When it comes to the economy, economists are a little pessimistic. Many believe that humanity is reaching the limit of possible gains from the material world. There’s only so fast a train can go or a person can type. Eventually, we will hit a physical wall for what’s materially possible – and we’re getting close.
But when you look at a chart of technological innovation over the last two centuries, you gain a different perspective. The number of emerging technologies today outstrips anything we’ve seen in the past.
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In the 19th century, for instance, major innovations included the steam engine, railways, and internal combustion engine. In the 20th century, we got the telephone, automobile, electricity and computers. So far in the 21st century, we are coasting on the effects of the internet. But from this decade onwards, we are going to see the emergence of new technologies that could radically change everything about the world. As with all new technologies, relatively few people are aware of the impact that they could have. But their effects on the economy are likely going to be tremendous – probably more than any of the innovations that came before.
In this post, we take a look at some of the platforms that are going to grow the future economy and why they’re exciting. These have three main properties that you should know about.
- Dramatic cost declines: All of the technology platforms we discuss below are going through a process of rapid cost decline. That means that we’re transitioning from a situation where very few people can afford them to the stage where they will become cheap. Cost falls follow Wright’s law which says that as demand follows a critical threshold, price collapses and production increases in tandem.
- All sectors and geographies: The internet and electricity penetrated all geographies. So too will the technology platforms we discuss below.
- Platform for innovators: Finally, these sectors we discuss here serve as additional platforms for innovation. Just as electricity and the internet were innovation platforms, the following technologies will also provide opportunities for keen entrepreneurs.
So what are these major innovations? And why should we be so excited about them?
Over the last ten years, the progress in artificial intelligence has been nothing short of miraculous. The idea that a piece of software could recognize images seemed like a long-shot in the past. But today, it happens all the time. Smartphones, for instance, can tell the difference between a face and the rest of the environment.
All this improvement was possible because of how computers changed. The basic programming for such systems had been around for about forty years. But nobody pursued it because it was too computationally intense. With the miniaturisation of technology, though, that’s all changing. You can now run AI algorithms on regular PCs – you don’t need a giant server room. And that means that it is becoming increasingly worthwhile investing in the technology.
Artificial intelligence is a platform because of how it will be able to replace tasks done by people. Eventually, machines will do nearly every rote or menial task. And if the technology continues to improve, entrepreneurs will find all sorts of new applications for it.
Thanks to machines, mass production is making the delivery of the majority of goods cheap for consumers. Electronics, household cleaning products and toys are all relatively cheap. But the same is not true of human-delivered services.
But that is going to change with artificial intelligence. Hiring a lawyer in the future, for instance, might be as cheap as sending an email if a computer can do all the cognitive work for them. The same goes for getting a taxi. When a machine can drive a car, there’s no need to pay a driver. And that could bring down the cost tremendously.
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Energy storage is another major platform ripe for development over the next ten years.
Green energy isn’t perfect. It actually creates many practical and environmental issues of its own. However, the biggest thorn in its side is the inability to store energy once produced. A solar farm simply collects energy from the sun and distributes it to the grid in the proportion it receives it. It can’t adjust to demand.
But with energy storage, that problem disappears. The solar farm or wind turbine collects energy when abundant, sends it to a battery, and then the battery becomes the de facto power plant, supplying energy to the grid in proportion to needs.
Yes – there are potential problems if the battery isn’t big enough – especially in winter. But there are clever ways of overcoming this, such as diversifying power supplies, using hydro storage and energy saving during the late weeks of the winter.
Energy storage isn’t quite ready for prime time because of the inherent limitations of lithium ion cell technology. But it won’t be long before solid state cells make an appearance. And they will offer lower-cost, higher-capacity solutions.
Advances in artificial intelligence are leading to a new generation of robotics technology. In the past, machinery would simply follow a pre-selected program. It wouldn’t be able to deviate from the plan. But thanks to AI, robots are getting a degree of independence. For instance, there are now robotic arms that know if they’ve bumped into a person, avoiding on-the-job injuries. There are also machine arms that can pick up specific items – like a green brick in the box full of red ones.
Near-term, the place where we are likely to see the most advances is in the area of drones. Already, models like the Mavic Air 2S are using the latest smartphone and camera technology. But in the future, they are likely to become the tool of choice for businesses looking to deliver parcels to customers in the local area for less. Deliveroo, for instance, might be able to use drones instead of bikers to send people their meals.
The economic gains from robotics are, again, spectacular. If robots can get smart enough to pick up parcels and deliver them to the correct location (as is currently happening in many e-commerce warehouses), they could save a tremendous quantity of human labor.
So far, we have spoken mainly about technologies that affect the external world and make production more efficient. But DNA sequencing is a technology that hits a little closer to home.
Thanks to gene editing and writing technologies, humanity’s capacity to manipulate biology is going to change. Within 20 years, scientists will be able to create practically any model organism they like, from the ground up. Already, they’ve created the first synthetic cells. And this capability is only going to accelerate. Regulations won’t work to stop it in the long-term.
What this means for human life is hard to fathom right now. We could be looking at a future where we don’t have to grow old and die, like thousands of generations that have come before.
DNA sequencing is a technology platform because it provides gains across practically all sectors. For instance, in agriculture, we could see the development of new types of crops that improve yields. We could also see the elimination of many genetic diseases. In fact, this process is already underway.
There are other places where gene technology could show up. For example, gene-edited humans, plants and animals could safely voyage through space, less affected by radiation. We could also see the creation of life that could survive on the surface of other planets, such as Mars. For instance, scientists could modify algae and lichen to carry out their life processes many degrees below freezing.
The final and perhaps strangest technology of the current crop is blockchain. This advancement has the potential to change the way humans conduct trades.
Block chain is a little challenging to describe. But essentially, it takes the risk out of transactions and negates the need for gatekeepers.
For instance, for the last three hundred years, the banking system has been the trusted guardian of people’s accounts, keeping score of who owns what.
But with blockchain, you won’t need an intermediary to settle accounts – the blockchain network will do it for you. That means that, effectively, you can get rid of the banking system entirely and simply perform tasks on the blockchain in a trustworthy environment. It seems like science fiction, but it’s also possible.
The effects of this technology on global trade are going to be profound. International clearing is going to become a thing of the past once bitcoin and other cryptos find their feet. Nobody would choose to use the more expensive method.
So, the news about the economy appears to be good overall. The next twenty years look as though they will see some of the most profound gains in history. If these platforms come to fruition, we could experience sustained economic expansion of 4 percent or more, and without any of the environmental consequences of previous technological revolutions. Within 30 years, humanity could gain freedom from drudgery, allowing people to focus on higher things.