Futurist Stan Davis firstname.lastname@example.org is a respected author and consultant on the changing nature of work. In Blur (written with Christopher Meyer and forthcoming from Addison-Wesley in March), Davis chronicles the new economics of free agency. Fast Company found Davis at his home in Chestnut Hill, Massachusetts.
How are free agents changing the economics of work?
The economics of free agency relate to a basic psychological shift, a tremendous San Andreas Fault between employee and employer. Once you're a free agent, you've moved to the other side of that divide.
Intellectual capital - knowledge - is becoming the most important resource in the economy, and we are going to see new financial instruments to buy, sell, trade, and leverage that resource.
There will have to be an entirely new tier of financial markets. You can't say, "Brains are the economy's most valuable resource, but we have no financial markets to trade in them." Whenever an important asset has been identified, a market has been developed for it.
So what's the financial instrument for free agents?
One of the major new financial instruments will involve the securitization of individuals. In the early Industrial Age, we created securities for large corporations. Then, early in the Information Age, we developed a stock market for fast-growth, startup companies. Now there are "microcaps" - smaller and smaller entities for capitalization. The ultimate logic leads to a market for the individual - a stock in a person.
How will the market deal with risk?
In two ways. One is to base the financial instruments on fame. That's why the first people to be securitized will be famous people - a David Bowie bond (which already exists) or a Michael Jordan stock (which could exist soon).
The second way is to pool and spread the risk: include not only Michael Jordan but also the rest of the Chicago Bulls - a Chicago Bulls Mutual Fund.
It's going to take a couple of decades for a securities market to develop. But over time these stocks will begin to trade, and the market will determine the true value of human capital.
A version of this article appeared in the December 1997/January 1998 issue of Fast Company magazine.