Why human empathy becomes the ultimate advantage as AI commoditizes intelligence

Aubrie Pagano, General Partner at Alpaca VC, has introduced the “Aquarius Economy” framework to describe how artificial intelligence is fundamentally reshaping the nature of work and human value. The concept envisions a future where intelligence becomes cheap and abundant, forcing humans to demonstrate their worth through uniquely human qualities like empathy, creativity, and intuition rather than technical efficiency.

What you should know: The Aquarius Economy represents a shift from efficiency-based productivity to what Pagano calls “Spirit-centered” leadership and work.

• McKinsey, a global consulting firm, reports that 78% of global companies are already using AI, while over one billion people worldwide use standalone AI platforms monthly according to Datareportal, a digital analytics company.
• Pagano argues that as AI automates optimization and execution, human comparative advantage moves from technique to Spirit—the uniquely human qualities that can’t be replicated by machines.
• “The danger in the Aquarius Economy is not that AI replaces humans, but that we forget what makes us irreplaceable: the Human Spirit,” Pagano writes in her new white paper.

The big picture: This economic transformation redefines human agency through three core beliefs derived from positive psychology.

• Efficacy: “I can do things”—the belief in one’s ability to act and make an impact.
• Optimism: “There are fruits to my labor”—confidence that efforts will yield meaningful results.
• Imagination: “I can dream up many things to do”—the capacity for creative thinking and innovation.

How leaders should adapt: Companies must redesign their approach to balance AI efficiency with human connection and creativity.

• Redesign roles for augmentation, not elimination: Use AI for repetitive tasks while redeploying saved time toward mentoring, innovation, and relationship-building.
• Invest in connection as a benefit: Create “loneliness insurance” through peer support programs, sensory wellness spaces, and guaranteed check-ins during major life moments.
• Reward creation from nothing: Recognize originality, emotional labor, and care while nurturing out-of-the-box intrapreneurship.

Why this matters: The transition period poses significant risks that require careful leadership to navigate successfully.

• Many early-career, service, and administrative positions will disappear faster than new roles are created, potentially deepening workplace inequity.
• Without proper guardrails, AI adoption could create divides between high-agency insiders who direct systems and everyone else who’s directed by them.
• “Businesses and leaders that refuse to evolve will lose to high-agency teams using near-AGI intelligence to force-multiply their impact,” Pagano warned.

What they’re saying: Trust between humans and AI systems remains a critical challenge that organizations must address.

• “There are still trust issues within Agent-to-Human protocols,” Pagano explained, referring to how people and AI systems coordinate their work together.
• “The best way to nurture agency is to not over-rely on AGI to originate efficacy in the first place. We have to create avenues for higher-order thinking to emerge.”
• She advocates for leaders to resist “letting pure rationality and optimization dominate all organizational considerations.”

The future of value: As intelligence becomes commoditized, Pagano predicts status will shift from material accumulation to spiritual contribution.

• Worth will be measured by one’s ability to create original thought, generate genuine empathy, and build authentic relationships.
• The most respected leaders may be those who generate new ideas, nurture community, and help others grow rather than those who simply maximize output.
• This challenges organizations to expand their definition of productivity to include imagination, empathy, and trust alongside traditional metrics.