Technology’s crystal ball offers only a hazy view of the future

September 24, 2013 5:08 pm

Technology’s crystal ball offers only a hazy view of the future

By John Kay

Exciting innovations such as big data and small robots are by historical standards modest

Perhaps it is the result of years of challenging students in Oxford tutorials, but my friends sometimes describe me as counter-suggestible – too inclined to point out weaknesses even in well presented arguments for motherhood and apple pie. So it is an unusual experience for me to leave a debate persuaded by both sides. But that was my reaction last week to a discussion at Columbia University’s Center on Capitalism and Society. Both protagonists are professors at Northwestern University in Illinois. In one corner was Robert Gordon, famous for his pessimistic view of the technological future. In the other was Joel Mokyr, the pre-eminent modern economic historian of technology.Prof Gordon argued that in the century from 1870 to 1970, experienced technological progress advanced at a pace that is unprecedented and probably unrepeatable. Several transformational technologies were implemented simultaneously – electricity, motorised transport, plumbing and sanitation.

Try to imagine a world in which the only power available outside large factories is provided by the physical effort of humans or animals. A world in which artificial light is costly and of poor quality. A world in which most people spend their whole lives within a few miles of where they were born, and most goods must be consumed within a few miles of where they are made. Women must spend almost all their time on mundane domestic tasks – fetching and carrying water, creating heat for the home and for cooking, making, repairing and washing clothes. That was how most people lived before the scientific and industrial revolution. In many parts of the globe, it is still how they live.

We will never see such a transformation again, Prof Gordon argued. Since 1970, there has been dramatic progress in one group of technologies – computers, electronics and IT. But in most other areas of industrially applied science – materials, pharmacology, fuel and power, transport – game-changing innovation has given way to incremental improvement. The 747 in which I crossed the Atlantic was still recognisably the same aircraft as the one in which I first made the trip 40 years ago. Forty years before that, commercial aviation barely existed; 40 years earlier still, Lord Kelvin, the great scientist, said manned flight was impossible.

On the other side of the debate Prof Mokyr emphasised the limitations of our knowledge of the future. It is the nature of radical new technologies that to anticipate them is to be a long way along the road to inventing them. Citing historians Derek Price and Nathan Rosenberg, Prof Mokyr pointed out that the rise of industrial science was, in large part, the result of new instruments of discovery: notably the telescope, which enabled us to see on a large scale; and the microscope, which enabled us to see on a small scale. No one could have anticipated the breadth and depth of knowledge that would result.

The addition of data processing capability to our instruments of discovery, Prof Mokyr argued, presaged a revolution of comparable significance in our capacity to see and hence begin to understand the universe. The CAT scanner and the cruise missile are simple examples of how a computer linked to sensing devices can find and achieve things far beyond the scope of either alone.

Knowledge is more than additive. What we learn when we bring two bodies of knowledge together may be much more than the sum of each alone. That is why the technological improvements that make it easier to gain access to that knowledge are so important. We do not know what we will discover, only that there is a lot still to be discovered

The conflicting positions are both persuasive. Yet both sides were able to agree on one proposition. The innovations that cause so much excitement among current technophiles, such as big data and small robots, are by historical standards modest. The car is transformational, the driverless car incremental. Substituting a wire or a radio wave for a physical messenger is revolutionary; in comparison, email and fibre optic cable represent a modest further step.

Prof Mokyr noted the eloquent disappointment of tech entrepreneur Peter Thiel: “We wanted flying cars, and they gave us 140 characters.” A preliminary to understanding the future is to recognise how little we do – or can hope to – know.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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