"Refresh: Rediscovering Business and the Future" Reading Notes

"Refresh: Rediscovering Business and the Future" Reading Notes#

Author: Satya Nadella
Reading Time: 2 hours

These are the notes and excerpts I recorded while reading "Refresh: Rediscovering Business and the Future" on WeChat Reading.

04 Cultural Renaissance#

He told me that you must firmly believe in one thing: the sky is the limit, and nothing can restrict you. You must work hard—not for constant promotions, but to do important work. In hindsight, I now understand that a person who feels like an outsider can also succeed, but two conditions are necessary: enlightened management and responsible employees. Managers must have high expectations, but they must also have empathy and know how to motivate employees. Similarly, employees must work hard and diligently, but they also have the right to demand greater responsibilities and higher recognition. A balance must be struck between these.

06 Beyond the Cloud#

But to truly take action, we must also meet our "3C" principles—do we have an inspiring concept? Do we have the capability needed for success? Do we have a culture that embraces these new ideas and methods?

If you know why you were born, you can accept everything.

You are traversing another dimension, not just a dimension of sight and sound, but a dimension of the mind. Enter a wonderful land, its boundaries depend on your imagination. That is the signpost ahead—your next stop, Twilight City.

But to truly take action, we must also meet our "3C" principles—do we have an inspiring concept? Do we have the capability needed for success? Do we have a culture that embraces these new ideas and methods?

If you know why you were born, you can accept everything.

You are traversing another dimension, not just a dimension of sight and sound, but a dimension of the mind. Enter a wonderful land, its boundaries depend on your imagination. That is the signpost ahead—your next stop, Twilight City.

07 The Trust Equation#

Trust but verify

Nobel Prize-winning economist Douglass North studied this issue. He found that technological innovation alone is insufficient to drive economic success; legal tools that fairly enforce contracts, like courts, are essential. Besides that, what other means can ensure that some warlord-like figure won't take your property? Trust distinguishes modern humans from cavemen.

Trust but verify

Nobel Prize-winning economist Douglass North studied this issue. He found that technological innovation alone is insufficient to drive economic success; legal tools that fairly enforce contracts, like courts, are essential. Besides that, what other means can ensure that some warlord-like figure won't take your property? Trust distinguishes modern humans from cavemen.

08 The Future of Humans and Machines#

Computer pioneer Alan Kay stated, "The best way to predict the future is to create it."

Novelist Jhumpa Lahiri was asked in an interview why she has such a special command of English, yet writes her new works in her third language, Italian. She replied, "To keep searching, isn't that the essence of creativity?"

Computer pioneer Alan Kay stated, "The best way to predict the future is to create it."

Novelist Jhumpa Lahiri was asked in an interview why she has such a special command of English, yet writes her new works in her third language, Italian. She replied, "To keep searching, isn't that the essence of creativity?"

09 Achieving Economic Growth that Benefits Everyone#

Economist Bart Hobijn spent several years creating the "Cross-National Technology Adoption History" (CHAT) dataset, studying the timeframes for 161 countries adopting 104 technologies, from steam engines to personal computers. He found that, on average, countries adopt a new technology 45 years after its invention, although this lag has shortened in recent years. According to this analysis, Komen believes that the differences between rich and poor countries largely stem from their speed of adopting industrial technologies. However, he noted that the intensity of using new technologies is equally important. Even if some countries are slow to adopt new technologies, they may eventually catch up; what truly creates economic opportunities is the intensity with which they use technology—not merely acquiring it. Are these countries letting technology gather dust, or are they providing targeted training to their workforce to maximize productivity? That is the intensity. "The issue is not just when technology arrives, but the intensity of its use," Professor Komen told me.

Unfortunately, in many underdeveloped areas, public and individual attention is focused on attracting Silicon Valley companies rather than nurturing local tech entrepreneurs. Successful entrepreneurs in developing countries often tell me that they cannot even meet with their president or prime minister. However, leaders in these countries frequently meet with Western CEOs like me, seeking short-term foreign direct investment.

Conrad's conclusion is that inequality ultimately brings faster growth and greater prosperity for everyone. Investors are waiting for good ideas, which leads to their own demand for well-trained talent, hoping to successfully commercialize those ideas through this talent. He believes that growth faces two constraints: one is the economy's capacity and willingness to bear risks, and the other is finding well-trained and motivated talent. However, excessive inequality can also have negative effects, leading to decreased motivation for many. What happens when people do more but earn less? This can be frustrating, causing many to work less hard, abandon dreams of starting or expanding businesses, or even leave the labor market entirely. This can also weaken the overall vitality of the economy. For companies like ours, this means that our global clients are spending less on emerging technologies that can improve their productivity. This is the current situation. There is a downward line at a perfect angle of 45 degrees on the Gini coefficient, representing the increasingly severe inequality. I hope to avoid the trap of what Marx called "late capitalism"—in this theoretical period, economic growth and profits will both decline—and return to the rich rewards enjoyed in early capitalism. But how can this be achieved? Most heads of state are also struggling to solve this problem.

In terms of technology, I believe that the global maximum for all regions—whether a country, a county, or a community—is to introduce the latest world-class technology, promoting entrepreneurs in the country or region to innovate and grow, deeply pushing the export of these innovative technologies and local consumption across various fields and sectors in the community. In other words, the focus should be on increasing value and expanding the use of technology, thereby creating dividends and opportunities for an increasing number of citizens. This means that, whether in developed or developing countries, every region must leverage new technological investments to develop industries with comparative economic advantages. Business leaders and policymakers should ask questions like: What do we have that others do not? How can we turn this unique advantage into a source of growth and wealth for all?

Education plus innovation, widely applied across the economy, especially in countries or regions with comparative advantages, multiplied by the intensity of technology use, will eventually lead to economic growth and productivity.

Believe that the only way to address economic shocks is to ensure that we provide skills training not only for those graduating from universities and other higher education programs but also for those losing jobs due to automation. Countries that allocate a certain percentage of GDP to enhance technological capabilities will see returns.

As Asimoglu summarizes: "Although automation tends to reduce employment and the share of labor in national income, creating more complex tasks has the opposite effect." Historically, new generations of workers and more complex new tasks have stemmed from cutting-edge technology. Asimoglu continues: "Creating complex new tasks always increases wages, employment, and the share of labor." However, before automation creates new labor-intensive tasks, technological change will first lower employment. We need a balanced growth path. We need to invent a new social contract for this era of artificial intelligence and automation, promoting a balance between individual labor—his skills, wages, sense of mission, and satisfaction—and capital returns.

Economist Bart Hobijn spent several years creating the "Cross-National Technology Adoption History" (CHAT) dataset, studying the timeframes for 161 countries adopting 104 technologies, from steam engines to personal computers. He found that, on average, countries adopt a new technology 45 years after its invention, although this lag has shortened in recent years. According to this analysis, Komen believes that the differences between rich and poor countries largely stem from their speed of adopting industrial technologies. However, he noted that the intensity of using new technologies is equally important. Even if some countries are slow to adopt new technologies, they may eventually catch up; what truly creates economic opportunities is the intensity with which they use technology—not merely acquiring it. Are these countries letting technology gather dust, or are they providing targeted training to their workforce to maximize productivity? That is the intensity. "The issue is not just when technology arrives, but the intensity of its use," Professor Komen told me.

Unfortunately, in many underdeveloped areas, public and individual attention is focused on attracting Silicon Valley companies rather than nurturing local tech entrepreneurs. Successful entrepreneurs in developing countries often tell me that they cannot even meet with their president or prime minister. However, leaders in these countries frequently meet with Western CEOs like me, seeking short-term foreign direct investment.

Conrad's conclusion is that inequality ultimately brings faster growth and greater prosperity for everyone. Investors are waiting for good ideas, which leads to their own demand for well-trained talent, hoping to successfully commercialize those ideas through this talent. He believes that growth faces two constraints: one is the economy's capacity and willingness to bear risks, and the other is finding well-trained and motivated talent. However, excessive inequality can also have negative effects, leading to decreased motivation for many. What happens when people do more but earn less? This can be frustrating, causing many to work less hard, abandon dreams of starting or expanding businesses, or even leave the labor market entirely. This can also weaken the overall vitality of the economy. For companies like ours, this means that our global clients are spending less on emerging technologies that can improve their productivity. This is the current situation. There is a downward line at a perfect angle of 45 degrees on the Gini coefficient, representing the increasingly severe inequality. I hope to avoid the trap of what Marx called "late capitalism"—in this theoretical period, economic growth and profits will both decline—and return to the rich rewards enjoyed in early capitalism. But how can this be achieved? Most heads of state are also struggling to solve this problem.

In terms of technology, I believe that the global maximum for all regions—whether a country, a county, or a community—is to introduce the latest world-class technology, promoting entrepreneurs in the country or region to innovate and grow, deeply pushing the export of these innovative technologies and local consumption across various fields and sectors in the community. In other words, the focus should be on increasing value and expanding the use of technology, thereby creating dividends and opportunities for an increasing number of citizens. This means that, whether in developed or developing countries, every region must leverage new technological investments to develop industries with comparative economic advantages. Business leaders and policymakers should ask questions like: What do we have that others do not? How can we turn this unique advantage into a source of growth and wealth for all?

Education plus innovation, widely applied across the economy, especially in countries or regions with comparative advantages, multiplied by the intensity of technology use, will eventually lead to economic growth and productivity.

Believe that the only way to address economic shocks is to ensure that we provide skills training not only for those graduating from universities and other higher education programs but also for those losing jobs due to automation. Countries that allocate a certain percentage of GDP to enhance technological capabilities will see returns.

As Asimoglu summarizes: "Although automation tends to reduce employment and the share of labor in national income, creating more complex tasks has the opposite effect." Historically, new generations of workers and more complex new tasks have stemmed from cutting-edge technology. Asimoglu continues: "Creating complex new tasks always increases wages, employment, and the share of labor." However, before automation creates new labor-intensive tasks, technological change will first lower employment. We need a balanced growth path. We need to invent a new social contract for this era of artificial intelligence and automation, promoting a balance between individual labor—his skills, wages, sense of mission, and satisfaction—and capital returns.

Postscript#

Previously, the global economic growth rate was about 4%, now it is about 2%, so we need some new technological breakthroughs to bring growth back to the levels of the 20th century. Mixed reality, artificial intelligence, and quantum computing will become breakthrough points for creating new economic surpluses, but at the same time, they will also impact the workforce, causing some jobs we take for granted today to disappear. Some believe that robots will take over all jobs, but this so-called "labor synthesis" view, that the number of jobs is limited, has historically been proven incorrect. Society simply needs different types of labor. Humans can provide value that machines cannot achieve. As artificial intelligence becomes more prevalent, true intelligence, genuine empathy, and real common sense will become scarce. New jobs will require employees not only to know how to operate machines but also to be based on unique human qualities.

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