iDisrupted

http://www.popularmechanics.com/technology/engineering/news/inside-the-future-how-popmech-predicted-the-next-110-years-14831802

Prologue

This time it is different.

Time, that’s what it takes. Technology that can change the world in a dramatic fashion does not come into this world fully formed like Athena from the head of Zeus. It can take years, even decades before the new technology grabs significant market share for itself.

Colour TV was first introduced into the US in the early 1950s. It was not until 1972 that sales exceeded those of black and white televisions. Take the story of cassette recorders, VCRs, record players and even of black and white TVs themselves; the story from market inception to dominance was similarly elongated.

While it takes time for new technology to gain market traction, cynicism in its relevance grows. Lee DeForest – self-styled inventor of the radio, and whose inventions it is said made radio broadcasting possible – is reputed to have opined: While theoretically and technically television may be feasible, commercially and financially it is an impossibility.

Compare this to recent technological developments. Apple launched its iPod in November 2001. By April 2007 the company had sold its one hundred millionth unit.

New technology – so-called disruptive technology, such as the iPod, smart phones, eBooks and tablets – is not subject to the time constraints that dominated the technology market place throughout the 20th century.

Other technologies in the pipeline will see extraordinarily rapid development. The product cycle from early adopter to market maturity is set to become compressed.

Innovations and developments, such as 3D printing, nanotechnology, robotics, artificial intelligence, virtual reality, genetics, stem cell research, new materials, and technology for promoting a sharing economy, are likely to change the world at a pace that has no precedent. This time it is different.

In one key respect, however, it is much the same as always. Cynics continue to abound. In 1876, Sir William Preece, chief engineer of the British Post Office, said: The Americans have need of the telephone, but we do not. We have plenty of messenger boys. In 1899, the eminent British scientist Lord Kelvin said: Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax.

Most infamously of all, in 1943 Thomas Watson, chairman of IBM, is supposed to have said: I think there is a world market for maybe five computers.2

This time it is the same as ever. The doubters are everywhere, and their cynicism will prove costly.

Disruptive technologies may be able to create wealth on an unprecedented scale – and it is certain that many entrepreneurs and their backers will enjoy wealth beyond anything they had expected – but it will also disrupt. Many companies will go out of business. Giant companies that once loomed above the business landscape like Californian Redwoods will fall.

That’s evolution – there are winners and losers. Part of the purpose of this book is to shed light on who those losers may be, and what – if anything – they can do to avoid this fate.

Then there are economic implications. Boom or bust or both may result from certain technologies. Alas, neither economists nor policy makers seem aware of the perfect tempest coming their way.

Disruptive technology may provide a feast for many. It could even provide a helping of fine living for most of us. But some will lose out. Some will be left asking: What happened to my company, my investment, my job?

But it doesn’t have to be bad news. If we play it right, the result of the technological innovations that are afoot will be a kind of economic utopia. Poverty will be ended; we will all live longer and have the potential to be healthier. Technology does not have to replace us; it can enhance us. But we first need to understand what is happening, why it is happening, and recognise both the dangers and opportunities associated with it. Then we can adapt and embrace it.

Part one and introduction

We begin with Apple. The story of this company illustrates a key point of this book. When technology isn’t quite good enough or powerful enough to offer popular consumer applications, it can look disappointing and over-hyped. But technology progresses, and once it makes that tiny step from being not quite good enough, to being just good enough, things can change dramatically. Technological progress can fall into three phases: the hype phase, the sceptical phase (as we react to what appears to have been unrealistic promises of the previous phase), and then the transformational phase, as previous innovations converge, create wealth, and – in the case of the period we are set to enter – lead to an acceleration in innovation. We are poised to enter the greatest transformational phase ever. Cynics have become fixated, however; they remain stuck in the sceptical phase.

Chapters one and two look at theory and history. We work forward from creative destruction, look at economists such as Robert Gordon and Tyler Cohen, who doubt the significance of technology, and move on to the idea of ‘free’, into the dream of utopia. In the chapter on history, we tot up how many of the world’s largest companies in the early 20th century are still with us today, and look at the most important innovations ever.

Chapter three is a tease, and a bit of fun. Forward wind the clock 30 years, and what will we then say are the most important innovations ever? Here is a clue: many of them are brand spanking new.

Chapter four looks at technologies, and developments that are making new technologies possible; from Moore’s Law, to MEMS, robots, graphene and virtual reality. These are the technologies that provide the foundations for the greatest changes ever seen in the story of our species.

Part two

This part looks at the unravelling of technology, the sharing economy, and how the Millennial generation is different.

It looks at the next industrial revolution and the one that will follow. The first will be charged by the internet of things, robotics, 3D printing and innovations in energy. The second will follow so soon, it may even merge into the first, but this will be extraordinarily dramatic. Nanotechnology and artificial intelligence will change the world more completely than all the innovations of the last 200 years put together.

This part finishes with healthcare. Those who are stuck with their sceptical view of technology have a shock coming their way. Technology is set to transform us, making us healthier and longer lived, and even the war against bugs, which antibiotics seem to be losing, may yet be won.

Part Three

In the third part we look at disruption: and disruption in four ways:

Part four

And finally we conclude: what can we do?

What can businesses do to survive? What can policy makers do to save jobs? What can educators do to ensure we master technology rather than letting it master us? What can we do to ensure we and our children have a job in 20 years’ time? What can we all do – that’s us, the human race – to ensure there is still a human race in 30 years’ time?

Bear in mind

It is human nature. We overestimate how quickly technology will develop, and underestimate its final impact. Technology has and will continue to disrupt business, the economy, workers, our health, and above all what it is to be human. Nothing is more important than understanding these issues.

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2 This quote may be apocryphal.

Introduction

It seems incredible now that the world’s largest company almost went bust ten years ago. Before that, it had to seek help from the enemy in order to survive. Apple aficionados said the company had sold its soul when in 1997 it was forced to date and then sleep with Microsoft. On 6 August 1997, their despair was palpable when, on the occasion of an Apple PR spectacular at the Mac World Expo in Boston, the words of a certain William Henry Gates (more commonly referred to as Bill Gates) echoed across the room like screechy brakes, apparently heralding the end of Apple’s reign as the world’s leading non-Microsoft compatible PC company.

It was a bitter-sweet year. January of 1997 saw the return of the prodigal son, as Apple’s co-founder Steve Jobs returned to the fold after years of enforced exile. But the prodigal son becoming the "de facto head" was seen as scant consolation on that auspicious day in August, when, as far as Apple fans were concerned, the devil walked amongst them. On one hand, the Apple faithful gave thanks for the return of Jobs; on the other hand they lamented the deal with the giant software company from Seattle. They spat venom at the very idea that MS Office was to run on Apple computers and Internet Explorer was to be the default browser for Mac OS for five years.

The new look Apple (then known as Apple Computers) with its reappointed head, enjoyed something of a recovery. In October 1998, it was able to announce its first profitable year since 1995, but the company continued to dice with failure. In the year 2000, Apple enjoyed a market capitalisation of nearly US $19 billion, but that was the year of the dotcom bust. By the first quarter of 2003, its market cap was $5.33 billion. During the post dotcom boom, investors across the world seemed to give up on the idea of technology companies altogether; Apple was seen by many as yesterday’s company, living off former glories.

Ten years and an iPod, iPhone and iPad later, Apple was valued at a fraction over half a trillion dollars (as of 17 December 2013, with a market cap of US $501 billion, according to Yahoo finance). To put that in context, the world’s second largest company by market cap was Exxon Mobile, worth US $424 billion.

The speed of the recovery and the turnaround is remarkable enough, but one question lurks: how did the company achieve it?

It appears that at least one factor, maybe the most important factor, is that change in technology made the Apple renaissance possible. This is an important theme of this book. When technology is not up to the tasks we demand of it, it is easy to become cynical, to adopt a dismissive attitude, claiming that it will take years and years before certain ideas become a possibility. But different technologies can converge, and technology’s march forward is relentless, and just a few minor developments in technological power mean that dreams suddenly become possible.

You would have expected John Sculley, the man who replaced Steve Jobs at the top of Apple in the 1983 only to be effectively forced out of the company in 1985, to be bitter and twisted about Apple’s famous co-founder. Despite the circumstances of his leaving, however, Sculley appears to have nothing but praise for the man who many saw as his arch nemesis. In an interview with Cult of the Mac, while Jobs was still alive, a magnanimous Sculley explained the Apple turnaround as follows:

For someone to build consumer products in the 1980s beyond what we did with the first Mac was literally impossible, said Scully, but then he suggested that by the 1990s things began to change. At this point it was at least possible to get an idea of where consumer products were going. Scully said the key to this being possible was Moore’s Law and… the homogenization of technology. It changed with the dawn of the 21st century, when the cost of components, commoditization and miniaturization coincided to make things possible. Scully said: The performance suddenly reached the point where you could actually build things that we can call digital consumer products.

To try to summarise a very long interview with Sculley in a few words: Jobs was obsessive about design; he loved the way Sony built consumer electronics, and had an idea for turning computer technology into beautiful design – beautiful to look at and to use. However, during the 1980s and 1990s, his ideas were too ambitious. It was not possible to apply his idea of design to technology that was clunky, unwieldy and which frustrated users to the point of despair with its technical short-comings. But as we moved beyond the year 2000, in the aftermath of the dotcom crash, things changed. Technology suddenly became advanced enough to turn Jobs’ vision into reality, and a brilliant plan unfolded. However, it was a plan that simply could not have gained traction a few years earlier.

Technology is like that. When it reaches a stage of sufficient power, it can help to promote a sudden explosion in creativity. It can also make ideas of the past that had seemed unrealistic, both possible and practical.

See it like the super cooling of water. It is generally believed that water freezes at zero degrees centigrade. This is not so. Ice melts at that temperature, but if it is pure and undisturbed, liquid water can remain in its liquid form at temperatures as low as minus 40 degrees. But when liquid water is super cooled in this way, something very interesting happens. When the pool of water begins to freeze, it does so immediately. There is no intermediate step; all the water that is being super cooled is either liquid or ice. Relatively speaking it is like that with technology. As long as it is not sufficiently powerful to provide certain key benefits, it appears to be clunky, cumbersome, and predictions of swanky future uses of technology seem to be stupid or naïve. But once the technology gains a certain critical mass in its capability, the applications taking advantage of it can explode onto the market. It seems to be human nature to overestimate how quickly technology will change, but to underestimate the effect it will have. It also appears to be human nature to become disenchanted with technology just before it reaches the transformational stage. During the dotcom boom, the human trait of over-exuberance led to wild forecasts about how rapidly the internet would change the world. You could say this is the exuberant, or hype, phase. In the aftermath of the crash, to many people, investors especially, the words internet or dotcom appeared to be synonymous with hype. You could say this was the sceptical phase. But the extraordinary rise of Apple that then followed showed how such cynicism was misplaced. Apple’s turnaround occurred as we entered the transformational phase.

To put it another way, for years many looked on and thought Apple seemed to be crawling into a pool of despair, but when technology converges and reaches a certain level of power, ideas and brilliant applications can shoot out of that pool, like Thunderbird One from the Tracy Island swimming pool.

The sceptical view of technology

We all get frustrated by technology. Indeed, it appears it can test our temper. One in three British computer users admitted that slow-processing PCs put them in a bad mood for the rest of the day, and 29 per cent said they lost sleep over the issue. The research, produced by Sandisk, also found that in Italy 6.8 days a year of productivity was lost due to slow computers, while 4.9 days a year were lost in the US.

Then there’s traffic. There may be someone out there who enjoys being stuck in a traffic jam, who deliberately goes out of their way to find one, but on very rare occasions, if there is something good on the radio perhaps, a traffic jam can be a positive thing. However, any kind of delay caused by traffic usually turns our mood foul.

Add poor signals on our mobile phones to the list of gripes about technology. How many conversations have you had that have been repeatedly interrupted by signal failure?

More alarming than technology rage is the view that in some respects it may have gone into reverse. Take the quite terrifying prospect of antibiotics losing their effectiveness. There are some who believe the discovery of penicillin was the single most important discovery of the 20th century, but over-use of antibiotics, especially in agriculture (80 per cent of antibiotic usage is accounted for by agriculture in the US), has led to the evolution of antibiotic immune bacteria – so-called super-bugs. The World Health Organisation estimates that on average antibiotics add 20 years to our lives, so imagine what will happen if they lose their effectiveness. As Gillian Tett wrote in the Financial Times: We are moving towards a world where, within a generation, the drugs simply may not work anymore. Modern medicine could lose the ability to combat many illnesses or infections. She added: This sounds so horrifying it seems hard to imagine.

Professor Richard Smith and Joanna Coast said in the British Medical Journal: An increase in resistant organisms coupled with a big fall in the number of new antimicrobial drugs suggests an apocalyptic scenario may be looming. They also said: From cradle to grave, antimicrobials have become pivotal in safeguarding the overall health of human societies.

And just to really terrify us they gave us an anecdote to illustrate the problem. The current infection rates for patients undergoing a hip replacement are 0.5 to 2 per cent, but without antibiotics, infection rates will soar to 40 to 50 per cent, and about 30 per cent of those infections will be fatal.

The idea that antibiotics are losing their effectiveness conjures up an image of us returning to the Victorian age; a time when childhood fatalities were expected, were a regular part of family life, and indeed death. It also makes us question whether we are really any better off.

The economist Robert J Gordon seems to draw similar conclusions, but from a different perspective. He calls it the New Yorker game, after an experiment carried out by the New Yorker publication. It commissioned someone to watch TV for a week and then write about it. The commissioned writer said: I was so struck by situation comedies of the 1950s, the reruns, how similar their lives seemed to today. Gordon asks us to imagine what life was like 30 years ago, and then to imagine it 30 years before that and keep going back in 30 year intervals. He says the changes between now and the early 1980s are not that great. The changes between the 1950s and 1980s, he says were modest too. But between the 1920s and 1950s lifestyles were transformed. The transformation was even more radical, he says, between the 1890s and 1920s.

Or consider it another way, he suggests. Imagine you have two choices. In one option you have technology circa 2002, complete with Windows ’98 PCs. In the other you have iPhones, and tablets, and Facebook, but you lose indoor toilets and hot and cold running water. Which option will you select?

The answer is obvious says Gordon, who claims that of all possible innovations, those that can change lives in a profound way have already been invented. We are left with smaller things. iPhones may offer superior functionality to the mobile phones of the late 1990s, tablets may be preferable in many respects to a Windows ’98 laptop PC, but the changes are not profound; they are not like they were when we learnt how to deliver hot and cold running water, electricity, the motor car, and air travel.

Another economist, Tyler Cohen, has a similar idea. He suggests we have picked the low hanging fruit of innovation, and from now on innovation is going to get harder. He cites the internet as an example. He says it has been great for satisfying the curiosity, for those who want to fill their brains with ideas, but he argues the internet has done very little to raise living standards.

Both Gordon and Cohen consider the extent to which growth has stagnated in the West in recent years; how living standards in many cases have not risen at all. As the Nobel Laureate Joseph Stiglitz says, median income today in the US is no higher than it was 25 years ago.

Writing in 2011, Cohen hailed what he called The Great Stagnation. The era of rapid growth was over he suggested. The implication was that only countries with scope for technological catch-up could look forward to a growth rate that was anything like the level we used to enjoy in the west.

Both Cohen and Gordon say the golden ages of innovation are in the past. Gordon talks about the innovation of steam, cotton spinning and railroads between 1750 and 1830 and then the second great era of innovation between 1870 and 1900, which saw electricity, the internal combustion engine and running water – thanks in part to the innovations of indoor plumbing.

In contrast, says Gordon, the computer and internet revolution kicked off around 1960, peaked in the late 1990s, but any resulting growth has fizzled out since then.

It is a fascinating, but not commonly understood, matter of fact that economic growth per capita was virtually non-existent until the 19th century. Your average peasant in 1820s Britain was only marginally better off than his equivalent at the time when the Romans left.

Take this chart.

So the question is: will growth from 2003 carry on from the level we saw after 1973, or will it return to the higher level seen post 1950, or will it return to the usual level seen by most of the last 2,000 years?

Gordon and Cohen appear to be suggesting that growth will stagnate, although Cohen only sees this as temporary. He is more optimistic than Gordon is about the longer term.

The essence of their argument is that much of the innovation we have seen in the last few decades have been more fun than useful. iPhones are great, but have they really transformed lives?

They then point to data to back-up their assertions: productivity growth has slowed. How can you explain such a slowdown without suggesting that the benefits of new technology are exaggerated?

The optimistic view

Economics is often known as the dismal science, and Robert Gordon seems determined to make sure that this nomenclature is justified.

Many economists disagree with his diagnosis, however. The most well-known of these is Paul Romer, an economics professor from Stanford University. He reckons we will carry on innovating until the sun explodes. So that means we have five billion years or so of progress ahead of us, which is long enough to outlast even the healthiest reader of this book. Romer says: Just ask how many things we could make by taking the elements from the periodic table and mixing them together. There’s a simple mathematical calculation: it’s 10 followed by 30 zeros. In contrast, 10 followed by 19 zeros is about how much time has elapsed since the universe was created.

The law professor Yochai Benkler argues that collaborative projects such as Wikipedia are helping to stimulate a new technological revolution. He says: By disrupting traditional economic production, copyright law and established competition, they’re paving the way for a new set of economic laws, where empowered individuals are put on a level playing field with industry giants.

Stuck in the sceptical phase

The danger that antibiotics may lose their effectiveness is indeed scary, but we are not without hope. Indeed, there are reasons to believe we may be on the cusp of winning a decisive victory over disease, particularly in those conditions previously thought incurable. As Oscar Pistorius showed, it is now possible for a man with no legs to run the 400 metres in 46.25 seconds. As we will read later in the book, cures for cancer, and both Alzheimer’s and Parkinson’s disease beckon. Some claim that scientists are on the verge of slowing down the ageing process. And that dichotomy – the fear that antibiotic immune diseases may send us back to a Victorian type of existence, versus the hope that technology – will transform medical science, seems typical.

There are dangers in technology. It is indeed possible that its negative effects will outweigh the positives. It is not hard to envisage, as a later chapter will show, circumstances in which technology creates conditions that are even more terrifying than antibiotics losing their effectiveness.

And those who dismiss technology; those who say progress is slowing down, are making a mistake, and furthermore, it is potentially a very dangerous mistake.

The authors and contributors to this book believe that to claim technology peaked in the late 1990s is, quite simply, absurd.

It is true that technology does not always advance in straight lines; sometimes certain applications can be left behind. It is unlikely that motor cars driven by humans will ever travel much faster than they do at present. But that does not mean it will not be possible to travel from one location to another any faster than we do at present.

Those who say technology has peaked are stuck in the sceptical phase of innovation. They are guilty of viewing the world through constricted lenses. It is as if they view the world from the wrong end of binoculars.

Romer and Benkler are right; modern technology is making other technology possible. The rate of technological progress is not slowing down; it is accelerating. Disappointing economic performance and the widening of the gap between the very richest in society and everyone else is not a symptom of technological progress abating. The relationship between technology and wealth creation is complex. On occasions, it can fool us into thinking it’s not creating wealth, but never fall into the trap of looking at the present, and projecting forward as though things will not change. It is even possible that a blinkered attitude to technological progress is the cause of much of the world’s recent economic troubles.

It is not that Robert J Gordon and Tyler Cohen don’t make important points: they do. Many of the problems to which they allude are real; it is just that the overriding theme of each of their respective theses is based on a false assumption.

We have not picked the low hanging fruit; rather technology presents the opportunity to step into an orchard of the ripest and sweetest fruit imaginable. The dotcom boom did not represent the peak of new technology. It was little more than a minor bump in the approach road to the towering mountain that is the technology which is due to follow.

Consider for a moment how technology has accelerated in recent years.

Acceleration

Today, a new automotive design cycle is typically 24 to 36 months, whereas five years ago it was nearer 60 months - or so an automobile consultant quoted in the Harvard Review says. 25 years after the launch of the telephone, market penetration in the US was just 10 per cent. It took 39 years to obtain 40 per cent penetration, yet smart phones obtained 40 per cent penetration within ten years. Compare this with the time it took for the televisions to emerge from launch to market saturation.

Be careful how you interpret this story. The elongated time period related to, say, electricity or the telephone has much to do with infrastructure. Wireless internet access, for example, is growing in popularity more rapidly in part because it needs less infrastructure, fewer roads to be dug up. Google is conducting research into offering internet access via balloons floating high in the atmosphere, sending out bandwidth over huge distances with minimal construction required. The market penetration of the World Wide Web was very rapid. It was developed by Tim Berners Lee in 1989. But the World Wide Web is just one facet of the internet; this was initially developed by ARPAnet in 1969. It took the application of the World Wide Web before the mass market took an interest in the internet. Maybe the introduction of broadband accelerated adoption, and the combination of wireless internet access with smart phones and tablets may have led to a further jump. Further internet adoption may follow as we move towards the internet of things, wearable technology, and - beyond that - interfaces that link the brain directly to the internet.

Disruptive effect

From a certain perspective, technology can be seen to have had a negative effect. Take Eastman Kodak. It was one of the world’s largest companies throughout the course of the 20th century. It went on to become a pioneer of digital photography, but within a few years of the 21st century, it went bust.

Take this somewhat unscientifically produced chart:

According to the 1,000 Moments web site, the total number of photos taken ever is 3.5 trillion. A presentation given by Yahoo predicted that no less than 880 billion photographs will be taken in 2014. According to NPD, The percentage of photos taken with a smartphone went from 17 per cent in 2010, to 27 per cent in 2011, while the share of photos taken on any camera dropped from 52 per cent to 44 per cent. Actually, it seems quite surprising that the number of photos taken with smart phones is that low, but bear in mind that the research was conducted in 2011. Yahoo’s prediction was for 2014, and when it comes to anything digital, three years can seem like a lifetime.

It is Eastman Kodak’s tragedy that its own business model imploded just as the markets it had dominated for so long saw levels of usage that dwarfed what we had seen before. If someone in the year 2000 could have somehow got hold of data showing the growing popularity of photography over the next decade and a half, it is surely unlikely they would have forecast the demise of Kodak.

Maybe this is why the link between technology and economic growth is not clear. Technology creates new opportunities, but it disrupts too. Sometimes it can offer new benefits at a fraction of the cost one would have previously paid for inferior benefits.

Cameras in smart phones may be technically inferior to premium cameras, but they are superior in one all-important respect. Most of us have our phone with us all the time, and taking a photograph with our phone is becoming as automatic as checking our watch for the time once was. They are superior to traditional cameras, because of their convenience, yet their cost is tiny. We take more photographs than ever before, yet the cost of developing them and sharing them with our friends is virtually zero. The incremental cost of our smart phone having a camera is small. Consider how much more convenient photography will become with the advent of wearable technology, such as Google Glass and smart watches.

Thanks to smart phones, in one respect we are richer. The story of our lives is now illustrated with more photographs, which are easier to access, and easier to share than ever before. Yet we pay virtually nothing for this benefit. As sales of digital cameras fall, the revenue generated by the photography industry in terms of camera sales and photographic development falls. Maybe it is not so much that new technologies do not generate wealth, but that GDP is no longer an adequate method of valuing our wealth when we receive so many benefits free. Imagine a world in which – thanks to future technology – food, energy, clothes and shelter are so plentiful that they are free. We would surely be better off, but economic statistics may suggest that GDP had declined.

Recent technologies, such as digital music players, smart phones, tablets, e-readers, and – looking forward – smart watches, and other wearable technologies (such as Google Glass) are changing the world. They may well make us better off but this may not be reflected in GDP.

Thanks to smart phones, how many of us still use maps? That is to say old fashioned maps on paper, which are incredibly hard to fold back to their original shape once you have opened them? It is not as if the mapping industry isn’t worth big bucks. In 2011, Nokia paid $8.1 billion for NAVTEQ, a provider of Geographic Information Systems, but as far as the