Some Numbers That Matter

If you spend enough time studying the digital transformation, you'll eventually come across "numbers that matter". Specific areas of society that provide measurable proof that transformation is happening. These "numbers" are the leading and lagging indicators of societal change and are a baseline for understanding where the world is heading.

If you're able to track meaningful change with these numbers, you'll have a better chance of investing and positioning yourself for future trends well before the mainstream becomes aware of them.

Here are some examples:

Generational Wealth Transfers As A Leading Indicator Of Crypto Adoption

Follow the wealth transfer from older generations to younger generations. Why? Because investment choices made by each generation are different. For example, younger generations are much more likely to adopt and invest in digitally transformative assets than older generations.

So, as the generational transfer takes place, we can expect a significant amount of money to flow to new, modern asset classes like cryptocurrencies.

"The Millennials age group are expected to inherit $68 trillion from Baby Boomer parents." - Visual Capitalist

Connecting the dots here, that's a tremendous amount of money being transferred across generations over the next few years.

Now look at generational investment preferences more closely to get a sense of what assets that massive amount of money might flow to.

Chart from: Younger Generations More Bullish on Cryptocurrencies (investopedia.com)

There's no clear-cut way to predict how much money will flow into crypto as that transfer takes place. But what is clear is that it's likely to be way more than is currently invested in the asset class. Let's say between 5 to 10% of the $68 trillion transfer ends up going into crypto.

That means we can expect between $3.5 to $7 trillion dollars to flow into crypto over the next 8 years. The current crypto market cap is $1 trillion. Any way you play around with these numbers, it looks likely that massive inflows will take place as a result of generational transfers.

The Point: As wealth transfers from the boomer generation to new generations, how much of those assets will get reallocated to crypto? How much will flow to other digital age assets? By following this generational transfer and the asset preferences of each generation, you can position yourself to benefit from those trends.

Time Spent Online Vs Offline - In Work & In Personal Settings (Time Spent In The Metaverse)

Speaking of different generational trends, the amount of time people spend online is increasing. And that can be tracked on a generational demographic scale.

What does that tell us about the changes taking place in society?

The time we spend online can be tracked as a way to understand where people are more likely to spend their money moving forward. But more importantly, it can be tracked as a way to understand the changes in how we live, work, and form relationships moving forward.

Think about it like this, we can break out time spent online by personal, social & work as measured by time spent in person vs online. Have you ever looked at your cell phones time tracker? It shows how long you've spent on your phone by day and week. And the amount of time you spend on each app. When you look at those numbers over a long enough arc, you can measure whether you're spending more or less time online.

But more broadly, think about what percentage of your human contact is in person vs on zoom, chat, or social media? How much of your work is done online vs in-person? Does the money you spend benefit your life physically or digitally? And how has that spend changed over time?

These are measurements of the digital transformation.

The more time people spend online, the more their preferences will change. The more they'll identify with digital communities as opposed to physical communities. And these are precursors to changes in how local and global policies are formed. ie: if you're more loyal to a global organization, that will impact your voting preferences. Now imagine those changing preferences across local, state, national, and international scales.

Therefore, tracking time spent online across major populations is becoming a number that matters.

Ratio Of Online To Offline Spending

Expanding on that, tracking the ratio of digital to physical spending is a number that now matters. This should be measured across business, personal, & government spending habits as well as generational trends.

Ie: how much money is allocated for digital goods & services vs physical goods & services? How will this impact lifestyles, business strategies, and government policies? Think of this ratio as a measurement of digital transformation, and as it grows, it indicates transformative pressures.

Think about it in terms of your own life.

If you were to take a look at your expenses, how much of your spending is digital vs in-person? Do you spend more money buying things online or in-person? And how much of your spending is on things you use for online work or pleasure vs in person goods and services?

This ratio is an increasingly important measurement of how much time we spend online, and the increasing role "digital life" plays in society.

Permanent Remote & Hybrid Work Policies

We are now getting to a point of post-covid life where remote work policy choices become permanent. It's still hard to pin down an actual number but somewhere between 25 to 35% of employers will now offer some form of hybrid/remote work on a permanent basis.

How this number grows and/or contracts will have important impacts on lifestyle choices, corporate real estate, travel industries, city economics and more.

And so, it's important to follow the percentage of a workforce that is remote work vs in-person. As this percentage shrinks or contracts on a local, state, national, and international level, it will directly correlate with policy, culture, and lifestyle changes.

As Remote Work Policies Become Permanent - We Can Anticipate Changes To Travel & Leisure Industries

You may be wondering, what's a good proxy for understanding how much remote work has penetrated society? One way to do so is to track emergent trends in the travel & leisure industries.

Like the average number of overnight stays booked in a single trip. Check out the tweet below. We can now see a growing number of travelers are booking longer "workation" style trips. As this number increases, we can use it as a proxy for understanding whether or not there are more permanent or at least more flexible remote work policies being adopted.

As remote work increases, we can expect other meaningful changes to lifestyles, local economies, and the policies that attract or repel this type of lifestyle.

The point: track the trends in the travel and leisure industries to have a general understanding of remote work's impact on the physical world. 

Tracking Remote Works Impact On Corporate Real Estate

To that end, we know remote & hybrid work means less time in the office. That ultimately means that companies will start downsizing their office footprints.

We can watch to see how corporate real estate values are impacted and what that means for broader society. 

Tracking the evolution of office leases offered moving forward, the size and scope of bank exposure to corporate real estate, and we can also expect to see cities experience tax revenue shortfalls based on declining corporate real estate valuations.

We can expect a growing correlation between property values & places that are strongly desirable or undesirable for remote workers. This can also be measured via hospitality and leisure reporting. Ie: where are the workation travelers booking longer stays? Do these stays correlate with stronger or weaker office valuations?

The point: tracking the percentage of remote working populations impacts on corporate real estate valuations will give you a sense of the transformative pressures on local economies.

Number, Type, And Scope Of Remote Work/Digital Nomad Visas

Tracking the impact of remote work on a local scale isn't so difficult. But what about its impact on society on an international scale?

One way to follow the impact of remote work around the world is by following the introduction of remote work and digital nomad visas. How many of them have been offered over the past two years? What type of policies are common and what are different about these visas? How much do they cost and what type of incentives do they offer?

These numbers matter because remote work has created a new type of global competition for talent. Tracking visas, resident permits, and the perks nations offer as incentives are a proxy for understanding demographic shifts we might expect in the future. ie: common benefits being offered by the rest of the world could force policy changes locally. Or if not, they could lead to an exodus of remote workers.

Closing Point

These are just a few examples of numbers that matter. They aren't a comprehensive list of "all" numbers that matter. Instead, this list is intended to frame your mind to think about how you'd go about tracking the digital transformation. And beyond that, how you can use these numbers to think about where the world is heading.

At the end of the day, you want to identify trends and position yourself to take advantage of them.