Azeem Azhar
The Exponential Age
Complexity scientists refer to moments of radical change within a system as a “phase transition.”5 When liquid water turns into steam, it is the same chemical, yet its behavior is radically different.
Sadly for these engineers, their view of technology is a fiction. Technologies are not just neutral tools to be applied (or misapplied) by their users. They are artifacts built by people. And these people direct and design their inventions according to their own preferences.
On the one hand, I will try to help technologists view their efforts in a wider social context. On the other, I’ll aim to help non-technologists get a better understanding of the technologies underpinning this period of rapid social change.
At heart, the argument of The Exponential Age has two key strands. First, new technologies are being invented and scaled at an ever-faster pace, all while decreasing rapidly in price. If we were to plot the rise of these technologies on a graph, they would follow a curved, exponential line. Second, our institutions—from our political norms, to our systems of economic organization, to the ways we forge relationships—are changing more slowly. If we plotted the adaptation of these institutions on a graph, they would follow a straight, incremental line.
Nations and other actors will be able to make use of new adversarial tactics, from cyber threats to drones and disinformation. These will dramatically reduce the cost of initiating conflict, making it much more common.
In the decade up to 2019, the price of electricity generated by solar power had declined by 89 percent.
Between these four key areas—computing, energy, biology, and manufacturing—it is possible to make out the contours of a wholly new era of human society.
In the ten years to 2019, the cost of generating electricity from wind turbines declined by 70 percent, or about 13 percent per year.
lithium-ion storage dropped by 19 percent per annum for the whole decade from 2010.39
Then, after a few years of dominance by Illumina, the Shenzhen-based company BGI announced in March 2020 it was capable of sequencing a full genome for only $100—representing a million-fold improvement in less than twenty years.41
Researchers estimate that most additive manufacturing methods are developing at a pace of between 16.7 percent and 37.6 percent every year,
3D printing market grew eleven times in the decade to 2019—a rate of 27 percent per annum.48
In the case of the aircraft Wright studied, it was a 15 percent improvement for every doubling of production.
But combination has never taken place at the scale it does today. For several reasons, contemporary technologies are more prone to combination than those of the early to mid-twentieth century. One factor is standardization.
But today, it would be trivial—and cheap, measured in tens of dollars—to give Tom what he wanted: accurate, up-to-date photographs of almost any part of the planet. Such images are used by hedge funds and commodities traders in precisely the way my boss envisaged.
One way to make sense of the social problems brought by industrialization is as a gap—between the speed of technological and social change and the speed of institutional and political adaptation.
Britain had a modern economy, but a distinctly pre-modern political order.
In 1633, it got into a dispute with the astronomer Galileo Galilei and his conclusions about the structure of our solar system. Yet it was not until 1979, 346 years after the astronomer was condemned to house arrest until his death—and twenty-two years after the Sputnik satellite orbited the planet—that Pope John Paul II ordered a papal commission
A couple of years later, Sasson was awarded US Patent 4131919A for an “electronic still camera.”115 He figured, by extrapolating from Moore’s Law, that it would take fifteen to twenty years for digital cameras to start to compete with film. His estimate was bang on. But Kodak, even with a two-decade head start, did not grab the opportunity. At the time, Kodak sold 90 percent of the photographic film in the US and 85 percent of its cameras—they felt little need to completely pivot their business strategy. “When you’re talking to a bunch of corporate guys about eighteen to twenty years in the future, when none of those guys will still be in the company, they don’t get too excited about it,” Sasson later recalled.116
This isn’t simply about personal wealth. Our rules and norms are shaped by the technologies of the time—those who design essential technologies get a chance to shape how we all live. And these people are in the minority. We are witnessing the emergence of a two-tier society—between those who have harnessed the power of new technology, and those who haven’t.
The rapidly declining costs of exponential technologies are part of the cause. Another, as we will soon learn, is a positive feedback loop that turns market leaders into a kind of perpetual motion machine.
When only one person has a fax machine it is effectively useless; when thousands have one, suddenly it comes in handy.
Pigou noted that air pollution—caused by the buyer and seller of a car, but affecting everyone—is a negative externality. With my parents’ fax machine, we were encountering a positive externality: the “network externality.” In other words, the benefits of the device went far beyond just my parent’s office in east London, increasing the usefulness of the fax machines of everyone else in the network.
They were well understood by Theodore Vail, the president of the Bell Telephone Company (the precursor to AT&T), who wrote in 1908: “A telephone[’s] value depends on the connection with the other telephone and increases with the number of connections.”140
This unleashed power of platforms is the second key driver of the rise of superstar companies. Unburdened from the sweaty, crowded, noisy atmosphere of large physical marketplaces, these companies can grow to extraordinary sizes: eBay brings together 185 million active buyers per year;143 Alibaba, 779 million users.
Ping An Good Doctor was spun up in 2014 as a service of a well-established Chinese insurance conglomerate, Ping An Insurance.
As the algorithms got better the service scaled, allowing AI to respond to 75 percent of the 670,000 consultations each day. A team of five thousand specialist doctors digitally handles more complex questions. None of those five thousand specialists are employed by Ping An; they jump on the service as needed, much as an Uber driver clocks on to find a ride. And these are just a few examples. In the Exponential Age, platforms are everywhere.
company that owns its own vehicles. Uber’s algorithm—its key intangible asset—is highly scalable, whereas the traditional cab company needs to add a new cab each time it wants to grow.
“data network effect,” pithily defined as “when your product, generally powered by machine learning, becomes smarter as it gets more data from your users.”
The more these effects operate, the more they give. Companies that master this cycle can use intangible assets to take on an unassailable position.
The most solar-rich nation, Azerbaijan, only gets four times more sunlight per square mile of land than the most impoverished, Norway. That may sound significant, but it is a relatively minor variance. The equivalent density between the haves and have-nots for oil is more than a million to one.284
Our electric vehicles can hoard electricity which could also power our homes and offices through so-called vehicle-to-grid systems. The average electric car stores about 50 kilowatt-hours of electricity: enough to run the typical British or American home for five days.
Yet the wider trend is towards an economy based on ever less stuff. These trends—the re-localization of commodity production, plus our decreasing dependence on some commodities altogether—mark a radical shift.
The diminishing dependence of rich countries on poor countries’ commodities may fundamentally destabilize the economies of much of the developing world. And depriving poor countries of manufacturing income—as high-tech local manufacturing becomes the norm in Europe and America—could be even more ruinous.
As the retired general Richard Barrons told me, many in the West are “strategic snowflakes.” “Our daily life is enormously fragile,” he says.388 The solution is digital literacy: the set of skills that enables citizens to operate safely in the digital world. An important feature of this is digital hygiene
Here, a partnership across the public and private sectors emphasizes a coherent response to disinformation—particularly that of Russian source. The program, launched in 2015, was developed by the president, Sauli Niinistö.389 Critical thinking skills form part of high school curricula, as well as later adult education.390 Children even take classes on how to recognize fake news. A second country leading the way is Taiwan, similarly dwarfed by an often-hostile neighboring state. Many of Taiwan’s policies are geared towards the threat posed by China, and their misinformation strategy is no exception. Taiwan’s digital minister, Audrey Tang, told me that they “teach media competence, meaning that instead of being just readers and viewers of data and journalism, everybody is essentially a producer of data and narratives.”391 It’s a lesson that many in the West would do well to heed.