We are living through a great equalization of opportunity. A change that is taking place on a global scale. A modern gold rush.
Unlike ever before, people now have access to the means of production and distribution of the valuable resources of the age. That resource? Information. And when it’s widely available and well curated, it transforms into a valuable information capital asset. Its a resource that can generate income.
Internet access is expanding around the globe and the ability to work remotely from anywhere is becoming a reality. With internet access, opportunities to create and distribute information capital assets are now available to the majority of the worlds population.
That’s significant for the transition to the Digital Age. It means you now compete with a globally connected population.
You’re now competing for jobs with a digitally accessible workforce. A population hungry to access the “developed” world’s opportunities. And this workforce will work harder than you, longer than you, and for less money than you.
It opens the door for a great arbitrage opportunity for small countries, corporations, and entrepreneurs. Why hire expensive local talent when you can hire inexpensive but very capable global workers?
The ultimate consequence of digital labor, connected at a global scale, is the equalization of capital throughout the world.
Why should you care? Because the ascending world finally has an opportunity to level the playing field. And unless you act now, these people will leave you behind.
This article covers the growing arbitrage emerging in the digital age. What it means for businesses and individuals. How the arbitrage changes society and how it fosters a gold rush mentality. And most importantly, it will cover the choices you must make to position yourself for what comes next.
Arbitrage – Competing With Inexpensive Cost of Living
An arbitrage is an exploitation of pricing differences between an asset in one place and another. As an example, assume a digital marketer in the US costs a company $60,000 a year. And a digital marketer of equal skill in Ukraine costs that same company $35,000. That means there is a potential $25,000 arbitrage the company can take advantage of.
These types of opportunities will become more widely available in the short term as the world becomes more connected. But they disappear quickly as competition for the exploit in price discrepancy grows.
A root cause of this pricing variance is the wide difference in cost of living around the world. Using our example, the cost of living in Ukraine is on average less than the US. That means that a digital worker in Ukraine can accept a lower wage than a worker in the US.
But it’s not only the ascending world people that benefit from this type of arbitrage in the digital age.
The COVID pandemic was a massive experiment in modern digital business. It showed that a large number of businesses could bypass office work by implementing remote work policies.
As people began working from home, they realized they could work from anywhere with stable internet. And because of this, many people began to understand that they could relocate to lower cost of living locations.
And thus, create a cost of living arbitrage.
This creates an interesting dynamic. On one side, the “ascending world”, which is starting to integrate with the digital age. And on the other, the “descending world”, accustomed to digital life seeking to escape the inevitable decline of western society as global equalization occurs.
It’s A Gold Rush & A Land Grab
But what do I mean by global equalization?
An arbitrage takes advantage of a pricing dislocation in markets. When two places value an asset differently it creates an opportunity for someone to buy low in one market and sell higher in the other. But as more market participants catch on to the opportunity, the price discrepancy closes to reflect the true market value of the asset.
This process creates a market equilibrium. An equaling out of the true value of the asset in question. So in a sense, an arbitrage is like a gold rush and a land grab. Its a race to take advantage of the price discrepancy before it gets equalized across the market.
Society’s transition to the digital age is itself, an arbitrage, a land grab, and a gold rush.
As global society adapts to the Digital Age, it reveals a massive arbitrage opportunity. There is a dislocation of the true market value of people, geographies, and new assets unique to the digital age society. And this opportunity is created from stable internet access.
The biggest opportunities, the ones that represent the greatest arbitrage, are formed from the merging of key digital fault lines: remote work, internet access, cryptoassets, and the ease of creating & distributing information capital assets.
They permit anyone, anywhere, to earn a digital age salary in a low cost of living location.
The greatest arbitrage opportunities will come from places that are yet to enter the digital age in meaningful ways but are primed and ready to move forward. And these opportunities wont be available on a permanent basis.
Where Are the Arbitrage Opportunities? And How Do you Measure Them?
How would you identify and analyze these locations to determine which are ideal for arbitrage?
The primary value driver at the moment is focused around cost of living variance. Generate location-independent income in a high value global currency and move to a location with a low cost of living. Bonus points if the payment currency is highly valued versus the local currency.
But cost of living alone isn’t by itself good enough to evaluate the digital age opportunities.
It becomes increasingly important to measure countries by critical digital infrastructure. Rate of smartphone adoption, internet accessibility, crypto adoption (active wallets and transactions), rule of law, tax rates for digital incomes and other regulatory policies, crime, quality of education (is it modern or does it suffer from the Red Queen Effect?).
How about the country’s industries? Are they pre-modern, agricultural based, tourism based, industrial or post modern? ie: is the country in desperate need to pivot to the digital age?
Does the country have the elected officials and the political will to move in a new direction? Are they willing to aggressively reduce “traditional income sources” and offer subsidies to digital age workers and businesses to attract the digital opportunities?
The general point – you want to move to a location that is growing towards digital age policies and not away from them. You want the comfort to know you can take advantage of the cost of living arbitrage without fear the government may be hostile to your activities. And you want to understand that in the future, there wont be unexpected or hidden costs.
The Sovereign Individual Goes Where The Opportunity is Greatest
This arbitrage will be exploited by the emergent class of Sovereign Individuals. A global cohort of people that seek out advantages created from the transitory phase between the previous age and the digital age. This class of people will be incredibly diverse. Comprised of people all over the world taking advantage of local and foreign economic changes.
And it means that Sovereign Individuals, in an effort to capitalize on the opportunities of the world must be willing to relocate. Or at the very least, they must pursue business in areas that stand to benefit from the arbitrage opportunities created in the digital age.
They understand that these market dislocations take place on the periphery and frontiers of society. That first movers have the advantage. And so an emerging subset of Sovereign Individual will become accustomed to seeking out first mover advantages offered by changing times.
The emerging sovereign individual class recognizes this shift and seeks to position within the opportunity it presents. Embracing the upside of the arbitrage.
With a mindset of: I must position myself in the “ascending” areas of the world and function as the person selling the guides and other tools of the modern digital world.
The bottom line is that as a Sovereign Individual, you must identify the opportunities that emerge as society transitions from what was to what will be. Seek out the industries, the countries, and the people that are embracing that changeover. The ones that are open to change and embrace pioneer mindsets.
Most importantly, when you identify an opportunity act quickly and decisively. You’re competing with the entire world. And it’s full of hungry ambitious people.
I’m tracking a new narrative that makes sense of society’s shift to the Digital Age. The goal: documenting how to become a Sovereign Individual. Giving you the facts and tools to successfully navigate digital life. I cover topics you can’t fully appreciate because you’re in the thick of it. Everything you need to know is delivered in a weekly newsletter.