written by
Tom Husson

Exponential technologies as the backbone of the century.

Emerging technologies Artificial Intelligence Blockchain Performance 4 min read
Exponential Technologies Century

The law underpinning all the exponential technologies

It is clear that we're at the dawn of the most significant socio-economic (r)evolution since the history of mankind and the effects are kicking in. Exponential technologies are jumping up left and right, automating away millions of jobs, blue-chip companies are being disrupted out of business and you have probably noted significant changes in your industry over the last decade.

But the effects of what exactly? Artificial Intelligence? Moore's law? Blockchain? The internet? Some other life-altering exponential technologies? The short answer is yes to all the above. The insightful meta answer, however, is this: The law of accelerating returns. This law, first coined by Ray Kurzweil, states that once a domain, discipline, technology or industry becomes information-enabled and powered by information flows, its price/performance begins doubling approximately annually.

Understanding Exponential Technologies

Let's break down the law of accelerating returns a little deeper. How can an annual doubling be sustained? Doesn't that seem excessive? What exactly does it mean to be "information-enabled"?

Exponential Technologies Overview

Keeping up the exponential pace

Arguably the most important exponential technology of the last decade has been computing technology driven by Moore's law. Moore's law is the observation first made by Gordon Moore that the number of transistors in a dense integrated circuit double about every two years. This surge in computation capacities is behind many off the breakthroughs in Artifical Intelligence that made it a technology applicable across many different industries.

Artificial Intelligence in itself is then again driving many exponential leaps in Medicine, Neurotech, Sensors, Drones, ... The data made available in these other areas is then again making the AI better. This creates positive feedback loops that give an "accelerating return". Exponential advancement in one area enables a whole bunch of exponential advances in other areas again advancing exponentially the initial area, accelerating the acceleration. This is how that annual doubling can be sustained. That's not to say that the acceleration is continuously accelerating, it's probably more appropriate to think of it as a messy S-curve. We made a visual aid that you can map onto any exponential price-performance graph to find the law of accelerating returns in it.

Exponential Technologies Exponential Pace

Power to the (informed) people

The other aspect of the Law of accelerating returns is that the domain needs to be information enabled. A company that has leveraged this in a very clear & brilliant way is Local Motors.

To build a car commercially, you used to need a workshop, factoryworkers with knowhow about building that car - information processes internal to the organization - with that workshop came management overhead, and so on.

Local Motors does it differently. They are a global co-creation platform that empowers its community to design, build and sell custom-built vehicles and has recently leveraged 3D printing to flip the script on the internal information processes. Now all you need to build that car is the file that contains the designs for the parts of the car, a tutorial on youtube on how to assemble it and a 3D printer - which is a technology that is also on an exponential price-performance curve. Anyone can now build a car.

Local Motors has been able to create multiple crowdsourced cars, significantly dropping development & production costs. Their Strati cost just 3 million to develop. Down from the average 1 billion industry-standard cost to develop a car. That's a 333x improvement.

From scarcity to abundance

Profound impact Exponential Technologies

The importance and profoundness of the law of accelerating returns in the 21st century can not be overstated. Think of any domain and it is being touched by not 1 or 2 exponential technologies, but a dozen.

One of the meta-effects of that feedback loop is that we move from a scarcity-based model, where for example you need your factory, factory workers & parts of which you have a limited supply and are able to use that limited supply & exclusivity to drive up a price, to an abundance-based model where you can't use scarcity anymore to drive up your price, since everybody with a 3D printer can print one.

This requires a totally different way of thinking about doing business since the basis of most of our economic stems from the supply & demand curve of which supply now becomes abundantly available... But we'll cover that in an upcoming post.

Power to the informed organization

How can your organization harness these exponential technologies optimally as local motors did? What are information flows you should accelerate for your business and how? How can you learn to look at this holistically & harness the true power of exponential technologies on the organizational level?

Exponential Organizations

We firmly believe that now that we've learned to exponentially scale technologies, it's time we've learned to exponentially scale organizations. And we'd be glad to help you do just that. Happy to hear your thoughts, answer any questions you might have or just have a coffee about how we could help you leverage exponential technologies in a way that makes sense for your organization.

Have a look at our Website or follow us Instagram, Twitter, Facebook or LinkedIn.

You can also leave us your info and we'll shoot you a message!

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