got zero money. There’s zero possibility.” Any kind of zero feelings that you ever have, a zero is a circle. A circle is an ancient symbol of wholeness. A lot of brands are always in the shape of a circle. If you change your perspective, you twist it a bit, you can turn it into an infinity symbol. This process moving from a seeming nothing to work with to infinite possibility is our job. That’s what we need to do. That’s what people have learned from COVID.
One of the gifts that COVID brought was you could say, “We’re going to take everything away. You’re not going to be able to go to work. You’re not going to be able to live the life you did.” Everything you were doing is gone. People have reconstructed, reformed, reshaped, and come up with new ways that they’re going, “Why was I killing myself before? I’m able to do things so much smarter now. I have a better sense of my actual priorities.” This ability to perceive in new ways has been enhanced. I’ll finish just with one idea. I like the idea very much, and I’m always trying to help my audiences understand this concept that was introduced by Ezra Pound, the poet in the 1930s, and Marshall McLuhan, who was writing in the 1960s. Both of them said, “Artists are the radar of society.”
Most people in business have no time for art. For them, art is like, “I go to a gallery once a year.” No, art is a community of people who see stuff coming before everybody else. If you watch them, they’ll tell you what’s on the way. For example, I know it sounds crazy as an economist, but the Paris fashion shows of December 2018, I was watching. I’m interested in fashion. I’m a woman. That’s an artistic space that interests me. What did they show? They showed riot gear. I’m like, “I think they might be onto something,” because I understood the context of social protest. The things that might instigate it. The fashion designer starts showing riot gear on the runway. I’m like, “We need to pay attention to this.”
It wasn’t just one outfit. Was it multiple?
It’s multiple. You can see it now in this presidential election, Melania Trump, what did she wear to the first debate? Military dress. This sense of militancy is reflected in the choices of what we wear. Now we’ve got a little time because COVID has restored our sense of time. We begin to have the freedom to choose, “What am I going to look at? What art am I going to follow? What interesting things are going on that I wasn’t looking at before because I was in my own narrow little world?” If you widen up, you can start to absorb a lot of signals and suddenly the landscape is a lot clearer than it was.
What’s the number one thing that somebody can do who’s an entrepreneur, a manager, or a CEO? What’s the number one thing somebody can do now to be more aware of the signals?
One is to get yourself better situational awareness. That’s a military term. I do some lecturing for the British military at Sandhurst, which is the equivalent of West Point. Situational awareness is understanding what’s happening around you. That sounds so simple. In working with CEOs and presidents, they often are quite disconnected from what’s going on because they’re so protected. The higher you go, the more protected you are from reality, the fewer people can randomly get to you. The people around you, you already know them well. They’re not always bringing new fresh material. It’s a bubble. You’ve got to open yourself up to new people, new ideas, new sources of information. A second thing is to understand the task. Most people in leadership positions think the task is like hiking to the top of Mount Everest. You pick a target and then you get equipped. You got a team together. We’re going to go to the top of Mount Everest. What if it’s not a static target?Entrepreneurial firms generate two-thirds of the net new jobs in the U.S. economy. Click To Tweet
It’s more like surfing. I told you before we started that I grew up surfing the beaches of California because my grandmother was a school teacher in LA. We spent every summer out there. It’s a lot more like surfing. You’re dealing with constantly conflicting forces, highly fluid environment. It’s sunny one minute and about to storm the next. Your target is to stay afloat. It’s to stay on that board. It’s not like hiking Mount Everest. It’s not a fixed target. It’s a different skillset and learning how to balance. I recommend that people get a balance board. They get a balance board at home. If you’re over 40, you ought to do that anyway for your physical health. As you physically experience being on a balance board and how hard that is, you start to open your mind to, “What is going on in my business that maybe I haven’t been paying attention to because I’ve been so focused on that target, I missed all the other things?”
The economy, economists, that’s your main focus and your main word that people would use to describe you as a speaker. A lot of people say, “I want an economist. I want someone to talk about the future of the economy.” What is going to happen? What’s the future of the economy now in the United States and the UK? Is it pretty clear to you? Is the worst behind us or is it coming? What does 2021 look like? We’ll be able to look at this in a year and say, “She’s right.”
First of all, there are always opportunities. Even in the direst circumstances, there are always opportunities and you can always create something out of nothing. It’s important to look at examples of people who are doing that. I’ll give you an example. I’ve seen here in Britain, it was super interesting. You would think there’s nothing new you could do with pizza. We all know pizza. I saw this British company that was selling pizza kits and they were selling them to pubs, which means the restaurants. It’s not meant that they could have fresh, but it was halfway made. They sell you all the stuff, and then you’d quickly put it together, throw it in the oven. COVID happened. All the pubs were closed. This business was dead in the water.
The management sat down and in ten days they reconfigured the whole business model away from B2B, turned it towards home delivery to the consumer, took on one of the biggest brand names in the world, Domino’s Pizza, and aced it. It started beating them because the quality was so much higher and the attention to detail. It coincided with COVID when everybody was stuck at home. The idea is they get to design their own pizza was suddenly hugely appealing. It’s like a family, community togetherness thing. It’s about composing the future, designing it yourself. This is also part of the zeitgeist. They turned that thing around and they are flying.
Nobody looking at that business model, no venture capital firm, no private equity firm would have said that’s possible.” They said, “It’s a different set of skills. It’s a completely different market. It has completely different financing requirements.” The reality is they did it in ten days and they did it successfully. Everybody can do that in every single business. Lack of access to capital, which is usually the excuse people use why we can’t get it done. I would point out that Jeff Bezos at Amazon says his most successful divisions of Amazon are always the ones with the least capital and that forces them to use the one thing that we’ve all got, but we often don’t use, and that’s imagination. Imaginable skills are critical.
When I talk about what’s coming in the future, I’m using imaginal skills. I’m using imagination. I love the quote from Mark Twain, where he says “The eyes cannot see clearly if the imagination is out of focus,” that is so true. What you have to do is begin to imagine a different future. What I see is entrepreneurs, tech people, policymakers, re-imagining that I’ll give you some practical examples. I’ll use a British example, but I like using them from all over the world. In this country, to get planning permission to build a new building is a really big process. It’s a rigmarole. They only let you build a building with one purpose. It’s either an office building, it’s residential, or it’s going to be a grocery store. You can’t build a building that’s a lot of things. COVID happens, and the government wants construction because this is an employer. They want to build into the future. They announced they’re abandoning all the planning restrictions. Now we’re going to start to see what’s required, which are buildings in urban areas that are going to be a grocery store on the ground level, several levels of office space, several levels of residential, and then some urban farms.
You’re going to see buildings that are multipurpose and serve many different interests, which now that we’ve had COVID, everybody’s realizing we need more farming in city centers. Buildings need to accommodate people who are working and living. Is that going to radically transform construction? Yes. It’s happening at a time in history when we have a revolution and construction methods. Traditionally, humanity had to start with a substance like a log and you would turn it into a piece of furniture or a wall. Now we can start with a need and build the material from the atomic structure up. This is called new materials technology. This is going to completely change what kind of buildings we can have, how quickly they can be constructed, modular technology. I see an unbelievable revolution coming in the construction of our buildings, that alone.
In almost every sector I look at, I see equally radical and hugely encouraging changes that are underway. I just think once we get past the uncertainty, people are going to just roll their sleeves up and they’re going to be working. Rather than trying to predict, will it be a further slowdown or will it pick up? This is a mug’s game. Prediction is not a smart way to spend your time. Preparedness is a great way to spend your time, get prepared for a whole bunch of different scenarios. One of them is that it takes off. That’s the one that most people are going to get wrong-footed on and they won’t be ready. It’s going to start blinding and you won’t be able to catch up.
It’s more of a cultural change. You’re not necessarily looking at governments are going to put all this money into the economy and then the economy is going to crash because of inflation or different reasons that we’re not going be able to pay back our debts and all these different things people are worried about. People thought that the Obama administration was doing silly things with the automotive industry, bailing them out, but they all repaid it with interest. Every government does what it needs to do. Hopefully, they’re doing all the things that they need to do right now, but is there anything that’s happening or that we don’t know yet? Something exciting to you that you found out? Anything you want to share with us, a secret, an insight, or maybe just information that not a lot of people are aware of?
Some of the things on my mind. One of them, you just touched on inflation. Most people think there can’t be any inflation because we’re in such a big slowdown. People like Stanley Druckenmiller and some of the most skilled and gifted traders in the world are starting to say Warren Buffett as well, “I think we’re going to get a little inflation.” That’s because when you break the global supply chain at both ends, the supply end and the demand, the US end, the China end, and a whole bunch of things start to happen. One of them is the relocation of production to local environments. I’ve had to make up a name for this, which is glocalization. We used to have globalization, which meant all the jobs went to China. Glocalization is now all the jobs are going everywhere.Preparedness is a great way to spend your time. Click To Tweet
We’re going to see a resurgence of manufacturing services locally. That’s because people want a supply chain that’s closer. They want to work with somebody they can see with their eyes, they can talk to them on the phone. You can make changes and get results quickly. That’s going to be a lot of competition. However, it will also raise prices initially, I believe. The thing is when prices start rising when we get a little inflation, what does everybody do? They buy equities because bonds don’t work, equities work. At the beginning of inflation, asset prices rise, stock markets go up. As I said before, we’ve had this extraordinary collapse of a digitization trend that should have taken many years, got pushed into three months. The stock market is already telling us that those efficiency gains are being built in. That’s why stock markets are so high.
The combination of a little inflation, not outrageous inflation, but a little inflation with all these other elements tell me the engine’s going to start revving. We already know governments are not going to let a terrible slowdown happen. They’ll do everything possible to avert it, speak and bank on that. For those who are pessimists, my question to them is, did you miss the recovery from the Dotcom Bubble bursting? Did you miss the recovery from the financial crisis? If you did, you might feel the same now like, “It’s so devastating. We’ll never recover.” I would say, “Buckle your seatbelt and get ready.” We’re going to have a recovery from this that beats those previous ones.
It seems like it. Once this is resolved, we can get back to where we were, which was an amazing economy and a lot of good things happening. The great thing about this is that now we’re looking at all the problems we have. We’re going to hopefully fix and address a lot of those social problems, economic problems, irresponsibility of people and businesses, and everything that we need to fix. I feel like it’s a little bit of a blessing in disguise. I know you feel the same way. That’s pretty cool. It’s almost like, there are going to be people who’ll read this and go, “These people are crazy. This is a horrible time.” It’s like, “Which way do you want to look at it?”
Another way is all the bad news has been built in, there isn’t that much more bad news that could undermine things. Any good news, it’s like, “That’s amazing.” One piece of good news goes a long way in this situation. I don’t think I’m being like a Pollyanna. It’s a belief that people are fundamentally going to figure out a way forward, partly because they know they can’t depend on the government to help them. For example, the fastest-growing part of the labor force in the US are people over the age of 50. Why is that? That’s because they’re all going, “Medical advances means I’m going to live until 90, but I haven’t got enough savings to make it that far.” Why is it we take the people with the most knowledge, skill, and experience, and then we sideline them? No, we should have them operating in the economy. It’s not like the old days where you had to have a full-time job with a big blue-chip firm.
People have a portfolio life, where they spend part of their time working with a friend who was an entrepreneur, part of a time consulting to some big blue-chip company, spread the risk around, and they’re engaged, but still have some control over their time. People get creative in that space. I’m seeing a lot of innovation around these people who are older with these skillsets being reintegrated into the economy. At the other end of the spectrum is a very interesting trend, which is companies are no longer always hiring college graduates. They are starting to hire high school graduates. What they’re looking for in high school graduates is drive and inquisitiveness, not credentials. We’ve gotten over credentialized. It reached the point where unless you had a PhD from Stanford that you wouldn’t qualify. Think of all the latent talent that’s out there that we could be using to do crazy interesting things.People are fundamentally going to figure out a way forward, partly because they know they can't depend on the government to help them. Click To Tweet
I’ve talked to manufacturers in the US for example, in the automotive industry. They’ve said, “We’re going back to a 1950s model where we hire somebody who’s eighteen. We’re going to pay for their college education, but they’ll be working part-time. They’ll be working for us mainly and doing college on the side.” That’s part of a bigger trend of lifelong learning anyway. “If they want to go to graduate school, we’ll support them. This way we get to train them the way we need them. The person gets a good salary and a great experience.” I talked to the CEO of one automotive company that’s hiring this way. She said to me, “Do you know what our biggest obstacle is? The teachers and the parents.” I was like, “What?”
She’s like, “The teachers and parents say to the kids, you don’t want a job in the automotive industry in manufacturing,” because they have some Victorian image in their mind of some dirty factory that’s like child labor. What they do is they get a bus and they bring all of these people into the factory. Modern manufacturing is pristine and elegant. These are high-tech spaces. Once they see that, then the parents go, “This might be good.” There’s a return to that. We’re going to see very different hiring patterns. People are going to get much more practical about what they need and having a college degree doesn’t guarantee that you’re the best person for a company to hire. Being inquisitive and energetic are much more important drivers.
I’ve heard that from several people and that’s positive stuff. It’s great to hear. I hope that happens. I know we’re getting to the end here and I want to make sure I ask you this question because why wouldn’t I ask you this question? If Biden wins, if Trump wins, either way, two-part question, are things going to change that much in the US if one of the other wins? Number two, a follow-up to question one, is there anything that is concerning that one of these administrations might do to mess things up, change things, make things worse, or not do the right thing? Is there anything to look out for?
I’m going to give you some controversial, unconventional answers on that. One of them is on one level, we already know the outcome. Whoever wins the other half of the country is going to hate it. One-half the country is going to be happy with it. At least we’ll have a certainty. The markets are going to go up on either one winning, just because we have certainty. There is the view the Democrats will bring in higher taxes, more regulation, more red tape, probably so. However, they’re going to have a big argument for about two years because internally there’s such a spread between the far left and the center of the Democrat party. What are they going to implement? It’s not yet clear where the mandate is. Therefore, we may end up with a government that doesn’t do very much. Markets love that.
They have certainty who’s in charge and they can’t do anything. Markets go up on that. Another thing is there is a very high risk that we aren’t going to have certainty that we won’t know who is the president. It can happen for multiple reasons. There’s the risk that President Trump refuses to go, for example. We already have the senior people in the military talking about how they’re not going to get involved in such a scenario. They wouldn’t be saying that. The denials tell you everything that may be a possibility. We also have all these people in Washington who are down with COVID. We’ve got the two most elderly presidential candidates we’ve ever had. Is it possible that Biden wins, but he’s in the hospital with COVID? Yes, this is possible.
Suddenly, the possibility that we won’t know is very real, but what I think is more important than all of that is a little story I heard from a taxi driver that I had in the States, it was in Texas. He was from Ethiopia and he was a 25-year-old immigrant. We were chatting in the taxi about elections. I was asking him the same question, “Who do you think is going to win?” He looked in the rearview mirror and he said to me, “It doesn’t matter to me who wins. I’m going to be a success anyway.” I’m like, “You’re American, right?” That’s the whole American like, “You’re done. You’ve gotten it.” Americans are going to say, “I’ve got to be a success either way.” What we’re seeing is leadership is moving from the level of the president down and people are taking leadership responsibility at lower more granular levels of society. That’s why it’s important to watch who’s exercising leadership at the city level, at the neighborhood level, at the regional level, because that’s where we’re going to see a lot of action and change. That may be more materially important than what happens in the White House.
This has been unbelievably exciting. We covered a lot of different things. You are a wealth of knowledge and expertise. I know whenever I pitch you to people and tell people about you, they’re always like, “She’s amazing.” I’m excited that we got to dive deep into many cool things, including your latest book, some of your other books, and the current status of the world and what’s coming. That was awesome. Thank you so much, Pippa. You are so great to always talk to. It’s always very entertaining. I remember the first phone call we had where you went into the drone conversation with me for a long time about that whole world. I hung up the phone. Everything with you is amazing. You know so much. You know about many different industries and facets of our economies and our government. You are a wealth of knowledge.
Thank you so much for having me. This is an amazing opportunity as a speaker to get to talk about all these different things. People are like, “What is it you talk about?” It’s like what’s coming on the landscape, but it doesn’t fit into a neat little box all the time. I appreciate this ability to skate around and explore.
I think we boxed it in as well as we could, in a way that people come away from this knowing you well about what you have to offer, and it’s amazing stuff. Thank you, Pippa. You are amazing. I appreciate you. You’re awesome for doing this, so thanks. Take care.
- The Leadership Lab
- Geopolitics for Investors
- The Infinite Leader
- Pippa Malmgren – LinkedIn
- The Great Gatsby
- The Grapes of Wrath
- Too Fast to Think
About Dr. Pippa Malmgren
Dr. Philippa Malmgren is an economist and an award-winning author who served President GW Bush in the White House and on the National Economic Council. She is focused on simple sensemaking of the world economy and all its complexities. She is a partner of The Monaco Foundry, a startup incubator and a Senior Advisor to Avonhurst, a solutions-oriented legal and consulting firm.
She is the Chairman of The BSI subcommittee on drone manufacturing standards (ACE 22) and lecturer in the Duke Fuqua Global MBA program. She was a co-founder of a firm in the drone/autonomy space that won a 2020 CogX award and the 2020 National Technology Award. She is also a popular public speaker on policy, tech and geopolitics.
She won the 2021 Independent Press Award for the Best Book on Leadership for her bestseller, the Infinite Leader. She won both the 2019 Business Book of the Year for The Leadership Lab and the 2020 Independent Press Award. She has been named a leading Woman in Tech by We Are Tech Women and the top 50 Women in Tech by AccelerateHer.
She occasionally lectures at Sandhurst, Duke GEMBA, INSEAD, U Texas Austin and elsewhere.
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