MIT Technology Review: Exponential Changes We Can Expect in the Year Ahead

From Azeem Azhar, Exponential View Newsletter
Exponential View

MIT Technology Review: Exponential Changes We Can Expect in the Year Ahead

Azeem Azhar is a strategist, product entrepreneur, and analyst living in London. He is the curator of the weekly newsletter Exponential View, from which the following is adapted. You can (and should!) sign up here.

Many trends, in particular the convergence of multiple technologies which are improving exponentially, continue. Climate change will continue to be a most pressing issue, especially as we eat our way through our carbon budget.

As Bill Gates said, “Most people overestimate what they can do in one year and underestimate what they can do in 10 years.” Likewise, most annual predictions overestimate what can occur in a year, and underestimate the power of the trend over time.

Here are some areas which I think will be interesting to watch in the coming year:

1. International relations, the political economy, and governance will desperately need new design patterns as we enter a new phase of the digital revolution.

These should be developed in the public sphere with a wide range of participants. Three major themes to explore:

The massive global platforms—Facebook, Google, Amazon, and the like—are defining a new political economy. Their corporate sovereignty will chafe with states’ own sovereignty. Those same nations will curry favor with the platforms to win the putative economic benefits provided by them. The large platforms know that governments will seek to rein in their power through regulation or legislation. These firms will accelerate their efforts to secure platform advantage and raise the baseline from which their settlement will be judged in the years to come.
National AI strategies will emerge from more countries. The result? More grounds for cooperation and more reason to argue about intellectual property, privacy, data, and license to operate.

Silicon Valley’s political culture—and how that has been codified into software, corporate culture, and strategy—will continue to smell. The Valley will hire outsiders to fix these problems or, more likely, just for the optics. This will take years. And before we’ve tackled that smell, crypto whizzes will establish governance mechanisms on emerging blockchain networks. They will do so with a narrow, ideological framing that will threaten to hurt us in the coming decades, by which time these networks will mediate many of the resources we need. This matters because information technology systems affect how we build our understanding of the world; they affect how we perceive our set of choices; they affect how we act in that world. In short: they affect our understanding both of the “is” and the “ought.”

2. While Silicon Valley leads, both innovation and scaling increasingly occur across the globe.

Europe and Central America lead the way in decarbonizing their energy chains. China is making huge strides in large-scale electrification of its urban transport systems. Its focus on AI, supported by the state and its homegrown tech giants, will show up as novel methods and large-scale implementations. And not just in personal surveillance.

The U.S., with its declining health and social outcomes and turn inward, will become less appealing to some entrepreneurs. And its business culture, focusing solely on corporate profits, will lack the motives to innovate in areas that affect the social fabric (for the collective good). Curiously, the European Union will provide room for innovation because of its ability to bring broader groups of stakeholders together than competition alone can foster. In particular, watch the innovation around open banking and privacy in Europe this year.

Leapfrogging in other innovation hubs will continue as well. We may not see an African firm to rival America’s tech giants anytime soon, but we will see meaningful innovation in fields like ag-tech and distributed power generation.

However, the largest firms in the world will hail predominantly from Silicon Valley, and one, most likely Apple, will exceed $1 trillion in market cap this year.

3. More money will flow into technology but it will be concentrated at later stages.

Following Softbank’s lead, funds bigger than $5 billion will abound now that the investment case of platform monopolies is well understood. These will seek to back emerging winners at a regional and global level (look at Careem and Didi Chuxing in ride sharing, for example). This may create funding gaps at earlier stages in the market, as already evidenced by the seed capital slowdown in Europe and the U.S.

Read the full article on MIT Technology review here.