Today’s incentive structures are crooked. There is a misalignment between general incentive structures and society at large. This creates a lack of meaning and fulfilment making people less motivated.

I loosely define “incentive structures” as those structures put in place that make society move forward. To further illustrate you could say that there are 3 entities that have their own incentive structures: government, corporate, and the general public. Society, defined as the collection of these 3 entities, thrives when each of the 3 incentive structures are broadly aligned. An example of such a period could be after WWII when most nations needed to be rebuild and an enormous economic boom followed making the “Baby Boomers” the most prosperous generation the world has ever seen.

In what follows I mainly focus on the corporate and public entities.

To illustrate the misalignment between business and the public I will resort to a simple example: the phone.

Every corporation has one incentive that comes before everything else and that is to make profit so it can keep on existing and provide for its shareholders. The way they go about achieving that goal can be different such as cost leadership, customer intimacy, quality leadership,…

Back in the day when handheld phones we relatively new there was a lot of room from improvement/innovation and the demand from the market i.e., the public, was there. Subsequently, companies could fulfil their first incentive by innovating and making more phones.

Fast forward to today and the innovation in the phone industry has been so immense that there are only minor improvement made every year. Generally speaking the incentive from the public has been met. People nowadays can have a phone that does it all for a relatively cheap price and that lasts a very long time. The incentive has changed and isn’t aligned with the corporate incentive of growth and profit making.

The result?

Manufacturers limit the longevity of their products via “updates” or just stop supporting their devices all together. Because the incentive structures do not align anymore they resort to behaviour that is a net negative for society. The perfect illustration of this is my grandfather who had a phone that worked perfectly but couldn’t download the latest Whatsapp update because the operating system wasn’t supported anymore by the manufacturer. This made the Whatsapp update not compatible. Given that the whole family communicates via Whatsapp he needed to buy a new phone.

This is just a simple example trying to illustrate something bigger that lies at the base of society. There is a disconnect between the public and the organisations that provide services and products to them.

Furthermore, because of the misalignment a lot of people experience a disconnect with the work they do resulting in a lack of meaning and fulfilment in their life. Just a quick search for “Burnout” on google leads you to articles and data like these:

https://www.forbes.com/sites/jackkelly/2021/04/05/indeed-study-shows-that-worker-burnout-is-at-frighteningly-high-levels-here-is-what-you-need-to-do-now/

https://www.hse.gov.uk/statistics/causdis/stress.pdf

Concluding:

Incentive structures and financial wellbeing are fundamental factors to a society’s state of mind and general wellbeing. Looking at past and current world events it is clear that there are improvements to be made on many fronts.

Blockchain realigns the incentives of every participant to be in the same direction. This is a such a groundbreaking aspect. This aspect is carried over to NFTs as they are a blockchain application. In my opinion NFTs even emphasised this more. The cocktail of economics, community, innovation, and ethics is a sight to behold and it is a very very important evolution. Every evolution that starts from the bottom and trickles up is an evolution to keep an eye on.

I believe that NFTs and Web3 is that bottom up answer to the problems laid out above. The development of Web3 and mainly the new business models it enables are the people’s/society’s answer to this macro problem and especially an answer to the lack of connection that is so present today.

However, make no mistake, building in Web3 is hard work (maybe even harder). But the community aspect can provide a sense of support. It gives a feeling of being part of something bigger. It provides closer meaningful human connection which is something that, for many, is absent in web2.

All this is why I am so passionate about web3 and the communities that are embedded within it. I don’t know how (yet), but I want to contribute to the space, however small my impact may be, to make sure that Web3 is developing towards the greater goals it envisions achieving.

Thank you for taking the time to read this. I hope it sparks some thoughts.

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P.S.: Another part of society’s reaction is the rise of the circular economy and the development of new circular business models. Another topic that is soooo interesting.

Lastly, this is aimed to engage the reader in thinking about the topic and forming their own opinions on the matter. What is laid out above is much more nuanced in reality.