A century ago, most Americans lived much like people in ancient times. As Robert Gordon explains in The Rise and Fall of American Growth, few had indoor plumbing, electricity or an automobile. Everyday chores, such as cooking a meal or washing yourself could take hours of backbreaking labor just to haul water and wood.
After 1920 things began to change. Productivity surged as never before or since as secondary shifts, such as electrical appliances, developing infrastructure and a retail transformation helped pave the way for social changes, like women in the workplace and suburban life. The digital revolution pales in comparison.
Yet today, we may be entering a new era just as transformative as a century ago. We're on the cusp of revolutionary changes in computing architectures, manufacturing and how we power our economy. The enabling technologies, still nascent today, will begin to hit their stride soon after 2020, but if you want to compete effectively in a decade you need to begin to shift now.
A Post Moore's Law World
Over the past 50 years, the tech world has been driven by Moore's law, the continuous doubling of the number of processors that can be fit on a chip. Every 18-24 months, computing power doubles, making new applications possible and creating new markets. This gave the advantage to quick and nimble entrepreneurs who could move fast to capture the value created.
Yet now that Moore's law is ending, the basis of competition will shift from applications back to improving fundamental technology. The first step will be to find ways of getting more out of the technology we already have. For example, Google and Microsoft have started to manufacture their own chips that are optimized for artificial intelligence tasks.
Mere optimization, however, only goes so far. Eventually we will have to make the switch to fundamentally new architectures, like quantum and neuromorphic computing. A wide array of firms, from tech giants like IBM and Intel as well as startups like Rigetti and D-wave have spent billions developing these in recent years and both should be commercially available by 2020. Major industrial firms have already begun signing on.
Yet the transition will not be seamless. These new technologies won't only be more powerful, they will also be fundamentally different and we're looking at a learning curve that will take at least a decade before we really know how to use and apply them. Those who start early will have a leg up.
An Energy Revolution
Every since Jimmy Carter installed solar panels on the White House in 1979, renewable energy has largely been a political issue. Environmentalists pushed technologies like solar and wind to save the planet while skeptics saw them as an economic burden that only the most irrational tree-hugger could love.
Today we are at an inflection point. Costs for renewables have been dropping an an incredible rate and will become considerable cheaper than fossil fuels over the next decade. At the same time, electric cars are on pace to become cheaper to use than gas powered ones by 2022. We are entering a new era when the interests of the environment and the economy become aligned.
The one fly in the ointment is energy storage. The current technology, much like Moore's law, is nearing theoretical limits and advancement will likely slow to a crawl in the next ten years. So it is essential that we come up with at least two new battery chemistries -- one for transportation and one for the grid -- in the near future.
Fortunately, there has been massive research into new battery technologies and we seem to be making progress. One effort I've been watching closely is the Joint Center for Energy Storage Research (JCESR) at Argonne National laboratory, which is coming to the end of its 5-year funding appropriation. We'll see if that gets renewed under the present administration.
Moving From Bits To Atoms
The productivity surge that began in the 1920's transformed every facet of life. Think of how hard things were when you had to carry in water for every meal and every time you needed to wash. Lighting was inefficient and messy as was transportation by horse. If you ended up getting sick from all the dust and grime, antibiotics weren't available until after 1946. No wonder life expectancy a century ago was less than 50 years old.
By the 1950s though, this transformation was mostly complete. If you walked into a typical American household, you would see many of the same things you see today. Indoor plumbing, electric appliances, air conditioning, a car in the garage and the TV in the living room were all common.
By comparison, the digital revolution hasn't changed much. Productivity growth has slowed dramatically and life expectancy has barely moved since 1970.
The future may look quite a bit brighter after 2020 as a number of nascent technologies hit their stride and innovation shifts from bits back to atoms. Advances in materials science will likely revolutionize how we make things, while new genomic technologies like CRISPR may have the same effect on healthcare as we begin to inject genes to cure diseases like hemophilia and cancer.
The new more powerful computing architectures, as well as falling energy costs and advances in artificial intelligence, will accelerate and reinforce these trends. The developments over the past decade will likely be dwarfed by those of the next.
Surviving The Shift
Take a look at the largest companies since the beginning of the century and the change has been nothing short of amazing. Back in 2001, General Electric was the most valuable company in the world. Today it isn't even in the top 50. At the same time, five of the top ten, Alphabet, Amazon Facebook, Tencent and Alibaba were startups or didn't exist at all in 2000.
If history is any guide, a similar list ten years from now will include names we haven't even heard of yet. At the same time, many giants today will likely fall by the wayside. Life expectancy on the S&P 500 continues to fall and Innosight predicts that 75% of the firms on the list will be replaced by 2027.
Although we can already see rough outlines of what the future will look like, it is almost impossible to know what the real implications will be. Take a look at the most used apps on your smartphone and most probably weren't on your radar a decade ago. So rather than trying to predict the future, you'd be better of exploring it by connecting to others, experimenting with new technologies and business models and keeping your eyes open.
Innovation is always more about networks than nodes. Much like a hundred years ago, it won't be one "next big thing" that changes the world, but a confluence of them. That's why although the impacts of nascent technologies today won't hit until years from now, you need to start the shift today. Great companies don't adapt, they prepare.