Entrepreneurial Freedom in the Age of AI

Your current “job” may be the last one you ever have.

Don’t panic. Americans can achieve economic security in the AI economy, even thrive, so long as we don’t get in our own way.  

The future of work is skills-based, flexible, and fragmented. I refer to it as the “Portfolio Economy.” Workers who maintain a portfolio of skills—old and new, offer those skills to a wide range of clients—small and large, startups and incumbents, and do so on a project-by-project basis, will do well in 2026 and beyond.

The transition to the Portfolio Economy means the headlines predicting that AI will cause the end of work as we know it are partially right. It’s true that the nature of work is going to look drastically different, perhaps even soon, and certainly by the time Gen Alpha is entering the labor market. The 9-to-5, Monday to Friday, single-employer model is done, but that has been true for many years, if not decades.

The ties that used to bind one worker to one firm, and vice versa, have largely faded away. When firms could hire only local talent and workers could work only for local firms, the two parties had a mutual interest in forming long-term, mutually beneficial relationships. Firms were incentivized to invest in their workers, in their human capital, and in the surrounding community. The alternative of searching for out-of-town talent, recruiting them, and then onboarding them was far costlier than simply doing as much as possible to support the surrounding talent pool.

Workers, too, had reason to invest their prime working years in a single firm because they could move up a fixed career ladder by helping the company succeed. They knew the skills they had to master, the people they had to please, and the metrics they needed to exceed. The longer they worked for that one firm, the more it made sense to stick around.

Those days are over.

Remote and hybrid work allows more firms to hire people in more places. It’s no longer the case that geography dictates who can work for whom.

An increasingly wide range of educational and vocational opportunities means that workers do not have to rely solely on their employer to learn the skills of the future. When given the time and means, any average Joe or Jane can become an expert in a new domain and find an employer willing to compensate them accordingly.

And, perhaps most importantly, neither laborers nor firms know for certain what those skills of the future may be!

Firms have little reason to invest in their workers if those trainees soon flee to a more lucrative opportunity at the click of a button. Additionally, they are more eager to bring on independent contractors or short-term workers to handle discrete projects, knowing that AI and related technologies may soon be able to handle similar initiatives.

Workers have less cause to give their all to a single firm if that employer cannot offer a predictable path to more lucrative and meaningful work. They may also be slightly more cautious about making any substantive investment in a single course of study or career path. It’s a costly gamble if your four-year degree or entry-level program is in a highly automatable field.

Both have plenty of reasons to be as nimble as possible given the jagged frontier of AI. Neither party knows which skills are best left to AI, human-AI teams, or just humans, because AI progresses at different rates across domains.

In sum, the incentives have shifted.

This reality doesn’t have to result in a dystopian future. In fact, it can lead to a more inclusive economy that permits people the freedom to choose when they work, what they work on, and who they work for. The Portfolio Economy is tailored for innovators, entrepreneurs, and doers. That’s supposed to be America, right?

The story goes that America is the nation that’s first to the future because we’re excited by the possibility of improving on the past. It’s the American Dream to progress further, and it’s the American Way to be unafraid of new horizons.

Yet our labor and employment laws are like rust on a bike — rigid legal requirements make it harder for entrepreneurial energy to translate into economic opportunity. The people primed to race forward are compelled to slow down, stay in their lane, and watch as workers in more dynamic labor environments shape the future. A few examples make this clear.

So long as benefits are largely tied to employers, rather than to work, then America’s workers will find it harder to transition to the Portfolio Economy. Congress needs to move forward with portable benefits. As spelled out by researchers at the Brookings Institution, all workers should receive prorated benefits based on the work they do for any employer for any period of time. This would allow workers to diversify their “clientele.” They could mark their respective skill portfolios to a range of actors and take on as many or as few hours as they see fit, accumulating benefits from each employer based on however many hours they end up working.

A move to portable benefits, however, is stymied by another vestigial feature of our labor and employment laws: ambiguous worker classification tests. Employers have long feared providing benefits to non-traditional workers, for fear that those workers would be classified as employees, resulting in a whole set of additional legal obligations. Here, again, Congress can and should step up and clarify that the provision of benefits is not a relevant factor in classification decisions. Utah has already moved in this direction. This should be the standard across the nation.

Making it easier for Americans to simultaneously work for more firms is only half the battle. For workers to thrive in the Portfolio Economy, they must have relevant skills. As mentioned above, firms have surprisingly little economic incentive to set up robust training programs. So if Congress wants to help Americans master the skills of the future, it must change the calculus for firms, make it easier for workers to enroll in formal or vocational education programs, or do both.

To encourage more firms to offer more training, Congress should look to the Internal Revenue Code. As things stand, firms can only deduct around $5,000 from efforts to upskill their workers. What’s more, those funds cannot be spent on programs that prepare a worker for a new role or line of business. A larger cap and a more flexible mandate make a world of sense in the Portfolio Economy.

Next, Congress should get creative and explore means to revive the sort of apprenticeships that helped Americans quickly join new fields. For starters, Congress should revise the Trump Savings Account program created by the One Big, Beautiful Bill to allow workers to withdraw their funds early for qualifying apprenticeships. Legislators should also task the Department of Labor with issuing guidance to employers seeking to offer apprenticeships with income-sharing agreements (ISAs). If the apprentice leaves the firm soon after their training, ISAs will ensure the training firm is not left without some degree of financial compensation. These and related policies will make it easier for firms to develop and offer robust training initiatives.  

More generally, it’s time for the U.S. to champion the idea of Entrepreneurial Liberty. Americans can thrive in the Portfolio Economy if they enjoy the freedom to study at institutions — private or public, formal or vocational — from pre-K to pre-AARP age, the freedom to shadow through new apprenticeship and trainee models, and the freedom to work in flexible, temporary arrangements. If Congress shapes its agenda around those three freedoms, then America will extend its reputation for being the first to the future, rather than becoming the last place to move on from the past.

Kevin Frazier is the AI Innovation and Law Fellow at the University of Texas School of Law and co-host of the Scaling Laws podcast.