Exponential Thinking

Speeding EarthRay Kurzweil has started about a dozen companies so far in his lifetime. He is a visionary, inventor, futurist and inspiring speaker. In his keynote speech at SIFMA Tech 2013 in New York in June, he shared some of his long-term predictions. His track record is pretty solid: 86% of the 147 predictions in his book The Age of Intelligent Machines were correct. Others were only slightly off the mark, like one that predicted we would have self-driving cars by now. They exist, but you can’t buy one yet.

Timing is critical to being successful as an inventor. You can’t plan your technology for the world that you’re looking at because if it takes a few years to get the project off the ground, it will be a very different world.

Yet the future is different than our intuition. Our intuition about the future is linear. By that, Kurzweil means that we anticipate things going at the same pace. While that’s true for many things, it’s not true for information technology.

The pace of change has been accelerating ever since we started creating technologies. Our first invention was a communication technology — spoken language — so we could collaborate with other people. That took hundreds of thousands of years to evolve. Stories began to vary between storytellers, so we invented written language to establish a permanent record. That evolved over tens of thousands of years. Then the printing press was invented over 500 years ago as a better way to produce written language, and that took 400 years to reach a mass audience. The telephone reached one quarter of the earth’s population in 50 years, while the cell phone did that in seven years. Social networks, wikis and blogs took three years. Now we see major changes in platforms, technologies and business models in one year.

The future isn’t predictable, but if you collect enough data and have the right visualization tools, you can make some educated guesses. Kurzweil realized that the fundamental measures of IT — price performance, capacity, bandwidth, and calculations per second, per constant dollar –  form a smooth, predictable trajectory that is exponential, not linear.

Take the genome project as an example. Scientists finished 1% of the project in seven-and-a-half years. Using linear thinking, at that rate, they thought it would take 750 years to complete. But the project was an exponential progression; it had been doubling every year. 1% is only seven doublings from 100%, so it was actually finished seven years later.

Every other aspect of treating biology as an information technology has continued to scale up in this exponential manner. The first genome cost $1 billion; we’re now down to a few thousand dollars. The amount of genetic data we collect keeps doubling every year, and we can now reprogram that information the way you would reprogram your cell phone.

Health and medicine has undergone a grand transformation from having been a linear process to being an exponential process. Some people believe Social Security will run out of money in 23 years, but their perception is based on linear models. They expect that there will continue to be extensions in longevity, but the models are based on the kind of progress we’ve seen during an era in which health and medicine was not an information technology. For financial professionals, this means a key assumption about the future that is built into instruments such as annuities, life insurance and long-term health insurance plans like Medicare is invalid.

The computer in a cell phone is several billion times more powerful in constant dollars than those used in the late 1960s. It’s several thousand times more powerful, it’s a billion times less expensive, it’s one hundred thousand times smaller.

“We’ll do both of those progressions again in the next 25 years. This [computer in a cell phone] again will be several billion times more powerful per dollar. It will be a hundred thousand times smaller. It will be the size of a blood cell, which gives you some idea of what will be feasible,” said Kurzweil. “But our intuition about the future doesn’t really fathom this kind of exponential progression.”

As price performance reaches certain levels, whole new applications become feasible, and that’s the driving edge of innovation. This can be said for everything from search engines to social networks. Social networks didn’t exist eight years ago because the price performance wasn’t there, he pointed out.

Kurzweil believes 3-D printing is going to revolutionize everything we care about. Already, doctors have scanned and imaged the throat of a girl with a damaged windpipe and used computer assisted design to create a virtual windpipe in the computer. They printed it with biodegradable materials, populated it with her stem cells, grew a new one for her in the laboratory and installed it surgically. This has been done already with tracheas and more complex organs like kidneys in animals.

The scale of precision is improving at a rate of 100 in 3-D volume per decade. By 2020, we’ll be able to print out an array of materials including plastic, ceramic, glass, metal and fabric and leverage the open source market to distribute free designs contributed by millions of people. Moreover, the open source market will coexist with high quality, proprietary products.

“We’re now in the quiet before the storm. This is a revolution that we can predict will happen,” he said. “Right now the precision is in several microns, but it needs to be sub microns for most applications to begin to revolutionize manufacturing. We’ll be there in a few years.”

Cloud technology is going to be another game changer. The mobile devices we carry around are extensions of our brain into the cloud. With minimally invasive surgery, Parkinson’s Disease patients will be able to have a tiny computer implanted in their body, which is connected into the brain. It will be possible to download new software to it from outside the patient. In the 2030s these will be the size of blood cells, and we’ll have millions of them in our body.

“Within 15 years, we’ll be adding more than a year every year to your life expectancy. So as you go forward a year, your life expectancy will move on away from you,” said Kurzweil. “That will be your tipping point. So if you can hang in there for another 15 years, you may get to experience the remarkable century ahead.”