The Future of Work, Technology, and Regulation in a Fragmenting World
This is a memo I drafted for an event at the British Academy convened by the Innovation, Equity and Prosperity program of the Canadian Institute for Advanced Research (CIFAR). The event had scholars in attendance with easily, in excess of a quarter million citations combined. I was asked to share a provocation and came up with the below. I am cross referencing it to some work and public commentary that to me is linked in my thinking about this work.
We are living through the slow unmaking of the market economy as we know it.
Markets coordinated societies not because they were perfect, but because they efficiently aggregated dispersed information through price signals. That architecture is now being hollowed out by exponential advances in data collection, predictive AI, platform monopolization, and the weaponization of economic dependencies by states.
At the same time, the traditional foundation of work as a vector for social integration and skills transmission is unraveling. Economic activity is becoming increasingly detached from physical scarcity. Skills that were once transmitted across generations are harder to accumulate and preserve. Trust, rather than efficiency, is becoming the core scarce resource. Meanwhile, governance struggles to catch up with the hybridization of power between states, platforms, and private data monopolies.
The future will not be defined by a restoration of old market equilibria. It will be shaped by how societies choose to rebuild the infrastructures — human, technological, and institutional — that enable coordination and trust in a world of direct, unmediated information flows.
The Productivity Shock to the Service Economy
Artificial intelligence is delivering a productivity shock to the service sector that few have fully digested. Historically, services expanded precisely because human labor was needed to navigate informational asymmetries, whether between patients and doctors, consumers and retailers, or clients and legal advisors.
Today, algorithmic systems can increasingly automate these tasks, diagnosing conditions, matching supply and demand, and optimizing legal and financial transactions. This technological leap does not simply replace jobs; it undermines intermediation itself as a core economic function.
The consequences are already becoming visible. There is a shrinking pool of meaningful, dignity-conferring work. In its place, we see the expansion of “bullshit jobs,” roles that exist largely to preserve the appearance of economic participation. Simultaneously, a deepening divide is emerging between those who design, own, and control the new algorithmic systems and those whose work and status are determined by them.
The Collapse of Skills Transmission
The collapse of skills transmission is accelerating under the pressure of economic fragmentation. Once naturally embedded in apprenticeship structures, manufacturing firms, and broad-based public education systems, the mechanisms of knowledge transfer are breaking down.
This decay is driven by several forces. First, the casualization of the service sector means that workers are no longer tied to firms through firm-specific capital or long-term investment in skills. Second, global labor arbitrage — the ability to easily import skilled labor — removes any systemic incentive for firms to train domestic workers. Third, education has increasingly become a positional good, with access to high-quality education being restricted by privilege rather than being treated as a public good.
The systemic consequences are profound. Societies lose their ability to maintain physical infrastructure, to innovate beyond a small class of privileged enclaves, and to sustain resilient, knowledge-based middle classes. Without a robust mechanism for transmitting hard skills across generations, economic dynamism collapses into rent-seeking and fragile dependence on increasingly narrow sources of human capital. Much of this rent-seeking nature is embodied in the growing proliferation of licensed occupations that cover an ever growing share of private sector employment.
From Price Signals to Direct Information — and Its Political Consequences
The traditional economic architecture was predicated on scarcity information being hidden and prices revealing it through decentralized competition. In today’s world of ubiquitous sensors, real-time data platforms, and predictive AI, supply, demand, and preference have become directly observable. The role of prices as a signaling mechanism is being diminished and often strategically distorted.
The implication is profound. Markets are no longer the default mechanisms for efficient resource allocation. Instead, platforms, data brokers, and algorithmic systems are becoming de facto central planners — but without democratic legitimacy or transparent accountability. This shift erodes the very political compact that once made market economies tolerable: the belief that decentralized competition would prevent concentrations of power.
What emerges is a system where power is centralized not in state institutions, but in private data monopolies operating without the counterbalancing constraints of democratic oversight.
Platformization and the Rise of the Rentier Economy
Instead of unlocking a new wave of innovation, information capitalism has produced a new class of rentiers. Platform monopolists increasingly extract control rents over information flows. Companies monetize artificial scarcity through aggressive intellectual property hoarding and the strategic locking-in of users without sharing of rents more broadly (think: taxation).
The result is a systemic bias toward less innovation and more defensive moats. Economic activity becomes centered not on solving real problems, but on obfuscation, regulatory complexity, and information gatekeeping. The so-called “bullshit economy” — characterized by bureaucratic compliance services, lobbying labyrinths, and privacy-as-a-service models — is no longer an aberration but the dominant operational logic of the system.
Unless societies radically rewire incentives away from rent extraction and toward real productivity-enhancing investment, Western economies risk becoming high-friction, low-dynamism systems incapable of sustaining their prosperity.
The Fragmentation of Regulation: Weaponized Systems and Standards
The regulatory frameworks built for nationally bounded economies are collapsing under the weight of globalization and technological transformation. Cross-border platform operations, stateless digital assets, and hybrid economic attacks have made traditional regulatory tools increasingly ineffective.
Examples of weaponization abound. Energy systems have been used as coercive tools, as seen in the manipulation of European gas supplies. Migration and refugee flows have been strategically weaponized by regimes to destabilize democracies. Disinformation campaigns have targeted the very ability of societies to sustain shared realities. Real estate markets have been distorted by illicit capital inflows, turning cities into financialized stores of value rather than livable communities.
At its core, the problem is that standards and regulatory architectures have themselves become battlegrounds. Europe, in particular, risks losing control over the rules that govern its own economy and society.
Digital Identity: The Critical Frontline for Sovereignty
The deployment of digital identity systems is already underway, but predominantly on American corporate and regulatory terms. Without sovereign digital ID frameworks, Europe risks losing critical pillars of its governance capabilities.
The absence of sovereign digital identity erodes taxation rights, fragments welfare systems, and makes democratic protections meaningless by outsourcing identity verification to unaccountable corporate actors.
The strategic imperative is clear. Europe must create a self-sovereign digital identity standard where citizens own and control their identity, mobility, and transaction data. Verification should occur only when needed, not as a constant surveillance mechanism. Fiscal systems should be capable of clearing tax obligations based on voluntary, auditable proofs of mobility.
Such a system would protect privacy and liberty while maintaining public trust — avoiding both the dystopia of mass surveillance and the dependency trap of corporate capture.
Intra-EU Mobility and the Taxation Crisis
The freedom of movement within the European Union, though a historical achievement, is being undermined by the absence of a clearing market for tax rights. Without mechanisms to adjudicate where a citizen’s tax base belongs, intra-EU mobility has become a loophole for individual and corporate tax arbitrage.
Today, moving across borders can erase tax obligations with minimal friction, hollowing out national social contracts, inducing immigration policy to become a beggar-thy-neighbor tool that helps create systemic fiscal imbalances. The political backlash against perceived unfairness is growing, feeding populist narratives and undermining European integration itself.
Addressing this challenge requires building systems where individuals own their mobility data and can verifiably demonstrate presence if challenged, without submitting to continuous tracking. Europe must also develop taxation rights clearinghouses capable of fairly allocating obligations between jurisdictions.
If these institutional innovations are not built, internal fragmentation will corrode the European project from within, accelerated by both opportunistic actors and external adversaries.
The Green Transition: The Last Great Opportunity
The transition to renewable energy fundamentally changes the structure of advanced economies. Capital-intensive upfront costs replace the logic of continuous fuel extraction. Marginal energy costs begin to approach zero. Localized energy sovereignty, technologically infeasible in the fossil fuel era, becomes viable.
This is not merely an environmental opportunity; it is an opportunity to re-anchor the economic system itself. Financial systems must shift away from speculative bubbles centered on real estate toward productive investment in resilient green infrastructure. Public trust ledgers for energy data, carbon accounting, and infrastructure verification must be built to ensure transparency and foster investment.
Moreover, Europe must seize the opportunity to set global standards in green finance, project validation, and carbon measurement. If it acts fast and decisively, it can shape the rules of the coming energy economy. If it delays, it will once again find itself ruled by standards set elsewhere.
Toward a New Economic Governance
We are entering an era where direct information flows replace price signals, where trust becomes the core economic bottleneck, where sovereignty depends not just on territory but on digital control, and where ownership of data defines freedom.
The old dichotomies between market and state, between private and public, are no longer sufficient to describe the economic realities ahead.
Future prosperity and legitimacy will hinge on building architectures of trust: sovereign digital systems that empower individuals, decentralized energy grids that ensure resilience, transparent AI infrastructures that are accountable to the public, and fiscal systems that align taxation with actual economic activity rather than allowing it to be gamed.
Without such institutions, governance will collapse into reactive crisis management. With them, it is still possible to rebuild resilient, open, and sovereign societies capable of navigating the disruptions ahead.
Choosing Agency in a Fragmenting World
The challenges ahead are immense, but they remain choices. Societies can accept the slow fragmentation of their economic and political sovereignty, or they can build the new institutions that the coming era demands.
We can allow skills transmission to decay into a marker of elite privilege, or we can rebuild robust pathways for collective capability and shared prosperity. We can surrender to foreign platforms defining our identities and economic rules, or we can set standards that align technology with freedom, dignity, and democracy.
This is not merely a technological race. It is a race to define which kinds of societies will survive the transition out of the market age. Europe, with its normative foundations, technical capabilities, and historical memory of institutional adaptation, still has the potential to lead.
But it must choose — and it must do so soon.