Are you lower value human capital?

 

As of the time of writing, the boss of Standard Chartered has already apologised for talking about replacing lower-value human capital with investments in AI, but I don't think that the sentiment of fear has faded, given that the DBS CEO has put it in much more politically correct terms, that even a CEO can be replaced by AI.

So, there should be some kind of framework to deal with AI disruption that will, perhaps indirectly, answer the question of whether a person is indeed lower-value human capital. 

Do note that these days, lower-value human capital is no longer the usual suspects like blue-collar workers or support staff. Lower-value human capital can encompass lawyers, accountants, or engineers, as the value of knowledge has declined significantly, raising the question of what the point of investing so many years in tertiary education is when knowledge has become so cheap over time.

So I'm going to develop a framework to address AI disruption.

We need to first construct a 2x2 matrix.

On one axis, we have AI optimists and AI pessimists. At the moment, I have noticed that entrepreneurs seem to enjoy and look forward to what AI can bring to their businesses, as much of the work no longer needs to be outsourced. One example of an AI optimist is Malaysian influencer Tim Tiah, who replaced his marketing vendor with a CRM system he vibe-coded himself, saving a six-figure sum every year. You can find AI-pessimists everywhere these days, but to me, someone like LinkedIn personality Ives Tay probbaly represents one of the most negative thought leaders on Singapore's AI drive today.

On another axis, we have makers versus takers. I use Ayn Rand's literature to divide the world into two main categories - makers and takers. Makers have to build things, and everything they do needs to be constantly challenged by the brutal hand of reality. If you are an IT engineer building and architecting systems, you are, in essence, a maker. A taker is someone who does not make but may have the power to regulate a maker. An IT auditor is a taker because he does not build systems; he checks and regulates them, as do many left-wing intellectuals. While it may seem that a maker is more heroic and useful than a taker, a taker can slow things down and prevent a humanitarian disaster (China's management of COVID is what happens when makers are not restrained by takers). Personally, my best career years were in IT Governance, which makes me a taker by my own definition.

With these two axes well-defined, we can figure out the best strategies for coping with AI.

If you are an AI-optimistic maker. Your best strategy is "Scorched Earth". As a person who believes in AI and someone who can build, your best strategy is to build systems to eventually replace your more stubborn peers. I've done a fair bit of vibe coding and have built an agentic pipeline program to summarise legal cases, and my students love it! At the very least, it demonstrates how efficiently it can run a legal team, and it might enable a smaller, more senior team to handle the same number of cases. On Instagram, entrepreneurs are using AI to avoid paying for expensive headcount or buying service contracts.

If you are an AI-optimist and a taker. Your best strategy is "Obstruction via Governance". If you can't build or create anything out of AI, but you love what AI is, then why not govern it and keep it from scorching everyone else? There will be a large number of compliance and governance jobs coming online because people are terrified of AI's potential, and you can work on aligning AI to business objectives. Yes, you remain functionally worthless because you don't build anything, but you can set up checks and balances against those who might decide to Scorch Earth the organisation.

If you are an AI-pessimist and a maker. Your best strategy is "Analogue Rebellion". I believe that there will always be a place for makers everywhere, even those who hate AI and can't cope with change. I think, given the backlash against AI, people will turn against anything digital and go analogue, and many analogue businesses and careers will thrive. Maybe you can start a business selling musical instruments or vinyl records. I was tickled pink when cassette players were sold in Swee Lee for hundreds of dollars. The resurgence of RPGs and pen-and-paper gaming points to how tired Gen Z is of AI.

Finally, there will be those AI-pessimists and takers. So you can't build things, and you really hate AI for it. I think this category comes the closest to a lower value of human capital. Your best strategy is "Strategic Retreat". At the lower end of things, you may be better off picking up a trade like plumbing or becoming a hawk, but the best odds of survival are to see whether you can thrive in a career in sales, like becoming a financial advisor or real estate agent. So the best thing to do is get a license early, because corporate work might not wait.

So in summary, if you think my framework makes any sense, the person most likely to be replaced by AI is AI-pessimists who are takers. It is not the end of the world for them because the world of sales (and maybe life coaching) is still a possibility.

Let me know what you think about this framework.