Coronavirus has accelerated the cybereconomy faster than we expected. WFH has turned to Work from Anywhere (WFA). Millions of people who have been grounded to a specific city for decades are now dispersing. Cloud stocks and virtual workspaces like Microsoft Teams, JIRA, MuleSoft are the backbone of the WFA movement. The pandemic propelled us into a contactless economy that was inevitably headed our way. The next generation of the economy will be built in the cyber realm. Prior to cloud deployment of applications, building an online presence was a tall endeavor. It required servers on premise and high infrastructure costs. The cybereconomy unlocked a cyber workforce. With a globalized cyber workforce, there are inevitable taxation problems countries will encounter.
Software workflow streams have moved from waterfall to agile, allowing Product Owners to split stories into individual tasks. The granularity that is being enabled is furthering micro tasks to be contracted to gig economy workers. There are multi billion dollar companies being built remotely. The lack of a physical HQ allows companies like Binance to access talent from anywhere in the world. Crypto companies are not the first to take advantage of global gig economy workers, and certainly will not be the last.
Software focused companies are harnessing the power of WFA. Immigration restrictions Trump recently placed forced big tech to move teams north of the border. Coronavirus limited contact Google, Twitter, and Facebook have announced WFA until summer of 2021. Many companies are following the lead and offering remote first as a employee perk. Pinterest recently cancelled their lease in downtown SF. The company paid a reportedly 90m to cancel the lease.
Pinterest may not be the size of FAANG, but what is stopping the FAANG companies from moving HQ to another country if talent is captured remotely? Remote-first work and internet contractors are an emerging threat to the US ability to keep major tech companies within its borders. Tech HQ’s will not immediately cease to exist. There’s an obvious reason so many tech companies have stayed in California; SV has a lock on high end developers. Whether coronavirus encourages other cities to create better software dev culture is yet to be seen. Although, FAANG moving to a WFA will certainly encourage software devs to explore other cities. Austin has become a popular destination for SV geeks.
Freelance work is becoming incredibly popular on sites like Fiverr. Enabling sellers to provide services in a free market is driving down the costs of simple tasks like setting up your AWS. Marketplaces that allow developers to build reputations are inevitable. The beautiful part is that workers can even pseudonymously build reputations, as Balaji Srinivasan has outlined.
The implications of increasingly remote companies are perplexing and undefined. Company structure like Binance’s is purposely done to have a lower tax obligation. More enterprises will follow on the face that smaller nation-state’s provide tax incentives. Moving to tax havens is already an existing trend. Walmart is purposely headquartered in Delaware to minimize tax obligation. The Cayman Islands are the fifth biggest financial center in the world in large part to the absence of corporate taxes. Ultimately, the US is simply another nation state bidding to keep it’s customers which makes taxation a tricky matter.
Why do casinos had out millions of dollars of free plays and room service to their largest clients? It’s promote casino loyalty. Similarly the US government needs to incentivize companies to stay. This already happens at the state level to lure companies into their regions. Amazon’s infamous 2nd HQ fallout in NYC shows why taxing corporations is a difficult endeavor. We yell ‘TAX THE CORPORATIONS! TAX THE WEALTHY!”, but within that narrative jobs and imperative tax dollars are lost. In reality the government has it’s hands tied behind it’s back and it is on it’s way to getting much worse. They can try to tax and regulate mega-cap corporations, but digital economies of scale will lead to a mass exodus of tax generating corporations if the US does not proceed carefully.
Not only is the digital economy threatening the US’s ability to tax its top corporations, but it’s stranglehold on the USD being the reserve currency is a looming threat. There are three steps to the cyber realm according to The Soverign Individual. The first was the digitization of information, making the internet a catalog. What once took hours of encyclopedia digging, was made easy through Google search and online forums like Wikipedia. The second progression is the coming of cybercommerce. Within this step, e-commerce companies submit to the jurisdiction of their respective nation states as the internet gains it’s footing. This is currently where we are. E-commerce companies are restricted to US legislation. As gigabytes of data are moved at the speed of light and more internet economies prop up globally, we will transcend into the third progression. This will be the turn of the free, decentralized, cybereconomy. Emergence of third-party free cyberbanks, cyberbrokerages, and cybermonies will be trusted worldwide. In this third progression, nation-sates will lose control in their ability to force citizens to use state issued fiat (i.e. Venezuela).
The internet is globalizing faster than ever. The cyber gig economy has been thrust 10 years into the future thanks to a pandemic. Although a transition to a cyber economy and cyber money seems like a sharp, unrealistic departure from the current state, the pressures it has on nation-state’s ability to juristic corporations are understated. Welcome to a global economy powered by a global money. Hello Bitcoin!
Dhruv's Bubble 