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Friday, August 13, 2010

Enabling a Revolution, Enabling Wealth

I saw a column by Rich Karlgaard this morning in Forbes entitled "How the Cheap Revolution Confuses Policymakers".  Karlgaard's title is a little misleading.  His article mostly focuses on how Moore's Law has driven down the cost of all things silicon and made the resulting products cheap.  (Moore’s Law refers to the fact that the number of transistor elements on a chip have doubled roughly every two years.) Making products cheap and affordable has made some people very, very rich.  Karlgaard tries to pull biotechnology advances into Moore's Law. But it is a bit of a stretch to say that biotechnology has made medicine cheap. 

Nonetheless, I subscribe to at least part of his thesis.  Some new technology platforms change everything.  They change how we live, how we work, who is rich, and who is poor.  Some technology platforms are so powerful that they can elevate nations to world leadership and relegate others to a has-been status.  Not all new technologies do this, of course  What sort of technology platforms can have such powerful effects?

The key is to be found in technologies with the broadest power to reach deeply into our world and change areas that would have never even occurred to the original developers. Here are a few examples that pop to mind:

The Printing Press - Gutenberg developed movable type so that he could print indulgences and bibles and make a few bucks. The printing press allowed for mass communication that changed the course of history.  Do you think Johannes could have foreseen the power and reach of his invention?  The Enlightment would never have happened, or happened much more slowly, without the printing press. 

Iron and Steel Processing - The Medieval world was one built of wood and stone. The discoveries (mostly) in England of how to smelt iron and later steel cheaply and in high volume had a dramatic impact that reached into every part of the lives of people in the 18th and 19th Centuries.  Without the ability to produce iron and steel cheaply, there would have been no steam engines, no railroads, no modern bridges, ships, or skyscrapers.  Those who controlled the steel mills became fabulously wealthy.  Those who worked in the mills had lives of misery.

The Automobile - This is an assemblage of inventions and materials (including the internal combustion engine, cheap fuel, steel, and rubber) that gave everyday people the ability to travel where they wanted, when they wanted at very low cost.  Whole industries were created to build and service automobiles and trucks. The highway system changed the face of the country just as suburbs changed the nature of our towns and cities.  Who was rich?  Auto and oil magnates, steel executives, and rubber company CEOs. 

The point I am trying to make is that some inventions have the ability to have very broad utility. They have uncounted ways of being exploited for products and services and hence for profits.  If there is a way to exploit one of these technologies, some entrepreneur will find it.

I would agree with Karlgaard on how pervasive the Silicon technology has been.  Look at who became wealthy.  The list includes chip company founders, personal computer execs, internet execs, venture capitalists, and social networking company founders. Less obviously but just as importantly, the wealth of bankers and financiers is tied directly to the enablement of silicon technology. Without computing, the world of instantaneous and complex finance would be impossible. 

What will be the next powerful technology platform?  If I knew, I would have my money there and I wouldn't be broadcasting my answer.  But I don't know.  I would hazard an educated guess, however.  It will be a new material.  I don't know if that will be a nano-material or a DNA-based, self-assembling material, but it will be some sort of material that opens doors that can't even be conceived of today.  My other prediction is that this next new material technology is a long way off and will take even longer to exploit.  Fundamental technologies are like that.  

Karlgaard writes of the Cheap Revolution but all powerful technologies have made things cheap.  But not all technologies have the capability to create such a profound impact.  That's why when we experience one, it is dubbed a "revolution".  We are still riding the Information Revolution.  Who knows what the next will be called?

[All pictures from Wikipedia]


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