Exponential Technologies

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The concept of exponential technology that is championed by Ray Kurzweil and Singularity University is surprisingly simple and powerful. It also quite consistent with the experience of reality. It also seems to apply at a more fundamental level of technology trends that Gartner’s Hype Cycle or similar concepts.

An exponential technology is one that improves exponentially. That is to say, it doubles in a fixed period of time. An exponential technology appears as a straight line in a logarithmic plot of performance against time. The most typical example of an exponential technology is computing power, which seems to follow Moore’s Law and has doubled at the same price each 2 years approximately over the last 100 years. The key insight behind Singularity University is that with digital technology being embedded in most other technologies, exponential improvement applies to them.

Price performance of computing over the 20th Century. From Ray Kurzweil

When a technology is exponential we get a performance curve that is difficult for humans to understand. The human brain and its forecasting systems are optimized for linear prediction. That is what works when escaping lions, playing soccer or driving a car. So when we find ourselves against an exponential curve we make predictable mistakes in the line of Bill Gates famous quote: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”

Linear vs. Exponential. From Monitor Deloitte

This creates three distinct phases with respect to exponential technologies that makes us fail to capture their benefits in different ways:

  • Hype and disillusionment in the long beginning. In the beginning, exponential works a lot slower than linear. The doubling base is small and it takes a lot of doublings to rise out of obscurity. During that time our linear brain keeps predicting a much faster pace and getting sadly disappointed much in line with Gartner’s Trough of Disillusionment“. This is the phase in which we confidently disregard technologies and experimentation. However, like they say in Singularity University if you want an overnight success look for something that has been a failure for the last 20 years.
  • Missing out the i-Phone moment. When the lines cross we fail to see something momentous has happened. For our brains, there are no watershed moments, just continuous linear improvement. So when the technology is ready and a doubling will be massive there is just a huge silence, we miss it. The best example of this is when Steve Jobs saw that the technology was finally ready for what has become the smartphone. Touch interfaces had been pioneered by technologists from the 80s, and had been a continuous stream of failures. Jobs saw technology was ready for consumers and positioned himself while Nokia and Blackberry continued to think linear progress wouldn’t bring fundamental change.
  • Chaos and amazement in the later stage. Once the line has crossed linear expectation it quickly moves beyond our wildest dreams very quickly. If we have just a 3 cycle old understanding of the technology we might be an order of magnitude wrong about what it can do. Our imagination will be inadequate to forecast what can be done with the technology in just a short period. The story most often told about this stage is that of the inventor of chess, his request of a grain of rice and a doubling of it with each square on the chess board and the consequences in the second half of the chessboard (bankruptcy for the emperor or beheading for the inventor depending on the teller).

To counter these human limitations I have found it is useful to map where you believe the technologies are right now (see the map here), look for the i-Phone moment in each of them and then extrapolate performance based on trends. For example, if we take computing and storage, an equivalent to the iPhone 7 should cost less than $1 in 2030. What could you do with a disposable iPhone? How can you change your processes? Where can you plug in technology that currently is not feasible?

Exponential progress of computing, digital transmission and storage. From Monitor Deloitte