The abundance economy is before us.

This is something that more people are starting to discuss. It is a topic that will garner more interest as time passes, especially with jobs being destroyed.

We should start by mentioning there are a number of names floating around for the "new economy" that is being formed. Some call it the "AI economy". Probably a better title is the "Automation economy" because that incorporates more than just the digital.

Many ask what happens when the robots take all the jobs? How will people live?

Ironically, whether this is the path we are going down is still contested. There are many who espoused the idea that "technology always creates more jobs than it destroys". It is a notion that is not reflected in the data yet is still held onto, primarily among futurists.

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The Abundance Economy: We Are Seeing It Being Built

Technology operates on a few curves that are easy to understand. It does seem, however, that most overlook them especially when it comes to the economic impacts.

One of the major components of technology is that it is deflationary. Peter Diamandis calls this "demonetization". Technology makes things cheaper. It does so because it makes it easier to product things.

We can look at a slew of industries where this was the case. Music, video, information, images (photos), and communications are all part of this. The digital world keeps touching upon many areas, notably knowledge work, where it democratizes it.

People debate the deflationary nature of technology, claiming that inflation is the norm. Actually, there are problems with the metrics along with the assumptions of the causes.

To start, zero does not factor into the calculations. When something use to have a cost but is now basically free, such as the development of a photo, where is that calculated? We can see the answer.

Consider how many industries say this. We use to pay commissions on stock trades. Information once cost money. Movie lovers paid for each video rental. Music albums were costly items.

The Union of AI and Robotics

AI is just getting started. Actually, the same is true for robotics. The latter will take longer to have an impact since we are dealing with the "world of atoms" along with something that is further behind its digital counterpart.

For the moment, we have a tendency to separate these out. That will not be the case in the near future. Ai is going to be integrated into all physical items, turning them "smart". Language models are the first phase of this process.

The narrative centers around the idea of "real world AI". Here again, we can use a couple different terms. Some prefer the concept of "spatial AI" to denote the entry (and understanding) of the physical world. This is where robots enter the picture.

Understanding exponentials is crucial. Obviously, manufacturing takes time, operating at a much slower pace than the online (digital) realm. We are still in the prototyping stage of humanoid robots. Once they enter production, it will be a multi-year process of scaling. This means we are looking at some time before the numbers are such where the economic impact is widely felt.

That said, once the penetration into the real world starts, we can see how the deflationary nature takes over. Simply focus upon the different levels of the supply chain and notice how automation will impact that. Since we have products that factor into others, we can see the entire "stepping up" pattern. The impact is felt all the way up, until we see the end product.

Labor is one of the largest costs to businesses. Here is where automation blasts the currency economic paradigm. Of course, there will be fallout, something that few leaders have taken the time to seriously discuss.

The path over the last few years with AI showed us what is unfolding. We had a number of obstacles mentioned which were overcome. At first it was GPUs. Then data. Next was transformers. Now we are onto energy (electricity).

With each obstacle, solutions were presented which moved us past it. At present, transformers and energy still are in the crosshairs. However, give it a few years and we will likely see solutions that alleviate these situations.

Economic output is going to explode in the 2030s. This is where abundance, across much of the industrial spectrum will be the norm. It will likely take a couple billion robots before this is noticeable but it is coming. The only question is how soon do we see viable humanoids that are ready for mass production?