Every major technological revolution has ripple effects: second- and third-order consequences that create entirely new industries. AI will be no different.

The displacement of labour by AI is both a massive productivity opportunity and a societal challenge. History reminds us that while technology eliminates some roles, it also creates new categories of work that were previously unimaginable.

In the 1990s, the world of finance was still largely paper-based. Secretaries, print shop workers, fax operators, and bicycle couriers spent their days moving documents around because email didn’t yet exist. When that work disappeared, those people didn’t vanish with it, finding new jobs in industries that barely existed before. Cafés, gyms, and personal training exploded in the following decade, creating millions of new roles in the service economy.

AI will bring a similar transformation. The industries that emerge to absorb displaced talent will look very different from those that came before.

New industries, new supply chains

As an angel investor, I expect to see founders pitching ideas that address these second- and third-order effects and the ecosystems that grow around newly created industries.

Just as the early internet created secondary booms in logistics, payments, and digital marketing, AI will spawn its own layers of infrastructure and services.

While angels might not invest directly in the next generation of cafés or gyms, there will be investment opportunities in the supply chain around them:

• AI-driven point-of-sale and order-taking systems.
• Workforce management and scheduling tools for new types of businesses.
• Consumer comparison apps for next-generation products and services.
• Local automation solutions that enable small businesses to operate with fewer people but higher margins.

The key is to recognise that innovation doesn’t stop at the technology layer — it propagates through society, reshaping consumption, work, and lifestyle patterns.

The investor’s lens

For angels, this means thinking beyond direct AI applications and looking at the knock-on effects.

Questions I ask myself include:

• What industries will exist because of AI that don’t exist today?
• What new pain points will those industries create?
• Which of those pain points could be solved by a software, data, or platform layer?
• Where will displaced talent flow, and what will they demand as new consumers or small business owners?

By investing one layer out from the obvious – in the enablers, infrastructure, and support ecosystems – you can capture outsized returns from the ripple effects of AI adoption.

Capitalising on displacement

Technological revolutions always create second and third waves of opportunity. The early returns go to the pioneers, but the lasting wealth often comes from those who understand the ripple effects.

AI will change how we work as well as what we do. And the entrepreneurs who recognise those shifts early will build the next generation of products and services that society doesn’t yet know it needs.

For angel investors, that’s where some of the most surprising and enduring returns will come from.

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