Why the Internet is creating more value than jobs

Increased leverage of the individual. The information age (post-industrial) doesn't need the same labor inputs to achieve the same wealth creation as before.

While this is great for individuals on the right side of the digital divide, we'll continue to see the impact this will have on societies for some time to come.

This article really speaks to some of the ideas presented by Paul Graham in his essay about the future of startups[1]. Combining ideas from them paints a particularly optimistic picture for the future of the individual. When a student can create and run a business in his spare time, it sort of marks the potential for a shift in the way value is measured. The emphasis on the utility or engagement of a service over strict monetary value could enable our growth going forward to be in quality of experiences rather than GDP (as Nick Szabo pointed out already isn't growing that much in developed nations anyway).

Going forward we could see applications that make it really easy for individuals without direct knowledge of HTML, CSS and a server scripting language to create valuable tools (they do exist know, but not really in a way that enable the right audience to create the right things). These, along with the existing social tools, are the things that could change the way an economy works by cutting out large corporations and creating an entire market of "externalities."

[1] http://www.paulgraham.com/webstartups.html

"externalities" don't put the food on the table, let alone buy the table.

or will the future economy be "click on this really cool web app and send its' creator a loaf of bread!"?

I would think that orbital data center would have some real problems with heat dissipation, since you can only cool via radiation in space. Terrestrial data centers already have a problem with heat, and they can cool via convection (which is what is ultimately going to cool those air-conditioners). And then there is the cost of lifting thousands of soon to be obsolete computers into orbit...

Because software and the Internet are making it easier to provide more value, more quickly and more cheaply, than ever before. Thus, less jobs needed. Plus more of the jobs that are needed can be done off-shore, or, on-shore but with less office space and commuting, which in turn drives down money that needs to be spent on those sectors as well. Also the increasing popularity of so-called Agile and MVP philosophies is also driving down the cost of testing business ideas and getting to market. And yes, there's an increasing amount of actionable information, quality entertainment and useful functionality available for free on the Internet. So less money (needing to be) spent in those areas, thus less money available for jobs in those areas, for any given unit of product provided. Plus, due to the Internet, an increasing proportion of the revenue that comes into businesses (overall, but most proportionately in the software industries) can be captured by the owners/capitalists/entrepreneurs, rather than labor.

I'm not sure if this is a net win or net lose, overall, for the world. But it's certainly a net win for certain subsets of the population, and a net lose for other subsets. But even for those who it is a net lose, they are not forced to stay in some frozen static configuration or context, there are choices one can make to shift oneself to take better advantage of the new economic landscape, making it more likely to be a net win for them. It may not be easy. But few things in life are easy, and the universe doesn't guarantee anybody a free lunch (outside the more extreme cases of great inherited wealth, etc.)

One thing I'm sure of is that, all other things being equal, we're lucky to be in the field of software and the Internet at a time when this shift is occurring, because we're in a population subset where it can more easily be a net win for us.