Anyone who studies the history of technologies and our standard of living will tell you that such progress is exponential in nature. It is also simultaneously cyclical with S-Curve surges of innovation and progress, followed by slower periods when new technologies emerge.
Gordon Moore at Intel became famous in the 1970s for his formulation of Moore’s Law. He saw a steeply declining cost curve for the microchips that drive all computing and electronics. The number of integrated circuits that could be etched into a given surface area, he said, would double every two years or so.
It is this simple law of exponential progress that has brought us handheld computers more powerful than mainframes way back in the day.
But the chart below shows that such progress is finally coming to an end…
As recently as 2002, a dollar purchased about 2.6 million transistors on a chip. But that looks to have peaked at 20 million transistors in 2012 and seems to be plateauing at best into 2014. It even looks like it may begin declining a bit by 2015.
See for yourself…
In a speech back in 2003, Moore explained that he saw about another decade of progress… and here we are.
I’m not surprised. This always happens with new technologies. The exponential progress is never continuous. There is a breakthrough; it hits a tipping point and accelerates; it grows exponentially; and then ultimately matures.
That is the essence of the S-Curve that I discovered when working at Bain and Company in the early 1980s. What actually happens is that a new S-Curve of exponential innovation begins as the older one matures. In other words, there’s overlap.
The greatest impact of the progression comes when the new innovation or technology moves rapidly from a 10% to a 90% market penetration.
S-Curves manifest in shorter or longer time periods, depending on the costs of bringing them into society and social resistance to them. Many of the big S-Curves, like the one cars moved through from 1914 to 1928 and the one the Internet moved through from 1994 to 2008, see progressions that last 14 to 15 years and then slower overlap periods that last 14 to 15 years as well. This is not unusual. Each stage of an S-Curve — innovation (.1% to 10%), mainstream adoption (10% to 90%) and maturity (90% to 99.9%) — typically takes the same amount of time.
What we are witnessing today, with the demise of Moore’s law, is simply that the last great information revolution is peaking and a new one will emerge in the next decade or so.
In my view, the next great technologies, which are still in their infancy, are biotechnologies, robotics, 3D printing, alternative energies and motors, and nanotechnologies.
I would expect this cluster of technologies to continue to improve over the next decade and then move mainstream from around 2022/23 into 2036/7, just as the next global boom emerges.
Between now and then we need the natural cycle of deleveraging and an economic winter crisis to motivate the innovation of the next radical technologies that will have their own cycles, but will also more broadly drive the economy over the next four-season cycle… just like computers, jet engines and TV did during this cycle.
That’s one of the benefits of moving through the economic winter season. It augments radical innovation with its extreme challenges.
Mark my words: The biggest breakthroughs in such technologies are ahead of us, not behind. We’ll be shocked at what will become possible in the decades ahead.
In fact, the biggest impact could be another rapid acceleration in our life expectancies, which could override the inevitable slowing in births and population growth as more countries go over the edge of the demographic cliff. (I address some of these possibilities in the epilogue of my new book. If you haven’t got your copy yet, get it now.)
We’re not just seeing a new 80-year economic cycle emerging, but a 250-year revolution cycle unfolding as well. The last one saw the emergence of the Industrial Revolution and the American Revolution. Now we’ll see an economic revolution… an evolution, if you will.
As much as I warn of the economic turmoil ahead, I am also compelled to warn you of the inevitable technological progress that will follow. They are flip sides of the same coin.
Life as we know it is changing. Embrace it.
P.S. I talk more about this evolutionary process we’re moving through in an interview I recorded recently. You can listen to it here.
|Follow me on Twitter @HarryDentjr|
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