Investors Marc Andreesen and Reid Hoffman talked about differing views on productivity, investments, “fake news,” and the role of social media in a wide-ranging discussion on the first day of this year’s. Andreesen challenged the conventional wisdom that technology is destroying jobs, while Hoffman was more worried about the transition to new jobs. He was more focused on systems that help people discern what is real and what is fake on social media, while Andreesen mostly dismissed that as an issue.
Both men are very successful technology investors with big roles in social media. Andreesen co-founded Netscape, runs Andreesen Horowitz, serves on the boards of Facebook, and is a prominent investor at Lyft. Hoffman co-founded LinkedIn, is a partner at Greylock Partners, and recently joined the board of Microsoft.
Andreesen said we now have two different kinds of economies. In fast-changing sectors like retail, transportation, and media, he said, we are seeing a huge role for software (echoing his comments a few years ago about how “software is eating the world”), massive productivity improvements, and a gigantic change in jobs. These sectors are marked by rapidly falling prices, and it is here that the concern about job loss is most real.
But he said there is also a “slow change” part of the economy, including healthcare, education, construction, elder care, child care, and government. Here he said, “we have a price crisis,” noting that almost all of the price increases we have seen in the past few years have been in education, health care, and construction. These are areas where technology is having almost no impact, and where we’re seeing almost no productivity growth. Left unchecked, those areas are “eating the economy.”
He divided his looking at investments into those two buckets, and said the opportunity and the challenge
Hoffman viewed the world a bit differently, splitting his investments into two areas. The first is businesses with network effects, such as Airbnb and Convoy (which he described as “Uber for trucking”). The second is areas that are contrarian, in that they focus on technologies that are not in the buzz cycle—not things like AI or virtual reality. These include construction robotics and energy sources, hinting that one of the companies was working on fusion energy.
Andreesen noted that in “so-called AI,” including machine learning and sensors, “something dramatic really tipped about five years ago.” He said this was following the classic model of Silicon Valley, saying “of course, we’re going to overinvest” in those areas. Most companies in these areas won’t work, he said, but the ones that do will become very successful.
Conference co-host and moderator Kara Swisher asked the two of them if they worried about the job impact of these technologies, and that led to an interesting discussion about jobs and productivity.
Hoffman said that he viewed platforms like LinkedIn as a way to help people get the right skills and the right connections, and said that things like autonomous vehicles would let people get to work in a more easy way and be more productive.
Andreesen called the concept that technology would replace jobs the “Luddite fallacy” that comes up every 25 to 50 years. He noted that the same issue came up when the automobile was invented and that jobs were lost for blacksmiths and others who took care of horses. But the car created a lot more jobs—not only building cars, but in “second-order” effects, such as paved streets, restaurants, hotels, motels, movie theaters, apartment complexes, office complexes, and suburbs. He said the self-driving car can improve productivity for people in the car and can save lives, and that it would have other impacts, including possibly a huge construction boom in areas outlying the big crowded cities.
He noted that unemployment numbers are very low, and claimed that we have six million job openings and that in many places, “we don’t have enough workers.”
Hoffman responded that many people will need different kinds of jobs, and said that “transitions can be very painful.” In general, he said, we should “try to make it work out in a way that’s more humane.”
I was pleased to see Andreesen point out that counter to most of the prevailing beliefs in the technology industry, productivity growth is at a generational low, not a high; that the rate of job creation and destruction has been declining for 40 years; that people are actually staying in jobs longer, not shorter, than they used to; and that we’re seeing a decrease in the number of new companies in existing industries. “We have the opposite problem. We don’t have enough change,” he said.
During the question period, I asked if the massive amounts of time that people are spending on social media is impacting productivity at work. Hoffman said he didn’t see that this as an issue, though Swisher seemed incredulous at his answer. Andreesen referred toon the topic, saying that might explain the generational decline in productivity. He didn’t really give an opinion but joked that maybe if it was slowing down productivity, it was good because it was slowing down job churn.
Andreesen and Hoffman were preceded on stage by Tristan Harris, a former design ethicist at Google, who gave a short but impassioned speech on how social media and internet technologies are “steering the thoughts” and beliefs of 2 billion people. Harris complained that the “the attention economy” is moving
Harris compared the “runaway AI” we already have to the invention of the nuclear bomb, and said we need to make fundamental changes—such as needing different accountability mechanisms instead of advertising—to stabilize the world as a result.
Not surprisingly, both Andreesen and Hoffman disagreed strongly, with Andreesen saying Harris’ thoughts reflect the “reality privilege” that elites have, and that most people don’t have better experiences away from the internet. Hoffman said we can correct the commercial system biases.
The two disagreed on the role of social media and “fake news.” Hoffman said he was focusing on things like discerning what are facts, and said he is doing a lot of thinking about building systems that would have more trust. He said we had presumed that most people could make discern the truth, but now we need to think about how we help people figure out better guideposts to the truth.
Andreesen said that “truth” has become a shorthand for things that people on the coasts believe, noting that if you read the mainstream press, you would have thought that Hillary Clinton would have been elected over Donald Trump, but that “If you wanted the truth, you should have read
Hoffman and Zynga co-founder Mark Pincus created a left-leaning political group called Win the Future to promote social responsibility and be pro-business, he said; noting that he was concerned about how Silicon Valley “problem solvers” can be inventive to solve the problems that people are facing, including fake news. But he agreed that charges of fake news can be leveled both ways, saying it results in an “erosion of institutions” and that the two sides need to be able to talk to one another. “Without that, we don’t have democracy,” he said. He echoed a thought from Microsoft COO Brad Smith about how we get to a “Geneva Convention in Cyber.”
Both adamantly said they were not running for office.