Over a period of five decades, the semiconductor industry has improved the performance of computer chips by roughly 50% annually. This remarkable achievement—described by Moore’s Law—is one of the exponential phenomena of our age, responsible for accelerating changes to our lives and societies in ways that are, if not unprecedented, rare in human history.
In his new book The Exponential Age, Azeem Azhar argues that we are living in a time of unusually fast social change as a result of these dramatic improvements in technology.
“In the early twenty-first century, the defining technologies of the industrial age are metamorphosing,” writes Azhar, an investor, entrepreneur, and creator of the popular email newsletter Exponential View. “Suddenly, our society is being propelled forward by several new innovations—computing and artificial intelligence, renewable electricity and energy storage, and new breakthroughs in biology and manufacturing.” (p. x)
The result is that there’s an “exponential gap” between the changes to society and the responses of institutions, such as governments, which tend to evolve in a slower, linear fashion. (Azhar defines exponential technologies as ones that improve their performance for roughly the same cost by more than 10% annually for several decades—the advances compound in accelerating fashion.)
There are examples of this all around us. Superstar tech companies like Amazon, Google, Apple, and Facebook have accumulated massive market power in shockingly little time, and industrial-age antitrust enforcers have been slow to understand and craft approaches to address it. Similarly, the traditional norms and regulations around employment are inadequate in the face of gig work directed by computer algorithms, as with car and delivery services like Uber. And our established protections for individual privacy and speech fall short of what’s needed when private companies have such extensive visibility into and control over what we see and do.
The Exponential Age provides a clear conceptual framework for understanding many of the biggest societal challenges today, as technologies gallop ahead and institutions adapt much more slowly. It could offer deeper analysis of advances in areas outside of computing such as biology. But it is a very readable explanation of why it’s hard for humans to understand exponential change and how that’s a major blindspot at this unique moment in history with numerous exponential developments.
Azhar offers predictions about where the technology will lead us, including a shift away from globalization to local economic production of goods and food, a transition to inexpensive renewable energy, and the widespread availability of genomic sequencing and much more personalized and preventative health care. “In short, we are entering an age of abundance,” he writes. “The first period in human history in which energy, food, computation, and many resources will be trivially cheap to produce.” (p. 256)
Among Azhar’s other interesting observations and contentions:
- Automation could over time create more jobs than it destroys. One study found that companies adopting robots increased employment by 10.9%. Jobs disappear when companies fail to keep up with change that powers their rivals, such as Blockbuster video’s closing in the face of competition from Netflix. “Our concern should not be with the quantity of work around for humans to do,” Azhar writes. “It should be with the quality of options that are available.” (p. 139)
- Exponential advances will increase local economic activity and reinforce the importance of cities. 3D printing allows goods to be manufactured locally, renewable energy can be produced locally, and vertical farming technology enables local food production. Azhar cites an ING estimate that 3D printing could eliminate up to 40% of world imports by 2040. Cities will become even more important because knowledge workers tend to cluster around universities, and the economy is centering around ever-more complex products that require their skills.
Azhar notes that human beings are generally bad at getting their heads around exponential change. Numerous studies show that we generally underestimate what happens when growth—such as that of an investment—compounds over time. And the speed of technological change amplifies that. If you increase something roughly 40% annually—approximately what Moore’s Law describes for chip performance—the compounding means that over three decades it will have grown 32,000-fold.
Among Azhar’s prescriptions for fixing the problems of our Exponential Age:
- Treat big tech platforms like utilities that can be required to meet service requirements. Require interoperability, so for example, if I post on one social network my friends on another one can see it. And reserve the right to unwind acquisitions later on if they result in market dominance.
- Provide safety nets for workers such as the “flexicurity” system in Denmark, which permits employers to hire and fire at will, but provides generous government benefits to the unemployed. Ensure workers have dignity and autonomy in their work, while providing them access to training and a greater share of companies’ earnings.
- Give cities and regions more power to manage their own affairs. Establish global cooperation around artificial intelligence, citizens’ data, and intellectual property.
- Increase military focus on defending against cyberattacks, train citizens to operate safely in a digital world, and establish new norms around escalating and de-escalating cyber conflicts.
To be sure:
- The urgency of climate change gets relatively limited discussion for a book about technology and the societal challenges of our time.
- Azhar’s contention that cities will become even more important is in contrast with some of the pandemic-era movement of people away from urban centers.
- Azhar is strong on computing-related changes, but devotes less focus to the implications of exponential developments in biology, for example.
Memorable facts and anecdotes:
- The price of electricity from solar power declined by about 90% from 2009 to 2019.
- From 2007 to 2017, chewing gum sales fell 15%, apparently because Americans began looking at their smartphones in the grocery checkout line rather than gum displays.
- Over 80% of the market value of S&P 500 companies in 1975 was represented by tangible assets such as factories. By 2015, it was only 16%, with 84% represented by non-physical assets such as data or software.
- China’s Ant Financial saw from purchase data that women who bought skinny jeans were more likely to spend money on smartphone repairs, presumably because their phones were more likely to slip out of tight back pockets. So it offered a smartphone insurance product aimed at those consumers.
- “Politicians frequently demonstrate a fundamental ignorance about even the most basic workings of mainstream technologies. They are like people trying to fuel a car by filling its trunk with hay.” (p. xiii)
- “The greatest shortcoming of the human race is our inability to understand the exponential function.”—physicist Albert Bartlett (p. 65)
- “In all of its guises, actual or aspirational, technology functions as an instrument of governance.”—ethicist Sheila Jasanoff (p. 259)
The bottom line is that The Exponential Age does a great job of explaining why technology is impacting our work and society so dramatically, and why our norms and institutions are struggling to adjust. It provides a timely reminder of the power of exponential changes and offers helpful theses about where trends are leading us.