TechSector

Carbonara

Observers have been waiting for carbon nanotubes, buckyballs, and graphene to transform the world for quite some time, and the wait has been longer than they expected.  Enthusiasts for this new miracle material had all but vanished.  Is this warranted?  Where does the state of innovation in various forms of carbon, that could yield ultra-strong, ultra-light materials and superfast computing really stand? 

CNET had an article just last month about the multiple disruptions that the various allotopes of carbon are about to make.  That is quite exciting, except that CNET also had a similar article in 2003.  Similarly, Ray Kurzweil extolled carbon nanotubes as a successor to silicon quite heavily in 1999, but not quite as much now, even though that supposed transition would be much closer to the present.  This does not mean that Kurzweil's estimation was in error, but rather that the technology was unexpectedly stagnant during the early 2000s.  So let us examine why there was such an interruption, and whether progress has since resumed.   

I wrote in 2009 about how we had undergone a multi-year nanotech winter, and how we were emerging from it in 2009.  As anticipated, carbon nanotubes are now finally lowering in price, and being produced at a scale that could start making an impact.  Sure enough, activity began to stir right as I predicted, and the 2010 Nobel Prize in physics has been awarded to research in graphene.  Just like CNETs article, Wired also has an article about the diverse applications that graphene could revolutionize.  Combining the two articles, we can summarize the core possibilities of carbon allotopes as follows :

Ultra-dense computing and storage : Graphene transistors smaller than 1 nanometer have been demonstrated.  Carbon allotopes could keep the exponential doubling of both computing and storage capacity going well into the 2030s. 

Carbon Fiber Vehicles : This lightweight, ultrastrong material can save vast amounts of fuel by reducing the weight of cars and aeroplanes.  While premium products such as the $6000 Trek Madone bicycles are already made from carbon fiber, greater volume is reducing prices and will soon make the average car much ligher than it is today, increasing fuel efficiency and reducing traffic fatalities. 

Energy Storage : Natural Gas is not only much cheaper than oil per unit of energy (oil would have to drop to about $30 to match current NG prices), but the supply of NG is more evenly distributed across the world than the oil supply.  The US alone has an enormous reserve of natural gas that could ensure total energy independence.  The main problem with NG is storage, which is the primary reason oil displacement is not happening rapidly.  But microporous carbon can effectively act as a sponge for natural gas, enabling safe and easy transport.  This could potentially change the entire energy map.

There are other applications beyond these core three, but suffice it to say, the allotopes of carbon can perform a greater variety of functions than any other material available to us today.  Watch for indications of carbon allotopes popping up in the strangest of places, and know that each emergence drives the cost down ever lower. 

Related :

Nanotechnology : Bubble, Bust,.....Boom?

Milli, Micro, Nano, Pico

The Techno-Sponge

After years of thinking about this, I have come up with a term that can describe the thoughts I have had about the new, 'good' type of deflation that is evading the notice of almost all of the top economists in the world today.  This changes many of the most fundamental assumptions about economics, even as most economic thought is far behind the curve. 

First, let us review some events that transpired over the last 2 years.  To stave off the prospect of a deflationary spiral that could lead to a depression, the major governments of the world followed 20th-century textbook economics, and injected colossal amounts of liquidity into the financial system.  In the US, not only was the Fed Funds rate lowered to nearly zero (for now 18 months and counting), but an additional $1 Trillion was injected in. 

However, now that a depression has been averted, and the recession has ended, we were supposed to experience inflation even amidst high unemployment, just like we did in the 1970s, to minimize debt burdens.  But alas, there is still no inflation, despite a yield curve with more than 3% steepness, and a near-0% FF rate for so long.  How could this be?  What is absorbing all the liquidity?   

In The Impact of Computing, I discussed how 1.5% of World GDP today comprises of products where the same functionality can be purchased for a price that halves every 18 months.  'Moore's Law' applies to semiconductors, but storage, software, and some biotech are also on a similar exponential curve.  This force makes productivity gains higher, and inflation lower, than traditional 20th century economics would anticipate.  Furthermore, the second derivative is also increasing - the rate of productivity gains itself is accelerating.  1.5% of World GDP may be small, but what about when this percentage grows to 3% of World GDP?  5%?  We may only be a decade away from this, and the impact of this technological deflation will be more obvious. 

Most high-tech companies have a business model that incorporates a sort of 'bizarro force' that is completely the opposite of what old-economy companies operate under : The price of the products sold by a high-tech company decreases over time.  Any other company will manage inventory, pricing, and forecasts under an assumption of inflationary price increases, but a technology company exists under the reality that all inventory depreciates very quickly (at over 10% per quarter in many cases), and that price drops will shrink revenues unless unit sales rise enough to offset it (and assuming that enough unit inventory was even produced).  This results in the constant pressure to create new and improved products every few months just to occupy prime price points, without which revenues would plunge within just a year.  Yet, high-tech companies have built hugely profitable businesses around these peculiar challenges, and at least 8 such US companies have market capitalizations over $100 Billion.  6 of those 8 are headquartered in Silicon Valley. 

Now, here is the point to ponder : We have never had a significant technology sector while also facing the fears (warranted or otherwise) of high inflation.  When high inflation vanished in 1982, the technology sector was too tiny to be considered a significant contributor to macroeconomic statistics.  In an environment of high inflation combined with a large technology industry, however, major consumer retail pricepoints, such as $99.99 or $199.99, become more affordable.  The same also applies to enterprise-class customers.  Thus, demand creeps upwards even as cost to produce the products goes down on the same Impact of Computing curve.  This allows a technology company the ability to postpone price drops and expand margins, or to sell more volume at the same nominal dollar price.  Hence, higher inflation causes the revenues and/or margins of technology companies to rise, which means their earnings-per-share certainly surges.

So what we are seeing is the gigantic amount of liquidity created by the Federal Reserve is instead cycling through technology companies and increasing their earnings.  The products they sell, in turn, increase productivity and promptly push inflation back down.  Every uptick in inflation merely guarantees its own pushback, and the 1.5% of GDP that mops up all the liquidity and creates this form of 'good' deflation can be termed as the 'Techno-Sponge'.  So how much liquidity can the Techno-Sponge absorb before saturation? 

At this point, if the US prints another $1 Trillion, that will still merely halt deflation, and there will be no hint of inflation at all.  It would take a full $2 Trillion to saturate the techno-sponge, and temporarily push consumer inflation to even the less-than-terrifying level of 4% while also generating substantial jumps in productivity and tech company earnings.  In fact, the demographics of the US, with baby boomers reaching their geriatric years, are highly deflationary (and this is the bad type of deflation), so the US would have to print another $1 Trillion every year for the next 10 years just to offset demographic deflation, and keep the techno-sponge saturated. 

A techno-sponge that is 1.5% of GDP might be keeping CPI inflation at under 2%, but when the techno-sponge is 3% of GDP, even trillions of dollars of liquidity won't halt deflation.  Deflation may become normal, even as living standards and productivity rise at ever-increasing rates.  The people who will suffer are holders of debt, particularly mortgage debt.  Inflating away debt will no longer be a tool available to rescue people (and governments) from their errors.  The biggest beneficiaries will be technology companies, and those who are tied to them. 

But to keep prosperity rising, productivity has to rise at the maximum possible rate.  This requires the Techno-Sponge to be kept full at all times - the 'new normal'.  Thus, the printing press has to start on the first $1 Trillion now, and printing has to continue until we see inflation.  Economists will be surprised at how much can be printed without seeing any inflation, and will not be able to draw the connection about why the printed money is boosting productivity. 

Related :

The Impact of Computing

Timing the Singularity

The Carnival of Creative Destruction

Words like 'disruption' and 'destruction' usually have negative meanings, and one may strain to find any good ways in which to use the terms.  But today, the accelerating rate of change ensures that more technologies alter more aspects of life at an ever-quickening rate.  A little-understood dimension of this is the concept of Joseph Schumpeter's 'Creative Destruction', where the process of technological change topples existing norms, often quite rapidly. 

Technological diffusion was in a lull in 2008, as I pointed out at the time.  But now, in 2010, I am happy to report that the recess has passed, and that the accelerating rate of change is rising back to the long-term exponential trendline (although it may not be fully back at the trendline until 2013, when people who have not been paying attention will be wondering why they were taken by surprise).  The Impact of Computing continues to progress, infusing itself into a wider and wider swath of our lives, and speeding up the rate of change in complacently stagnant industries that never thought technology could affect them.  Silicon Valley continues to be 'ground zero' for creative destruction, and complacent industries thousands of miles away could be toppled by someone working from their bedroom in Silicon Valley. 

Just a few of the examples of creative destruction that is presently in process have been covered by prior articles here at Techsector.  These, along with others, are :

1) Video Conferencing is poised to disrupt not just airline and hotel industry revenues (which stand to lose tens of billions of dollars per year of business travel revenue), but the real-estate, medical, and aeronautical industries as well.  Corporations will see substantial productivity gains from successful adoption of videoconferencing as a substitute for 50% or more of their travel expenses.  Major mergers and acquisitions have happened in this sector in the last few months, and imminent price reductions will open the floodgates of diffusion.  Skype provides a form of video telephony that is free of cost.  This is described in detail in my August 2008 article on the subject, as well as in my earlier October 2006 introductory article. 

2) Surface Computing, which I wrote about in July of 2008, has begun to emerge in a myriad of forms, from the handheld Apple iPad to the upcoming consumer version of the table-sized Microsoft Surface.  This not only transforms human-computer interaction for the first time in decades, but the Apple 'Apps' ecosystem alters the utility of the Internet as well.  All sizes between the blackboard and the iPad will soon be available, and by 2015, personal computing, and the Internet, will be quite different than they are today, with surfaces of varying sizes abundant in many homes. 

3) The complete and total transformation of video games into the dominant form of home entertainment will be visible by 2012 through a combination of technologies such as realistic graphics, motion-responsive controllers, 3-D televisions, voice recognition, etc.  The biggest casualty of this disruption will be television programming, which will struggle to retain viewers.  Beyond this, the way in which humans process sensations of pleasure, excitement, and entertainment will irrevocably change.  Thus, the way humans relate to each other will also change.  I have written about this in April 2006, with a follow-up in July 2009. 

4) The book-publishing industry has been stubbornly resistant to technology, as evidenced by their insistence as late as 2003 that manuscript queries be submitted by postal mail, and that a self-addressed stamped envelope be enclosed in which a reply can be sent.  A completed manuscript would take a full 12 months to be printed and distributed, and the editors didn't even find this to be odd.  Fortunately, two simultaneous disruptions are toppling this obsolete and unproductive industry from both ends.  Print-on-demand services that greatly shorten the self-publishing process and entry-cost, such as iUniverse and Blurb, are now flexible and easy, while finished books can further avoid the paper-binding process altogether and be available to millions in e-book format for the Kindle and other e-readers.  When e-readers are eventually available for only $100, bookstores that sell paper books will be relegated to surviving mostly on gifts, coffee table books, and cafe revenues.  This is a disruption that is happening quickly due to it being so overdue in the first place, resulting in a speedy 'catchup'.  I wrote about this in more detail in December of 2009.

5) The automobile is undergoing multiple major transformations at once.  Strong, light nanomaterials are entering the bodies of cars to increase fuel efficiency, engines are migrating to hybrid and electrical forms, sub-$5000 cars in India and China will lead to innovations that percolate up to lower the cost of traditional Western models, and the computational power engineered into the average car today leads to major feature jumps relative to models from just 5 years ago.  The $25,000 car of 2020 will be superior to the $50,000 car of 2005 is every measurable way. 

By 2016, consumer behavior will change to a mode where people consider it normal to 'upgrade' their perfectly functioning 6-year-old cars to get a newer model with better electronic features.  This may seem odd, but people did not tend to replace fully functional television sets before they failed until the 2003 thin-TV disruption.  The Impact of Computing pulls ever-more products into a rapid trajectory of improvement. 

By 2018, self-driving cars will be readily available to the average US consumer, and will constitute a significant fraction of cars on the highway.  This will revise existing assumptions about highway speeds and acceptable commute distances, and will further impede the real estate prices of expensive areas. 

6) The Mobile Internet revolution, which I wrote about in October of 2009, is already transforming the way consumers in developed markets access the Internet.  The bigger disruption is the entry of 1 billion new Internet users from emerging economies.  While many of these people have relatively little education compared to Western Internet users, as the West shrinks as a fraction of total Internet mindshare, many Western cultural quirks that are seen as normal (such as institutionalized misandry sustained by an ever-expanding state) might be seen for the aberrations that they are.  Thomas Friedman's concept of the world being 'flat' has not even begun to fully manifest. 

7) The energy sector is in the midst of multiple disruptions, which will introduce competition between sectors that were previously unrelated.  Electrical vehicles displace oil consumption with electricity, even while the electricity itself starts to be generated through nuclear, solar, and wind.  The electrical economy will be further transformed by revolutions in lighting and batteries.  Cellulostic ethanol will arrive in 2012, and further replace billions of gallons of gasoline.  I wrote in October 2007 why I want oil to surpass $120/barrel and stay there (it subsequently was above that level for a mere 6-week period in 2008).  This leads to why I claim that 'Peak Oil', far from being fatal for civilization, will actually be a topic few people even mention in 2020.  The creative destruction in energy will extend to the geopolitical landscape, where we will see many petrotyrannies much weaker in 2020 than they are today. 

8) Despite the efforts of Democrats to create a system unfavorable to advancement in healthcare and biotechnology, innovation continues on several fronts (partly due to Asian nations compensating for US shortfalls).  One disruption is robotic surgery, where incisions can be narrow instead of the customary practice of making incisions large enough for the surgeon's hands, which in turn often necessitates sawing open the sternum, pelvis, etc.  Intuitive Surgical is a company that already has a market cap of $14 Billion. 

The biggest disruption, however, is that the globalization of technology is enabling medical tourism.  In the US, about twice as much is spent on healthcare as in other OECD countries.  If manufacturing and software work can be offshored, so can many aspects of healthcare, which is much more expensive than manufacturing or software engineering ever became in the US.  This will correct inflated salaries in the healthcare sector, return the savings to consumers, and force innovations and systemic improvements in all OECD countries. 

9) By all accounts, the cost of genome sequencing has plunged by a factor of 10,000 in just the last 4 years (it is less clear how this was accomplished, and whether the next 4 years will see a comparable drop).  I tend to be skeptical about such eye-popping numbers, because if something became so much cheaper so quickly, yet it still didn't sweep over the world, then maybe it was not so valuable after all. 

But it is also possible that while the raw data is now available cheaply, there is not yet enough of a community that instructs people how to use their data.  As more people sequence their genomes, networks of common genetic patterns will form, and health information will be shared.  Medicine will take on a Web 2.0 flavor, and physicians that realize they need to practice medicine as an information technology will thrive, while those who still adhere to the paternalistic paradigm will be left behind.  The standard medical diagnosis will be for a user to ask questions to others with the same genotype, and receive answers from multiple laypeople, and then, if necessary, take the information to a genome-savvy doctor.  The Economist has a special report on the implications of inexpensive genome sequencing. 

10) Social media such as Facebook, Twitter, etc. are mostly inundated with the trivialities of young people, or of older people who never matured, who think they have an audience far larger than it is.  However, these mediums have been used to horizontally organize interest groups and movements for political change that know no distance barriers or boundaries. 

Blogs have shattered the hold that traditional media had on the release of information and opinions, and the revenues of newspapers, magazines, and network television have tumbled.  The Tea Party movement in the US was started by a very small number of people, but has surged with a momentum that has reshaped the American landscape in just one year, and, irony of ironies, the Tea Party is spreading to overtaxed Britain.  The next Iranian revolution will not only use Twitter and YouTube, but will have millions of collaborators outside of Iran, operating out of their own homes. 

11) The financial services industry currently charges $100 Billion in fees for the $3.3 Trillion in annual credit/debit card transactions that take place in the US alone.  This was the cover story of Wired Magazine for March 2010, and was a structure established in an era when computing power needed to process transactions was expensive.  Today, several startups are seeking to change the way money is transacted to eliminate this cut that incumbent companies take.  Major financial services companies will see shrinkages in revenue, and will have to innovate and create new value-added services, or accept a diminishment. 

Aside from this effectively being a sizable 'tax cut' for the economy, this is particularly valuable as a complement to mobile Internet penetration in poorer regions, as the capacity to conduct web micro-transactions without fees will be an essential element of human development.  The highly successful concept of micro-finance will be augmented when transaction fees that consumed a high percentage of these sub-$10 transactions are minimized. 

12) 3-D Printing will soon be accessible to small businesses and households.  This transforms everything from commodity consumer goods to the construction of buildings.  An individual could download a design and print it at home, rather than be restricted to only those products that can be mass produced.  It is quite possible that by 2025, construction of basic structures takes less than one-tenth the time that it does today, which, of course, will deflate the value of all existing buildings in the world at that time. 

So we see there are at least 12 ways in which our daily lives will shift considerably in just the next few years.  The typical process of creative destruction results in X wealth being destroyed, and 2X wealth being created instead, but by different people.  For each of the 12 disruptions listed, 'X' might be as much a $1 Trillion.  As a result, the US economy might be mired in a long-term situation where vanishing industries force many laid off workers to start in new industries at the entry level, for half of their previous compensation, even as new fortunes created by the new industries cause net wealth increases.  The US could see a continuation of high unemployment combined with high productivity gains and corporate earnings growth for several years to come.  This would be the 'new normal'. 

Income diversification is the golden rule of the early 21st century.  Those that fail to create and maintain multiple streams of income are imperiling themselves.  The hottest career one can embark on, which will never be obsolete, is that of the serial entrepreneur. 

The Publishing Disruption

What a unique thing a book is.  Made from a tree, it has a hundred or more flexible pages that contain written text, enabling the book to contain a large sum of information in a very small volume.  Before paper, clay tablets, sheepskin parchment, and papyrus were all used to store information with far less efficiency.  Paper itself was once so rare and valuable that the Emperor of China had guards stationed around his paper posessions. 

Before the invention of the printing press, books were written by hand, and few outside of monastaries knew how to read.  There were only a few thousand books in all of Europe in the 14th century.  Charlemagne himself took great effort to learn how to read, but never managed to learn how to write, which still put him ahead of most kings of the time, who were generally illiterate. 

But with the invention of the printing press by Johannes Gutenberg in the mid-15th century, it became possible to make multiple copies of the same book, and before long, the number of books in Europe increased from thousands to millions. 

Fast forward to the early 21st century, and books are still printed by the millions.  Longtime readers of Techsector know that I initially had written a book (2001-02), and sought to have it published the old-fashioned way.  However, the publishing industry, and literary agents, were astonishingly low-tech.  They did not use email, and required queries to be submitted via regular mail, with a self-addressed, stamped envelope included.  So I had to pay postage in both directions, and wait several days for a round trip to hear their response.  And this was just the literary agents.  The actual publishing house, if they decide to accept your book, would still take 12 months to produce and distribute the book even after the manuscript was complete.  Even then, royalties would be 10-15% of the retail price.  This prospect did not seem compelling to me, and I chose to parse my book into this blog you see before you. 

The refusal by the publishing industry to use email and other productivity-enhancing technologies as recently as 2003 kept their wages low.  Editors always moaned that they worked 60 hours a week just to make $50,000 a year, the same as they made in 1970.  My answer to them is that they have no basis to expect wage increases without increasing their productivity through technology. 

In the meantime, self-publishing technologies emerged to bypass the traditional publishers' role as arbitrers of what can become a book and what cannot.  From Lulu to iUniverse to BookSmart, any individual can produce a book, with copies that can be printed on demand.  Instances where an individual is seeking to go it alone without being saddled with a huge upfront inventory production and storage burden, or is otherwise marketing to only a tiny audience, have flourished.  But print-on-demand is not the true disruption - that was yet to come. 

The Amazon Kindle launched in late 2007 at the high price of $400.  Within 2 years, a substantially more advanced Kindle 2 was available for a much lower price of $260, alongside competing readers from several other companies.  Many people feel that the appeal of holding a physical book in our hands cannot be replaced by a display screen, and take a cavalier attitude towards dismissing e-readers.  The tune changes upon learning that the price of a book on an e-reader is just a third of what the paper form at a brick-and-mortar bookstore, with sales tax, would cost.  Market research firm iSuppli estimates that 5 million readers have been sold in 2009, and another 12 million will sell in 2010.  Amazon estimates that over one-third of its book sales are now through the kindle, greatly displacing sales of paper books. 

Imagine what happens when the Kindle and other e-readers cost only $100.  Brick and mortar bookstores will consolidate to fewer premises, extract profits mainly from picture-heavy books and magazines, and step up their positioning as literary coffeehouses.  Many employees and affiliates of the publishing industry will see their functions eliminated as part of the productivity gains.  College students forced to pay $100 for a textbook produced in small quantities will now pay only $20 for an e-reader version.  But even this is not the ultimate endgame of disruption. 

Intel now has a reader for the visually impaired that scans text from paper books, and reads them in an acceptable audio voice.  It is reported that with practice, an audio rate of 250 words per minute can be coherent.  While the reader costs $1500, and requires a user to turn pages manually, it is a matter of time before not only the reader's price drops, and more and more books are available as text files similar to those contained in e-readers like the Kindle.  There are already books available as free downloads of text files under the ironically named Project Gutenberg. 

Therein lies the crescendo of disruption.  The Intel Reader is a $1500 device for the visually impaired, but will soon evolve into a technology that interfaces with Kindle-type e-readers and chatters off e-books at 250 words/minute, from the full e-book library that is vastly larger than any traditional collection of audiobooks.  A 90,000-word novel could be recited in just 6 hours, enabling a user to imbibe the whole book during a single coast-to-coast flight, even if the lights are dimmed.  People could further choose to preserve their vision at home, devouring book after book with the lights out.  As the technology advances further, the speech technology will allow the user to select a voice of his choosing to be read to in, perhaps even his own voice. 

Thus, without many people even noticing the murmurs, we can predict that the next 3 years will see the biggest transformation in book production and consumption since the days of Johannes Gutenberg.  That is a true demonstration of both the Accelerating Rate of Change and The Impact of Computing.   

Timing the Singularity

The Singularity.  The event when the rate of technological change becomes human-surpassing, just as the advent of human civilization a few millenia ago surpassed the comprehension of non-human creatures. So when will this event happen?

There is a great deal of speculation on the 'what' of the Singularity, whether it will create a utopia for humans, cause the extinction of humans, or some outcome in between.  Versions of optimism (Star Trek) and pessimism (The Matrix, Terminator) all become fashionable at some point.  No one can predict this reliably, because the very definition of the singularity itself precludes such prediction.  Given the accelerating nature of technological change, it is just as hard to predict the world of 2050 from 2009, as it would have been to predict 2009 from, say, 1200 AD.  So our topic today is not going to be about the 'what', but rather the 'when' of the Singularity. 

Let us take a few independent methods to arrive at estimations on the timing of the Singularity.

1) Ray Kurzweil has constructed this logarithmic chart that combines 15 unrelated lists of key historic events since the Big Bang 15 billion years ago.  The exact selection of events is less important than the undeniable fact that the intervals between such independently selected events are shrinking exponentially.  This, of course, means that the next several major events will occur within single human lifetimes. 

Kurzweil wrote with great confidence, in 2005, that the Singularity would arrive in 2045.  One thing I find about Kurzweil is that he usually predicts the nature of an event very accurately, but overestimates the rate of progress by 50%.  Part of this is because he insists that computer power per dollar doubles every year, when it actually doubles every 18 months, which results in every other date he predicts to be distorted as a downstream byproduct of this figure.  Another part of this is that Kurzweil, born in 1948, is taking extreme measures to extend his lifespan, and quite possibly may have an expectation of living until 100 but not necessarily beyond that.  A Singularity in 2045 would be before his century mark, but herein lies a lesson for us all.  Those who have a positive expectation of what the Singularity will bring tend to have a subconscious bias towards estimating it to happen within their expected lifetimes.  We have to be watchful enough to not let this bias influence us.  So when Kurzweil says that the Singularity will be 40 years from 2005, we can apply the discount to estimate that it will be 60 years from 2005, or in 2065. 

2) John Smart is a brilliant futurist with a distinctly different view on accelerating change from Ray Kurzweil, but he has produced very little visible new content in the last 5 years.  In 2003, he predicted the Singularity for 2060, +/- 20 years.  Others like Hans Moravec and Vernor Vinge also have declared predictions at points in the mid/late 21st century. 

3) Ever since the start of the fictional Star Trek franchise in 1966, they have made a number of predictions about the decades since, with impressive accuracy.  In Star Trek canon, humanity experiences a major acceleration of progress starting from 2063, upon first contact with an extraterrestrial civilization.  While my views on first contact are somewhat different from the Star Trek prediction, it is interesting to note that their version of a 'Singularity' happened to occur in 2063 (as per the 1996 film Star Trek : First Contact). 

4) Now for my own methodology.  We shall first take a look at novel from 1863 by Jules Verne, titled "Paris in the 20th Century".  Set about a century in the future from Verne's perspective, the novel predicts innovations such as air conditioning, automobiles, helicopters, fax machines, and skyscrapers in detail.  Such accuracy makes Jules Verne the greatest futurist of the 19th century, but notice how his predictions involve innovations that occured within 120 years of writing.  Verne did not predict exponential growth in computation, genomics, artificial intelligence, cellular phones, and other innovations that emerged more than 120 years after 1863.  Thus, Jules Verne was up against a 'prediction wall' of 120 years, which was much longer than a human lifespan in the 19th century. 

But now, the wall is closer.  In the 3.5 years since the inception of The Futurist, I have consistently noticed a 'prediction wall' on all long-term forecasts, that makes it very difficult to make specific predictions beyond 2040 or so.  In contrast, it was not very hard to predict the state of technology in 1930 from the year 1900, just 30 years prior.  Despite all the inventions between 1900 and 1930, the diffusion rate was very slow, and it took well over 30 years for many innovations to affect the majority of the population.  The diffusion rate of innovation is much faster today, and the pervasive Impact of Computing is impossible to ignore.  This 'event horizon' that we now see does not mean the Singularity will be as soon as 2040, as the final couple of decades before the Singularity may still be too fast to make predictions about until we get much closer.  But the compression of such a wall/horizon from 120 years in Jules Verne's time to 30 years today gives us some idea of the second derivative in the rate of change, and many other top futurists have observed the same approaching phenomenon.  By 2030, the prediction wall may thus be only 15 years away.  By the time of the Singularity, the wall would be almost immediately ahead from a human perspective. 

So we can return to the Impact of Computing as a driver of the 21st century economy.  In the article, I have written about how about $700 Billion per year as of 2008, which is 1.5% of World GDP, comprises of products that improve at an average of 59% a year per dollar spent.  Moore's Law is a subset of this, but this cost deflation applies to storage, software, biotechnology, and a few other industries as well. 

If products tied to the Impact of Computing are 1.5% of the global economy today, what happens when they are 3%? 5%?  Perhaps we would reach a Singularity when such products are 50% of the global economy, because from that point forward, the other 50% would very quickly diminish into a tiny percentage of the economy, particularly if that 50% was occupied by human-surpassing artificial intelligence.   

We can thus calculate a range of dates by when products tied to the Impact of Computing become more than half of the world economy.  In the table, the columns signify whether one assumes that 1%, 1.5%, or 2% of the world economy is currently tied, and the rows signify the rate at which this percentage share of the economy is increasing, whether 6%, 7%, or 8%.  This range is derived from the fact that the semiconductor industry has a 12-14%% nominal growth trend, while nominal world GDP grows at 6-7% (some of which is inflation).  Another way of reading the table is that if you consider the Impact of Computing to affect 1% of World GDP, but that share grows by 8% a year, then that 1% will cross the 50% threshold in 2059.  Note how a substantial downward revision in the assumptions moves the date outward only by years, rather than centuries or even decades. 

We see these parameters deliver a series of years, with the median values arriving at around the same dates as aforementioned estimates.  Taking all of these points in combination, we can predict the timing of the Singularity.  I hereby predict that the Technological Singularity will occur in :

2060-65 ± 10 years

So the earliest that it can occur is 2050 (hence the URL of this site), and the latest is 2075, with the highest probability of occurance in 2060-65.  There is virtually no statistical probability that it can occur outside of the 2050-75 range (sorry, Ray). 

So now we know the 'when' of the Singularity.  We just don't know the 'what', nor can we with any certainty. 

Related :

The Impact of Computing

Are You Acceleration Aware?

Pre-Singularity Abundance Milestones

SETI and the Singularity

Video Conferencing : A Cascade of Disruptions

Almost 3 years ago, in October of 2006, I first wrote about Cisco's Telepresence technology which had just launched at that time, and how video conferencing that was virtually indistinguishable from reality was eventually going to sharply increase the productivity and living standards of corporate employees (image : Cisco). 

At that time, Cisco and Hewlett Packard both launched full-room systems that cost over $300,000 per room.  Since then, there has not been any price drop from either company, which is unheard of for a system with components subject to Moore's Law rates of price declines.  This indicates that market demand has been high enough for both Cisco and HP to sustain pricing power and improve margins.  Smaller companies like LifeSIze, Polycom, and Teleris have lower-end solutions for as little as $10,000, that have also been selling briskly, but have not yet dragged down the Cisco/HP price tier.

This article in the San Jose Mercury News indicates what sort of savings these two corporations have earned by use of their own systems :

In a trend that could transform the way companies do business, Cisco Systems has slashed its annual travel budget by two-thirds — from $750 million to $240 million — by using similar conferencing technology to replace air travel and hotel bills for its vast workforce.

Likewise, Hewlett-Packard says it sliced 30 percent of its travel expenses from 2007 to 2008 — and expects even better results for 2009 — in large part because of its video conference technology.

If Cisco can chop its travel expenses by two-thirds, and save $500 million per year (which increases their annual profit by a not-insignificant 6-10%), then every other large corporation can save a similar magnitude of money.  For corporations with very narrow operating margins, the savings could have a dramatic impact on operating earnings, and therefore stock price.  The Fortune 500 alone (excluding airline and hotel companies) could collectively save $100 billion per year, in a wave set to begin immediately if either Cisco or HP drops the price of their solution, which may happen in a matter of months.  We will soon see that for every $20 that corporations used to spend on air travel and hotels, they will instead be spending only $1 on videoconferencing expenses.  This is gigantic gain in enterprise productivity. 

Needless to say, high-margin airline revenue from flights between major business centers (such as San Francisco-Taipei or New York-London) will be slashed, and airlines will have to consolidate to fewer flights, making suitability for business travel even less flexible and losing even more passengers.  Hotels will have to consolidate, and taxis and restaurants in business hubs will suffer as well.  But these are merely the most obvious of disruptions.  What is even more interesting are the less obvious ripple effects that only manifest a few years later, which are :

1) Employee Time and Hassle : Anyone who has had to travel to another continent for a Mon-Fri workweek trip knows that the process of taking a taxi to the airport, waiting 2 hours at the airport, the flight itself, and the ride to the final destination consumes most of the weekends on either side of the trip.  Most senior executives log over 200,000 miles of flight per year.  This is a huge drag on personal time and quality of life.  Travel on weekdays consume productive time that the employer could benefit from, which for senior executives, could be worth thousands of dollars per hour.  Furthermore, in an era of superviruses, we have already seen SARS, bird flu, and swine flu as global pandemic threats within the last few years.  A reduction of business travel will slow down the rate at which such viruses can spread across the globe and make quarantines less inconvenient for business (although tourist travel and remaining business travel are still carriers of this). 

2) Real Estate Prices in Expensive Areas : Home prices in Manhattan and Silicon Valley are presently 4X or more higher than a home of the same square footage 80 miles away.  By 2015, the single-screen solution that Cisco sells for $80,000 today may cost as little as $2000, and those from LifeSize and others may be even cheaper, so hosting meetings with colleagues from a home office might be as easy as running a conference call.  A good portion of employees who have small children may find it possible to do their jobs in a manner than requires them to go to their corporate office only once or twice a week.  If even 20% of employees choose to flee the high-cost housing near their offices, the real estate prices in Manhattan and Silicon Valley will deflate significantly.  While this is bad news for owners of real-estate in such areas, it is excellent news for new entrants, who will see an increase in their purchasing power. 

3) Passenger Aviation Technological Leap : Airlines and aircraft manufacturers have little recourse but to respond to these disruptions with innovations of their own, of which the only compelling possibility is to have each journey take far less time.  It is apparent that there has been little improvement in the speed of passenger aircraft in the last 40 years.  J. Storrs Hall at the Foresight Institute has an article up with a chart that shows the improvements and total flattening of the speed of passenger airline travel.  The cost of staying below Mach 1 vs. being above it are very different, as much as 3X, which accounts for the sudden halt in speed gains just below the speed of sound after the early 1960s.  However, the technologies of supersonic aircraft (which exist, of course, in military planes) are dropping in price, and it is possible that suborbital passenger flight could be available for the cost of a first-class ticket by 2025.  The Ansari X-prize contest and Space Ship Two have already demonstrated early incarnations of what could scale up to larger planes.  This will not reverse the video-conferencing trend, of course, but it will make the airlines more competitive for those interactions that have to be in person. 

So we are about to see a cascade of disruptions pulsate through the global economy.  While in 2009, you may have no choice but to take a 14-hour flight (each way) to Asia, in 2025, the similar situation may present you with a choice between handling the meeting with the videoconferencing system in your home office vs. taking a 2-hour suborbital flight to Asia. 

This, my friends, is progress. 

The Next Big Thing in Entertainment : A Half-Time Update

On April 1, 2006, I wrote a detailed article on the revolutionary changes that were to occur in the concept of home entertainment by 2012 (see Part I and Part II of the article).  Now, in 2009, half of the time within the six-year span between the original article and the prediction has elapsed.  Of course, given the exponential nature of progress, much more happens within the second half of any prediction horizon relative to the first half. 

The prediction issued in 2006 was:

Video Gaming (which will no longer be called this) will become a form of entertainment so widely and deeply partaken in that it will reduce the time spent on watching network television to half of what it is (in 2006), by 2012.

The basis of the prediction was detailed in various points from the original article, which in combination would lead to the outcome of the prediction.  The progress as of 2009 around these points is as follows :

1) Video game graphics continue to improve : Note the progress of graphics at 10-year intervals starting from 1976.  Projecting the same trend, 2012 will feature many games with graphics that rival that of CGI films, which itself can be charted by comparing Pixar's 'Toy Story' from 1995 to 'Up' from 2009.  See this demonstration from the 2009 game 'Heavy Rain', which arguably exceeds the graphical quality of many CGI films from the 1990s.   

The number of polygons per square inch on the screen is a technology that is closely tied to The Impact of Computing, and can only rise steadily.  The 'uncanny valley' is a hurdle that designers and animators will take a couple of years to overcome, but overcoming this barrier is inevitable as well. 

2) Flat-screen HDTVs reach commodity prices : This has already happened, and prices will continue to drop so that by 2012, 50-inch sets with high resolution will be under $1000.  A thin television is important, as it clears the room to allow more space for the movement of the player.  A large size and high resolution are equally important, in order to create an immersive visual experience. 

We are rapidly trending towards LED and Organic LED (OLED) technologies that will enable TVs to be less than one centimeter thick, with ultra-high resolution. 

3) Speech and motion recognition as control technologies : When the original article was written on April 1, 2006, the Nintendo Wii was not yet available in the market.  But as of June 2009, 50 million units of the Wii have sold, and many of these customers did not own any game console prior to the Wii. 

The traditional handheld controllers are very limited in this regard, despite being used by hundreds of millions of users for three decades.  If the interaction that a user can have with a game is more natural, the game becomes more immersive to the human senses.  See this demonstration from Microsoft for their 'Project Natal' interface technology, due for release in 2010. 

Furthermore, haptic technologies have made great strides, as seen in the demonstration videos over here.  Needless to say, the possibilities are vast. 

4) More people are migrating away from television, and towards games :  Television viewership is plummeting, particularly among the under-50 audience, as projected in the original 2006 article.  Fewer and fewer television programs of any quality are being produced, as creative talent continues to leak out of television network studios.  At the same time, World of Warcraft has 11 million subscribers, and as previously mentioned, the Wii has 50 million units in circulation. 

There are only so many hours of leisure available in a day, and Internet surfing, movies, and video games are all more compelling than the ever-declining quality of television offerings.  Children have already moved away from television, and the trend will creep up the age scale.

5) Some people can earn money through games : There are an increasing number of ways where avid players can earn real money from activities within a Game.  From trading of items to selling of characters, this market is estimated at over $1 billion in 2008, and is growing. Highly skilled players already earn thousands of dollars per year this way, and with more participants joining through more advanced VR experiences described above, this will attract a group of people who are able to earn a full-time living through these VR worlds.  This will become a viable form of entrepreneurship, just like eBay and Google Ads support entrepreneurial ecosystems today. 

Taking all 5 of these points in combination, the original 2006 prediction appears to be on track.  By 2012, hours spent on television will be half of what they were in 2006, with sports and major live events being the only forms of programming that retain their audience. 

Overall, the prediction seems to be well on track.  Disruptive technologies are in the pipeline, and there is plenty of time for each of these technologies to combine into unprecedented new applications.  Let us see what the second half of the time interval, between now and 2012, delivers. 

Wolfram Alpha : The Birth of Web 3.0

The Wolfram Alpha engine is set to be launched.  Rather than a search engine, it is an 'answer engine' that interprets actual questions and answers them in accordance with their intended meaning. 

Here is a video demonstrating the Wolfram Alpha engine. 

I have written about the Semantic Web back on June 11, 2007.  The Wolfram Alpha, at first, will seem rather underwhelming, and will merely enable high-school and college students (as well as bloggers) to conduct their research more easily.  But as refinements accumulate and users go through their own learning curve, we could see a major transformation in Internet usage starting around 2012. 

The Wolfram Alpha will be the first mainstream experience of the Semantic Web, much as the launch of the Netscape Navigator browser in late 1994 heralded the arrival of the World Wide Web to the mainstream.  The launch of the Wolfram Alpha will be a similar moment in technological progress, and while it will not be as much on an incremental jump in user experience as Netscape Navigator was, consider that when Netscape Navigator was launched, it could only be accessed by desktop PCs, as there were virtually no laptops and mobile phones in 1994.  Furthermore, countries like India and China did not even have more than a handful of desktop PCs at the time.  But today, in 2009, there are devices of many shapes and sizes, across many countries, than can access the Wolfram Alpha on the first day. 

This does not mean that Wolfram Alpha will be the most successful Web 3.0 product.  Recall how Netscape failed to win the marathon despite the early dominance, and how Google surpassed earlier search engines like Lycos, AltaVista, and Yahoo.  The technology, and the trends underlying it, always supercede any one company or individual. 

Thus, we have arrived at the start of the third chapter of the Internet age.  Web 1.0 (the information web) ran from 1991 until 2001.  2001-03 was a nuclear winter for the Internet, which ended with Web 2.0 (the collaboration web) that ran from 2003 until 2009, and Web 3.0 (the semantic web) will begin now, in May 2009. 

The Impact of Computing, 78% More Each Year

Anyone who follows technology is familar with Moore's Law and its many variations, and has come to expect the price of computing power to halve every 18 months.  But many people don't see the true long-term impact of this beyond the need to upgrade their computer every three or four years.  To not internalize this more deeply is to miss investment opportunities, grossly mispredict the future, and be utterly unprepared for massive, sweeping changes to human society.  Hence, it is time to update the first version of this all-important article that was written on February 21, 2006.

Today, we will introduce another layer to the concept of Moore's Law-type exponential improvement. Consider that on top of the 18-month doubling times of both computational power and storage capacity (an annual improvement rate of 59%), both of these industries have grown by an average of approximately 12% a year for the last fifty years. Individual years have ranged between +30% and -12%, but let us say that the trend growth of both industries is 12% a year for the next couple of decades.

So, we can conclude that a dollar gets 59% more power each year, and 12% more dollars are absorbed by such exponentially growing technology each year. If we combine the two growth rates to estimate the rate of technology diffusion simultaneously with exponential improvement, we get (1.59)(1.12) = 1.78

The Impact of Computing grows at a scorching pace of 78% a year.

Sure, this is a very imperfect method of measuring technology diffusion, but many visible examples of this surging wave present themselves.  Consider the most popular television shows of the 1970s, where the characters had all the household furnishings and electrical appliances that are common today, except for anything with computational capacity. Yet, economic growth has averaged 3.5% a year since that time, nearly doubling the standard of living in the United States since 1970. It is obvious what has changed during this period, to induce the economic gains.

We can take the concept even closer to the present.  Among 1990s sitcoms, how many plot devices would no longer exist in the age of cellphones and Google Maps?  Consider the episode of Seinfeld entirely devoted to the characters not being able to find their car, or each other, in a parking structure (1991).  Or this legendary bit from a 1991 episode in a Chinese restaurant.  These situations are simply obsolete in the era of cellphones.  This situation (1996) would be obsolete in the era of digital cameras, while the 'Breakfast at Tiffany's' situation would be obsolete in an era of Netflix and YouTube. 

In the 1970s, there was virtually no household product with a semiconductor component.  In the 1980s, many people bought basic game consoles like the Atari 2600, had digital calculators, and purchased their first VCR, but only a fraction of the VCR's internals, maybe 20%, comprised of exponentially deflating semiconductors, so VCR prices did not drop that much per year.  In the early 1990s, many people began to have home PCs. For the first time, a major, essential home device was pegged to the curve of 18-month halvings in cost per unit of power.  In the late 1990s, the PC was joined by the Internet connection and the DVD player. 

Now, I want everyone reading this to tally up all the items in their home that qualify as 'Impact of Computing' devices, which is any hardware device where a much more powerful/capacious version will be available for the same price in 2 years.  You will be surprised at how many devices you now own that did not exist in the 80s or even the 90s.

Include : Actively used PCs, LCD/Plasma TVs and monitors, DVD players, game consoles, digital cameras, digital picture frames, home networking devices, laser printers, webcams, TiVos, Slingboxes, Kindles, robotic toys, every mobile phone, every iPod, and every USB flash drive.  Count each car as 1 node, even though modern cars may have $4000 of electronics in them.

Do not include : Tube TVs, VCRs, film cameras, individual video games or DVDs, or your washer/dryer/oven/clock radio just for having a digital display, as the product is not improving dramatically each year. 

How many 'Impact of Computing' Nodes do you currently own?
	Under 10
	11-15
	16-20
	21+
Free polls from Pollhost.com

If this doesn't persuade people of the exponentially accelerating penetration of information technology, then nothing can.

To summarize, the number of devices in an average home that are on this curve, by decade :

1960s and earlier : 0

1970s : 0-1

1980s : 1-2

1990s : 3-4

2000s : 6-12

2010s : 15-30

The average home of 2020 will have multiple ultrathin TVs hung like paintings, robots for a variety of simple chores, VR-ready goggles and gloves for advanced gaming experiences, sensors and microchips embedded into clothing, $100 netbooks more powerful than $10,000 workstations of today, surface computers, intelligent LED lightbulbs with motion-detecting sensors, cars with features that even luxury models of today don't have, and at least 15 nodes on a home network that manages the entertainment, security, and energy infrastructure of the home simultaneously. 

Now, the economic impact of this is substantial.  Refer to the Future Timeline for Economics, particularly the 2014, 2024, and 2034 entries.  Deflation has traditionally been a bad thing, but the Impact of Computing has introduced a second form of deflation.  A good one. 

It is true that from 2001 to 2009, the US economy has actually shrunk in size, if measured in oil, gold, or Euros.  To that, I counter that every major economy in the world, including the US, has grown tremendously if measured in Gigabytes of RAM, TeraBytes of storage, or MIPS of processing power, all of which have fallen in price by about 40X during this period.  One merely has to select any suitable product, such as a 42-inch plasma TV in the diagram, to see how quickly purchasing power has risen.  What took 500 hours of median wages to purchase in 2002 now takes just 40 hours of median wages in 2009.  Pessimists counter that computing is too small a part of the economy for this to be a significant prosperity elevator.  But let's see how much of the global economy is devoted to computing relative to oil (let alone gold).

Oil at $50/barrel amounts to about $1500 Billion per year out of global GDP.  When oil rises, demand falls, and we have not seen oil demand sustain itself to the extent of elevating annual consumption to more than $2000 Billion per year.

Semiconductors are a $250 Billion industry and storage is a $200 Billion industry.  Software, photonics, and biotechnology are deflationary in the same way as semiconductors and storage, and these three industries combined are another $500 Billion in revenue, but their rate of deflation is less clear, so let's take just half of this number ($250 Billion) as suitable for this calculation.

So $250B + $200B + $250B = $700 Billion that is already deflationary under the Impact of Computing.  This is about 1.5% of world GDP, and is a little under half the size of global oil revenues. 

The impact is certainly not small, and since the growth rate of these sectors is higher than that of the broader economy, what about when it becomes 3% of world GDP?  5%?  Will this force of good deflation not exert influcence on every set of economic data?  At the moment, it is all but impossible to get major economics bloggers to even acknowledge this growing force.  But over time, it will be accepted as a limitless well of rising prosperity. 

12% more dollars spent each year, and each dollar buys 59% more power each year.  Combine the two and the impact is 78% more every year. 

Related :

A Future Timeline for Economics

Economic Growth is Exponential and Accelerating

Are You Acceleration Aware?

Pre-Singularity Abundance Milestones

The Technological Progression of Video Games

Pre-Singularity Abundance Milestones

I am of the belief that we will experience a Technological Singularity around 2050 or shortly thereafter. Many top futurists all arrive at prediction dates between 2045 and 2075. The bulk of Singularity debate revolves not so much around 'if' or even 'when', but rather 'what' the Singularity will appear like, and whether it will be positive or negative for humanity.

To be clear, some singularities have already happened.  To non-human creatures, a technological singularity that overhauls their ecosystem already happened over the course of the 20th century.  Domestic dogs and cats are immersed in a singularity where most of their surroundings surpass their comprehension.  Even many humans have experienced a singularity - elderly people in poorer nations make no use of any of the major technologies of the last 20 years, except possibly the cellular phone.  However, the Singularity that I am talking about has to be one that affects all humans, and the entire global economy, rather that just humans that are marginal participants in the economy.  By definition, the real Technological Singularity has to be a 'disruption in the fabric of humanity'. 

In the period between 2008 and 2050, there are several milestones one can watch for in order to see if the path to a possibile Singularity is still being followed.  Each of these signifies a previously scarce resource becoming almost infinitely abundant (much like paper today, which was a rare and precious treasure centuries ago), or a dramatic expansion in human experience (such as the telephone, airplane, and Internet have been) to the extent that it can even be called a transhuman experience.  The following are a random selection of milestones with their anticipated dates. 

Technological :

Hours spent in videoconferencing surpass hours spent in air travel/airports : 2015

Video games with interactive, human-level AI : 2018

Semi-realistic fully immersive virtual reality : 2020

Over 5 billion people connected to the Internet (mostly wirelessly) at speeds greater than 10 Mbps : 2022

Over 30 network-connected devices in the average household worldwide : 2025

1 TeraFLOPS of computing power costs $1 : 2026

1 TeraWatt of worldwide photovoltaic power capacity : 2027

1 Petabyte of storage costs $1 : 2028

1 Terabyte of RAM costs $1 : 2031

An artificial intelligence can pass the Turing Test : 2040

Biological :

Complete personal genome sequencing costs $1000 : 2020

Cancer is no longer one of the top 5 causes of death : 2025

Complete personal genome sequencing costs $10 : 2030

Human life expectancy achieves Actuarial Escape Velocity for wealthy individuals : 50% chance by 2040

Economic :

Average US household net worth crosses $2 million in nominal dollars : 2024

90% of humans living in nations with a UN Human Development Index greater than 0.800 (the 2008 definition of a 'developed country', approximately that of the US in 1960) : 2025

10,000 billionaires worldwide (nominal dollars) : 2030

World GDP per Capita crosses $50,000 in 2008 dollars : 2045

_________________________________________________________________

Each of these milestones, while not causing a Singularity by themselves, increase the probability of a true Technological Singularity, with the event horizon pulled in closer to that date.  Or, the path taken to each of these milestones may give rise to new questions and metrics altogether.  We must watch for each of these events, and update our predictions for the 'when' and 'what' of the Singularity accordingly. 

Related : The Top 10 Transhumanist Technologies

Surfaces : The Next Killer Ap in Computing

Computing, once seamlessly synonymous with technological progress, has not grabbed headlines in recent memory. We have not had a 'killer ap' in computing in the last few years.  Maybe you can count Wi-fi access to laptops in 2002-03 as the most recent one, but if that is not a sufficiently important innovation, we then have to go all the way back to the graphical World Wide Web browser in 1995.  Before that, the killer ap was Microsoft Office for Windows in 1990.  Clearly, such shifts appear to occur at intervals of 5-8 years. 

I can, without hesitation, nominate surface computing as the next great generational augmentation in the computing experience.  This is because surface computing entirely transforms the human-computer interaction in a matter that is more suitable for the human body than the mouse/keyboard model is.  In accordance with the Impact of Computing, rapid drops in the costs of both high-definition displays and tactile sensors are set to bring this experience to consumers by the end of this decade. 

BusinessWeek has a slideshow featuring several different products for surface computing.  Over ten major electronics companies have surface computing products available.  The most visible is the Microsoft Surface, which sells for about $10,000, but will probably drop to $3000 or less within 3-4 years, enabling household adoption. 

As far as early applications of surface computing, a fertile imagination can yield many prospects.  For example, a restaurant table may feature a surface that displays the menu, enabling patrons to order simply by touching the picture of the item they choose.  The information is sent to the kitchen, and this saves time and reduces the number of waiters needed by the restaurant (as waiters would only be needed to deliver the completed orders).  Applications for classroom and video game settings also readily present themselves. 

Watch for demonstrations of various surface computers at your local electronics store, and keep an eye on the price drops.  After seeing a demonstration, do share at what pricepoint you might purchase one.  The next generation of computing beckons. 

Related :

The Impact of Computing

Is Technology Diffusion in a Lull?

There are minor but growing elements of evidence that the rate of technological change has moderated in this decade.  Whether this is a temporary trough that merely precedes a return to the trendline, or whether the trendline itself was greatly overestimated, will not be decisively known for some years.  In this article, I will attempt to examine some datapoints to determine whether we are at, or behind, where we would expect to be in 2008. 

There is overwhelming evidence that many seemingly unrelated technologies are progressing at an accelerating rate.  However, the exact magnitude to the accelerating gradient - the second derivative - is difficult to measure with precision.  Furthermore, there are periods where advancement can be significantly above or below any such trendline. 

This brings us to the chart below from Ray Kurzweil (from Wikipedia) :

 

This chart appears prominently in many of Kurzweil's writings, and brilliantly conveys the concept of how each major consumer technology reached the mainstream (as defined by a 25% US household penetration rate) in successively shorter times.  The horizontal axis represents the year in which the technology was invented. 

This chart was produced some years ago, and therein lies the problem.  If we were to update the chart to the present day, which technology would be the next addition after 'The Web'? 

Many technologies can claim to be the ones to occupy the next position on the chart.  IPods and other portable mp3 players, various Web 2.0 applications like social networking, and flat-panel TVs all reached the 25% level of mainstream adoption in under 6 years in accordance with an extrapolation of the chart through 2008.  However, it is debatable that any of these are 'revolutionary' technologies like the ones on the chart, rather than merely increments above incumbent predecessors.  The iPod merely improved upon the capacity and flexibility of the walkman, the plasma TV merely consumed less space than the tube TV, etc.  The technologies on the chart are all infrastructures of some sort, and it is clear that after 'The Web', we are challenged to find a suitable candidate for the next entry. 

Thus, we either are on the brink of some overdue technology emerging to reach 25% penetration of US households in 6 years or less, or the rapid diffusion of the Internet truly was a historical anomaly, and for the period from 2001 to 2008 we were merely correcting back to a trendline of much slower diffusion (where it take 10-15 years for a technology to each 25% penetration in the US).  One of the two has to be true, at least for an affluent society like the US.

This brings us to the third and final dimension of possibility.  This being the decade of globalization, with globalization itself being an expected natural progression of technological change, perhaps a US-centric chart itself was inappropriate to begin with.  Landline telephones and television sets still do not have 25% penetration in countries like India, but mobile phones jumped from zero to 10% penetration in under 7 years.  The oft-cited 'leapfrogging' of technologies that developing nations can benefit from is a crucial piece of technological diffusion, which would thus show a much smaller interval between 'telephones' and 'mobile phones' than in the US-based chart above.  Perhaps '10% Worldwide Household Penetration' is a more suitable measure than '25% US Household Penetration', which would then possibly show that there is no lull in worldwide technological adoption at all. 

I may try to put together this new worldwide chart.  The horizontal axis would not change, but the placement of datapoints along the vertical axis would.  Perhaps Kurzweil merely has to break out of US-centricity in order to strengthen his case and rebut most of his critics. 

The future will disclose the results to us soon enough.

(crossposted on The Futurist)

Related :

Are You Acceleration Aware?

The Impact of Computing

These are the Best of Times

Nine Tantalizing Small Companies

In scouring the startup universe for the companies and technologies that can reshape human society and create entirely new industries, one has to play the role of a prospective Venture Capitalist, yet not be constrained by the need for a financial exit 3-6 years hence. 

Therefore, I have assembled a list of nine small companies, each with technologies that have the potential to create trillion-dollar economic disruptions by 2020.  Note that the emphasis is on the technologies rather than the companies themselves, as a startup requires much more than a revolutionary technology in order to prosper.  Management skills, team synergy, and execution efficiency are all equally important.  I predict that out of this list of nine companies, perhaps one or two will become titans, while the others will be acquired by larger companies for modest sums, enabling the technology to reach the market through the acquiring company. 

1) NanoSolar : NanoSolar produces low-cost solar cells that are manufactured by a process analogous to 'printing'.  The company's technology was selected by Popular Mechanics as the 'Innovation of the Year' for 2007, and Nanosolar's solar cells are significantly ahead of the Solar Energy Cost Curve.  The flexible, thin nature of Nanosolar's cells may enable them to be quickly incorporated onto the surfaces of many types of commercial buildings.  Nanosolar's first shipments have already occurred, and if we see several large deployments in the near future, this might just be the company that finally makes solar energy a mass-adopted consumer technology.  Nanosolar itself calls this the 'third wave' of solar power technology. 

2) Tesla Motors : I wrote about Tesla Motors in late 2006.  Tesla produces fully electric cars that can consume as little as 1 cent of electricity per mile.  They are about to deliver the first few hundred units of the $98,000 Tesla Roadster to customers, and while the Roadster is not a car that can be marketed to average consumers, Tesla intends to release a 4-door $50,000 sedan named 'WhiteStar' in 2010, and a $30,000 sedan by 2013.  The press coverage devoted to Tesla Motors has been impressive, but until the WhiteStar sedan successfully sells at least 10,000 units, Tesla will not have silenced critics who say the technology cannot be brought down to mass-market costs. 

3) Aptera Motors : When I first wrote about Tesla Motors, it was before I had heard about Aptera Motors.  While Tesla is aiming to produce a $30,000 sedan for 2013, Aptera already has an all-electric car due for late 2008 that is priced at just $27,000, while delivering the equivalent of between 200 and 330 mpg.  The fact that the vehicle has just three wheels may reduce mainstream appeal to some degree, but the futuristic appearance of the car will attract others.  Aptera Motors is a top candidate for winning the Automotive X-Prize in 2010. 

The simultaneous use of Nanosolar's solar panels with the all-electric cars from Tesla and Aptera may enable automotive driving to be powered by solar generated electricity for the average single-family household.  The combination of these two technologies would be the 'killer ap' of getting off of oil and onto fully renewable energy for cars. 

4) 23andMe : This company gets some press due to the fact that co-founder Anne Wojcicki is married to Sergey Brin, even as Google has poured $3.9M into 23andMe.  Aside from this, what 23andMe offers is an individual's personal genome for just $1000.  What a personal genome provides is a profile of which health conditions the customer is more or less susceptible to, and thus enables the customer to provide this information to his physician, and make the preventive lifestyle adjustments well in advance.  Proactive consumers will be able to extend their lifespans by systematically reducing their risks of ailments they are genetically predisposed to.  As the service is a function of computational power, the price of a personal genome will, of course, drop, and might become an integral part of the average person's medical records, as well as an expense that insurance covers. 

5) Desktop Factory : In 2008, Desktop Factory will begin to sell a $5000 device that functions as a 3-D printer, printing solid objects one layer at a time.  A user can scan almost any object (including a hand, foot, or head) and reproduce a miniature model of it (up to 5 X 5 X 5 inches).  The material used by the 3-D printer costs about $1 per cubic inch. 

The $5000 printer is a successor to similar $100,000 devices used in mechanical engineering and manufacturing firms.  Due to the Impact of Computing, consumer-targeted devices costing under $1000 will be available no later than 2014.  I envision an ecosystem where people invent their own objects (statuettes, toys, tools, etc.) and share the scanned templates of these objects on social networking sites like MySpace and Facebook.  People can thus 'share' actual objects over the Internet, through printing a downloaded template.  The cost of the printing material will drop over time as well.  A lot of fun is to be had, and expect an impressive array of brilliant ideas to come from people below the age of 16. 

6) Zazzle : Welcome to the age of the instapreneur.  Zazzle enables anyone to design their own consumer commodities like T-shirts, mugs, calendars, bumper stickers, etc. on demand.  If you have an idea, you can produce it on Zazzle with no start-up costs, and no inventory risks.  You profit even from the very first unit you sell, with no worries about breakeven thresholds.  You can produce an infinite number of products, limited only by your imagination.  At this point, those of you reading this are probably in the midst of an avalanche of ideas of products you would like to produce. 

While the bulk of Zazzle users today are would merely be vanity users who manage to sell under ten units of their creations, this new paradigm of low-cost customization will inevitably creep up to major industrial supply chains.  Even more interesting, think about #5 on this list, Desktop Factory, combining with Zazzle's application, into an amazing transformation of the very economics of manufacturing and mass-production. 

7) A123 Systems : Read here about how battery technology is finally set to advance after decades of stagnation.  A123 Systems is at the forefront of these advances, and has already received over $148 Million in private funding, as well as an article from the prestigious MIT Technology Review.  A123 is a supplier for GM's upcoming Volt, and has already has begun to sell a module to convert a Toyota Prius into a plug-in hybrid.  For choices beyond those offered by the #2 and #3 companies on this list, A123 Systems is poised to enable the creation of many new electric or plug-in hybrid vehicles, greatly increasing the the choices available to consumers seeking the equivalent of more than 50 mpg.  A123 may just become the Intel of batteries.  Combine A123's batteries with Nanosolar's cells, and the possibilities become even more interesting. 

8) Luxim : Brightness of light is measured in Lumens, not Watts, which is a measure of power consumption.  Consumers are learning that CFL and LED bulbs offer the same Lumens with just a fifth or a tenth of the Watts consumed by a traditional incandescent bulb, and billions of tons of coal are already being saved by the adoption of CFLs and LEDs.  Luxim, however, aims to take this even further.  Luxim makes tiny bulbs that deliver 8 times as many Lumens per Watt as incandescent bulbs.  The bulbs are too expensive for home use, but are already going into projection TVs.  With $61 Million in funding to date, Luxim's main hurdle will be to reduce the cost of their products enough to penetrate the vast home and office lighting market, which consumes tens of billions of bulbs each year.   

9) Ugobe : Ugobe sells a robotic dinosaur toy known as the Pleo.  A mere toy, especially a $350 toy, would not normally be on a list of technologies that promise to crease the fabric of human society.  However, a closer look at the Pleo reveals many impressive increments in the march to make inexpensive robots more lifelike.  The skin of the Pleo covers the joints, the Pleo has more advanced 'learning' abilities than $2500 robots from a few years ago, and the Pleo even cries when tortured, to the extent that it is difficult to watch this. 

The reason Ugobe is on this list is that I am curious to see what is the next product on their roadmap, so that I can gauge how quickly the technology is advancing.  The next logical step would be an artificial mammal of some sort, with greater intelligence and realistic fur.  The successful creation of this generation of robot would provide the datapoints to enable us to project the approximate arrival of future humanoid robots, for better or for worse.  Another company may leapfrog Ugobe in the meantime, but they are currently at the forefront of the race to create low-priced robotic toys. 

This concludes the list of nine companies that each could greatly alter our lives within the next several years.  Of these nine, at least three, Nanosolar, Tesla Motors, and 23andMe, have Google or Google's founders as investors.  The next 24 months have important milestones for each of these companies to cross (by which time I might have a new list of new companies).  For those that clear their respective near-term bars, there might just be a chance of attaining the dizzy heights that Google, Microsoft, or Intel has.

Related :

The Impact of Computing

A Future Timeline for Automobiles

A Future Timeline for Energy

The Imminent Revolution in Lighting

Batteries Set to Advance, Finally

(crossposted on The Futurist)

World Broadband Lines and Average Speeds

World Broadband Lines in active use will reach 350 Million in 2008, and rise to 470 Million by 2010.  Of equal significance, the Impact of Computing ensures that the cost of network bandwidth continues to drop exponentially, and thus the average speed of each Broadband line is also increasing by as much as 30% a year.

As both the number and the average speed of lines are increasing simultaneously, this combined growth enables continued Internet evolution to occur much faster than most observers are expecting.  Technological changes often take observers by surprise because they are fixated on just one advancing trend, while failing to notice another trend on a rapid collision course with the first. 

Web 2.0 emerged a mere half-decade after the Internet bust (2000-02) due to the simultaneous combination of greater Internet connection speeds and wider Broadband penetration, leading to a greater number of people each spending more time online.  The total aggregate person-hours spent on the Internet grew dramatically, enabling new business models to sustainably exist. 

Thus, early in the next decade, the greater number of Broadband users, each with access to much higher speeds than today, will create an ecosystem that can sustain new Internet business models that may seem premature today.  This will eventually be defined as 'Web 3.0', which could include technologies known today under the term of 'Semantic Web'.

Be watchful of the companies that could become to Web 3.0 what YouTube, MySpace, Facebook, Wikipedia, etc. were to Web 2.0.