A derivative is a mathematical tool to measure the rate of change. In physics, this takes the form of change in distance over time, or what we call speed. And if you take the derivative of the derivative, you get acceleration — the second derivative. We tend to think in straight lines, but the world is accelerating — i.e., it has a wicked second derivative.
Technology & Information
An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense “intuitive linear” view. So we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate). —Ray Kurzweil, Law of Accelerating Returns
Moore’s Law is what is often cited in describing technological change (note the above graph is logarithmic, not linear), but what is astonishing is that it’s not just silicon chips. The exponential growth in the density of transistors, which drives storage and computation, has been accelerating for nearly a hundred years. The trend is not just about silicon; it’s a line that runs from the first electromechanical technologies through silicon and on next to biological and quantum computers.
This report is a snapshot of what the information revolution means to the average American on an average day, who consumes 34 gigabytes and 100,000 words of information. —University of California
The consequence of this, as Eric Schmidt has said, is that “every two days now we create as much information as we did from the dawn of civilization up until 2003. That’s something like five exabytes of data.” Think about that: every two days, we create more information than humanity did during its entire history. That’s the problem with exponential growth — you start with a couple of rabbits, and a year later there are hundreds running around.
And we’re adopting this technology even faster. The Internet was adopted faster than the mobile phone, which was faster than the computer, which was faster than VCRs.
Think about the Nest thermostat — they created a $3 billion company in a couple years. Consumers adopted the product incredibly quickly, leading to rapid growth and creating immense value.
This is going to continue. Costs for gene sequencing are dropping faster than they did for computers. Biological and quantum computers are becoming a reality — we’ll compute in DNA and other universes. Solar installation is growing exponentially as well and driving an energy transition.
There’s a cultural consequence to this as well — events happen faster and news spreads more quickly and widely before it is digested and discarded. There is no information arbitrage anymore — news and economic data circle the globe in milliseconds. There is no dampening effect, which leads to reactionary moves and quicker corrections — short-term shocks and retracements.
This affects businesses as well. A company like GroupOn can export its business model around the world in a matter of months. It’s how a company like Zara reacts to consumer demands by re-tooling, re-designing, and producing new designs in their stores in a matter of weeks, not seasons.
And there are consequences for governments that can’t react to this change. Regulation is design for last-generation technology, or worse yet, a couple generations ago. And it leads to such inanities as the banning of home genetics kits by the FDA.
This type of change isn’t a new phenomenon. Reuters started by sending pigeons to London to report on World War I, which greatly sped up the dissemination of news. What is different now is the pace of change — the acceleration — the second derivative.
Skills that Matter
I think this environment rewards two people — the long-term thinkers and the editors.
The long-term thinkers will excel because an abundance of change leads to overreaction. Those that can see the big picture, the long history, and who can navigate the short-term changes, will create a lot of value. Perspective is important in a world where we’re consuming 34 gigabytes of information a day.
You can’t stop the onslaught, and thus your only hope is to contain it. To do this, we need to learn how to edit, to reduce, to find the most valuable streams. All this change has created a lot of noise — we need better filters. The people that learn to use the filters and the companies that build them will also create a lot of value. Editing may be the skill of the next century.
Lastly, we need to be open to change. We may yearn for nostalgia, but it’s dangerous not to evolve — evolution, by definition, kills those who don’t adapt.
These trajectories do have limits though. We live on a finite planet with finite resources. There is a physical upper limit that needs to be managed. The balance between our appetite and the limits of the planet is delicate.
We also have mental limits. Our bodies and our brains were not designed for a world that is changing faster than we can adapt to it. This causes stress as we are overwhelmed by choice and change.
The acceleration of technology can also lead us to imagine a techno-utopian view of the world, one where we don’t have to think about or solve the complicated problems as technology will solve them for us. But this technological change is just a change of tools; it’s not an ideal.
Harness the Force
Lastly, back to physics, if we take this acceleration and multiply it by mass, we get force: Force = Mass x Acceleration or F=MA, Newton’s second law of motion. This force can be good or bad — it could be a baseball that hits you in the head or it could be the a rocket engine that lifts us to other planets. Acceleration is important: it’s the variable that matters, it’s what creates force. Our job is to not get knocked over by the acceleration but to harness it and create a positive force.